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As filed with the Securities and Exchange Commission on June 28, 2023.
Registration No. 333-     ​
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SHARKNINJA, INC.
(Exact name of registrant as specified in its charter)​
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Not Applicable
(Translation of Registrant’s Name into English)​
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Cayman Islands
(State or other jurisdiction of
incorporation or organization)​
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3630
(Primary Standard Industrial
Classification Code Number)​
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98-1738011
(I.R.S. Employer
Identification Number)
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89 A Street
Needham, MA 02494
(617) 243-0235
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
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Mark Barrocas
Chief Executive Officer
SharkNinja, Inc.
89 A Street
Needham, MA 02494
(617) 243-0235
(Name, address, including zip code, and telephone number, including area code, of agent for service)​
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Copies to:
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Pedro J. Lopez-Baldrich
Chief Legal Officer
SharkNinja, Inc.
89 A Street
Needham, MA 02494
(617) 243-0235
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Howard L. Ellin
Ryan J. Dzierniejko
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, NY 10001
(212) 735-3000
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Approximate date of commencement of proposed sale to public: As soon as practicable after this registration statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☐​
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
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The information in this preliminary prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated June 28, 2023
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SharkNinja, Inc.
Ordinary Shares
This prospectus is being furnished in connection with (i) the separation (the “separation”) of SharkNinja, Inc. (“SharkNinja,” the “Company,” “we,” “us” or “our”) from JS Global Lifestyle Company Limited (“JS Global”) and (ii) the distribution (the “distribution” and, together with the separation, the “separation and distribution”) to the holders of JS Global ordinary shares (the “JS Global Shareholders”) of all of JS Global’s equity interest in us in the form of a dividend of our ordinary shares. Prior to the separation and distribution, we will be a wholly owned subsidiary of JS Global and all of our outstanding ordinary shares will be owned by JS Global.
Currently, no public market exists for our ordinary shares. We intend to apply to list our ordinary shares on the New York Stock Exchange (‘‘NYSE’’) under the symbol “SN.”
Upon the completion of the separation and distribution, Xuning Wang, the Chairperson of our board of directors (the “Board”), will hold or have the ability to control approximately    % of the voting power of our outstanding share capital. As a result, upon the completion of the separation and distribution, we will be a “controlled company” as defined under the corporate governance rules of NYSE. We have currently elected not to avail ourselves of any “controlled company” exemptions. See “Prospectus Summary—​Corporate Information” and “Management—Controlled Company Exemption.”
We are a “foreign private issuer” as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements. See “Prospectus Summary—​Implications of Being a Foreign Private Issuer.”
In reviewing this prospectus, you should carefully consider the matters described under “Risk Factors” beginning on page 22.
Neither the Securities and Exchange Commission (the “SEC”) nor any other regulatory body or state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
This prospectus is not an offer to sell, or a solicitation of an offer to buy, any securities.
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Prospectus dated                 , 2023.
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ABOUT THIS PROSPECTUS
Unless the context requires otherwise, (i) references to “SharkNinja,” the “Company,” “we,” “us” and “our” refer to (a) SharkNinja Global SPV, Ltd. (“SharkNinja SPV”) and its consolidated subsidiaries prior to the separation and (b) SharkNinja, Inc. and its consolidated subsidiaries after giving effect to the separation, (ii) references to “JS Global” refer to JS Global Lifestyle Company Limited, SharkNinja’s parent, and its consolidated subsidiaries other than SharkNinja and SharkNinja’s subsidiaries and (iii) references to “Joyoung” refer to Joyoung Co., Ltd., a subsidiary of JS Global. Unless the context requires otherwise, statements relating to our history in this prospectus describe the history of JS Global’s SharkNinja operations.
Certain amounts, percentages and other figures presented in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals, dollars or percentage amounts of changes may not represent the arithmetic summation or calculation of the figures that precede them.
MARKET AND INDUSTRY DATA
This prospectus includes estimates regarding market and industry data. Unless otherwise indicated, information concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity and market size, are based on our management’s knowledge and experience in the markets in which we operate, together with currently available information obtained from various sources, including publicly available information, industry reports and publications, surveys, our retailers and consumers, trade and business organizations and other contacts in the markets in which we operate. Certain information is based on management estimates, which have been derived from third-party sources, as well as data from our internal research. For certain market share and brand ranking data, we rely upon the NPD Group’s Retail Tracking Service (“NPD”) data, which is based on brand-level dollar sales for the 52-week period ended January 1, 2023, unless expressed otherwise, and references to consecutive periods reflect the preceding 52-week time periods, in addition to Growth from Knowledge (“GfK”) data, which is based on volume and value sales in Great Britain and/or the United Kingdom between January and December 2022, unless expressed otherwise.
In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. While we believe the estimated market and industry data included in this prospectus is reliable, such information is inherently uncertain and imprecise. Market and industry data is subject to change and may be limited by the availability of raw data, the voluntary nature of the data gathering process and other limitations inherent in any statistical survey of such data. In addition, projections, assumptions and estimates of the future performance of the markets in which we operate are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us. Accordingly, you are cautioned not to place undue reliance on such market and industry data or any other such estimates.
TRADEMARKS, SERVICE MARKS, COPYRIGHTS AND TRADENAMES
We own or otherwise have rights to the trademarks, service marks and copyrights, including those mentioned in this prospectus, used in conjunction with the operation of our business. This prospectus includes our own trademarks, which are protected under applicable intellectual property laws, as well as trademarks, service marks, copyrights and tradenames of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or tradenames to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Solely for convenience, trademarks, tradenames and service marks referred to in this prospectus may appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, tradenames and service marks.
 
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PROSPECTUS SUMMARY
The following is a summary of material information discussed in this prospectus. It is included for convenience only and should not be considered complete. You should read the entire prospectus carefully, including “Risk Factors” to better understand the separation and distribution and our business, financial condition and results of operations.
Company Overview
At SharkNinja, our mission is to positively impact people’s lives every day in every home in our Global Markets.
SharkNinja: World-Class Household Appliance Brands Built on Continuous, Disruptive Innovation
SharkNinja is a global product design and technology company that creates 5-star rated lifestyle solutions through innovative products for consumers around the world. We seek to leverage our global, agile and cross-functional engineering know-how, product development and manufacturing expertise along with our solutions-driven marketing to increase the efficiency, convenience and enjoyment of consumers’ daily tasks and improve everyday lives. We have built two billion-dollar brands, Shark and Ninja, and have a proven track record of establishing leadership positions by disrupting numerous household product categories, including Cleaning, Cooking, Food Preparation and Other, which includes Home Environment and Beauty. We have successfully gained market share across geographies, taking share from competitors priced both above and below our offerings. We believe our success is centered around our advanced engineering and innovation capabilities coupled with our deep understanding of consumer needs, enabling us to solve consumer problems that others either do not see or are unable to solve.
We are driven by our relentless pursuit of perfection to deliver innovative products at compelling value to delight consumers. We constantly analyze consumers’ interactions with small home appliances and leverage consumer reviews across multiple platforms, which we refer to as our “always-on” approach. Our global product design and engineering team applies these always-on consumer insights to create new technologies and intellectual property that differentiates our products. Further, we continuously enhance our products through rapid iteration and constant refinement with the goal of increasing the value of our legacy products while decreasing costs. We believe this constant pursuit of perfection through continuous innovation extends our product life cycles and differentiates us from competitors with longer innovation cycles. Our approach enables us to rapidly bring new products to market, grow share of shelf and market share and thus quickly establish leadership positions in both existing and new categories.
Our marketing strategies drive high brand engagement through our dynamic approach to solutions-driven storytelling in categories that we believe have not been historically known for high engagement. Our differentiated marketing complements our innovative solutions and fuels demand for our products. We advertise our differentiated products across various channels, driving sales at numerous retailers, online and offline, and on our direct-to-consumer (“DTC”) platform.
Today, we are a portfolio of trusted, global, billion-dollar brands driving strong growth and innovation across numerous categories. We are continuously launching new products, expanding into new categories, entering new markets and adding new channels of distribution. We believe this strategy has driven our growth in net sales from $1.5 billion in 2018 to $3.7 billion in 2022, representing a compound annual growth rate (“CAGR”) of 26%.
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Trusted Global Brands with Large and Growing Market Share
Our trusted global brands have established a firm reputation for industry-leading innovation and 5-star consumer reviews. Our unwavering consumer focus manifests in our leading market positions. Shark was the #1-selling floorcare brand in the United States in 2022, and Ninja was the #1-selling small kitchen appliance brand in the United States for the last three years, according to NPD.
Our proven track record of bringing disruptive products to market and developing one consumer solution after another has allowed us to enter into multiple product categories, driving significant growth and market share gains. As we continue to innovate, typically our legacy products continue to be sold at more accessible price points, which diversifies our product offering across price points within a category and creates increasing market share positions. We believe our products have broad appeal across income brackets as we aim to deliver industry-leading innovation, design and product quality at compelling value. As a result, we aim to acquire market share from higher and lower priced competitors. We believe our products are aspirational, offering the performance of more expensive competitor products, and attainable, representing a compelling value.
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Scaled Engineering Powerhouse Focused on Disruptive Innovation and Continuous Optimization
SharkNinja is built to continuously innovate products that exceed consumer expectations. Our global rapid innovation model is enabled by the following pillars:
Dynamic Global Engineering, Product Design and Rapid Research and Development
To win in the market, we leverage the diverse expertise of our cross-functional design and engineering teams to capitalize on our deep knowledge of consumer needs. We have a dynamic, in-house global product design team located across the United States, the United Kingdom and China that collaborates seamlessly around the clock to integrate unique local market insights into the design and functionality of our products. Our engineering prowess continuously drives our new product innovation, including design, construction, material performance requirements, manufacturing protocols, supplier selection, packaging specifications and quality assurance. Our scaled engineering organization possesses wide-ranging skillsets across mechanical design, mechatronics, electronics engineering, robotics, firmware, app and cloud, deep learning, algorithmic engineering and industrial design. Our team of over 700 cross-functional engineering and design associates is integrated across Shark and Ninja solutions, introducing disruptive technologies within our portfolio to new market segments, in addition to accessing the latest technologies from across the globe. The breadth of our engineering team’s competencies allows us to develop innovative products, while our continuous global collaboration produces a rapid and iterative development cycle.
As soon as we launch a first product within a category, our engineering teams are already working to enhance that product and develop ways of bringing even more innovation to that category. This intense focus on continuous innovation would not be possible without our in-house engineering organization, which
 
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differentiates us from other companies that rely heavily on third parties to provide engineering services. We regularly rotate our engineers and designers across product categories and locations to develop robust teams with diverse viewpoints and experience. The integration of a variety of skillsets across a broad range of market segments has created an idea-generation and consumer solution engine, which constantly produces award-winning products.
Continuous Consumer Engagement, Insights and Dynamic Testing
Our always-on consumer input fuels our world-class innovation. We deploy a wide variety of tools to understand what consumers need today and what will delight them tomorrow. In addition, through our development of local insights, we are able to design and develop products that are tailored for specific regions, and then leverage applicable insights across our global offering.
Our dynamic testing model tests our products to the extreme. We test across various environments, from our laboratories and simulated home facilities to restaurants, beauty salons and homes. This approach enables us to collect valuable input from category experts, professional users and everyday consumers. We use in-person consumer testing to gather direct observations and insights. We leverage internal software that scours product reviews to learn consumer likes and dislikes with existing solutions. Our constant qualitative and quantitative testing informs every stage of our design, engineering, manufacturing and marketing processes, during late-stage development and also through further refinements after product release.
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Delivering Critical Consumer Value Points with Every Product
SharkNinja is differentiated by our ability to innovate while identifying and solving consumer pain points that others either do not see or are unable to solve. SharkNinja strives to deliver on all four of the following critical consumer value points in every innovative product we bring to market:
Speed: Deliver first-to-market disruptive innovations
Our global consumer insights and product development approach enables us to discover some of the most pressing consumer problems and develop innovative solutions to solve them. Our global product development team collaborates around the world and around the clock, producing an ongoing cycle of development, thereby increasing our speed of innovation and ultimately our speed to market. Whether it is a first-to-market innovation in an emerging category or our disruption of a mature category with new technologies, we redefine what is possible. Our differentiated pace of innovation enables us to be
 
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first-to-market in many product sub-categories; we rapidly grow our market share and launch new products often faster than our competitors, creating competitive advantages that deliver strong and sustainable growth.
Performance: Deliver innovative high-performing products that exceed expectations and improve consumers’ quality of life
Our scaled global team of designers and engineers is passionate about delivering a high level of performance that increases consumers’ quality of life. Our products are designed to solve existing problems, often problems consumers do not even know they have. We rigorously test our products against our high-performance expectations under extreme use cases. Our product development process allows us to deliver innovative, high-performance technologies that are designed to meet or exceed consumers’ expectations. This is product performance in the pursuit of unwavering consumer trust.
Quality: Deliver a 5-star quality product experience, winning over consumers one review at a time
We know a discerning and educated consumer never gives you a second chance. Therefore, we focus on quality in designing our products and test repeatedly, recreating extreme cases of use and misuse to deliver high-quality products with long-lasting reliability in the real world. We have rigorous sourcing and manufacturing standards, and we maintain high-quality standards to which our manufacturing partners must adhere, including through frequent quality checks and manufacturing score cards. We are quick to react to negative feedback that we receive through our call centers, online reviews or on social media. We strive to deliver a seamless consumer experience with our products to ensure our consumers have a 5-star experience across the entirety of their journey with our products, starting from the very first use out of the box. Our pursuit of excellence in overall quality not only leads to more highly satisfied consumers, but also produces an army of global brand ambassadors.
Value: Deliver products at accessible prices for incredible value
We are obsessed with delivering world-class, innovative products to every consumer in every home in the markets we serve around the world (which will exclude Japan, the Asia Pacific Region and Greater China following the separation) (such markets, our “Global Markets”) at great value. With our consumers always in mind, we have built hyper-efficient, global product design and supply chain organizations designed to deliver the perfect product at a compelling price. We believe that, in purchasing our products, our consumers receive the greatest value and a high level of performance for every hard-earned dollar they spend. We accomplish this through our design and manufacturing engineering team and our on-the-ground sourcing organization in Asia, which facilitates a competitive bidding process across numerous manufacturers to secure favorable pricing terms. Furthermore, we are a crucial partner to many of our manufacturers given the scale of our brands. This allows us to enter new categories that are dominated by a few big players, disrupt them through innovation and compelling value and grow the overall market while gaining market share.
Open and Agile Manufacturing and Supply Chain
Our open and highly scalable manufacturing base and supply chain achieve competitive costs as well as high quality and performance. While competitors are limited by a traditional linear manufacturing model, our iterative method gives us continuous opportunities to optimize our products. We have developed and invested in this approach for years, in order to ensure maximum control and flexibility over production. This approach drives our goal of delivering 5-star products the first time off the line and at high global volumes.
Omni-channel Strategy Driven by Consumer-focused Storytelling
We have secured a leading position in most of our product sub-categories in the United States, in part, by establishing differentiated channel strategies and a robust omni-channel sales, marketing and distribution network. We adopt distribution channel strategies tailored to specific regions and deliver innovative products specific to local needs. Our products are available, often with disproportionate share of shelf, across retailers in each channel and online. Continuous innovation across our product offerings further drives our share of
 
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shelf and our category growth. Shark and Ninja serve as the category captains, the market leaders, in a majority of our most important sub-categories.
Our goal is to be the most relevant and prominent brand wherever consumers shop. Our always-on media strategy leverages the power of storytelling to educate consumers about our technologies and performance. We leverage many forms of media, including television, digital advertising, print and social media, to continuously create awareness and drive demand for our products. We believe our solutions-driven storytelling inspires consumers to seek out our products, online and in-store, driving traffic and conversion for our retailers.
Our Competitive Strengths
Category-leading trusted brands with a diverse product portfolio across the home
Our diverse product portfolio spans 27 household sub-categories, across Cleaning, Cooking, Food Preparation and Other, which includes Home Environment and Beauty. We are the leading brand across many of our product sub-categories according to NPD, garnering over 40 industry awards and recognitions since 2021 alone.
Ninja has been an innovative and trusted kitchen brand for well over a decade. In 2009, we launched the Ninja Master Prep blender, which enabled consumers to produce restaurant-quality, at-home frozen drinks. We rapidly emerged as a leading player in the mature blender category, and we have maintained our leading position by continuously evolving our products: Ninja has been the #1-selling blender brand in the United States by market share for the last four years, according to NPD. We have expanded Ninja into a portfolio of food preparation and cooking appliances (electric and non-electric). Today, we believe we are becoming the brand of choice for consumers: Ninja has been ranked the #1-selling brand in small kitchen appliances in the United States for the last three years, according to NPD. Ninja empowers consumers to achieve more than they thought possible and has transformed how consumers cook and utilize their kitchens.
Our Shark brand, which we believe is synonymous with power and versatility, has transcended across small household appliance sub-categories, leveraging the credibility of its award-winning brand. Shark has been the #1-selling vacuum brand by market share in the United States for the last four years. In 2022, we were the #1-selling multi-function robotic vacuum brand in the United States with 25% market share, according to NPD. In 2021, we extended the Shark brand beyond floorcare with a series of air purifiers, and we have achieved over 6% share of the United States air purifier market for the twelve months ended December 31, 2022, according to NPD. In late 2021, we launched the Shark HyperAIR hair dryer, marking our first entry into the beauty space, which quickly became the #1-selling hair dryer in the United States priced between $100 and $300 for the three months ended December 31, 2021 and remained the #1-selling hair dryer in the same category for the twelve months ended December 31, 2022, according to NPD.
Passion for uncompromising product performance and quality, at greatest value
We are deeply passionate about delivering performance that goes above and beyond in the pursuit of extreme consumer delight. Through our constant global engineering and innovation mechanism, which has been in the making for over a decade, we have created a broad portfolio of top-performing products.
Our Shark and Ninja products are differentiated through industry-leading performance on key attributes that our consumers value. For example, our Shark vacuum offering’s patented technology enables the strongest suction of any upright household vacuum at the hose, and Shark’s hair product offerings include patented technology that intelligently combines high-velocity heated air and adjustable concentrator technology for ultra-fast drying with no heat damage. Our Ninja NeverStick cookware delivers a 10-year won’t stick, chip or flake guarantee, and our Ninja Foodi 10-in-1 XL Pro Air Fry Oven provides up to 10x the convection power of traditional full-size convection ovens. With extended performance, enhanced efficiency and compelling designs, we believe our appliances are among the best performers in our consumer’s household.
We focus relentlessly on product testing, recreating extreme use and misuse cases, simulating everyday life to ensure we deliver the most durable and high quality products. In 2022, we interacted with over 122,000
 
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consumers as part of our product development process to rigorously test and closely observe how consumers interact with our products before launch. As a result of our focus on testing and quality, we believe we have achieved low return rates, which we constantly strive to lower further.
Our consumers recognize our compelling value proposition and are advocates for our brands. We have received the #1 brand ranking for consumer satisfaction in the annual J.D. Power Highest User Satisfaction (upright vacuum category) on six occasions since 2014. Our average product rating is 4.5-stars across our brand websites in the United States and Europe, and over 74% of those reviews are 5-star rated. We continue to attract existing and new consumers to our brands, which enables us to maintain our leadership position in the marketplace.
Perpetual disruptive innovation rooted in consumer insights, redefining the possible
We have a dynamic, in-house global product design team across the United States, the United Kingdom and China that collaborates seamlessly around the clock to integrate unique local market insights into the design and functionality of our products. Our team of over 700 cross-functional engineering and design associates is integrated across Shark and Ninja solutions, introducing disruptive technologies from within our portfolio to new market segments, in addition to accessing the latest technologies from across the globe. The embedded nature of our engineering and design teams powers our idea-generation machine. Our research and development (“R&D”) engine has been optimized over decades into the scalable innovation enterprise it is today, enabling rapid turnaround of ideas from sketch to global production across an ever-expanding portfolio.
We continuously work to understand what consumers need today and may desire tomorrow. We meet consumers in their homes, and in our simulated home environments, where our experts observe how they interact with their appliances, gleaning new consumer needs, even before our consumers identify them. This process has led us to:
Disrupt appliance categories with new technologies:
Our products often disrupt established incumbents, help drive growth in emerging categories and even pioneer new sub-categories. In 2021, we launched Ninja CREAMi, disrupting the $53 million home ice cream maker category in the United States with an offering that transforms frozen solid bases into ice cream, milkshakes and more, at the touch of a button. By the end of December 2022, our Ninja CREAMi offering had generated sales of $78 million, approximately doubling the category size. The Ninja CREAMi was the #1-selling ice cream maker in the United States for 2022, according to NPD.
Continuously optimize our existing offering:
We are passionate about driving incremental enhancements to our products in our quest for product perfection. Almost all of our original products, across 27 product sub-categories, are still in production today through continuous enhancements that make our products as relevant and innovative today as they were when introduced. For example, our original Shark Navigator vacuum, launched in 2009, featuring our No-Loss-of-Suction technology, and our Shark Lift-Away model, launched in 2010, for effortless cleaning on and above floors, are both still sold today, continuing to win awards and remain at the forefront of their respective sub-category. We have continued to expand our suite of industry-leading technologies, which are integrated across our vacuum offering, such as our DuoClean Brushroll (launched in 2017), our Self-Cleaning Brushroll (launched in 2018) and our Odor Neutralizer Technology (launched in 2022).
Innovate across price bands and introduce new ones:
We aim to offer the best experience per hard-earned dollar that our consumers can spend. Our product offering provides optionality for consumers looking at entry-level price points to increase spend for enhanced functionality and performance. Those consumers who seek products with premium positioning often realize they can receive similar, or even better, performance at much better value with SharkNinja. As a result, across our portfolio of products, we have innovated new price bands drawing consumers to the Shark and Ninja brands. For example, following Shark’s launch into hair dryers in the United States in the final quarter of 2021, the over $100 price segment of hair styling tools saw category growth of $132 million for the
 
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twelve months ended December 31, 2022, taking 7% of share from the under $100 segment, according to NPD. In the same period, Shark added the most dollar growth to the hair styling tools category, delivering growth of $66 million (1.5 times the growth of the next top growing brand in the same category), according to NPD.
Our global marketing engine captivates consumers and creates demand
Our global marketing organization deploys marketing strategies that capture the hearts and minds of consumers worldwide. Our always-on omni-channel marketing strategy is underpinned by our in-house team of marketing and data insights experts and our production studio in Irvine, California. Our experts help educate consumers, build excitement and engage our communities. We do not wait for demand; we create it, driving traffic to online and brick-and-mortar retail.
We have mastered the art of storytelling over decades, tailoring our approach to appeal to the right audience through the right media format at the right time. Every year since 2009 we have run infomercials for our new and enhanced solutions-focused technologies for the Shark branded vacuum offering with clear storytelling centered around the consumer pain points we address. In our new category launches, we adapt our approach to target consumers across the most relevant media formats. For instance, our new short-form social media SharkBeauty campaign on TikTok rapidly raised awareness of our latest Beauty product, the Shark FlexStyle, achieving over 250 million views since launch on August 24, 2022. We deploy a cohesive marketing strategy across television, streaming services, social media, influencers, PR and online/in-store marketing to ensure we reach consumers wherever they are in their purchase journey, provide relevant information and drive conversion.
We have built incredibly engaged communities with the Ninja brand, as well. As of December 31, 2022, we have expanded our followership to over 1.9 million across Facebook, Instagram, TikTok, YouTube and Pinterest, representing over 120% growth relative to 2020 levels, and our “Likes” have increased by over 2,000% over the same time period. Many of our consumers share their Ninja product journey on social media, adding to our marketing content of recipes and “how-to” videos, with user-generated content. We are purposeful in our sub-branding to tap into key consumer trends. In 2018, we introduced our ‘Foodi’ sub-branded line to engage with our consumers who identify with “food culture” and draw excitement around our new product offerings, ultimately building new communities.
Omni-channel distribution strategy reaching consumers where they choose to shop—in-store and online
We focus on being everywhere our consumer shops. From mass retail to department stores to specialty retail, online through our own websites, leading e-commerce platforms and marketplaces, as well as through home shopping networks. We prioritize our SharkNinja Available Everywhere strategy, converting consumer demand across channels, domestically and internationally. Our Shark and Ninja branded websites help deepen consumer engagement and aid consumer education on product capabilities across our portfolio of offerings, while also providing us the ability to harness data insights.
We never practice channel or retailer exclusivity. Through retailer-specific strategies, we maintain and deepen relationships with our diverse base of leading U.S. retailers, including Walmart, Target, Costco, Best Buy, Kohls, Sam’s Club and Macy’s and key international retailers including Canadian Tire, Argos, Curry’s, MSH and Amazon, among others. We leverage our proven track record of launching category-leading products and our ability to execute through peak seasons to build retailer trust. As a result, we enjoy leading market share across numerous sub-categories, and we have seen rapid year-over-year increases in physical points of distribution (defined as the number of products placed at a specific store location, multiplied by the number of retail locations). For the twelve months ended December 31, 2022, we added over 113,000 new total points of distribution across North America and Europe, reflecting growth of 22% relative to the same period in the prior year, as we continue to focus on expanding our share of shelf with our retail partners to enable our future growth. The strength of our relationships allows us to achieve wide distribution and retail penetration for our new product launches, often driving immediate sales volume and further enhancing our retailer relationships.
Agile, scalable and competitive supply chain to support future growth and leading value proposition
Our agile, scalable and competitive supply chain is designed to support our growth and enables continuous product innovation. We leverage a dedicated team of employees co-located in regions with our
 
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largest suppliers to manage relationships with our diverse supplier base. Approximately 50% of our volume is produced by suppliers with which we have worked for over a decade. We have cultivated a robust supplier base built on longstanding relationships that share in our vision to deliver high-quality products and fast-paced development. We have continuously expanded our supplier base while also expanding into new geographies including Vietnam, Thailand and Hong Kong with our existing suppliers to ensure we are multi-sourced across our high-volume SKUs and maintain consistency of our product supply. We strive to ensure our supply chain remains highly competitive with competitive bidding processes to secure the most favorable pricing, which allows us to offer the best value to our consumers for new and legacy products.
Our supply chain management system provides us with enhanced visibility and controls. We collect and review performance data from the manufacturing facilities of our suppliers, and we work proactively with our suppliers to optimize product costs and increase overall operational efficiency. Our agile and scalable manufacturing and supply chain exceeds industry benchmarks for cost, quality and performance, and enables us to move with tremendous speed and accuracy to optimize our products.
Highly experienced management team with a consumer-centric mindset
We have assembled a world-class executive team that harnesses decades of strategic and operating experience at SharkNinja and across leading global consumer brands, combining a deep understanding of our culture with industry-leading perspectives. Our management team has a proven track record of building brands, leading market innovation, expanding distribution, driving best-in-class operations and delivering consistently strong financial results.
Our team is led by our CEO and second-generation founder, Mark Barrocas, who has led SharkNinja since 2008 and oversaw our transformation from an early-stage pioneer in small household appliances with less than $250 million in net sales to a leading global product design company with over $3.7 billion in net sales for the fiscal year ended December 31, 2022. Through his executive leadership and strategic vision, Mr. Barrocas is the driving force behind SharkNinja’s innovative and award-winning culture, establishing and activating success drivers that empower our highly skilled workforce to consistently deliver exceptional results. In recognition of our efforts to build a valued workplace, we have received numerous accolades, including Built In’s “2022 Best Places to Work: Boston” and “2022 Best Places to Work: 100 Best Large Companies.”
We win because when others say “it’s good enough,” we keep going; our deep bench of passionate and talented employees want to do everything possible to make our product offerings the best that they can possibly be. Our years of learning, constantly evolving and optimizing how best to deliver something great, fosters an environment across our business that embraces change and adaptability. Fail fast, learn, pivot, move on; we constantly challenge the status quo and always assess whether we can do it better and faster.
Compelling financial profile with consistent organic growth, attractive margins and strong cash flow generation
We have delivered strong consistent historical organic growth, increasing our net sales at a CAGR of 29% over the last three years and at a CAGR of 20% from March 2008 through 2022. Our organic growth has been driven by our continuous innovation expanding our consumer reach and distribution domestically and internationally. Our business maintains an industry-leading margin profile driven by our scale, our best-in-class supply chain and our continuous operational enhancements.
Our robust organic growth, strong margin and efficient capital intensity all contribute to our consistently strong free cash flow. Our strong free cash flow profile allows for significant capital allocation flexibility, enabling long-term shareholder value creation through multiple operating and financial strategies.
Our Growth Strategies
Our highly diversified business is powered by trusted brands, which enables us to drive sustainable long-term global growth. We continuously broaden our geographic footprint and scale into new product categories and markets that reach more consumers in the constant pursuit of our mission to positively impact people’s lives every day in every home in our Global Markets. Our goal is to expand and strengthen
 
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relationships with our existing consumers and cultivate relationships with new consumers to drive our continued growth and profitability.
We believe we are well-positioned for continued growth driven by the following strategies:
1.   Grow Share in Existing Categories
Innovation by using consumer insights to identify and develop solutions enables us to maintain and continuously grow share in our existing product categories
We build products to delight discerning, educated global consumers who only trust brands that have proven their worth. We aim to offer our consumers the technologies of tomorrow, today. Our global consumer insights and product development approach enable us to deliver innovative solutions for pressing consumer problems that others either do not see or are unable to solve. Combining our speed of innovation and engineering expertise with our ability to translate consumer insights into tangible outputs helps us gain a disproportionate share of the market, which propels and sustains our growth and profitability.
Our model of innovation and optimization enables us to consistently launch new technologically-advanced products in order to satisfy our consumers’ evolving needs and preferences. Once we have entered a category, we consistently launch new products with additional high-quality features and functionality while we simultaneously identify ways to optimize the cost of the existing products that we are selling. This approach allows us to reach additional price points, create a diversified lineup of products and expand our presence on retailers’ shelves.
We have a longstanding history of growing market share at a rapid pace. In Cordless Stick vacuums, one of our major sub-categories today, Shark has increased market share from 10% for the twelve months ended January 4, 2020 to 25% for the twelve months ended December 31, 2022, capturing 56% share of the category growth over that time period. Further, Ninja has captured 26% market share and 33% market share in Traditional Blending for the twelve months ended January 4, 2020 and the twelve months ended December 31, 2022, respectively, capturing 68% share of the category growth over that time period. We have consistently increased our market share in existing categories both in the United States and internationally.
Leveraging our always-on media marketing drives awareness and educates consumers on product technologies and innovative solutions across both new and existing categories
Our global marketing organization is designed to deploy 360-degree marketing strategies that capture the hearts and minds of consumers worldwide. By leveraging solution-based storytelling across omni-channel media, we educate and create awareness of our technology solutions and new products, ultimately driving high volumes of traffic and interest across all channels. When a consumer arrives at the shelf, in store or online, we want them to find SharkNinja products across a wide range of price points offering various solutions with clear benefit-oriented messaging. We believe in communicating for impact because consumer-relevant storytelling has the ability to make products go viral, enabling us to reach more consumers and drive our continued growth.
2.   Expand Our Brand in New Categories
We believe SharkNinja is uniquely equipped to disrupt massive and fragmented markets through our proprietary consumer insights and innovative product development approach. We have a proven track record of launching game-changing innovations and rapidly capturing market share across sub-categories. We are not limited by our current categories, because our cross-functional design and engineering capabilities allow us to enter adjacent and altogether new categories. We intend to continue to enter new categories around the home by:
Leveraging our proprietary innovation process to identify new opportunities
Our proprietary innovation process enables us to proactively identify and develop consumer solutions. We incorporate constant and detailed consumer feedback in our dynamic product development process, allowing us to iterate on and improve our products throughout development and identify new adjacent
 
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opportunities. We scour ratings and reviews using proprietary software to find and understand opportunities to improve the consumer experience. This always-on dialogue with the consumer leads to our continuous identification of unsolved consumer pain points in multiple new categories.
Adapting technologies and engineering new solutions to solve consumer problems in new areas
Our global, cross-functional product development and engineering teams are constantly improving our consumer solutions. Leveraging these teams’ expertise, we solve consumer problems that we have uncovered, adapt our technologies to new uses or solve new problems from scratch. For instance:
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We launched our Shark Cordless vacuums in 2014. Leveraging our No-Loss-of-Suction technology, we delivered a game-changing product that housed the cleaning performance of a corded vacuum in a lightweight cordless format. In addition to our No-Loss-of-Suction technology, our cordless vacuums boast impressive runtimes and Self-Cleaning Brushroll technology. In cordless sticks, we have captured 56% share of the category growth between the twelve months ended January 4, 2020 and the twelve months ended December 31, 2022, according to NPD.
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Ninja’s 2018 launch of Foodi not only showcased our ability to rapidly scale novel concepts, but also launched an entire category. Foodi was the first in the market to combine two popular cooking techniques, pressure cooking and air frying, into one multifunctional cooker, achieving food texture that is tender inside and crispy outside. Foodi has over 27% market share in multi-cookers in the United States as of December 31, 2022 and 60% market share in Electrical Cooking Pots in Great Britain as of December 31, 2022, according to NPD and GfK, respectively. The Foodi brand then expanded to Toaster Ovens, Electric Grills and Air Fryers capturing 23%, 43% and 27% market share in each category, respectively, as of December 31, 2022, according to NPD.
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We introduced the Ninja CREAMi, our revolutionary ice cream maker, in 2021 and were able to rapidly expand the ice cream maker market while capturing 60% market share, according to NPD, all within less than two years of entering the category.
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When we launched Ninja NeverStick Premium Cookware, we entered a new category with superior performance relative to the traditional non-stick design that had existed with limited innovation for decades. In the Food Preparation category, as of December 31, 2022, we had gained approximately 5% market share of the United States’ $2.5 billion cookware market according to NPD. We captured that market share within two years of entering the market and we believe we are just getting started.
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The success of our Foodi indoor heated cooking line has enabled us to enter outdoor cooking in 2022. Our innovative Ninja Woodfire outdoor grill relies on proprietary technology to cook low and slow or hot and fast, while adding massive woodfired flavor, with only a small amount of natural wood pellets, and also operates as an air-fryer.
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Expanding the product assortment and retailer placements of our new categories
Within the new categories we enter, we continuously expand our product assortment, further disrupting these markets and growing retailer placements of our new products. For example:
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We entered the Beauty category with the 2021 launch of Shark HyperAIR. Leveraging our air-movement technologies and broader engineering and design capabilities, we created an innovative hair drying and styling system within the $100-$300 price point. We have since expanded our product offering in the category through the launch of Shark FlexStyle, an innovative hair styler that enables consumers to dry while they style with no heat damage. This product has garnered significant consumer and retailer demand, further fueling our momentum in the Beauty category and earning us disproportionate share of shelf across retailers.
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In the Home Environment category, we launched our first generation of Shark air purifiers in 2021 with anti-allergen, odor lock and smart sensing monitor technology. In 2022, we launched our second generation of air purifiers, which feature HEPA filtration and a smaller, more versatile design. We have continued to expand our product assortment in this category with our recent launch of our 3-in-1 air purifier, which offers heating and cooling functionality in addition to our previous air purification technologies.
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In the multi floorcare sub-category, we wanted to continue our path of innovation by combining two historically separate products into one. We created the Shark HydroVac, a 3-in-1 vacuum, mop and self-cleaning system. The newest addition to our multi-floorcare lineup vacuums, mops and cleans itself at the same time as it deep cleans hard floors and area rugs.
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We consistently launch into new categories to bring original consumer-centric innovations to market. Year after year, SharkNinja has accelerated its pace of growth by entering and capturing share in over 27 sub-categories, swiftly disrupting and gaining leading market share in many of them. In the past three years alone, we have entered and disrupted the following product sub-categories: Countertop Ovens, Indoor Grills, Cookware, Ice Cream Makers, Cutlery, Bakeware, Home Environment, Hair Dryers, Wet/Dry Floorcare and Outdoor Grilling. These new product sub-categories not only increase our household penetration but also expand use occasions, the number of products per home and our brand presence across households.
3.   Globalize Our Brand
We will operate in 26 markets upon the completion of the separation and distribution and our international expansion remains a key area of strategic focus. In 2014, we transformed our United Kingdom model from a distributor model to a direct SharkNinja operation and unleashed a new phase of category expansion and market share gains. Since shifting to a direct SharkNinja operation, we have scaled the United Kingdom business to sales of over $490 million in 2022. With the success of our direct model in the United Kingdom, SharkNinja has captured significant share across all major categories in which we operate, and in 2020, we began leveraging our success in the United Kingdom to drive further expansion across Europe, particularly in Germany and France. We have been able to consistently leverage this model to successfully enter and meaningfully grow in new markets.
Our international presence enables us to develop local consumer insights to create new consumer-driven innovations that we are able to offer globally. We are confident that globalizing our brand will drive synergistic growth.
4.   Drive Operating Margins and Efficiencies
At SharkNinja, we are rarely satisfied. That tenacious spirit extends beyond producing some of the world’s most innovative and technologically advanced household appliances, to our production processes and the way we operate. We have built an agile and quality-oriented supply chain with ample capacity to support future growth. We intend to grow our margins by enhancing our product mix through innovation and by pursuing additional cost-saving opportunities. We achieved a gross margin of over 45% for the year ended December 31, 2020 and we are highly focused on returning to approximately that margin level over the longer term; we view our gross margin as a competitive advantage providing us with significant flexibility over how much we invest in our R&D, selling and marketing and other growth-oriented investments.
Our Market Opportunity
We consider all households to be potential consumers, from students in their college dormitories to single adults and large families in starter or high-end homes. Our offering allows consumers to progress from lower price points to more premium offerings, and expand from one SharkNinja product to many. Further, we believe in the recession-resilient nature of our offerings, as we believe consumers may view expenditure on many of our products as potential cost-saving investments.
Our Addressable Market
We compete in a broad range of product sub-categories, which we continue to expand. Our Shark and Ninja brands primarily compete in the massive and growing small household appliance market. We consider our market opportunity in terms of a Total Addressable Market (“TAM”), which we believe is the market we can reach over the long-term and is comprised of existing product categories in existing markets and potential new product categories and potential new markets. We consider our TAM to be represented by the small appliance market, as defined by Euromonitor, in the United States and international markets. This TAM is $112 billion and grew at 7.2% CAGR from 2017 through 2022 and is expected to grow at an 8.4%
 
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CAGR from 2022 through 2027. Our 2022 net sales of $3.7 billion represented 3.3% penetration of our TAM, calculated as our net sales divided by total TAM.
We define the categories and markets which we currently serve as our Serviceable Addressable Market (“SAM”), which is $39 billion. This figure represents the aggregate retail value RSP in U.S. Dollars for all categories and all geographies in which SharkNinja currently has retail value RSP data available based on Euromonitor. We expect to continue to grow our SAM over time as we expand beyond our current markets into new adjacent categories and increase our number of products per household.
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Source: Euromonitor International Limited, Consumer Appliances 2023 edition. Market size and growth estimates based on Euromonitor retail value RSP in USD$ at current prices and fixed 2022 exchange rates.
Consumer Trends in Our Favor
Consumer aspirations for higher quality lifestyles; more time for leisure and less for chores
The rise in dual-income households has left consumers with less time for household tasks and increased disposable income to pay more for quality, time- and energy-saving devices. A 2022 study by Happy Money found that, across various income levels, those who made time-saving purchases, which reduce time spent on cooking, cleaning and household maintenance tasks, reported higher levels of happiness compared to those who did not. We believe SharkNinja products allow consumers to navigate daily tasks more efficiently without compromising on quality.
Emergence of millennials as the prominent consumer force
We believe our products have broad consumer appeal, especially among consumers seeking high quality products with advanced technological capabilities. The Millennial generation, in particular, has an affinity for advanced technological capabilities as the first generation of digital natives. Millennials currently comprise the largest living generation in the United States and are in their peak home-buying and consumption years. According to a 2022 National Association of Realtors study, Millennials currently comprise 43% of homebuyers, which we expect to be a tailwind for the small household appliance categories.
Increased importance of the home environment
A 2022 study by AT&T predicts the hybrid work model will grow to 81% of the American workforce in 2024. We believe that as consumers continue to spend more time at home and seek to elevate their home environment the demand for our products will increase.
 
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Increased availability and influence of product ratings and reviews
Product reviews and ratings have become critical measures of performance for consumer goods companies. According to a 2021 PowerReviews survey, more than 99.9% of U.S. consumers read reviews when shopping online and 57% read reviews when shopping in brick-and-mortar stores to assess potential purchases. The survey found that ratings and reviews have become the most important factor influencing purchase decisions for the first time, ranking above price, free shipping, brand and recommendations from family and friends. We believe SharkNinja is well-positioned to take advantage of this trend, with 74% of our reviews across our own websites rated 5-star.
Summary Risk Factors
Our business is subject to a number of risks and uncertainties, as more fully described under “Risk Factors” in this prospectus. These risks could materially and adversely impact our business, financial condition and results of operations, which could cause the trading price of our ordinary shares to decline. Some of these risks include:
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Our business depends on maintaining and strengthening our brands to generate and maintain ongoing demand for our products, and a significant reduction in such demand, or misuse by licensees of our brands, could harm our business, financial condition and results of operations.
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If we are unable to commercialize a continuing stream of new products and line extensions that create demand, our ability to compete in the marketplace may be materially and adversely impacted.
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We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.
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Our net sales and profits depend on the level of consumer spending on our products, which is sensitive to general economic conditions and other factors; during a downturn in the economy, consumer purchases of discretionary items may be adversely affected, which could materially harm our business, financial condition and results of operations.
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Our growth depends, in part, on our continued penetration and expansion into new markets, and we may not be successful in doing so.
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Our business could be adversely affected if we fail to maintain product safety, quality and performance at an acceptable cost.
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We participate in highly competitive markets, and we may not be able to compete successfully, causing us to lose market share and sales.
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We rely principally on suppliers, and problems with, or loss of, our suppliers or an inability to obtain raw materials could harm our business, financial condition and results of operations.
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We have significant international operations and are exposed to risks associated with doing business globally.
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Our results of operations may be adversely affected by inflation, changes in the cost or availability of raw materials, energy, transportation and other necessary supplies and services.
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We depend on highly skilled personnel, and if we are unable to hire, integrate and retain our personnel, we may not be able to address competitive challenges.
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Claims by third parties that we are infringing their intellectual property and other litigation could adversely affect our business.
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We are subject to data security and privacy risks that could negatively affect our reputation, business, financial condition and results of operations.
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From time to time, we may be subject to legal proceedings, regulatory disputes and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention and materially harm our business, financial condition and results of operations.
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Our business involves the potential for product delays, product recalls, product liability and other claims against it, which could affect our business, financial condition and results of operations.
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We have no operating history as a stand-alone public company, and our historical financial data is not necessarily representative of the results we would have achieved as a stand-alone public company and may not be a reliable indicator of our future results.
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We may be unable to achieve some or all of the anticipated benefits of the separation, and the separation may adversely affect our business, financial condition and results of operations.
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We or JS Global may fail to perform under various transaction agreements that will be executed as part of the separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.
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We have identified a material weakness in our internal control over financial reporting. As a public company, we will be obligated to maintain internal control over financial reporting and to evaluate and determine its effectiveness. Identification of material weaknesses in the future or any failure of our internal systems, controls and procedures could have an adverse effect on our business, financial condition, results of operations and investor confidence.
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Immediately following the completion of the separation and distribution, Mr. Wang will be a substantial shareholder of us and will have influence over matters outside the ordinary course of our business requiring a shareholder vote, which may limit your ability to influence our actions.
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Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
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The Separation and Distribution
Background
JS Global has determined to separate SharkNinja from JS Global.
As part of the separation, JS Global intends to effect a reorganization whereby: (i) JS Global forms a wholly owned subsidiary, SharkNinja, Inc., (ii) we and JS Global effect certain transfers and transactions such that, among other things, (a) JS Global directly owns all outstanding shares of SharkNinja SPV and (b) SharkNinja Co., Ltd. (“SNJP”) and our Asia Pacific Region and Greater China (“APAC”) distribution channels are transferred to JS Global and (iii) JS Global contributes all outstanding shares of SharkNinja SPV to SharkNinja, Inc. in exchange for shares of SharkNinja, Inc. (following which, we will be governed by the memorandum and articles of association of SharkNinja, Inc. (the “New Memorandum and Articles of Association”)). Therefore, prior to the completion of the separation and distribution, we will be a wholly owned subsidiary of JS Global and all of our outstanding ordinary shares will be owned by JS Global.
As part of the separation and distribution, we intend to enter into a separation and distribution agreement with JS Global (the “Separation and Distribution Agreement”). We also intend to enter into various other agreements to provide a framework for our relationship with JS Global after the separation, including the Transition Services Agreement, the Employee Matters Agreement, the Brand License Agreement, the Sourcing Services Agreement (JS Global), the Sourcing Services Agreement (Joyoung) and the Product Development Agreement. These agreements will govern certain relationships between JS Global and us following the separation and will provide for the allocation between JS Global and us of the assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the separation that comprise the SharkNinja business (the “SharkNinja Business”) and the JS Global business, respectively. See “Risk Factors—Risks Related to the Separation and Distribution and Being a Public Company,” “The Separation and Distribution Transactions—The Separation” and “Certain Relationships and Related Party Transactions.”
JS Global also intends to make a distribution to the JS Global Shareholders of all of its equity interest in us in the form of a dividend of our ordinary shares.
 
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Reasons for the Separation and Distribution
Following JS Global’s assessment of the overall market positions of product offerings under the Shark, Ninja and Joyoung brands, JS Global recognized that continued success in each market requires geographic-specific considerations, including consumer habits, localized lifestyle differences, cultural differences and consumer and market preferences. As a result, the JS Global board of directors (the “JS Global Board”) believes that the best strategy to drive global business growth and expand its presence in localized markets at this time is to separate into its two primary delineated markets: (i) the APAC region and (ii) North America, Europe and other select international markets. JS Global intends to remain listed on the Stock Exchange of Hong Kong (with Joyoung remaining listed on the Shenzhen Stock Exchange) and focus on the APAC region, while SharkNinja, as a separate entity, intends to list on NYSE and focus on North America, Europe and other select international markets.
The JS Global Board believes that the separation and distribution at this time is commercially beneficial to JS Global and SharkNinja and in the interest of the JS Global Shareholders as a whole as it expects the following benefits:
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the separation would strengthen the operational management ability of both JS Global and SharkNinja, and their respective abilities to recruit and retain personnel;
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the separation and distribution would create two independent businesses, JS Global and SharkNinja, with enhanced geographic focus, each of which the JS Global Board believes is well positioned for continued growth and market share capture, driven by innovation and new product offerings in their respective areas;
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the separation and distribution would be conducive to improving the operation, financial transparency and corporate governance level of JS Global and SharkNinja, respectively, through which investors could form a better understanding of, and make investment decisions in, businesses with different focuses, thus achieving reasonable valuations, enhancing the interests of all shareholders of JS Global and SharkNinja; and
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the separation and distribution would enable shareholders and investors to assess the investment propositions of each business of JS Global and SharkNinja individually and freely select whether to continue to participate in both businesses or adjust their investment exposure, so as to unlock and enhance the market value of both JS Global and SharkNinja.
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Following the completion of the separation and distribution, JS Global will continue to engage in the design, production, marketing and distribution of various product offerings under the Shark and Ninja brands across the APAC region. While such product offerings will be under the Shark and Ninja brands, the products designed for the APAC markets will generally be distinct and designed to cater to local consumer preferences. Alongside this operation, JS Global will continue its existing Joyoung business that it has been operating for almost 30 years. Joyoung primarily engages in product research, design, marketing, export and distribution of products under the Joyoung brand, including soybean milk makers, juicers, rice cookers and air fryers. Joyoung products are primarily sold in Mainland China, and Joyoung has a leading position in Mainland China in various small household appliance products. JS Global and Joyoung have historically manufactured, and procured their suppliers to manufacture, certain Shark and Ninja branded products, including cooking appliances, food preparation appliances and floorcare products, which we then distribute in the North American and European markets. Following the completion of the separation and distribution, we will pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis as we establish independent sourcing capabilities, and Joyoung will manufacture, or procure its suppliers to manufacture, certain products on our behalf on which we will pay Joyoung an arm’s-length markup.
While, as of the date of this prospectus, JS Global intends to effect the separation and distribution, JS Global has no obligation to pursue or consummate the separation and distribution by any specified date or at all. If pursued, the separation and distribution are subject to various conditions, including receipt of any necessary regulatory or other approvals. If the conditions to the separation and distribution are not satisfied, JS Global may decide to waive one or more of these conditions and consummate the separation and distribution.
 
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For additional information on the separation and distribution, see “The Separation and Distribution Transactions” and the JS Global Circular, a copy of which is filed as Exhibit 99.6 to this registration statement.
Implications of Being a Foreign Private Issuer
We qualify as a “foreign private issuer” for purposes of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a foreign private issuer, we may take advantage of certain provisions under the rules that allow us to follow Cayman Islands law (“Cayman Law”), including the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”) for certain corporate governance matters. As long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:
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the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;
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the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and
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the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.
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Foreign private issuers are also exempt from certain more stringent executive compensation disclosure rules. Thus, if we remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of public companies that are not a foreign private issuer.
For risks related to our status as a foreign private issuer, see “Risk Factors—Risks Related to the Separation and Distribution and Being a Public Company—As a foreign private issuer, we will be subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to our shareholders” and “Risk Factors—Risks Related to the Separation and Distribution and Being a Public Company—We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and may cause us to incur significant legal, accounting and other expenses.”
Corporate Information
We were incorporated as an exempted company in the Cayman Islands on June 27, 2017. Our principal executive offices are located at 89 A Street, Needham, MA 02494. Our telephone number is (617) 243-0235 and our website address is www.sharkninja.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
JS Global, an exempted company incorporated in the Cayman Islands, will be our only shareholder immediately prior to the completion of the separation and distribution. For more information on our relationship with JS Global, see “The Separation and Distribution Transactions,” “Certain Relationships and Related Party Transactions” and “Principal Shareholders.”
Upon the completion of the separation and distribution, Mr. Wang, the Chairperson of our Board, will hold or have the ability to control approximately    % of the voting power of our outstanding share capital. As of May 4, 2023, Mr. Wang holds or controls 56.7% of JS Global’s outstanding share capital through (i) JS Holding Limited Partnership (“JS Holding”), which owns 45.9% of JS Global’s outstanding share capital, (ii) Sol Omnibus SPC (“Sol Omnibus”), which owns 9.5% of JS Global’s outstanding share capital, and (iii) direct ownership of 1.3% of JS Global’s outstanding share capital. The general partner of JS Holding is ultimately controlled by Mr. Wang. Mr. Wang also ultimately controls Sol Omnibus.
As a result, upon the completion of the separation and distribution, we will be a “controlled company” as defined under NYSE corporate governance rules. As long as Mr. Wang continues to hold or has the ability to control a majority of the voting power of our outstanding shares, he will generally be able to
 
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control significant corporate activities, including the appointment of our directors and approval of significant corporate transactions. Mr. Wang’s controlling interest may discourage or prevent a change in control of our company that other holders of our ordinary shares may favor. We have currently elected not to avail ourselves of any “controlled company” exemptions. See “Risk Factors—Risks Related to Ownership of Our Ordinary Shares—Immediately following the completion of the separation and distribution, Mr. Wang will be a substantial shareholder of us and will have influence over matters outside the ordinary course of our business requiring a shareholder vote, which may limit your ability to influence our actions” and “Risk Factors—Risks Related to Ownership of Our Ordinary Shares—We will be a “controlled company” within the meaning of the rules of NYSE and, as a result, will qualify for exemptions from certain corporate governance requirements. Although we do not intend to rely on these exemptions at this time, we may do so in the future and you may not have the same protections afforded to shareholders of companies that are subject to such requirements.”
Immediately Prior to the Distribution(1)
[MISSING IMAGE: fc_immediatelyprior-4c.jpg]
​
(1)
This simplified organizational chart does not reflect certain intermediate holding companies, subsidiaries or special purpose vehicles that are the direct shareholders of some of the depicted entities.
​
(2)
Immediately prior to the separation and distribution, Mr. Wang holds or controls    % of JS Global’s outstanding share capital through (i) JS Holding, which owns    % of JS Global’s outstanding share capital, (ii) Sol Omnibus, which owns    % of JS Global’s outstanding share capital, and (iii) direct ownership of    % of JS Global’s outstanding share capital.
​
(3)
SharkNinja Operations refers to SharkNinja SPV and its consolidated subsidiaries, which are the entities conducting our operations.
​
​
 
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Immediately After the Distribution(1)
[MISSING IMAGE: fc_immediatelyafter-4c.jpg]
​
(1)
This simplified organizational chart does not reflect certain intermediate holding companies, subsidiaries or special purpose vehicles that are the direct shareholders of some of the depicted entities.
​
(2)
As the distribution will occur on a pro rata basis, immediately after the completion of the distribution, the percentage of our share capital that Mr. Wang owns or controls will be the same as the percentage of JS Global’s share capital that Mr. Wang owns or controls.
​
(3)
SharkNinja Operations refers to SharkNinja SPV and its consolidated subsidiaries, which are the entities conducting our operations.
​
​
 
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SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
The following tables summarize our consolidated financial and operating information. We have derived our summary consolidated statements of income information and consolidated statements of cash flows information for the years ended December 31, 2020, 2021 and 2022 from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of income information and consolidated statements of cash flows information for the three months ended March 31, 2022 and 2023 and the summary consolidated balance sheet information as of March 31, 2023 are derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. In our opinion, our unaudited condensed consolidated financial statements have been prepared on the same basis as our annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of our financial information set forth in those statements. Our historical results are not necessarily indicative of the results that may be expected in the future. Except as otherwise indicated, the following unaudited pro forma condensed consolidated financial and operating information presents SharkNinja’s summary consolidated statements of income information and balance sheet information after giving pro forma effect to the Transactions described in “Unaudited Pro Forma Condensed Consolidated Financial Information.” The unaudited pro forma condensed consolidated statement of income information for the year ended December 31, 2022 and for the three months ended March 31, 2023 gives pro forma effect to the Transactions described in “Unaudited Pro Forma Condensed Consolidated Financial Information” as if they had occurred on January 1, 2022. The unaudited pro forma condensed consolidated balance sheet information as of March 31, 2023 gives pro forma effect to the Transactions described in “Unaudited Pro Forma Condensed Consolidated Financial Information” as if they had occurred on March 31, 2023. The unaudited pro forma condensed consolidated financial and operating information set forth below is based upon available information and assumptions that we believe are reasonable. The unaudited pro forma information is illustrative and not intended to represent what our results of operations or financial position would have been had the transactions described in “Unaudited Pro Forma Condensed Consolidated Financial Information” occurred on the dates indicated or to project our results of operations or financial position for any future period. You should read the following financial information together with the information under “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Consolidated Financial Information” and our consolidated financial statements and related notes included elsewhere in this prospectus.
Consolidated Statements of Income Information
($ in thousands, except
share and per share data)
​ ​
Years Ended
December 31,
​ ​
Three Months Ended
March 31,
​ ​
Pro Forma
Year Ended
December 31,
​ ​
Pro Forma
Three
Months
Ended
March 31,
​
​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​ ​
2022
​ ​
2023
​
Net Sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ $ 809,626 ​ ​ ​ ​ $ 855,282 ​ ​ ​ ​ $       ​ ​ ​ ​ $       ​ ​
Cost of Sales
​ ​ ​ ​ 1,499,724 ​ ​ ​ ​ ​ 2,288,810 ​ ​ ​ ​ ​ 2,307,172 ​ ​ ​ ​ ​ 457,700 ​ ​ ​ ​ ​ 454,739 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Gross Profit
​ ​ ​ ​ 1,253,442 ​ ​ ​ ​ ​ 1,438,184 ​ ​ ​ ​ ​ 1,410,194 ​ ​ ​ ​ ​ 351,926 ​ ​ ​ ​ ​ 400,543 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and Development(1)
​ ​ ​ ​ 159,635 ​ ​ ​ ​ ​ 200,641 ​ ​ ​ ​ ​ 215,660 ​ ​ ​ ​ ​ 51,971 ​ ​ ​ ​ ​ 58,725 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sales and Marketing(1)
​ ​ ​ ​ 445,084 ​ ​ ​ ​ ​ 619,162 ​ ​ ​ ​ ​ 621,953 ​ ​ ​ ​ ​ 125,541 ​ ​ ​ ​ ​ 152,120 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
General and Administrative(1)
​ ​ ​ ​ 183,286 ​ ​ ​ ​ ​ 180,124 ​ ​ ​ ​ ​ 251,207 ​ ​ ​ ​ ​ 52,025 ​ ​ ​ ​ ​ 67,068 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Operating Expenses
​ ​ ​ ​ 788,005 ​ ​ ​ ​ ​ 999,927 ​ ​ ​ ​ ​ 1,088,820 ​ ​ ​ ​ ​ 229,537 ​ ​ ​ ​ ​ 277,913 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating Income
​ ​ ​ ​ 465,437 ​ ​ ​ ​ ​ 438,257 ​ ​ ​ ​ ​ 321,374 ​ ​ ​ ​ ​ 122,389 ​ ​ ​ ​ ​ 122,630 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest Expense, Net
​ ​ ​ ​ (40,279) ​ ​ ​ ​ ​ (16,287) ​ ​ ​ ​ ​ (27,021) ​ ​ ​ ​ ​ (4,004) ​ ​ ​ ​ ​ (8,489) ​ ​ ​ ​ ​ ​ ​ ​ ​
Other Income (Expense),
Net
​ ​ ​ ​ (5,692) ​ ​ ​ ​ ​ (7,644) ​ ​ ​ ​ ​ 7,631 ​ ​ ​ ​ ​ (3,909) ​ ​ ​ ​ ​ (2,780) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
 
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($ in thousands, except
share and per share data)
​ ​
Years Ended
December 31,
​ ​
Three Months Ended
March 31,
​ ​
Pro Forma
Year Ended
December 31,
​ ​
Pro Forma
Three
Months
Ended
March 31,
​
​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​ ​
2022
​ ​
2023
​
Income Before Income
Taxes
​ ​ ​ ​ 419,466 ​ ​ ​ ​ ​ 414,326 ​ ​ ​ ​ ​ 301,984 ​ ​ ​ ​ ​ 114,476 ​ ​ ​ ​ ​ 111,361 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Provision for Income
Taxes
​ ​ ​ ​ 92,268 ​ ​ ​ ​ ​ 83,213 ​ ​ ​ ​ ​ 69,630 ​ ​ ​ ​ ​ 25,565 ​ ​ ​ ​ ​ 24,265 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net Income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​ ​ ​ $ ​ ​ ​ ​ $ ​ ​
Net Income Per Share, basic and diluted ​ ​ ​ $ 6,544 ​ ​ ​ ​ $ 6,622 ​ ​ ​ ​ $ 4,647 ​ ​ ​ ​ $ 1,778 ​ ​ ​ ​ $ 1,742 ​ ​ ​ ​ $ ​ ​ ​ ​ $ ​ ​
Weighted-Average Number of
Shares Used in Computing
Net Income Per Share, basic
and diluted
​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pro Forma Net Income Per Share, basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pro Forma Weighted-Average
Number of Shares Used in
Computing Net Income Per
Share, basic and diluted
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Consolidated Statements of Cash Flows Information
($ in thousands, except
share and per share data)
​ ​
Years Ended
December 31,
​ ​
Three Months Ended
March 31,
​ ​
Pro Forma
Year Ended
December 31,
​ ​
Pro Forma
Three
Months
Ended
March 31,
​
​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​ ​
2022
​ ​
2023
​
Net Cash Provided by (Used in) Operating Activities
​ ​ ​ $ 293,435 ​ ​ ​ ​ $ 229,147 ​ ​ ​ ​ $ 204,964 ​ ​ ​ ​ $ (101,130) ​ ​ ​ ​ $ 89,762 ​ ​ ​ ​ $ ​ ​ ​ ​ $ ​ ​
Net Cash Used in Investing Activities
​ ​ ​ ​ (81,434) ​ ​ ​ ​ ​ (66,366) ​ ​ ​ ​ ​ (52,384) ​ ​ ​ ​ ​ (11,134) ​ ​ ​ ​ ​ (7,799) ​ ​ ​ ​
Net Cash Provided by (Used in) Financing Activities
​ ​ ​ ​ (120,668) ​ ​ ​ ​ ​ (54,500) ​ ​ ​ ​ ​ (160,170) ​ ​ ​ ​ ​ 8,026 ​ ​ ​ ​ ​ (98,631) ​ ​ ​ ​
Consolidated Balance Sheet Information
​ ​ ​
As of March 31, 2023
​
($ in thousands)
​ ​
Actual
​ ​
Pro Forma
​
Cash and Cash Equivalents
​ ​ ​ $ 181,537 ​ ​ ​ ​ $       ​ ​
Total Assets
​ ​ ​ ​ 3,166,828 ​ ​ ​ ​ ​ ​ ​ ​
Total Liabilities
​ ​ ​ ​ 1,308,821 ​ ​ ​ ​ ​ ​ ​ ​
Total Shareholders’ Equity
​ ​ ​ ​ 1,858,007 ​ ​ ​ ​ ​ ​ ​ ​
​
(1)
Includes share-based compensation as follows:
​
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Research and Development
​ ​ ​ $ 1,713 ​ ​ ​ ​ $ 2,918 ​ ​ ​ ​ $ 1,741 ​ ​ ​ ​ $ 821 ​ ​ ​ ​ $ 230 ​ ​
Sales and Marketing
​ ​ ​ ​ 1,866 ​ ​ ​ ​ ​ 1,755 ​ ​ ​ ​ ​ 459 ​ ​ ​ ​ ​ 257 ​ ​ ​ ​ ​ 101 ​ ​
General and Administrative
​ ​ ​ ​ 6,455 ​ ​ ​ ​ ​ 9,251 ​ ​ ​ ​ ​ 3,309 ​ ​ ​ ​ ​ 1,492 ​ ​ ​ ​ ​ 517 ​ ​
Total Share-Based Compensation
​ ​ ​ $ 10,034 ​ ​ ​ ​ $ 13,924 ​ ​ ​ ​ $ 5,509 ​ ​ ​ ​ $ 2,570 ​ ​ ​ ​ $ 848 ​ ​
 
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Non-GAAP Financial Measures
We review the following non-GAAP financial measures to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. Increases or decreases in our non-GAAP financial measures may not correspond with increases or decreases in our net sales and our non-GAAP financial measures may be calculated in a manner different than similar non-GAAP financial measures, respectively, used by other companies.
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended March 31,
​
($ in thousands, except % and per share data)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Adjusted Net Sales(1)
​ ​ ​ $ 2,689,708 ​ ​ ​ ​ $ 3,625,299 ​ ​ ​ ​ $ 3,619,932 ​ ​ ​ ​ $ 789,546 ​ ​ ​ ​ $ 835,633 ​ ​
Adjusted Gross Profit(2)
​ ​ ​ $ 1,204,356 ​ ​ ​ ​ $ 1,476,062 ​ ​ ​ ​ $ 1,447,561 ​ ​ ​ ​ $ 359,210 ​ ​ ​ ​ $ 406,792 ​ ​
Adjusted Gross Margin(3)
​ ​
44.8%
​ ​
40.7%
​ ​
40.0%
​ ​
45.5%
​ ​
48.7%
​
Adjusted Net Income(4)
​ ​ ​ $ 349,490 ​ ​ ​ ​ $ 423,242 ​ ​ ​ ​ $ 330,365 ​ ​ ​ ​ $ 109,280 ​ ​ ​ ​ $ 118,999 ​ ​
Adjusted Net Income Per Diluted Share(5) ​ ​ ​ $ 6,990 ​ ​ ​ ​ $ 8,465 ​ ​ ​ ​ $ 6,607 ​ ​ ​ ​ $ 2,186 ​ ​ ​ ​ $ 2,380 ​ ​
EBITDA(6) ​ ​ ​ $ 537,825 ​ ​ ​ ​ $ 508,796 ​ ​ ​ ​ $ 415,713 ​ ​ ​ ​ $ 138,684 ​ ​ ​ ​ $ 142,604 ​ ​
Adjusted EBITDA(7)
​ ​ ​ $ 527,699 ​ ​ ​ ​ $ 603,129 ​ ​ ​ ​ $ 519,614 ​ ​ ​ ​ $ 159,235 ​ ​ ​ ​ $ 178,016 ​ ​
Adjusted EBITDA Margin(8)
​ ​
19.6%
​ ​
16.6%
​ ​
14.4%
​ ​
20.2%
​ ​
21.3%
​
​
(1)
We define Adjusted Net Sales as net sales as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including net sales from our Japanese subsidiary, SNJP, and our APAC distribution channels, both of which will be transferred to JS Global concurrently with the separation (the “Divestitures”).
​
(2)
We define Adjusted Gross Profit as gross profit as adjusted to exclude (i) non-recurring tariff refunds received and recognized in 2020 related to tariffs incurred in 2019 (the “Tariff Refunds”) and (ii) certain items that we do not consider indicative of our ongoing operating performance following the separation, including the net sales and cost of sales from our Divestitures and the cost of sales from inventory markups that will be eliminated as a result of transitioning certain product procurement functions from a subsidiary of JS Global to SharkNinja concurrently with the separation (the “Product Procurement Adjustment”).
​
(3)
We define Adjusted Gross Margin as Adjusted Gross Profit divided by Adjusted Net Sales.
​
(4)
We define Adjusted Net Income as net income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) foreign currency gains and losses, (iv) amortization of certain deferred financing fees, (v) amortization of certain acquired intangible assets, (vi) the Tariff Refunds, (vii) certain separation and distribution costs, (viii) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment, (ix) a one-time discretionary bonus and (x) the tax impact of the adjusted items.
​
(5)
We define Adjusted Net Income Per Diluted Share as Adjusted Net Income divided by the diluted weighted average number of ordinary shares.
​
(6)
We define EBITDA as net income excluding (i) interest expense, (ii) income tax expense and (iii) depreciation and amortization.
​
(7)
We define Adjusted EBITDA as EBITDA excluding (i) share-based compensation cost, (ii) the Tariff Refunds, (iii) certain litigation costs, (iv) foreign currency gains and losses, (v) certain separation and distribution costs, (vi) a one-time discretionary bonus and (vii) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment.
​
(8)
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Adjusted Net Sales.
​
For additional information about our non-GAAP financial measures, including reconciliations of the non-GAAP financial measures to the most directly comparable financial measures stated in accordance with GAAP, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—​Non-GAAP Financial Measures.”
 
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RISK FACTORS
You should consider carefully the following risks, together with the financial and other information contained in this prospectus, which we believe are the principal risks that we face. If any of the following risks or uncertainties actually occurs, our business, financial condition and results of operations could be materially and adversely affected. In that case, the market price of our ordinary shares could decline. The risks discussed below are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition and results of operations. We cannot assure you that any of the events discussed below will not occur.
Risks Related to Our Business, Operations and Industry
Our business depends on maintaining and strengthening our brands to generate and maintain ongoing demand for our products, and a significant reduction in such demand, or misuse by licensees of our brands, could harm our business, financial condition and results of operations.
The “Shark” and “Ninja” names and related brand images are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business into new categories and markets. Our success depends on the value and reputation of our brands, which, in turn, depends on factors such as the quality, design, performance, functionality and durability of our products, the image of our DTC sales channels and retailer floor spaces, our communication activities, including advertising, social media and public relations, and our management of the consumer experience, including direct interfaces through support services. Maintaining, promoting and positioning our brands is important to expanding our consumer base and will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high-quality consumer experiences. We intend to continue making substantial investments in these areas in order to maintain and enhance our brands, and such investments may not be successful.
Ineffective marketing, negative publicity, product diversion to unauthorized distribution channels, product or manufacturing defects, product recalls, counterfeit products, unfair labor practices, failure to protect the intellectual property rights in our brands and detrimental acts by third parties are potential threats to the strength of our brands, and those and other factors could rapidly and severely diminish consumer confidence in us, which may materially and adversely affect our business, financial condition or results of operations. Additionally, the growing use of social media increases the speed with which information and opinions can be shared and the speed with which a company’s reputation can be affected. If we fail to correct or mitigate misinformation or negative information, including information spread through social media or traditional media channels, about us, the products we offer, our consumer experience or any aspect of our brands, our business, financial condition and results of operations could be adversely impacted. Maintaining and enhancing the image of our brands in our current key markets, including North America, Europe and other select international markets, and in new markets where we currently may have limited brand recognition, is important to expanding our consumer base. If we are unable to maintain or enhance our brands in current or new markets, or if we fail to continue to successfully market and sell our products to our existing consumers or expand our consumer base, growth strategy, business, financial condition and results of operations could be harmed.
We also intend to license certain of our brands and other product-related intellectual property to JS Global and certain affiliates of JS Global for use in certain markets, as well as the right for JS Global and certain affiliates of JS Global to independently manufacture and distribute products under those brands in such markets, and such licenses and other grants of rights may create additional exposure for those brands to issues related to product safety, quality and sustainability, among other concerns, including risks to our intellectual property and our reputation. If JS Global or its affiliates fails to comply with our quality standards and other controls, or otherwise breach the terms of an agreement with us, such failure or breach could materially and adversely affect our brands, business, financial condition and results of operations. Any dispute with JS Global or its affiliates could be complex, expensive and time-consuming.
Additionally, independent third parties and consumers often review our products as well as those of our competitors. Perceptions of our product offerings in the marketplace may be significantly influenced by these reviews, which are disseminated via various media, including the internet. If reviews of our products
 
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or our brands are negative or less positive as compared to those of our competitors, our brands may be adversely affected and our business, financial condition and results of operations may be materially harmed.
If we are unable to commercialize a continuing stream of new products and line extensions that create demand, our ability to compete in the marketplace may be materially and adversely impacted.
Our strategy includes investment in new product development and a focus on continuous innovation to enhance our product offerings. Our long-term success in the competitive retail environment depends on our ability to develop and commercialize a continuing stream of innovative new products and line extensions that create consumer demand. Our ability to quickly innovate in order to adapt our products to meet changing consumer demands is essential, especially in light of e-commerce significantly reducing the barriers for even small competitors to quickly introduce new brands and products directly to consumers, which may increase competition in our industry and has the potential to divert demand for our products to competitors. New product development and commercialization efforts, including efforts to enter markets or product categories in which we have limited or no prior experience, have inherent risks. These risks include the costs involved, such as development and commercialization, product development or launch delays and the failure of new products and line extensions to achieve anticipated levels of market acceptance or growth in sales or operating income. We also face the risk that our competitors will introduce innovative new products that compete with our products and thereby divert demand for our products to such competitors’ products. In addition, sales generated by new products or line extensions could cause a decline in sales of our existing products. If new product development and commercialization efforts are not successful, our business, financial condition and results of operations could be adversely affected.
Past growth may not be indicative of future growth.
Historically, we have experienced sales growth mainly through organic market share gains, geographic expansion, technological innovation, new product offerings and increased consumer demand for our product lines, including as a result of the COVID-19 pandemic. Our various business strategies and initiatives, including our growth initiatives, are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In the future, we may not be able to:
•
acquire new consumers, retain existing consumers or grow or maintain our share of our current key markets, including North America, Europe and other select international markets;
​
•
penetrate new markets;
​
•
identify and develop new products that meet the demand of rapidly evolving consumer expectations;
​
•
generate sufficient cash flows to support expansion plans and general operating activities;
​
•
obtain financing for our growth initiatives, including acquisitions;
​
•
identify suitable acquisition candidates and successfully integrate acquired businesses;
​
•
maintain favorable supplier, retailer and distributor arrangements and relationships;
​
•
manage an effective pricing strategy to meet changing consumer demands or preferences;
​
•
maintain our intellectual property to promote and sustain our growth in existing and new categories;
​
•
maintain our omni-channel presence through our relationships with various online and retailers and distributors;
​
•
maintain consumer satisfaction and retention; and
​
•
identify and divest assets that do not continue to create value consistent with our strategic or financial objectives.
​
If we are not able to manage these potential difficulties successfully in order to continue to compete in our markets and grow our business, financial condition and results of operations could be adversely affected.
We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.
We have experienced rapid and consistent growth in our business operations and the scope and complexity of our business has increased substantially over the past several years. As a result, the number of
 
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our full-time employees increased from approximately 1,900 as of December 31, 2020, to approximately 2,800 as of December 31, 2022, and we have expanded our operations to include new supplier engagements. We have made, and expect to continue to make, significant investments in our research and development efforts and in our sales and marketing organizations, including with respect to future product offerings and accessories and to expand our operations and infrastructure both domestically and internationally. This growth has placed, and may continue to place, significant demands on our management, our personnel and our operational and financial infrastructure. For example, our consumers may increasingly rely on our support services to resolve any issues related to the use of our products and smart features. Providing a high-quality consumer experience is vital to our success in generating word-of-mouth and social media referrals to drive sales, maintain and expand our brand recognition and retain existing consumers. The importance of high-quality support services will increase as we continue to expand our business and introduce new and/or enhanced product offerings, especially if we face limited brand recognition in certain markets that leads to non-acceptance or delayed acceptance of our products by consumers. Our ability to manage our growth effectively and to integrate new employees, technologies and acquisitions into our existing business will require us to continue to expand our operational and financial infrastructure and to continue to retain, attract, train, motivate and manage employees. Continued growth could strain our ability to develop and improve our operational, financial and management controls, enhance our reporting systems and procedures, recruit, train and retain highly skilled personnel and maintain consumer satisfaction. Additionally, if we do not effectively manage the growth of our business and operations, the quality of our products could suffer, which could negatively affect our reputation, business, financial condition and results of operations, and our corporate culture may be harmed.
Our net sales and profits depend on the level of consumer spending on our products, which is sensitive to general economic conditions and other factors; during a downturn in the economy, consumer purchases of discretionary items may be adversely affected, which could materially harm our business, financial condition and results of operations.
Our products are discretionary items for consumers. Therefore, the success of our business depends significantly on economic factors and trends in consumer spending. There are a number of factors that influence consumer spending, including actual and perceived economic conditions, consumer confidence, inflation levels, disposable consumer income, consumer credit availability, unemployment and tax rates in the markets where we sell our products. Consumers also have discretion as to where to spend their disposable income and may choose to purchase other products if we do not continue to provide authentic, compelling and high-quality products at appropriate price points. As global economic conditions continue to be volatile and economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and consumer spending levels may be subject to declines. Any of these factors could harm discretionary consumer spending, resulting in a reduction in demand for our products, decreased prices and harm to our business, financial condition and results of operations. Moreover, consumer purchases of discretionary items, such as our products, tend to decline during recessionary periods when disposable income is lower or during other periods of economic instability or uncertainty, which may adversely affect our net sales and profits and slow our growth. A downturn in the economies in markets in which we sell our products, particularly in the United States, may materially harm our sales, profitability and financial condition.
Our growth depends, in part, on our continued penetration and expansion into new markets, and we may not be successful in doing so.
We believe that our future growth depends not only on continuing to reach our current core demographic, but also continuing to penetrate and broaden our retailer, consumer and distribution bases, including through retail brick-and-mortar and online sales channels and our websites, in the United States and international markets. In these markets, we have faced, and may continue to face, challenges that are different from those we currently encounter, including competitive, merchandising, pricing, distribution, hiring, legal and regulatory and other difficulties, such as understanding and accurately predicting the demographics, preferences and purchasing habits of consumers in these new markets. We have encountered, and may continue to encounter, problems in our logistical operations, including our fulfillment and shipping functions, related to an increased consumer demand for our products from online sales channels. We have also encountered, and may continue to encounter, difficulties in attracting consumers due to a lack of familiarity with, or acceptance of, our brands or a resistance to paying for our products, particularly in
 
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international markets. We continue to evaluate our marketing efforts and other strategies to expand our retailer, consumer and distribution bases in the United States and international markets. In addition, although we are continuing to invest in sales and marketing activities to further penetrate newer geographies and product categories, we may not be successful. If we are not successful with such investments, our business, financial condition and results of operations may be harmed.
Our business could be adversely affected if we fail to maintain product safety, quality and performance at an acceptable cost.
In order to maintain and increase net sales, we must produce safe, high quality products at acceptable costs. If we are unable to maintain the safety, quality and performance of our products at acceptable costs, our brands, the market acceptance of our products and our results of operations may suffer. As we periodically update our products and incorporate new materials and technologies, we may encounter unanticipated issues with product safety, quality and performance or production and supply delays. While we engage in product testing in an effort to identify and address any product safety, quality or performance issues before we introduce products to market, unanticipated product safety, quality or performance issues may be identified after a product has been introduced and sold. As we continue to introduce new products and enhancements, we expect the costs associated with such products and enhancements will continue to increase.
We participate in highly competitive markets, and we may not be able to compete successfully, causing us to lose market share and sales.
We compete for consumer acceptance and limited shelf space based upon brand recognition, perceived product quality, price, performance, product features and enhancements, product packaging and design innovation, as well as creative marketing, promotion and distribution strategies and new product introductions. Our ability to compete in these highly competitive markets may be adversely affected by a number of factors, including, but not limited to, the following:
•
we compete against many well-established companies that may have substantially greater financial and other resources, including personnel and research and development, and greater overall market share than us, as well as established supplier, retailer and distributor relationships;
​
•
in some key product categories, our competitors may have lower production costs and higher profit margins than us, which may enable them to compete more aggressively in offering retail discounts, rebates and other promotional incentives;
​
•
our competitors have obtained, and may in the future be able to obtain, exclusivity or sole source at particular retailers and distributors or favorable in-store placement;
​
•
technological advancements, product improvements or effective advertising campaigns by competitors may weaken consumer demand for our products;
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consumer preferences may change to lower or higher margin products or products other than those we market; and
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we may not be successful in the introduction, marketing and manufacturing of any new products, product innovations or line extensions or be able to develop and introduce, in a timely manner, innovations to our existing products that satisfy consumer needs or achieve market acceptance.
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Some competitors may be willing to reduce prices and accept lower profit margins to compete with us. As a result of this competition, we could lose market share and sales or be forced to reduce our prices to meet competition. If our product offerings are unable to compete successfully, our business, financial condition and results of operations could be materially and adversely affected. In addition, we may be unable to implement changes to our products or otherwise adapt to changing consumer trends. If we are unable to respond to changing consumer trends, our business, financial condition and results of operations could be adversely affected.
The pace of technological change continues to accelerate and our ability to react effectively to such change may present significant competitive risks.
The pace of technological change is increasing at an exponential rate. To remain competitive, we must invest in developing tools and processes to improve the speed at which we are able to develop competitive
 
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products, including significant investment in the development and advancement of new technologies, such as artificial intelligence, data analytics, robotics, sensor technology, data storage, among others, as well as other technologies in the future that are not foreseen today. Failure to adapt or react effectively to such changes could adversely affect our business, financial condition and results of operations.
We rely principally on suppliers, and problems with, or loss of, our suppliers or an inability to obtain raw materials could harm our business, financial condition and results of operations.
Our operation is highly dependent on our relationships with suppliers. Although we generally employ a dual-source strategy to mitigate potential manufacturing disruptions, we face the risk that these suppliers may not produce or deliver our products on a timely basis. We have experienced, and expect that we will continue to experience, operational difficulties and risk within our supply chain. These difficulties include reductions in the availability of production capacity, delays due to compliance with product specifications and regulatory and consumer requirements, failures to meet production deadlines, failure to meet our product quality standards, increases in costs of materials and manufacturing, operational impacts due to regional shutdowns, shipping and port disruptions, environmental impacts or other business interruptions. The ability of our suppliers to effectively satisfy our production requirements could also be impacted by financial difficulty or damage to their operations caused by fires, floods and other natural disasters, terrorist attacks, riots, geopolitical events, public health issues such as the COVID-19 pandemic (or other future pandemics or epidemics) or other events. The failure of any supplier to perform to our expectations could result in supply shortages or delays for certain products and harm our business, financial condition and results of operations. If we experience significantly increased demand, or if we need to replace an existing supplier due to lack of performance, we may be unable to supplement or replace our manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins and harm our ability to deliver our products on time or at a cost that is acceptable to retailers and consumers. For certain of our products, it may take a significant amount of time to identify and qualify a supplier that has the capability and resources to produce our products to our specifications in sufficient volume and satisfy our service and quality control standards.
The capacity of our suppliers to produce our products is also dependent upon the availability of raw materials. Our suppliers may not be able to obtain sufficient supply of raw materials, which could result in delays in deliveries of our products by our suppliers or increased costs. Any shortage of raw materials or inability of a supplier to produce or ship our products in a timely manner, or at all, could impair our ability to ship orders of our products in a cost-efficient, timely manner and could cause us to miss the delivery requirements of our retailers. As a result, we could experience cancellations of orders, refusals to accept deliveries or reductions in our prices and margins, any of which could harm our business, financial condition and results of operations.
Further, our new products may utilize customized components available from limited sources. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers’ yields have matured or manufacturing capacity has increased. Continued availability of these components or products at acceptable prices, or at all, may be affected for various reasons, including if those suppliers decide to concentrate on the production of common components and products instead of components and products customized to meet our requirements.
We have also entered into, and intend to continue to enter into, various supply agreements with JS Global and certain affiliates of JS Global. There can be no assurance that we could not have achieved more favorable terms if such transactions had not been entered into with related parties, or that we will be able to maintain existing terms in the future. In addition, while these supply services are being provided to us by related parties, our operational flexibility to modify or implement changes with respect to such services or the amounts we pay for them may be limited. If JS Global or its affiliates fails to provide the supply and sourcing services contemplated by such agreements, or otherwise breach the terms of such agreements, such failure or breach could materially and adversely affect our brands, business, financial condition and results of operations. Any dispute with JS Global or its affiliates could be complex, expensive and time-consuming. See “Certain Relationships and Related Party Transactions—Related Party Transactions with JS Global.”
 
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We rely on a series of purchase orders with our suppliers. Some of these relationships are not exclusive, which means that these suppliers could produce similar products for our competitors.
Although we typically have contractual agreements with our suppliers, we primarily rely on a series of purchase orders. Our suppliers have, and may in the future, raise prices, which would increase our costs and harm our margins. Our suppliers may breach these agreements, and we may not be able to enforce our rights under these agreements or may incur significant costs attempting to do so. As a result, we cannot predict with certainty our ability to obtain finished products in adequate quantities, of required quality and at acceptable prices from our suppliers in the future. Any one of these risks could harm our ability to deliver our products on time, or at all, damage our reputation and our relationships with our retailers, consumers and distributors and increase our product costs thereby reducing our margins.
In addition, not all of our arrangements with our suppliers are exclusive. As a result, our suppliers could produce similar products for our competitors, some of which could potentially purchase products in significantly greater volume. Further, while certain of our long-term contracts stipulate contractual exclusivity, those suppliers could choose to breach our agreements and work with our competitors. Our competitors could also enter into restrictive or exclusive arrangements with our suppliers that could impair or eliminate our access to manufacturing capacity or supplies, which could adversely affect our business, financial condition and results of operations.
If we fail to timely and effectively obtain shipments of products from our suppliers and deliver products to our retailers, consumers and distributors, our business, financial condition and results of operations could be harmed.
Our business depends on our ability to source and distribute products in a timely manner. We import most of our products and have been, and are, vulnerable to risks associated with products manufactured abroad, including, among other things, transportation and other delays in shipments, including as a result of labor disputes or shortages, heightened security screening, port congestion, container shortages and inspection processes or other port-of-entry limitations or restrictions in the countries in which we operate.
In addition, we rely upon independent land-based, ocean freight and air freight carriers for product shipments to our retailers and distributors, as well as consumers who purchase through our DTC sales channels. We may not be able to obtain sufficient freight capacity on a timely basis or at favorable shipping rates and, therefore, may not be able to receive products from suppliers or deliver products to retailers, consumers or distributors in a timely and cost-effective manner. Failure to procure our products from our suppliers and deliver our products to our retailers, consumers and distributors in a timely and cost-effective manner could damage our brands and harm our business, financial condition and results of operations.
If we fail to maintain existing consumers and attract new consumers, or fail to do so in a cost-effective manner, we may not be able to increase sales.
Our success depends, in part, on our ability to cost-effectively attract consumers to our products, retain our existing consumers and encourage these consumers to continue to utilize our products. We have made, and we expect that we will continue to make, significant investments in attracting new consumers, including through the use of corporate partnerships, product ambassadors, traditional, digital and social media, original infomercials and engagement in sponsorship initiatives. Marketing campaigns can be expensive and may not result in the cost-effective acquisition of consumers. We cannot guarantee that any increase in our consumer acquisition costs will result in any new consumer acquisitions or net sales growth. Inflation and rising product costs may also affect our ability to provide products in a cost-effective manner and hinder us from attracting new consumers.
We spend significant amounts on advertising and other marketing campaigns, as well as increased promotional activities, to acquire new consumers, and we expect our marketing expenses to increase in the future as we continue to spend significant amounts to increase awareness of our brands and our products. For the years ended December 31, 2020, 2021 and 2022, our advertising expenses were $254.0 million, $296.0 million and $270.8 million, respectively, representing approximately 9.2%, 7.9% and 7.3% of our net sales, respectively. Our paid marketing initiatives include television and other advertising, search engine marketing, email, displays and dedicated in-store arrangements and social media marketing. For example, we actively market our products through television and buy search advertising through search engines, such
 
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as Google and Bing, major mobile application stores and social media platforms, such as Facebook, TikTok and Instagram, and use internal analytics and external vendors for bid optimization and channel strategy. Our non-paid advertising efforts include search engine optimization, non-paid social media and email marketing. Search engines frequently modify their search algorithms and these changes can cause our websites to receive less favorable placements, which could reduce the number of consumers who visit our websites or are directed to information about our products. The costs associated with advertising through search engines can also vary significantly from period to period and have generally increased over time. We may be unable to modify our strategies in response to any future search algorithm changes made by the search engines, which could require a change in the strategy we use to generate consumer traffic and drive consumer interactions. In addition, our websites must comply with search engine guidelines and policies, which are complex and may change at any time. If we fail to follow such guidelines and policies properly, search engines may rank our content lower in search results, penalize us or could remove our content altogether from their indices. Further, changes to third-party policies that limit our ability to deliver, target or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google, could reduce the effectiveness of our marketing, which may reduce consumer demand for our products and adversely affect our business, financial condition and results of operations.
While we seek to structure our advertising campaigns in the manner that we believe is most likely to encourage people to purchase our products, we may fail to identify advertising opportunities that satisfy our anticipated return on advertising spend as we scale our investments in marketing or to fully understand or estimate the conditions and behaviors that drive consumer behavior. If any of our advertising campaigns prove less successful than anticipated in attracting consumers, we may not be able to recover our advertising spend and our net sales may fail to meet market expectations, either of which could have an adverse effect on our business, financial condition and results of operations. There can be no assurance that our advertising and other marketing efforts will result in increased sales of our products. If we are unable to attract new consumers, or fail to do so in a cost-effective manner, our growth could be slower than we expect, and our business, financial condition and results of operations may be harmed.
If we are not successful in expanding our DTC sales channel by driving consumer traffic and consumer purchases through our infomercials and websites, our business, financial condition and results of operations could be harmed.
We are currently investing in our DTC sales channels, primarily through our infomercials and websites, and our future growth relies, in part, on our ability to attract consumers through these channels, which requires significant expenditures in marketing and infrastructure. If we are unable to drive traffic to, and increase sales through, our infomercials and websites, our business, financial condition and results of operations could be harmed. The success of our DTC sales is subject to risks associated with the e-commerce marketplace, many of which are outside of our control. Our inability to adequately respond to these risks and uncertainties or to successfully maintain and expand our DTC business via our infomercials and websites may have an adverse impact on our business, financial condition and results of operations.
We have significant international operations and are exposed to risks associated with doing business globally.
We sell and distribute our products in many key international markets in North America, Europe and elsewhere around the world. These activities have resulted, and will continue to result, in investments in inventory, accounts receivable, employees, corporate infrastructure and facilities. In addition, we rely on suppliers located outside of the United States. The operation of foreign distribution in our international markets, as well as the management of relationships with suppliers, will continue to require the dedication of management, our workforce and other resources.
As a result of this international business, we are exposed to increased risks inherent in conducting business outside of the United States. These risks include the following:
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adverse changes in foreign currency exchange rates can have a significant and adverse effect upon our business, financial condition and results of operations;
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increased difficulty in protecting our intellectual property rights and trade secrets, including litigation costs and the outcome of such litigation in jurisdictions outside the United States;
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increased exposure to events that could impair our ability to operate internationally with third parties such as problems with such third parties’ operations, finances, insolvency, labor relations, manufacturing capabilities, costs, insurance, natural disasters, public health emergencies or other catastrophic events;
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unexpected legal or government action or changes in legal or regulatory requirements;
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difficulties in managing, growing and staffing international operations, including in countries in which foreign employees may become part of labor unions, employee representative bodies or collective bargaining agreements, and challenges relating to work stoppages or slowdowns;
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social, economic or political instability;
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potential negative consequences from changes to taxation or tariff policies;
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the effects of any xenophobic or racist sentiments on our brands or sales of our products;
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increased difficulty in ensuring compliance by employees, agents and contractors with our policies as well as with the laws of multiple jurisdictions, including, but not limited to, the U.S. Foreign Corrupt Practices Act (the “FCPA”) and the U.K. Bribery Act 2010 (the “U.K. Bribery Act”), international environmental, health and safety laws and increasingly complex regulations relating to the conduct of international commerce, including import/export laws and regulations, economic sanctions laws and regulations and trade controls;
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increased exposure to cybersecurity risks in foreign jurisdictions that may materially and adversely affect our business, financial condition and results of operations;
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increased difficulty in controlling and monitoring foreign operations from the United States, including increased difficulty in identifying and recruiting qualified personnel for our foreign operations and maintaining appropriate protocols and guidelines for managing our foreign operations; and
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increased exposure to interruptions in land, air carrier or vessel shipping services.
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We may not be able to penetrate or successfully operate in any foreign markets we have entered or may choose to enter. In addition, we may incur significant expenses as a result of our continued international expansion, and we may not be successful in converting those expenditures into increased consumer demand and sales. We may face limited brand recognition in certain parts of the world that could lead to non-acceptance or delayed acceptance of our products by consumers in new markets. We may also face challenges to acceptance of our products in new markets. Our failure to successfully manage these risks could harm our international operations and have an adverse effect on our business, financial condition and results of operations.
Our results of operations could be materially harmed if we are unable to accurately forecast demand for our products and manage product inventory in an effective and efficient manner.
To ensure adequate inventory supply for our various products, we must forecast inventory needs and place orders with our suppliers before firm orders are placed by our retailers, consumers and distributors. If we fail to accurately forecast consumer demand, we may experience excess inventory levels or a shortage of product to deliver to our retailers, consumers and distributors. Factors that could affect our ability to accurately forecast demand for our products include:
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an increase or decrease in consumer demand for our products;
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a failure to accurately forecast consumer acceptance for our new products;
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product introductions by competitors;
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unanticipated changes in general market conditions or other factors, which may result in cancellations of advance orders or a reduction or increase in the rate of reorders or at-once orders placed by retailers;
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weakening of economic conditions or reduced consumer confidence in future economic conditions, which could reduce demand for discretionary items, such as our products;
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the uncertainties and logistical challenges that accompany operations on a global scale; and
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terrorist attacks or acts of war, or the threat thereof, riots, political or labor instability, civil unrest, geopolitical events, public health issues such as the COVID-19 pandemic (or other future pandemics or epidemics), including the severity and transmission rates of new variants, which could adversely affect consumer confidence and spending or interrupt production and distribution of product and raw materials.
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Inventory levels in excess of consumer demand may result in inventory write-downs or write-offs, and the sale of excess inventory at discounted prices or in less preferred distribution channels could impair the image of our brands and harm our gross margin. In addition, if we underestimate the demand for our products, our suppliers may not be able to produce products to meet our retailer requirements, and this could result in delays in the shipment of our products, thereby impacting our ability to recognize net sales, generate lost sales and cause damage to our reputation and relationships with our retailers, consumers and distributors.
Challenges in forecasting demand due to changes in the market can also make it difficult to estimate future results of operations and financial conditions from period to period. A failure to accurately predict the level of demand for our products or manage product inventory in an effective and efficient manner could adversely impact our business, financial condition and results of operations.
Our results of operations may be adversely affected by inflation, changes in the cost or availability of raw materials, energy, transportation and other necessary supplies and services.
We are currently experiencing inflationary pressures on our operating costs. Among other things, competition for labor is becoming more acute, and we have experienced, and may continue to experience, increased labor costs as a result. In addition, we have experienced, and may continue to experience, increased costs from suppliers and for the transportation of our products, including shipping supplies. We also have experienced, and may continue to experience, increased costs for, and limited availability of, warehouse space. There is no assurance that we will be able to fully offset any cost increases through cost reduction programs or price increases of our products, especially given the competitive environment. If we are not able to sufficiently increase our pricing to offset these increased costs or if increased costs and prolonged inflation continue, it could materially and adversely affect our business, financial condition and results of operations. Sustained price increases may lead to declines in demand volume as competitors may not adjust their prices or consumers may decide not to pay the higher prices, which could lead to sales declines and loss of market share. While we seek to project tradeoffs between price increases and volume, our projections may not accurately predict the volume impact of price increases. In addition, volatility in certain commodity markets could significantly affect our manufacturing costs, which may result in reduced profitability.
In addition, our success is dependent, in part, on our continued ability to reduce our exposure to, or mitigate the impact of, increases in the cost of raw materials, finished goods, energy, transportation and other necessary supplies and services through a variety of programs, including future delivery purchases, long-term contracts and sales price adjustments, while maintaining and improving margins and market share. Also, we rely on suppliers to manufacture our products. These suppliers are also subject to price volatility, labor costs and other inflationary pressures, which may, in turn, result in an increase in the amount we pay for sourced products. During periods of rising prices of raw materials, there can be no assurance that we will be able to pass any portion of such increases onto consumers. Conversely, when raw material prices decline, consumer demands for lower prices could result in lower sale prices and, to the extent we have existing inventory, lower margins. As a result, fluctuations in raw material prices could have a material adverse effect on our business, financial condition and results of operations.
Some of the products we manufacture require particular types of glass, metal, paper, plastic, resin, wood, electronics or other materials. Lead times for these items vary significantly and are increasing in light of global shortages of critical components, including semi-conductors. Supply shortages for a particular type of material can delay production or cause increases in the cost of manufacturing our products. Pricing and availability of finished goods, raw materials, energy, transportation and other necessary supplies and services can be volatile due to numerous factors beyond our control, including general, domestic and international economic conditions, supply chain issues, natural disasters, labor costs, production levels,
 
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competition, consumer demand, import duties and tariffs, currency exchange rates, international treaties and changes in laws, regulations and related interpretations.
We rely substantially on our retailers and distributors.
We have established comprehensive and integrated global retail and distribution networks. In many cases, we sell our products to our retailers or distributors who then in turn sell our products, directly or indirectly, to our consumers. As of December 31, 2022, we had relationships with over 150 retailers and distributors globally. Although we have long-established relationships with many of our retailers and distributors, purchases are normally made through the use of individual purchase orders. Any significant reduction in purchases, failure to obtain anticipated orders or delays or cancellations of orders by any of these major retailers or distributors, or significant pressure to reduce prices from any of these major retailers or distributors, could have a material adverse effect on our business, financial condition and results of operations. Factors that could affect our ability to maintain or expand our sales to these third parties include:
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failure to accurately identify the needs of our consumers;
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a lack of consumer acceptance of new products or enhancements to existing products;
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unwillingness of our key retailers and consumers to attribute value to our new or existing products relative to competing products;
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failure to obtain shelf space from our retailers;
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new, well-received product introductions by competitors;
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damage to our relationships with key retailers and distributors due to brand or reputational harm;
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delays or defaults on our retailers’ or distributors’ payment obligations to us; and
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store closures, decreased foot traffic, recessionary pressures, adverse economic or market conditions or other adverse effects, including public health crises such as the COVID-19 pandemic (or other future pandemics or epidemics).
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We cannot ensure that our current retailers and distributors will continue to carry our current products, carry any new products that we develop or continue to operate. If we lose any of our key retailers or distributors or any key retailer reduces its purchases of our existing or new products or promotes products of our competitors over ours, our sales would be harmed. Additionally, a significant deterioration in the financial condition of the retail industry in general could have a material adverse effect on our business, financial condition and results of operations.
Consolidation of retailers may negatively affect our business, financial condition and results of operations.
Although no single retailer accounts for a significant percentage of our sales, as a result of the consolidation of retailers that has occurred during the past several years, particularly in the United States and Europe, and consumer trends toward national mass retailers, we may see an increase in the concentration of our sales that are attributable to a limited group of retailers. As these retailers grow larger and become more sophisticated, they may demand lower pricing, special packaging or impose other requirements on us, our distributors and suppliers. These business demands may relate to inventory practices, logistics or other aspects of the retailer-supplier relationship. Because of the importance of these key retailers, demands for price reductions or promotions, reductions in their purchases, changes in their financial condition or loss of their accounts could have a material adverse effect on our business, financial condition and results of operations. Our success is dependent, in part, on our ability to effectively manage our retailer relationships, including offering mutually acceptable trade terms.
We depend on our retailers to display and present our products to consumers, and our failure to maintain and further develop our relationships with our retailers could harm our business, financial condition and results of operations.
Through our retail channel, we sell a significant amount of our products through knowledgeable national, regional and independent retailers. These retailers service consumers by stocking and displaying
 
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our products, explaining our products’ attributes and capabilities and sharing the story of our brands. Our relationships with these retailers are important to the authenticity of our brands and the marketing programs we continue to deploy. Our failure to maintain relationships with retailers and brand ambassadors at retailers or financial difficulties experienced by these retailers could harm our business, financial condition and results of operations.
Our sales depend, in part, on retailers effectively displaying our products, including providing attractive space and point of purchase displays in their stores and e-commerce platforms and training their sales personnel to sell our products. If retailers reduce or terminate those activities, we may experience reduced sales of our products, which would harm our business, financial condition and results of operations.
Use of social media and influencers may materially and adversely affect our reputation, business, financial condition and results of operations.
We use third-party social media platforms as marketing tools, among other things. For example, we maintain Instagram, TikTok, Facebook, Twitter, YouTube and Pinterest accounts, as well as our own content on our websites. We maintain relationships with many influencers and engage in sponsorship initiatives. As existing e-commerce and social media platforms continue to rapidly evolve, new platforms develop and new influencers emerge, we must continue to maintain a presence on these platforms and establish presences on new or emerging popular social media platforms and with new or emerging influencers. If we are unable to cost-effectively use social media platforms and influencers as marketing tools, if the social media platforms we use do not evolve quickly enough for us to fully optimize such platforms or if the influencers we use lose their following, our ability to acquire new consumers and our business, financial condition and results of operations may suffer as a result.
Negative commentary regarding us, our products or influencers and other third parties who are affiliated with us may also be posted on social media platforms and may be adverse to our reputation or business. Influencers with whom we maintain relationships could engage in behavior or use their platforms to communicate directly with our consumers in a manner that reflects poorly on our brands and may be attributed to us or otherwise adversely affect us. It is not possible to prevent such behavior, and the precautions we take to detect this activity may not be effective in all cases.
In addition, an increase in the use of social media for marketing may increase our burden to monitor compliance of such materials and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations. For example, the Federal Trade Commission (the “FTC”) can seek enforcement action where an endorsement has failed to clearly and conspicuously disclose a material relationship between an influencer and an advertiser. We generally require influencers to comply with the FTC regulations and regularly monitor what our influencers post. Nevertheless, if they fail to comply with these regulations and we are held responsible for the content of their posts, we could be forced to alter our practices, among other things, which could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, as laws and regulations rapidly evolve to govern the use of these social media platforms, the failure by us, our employees, our network of influencers or third parties acting at our direction (including retailers and distributors) to abide by the evolving applicable laws and regulations in the use of these platforms or otherwise could subject us to regulatory investigations, class action lawsuits, liability, fines or other penalties and have a material adverse effect on our business, financial condition and results of operations.
Insolvency, credit problems or other financial difficulties that could confront our retailers and distributors could expose us to financial risk.
We are exposed to credit risk primarily on our accounts receivable. We provide credit to our retailers and distributors in the ordinary course of our business and perform ongoing credit evaluations. While we mitigate this risk by insuring certain retailer sales, the majority of our accounts receivable with our retailers and distributors are unsecured. While we believe that our exposure to concentrations of credit risk with respect to trade receivables is further mitigated by our large retailer and distributor bases and we make allowances for doubtful accounts, we nevertheless run the risk of our retailers and distributors not being able to meet their payment obligations, particularly in a future economic downturn. Insolvency, credit problems or other financial
 
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difficulties confronting our retailers or distributors could expose us to financial risk. These actions could expose us to risks if our retailers or distributors are unable to pay for the products they purchase from us. Financial difficulties of our retailers could also cause them to reduce their sales staff, use of attractive displays, number or size of stores and the amount of shelf space dedicated to our products. Any reduction in sales by, or loss of, our current retailers or distributors, or consumer demand or credit risks associated with our retailers or distributors could harm our business, financial condition and results of operations.
If our suppliers, retailers and distributors do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, financial condition and results of operations could be harmed.
Our reputation and our consumers’ willingness to purchase our products depend in part on the compliance of our suppliers, retailers and distributors with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions and with all legal and regulatory requirements relating to the conduct of their businesses. While we believe we have prudent policies and programs in place, we do not control our suppliers, retailers and distributors and cannot guarantee their compliance with ethical and lawful business practices. If our suppliers, retailers or distributors fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices or other obligations, norms or ethical standards, our reputation and brand image could be harmed, and we could be exposed to litigation, regulatory proceedings, liability or additional costs that may harm our reputation, business, financial condition and results of operations.
The United States and various foreign governments recently have adopted measures to oppose the use of forced labor. Governments, including the U.S. Government, also have imposed sanctions and export control restrictions with respect to entities that are deemed to have engaged in, or supported the use of, forced labor. We have strong policies against the use of forced labor and do not tolerate this practice within our company or by our suppliers. While we do not expect that our operations will be directly impacted by any government measures targeting forced labor, it is possible that customs authorities could detain shipments of goods based on concerns over the possible use of forced labor, resulting in delays, litigation, damages and reputational harm. Likewise, we cannot rule out the possibility that in the future one of our suppliers could be named to a sanctions or restricted party list, such as the U.S. Department of Commerce’s Bureau of Industry and Security Entity List, based on concerns over forced labor, with similar negative effects on our reputation, business, financial condition and results of operations.
Changes in consumer shopping trends and changes in distribution channels could significantly harm our business.
We sell our products through a variety of trade channels with a significant portion dependent upon retail partnerships, through both traditional brick-and-mortar retail channels and e-commerce channels. We are seeing the emergence of strong e-commerce channels generating more online competition and declining in-store traffic in brick-and-mortar retailers. Consumer shopping preferences have shifted, and may continue to shift in the future, to distribution channels other than traditional retail, such as e-commerce channels. If we are not successful in adopting and utilizing e-commerce channels that future consumers may prefer, we may experience lower than expected net sales.
We are also seeing more traditional brick-and-mortar retailers closing physical stores and filing for bankruptcy, which could negatively impact our distribution strategies and/or sales if such retailers decide to significantly reduce their inventory levels for our products or to designate more shelf space to our competitors. Further consolidation, store closures and bankruptcies of retailers could have a material adverse effect on our business, financial condition and results of operations.
We must successfully manage the demand, supply and operational challenges associated with the actual or perceived effects of the COVID-19 pandemic or any other disease outbreak, including epidemics, pandemics or similar widespread public health developments or concerns.
Our business may be unfavorably impacted by the fear of exposure to or actual effects of the COVID-19 pandemic or any other disease outbreak, epidemic, pandemic or similar widespread public health
 
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development or concern, such as reduced travel or recommendations or mandates from governmental authorities to cease particular activities. These impacts include, but are not limited to:
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significant reductions or volatility in demand for one or more of our products, which may be caused by, among other things, the inability of consumers to purchase our products due to illness, quarantine, travel restrictions, store closures, financial hardship among retailers, consumers and distributors, decreased consumer confidence or changes in consumer spending or shopping habits; if prolonged, such impacts can further increase the difficulty in planning our operations, which may adversely impact our business, financial condition and results of operations;
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inability to meet our consumers’ needs or achieve cost targets or cost inflation due to disruptions or shortages in our supply arrangements as well as distribution centers caused by the loss or disruption of essential manufacturing and supply elements such as raw materials or other finished product components, transportation, workforce or other manufacturing and distribution capability;
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failure of third parties on which we rely, including our suppliers, distributors, contractors, fulfillment and shipping providers and commercial banks, to meet their obligations to us or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, which may adversely impact our liquidity, business, financial condition and results of operations; or
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significant changes in the political and labor conditions in markets in which we manufacture, sell or distribute our products, including governmental or regulatory actions such as quarantines, closures or other restrictions, that limit or close our facilities, restrict our employees’ ability to travel or perform necessary business functions or require employees and business partners to work remotely creating potential for risks related to cybersecurity, confidentiality and data privacy breaches or otherwise prevent our partners from sufficiently staffing operations, including operations necessary for the production, distribution, sale and support of our products, which could adversely impact our liquidity, business, financial condition and results of operations or impairment of our net assets.
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There are no comparable recent events that provide guidance as to the effect the spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole. Despite our efforts to manage and remedy these impacts on us, the ultimate impact of the COVID-19 pandemic could materially and adversely impact our business, financial condition and results of operations, and depends on factors beyond our knowledge or control. In this regard, the extent of the impact of the COVID-19 pandemic on our business, financial condition and results of operations will be primarily driven by the duration and severity of the COVID-19 pandemic, its impact on the United States and global economies and the timing, scope and effectiveness of federal, state and local governmental plans to administer vaccines to the general public, especially in areas where new variants have emerged, conditions have worsened and lockdowns or travel bans are reinstituted.
We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.
Our operations are subject to many hazards and operational risks inherent to our business, including:
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general business risks;
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product liability;
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product recall; and
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damage to third parties (e.g., our suppliers, retailers, distributors and fulfillment and shipping providers), our infrastructure or our properties caused by fires, floods and other natural disasters, power losses, telecommunications failures, terrorist attacks, riots, cyberattacks, geopolitical events, public health issues such as the COVID-19 pandemic (or other future pandemics or epidemics), human errors and similar events.
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Our insurance coverage may be inadequate to cover our liabilities related to such hazards or operational risks. In addition, we may not be able to maintain adequate insurance in the future at rates we consider
 
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reasonable and commercially justifiable, and insurance may not continue to be available on terms as favorable as our current arrangements. The occurrence of a significant uninsured claim or a claim in excess of the insurance coverage limits maintained by us could harm our business, financial condition and results of operations.
Our reputation and profitability may be adversely affected if our products are counterfeited or imitated in the market.
Our products may be counterfeited in the market, such as unauthorized imitation, replication of our design, infringement of trademarks or labeling by third parties, which may affect our reputation and profitability. We are not currently aware of any substantial counterfeiting of our products. Although we monitor any unauthorized use of our registered designs and trademarks, counterfeiting or imitation of our products to ensure that our intellectual property rights are protected, we cannot assure you that counterfeiting and imitation would not occur, or if it does occur, that we would be able to detect and address the problem effectively. A significant presence of counterfeit products in the market could have a negative impact on the value and image of our brands, lead to loss of consumer confidence in our brands and materially and adversely affect our business, financial condition and results of operations.
We are subject to payment-related risks that may result in higher operating costs or the inability to process payments, either of which could harm our business, financial condition and results of operations.
For our DTC sales, as well as for sales to certain retailers, we accept a variety of payment methods, including credit cards, buy-now-pay-later and certain other financing services, electronic funds transfers and electronic payment systems. Accordingly, we are, and will continue to be, subject to significant and evolving regulations and compliance requirements, including obligations to implement enhanced authentication processes that could result in increased costs and liability and reduce the ease of use of certain payment methods. For certain payment methods, including credit and debit cards, as well as electronic payment systems, we pay interchange and other fees, which may increase over time. We rely on independent service providers for payment processing, including credit and debit cards. If these independent service providers become unwilling or unable to provide these services to us, or if the cost of using these providers increases, our business could be harmed. We and our payment processing providers are also subject to payment card association operating rules and agreements, including data security rules and agreements, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for losses incurred by card issuing banks or consumers, subject to fines and higher transaction fees, lose our ability to accept credit or debit card payments from our consumers or process electronic fund transfers or facilitate other types of payments. Any failure to comply could significantly harm our business, financial condition and results of operations.
The failure of any bank in which we deposit our funds could have an adverse effect on our business, financial condition and results of operations.
Although we generally seek to diversify our cash and cash equivalents across several financial institutions in an attempt to minimize exposure to any one of these entities, we currently have cash and cash equivalents deposited in several financial institutions in the United States significantly in excess of federally insured levels. If any of the financial institutions in which we have deposited funds ultimately fails, we may lose our deposits over $250,000 at such financial institutions, and/or we may be required to move our accounts to another financial institution, which could cause operational difficulties, such as delays in making payments to third parties, which could have an adverse effect on our business, financial condition and results of operations.
Our sales and results of operations are subject to seasonal and quarterly variations.
We believe that our sales and results of operations are subject to seasonal fluctuations. We expect our net sales to be highest in our third and fourth quarters as a result of holiday shipments, with the second quarter generating the lowest sales. To date, however, it has been difficult to analyze this seasonality due to fluctuations in our sales. In addition, due to our more recent, and therefore more limited, experience with
 
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beauty and outdoor cooking products and accessories, we are continuing to analyze the seasonality of these products. We expect that this seasonality will continue to be a factor in our results of operations and sales.
Our annual and quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including, among other things, the timing of the introduction of, and advertising for, our new products and those of our competitors, changes in our product mix and the shifting dynamics of retailer and distributor trade inventories in products viewed as seasonal in nature.
As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our operational results between different quarters within a single fiscal year or across different fiscal years are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance. In the event that any seasonal or quarterly fluctuations in our net sales and results of operations result in our failure to meet our forecasts or the forecasts of the research analysts that may cover us in the future, the market price of our ordinary shares could fluctuate or decline.
Conflicts with our retailers could harm our business and operating results.
The expansion of our DTC sales channels could alienate some of our retailers and cause a reduction in product sales from these retailers. Retailers may perceive themselves to be at a disadvantage based on the DTC sales offered through our websites and infomercials. Due to these and other factors, conflicts in our sales channels could arise and cause retailers to divert resources away from the promotion and sale of our products. Any of these situations could adversely impact our business, financial condition and results of operations.
We may be unable to generate anticipated cost savings, successfully implement our strategies or efficiently manage our supply chain and manufacturing processes, and our business, financial condition and results of operations could suffer as a result.
We continue to work with our suppliers to implement plans to improve our competitive position by reducing material costs and manufacturing inefficiencies and realizing productivity gains and distribution and supply chain efficiencies. If we cannot successfully implement our cost savings plans or offset the cost of making these changes, we may not realize all anticipated benefits, which could adversely affect our business, financial condition and results of operations or our long-term strategies. We also continue to penetrate new markets and introduce new products and line extensions. We may fail to implement these goals and strategies or to achieve the desired results and we may fail to achieve one or more of our financial goals.
We expect to continue to restructure our operations as necessary to improve operational efficiency, including occasionally opening or closing offices or facilities. Gaining additional efficiencies may become increasingly difficult over time. There may be one-time and other costs and negative impacts on sales growth relating to facility closures or other restructurings and anticipated cost savings. Our strategies may not be implemented or may fail to achieve desired results. If we are unable to generate anticipated cost savings, successfully implement our strategies or efficiently manage our supply chain and manufacturing processes, our results of operations could suffer. These plans and strategies could also have a negative impact on our relationships with suppliers, retailers, employees or consumers, which could also adversely affect our business, financial condition and results of operations.
We may acquire or invest in other companies, which could divert our management’s attention, result in dilution to our shareholders and otherwise disrupt our operations and harm our business, financial condition and results of operations.
We may acquire or invest in businesses, products or technologies that we believe could complement or expand our business, enhance our capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various costs and expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.
In any such acquisitions, we may not be able to successfully integrate acquired personnel, operations and technologies or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from future acquisitions due to a number of factors, including:
 
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an inability to integrate or benefit from acquisitions in a profitable manner;
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unanticipated costs or liabilities associated with the acquisition;
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the incurrence of acquisition-related costs;
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the diversion of management’s attention from other business concerns;
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the loss of our or the acquired business’ key employees; or
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the issuance of dilutive equity securities, the incurrence of debt or the use of cash to fund such acquisitions.
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In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our results of operations based on this impairment assessment process, which could harm our results of operations.
Further, in connection with business acquisitions, we may assume certain potential liabilities. To the extent such liabilities are not identified by us or to the extent the indemnifications obtained from third parties are insufficient to cover such liabilities, these liabilities could have a material adverse effect on our business, financial condition and results of operations.
As a result of retailers maintaining tighter inventory control, we face risks related to meeting demand and storing inventory.
As a result of the desire of retailers to more closely manage inventory levels, there is a growing trend among them to purchase products on a “just-in-time” basis, which will put greater demands on warehouse labor and carrier compliance as we compress shipping windows. Due to a number of factors, including manufacturing lead-times, seasonal purchasing patterns and the potential for material price increases, we may be required to shorten our lead-time for production and more closely anticipate our retailers’ and consumers’ demands, which could in the future require us to carry additional inventories and increase our working capital and related financing requirements. This may increase the cost of warehousing inventory, result in excess inventory becoming difficult to manage, unusable or obsolete or require inventory deviations or substitutions. In addition, if our retailers significantly change their inventory management strategies, we may encounter difficulties in filling consumer orders resulting in chargebacks or liquidating excess inventories or we may find that retailers and consumers are cancelling orders or returning products, which may have a material adverse effect on our business, financial condition and results of operations.
We depend on highly skilled personnel, and if we are unable to hire, integrate and retain our personnel, we may not be able to address competitive challenges.
Our future success will depend upon our continued ability to hire, integrate and retain highly skilled personnel, including senior management, engineers, product designers, finance and legal personnel and support service professionals. Competition for highly skilled personnel is intense. We compete with many other companies for engineers and product designers with meaningful experience in designing, developing and managing software, as well as for skilled marketing, operations and support service professionals, and we may not be successful in attracting and retaining the professionals we need. We may need to invest significant amounts of cash and equity to attract and retain new and highly skilled employees, and may never realize returns on these investments. If we are not able to effectively hire, train and retain employees, our ability to achieve our strategic objectives may be adversely impacted and our business, financial condition and results of operations may be harmed.
In addition to hiring and integrating new employees, we must continue to focus on retaining our key employees who foster and promote our innovative corporate culture. Our future performance depends on the continued services and contributions of our Chief Executive Officer, Mr. Barrocas, who is critical to the development of our business and growth strategy, in addition to other key employees to execute on our business plan and to identify and pursue new opportunities and solutions. The failure to properly develop or manage succession plans or develop leadership talent or the loss of services of key employees could significantly delay or prevent the achievement of our strategic objectives. From time to time, there may be
 
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changes in our senior management team resulting from the hiring or departure of executives, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period; therefore, they could terminate their employment with us at any time. We also do not have key person insurance on the life of any of our executive officers or other key personnel. The loss of one or more of our key employees (including any limitation on the performance of their duties or short-term or long-term absences as a result of illness or other factors) could adversely affect our business, financial condition and results of operations.
Risks Related to Intellectual Property, Information Technology and Data Privacy
Claims by third parties that we are infringing their intellectual property and other litigation could adversely affect our business.
From time to time we have been, and expect we will continue to be, subject to claims that we are infringing the patents and other intellectual property of others, and it is possible that third parties will assert infringement, misappropriation, unfair competition or similar claims against us in the future. An adverse finding against us in these or similar patent or other intellectual property litigation or disputes may have a material adverse effect on our business, financial condition and results of operations. Any such claims, with or without merit, could be time consuming and expensive and may require us to incur substantial costs, including the diversion of the resources of management and technical personnel, cause product delays or require us to redesign our products or enter into licensing or other agreements in order to secure continued access to necessary or desirable intellectual property. If we are deemed to be infringing or otherwise violating a third party’s intellectual property and are unable to continue using that intellectual property as we had been, our business and results of operations could be harmed if we are unable to successfully develop non-infringing alternative products or features on a timely basis or license non-infringing alternatives or substitutes, if any exist, on commercially reasonable terms. In addition, an unfavorable ruling in intellectual property litigation could subject us to significant liability, as well as require us to cease developing, manufacturing or selling the affected products or using the affected processes or product feature. Any significant restriction on our proprietary or licensed intellectual property or operations that impedes our ability to develop and commercialize our products could have a material adverse effect on our business, financial condition and results of operations.
If we fail to adequately protect our intellectual property rights, competitors may manufacture and market similar products, which could adversely affect our market share and results of operations.
Our success with our proprietary products depends, in part, on our ability to protect our current and future technologies and products and to defend our intellectual property rights, including our patent, trade secret, copyright and trademark rights. If we fail to adequately protect our intellectual property rights, competitors may manufacture and market similar products, which may reduce consumer demand for our products and adversely affect our business, financial condition and results of operations.
We hold numerous design and utility patents, in numerous jurisdictions, that cover a wide variety of products and processes. We cannot be certain that we will receive patents for any of our patent applications or that any existing or future patents that we receive or license will provide competitive advantages for our products. We also cannot be sure that competitors will not challenge and potentially invalidate any existing or future patents that we receive or license. In addition, patent rights may not prevent competitors from developing, using or selling products that are similar or functionally equivalent to our products.
We operate our business in jurisdictions where intellectual property theft or compromise is common.
Currently, we maintain operations in China, where third parties manufacture a majority of our products. In addition, we currently sell our products and manage operations in multiple additional jurisdictions outside of the United States. Subject to contractual confidentiality obligations, we are required to share significant product design and manufacturing information and materials with third parties necessary for the design and manufacture of our products. We cannot be sure that our data or intellectual property will not be compromised through cyber-intrusion, theft or other means, particularly when the data or intellectual property is held by partners in foreign jurisdictions. Should our intellectual property be compromised, it
 
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may be difficult to enforce our rights in China and other foreign jurisdictions in which we operate, which could harm our business, financial condition and results of operations.
A cybersecurity breach or failure of one or more key information technology systems could have a material adverse effect on our business or reputation.
We rely extensively on information technology (“IT”) systems, networks and services, including internet sites, data hosting and processing facilities and tools and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used by third parties or their vendors, to assist in conducting our business.
Our IT systems have been, and will likely continue to be, subject to computer viruses or other malicious codes, unauthorized access attempts, phishing and other cyberattacks. We continue to assess potential threats and make investments seeking to address and prevent these threats, including monitoring of our networks and systems and upgrading skills, employee training and security policies for us and our third-party providers. However, because the techniques used in these cyberattacks change frequently and may be difficult to detect for periods of time, we may face difficulties in anticipating and implementing adequate preventative measures. To date, we have seen no material impact on our business or operations from these attacks; however, we cannot guarantee that our security efforts will prevent breaches or breakdowns to our or our third-party providers’ databases or systems. If the IT systems, networks or service providers we rely upon fail to function properly or if we or one of our third-party providers suffer a loss, significant unavailability of or disclosure of our business or stakeholder information and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action, including administrative fines. The costs and operational consequences of responding to breaches and implementing remediation measures could be significant.
We may not be able to enforce our intellectual property rights throughout the world.
We may be required to protect our proprietary technology in an increasing number of jurisdictions, a process that is expensive and may not be successful or which we may not pursue in every location due to costs, complexities or other reasons. Filing, prosecuting, maintaining, defending and enforcing patents and other intellectual property rights on our products and technologies in all countries throughout the world would be prohibitively expensive and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection or other intellectual property rights to develop their own products and technologies and, further, may export otherwise infringing, misappropriating or violating products and technologies to territories where we do not have patent or other intellectual property protection or we do have such protection but enforcement is not as strong as that in the United States. These products and technologies may compete with our products and technologies, and our intellectual property rights may not be effective or sufficient to prevent them from competing.
In addition, the laws of some foreign countries do not protect proprietary rights to the same extent as the laws of the United States, and many companies have encountered significant challenges in establishing and enforcing their proprietary rights outside of the United States. These challenges can be caused by the absence or inconsistency of the application of rules and methods for the establishment and enforcement of intellectual property rights outside of the United States. In addition, the legal systems of some countries, particularly developing countries, may not favor or facilitate the enforcement of intellectual property protection. This could make it difficult for us to stop the infringement, misappropriation or other violation of our intellectual property rights. Accordingly, we may choose not to seek protection in certain countries, and we will not have the benefit of protection in such countries. Proceedings to enforce our intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and the attention of our management from other aspects of our business. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our products and technologies and the enforcement of intellectual property rights. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition and results of operations.
 
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If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be harmed significantly.
We rely on trade secrets, know-how and other proprietary information in operating our business. If this information is not adequately protected, then it may be disclosed or used in an unauthorized manner. To the extent that consultants, key employees or other third parties apply technological information independently developed by them or by others to our proposed products, disputes may arise as to the proprietary rights to such information, which may not be resolved in our favor. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to our management. In addition, while it is our policy to require certain of our employees, suppliers, consultants, advisors and independent contractors who may be involved in the conception or development of intellectual property rights for us to execute agreements assigning such intellectual property rights to us, we cannot guarantee that we have entered into such agreements with each party that may have developed intellectual property rights for us. Individuals involved in the development of intellectual property rights for us may make adverse ownership claims to our current and future intellectual property rights, which may compromise our ability to pursue commercial objectives that utilize our intellectual property assets. The assignment of intellectual property rights in agreements entered into by individuals involved in the development of intellectual property rights for us may not be self-executing, or the assignment agreements otherwise may be insufficient or breached, and we may not be able to obtain adequate remedies for such breaches. We may be forced to bring claims against third parties or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property rights. Additionally, to the extent that our employees, independent contractors or other third parties with whom we do business use intellectual property rights owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition and results of operations.
The risk that other parties may breach confidentiality agreements or that our trade secrets become known or independently discovered by competitors could harm us by enabling our competitors, who may have greater experience and financial resources, to copy or use our trade secrets and other proprietary information in the advancement of their products, methods or technologies. The unauthorized use or disclosure of our trade secrets would impair our competitive position, thereby weakening demand for our products and harming our ability to maintain or increase our consumer base.
We are subject to data security and privacy risks that could negatively affect our reputation, business, financial condition and results of operations.
In addition to our own sensitive and proprietary business information, we handle transactional and personal information about our employees, consumers, suppliers and retailers. Hackers and data thieves are increasingly sophisticated and operate social engineering, such as phishing and large-scale, complex automated attacks that can evade detection for long periods of time. Any breach of our or our service providers’ network or other vendor systems, may result in the loss of confidential business and financial data, misappropriation of our consumers’, users’ or employees’ personal information or a disruption of our business. Any of these outcomes could have a material adverse effect on our business, including unwanted media attention, impairment of our consumer and retailer relationships and damage to our reputation, resulting in lost sales and consumers, fines, lawsuits or significant legal and remediation expenses. We also may need to expend significant resources to protect against, respond to and/or redress problems caused by any breach.
In addition, as a global company, we are subject to global privacy and data security laws, regulations and codes of conduct that apply to our various business units. These laws and regulations may be inconsistent across jurisdictions and are subject to evolving and differing interpretations. Government regulators, privacy advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data. This increased scrutiny may result in new interpretations of existing laws, thereby further impacting our business.
 
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New and emerging global and local laws on privacy, data and related technologies, as well as industry self-regulatory codes, are creating new compliance obligations and expanding the scope of potential liability, either jointly or severally with our retailers and suppliers. While we have invested in readiness to comply with applicable requirements, these new and emerging laws, regulations and codes may affect our ability to reach current and prospective consumers, to respond to consumer requests under the laws (such as individual rights of access, correction and deletion of their personal information) and to implement our business models effectively. The costs of compliance or failure to comply with such laws, regulations, codes of conduct and expectations could have a material adverse effect on our business, financial condition and results of operations. Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, investigations or proceedings against us by governmental entities or others, damage to our reputation and credibility and could have a negative impact on net sales and profits.
For example, the European Union adopted the General Data Protection Regulation (the “GDPR”), which became effective on May 25, 2018, and has been transposed into the national laws of the United Kingdom (the “U.K. GDPR”) following the exit of the United Kingdom from the European Union in a currently substantially unvaried form which is likely to be subject to divergence from the GDPR over time. While the United States does not have a federal privacy law yet, California passed the California Consumer Privacy Act, which took effect in 2020 and was amended by the California Privacy Rights Act, which became effective on January 1, 2023 (the “CCPA”). Four other states, Colorado, Utah, Virginia and Connecticut, have also passed state privacy laws imposing new regulatory requirements. These laws impose additional obligations on companies such as ours regarding the handling of personal data and provide certain individual privacy rights to persons whose data is processed or stored. Compliance with existing, proposed and recently enacted laws (including implementation of the privacy and process enhancements called for under GDPR, U.K. GDPR and U.S. state privacy laws like the CCPA) and regulations can be costly. In particular, GDPR and U.K. GDPR can each trigger similar and separate administrative fines for noncompliance up to €20 million (£17.5 million) or 4% of annual global revenue, whichever is higher.
We are also subject to evolving European Union and U.K. privacy laws on cookies and e-marketing. In the European Union and the United Kingdom, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced by an European Union regulation known as the ePrivacy Regulation, which will significantly increase fines for noncompliance. Recent guidance and case law in the European Union and the United Kingdom require opt-in, informed consent for the placement of a cookie or similar tracking technologies on a consumer’s device and for direct electronic marketing. The GDPR and U.K. GDPR also impose conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or tracking technology. While the text of the ePrivacy Regulation is still under development, recent European case law and regulators’ recent guidance are driving increased attention to cookies and tracking technologies. This could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies and e-marketing may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand consumers.
Any failure to comply with these regulatory standards could also subject us to legal and reputational risks, which could harm our business, financial condition and results of operations.
Our actual or perceived failure to adequately protect personal data could adversely affect our business, financial condition and results of operations.
A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data. These privacy and data protection-related laws and regulations are evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. Compliance with these laws and regulations can be costly and can delay or impede the development of new products.
 
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Our actual or alleged failure to comply with applicable laws, regulations or policies or to protect personal data could result in enforcement actions and significant penalties against us, which could result in negative publicity, increase our operating costs, subject us to claims or other remedies and have a material adverse effect on our business, financial condition and results of operations.
Recent changes to patent laws in the United States and in foreign jurisdictions may limit our ability to obtain, defend and/or enforce our patents.
The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on actions by the U.S. Congress, the U.S. federal courts and the U.S. Patent and Trademark Office, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future. Similarly, changes in patent laws or regulations in other countries or jurisdictions, changes in the governmental bodies that enact them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.
If we fail to comply with our obligations under license, technology or intellectual property agreements with third parties, we may be required to pay damages and we could lose license, technology or intellectual property rights that are critical to our business.
We license certain intellectual property rights, including technologies, data, content and software from third parties, that are important to our business, and in the future we may enter into additional agreements that provide us with licenses to valuable intellectual property rights or technology, including under our intended agreements with JS Global and certain affiliates of JS Global. If we fail to comply with any of the obligations under our license agreements, we may be subject to liability or required to pay damages, and the licensor may have the right to terminate the license. Termination by the licensor may cause us to lose valuable rights and could prevent us from selling our products or inhibit our ability to commercialize future products. Our business could suffer if any current or future licenses terminate, if the licensors fail to abide by the terms of the license, if the licensors fail to enforce licensed patents against infringing third parties, if the licensed intellectual property rights are found to be invalid or unenforceable or infringe or otherwise violate third-party rights or if we are unable to enter into necessary licenses on acceptable terms. In addition, our rights to certain technologies are licensed to us on a non-exclusive basis. The owners of these non-exclusively licensed technologies are therefore free to license them to third parties, including our competitors, on terms that may be superior to those offered to us, which could place us at a competitive disadvantage. Moreover, our licensors or other third parties may own or control intellectual property rights that have not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing, misappropriating or otherwise violating the licensor’s or other third party’s rights. In addition, the agreements under which we license intellectual property rights or technology from third parties are generally complex and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property rights or technology or increase what we believe to be our financial or other obligations under the relevant agreement. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition and results of operations.
Disruption or failures of our information technology systems could have a material adverse effect on our business.
Our IT systems are susceptible to security breaches, operational data loss, general disruptions in functionality and may not be compatible with new technology that may emerge from time to time. We depend on our IT systems for the effectiveness of our operations and to interface with our consumers, as well as to maintain financial records and accuracy. Disruption or failures of our IT systems could impair our
 
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ability to effectively and timely provide our products and maintain our financial records, which could damage our reputation and have a material adverse effect on our business, financial condition and results of operations.
Some of our products and technologies contain open source software, which may pose particular risks to our proprietary software, products and technologies in a manner that could have a material and adverse effect on our business, financial condition and results of operations.
We use open source software in connection with our products and technologies and anticipate using open source software in the future. Some open source software licenses require users who distribute open source software as part of their own software product to publicly disclose all or part of the source code to such software product or to make available any derivative works of the open source code on unfavorable terms or at no cost, and we may be subject to such terms. The terms of certain open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute the products or technologies related to, the open source software subject to those licenses. While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open source agreement, such use could inadvertently occur, or claims could be made that such use had occurred, in part because open source license terms are often ambiguous. Additionally, we could face claims from third parties claiming ownership of, or demanding release of, any open source software or derivative works that we have developed using such software, which could include proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to make our software source code freely available, purchase a costly license or cease offering the implicated products or technologies unless and until we can recode or reengineer such source code in a manner that avoids infringement. This reengineering process could require us to expend significant additional research and development resources, and we may not be able to complete the reengineering process successfully. In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protection regarding infringement claims or the quality of the code. There is little legal precedent in this area and any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could harm our business and could help third parties, including our competitors, develop products and technologies that are similar to or better than ours. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition and results of operations.
If we cannot license rights to use technologies on reasonable terms, we may not be able to commercialize new products in the future.
In the future, we may identify additional third-party intellectual property rights we may need to license in order to engage in our business, including to develop or commercialize new products or technologies. However, such licenses may not be available on acceptable terms or at all. The licensing or acquisition of third-party intellectual property rights is a competitive area, and other well-established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources or greater development or commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Even if such licenses are available, we may be required to pay the licensor substantial royalties based on sales or anticipated sales of our products. Such royalties are a component of the cost of our products and may affect the margins on our products. In addition, such licenses may be non-exclusive, which could give our competitors access to the same intellectual property rights licensed to us. If we are unable to enter into the necessary licenses on acceptable terms or at all, if any necessary licenses are subsequently terminated, if our licensors fail to abide by the terms of the licenses, if our licensors fail to prevent infringement by third parties or if the licensed intellectual property rights are found to be invalid or unenforceable, our business, financial condition and results of operations could be materially and adversely affected. Moreover, we could encounter delays in the introduction of products while we attempt to develop alternatives. Defense of any lawsuit or failure to
 
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obtain any of these licenses on favorable terms could prevent us from commercializing products, which could have a material adverse effect on our competitive position, business, financial condition and results of operations.
We rely on operating system providers and app stores to support some of our products and technologies, including our app, and any disruption, deterioration or change in their services, policies, practices, guidelines and/or terms of service could have a material adverse effect on our reputation, business, financial condition and results of operations.
The success of some of our products and technologies depend upon the effective operation of certain mobile operating systems, networks and standards that are run by operating system providers and app stores (“Providers”). We do not control these Providers and as a result, we are subject to risks and uncertainties related to the actions taken, or not taken, by these Providers. We largely utilize Android-based and iOS-based technology for our SharkClean app.
The Providers that control these operating systems frequently introduce new technology, and from time to time, they may introduce new operating systems or modify existing ones. Further, we are also subject to the policies, practices, guidelines, certifications and terms of service of Providers’ platforms on which we publish our SharkClean app and content. These policies, guidelines and terms of service govern the promotion, distribution, content and operation generally of applications and content available through such Providers. Each Provider has broad discretion to change and interpret its terms of service, guidelines and policies and those changes may have an adverse effect on our or our consumers’ ability to use our products and technologies. A Provider may also change its fee structure, add fees associated with access to and use of its platform or app store, limit the use of personal information and other data for advertising purposes or restrict how users can share information on their platform or across other platforms. If we or our consumers were to violate a Provider’s terms of service, guidelines, certifications or policies or if a Provider believes that we or our consumers have violated, its terms of service, guidelines, certifications or policies, then that Provider could limit or discontinue our or our consumers’ access to its platform or app store. In some cases, these requirements may not be clear and our interpretation of the requirements may not align with the interpretation of the Provider, which could lead to inconsistent enforcement of these terms of service or policies against us or our consumers and could also result in the Provider limiting or discontinuing access to its platform or app store. If our products and technologies are unable to work effectively on or with these operating systems, either because of technological or operational constraints or because the Provider impairs our ability to operate on their platform, this could have a material adverse effect on our business, financial condition and results of operations.
If any Providers, including either Google (for Android) or Apple (for iOS) stop providing us with access to their platform or infrastructure, fail to provide reliable access, cease operations, modify or introduce new systems or otherwise terminate services, the delay caused by qualifying and switching to other operating systems could be time consuming and costly and could materially and adversely affect our business, financial condition and results of operations. Any limitation on or discontinuation of our or our consumers’ access to any Provider’s platform or app store could materially and adversely affect our business, financial condition, results of operations or otherwise require us to change the way we conduct our business.
Risks Related to Our Legal, Tax and Regulatory Environment
From time to time, we may be subject to legal proceedings, regulatory disputes and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention and materially harm our business, financial condition and results of operations.
From time to time, we have been, and may continue to be, subject to claims, lawsuits, government investigations and other proceedings involving products liability, competition and antitrust, intellectual property, privacy, consumer protection, securities, tax, labor and employment, commercial disputes and other matters that could adversely affect our business, financial condition and results of operations. As we have grown, we generally have seen a rise in the number and significance of such disputes and inquiries, and we may face increased exposure to securities litigation as a public company. Litigation and regulatory proceedings that we are currently facing, or could face, may be protracted and expensive and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages and include claims for
 
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injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines or require us to modify our products or technologies, make products unavailable or require us to stop offering certain features, all of which could negatively affect our business, financial condition and results of operations.
The results of litigation, investigations, claims and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation and other legal and regulatory matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters and the time and resources necessary to litigate or resolve them, could harm our business, financial condition and results of operations. In addition, we have agreed to provide indemnification in connection with prior acquisitions or dispositions for certain of these matters, and we cannot provide assurances that material indemnification claims will not be brought against us in the future.
Our business involves the potential for product delays, product recalls, product liability and other claims against it, which could affect our business, financial condition and results of operations.
We manufacture products exclusively through our suppliers. As a designer, marketer and distributor of consumer products, we are subject to the United States Consumer Products Safety Act of 1972, as amended by the Consumer Product Safety Improvement Act of 2008, which empowers the Consumer Product Safety Commission (the “CPSC”) to exclude from the market products that are found to be unsafe or hazardous, and similar laws under foreign jurisdictions. Although we extensively and rigorously test new and enhanced products, our products may contain defects and errors, and may in the future contain defects and errors, when first introduced, when new versions or enhancements are released or even after these products have been on the market for some time. There can be no assurance we will be able to detect, prevent or fix all defects or errors, and the presence of any such defects or errors in our products may result in expensive and time-consuming design modifications or warranty charges, delays in the introduction of new products or enhancements, reputational harm, product recalls and liability exposure, all of which may adversely affect our business, financial condition and results of operations.
We are regularly subject to inquiries from regulators about product safety in the United States and in other jurisdictions. Under certain circumstances, the CPSC or comparable foreign agency could require us to repair, recall, replace or refund the purchase price of one or more of our products or potentially even discontinue entire product lines. We also may voluntarily take such action within strictures recommended by the CPSC or other regulators. The CPSC and other regulators also can impose fines or penalties on a supplier for noncompliance with its requirements. Furthermore, failure to timely notify the CPSC or other regulators of a potential safety hazard can result in significant fines being assessed. Additionally, laws regulating consumer products exist in certain states and some cities in the United States, as well as other countries in which our products are sold, and more restrictive laws and regulations may be adopted in the future. Any repurchase or recall of our products, monetary judgment, fine or other penalty could be costly and damaging to our brands and our reputation. If we were required to remove, or we voluntarily removed, any of our products from the market, our reputation could be impaired and we may have large quantities of finished products that we may not be able to sell. We also face exposure to product liability claims and litigation in the event that one or more of our products is alleged to have resulted in bodily injury, property damage or other adverse effects. Furthermore, although we maintain insurance, the occurrence of any material defects in our products could expose us to product liability claims in excess of our insurance coverage or current reserves, and if our insurance coverage or current reserves are inadequate to cover future product liability claims on our products, our business, financial condition and results of operations may be harmed.
In addition to the risk of monetary judgments or other penalties that may result from product liability claims, such claims could result in negative publicity that could harm our reputation, adversely impact our brands or result in an increase in the cost of producing our products. As a result, these types of claims could have a material adverse effect on our business, financial condition and results of operations. We also face exposure to class action lawsuits related to the performance, safety or advertising of our products. Such class action suits could result in substantial monetary judgments and injunctions related to the sale of products and could potentially damage our reputation, business, financial condition and results of operations.
 
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Public perceptions that some of the products we produce and market are not safe could adversely affect us.
On occasion, consumers have alleged that some of our products failed to perform up to expectations or have caused damage or injury to individuals or property. Public perception that any of our products are not safe, whether justified or not, could impair our reputation, damage our brands and have a material adverse effect on our business, financial condition and results of operations. In addition, we rely on certain third-party trademarks, brand names and logos of which we do not have exclusive use. Public perception that any such third-party trademarks, brand names and logos used by us are not safe or otherwise have negative reputations or associations, whether justified or not, could have a material adverse effect on our business, financial condition and results of operations.
Compliance with various public health, consumer protection and other regulations applicable to our products and facilities could increase our cost of doing business and expose us to additional requirements with which we may be unable to comply.
Certain of our packaging materials and products sold through, and/or facilities operated under, each of our business segments are regulated by the CPSC, the Federal Communications Commission, the U.S. Environmental Protection Agency, the Occupational Safety and Health Administration, the U.S. Food and Drug Administration, the FTC and other federal or state consumer protection and product safety agencies and are subject to the regulations such agencies enforce, as well as by similar state, foreign and multinational agencies and regulations. Failure to comply with such regulatory requirements could result in government-imposed fines, stop sale orders or other penalties, as well as consumer litigation. Our inability to obtain, or the cancellation of, any registration or approval required by such agencies could have an adverse effect on our business, financial condition and results of operations. The severity of the effect could depend, among other things, on factors such as which products were involved, whether another product could be substituted and whether our competitors were similarly affected. We attempt to anticipate regulatory developments and maintain registrations of, and access to, substitute chemicals and other ingredients, but we may not always be able to avoid or minimize these risks.
Certain of our products may be regulated under programs within the United States, Canada, the United Kingdom, the European Union or in other countries that may require that those products and the associated product packaging be recycled or managed for disposal through a designated recycling program. Some programs are funded through assessment of a fee on the suppliers, including us. We do not expect that such programs will cause us to incur expenditures that are material to our business, financial condition or results of operations; however, it is possible that our future liability could be material. Furthermore, where we make claims about our products’ recyclability, recycled content or other environmental attributes, we are subject to enforcement by the FTC that any such claims are not false or misleading.
Any failure to comply with U.S. or foreign consumer safety, food and/or environmental laws or regulations could result in us incurring substantial costs, including fines, penalties and other civil and criminal sanctions, civil damages or the prohibition of sales of our products. Such legal and regulatory requirements and the enforcement thereof change frequently, have tended to become more stringent over time and could require us to incur significant expenses. Our retailers routinely require certification by independent third-party laboratories, such as UL Solutions, Inc., which are engaged in the testing of our products for compliance with certain nationally accredited standards in the markets in which we operate. Failure to obtain retailer-required certifications could result in the inability to sell our products.
Given the increasing number of foreign laws to which we are subject and the high level of complexity of these laws, there is a risk that some provisions may be inadvertently violated by us, for example, through fraudulent or negligent behavior of individual employees, our failure to comply with certain formal documentation requirements or otherwise. If we incur liability for noncompliance under these laws or regulations, we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial resources or to discontinue certain products, which would negatively affect our business, financial condition and results of operations. In addition, any negative publicity directed to us as a result of lawsuits, regulatory proceedings and legislative proposals could harm our brands or otherwise impact the growth of our business. Any costs incurred as a result of compliance efforts or other liabilities under these laws or regulations could harm our business, financial condition and results of operations.
 
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Class action and derivative action lawsuits and other investigations, regardless of their merits, could have an adverse effect on our business, financial condition and results of operations.
We have been named in the past, and may be named in the future, as defendants of class action and derivative action lawsuits. In the past, we have also received requests for information from government authorities. Regardless of their subject matter or merits, class action and derivative action lawsuits and other government investigations may result in significant cost to us, which may not be covered by insurance, may divert the attention of management or may otherwise have an adverse effect on our business, financial condition and results of operations.
Changes to U.S. trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business.
There have been significant changes and proposed changes in recent years to U.S. trade policies, tariffs and treaties affecting imports. For example, the United States has imposed supplemental tariffs of up to 25% on certain imports from China, as well as increased tariffs and import restrictions on products imported from various other countries. In response, China and other countries have imposed or proposed additional tariffs on certain imports from the United States.
A significant proportion of our products are manufactured in China, Vietnam and other regions outside of the United States. Accordingly, such U.S. policy changes have made it, and may continue to make it, difficult or more expensive for us to obtain certain products manufactured outside the United States, which could affect our net sales and profitability. For instance, we currently benefit from exclusions to 25% tariffs on certain products imported from China. If these exclusions are not extended, we would face a substantial increase in costs. The expiration of these exclusions or additional tariff increases could require us to increase our prices, which could decrease consumer demand for our products. Retaliatory tariff and trade measures imposed by other countries could affect our ability to export products and therefore adversely affect our net sales. Any of these factors could depress economic activity and restrict our access to suppliers, retailers or consumers and could have a material adverse effect on our business, financial condition and results of operations and affect our strategy in China, Vietnam and elsewhere around the world. While we will continue to work to mitigate our tariff exposure, there can be no assurance that our mitigation efforts will be successful.
We are subject to governmental export and import controls, customs and economic sanction laws that could subject us to liability and impair our ability to compete in international markets.
The United States and various foreign governments have imposed controls, export license requirements and restrictions on the import or export of certain products, as well as customs and other import regulatory requirements. Our products may be subject to U.S. export controls. Compliance with applicable regulatory requirements regarding the import and export of our products may create delays in the introduction of our products in international markets and, in some cases, prevent the export of our products to some countries altogether. Over the past year, several countries have imposed far-reaching export controls with respect to geopolitical conflicts in addition to export control measures targeting certain industries. Although we do not believe our products are directly impacted by these recent measures, we cannot rule out the possibility that these measures could have an indirect negative impact on our business and our ability to source certain products from key jurisdictions.
Furthermore, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and other relevant agencies of the U.S. government administer certain laws and regulations that restrict U.S. persons and, in some instances, non-U.S. persons, from conducting activities, transacting business with or making investments in certain countries or with governments, entities and individuals subject to U.S. economic sanctions. Similar economic sanctions are imposed by the European Union and other jurisdictions. Sanctions may evolve rapidly and with far-reaching impact on global business—for example, over the past year, the United States, the United Kingdom, the European Union, as well as certain other countries have imposed multiple rounds of significant sanctions in response to geopolitical conflicts. Our international operations subject us to these laws and regulations, which are complex, restrict our business dealings with certain countries, governments, entities and individuals and are constantly changing. Penalties for noncompliance with these complex laws and regulations can be significant and include substantial fines,
 
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sanctions or civil and/or criminal penalties and violations can result in adverse publicity, which could harm our business, financial condition and results of operations. Even though we take precautions to prevent conducting business with targets of U.S. sanctions, business could be conducted with those targets or conducted by our retailers. Any such business could have negative consequences, including government investigations, penalties and reputational harm. Our failure to obtain required import or export approval for our products or to comply with applicable laws and regulations with regard to our import and export activity, could harm our international and domestic sales and adversely affect our net sales.
We could be subject to future enforcement action with respect to compliance with governmental export and import controls, customs laws and economic sanctions laws that result in penalties, costs and restrictions on export privileges that could have an adverse effect on our business, financial condition and results of operations.
Failure to comply with anti-corruption and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences.
We operate a global business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or government controlled entities. We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act and possibly other anti-bribery and anti-money laundering laws in countries in which we conduct activities. These laws generally prohibit companies, their employees and third-party intermediaries from corruptly promising, authorizing, offering or providing, directly or indirectly, improper payments of anything of value to government officials, political parties and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person or securing any improper advantage. Certain laws, including the U.K. Bribery Act, also prohibit soliciting or receiving bribes or improper payments. In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls.
Some of the countries where we operate or where our products are sold may not have as strong a commitment to anti-corruption and ethical behavior that is required by U.S. laws or by our corporate policies. Noncompliance with anti-corruption, anti-bribery, anti-money laundering or similar laws and regulations could subject us to substantial fines, whistleblower complaints, adverse media coverage, investigations and severe administrative, civil and criminal sanctions and penalties, collateral consequences, including restrictions on the marketing of our products in certain countries, remedial measures and legal expenses, all of which could have a material adverse effect on our reputation, business, financial condition and results of operations. Further, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.
In addition, if any person in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering, or is involved with terrorism or terrorist financing and property, and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands (the “FRA”), pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands, if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the FRA, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property.
Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.
We are subject to income taxes in various jurisdictions around the world. Our effective income tax rate could be adversely affected in the future by a number of factors, including changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations or their interpretations and application and the outcome of income tax audits in any of the jurisdictions in which we operate or are otherwise subject to tax. Our effective tax rate may also be impacted by changes in the geographic mix of our earnings.
 
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A significant change in U.S. tax law, or that of other countries where we operate or have a presence, may materially and adversely impact our income tax liability, provision for income taxes and effective tax rate. We regularly assess all of these matters to determine the adequacy of our income tax provision, which is subject to significant judgment.
In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final outcome of tax audits and related litigation could be materially different than that reflected in our historical income tax provisions and accruals. There can be no assurance that the resolution of any audits or litigation will not have an adverse effect on future operating results.
In August 2022, the United States passed the Inflation Reduction Act (“IRA”), which imposed, among other things, a corporate alternative minimum tax on book income on certain large U.S. corporations, including certain U.S. subsidiaries of certain large multinational corporate groups. These provisions became effective on January 1, 2023. Although we do not currently believe our U.S. subsidiaries are subject to this corporate alternative minimum tax, the full effects of these rules and other provisions of the IRA on us are uncertain until further regulations and guidance from the Internal Revenue Service (“IRS”) and Treasury are released.
We may be subject to the Economic Substance Regime in the Cayman Islands.
The Cayman Islands has recently enacted the International Tax Co-operation (Economic Substance) Act (As Revised) (the “Cayman Economic Substance Act”). The Cayman Economic Substance Act is supplemented by the issuance of related Guidance on Economic Substance for Geographically Mobile Activities. The Cayman Economic Substance Act generally requires legal entities domiciled or registered in the Cayman Islands to have demonstrable substance in the Cayman Islands. The Cayman Economic Substance Act was introduced by the Cayman Islands to ensure that it meets its commitments to the European Union, as well as its obligations under the Organization for Economic Co-operation and Development’s global Base Erosion and Profit Shifting initiatives. We are required to comply with the Cayman Economic Substance Act. As we are a Cayman Islands company, compliance obligations include filing annual notifications, which need to state whether we are carrying out any relevant activities and, if so, whether we have satisfied economic substance tests to the extent required under the Cayman Economic Substance Act. As it is a relatively new regime, it is anticipated that the Cayman Economic Substance Act will evolve and be subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in order to comply with all requirements under the Cayman Economic Substance Act. Failure to satisfy these requirements may subject us to penalties under the Cayman Economic Substance Act. The Cayman Islands Tax Information Authority shall impose a penalty of CI$10,000 (or US$12,500) on a relevant entity for failing to satisfy the economic substance test or CI$100,000 (or US$125,000) if it is not satisfied in the subsequent financial year after the initial notice of failure. Following two consecutive years of failing the economic substance test, the Grand Court of the Cayman Islands may make an order requiring the relevant entity to take specified action to satisfy the economic substance test or order that the entity become defunct or struck off.
The Chinese government may intervene in or influence our operations or the operations of our third party suppliers at any time, which could result in a material change in our business, financial condition and results of operations as well as the value of our ordinary shares.
Currently, we maintain operations in China where various third party suppliers manufacture a majority of our products. The Chinese government has significant oversight and discretion over the conduct of these suppliers in China and may intervene or influence their operations as the government deems appropriate to further regulatory, political and societal goals. The Chinese government has recently published new policies that significantly affect certain industries and we cannot rule out the possibility that it will, in the future, implement regulations or policies that impact our suppliers, which may adversely affect our business, financial condition and results of operations. In addition, the Chinese government may, in the future, seek to affect operations of any company with any level of operations in China. If we were to become subject to the direct intervention or influence of the Chinese government at any time due to changes in policies, regulations, laws or otherwise, our business, financial condition and results of operations as well as the value of our ordinary shares could be adversely impacted.
 
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Increased focus by governmental and non-governmental organizations, consumers and shareholders on sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
As climate change, land use, water use, deforestation, plastic waste, recyclability or recoverability of packaging, including single-use and other plastic packaging and other sustainability concerns become more prevalent, governmental and non-governmental organizations, consumers and investors are increasingly focusing on these issues. In particular, changing consumer preferences may result in increased consumer concerns and demands regarding plastics and packaging materials, including single-use and non-recyclable plastic packaging and their environmental impact on sustainability, a growing demand for natural or organic products and ingredients or increased consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of ingredients or substances present in certain consumer products. This increased focus on environmental issues and sustainability may result in new or increased regulations and consumer and investor demands that could cause us to incur additional costs or to make changes to our products to comply with any such regulations and address demands. If we are unable to respond or perceived to be inadequately responding to sustainability concerns, consumers may choose to purchase products from a competitor.
Concern over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate the effects of climate change on the environment. Increased costs of energy or compliance with emissions standards due to increased legal or regulatory requirements may cause disruptions in or increased costs associated with manufacturing our products. Any failure to achieve our goals with respect to reducing our impact on the environment or a perception (whether or not valid) of our failure to act responsibly with respect to the environment or to effectively respond to new, or changes in, legal or regulatory requirements concerning climate change or other sustainability concerns could adversely affect our business, financial condition, results of operations and reputation.
In addition, shareholders are increasingly sensitive to the climate change impacts and mitigation efforts of companies, are increasingly seeking enhanced disclosure on the risks, challenges, governance implications and financial impacts of climate change faced by companies and are demanding that companies take a proactive approach to addressing perceived environmental risks, including risks associated with climate change, relating to their operations. In an effort to increase climate change disclosure, the SEC proposed climate disclosure rules that would require new climate-related disclosure in SEC filings, as described below. Adverse publicity or climate-related litigation that may result from such enhanced disclosure or shareholder perception could have a negative impact on our business, financial condition and results of operations.
New climate disclosure rules, if adopted by the SEC, may increase our costs and litigation risks, which would materially and adversely affect our business, financial condition and results of operations.
In 2022, the SEC proposed new climate disclosure rules which, if adopted, would require new climate-related disclosure in SEC filings, including certain climate-related metrics and greenhouse gas emissions data, information about climate-related targets and goals, transition plans, if any, and extensive attestation requirements. In addition to requiring filers to quantify and disclose direct emissions data, the new rules also would require disclosure of climate impact arising from the operations and uses by the filer’s business partners and contractors and end-users of the filer’s products and/or services. We are currently assessing the impact of the new rules, if adopted as proposed, but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the new rules if adopted. However, we may incur increased costs relating to the assessment and disclosure of climate-related risks and increased litigation risks related to disclosures made pursuant to the new rules, either of which could materially and adversely affect our business, financial condition and results of operations.
We are subject to a limited number of environmental and health and safety laws and regulations, which could subject us to liabilities, increase our costs or restrict our operations in the future.
Our facilities and operations are subject to a limited number of environmental, health and safety laws and regulations in each of the jurisdictions in which we operate. Given that we rely on suppliers to manufacture our products, the principal environmental, health and safety laws that apply to our facilities and operations relate to safe use, storage and management of the few hazardous chemicals used in our
 
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operations, reporting inventories of certain hazardous chemicals stored at our facilities to state and local emergency responders and proper storage and management of batteries.
We expect to continue to incur costs to comply with these laws and regulations. If we fail to comply with these laws and regulations, we could incur civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders enjoining or curtailing our operations or requiring us to conduct or fund remedial or corrective measures or perform other actions.
In addition, future developments such as new and more restrictive or changes to existing, environmental, health or safety laws and regulations, more aggressive enforcement of existing laws and regulations or the discovery of presently unknown environmental conditions may require expenditures that could have an adverse effect on our business, financial condition and results of operations.
Risks Related to Our Financial Condition
Our indebtedness could materially adversely affect our financial condition.
At December 31, 2022, we had $437.5 million in outstanding debt. Our indebtedness could have important consequences to the holders of our ordinary shares, including the following:
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making it more difficult for us to satisfy our obligations with respect to our other debt;
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limiting our ability to refinance any of our other debt or to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate purposes;
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requiring us to dedicate a substantial portion of our cash flows to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;
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increasing our vulnerability to general adverse economic and industry conditions;
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limiting our flexibility in planning for and reacting to changes in the industry in which we compete;
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placing us at a disadvantage compared to other, less leveraged competitors; and
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increasing our cost of future borrowings.
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In addition, if we are unable to timely reduce our level of indebtedness, we will be subject to increased demands on our cash resources, which could increase our total debt-to-capitalization ratios, decrease our interest coverage ratios, lower our credit ratings, result in a breach of covenants or otherwise adversely affect our business and financial results going forward.
Restrictive covenants in our debt agreements may restrict our ability to pursue our business strategies.
Our credit facilities include certain restrictive covenants, which limit our ability to, among other things:
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incur additional debt;
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issue shares;
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pay dividends or repurchase shares;
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create liens on our assets or provide guarantees;
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enter certain transactions with affiliates;
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make certain investments or loans; or
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dispose of or sell assets, make acquisitions or enter into a merger or similar transaction.
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Compliance with such restrictive covenants in our credit facilities may limit our ability to engage in acts that may be in our best long-term interests. Additionally, a breach of any of the restrictive covenants in our credit facilities could result in a default under these facilities. If a default occurs, the lenders under our credit facilities may elect to declare all outstanding borrowings, together with accrued interest, to be immediately due and payable, to terminate any commitments they have to provide further borrowings and
 
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to exercise any other rights and remedies they have under the facilities or applicable law, including foreclosing on any collateral securing the facilities.
Our net sales could decline due to changes in credit markets and decisions made by credit providers.
Certain of our retailers and consumers finance their purchase of our products through third-party credit providers with whom we have existing relationships. If we are unable to maintain our relationships with our financing partners, there is no guarantee that we will be able to find replacement partners who will provide our retailers and consumers with financing on similar terms and our ability to sell our products may be adversely affected. Further, reductions in consumer lending and the availability of consumer credit could limit the number of consumers with the financial means to purchase our products. Higher interest rates could increase our costs or the monthly payments for products financed through other sources of consumer financing. In the future, we cannot be assured that third-party financing providers will continue to provide retailers and consumers with access to credit or that available credit limits will not be reduced. Such restrictions or reductions in the availability of consumer credit or the loss of our relationship with our current financing partners, could have an adverse effect on our business, financial condition and results of operations.
The estimates and assumptions on which our financial projections are based may prove to be inaccurate, which may cause our actual results to materially differ from our projections, which may adversely affect our future business, financial condition, results of operations and share price.
Our financial projections, including any sales or earnings guidance or outlook we may provide from time to time, depend on certain estimates and assumptions related to, among other factors, product category growth, development and launch of innovative new products, market share projections, product pricing and sale, volume and product mix, foreign exchange rates and volatility, tax rates, manufacturing costs including commodity prices, distribution channel volume and costs, cost savings, accruals for estimated liabilities, including litigation reserves, measurement of benefit obligations for pension and other post-retirement benefit plans and our ability to generate sufficient cash flow to reinvest in our existing business, fund internal growth, make acquisitions and meet debt obligations.
We develop our financial projections based on historical experience and on various other estimates and assumptions that we believe to be reasonable under the circumstances and at the time they are made. Our actual results may differ materially from our financial projections. Any material variation between our financial projections and our actual results may adversely affect our future profitability, cash flows and share price.
Our financial results and future growth could be harmed by currency exchange rate fluctuations.
As our international business grows, our results of operations could be adversely impacted by changes in foreign currency exchange rates. Net sales and certain expenses in markets outside of the United States are recognized in local foreign currencies, and we are exposed to potential gains or losses from the translation of those amounts into U.S. dollars for consolidation into our financial statements. Similarly, we are exposed to gains and losses resulting from currency exchange rate fluctuations on transactions generated by our foreign subsidiaries in currencies other than their local currencies. Although we may employ, at times, a variety of techniques to mitigate the impact of exchange rate fluctuations and/or foreign currency transaction risk, including financial hedging instruments, we cannot guarantee that such risk management strategies will be effective, and our business, financial condition and results of operations could be adversely impacted.
In addition, the business of our suppliers may also be disrupted by currency exchange rate fluctuations by making their purchases of raw materials more expensive and more difficult to finance. Further, under most of our supply agreements, the purchase price payable by us for finished goods is tied to movements in local foreign currency rates. As a result, foreign currency exchange rate fluctuations may adversely impact our business, financial condition and results of operations.
We depend on cash generated from our operations to support our growth, and we may need to raise additional capital, which may not be available on terms acceptable to us or at all.
We primarily rely on cash flow generated from our sales to fund our current operations and our growth initiatives. As we expand our business, we will need significant cash from operations to purchase inventory,
 
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increase our product development, expand our supplier relationships, pay personnel, pay for the increased costs associated with operating as a public company, expand internationally and further invest in our sales and marketing efforts. If our business does not generate sufficient cash flow from operations to fund these activities and sufficient funds are not otherwise available from our current or future credit facility, we may need to obtain additional equity or debt financing. If such financing is not available to us on satisfactory terms or in a timely manner, our ability to operate and expand our business or to respond to competitive pressures could be harmed. Moreover, if we raise additional capital by issuing equity securities or securities convertible into equity securities, the ownership of our existing shareholders may be diluted. The holders of new securities may also have rights, preferences or privileges which are senior to those of existing holders of ordinary shares. In addition, any indebtedness we incur may subject us to covenants that restrict our operations and our ability to effectuate certain corporate decisions for our business and will require interest and principal payments that could create additional cash demands and financial risk for us.
Future financing activities may adversely affect our leverage and financial condition.
Subject to the limitations set forth in our debt agreements, we may incur additional indebtedness and issue dividend-bearing redeemable equity interests. We may incur substantial additional financial obligations to enable us to execute our business objectives. These obligations could result in:
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default and foreclosure on our assets if our gross profit after an investment or acquisition are insufficient to repay our financial obligations;
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acceleration of our obligations to repay the financial obligations even if we make all required payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payments of all amounts owed, if any, if such financial obligations are payable on demand;
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our inability to obtain additional financing if such financial obligations contain covenants restricting our ability to obtain such financing while the financial obligations remain outstanding;
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our inability to pay dividends on our share capital;
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using a substantial portion of our cash flow to pay principal and interest or dividends on our financial obligations, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industries in which we operate;
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an event of default that triggers a cross default with respect to other financial obligations, including our indebtedness;
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increased vulnerability to adverse changes in general economic, industry, financial, competitive, legislative, regulatory and other conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors.
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If our estimates or judgments relating to our critical accounting policies prove to be incorrect or change significantly, our business, financial condition and results of operations could be harmed.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of sales and expenses that are not readily apparent from other sources. Our results of operations may be harmed if our assumptions change
 
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or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors and could result in a decline in our share price.
If our goodwill, other intangible assets or fixed assets become impaired, we may be required to record a charge to our earnings.
We may be required to record future impairments of goodwill, other intangible assets or fixed assets to the extent the fair value of these assets falls below their book value. Our estimates of fair value are based on assumptions regarding future cash flows, gross margins, expenses, discount rates applied to these cash flows and current market estimates of value. Estimates used for future sales growth rates, gross profit performance and other assumptions used to estimate fair value could cause us to record material non-cash impairment charges, which could harm our business, financial condition and results of operations.
Circumstances associated with divestitures and product category exits could adversely affect our business, financial condition and results of operations.
We may decide to sell or discontinue certain brands or product categories in the future based on an evaluation of performance and strategic fit. Divestitures or discontinuations of businesses or products may result in asset impairments, including those related to goodwill and other intangible assets and losses upon disposition, both of which could have an adverse effect on our business, financial condition and results of operations. In addition, we may encounter difficulty in finding buyers or executing alternative exit strategies at acceptable prices and terms and in a timely manner and prospective buyers may have difficulty obtaining financing. Past and future divestitures and business discontinuations also involve additional risks, including the following:
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difficulties in the separation of operations, services, products and personnel;
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the retention of certain current or future liabilities in order to induce a buyer to complete a divestiture;
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the disruption of our business;
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the potential loss of key employees; and
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disputes or litigation with the buyers.
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We may not be successful in managing these or any other significant risks that we may encounter in divesting or discontinuing a business or exiting product categories, which could have a material adverse effect on our business, financial condition and results of operations.
The phase-out of LIBOR may adversely affect a portion of our outstanding debt.
The United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates the London Interbank Offered Rate (“LIBOR”), and the ICE Benchmark Administration (the “IBA”), the administrator of LIBOR, have announced the intention to phase out LIBOR by the end of June 2023, with the FCA requiring IBA to continue publication of one-, three- and six-month U.S. Dollar LIBOR settings on a “synthetic,” or non-representative, basis through the end of September 2024. Although we do not expect to have any LIBOR-based debt after completing the refinancing described herein, if such refinancing is not completed prior to June 30, 2023, we anticipate that a portion of our outstanding debt will continue to be administered using an unrepresentative synthetic methodology for calculating LIBOR until September 2024 at the latest. In this case, we cannot predict the effect of the changes to LIBOR or the establishment and use of alternative floating borrowing rates on the portion of our outstanding debt that is LIBOR based. Differences between LIBOR and any applicable alternative reference rates may adversely impact the interest rates on our existing debt and result in higher borrowing costs. We may fail to adequately prepare for or react to LIBOR discontinuation and replacement, or fail to fully protect ourselves from all the effects of such changes, which may have an adverse effect on our business, financial condition and results of operations.
We are a holding company.
We are a holding company. Accordingly, our ability to conduct our operations, service any debt that we may incur and pay dividends, if any, is dependent upon the earnings from the business conducted by our
 
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subsidiaries. The distribution of those earnings or advances or other distributions of funds by our subsidiaries to us, as well as our receipt of such funds, are contingent upon the earnings of our subsidiaries and are subject to various business considerations and applicable law, including Cayman Law. If our subsidiaries are unable to make sufficient distributions or advances to us, or if there are limitations on our ability to receive such distributions or advances, we may not have the cash resources necessary to conduct our corporate operations, which could adversely affect our business, financial condition and results of operations.
Risks Related to the Separation and Distribution and Being a Public Company
We have no operating history as a stand-alone public company, and our historical financial data is not necessarily representative of the results we would have achieved as a stand-alone public company and may not be a reliable indicator of our future results.
We have historically operated as part of JS Global’s broader corporate organization and not as a stand-alone entity. We have no prior operating history as a separate publicly traded company. The consolidated historical information in this prospectus refers to our business as part of JS Global. This information does not necessarily reflect the financial position, results of operations and cash flows we would have achieved as a public company during the periods presented, or those that we will achieve in the future.
Therefore, our historical financial data may not necessarily be indicative of our future financial position, results of operations or cash flows, and the occurrence of any of the risks discussed in this “Risk Factors” section, or any other event, could cause our future financial position, results of operations or cash flows to materially differ from our historical financial data. While we have been profitable as part of JS Global, we cannot assure you that our profits will continue at a similar level when we are a stand-alone public company.
For additional information about the past financial performance of our business and the basis of presentation of the historical consolidated financial statements of our business, see “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and accompanying notes included elsewhere in this prospectus.
We may be unable to achieve some or all of the anticipated benefits of the separation, and the separation may adversely affect our business, financial condition and results of operations.
We may not realize some or all of the anticipated strategic, financial, operational or other benefits of the separation for a variety of reasons, including, among others:
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the execution of the separation will require significant time and attention from our management, which could impact other strategic initiatives;
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following the consummation of the separation, we may be more susceptible to macroeconomic factors, have less leverage with suppliers, retailers and distributors and may experience other adverse events compared to if we were still a part of JS Global;
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following the consummation of the separation, our business will be less diversified than prior to the separation; and
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the other actions required to separate our and JS Global’s respective businesses could disrupt our operations.
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If we fail to achieve some or all of the benefits expected to result from the separation, or if such benefits are delayed, our business, financial condition and results of operations could be adversely affected.
The separation and distribution are subject to final approval of JS Global’s board of directors and shareholders, as well as a number of other conditions. The transactions may not take place, may be delayed or may not take place in the manner currently anticipated.
The separation and distribution are a series of transactions designed to fully separate us from JS Global and list us on NYSE, following which JS Global would no longer be our shareholder. The separation
 
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and distribution are subject to final approval of JS Global’s board of directors and shareholders, as well as a number of other conditions, including necessary regulatory approvals and other uncertainties. If the approvals are not obtained or conditions are not satisfied (and not otherwise waived), the separation and/or distribution will not take place. See “The Separation and Distribution Transactions” and the JS Global Circular, a copy of which is filed as Exhibit 99.6 to this registration statement. The separation and distribution encompasses a series of complex transactions involving a number of professional parties and regulators across multiple jurisdictions, and may not be completed in the manner and within the time expected, or at all. If the separation and distribution from JS Global are not completed, the benefits we currently expect from the separation and distribution, such as our strategic independence from JS Global, would not materialize. In that event, JS Global will continue to hold sufficient shares to exercise control over all matters requiring shareholder approval, whether approval is required as an ordinary resolution or special resolution as a matter of Cayman Law or under the rules and regulations of the place of the exchange on which JS Global is listed, such as approval of the financial statements, declarations of final dividends, the appointment and removal of directors, share capital amendments (including increases, consolidations, subdivision, repurchase and cancellation), adoption of share incentive schemes, share issuances and amendments to our memorandum and articles of association.
Conflicts of interest may arise because some of our directors will hold a management or board position with JS Global.
Mr. Wang, the Chairperson of our Board, is also the Chairman, Executive Director and Chief Executive Officer of JS Global. Mr. Hui and Mr. Warner, who are expected to join our Board upon the completion of the separation and distribution, also currently serve as members of the JS Global Board; however, Mr. Hui and Mr. Warner intend to step down from the JS Global Board in connection with joining our Board. The interests of these directors in JS Global and us could create, or appear to create, conflicts of interest with respect to decisions involving both us and JS Global that could have different implications for JS Global and us. These decisions could, for example, relate to:
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disagreement over corporate opportunities;
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competition between us and JS Global;
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employee retention or recruiting;
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our dividend policy; and
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the services and arrangements from which we benefit as a result of our relationship with JS Global.
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Conflicts of interest could also arise if we enter into any new commercial arrangements with JS Global in the future, or if JS Global decides to compete with us in any of our markets. The presence of directors or officers of entities affiliated with JS Global on our Board could create, or appear to create, conflicts of interest and conflicts in allocating their time with respect to matters involving both us and any one of them, or involving us and JS Global, that could have different implications for any of these entities than they do for us. We cannot assure you that our New Memorandum and Articles of Association, policies and procedures will adequately address potential conflicts of interest or that potential conflicts of interest will be resolved in our favor or that we will be able to take advantage of corporate opportunities presented to individuals who are directors of both us and entities affiliated with JS Global. As a result, we may be precluded from pursuing certain advantageous transactions or growth initiatives.
We or JS Global may fail to perform under various transaction agreements that will be executed as part of the separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.
In connection with the separation, we intend to enter into the Separation and Distribution Agreement and several other ancillary agreements with JS Global and its subsidiaries (as applicable), including the Transition Services Agreement, the Employee Matters Agreement, the Brand License Agreement, the Sourcing Services Agreement (JS Global), the Sourcing Services Agreement (Joyoung) and the Product Development Agreement. See “Certain Relationships and Related Party Transactions—Related Party Transactions with JS Global.” Certain of these agreements will provide for the performance of key business
 
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services by us and JS Global for each other’s benefit after the consummation of the separation. The services provided by JS Global to us may not be sufficient to meet our needs and the terms of such services may not be equal to or better than the terms we may have received from unaffiliated third parties, including our ability to obtain redress. These agreements will also provide for, among other things, indemnification obligations. If we are required to indemnify JS Global under the circumstances set forth in these agreements, we may be subject to substantial liabilities. In addition, third parties could also seek to hold us responsible for any of the liabilities that JS Global has agreed to retain, and we cannot assure you that the indemnity from JS Global will be sufficient to protect us against the full amount of such liabilities, or that JS Global will be able to fully satisfy its indemnification obligations.
In addition, we will rely on JS Global to satisfy its performance and payment obligations under these agreements. If JS Global is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses. If we do not have our own systems and services in place, or if we do not have agreements with other providers of these services once certain transitional agreements expire, we may not be able to operate our business effectively and this may have an adverse effect on our business, financial condition and results of operations. In addition, after our agreements with JS Global expire, we may not be able to obtain these services at as favorable prices or on as favorable terms. As a result of any the above factors, we may be precluded from pursuing growth opportunities or other opportunities that we would otherwise pursue, which in turn may adversely affect our business, financial condition and results of operations.
Our and JS Global’s contracts may contain provisions requiring the notice or consent of third parties in connection with the separation. If we or JS Global fail to notify these third parties or obtain their consents, we may be unable to enjoy the benefit of these contracts in the future.
We have entered into various business, financial and other contracts in the ordinary course of business. Some of these contracts may require us to notify or seek prior consent from the counterparties in connection with the separation. We believe that we have carried out our contractual obligations and are not otherwise in material default or violation of these contracts. However, if any contractual counterparties find us in default or violation due to failure to notify them or obtain their prior consent in connection with the separation or otherwise, they may terminate their business relationship with us, declare any repayment obligations immediately due and/or pursue legal actions against us, which may materially and adversely affect our business, financial condition and results of operations.
Furthermore, JS Global has entered into various business, financing and other contracts in the ordinary course of business. Some of these contracts may require JS Global to notify or seek prior consent from the counterparties in connection with the separation. JS Global has notified us that they believe that they have carried out their contractual obligations and are not otherwise in material default or violation of those contracts. However, if any contractual counterparties find JS Global in default or violation due to failure to notify them or obtain their prior consent in connection with the separation or otherwise, they may terminate their business relationship with JS Global or us, declare any repayment obligations immediately due and/or pursue legal actions against JS Global or us, which may materially and adversely affect our business, financial condition and results of operations.
A court could require that we assume responsibility for obligations allocated to JS Global under the Separation and Distribution Agreement.
Under the Separation and Distribution Agreement and related ancillary agreements, from and after the separation, we and JS Global will be generally responsible for the debts, liabilities and other obligations related to the businesses which we own and operate following the consummation of the separation. Although we do not expect to be liable for any obligations that are not allocated to us under the Separation and Distribution Agreement, a court could disregard the allocation agreed to between the parties, and require that we assume responsibility for obligations allocated to JS Global (for example, tax liabilities), particularly if JS Global were to refuse or to be unable to pay or perform the allocated obligations.
The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business.
Following the completion of the separation and distribution, we will be required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these
 
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reporting and other regulatory requirements will be time-consuming and will result in increased costs to us and could have a negative effect on our business, financial condition and results of operations.
As a public company, we will be subject to the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act. These requirements may place a strain on our systems, personnel and resources. The Exchange Act requires, among other things, that we file annual and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth will also require us to commit additional management, operational and financial resources to identify new professionals to join our company and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.
We have identified a material weakness in our internal control over financial reporting. As a public company, we will be obligated to maintain internal control over financial reporting and to evaluate and determine its effectiveness. Identification of material weaknesses in the future or any failure of our internal systems, controls and procedures could have an adverse effect on our business, financial condition, results of operations and investor confidence.
Pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”) and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, our management will be required to report on the effectiveness of our internal control over financial reporting starting with our second annual report that we file with the SEC after the completion of the separation and distribution. Because we are not currently required to comply with Section 404, we are not currently required to make an assessment of the effectiveness of our internal controls, or to deliver a report that assesses the effectiveness of our internal control over financial reporting. The process of designing and implementing effective internal controls compliant with Section 404 is a continuous effort and will require the investment of substantial time and resources, including by our Chief Financial Officer and other members of our senior management.
The report prepared by management assessing the effectiveness of our internal control over financial reporting will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.
The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
In the course of preparing the financial statements that are included in this prospectus, we identified a material weakness in our internal control over financial reporting. The material weakness identified related to controls to ensure proper accounting for non-routine and complex transactions. We concluded that the material weakness in our internal control over financial reporting existed because, prior to the completion of the separation and distribution, we have been a private company and have not had the necessary business processes, appropriate accounting personnel and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.
We have taken and will continue to take action to remediate the material weakness, including hiring additional accounting resources with sufficient public company experience and technical accounting expertise. We have also engaged, and will continue to engage as necessary, external specialists to augment our internal resources in accounting for transactions of greater complexity or where specific technical expertise is needed. Furthermore, we are taking actions to improve processes, documentation and review of the analysis and accounting for non-routine and complex transactions.​
 
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We will not be able to fully remediate the identified material weakness until the ongoing steps described above have been completed and our internal controls have been operating effectively for a sufficient period of time. We believe we will make significant progress in our remediation plan within fiscal year 2023, but cannot assure you that we will be able to fully remediate the material weakness by such time. We may also incur significant costs to execute various aspects of our remediation plan but cannot provide a reasonable estimate of such costs at this time.
Furthermore, we cannot assure you that we have identified all material weaknesses. In the future, it is possible that additional material weaknesses or significant deficiencies may be identified that we may be unable to remediate timely. If we fail to maintain effective systems, controls and procedures, including disclosure controls and procedures and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations and prevent fraud could be adversely impacted. We are upgrading and standardizing our information systems and related controls, but failure to achieve these goals effectively or in a timely manner could adversely impact our ability to maintain an effective internal control environment and our financial results. We may also experience higher than anticipated operating expenses during and after the implementation of any of these changes to our systems, controls or procedures, or become subject to investigations by the SEC or other regulatory authorities. Additionally, we do not expect that our internal control systems, even if timely and well established, will prevent all errors and all fraud. Internal control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.
Further, if we are unable to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404, our independent registered public accounting firm may not issue an unqualified opinion as to the effectiveness of our internal control over financial reporting. If we are unable to conclude that we have effective internal control over financial reporting, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our ordinary shares. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Irrespective of compliance with Section 404, as we mature, we will need to further develop our internal control systems and procedures to keep pace with our rapid growth and we are currently working to improve our controls. Our current controls and any new controls that we develop may become inadequate because, among other reasons, they may not keep pace with our growth or the conditions in our business may change. We are in the process of developing and implementing an enterprise risk management framework, but this development and implementation may not proceed on our projected timetable, and this framework may not fully protect us against operational risks and losses.
As a foreign private issuer, we will be subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to our shareholders.
We are a “foreign private issuer,” as such term is defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), and are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we will be subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. As a result, we will not file the same reports that a U.S. domestic issuer would file with the SEC, although we will be required to file or furnish to the SEC the continuous disclosure documents that we are required to file in the Cayman Islands under the Companies Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short swing” profit recovery provisions of Section 16 of the Exchange Act. Therefore, our shareholders may not know on as timely a basis when our officers, directors and principal shareholders purchase or sell shares, as the reporting deadlines under the corresponding Cayman Law insider reporting requirements are longer.
As a foreign private issuer, we will be exempt from the rules and regulations under the Exchange Act related to the furnishing and content of proxy statements. We will also be exempt from Regulation FD, which prohibits issuers from making selective disclosures of material non-public information. While we will comply with the corresponding requirements relating to proxy statements and disclosure of material non-public information under the Companies Act, these requirements differ from those under the Exchange
 
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Act and Regulation FD and shareholders should not expect to receive the same information at the same time as such information is provided by U.S. domestic companies.
In addition, as a foreign private issuer, we have the option to follow certain Cayman Law corporate governance practices, except to the extent that such laws would be contrary to U.S. securities laws, and provided that we disclose the requirements we are not following and describe the Cayman Law practices we follow instead. We do not intend to rely on this exemption. We may in the future elect to follow home country practices in the Cayman Islands with regard to other matters. As a result, our shareholders may not have the same protections afforded to shareholders of U.S. domestic companies that are subject to all corporate governance requirements.
We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and may cause us to incur significant legal, accounting and other expenses.
As discussed above, we are a foreign private issuer and, therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2024. In the future, we would lose our foreign private issuer status if more than 50% of our outstanding voting securities are owned by U.S. residents and any one of the following is true: (i) a majority of our directors or executive officers are U.S. citizens or residents, (ii) more than 50% of our assets are located in the United States or (iii) our business is administered principally in the United States. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to comply with mandatory U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules of NYSE. As a U.S. listed public company that is not a foreign private issuer, we may incur significant additional legal, accounting and other expenses that we may not otherwise incur as a foreign private issuer, which could harm our business, financial condition and results of operations.
Members of our management team have limited experience managing a U.S. public company.
Some members of our management team have limited experience managing a publicly traded company in the United States, interacting with U.S. public company investors and complying with the increasingly complex laws pertaining to public companies in the United States. Our management team may not successfully or efficiently manage our transition to being a U.S. public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, financial condition and results of operations.
Expectations of our company relating to environmental, social and governance factors may impose additional costs and expose us to new risks.
There is an increasing focus from certain investors, consumers and other key stakeholders concerning corporate responsibility, specifically related to environmental, social and governance (“ESG”) factors. We expect that an increased focus on ESG considerations will affect some aspects of our operations. There are a number of constituencies that are involved in a range of ESG issues including investors, special interest groups, public and consumer interest groups and third-party service providers. As a result, there is an increased emphasis on corporate responsibility ratings and a number of third parties provide reports on companies in order to measure and assess corporate responsibility performance. In addition, the ESG factors by which companies’ corporate responsibility practices are assessed may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria. Alternatively, if we are unable to satisfy such new criteria, investors may conclude that our policies with respect to corporate responsibility are inadequate. We risk damage to our brands and our reputation in the event that our corporate
 
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responsibility procedures or standards do not meet the standards set by various constituencies. We may be required to make substantial investments in matters related to ESG, which could require significant investment and impact our operating results. Any failure in our decision-making or related investments in this regard could affect consumer perception of our brands. Furthermore, if our competitors’ corporate responsibility performance is perceived to be greater than ours, potential or current investors may elect to invest with our competitors instead. In addition, in the event that we communicate certain initiatives and goals regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized by various constituencies for the scope of such initiatives or goals. If we fail to satisfy the expectations of investors and other key stakeholders or our initiatives are not executed as planned with respect to our ESG considerations, our business, financial condition and results of operations could be materially and adversely affected.
Risks Related to Ownership of Our Ordinary Shares
No market for our ordinary shares currently exists and an active, liquid and orderly trading market may not develop or be maintained, and our share price may be volatile.
Prior to the completion of the separation and distribution, our ordinary shares were not traded on any market. An active, liquid and orderly trading market for our ordinary shares may not develop or be maintained after the completion of the separation and distribution. Active, liquid and orderly trading markets usually result in less price volatility and more efficiency in carrying out investors’ purchase and sale orders. If an active trading market does not develop, you may have difficulty selling your ordinary shares at an attractive price, or at all. The market price of our ordinary shares could vary significantly as a result of a number of factors, some of which are beyond our control. In the event of a drop in the market price of our ordinary shares, you could lose a substantial part or all of your investment in our ordinary shares.
The following factors could affect our share price:
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our financial performance;
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quarterly variations in the rate of growth of our financial indicators, such as net sales and profitability;
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the public reaction to our press releases, our other public announcements and our filings with the SEC;
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strategic actions by our competitors;
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changes in net sales or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;
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speculation in the press or investment community;
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publication of research reports about us or the investment management industry, or the failure of securities analysts to cover our ordinary shares after the completion of the separation and distribution;
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sales of our ordinary shares by us or other shareholders, or the perception that such sales may occur;
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changes in accounting principles, policies, guidance, interpretations or standards;
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additions or departures of key management personnel;
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actions by our shareholders;
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general market and economic conditions;
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adverse publicity about the investment management industry generally, or particular scandals, specifically;
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domestic and international economic, legal and regulatory factors unrelated to our performance; and
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the realization of any risks described under this “Risk Factors” section.
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Substantial sales of our ordinary shares by our shareholders could cause the market price of our ordinary shares to decline.
Sales of a substantial number of our ordinary shares into the public market, or the perception that these sales might occur, could cause the market price of our ordinary shares to decline. We are unable to predict the timing or effect of such sales on the market price of our ordinary shares.
All of the ordinary shares distributed to JS Global Shareholders will be freely transferable, except for shares received by our affiliates, as that term is defined in Rule 144 under the Securities Act. Affiliates will be permitted to sell their ordinary shares only pursuant to an effective registration statement under the Securities Act or an exemption from registration, such as Rule 144 under the Securities Act.
We intend to file one or more registration statements with the SEC on Form S-8 to register ordinary shares reserved for future issuance under our equity incentive plan and employee share purchase plan. The registration statement on Form S-8 is expected to become effective immediately upon filing and, subject to the satisfaction of vesting conditions, the ordinary shares covered by the registration statement will then become eligible for sale in the public market, subject to the Rule 144 limitations applicable to affiliates.
Furthermore, we may issue additional ordinary shares or convertible securities in public offerings following the completion of the separation or distribution or as consideration for future acquisitions. We cannot predict the size of future issuances of our ordinary shares or securities convertible into ordinary shares or the effect, if any, that future issuances and sales of our ordinary shares will have on the market price of our ordinary shares. Sales of substantial amounts of our ordinary shares (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our ordinary shares. See “Shares Eligible for Future Sale.”
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.
The trading market for our ordinary shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our ordinary shares could be negatively impacted. If we obtain securities or industry analyst coverage, and if one or more of the analysts who covers us downgrades our ordinary shares or publishes inaccurate or unfavorable research about our business, our share price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our ordinary shares could decrease, which could cause the share price and trading volume of our ordinary shares to decline.
Immediately following the completion of the separation and distribution, Mr. Wang will be a substantial shareholder of us and will have influence over matters outside the ordinary course of our business requiring a shareholder vote, which may limit your ability to influence our actions.
Immediately following the completion of the separation and distribution, Mr. Wang, the Chairperson of our Board, will hold or have the ability to control approximately    % of the voting power of our outstanding share capital. As long as Mr. Wang continues to hold or have the ability to control a majority of the voting power of our outstanding shares, he will generally be able to control significant corporate activities, subject to applicable laws, including, among other things:
•
the composition of our Board and through our Board, decision-making with respect to our policies and the appointment and removal of corporate officers;
​
•
determinations with respect to mergers, business combinations or dispositions of assets; and
​
•
the adoption of amendments to our New Memorandum and Articles of Association.
​
In addition, the concentration of Mr. Wang’s ownership could discourage others from making tender offers, which could prevent holders from receiving a premium for their ordinary shares.
Furthermore, our New Memorandum and Articles of Association will provide that Mr. Wang, so long as he and/or his affiliates (as defined in our New Memorandum and Articles of Association) continue to
 
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remain beneficial owners (as such term is defined in the Exchange Act) of at least 30.0% of our share capital, shall have the right to appoint a director and that director will serve as the Chairperson of our Board. Should no such director be appointed, the Chairperson of our Board shall be decided by a majority of the directors then in office. Mr. Wang will serve as the initial Chairperson of our Board. See “Description of Share Capital—Directors—Appointment, Disqualification and Removal of Directors.”
Because Mr. Wang’s interests may differ from, or conflict with, ours or from those of our other shareholders, actions that Mr. Wang takes with respect to us, as our controlling shareholder, may not be favorable to us or our other shareholders.
We will be a “controlled company” within the meaning of the rules of NYSE and, as a result, will qualify for exemptions from certain corporate governance requirements. Although we do not intend to rely on these exemptions at this time, we may do so in the future and you may not have the same protections afforded to shareholders of companies that are subject to such requirements.
Upon the completion of the separation and distribution, Mr. Wang, the Chairperson of our Board, will hold or have the ability to control approximately    % of the voting power of our outstanding share capital. As a result, upon the completion of the separation and distribution, we will be a “controlled company” as defined under the corporate governance rules of NYSE. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:
•
the requirement that a majority of our Board consist of independent directors;
​
•
the requirement that our compensation, nominating and corporate governance committee be composed entirely of independent directors; and
​
•
the requirement for an annual performance evaluation of our compensation, nominating and corporate governance committee.
​
While we do not intend to rely on these exemptions at this time, we may in the future elect to rely on these exemptions and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE.
Our New Memorandum and Articles of Association, as well as Cayman Law, will contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our ordinary shares.
Our New Memorandum and Articles of Association will authorize our Board to issue one or more classes or series of preferred shares, the terms of which may be established and the shares of which may be issued without shareholder approval, and which may include super voting, special approval, dividend, repurchase rights, liquidation preferences or other rights or preferences superior to the rights of the holders of ordinary shares. The terms of one or more classes or series of preferred shares could adversely impact the value of our ordinary shares. Furthermore, if our Board elects to issue preferred shares it could be more difficult for a third party to acquire us. For example, our Board may grant holders of preferred shares the right to elect some number of our directors in all events or upon the occurrence of specified events or the right to veto specified transactions.
In addition, some provisions of our New Memorandum and Articles of Association could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our shareholders, including:
•
establishing advance notice provisions with regard to shareholder proposals relating to the nomination of candidates for appointment as directors or new business to be brought before meetings of our shareholders;
​
•
providing that the authorized number of directors may be changed only by resolution of our Board;
​
•
providing that all vacancies in our Board may, except as otherwise be required, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
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•
providing that our New Memorandum and Articles of Association may be amended by the affirmative vote of the holders of at least two-thirds of our then outstanding voting shares;
​
•
limitations on the ability of shareholders to call special meetings; and
​
•
limitations on the ability of shareholders to act by written consent.
​
Our New Memorandum and Articles of Association will designate the courts of the Cayman Islands as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our New Memorandum and Articles of Association will provide that, unless we consent in writing to the selection of an alternative forum, the courts of the Cayman Islands (“Cayman Courts”) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for:
•
any derivative action or proceeding brought on our behalf;
​
•
any action asserting a claim of breach of a fiduciary or other duty owed by any of our current or former directors, officers or other employees or our shareholders;
​
•
any action asserting a claim arising pursuant to any provision of the Companies Act or our New Memorandum and Articles of Association; or
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•
any action asserting a claim against us or any director or officer or other employee of ours that is governed by the internal affairs doctrine (as such concept is recognized under the laws of the United States).
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Unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the federal securities laws of the United States, including those arising under the Securities Act or Exchange Act. Any person or entity purchasing or otherwise acquiring any interest in our share capital will be deemed to have notice of, and consented to, the provisions of our New Memorandum and Articles of Association described in the preceding sentence. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our New Memorandum and Articles of Association inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition and results of operations.
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
We are an exempted company incorporated under the Companies Act. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the U.S. courts against our directors or officers.
Our corporate affairs will be governed by our New Memorandum and Articles of Association and the Companies Act. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a federal court of the United States.
 
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We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that Cayman Courts are unlikely to (i) recognize or enforce against us judgments of U.S. courts predicated upon the civil liability provisions of the federal securities laws of the U.S. or any state, and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the U.S. or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, Cayman Courts will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of our Board or controlling shareholders than they would as public shareholders of a U.S. company.
Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
Our New Memorandum and Articles of Association will provide that we will indemnify our directors and officers to the fullest extent permitted by Cayman Law. Our New Memorandum and Articles of Association will also permit us to purchase insurance on behalf of any officer, director, employee or other agent for any liability arising out of that person’s actions as our officer, director, employee or agent, regardless of whether Cayman Law would permit indemnification. We intend to enter into indemnification agreements with each of our current and future directors and officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Cayman Law against liability that may arise by reason of their service to us and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Our New Memorandum and Articles of Association will also provide, to the fullest extent permissible under Cayman Law, that our directors and officers shall be indemnified against any liability, action, proceeding, claim, demand, costs damages or expenses, including legal expenses, incurred in their capacities as such unless such liability (if any) arises from actual fraud, willful neglect or willful default, as determined by a court of competent jurisdiction in a final non-appealable order. Cayman Law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.
The above limitations on liability and our indemnification obligations limit the personal liability of our directors and officers for monetary damages for breach of their duties as directors by shifting the burden of such losses and expenses to us. Certain liabilities or expenses covered by our indemnification obligations may not be covered by our directors’ and officers’ liability insurance or the coverage limitation amounts may be exceeded. As a result, any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
We do not currently anticipate paying dividends on our ordinary shares after the completion of the separation and distribution. Consequently, your only opportunity to achieve a return on your investment may be if the price of our ordinary shares appreciates.
We do not currently anticipate paying dividends on our ordinary shares after the completion of the separation and distribution. Any declaration and payment of future dividends to holders of our ordinary shares will be at the discretion of our Board and will depend on many factors, including our financial
 
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condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends, the provisions of Cayman Law affecting the payment of dividends and distributions to shareholders and other considerations that our Board deems relevant. Consequently, your only opportunity to achieve a return on your investment in us may be if the price of our ordinary shares appreciates. See “Dividend Policy.”
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that reflect our current views with respect to, among other things, future events and our future business, financial condition, results of operations and prospects. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or phrases or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not statements of historical fact, and are based on current expectations, estimates and projections about our industry as well as certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, which you should consider and read carefully, including but not limited to:
•
our ability to maintain and strengthen our brands to generate and maintain ongoing demand for our products;
​
•
our ability to commercialize a continuing stream of new products and line extensions that create demand;
​
•
our ability to effectively manage our future growth;
​
•
general economic conditions and the level of discretionary consumer spending;
​
•
our ability to expand into additional consumer markets;
​
•
our ability to maintain product quality and product performance at an acceptable cost;
​
•
our ability to compete with existing and new competitors in our markets;
​
•
problems with, or loss of, our supply chain or suppliers, or an inability to obtain raw materials;
​
•
the risks associated with doing business globally;
​
•
inflation, changes in the cost or availability of raw materials, energy, transportation and other necessary supplies and services;
​
•
our ability to hire, integrate and retain highly skilled personnel;
​
•
our ability to maintain, protect and enhance our intellectual property;
​
•
our ability to securely maintain consumer and other third-party data;
​
•
our ability to comply with ongoing regulatory requirements;
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•
the increased expenses associated with being a public company;
​
•
our status as a “controlled company” within the meaning of the rules of NYSE;
​
•
our ability to achieve some or all of the anticipated benefits of the separation; and
​
•
the other risks and uncertainties described under “Risk Factors.”
​
This list of factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus, and our future levels of activity and performance, may not occur and actual results could differ materially and adversely from those described or implied in the forward-looking statements. As a result, you should not regard any of these forward-looking statements as a representation or warranty by us or any other person or place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
 
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In addition, statements that contain “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus. While we believe that this information provides a reasonable basis for these statements, this information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by the cautionary statements contained in this section and elsewhere in this prospectus.
 
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DIVIDEND POLICY
We do not currently anticipate paying dividends on our ordinary shares following the separation and distribution. Any declaration and payment of future dividends to holders of our ordinary shares will be at the discretion of our Board and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends, the provisions of Cayman Law affecting the payment of dividends and distributions to shareholders and other considerations that our Board deems relevant. See “Risk Factors—Risks Related to Ownership of Our Ordinary Shares—We do not currently anticipate paying dividends on our ordinary shares after the completion of the separation and distribution. Consequently, your only opportunity to achieve a return on your investment may be if the price of our ordinary shares appreciates.”
On March 18, 2021, we declared and paid a special cash dividend of $42.0 million to JS Global. On May 26, 2022, we declared and paid a special cash dividend of $83.5 million to JS Global. On February 15, 2023, we declared and paid a special cash dividend of $15.5 million to JS Global. On February 27, 2023, we declared and paid a special dividend of $94.9 million to JS Global, which consisted of a cash dividend of $44.5 million and amounts receivable of $50.4 million under an intercompany note in satisfaction of such note. In connection with the separation, we expect to declare and pay a special cash dividend of $375.0 million to JS Global for the repayment of JS Global’s outstanding debt under the Facilities Agreement (as defined below). See “Certain Relationships and Related Party Transactions—Related Party Transactions with JS Global—Loans, Contributions and Dividends.”
 
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CAPITALIZATION
The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2023 as follows:
•
on an actual basis; and
​
•
on a pro forma basis, giving effect to the Transactions described in “Unaudited Pro Forma Condensed Consolidated Financial Information.”
​
You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Consolidated Financial Information” and our consolidated financial statements and related notes included elsewhere in this prospectus.
​ ​ ​
As of March 31, 2023
​
($ in thousands, except share data)
​ ​
Actual
​ ​
Pro Forma
​
Cash and cash equivalents
​ ​ ​ $ 181,537 ​ ​ ​ ​ $         ​ ​
Debt: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Term loan, due March 2025(1)
​ ​ ​ ​ 400,000 ​ ​ ​ ​ ​ ​ ​ ​
Term loan, due       (2)
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total debt
​ ​ ​ ​ 400,000 ​ ​ ​ ​ ​ ​ ​ ​
Shareholders’ equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Ordinary shares, $0.20 par value per share; 250,000 shares authorized and
50,000 shares issued and outstanding on an actual basis;        shares
authorized and        shares issued and outstanding on a pro forma basis
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ ​ ​ ​
Preferred shares, $       par value per share; no shares authorized, issued
and outstanding on an actual basis;        shares authorized; and no
shares issued or outstanding on a pro forma basis
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Additional paid-in capital
​ ​ ​ ​ 941,210 ​ ​ ​ ​ ​ ​ ​ ​
Retained earnings
​ ​ ​ ​ 923,551 ​ ​ ​ ​ ​ ​ ​ ​
Accumulated other comprehensive loss
​ ​ ​ ​ (6,764) ​ ​ ​ ​ ​ ​ ​ ​
Total shareholders’ equity
​ ​ ​ ​ 1,858,007 ​ ​ ​ ​ ​ ​ ​ ​
Total capitalization
​ ​ ​ $ 2,258,007 ​ ​ ​ ​ $ ​ ​ ​
​
(1)
Consists of outstanding borrowings as of March 31, 2023 under the $500.0 million term loan facility; see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness.” Amount excludes deferred financing costs of $1.2 million as of March 31, 2023.
​
(2)
Consists of a senior secured term loan issued pursuant to a new loan agreement entered into on or prior to the completion of the separation and distribution; see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—​Liquidity and Capital Resources—Indebtedness.” Amount excludes deferred financing costs related to the issuance of the new loan agreement.
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THE SEPARATION AND DISTRIBUTION TRANSACTIONS
The Separation
JS Global has determined to separate SharkNinja from JS Global.
As part of the separation, JS Global intends to effect a reorganization whereby: (i) JS Global forms a wholly owned subsidiary, SharkNinja, Inc., (ii) we and JS Global effect certain transfers and transactions such that, among other things, (a) JS Global directly owns all outstanding shares of SharkNinja SPV and (b) SNJP and our APAC distribution channels are transferred to JS Global and (iii) JS Global contributes all outstanding shares of SharkNinja SPV to SharkNinja, Inc. in exchange for shares of SharkNinja, Inc. (following which, we will be governed by the New Memorandum and Articles of Association). Therefore, prior to the completion of the separation and distribution, we will be a wholly owned subsidiary of JS Global and all of our outstanding ordinary shares will be owned by JS Global.
As part of the separation and distribution, we intend to enter into the Separation and Distribution Agreement with JS Global. The Separation and Distribution Agreement will set forth our agreements with JS Global regarding the principal actions to be taken in connection with the separation and distribution. We will also enter into various other agreements that will govern certain aspects of our relationship with JS Global following the separation. The following are the principal steps of the separation:
•
Transfer of Assets and Liabilities.   Pursuant to the Separation and Distribution Agreement, JS Global intends to transfer to us the SharkNinja Business.
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•
Transition Services Agreement.   We and JS Global intend to enter into a transition services agreement that will be effective upon the separation, pursuant to which we and JS Global will provide to each other various services.
​
•
Employee Matters Agreement.   We and JS Global intend to enter into an employee matters agreement that will govern our and JS Global’s respective rights, responsibilities and obligations with respect to the employees and other service providers of each company, and generally will allocate assets, liabilities and responsibilities relating to employees, employment matters and employee compensation and benefit plans and programs.
​
•
Brand License Agreement.   We intend to enter into a brand license agreement with JS Global entities, pursuant to which we will grant to JS Global entities the non-exclusive rights to obtain, produce and source, and the exclusive rights to distribute and sell, our brands of products in certain international markets (and, in connection with the foregoing, each of us and JS Global entities will grant the other certain licenses in certain intellectual property related to products sold under our brands).
​
•
Sourcing Services Agreement with JS Global.   We intend to continue to rely on JS Global for certain supply chain services, including supplier management and supply chain strategy, and intend to enter into an agreement with JS Global with respect to such services.
​
•
Sourcing Services Agreement with Joyoung.   We intend to continue to rely on Joyoung for certain supply chain services, including product procurement, and intend to enter into an agreement with Joyoung with respect to such services.
​
•
Product Development Agreement.   We intend to enter into a product development agreement with JS Global to provide certain research and development, and related product management, services to JS Global entities.
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The Distribution
JS Global intends to make a distribution to the JS Global Shareholders of all of its equity interest in us in the form of a dividend of our ordinary shares.
While, as of the date of this prospectus, JS Global intends to effect the separation and distribution, JS Global has no obligation to pursue or consummate the separation and distribution by any specified date or at all. If pursued, the separation and distribution are subject to various conditions, including receipt of
 
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any necessary regulatory or other approvals. If the conditions to the separation and distribution are not satisfied, JS Global may decide to waive one or more of these conditions and consummate the separation and distribution.
For additional information on the separation and distribution, see the JS Global Circular, a copy of which is filed as Exhibit 99.6 to this registration statement.
Reasons for the Separation and Distribution
Following JS Global’s assessment of the overall market positions of product offerings under the Shark, Ninja and Joyoung brands, JS Global recognized that continued success in each market requires geographic-specific considerations, including consumer habits, localized lifestyle differences, cultural differences and consumer and market preferences. As a result, the JS Global Board believes that the best strategy to drive global business growth and expand its presence in localized markets at this time is to separate into its two primary delineated markets: (i) the APAC region and (ii) North America, Europe and other select international markets. JS Global intends to remain listed on the Stock Exchange of Hong Kong (with Joyoung remaining listed on the Shenzhen Stock Exchange) and focus on the APAC region, while SharkNinja, as a separate entity, intends to list on NYSE and focus on North America, Europe and other select international markets.
The JS Global Board believes that the separation and distribution at this time is commercially beneficial to JS Global and SharkNinja and in the interest of the JS Global Shareholders as a whole as it expects the following benefits:
•
the separation would strengthen the operational management ability of both JS Global and SharkNinja, and their respective abilities to recruit and retain personnel;
​
•
the separation and distribution would create two independent businesses, JS Global and SharkNinja, with enhanced geographic focus, each of which the JS Global Board believes is well positioned for continued growth and market share capture, driven by innovation and new product offerings in their respective areas;
​
•
the separation and distribution would be conducive to improving the operation, financial transparency and corporate governance level of JS Global and SharkNinja, respectively, through which investors could form a better understanding of, and make investment decisions in, businesses with different focuses, thus achieving reasonable valuations, enhancing the interests of all shareholders of JS Global and SharkNinja; and
​
•
the separation and distribution would enable shareholders and investors to assess the investment propositions of each business of JS Global and SharkNinja individually and freely select whether to continue to participate in both businesses or adjust their investment exposure, so as to unlock and enhance the market value of both JS Global and SharkNinja.
​
Following the completion of the separation and distribution, JS Global will continue to engage in the design, production, marketing and distribution of various product offerings under the Shark and Ninja brands across the APAC region. While such product offerings will be under the Shark and Ninja brands, the products designed for the APAC markets will generally be distinct and designed to cater to local consumer preferences. Alongside this operation, JS Global will continue its existing Joyoung business that it has been operating for almost 30 years. Joyoung primarily engages in product research, design, marketing, export and distribution of products under the Joyoung brand, including soybean milk makers, juicers, rice cookers and air fryers. Joyoung products are primarily sold in Mainland China, and Joyoung has a leading position in Mainland China in various small household appliance products. JS Global and Joyoung have historically manufactured, and procured their suppliers to manufacture, certain Shark and Ninja branded products, including cooking appliances, food preparation appliances and floorcare products, which we then distribute in the North American and European markets. Following the completion of the separation and distribution, we will pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis as we establish independent sourcing capabilities, and Joyoung will manufacture, or procure its suppliers to manufacture, certain products on our behalf on which we will pay Joyoung an arm’s-length markup.
 
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial information consists of an unaudited pro forma condensed consolidated balance sheet as of March 31, 2023, an unaudited pro forma condensed consolidated statement of income for the three months ended March 31, 2023 and an unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2022.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2023, presents our consolidated financial position after giving pro forma effect to the separation and distribution, including the refinancing of our indebtedness and related dividend to JS Global (collectively, the “Transactions”), as described in Note 1 below, as if the Transactions occurred on March 31, 2023.
The unaudited pro forma condensed consolidated statement of income for the three months ended March 31, 2023 presents our consolidated results of operations after giving pro forma effect to the Transactions as if the Transactions occurred on January 1, 2022, the first day of fiscal year 2022.
The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2022 presents our consolidated results of operations after giving pro forma effect to the Transactions as if the Transactions occurred on January 1, 2022, the first day of fiscal year 2022.
The unaudited pro forma condensed consolidated financial information was prepared in accordance with Article 11 of Regulation S-X using the assumptions set forth in the notes to the unaudited pro forma condensed consolidated financial information. The unaudited pro forma condensed consolidated financial information has been adjusted to include Transaction Accounting Adjustments (as defined below), which reflect the application of the accounting required by GAAP, linking the effects of the Transactions to our historical consolidated financial statements. The unaudited pro forma condensed consolidated financial information has also been adjusted to include the Autonomous Entity Adjustments (as defined below) to present the impact of certain items, as described in Note 1 below, on the results of operations as if we were a standalone entity.
The unaudited pro forma condensed consolidated financial information is for illustrative and informational purposes only and is not necessarily indicative of financial results that would have been attained had the Transactions occurred on the dates indicated above and does not project our results of operations or financial position for any future period or as of any future date. The unaudited pro forma condensed consolidated financial information also does not give effect to the potential impact of any operating synergies or cost savings that may result from the Transactions. In addition, the pro forma condensed consolidated financial information is not intended to present the results that JS Global would have attained for the APAC region had the Transactions occurred on the dates indicated above, and should not be relied upon for such purposes. Our future results of operations or financial position may vary significantly from the results reflected in the unaudited pro forma condensed consolidated statement of income and should not be relied on as an indication of our results after the consummation of the Transactions. See “Risk Factors—​Risks Related to the Separation and Distribution and Being a Public Company—We have no operating history as a stand-alone public company, and our historical financial data is not necessarily representative of the results we would have achieved as a stand-alone public company and may not be a reliable indicator of our future results.” However, we believe that the assumptions provide a reasonable basis for presenting the effects of the Transactions as contemplated and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed consolidated financial information.
The historical consolidated financial information has been derived from the consolidated financial statements of SharkNinja Global SPV, Ltd. and accompanying notes included elsewhere in this prospectus. SharkNinja, Inc. was formed in May 2023 and will not have any material assets or results of operations until the completion of the separation and distribution. Therefore, its historical financial information is not included in the unaudited pro forma condensed consolidated financial information. Following the separation and distribution, SharkNinja, Inc. will be a holding company with no operations and no material assets of its own other than its ownership interest in SharkNinja Global SPV, Ltd.
 
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SHARKNINJA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 2023
(in thousands, except par value amounts)
​ ​ ​
SharkNinja
Global
SPV, LTD.
​ ​
Divestiture
Transactions
Adjustments
​ ​ ​ ​ ​
As Adjusted
Before Other
Transaction
Accounting
Adjustments
and
Autonomous
Entity
Adjustments
​ ​
Other
Transaction
Accounting
Adjustments
​ ​ ​ ​ ​
Autonomous
Entity
Adjustments
​ ​
SharkNinja,
Inc.
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 181,537 ​ ​ ​ ​ $ (2,961) ​ ​ ​
[a]
​ ​ ​ $ 178,576 ​ ​ ​ ​ $ 8,830 ​ ​ ​
[b]
​ ​ ​ $ — ​ ​ ​ ​ $      ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (48,812) ​ ​ ​
[c]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[d]
​ ​ ​ ​ — ​ ​ ​
Restricted cash
​ ​ ​ ​ 25,914 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 25,914 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Accounts receivable, net
​ ​ ​ ​ 780,558 ​ ​ ​ ​ ​ (27,961) ​ ​ ​
[a]
​ ​ ​ ​ 752,597 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Inventories
​ ​ ​ ​ 510,472 ​ ​ ​ ​ ​ (10,771) ​ ​ ​
[a]
​ ​ ​ ​ 499,701 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Prepaid expenses and other current
assets
​ ​ ​ ​ 80,436 ​ ​ ​ ​ ​ (113) ​ ​ ​
[a]
​ ​ ​ ​ 80,323 ​ ​ ​ ​ ​ (8,830) ​ ​ ​
[b]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total current assets
​ ​ ​ ​ 1,578,917 ​ ​ ​ ​ ​ (41,806) ​ ​ ​ ​ ​ ​ ​ ​ 1,537,111 ​ ​ ​ ​ ​ (48,812) ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Property and equipment, net
​ ​ ​ ​ 144,942 ​ ​ ​ ​ ​ (1,787) ​ ​ ​
[a]
​ ​ ​ ​ 143,155 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Operating lease right-of-use assets
​ ​ ​ ​ 65,552 ​ ​ ​ ​ ​ (590) ​ ​ ​
[a]
​ ​ ​ ​ 64,962 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Intangible assets, net
​ ​ ​ ​ 488,518 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 488,518 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Goodwill
​ ​ ​ ​ 840,183 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 840,183 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Deferred tax assets, noncurrent
​ ​ ​ ​ 5,017 ​ ​ ​ ​ ​ (3,062) ​ ​ ​
[a]
​ ​ ​ ​ 1,955 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Other assets, noncurrent
​ ​ ​ ​ 43,699 ​ ​ ​ ​ ​ (342) ​ ​ ​
[a]
​ ​ ​ ​ 43,357 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​ $ 3,166,828 ​ ​ ​ ​ $ (47,587) ​ ​ ​ ​ ​ ​ ​ $ 3,119,241 ​ ​ ​ ​ $ (48,812) ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ $ ​ ​
Liabilities and Shareholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accounts payable
​ ​ ​ $ 275,955 ​ ​ ​ ​ $ (17,661) ​ ​ ​
[a]
​ ​ ​ $ 258,294 ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ ​
Accrued expenses and other current
liabilities 
​ ​ ​ ​ 483,643 ​ ​ ​ ​ ​ (12,233) ​ ​ ​
[a]
​ ​ ​ ​ 471,410 ​ ​ ​ ​ ​ (5,355) ​ ​ ​
[c]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Tax payable
​ ​ ​ ​ 8,539 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 8,539 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Current portion of long-term debt
​ ​ ​ ​ 99,503 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 99,503 ​ ​ ​ ​ ​ ​ ​ ​ ​
[d]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total current liabilities
​ ​ ​ ​ 867,640 ​ ​ ​ ​ ​ (29,894) ​ ​ ​ ​ ​ ​ ​ ​ 837,746 ​ ​ ​ ​ ​ (5,355) ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Long-term debt
​ ​ ​ ​ 299,340 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 299,340 ​ ​ ​ ​ ​ ​ ​ ​ ​
[d]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Operating lease liabilities, noncurrent
​ ​ ​ ​ 61,242 ​ ​ ​ ​ ​ (249) ​ ​ ​
[a]
​ ​ ​ ​ 60,993 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Deferred tax liabilities, noncurrent
​ ​ ​ ​ 54,546 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 54,546 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Other liabilities, noncurrent
​ ​ ​ ​ 26,053 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 26,053 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total liabilities
​ ​ ​ $ 1,308,821 ​ ​ ​ ​ $ (30,143) ​ ​ ​ ​ ​ ​ ​ $ 1,278,678 ​ ​ ​ ​ $ (5,355) ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​
Shareholders’ equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Ordinary shares, $0.20 par value
per share, 250,000 shares
authorized, 50,000 shares issued
and outstanding as of March 31,
2023 on a historical basis and $   
par value per share,      shares
authorized,     shares issued and
outstanding as of March 31, 2023
on a pro forma basis
​ ​ ​ $ 10 ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ — ​ ​ ​
[e]
​ ​ ​ $ — ​ ​ ​ ​ $ ​ ​
Additional paid-in capital
​ ​ ​ ​ 941,210 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 941,210 ​ ​ ​ ​ ​ — ​ ​ ​
[e]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Retained earnings
​ ​ ​ ​ 923,551 ​ ​ ​ ​ ​ (17,444) ​ ​ ​
[a]
​ ​ ​ ​ 906,107 ​ ​ ​ ​ ​ (43,457) ​ ​ ​
[c]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[d]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Accumulated other comprehensive
loss
​ ​ ​ ​ (6,764) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ (6,764) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total shareholder’s equity
​ ​ ​ $ 1,858,007 ​ ​ ​ ​ ​ (17,444) ​ ​ ​ ​ ​ ​ ​ ​ 1,840,563 ​ ​ ​ ​ ​ (43,457) ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 3,166,828 ​ ​ ​ ​ $ (47,587) ​ ​ ​ ​ ​ ​ ​ $ 3,119,241 ​ ​ ​ ​ $ (48,812) ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ $ ​ ​ ​
See accompanying “Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.”
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SHARKNINJA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Three Months Ended March 31, 2023
(in thousands, except share and per share amounts)
​ ​ ​
SharkNinja
Global
SPV, LTD.
​ ​
Divestiture
Transactions
Adjustments
​ ​ ​ ​ ​
Before Other
Transaction
Accounting
Adjustments
and
Autonomous
Entity
Adjustments
​ ​
Other
Transaction
Accounting
Adjustments
​ ​ ​ ​ ​
Autonomous
Entity
Adjustments
​ ​ ​ ​ ​
SharkNinja,
Inc.
​
Net sales
​ ​ ​ $ 855,282 ​ ​ ​ ​ $ (19,060) ​ ​ ​
[f]
​ ​ ​ $ 836,222 ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $   ​ ​
Cost of sales
​ ​ ​ ​ 454,739 ​ ​ ​ ​ ​ (25,898) ​ ​ ​
[f]
​ ​ ​ ​ 428,841 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 7,095 ​ ​ ​
[k]
​ ​ ​ ​ ​ ​ ​
Gross profit
​ ​ ​ ​ 400,543 ​ ​ ​ ​ ​ 6,838 ​ ​ ​ ​ ​ ​ ​ ​ 407,381 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ (7,095) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating expenses:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and development
​ ​ ​ $ 58,725 ​ ​ ​ ​ $ (99) ​ ​ ​
[f]
​ ​ ​ $ 58,626 ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ ​ ​
Sales and marketing
​ ​ ​ ​ 152,120 ​ ​ ​ ​ ​ (5,052) ​ ​ ​
[f]
​ ​ ​ ​ 147,068 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
General and administrative
​ ​ ​ ​ 67,068 ​ ​ ​ ​ ​ (917) ​ ​ ​
[f]
​ ​ ​ ​ 66,151 ​ ​ ​ ​ ​ (18,468) ​ ​ ​
[h]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total operating expenses
​ ​ ​ ​ 277,913 ​ ​ ​ ​ ​ (6,068) ​ ​ ​ ​ ​ ​ ​ ​ 271,845 ​ ​ ​ ​ ​ (18,468) ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating income
​ ​ ​ ​ 122,630 ​ ​ ​ ​ ​ 12,906 ​ ​ ​ ​ ​ ​ ​ ​ 135,536 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ (7,095) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest expense, net
​ ​ ​ ​ (8,489) ​ ​ ​ ​ ​ 2 ​ ​ ​
[f]
​ ​ ​ ​ (8,487) ​ ​ ​ ​ ​ ​ ​ ​ ​
[i]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other expense, net
​ ​ ​ ​ (2,780) ​ ​ ​ ​ ​ (5) ​ ​ ​
[f]
​ ​ ​ ​ (2,785) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[l]
​ ​ ​ ​ ​ ​ ​
Income before income taxes ​ ​ ​ ​ 111,361 ​ ​ ​ ​ ​ 12,903 ​ ​ ​ ​ ​ ​ ​ ​ 124,264 ​ ​ ​ ​ ​ 18,468 ​ ​ ​ ​ ​ ​ ​ ​ (7,095) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Provision for income taxes ​ ​ ​ ​ 24,265 ​ ​ ​ ​ ​ (162) ​ ​ ​
[f]
​ ​ ​ ​ 27,082 ​ ​ ​ ​ ​ 4,063 ​ ​ ​
[j]
​ ​ ​ ​ (1,561) ​ ​ ​
[m]
​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,979 ​ ​ ​
[g]
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 87,096 ​ ​ ​ ​ $ 10,086 ​ ​ ​ ​ ​ ​ ​ $ 97,182 ​ ​ ​ ​ $ 14,405 ​ ​ ​ ​ ​ ​ ​ $ (5,534) ​ ​ ​ ​ ​ ​ ​ $      ​ ​
Net income per share, basic and diluted
​ ​ ​ $ 1,742 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Weighted-average number
of shares used in
computing net income per
share, basic and diluted
​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pro forma net income per
share:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic and diluted
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[v]
​ ​ ​ $ ​ ​
Pro forma number of shares used in computing net income per share:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic and diluted
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[v]
​ ​ ​ ​ ​ ​ ​
See accompanying “Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.”
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SHARKNINJA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 2022
(in thousands, except share and per share amounts)
​ ​ ​
SharkNinja
Global
SPV, LTD.
​ ​
Divestiture
Transactions
Adjustments
​ ​ ​ ​ ​
As Adjusted
Before Other
Transaction
Accounting
Adjustments
and
Autonomous
Entity
Adjustments
​ ​
Other
Transaction
Accounting
Adjustments
​ ​ ​ ​ ​
Autonomous
Entity
Adjustments
​ ​ ​ ​ ​
SharkNinja,
Inc.
​
Net sales
​ ​ ​ $ 3,717,366 ​ ​ ​ ​ $ (94,510) ​ ​ ​
[n]
​ ​ ​ $ 3,622,856 ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $       ​ ​
Cost of sales
​ ​ ​ ​ 2,307,172 ​ ​ ​ ​ ​ (134,800) ​ ​ ​
[n]
​ ​ ​ ​ 2,172,372 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ 75,622 ​ ​ ​
[s]
​ ​ ​ ​ ​ ​ ​
Gross profit
​ ​ ​ ​ 1,410,194 ​ ​ ​ ​ ​ 40,290 ​ ​ ​ ​ ​ ​ ​ ​ 1,450,484 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ (75,622) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and development
​ ​ ​ $ 215,660 ​ ​ ​ ​ $ (724) ​ ​ ​
[n]
​ ​ ​ $ 214,936 ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ $ ​ ​
Sales and marketing
​ ​ ​ ​ 621,953 ​ ​ ​ ​ ​ (23,658) ​ ​ ​
[n]
​ ​ ​ ​ 598,295 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
General and administrative
​ ​ ​ ​ 251,207 ​ ​ ​ ​ ​ (3,485) ​ ​ ​
[n]
​ ​ ​ ​ 247,722 ​ ​ ​ ​ ​ 61,925 ​ ​ ​
[p]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total operating expenses
​ ​ ​ ​ 1,088,820 ​ ​ ​ ​ ​ (27,867) ​ ​ ​ ​ ​ ​ ​ ​ 1,060,953 ​ ​ ​ ​ ​ 61,925 ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating income
​ ​ ​ ​ 321,374 ​ ​ ​ ​ ​ 68,157 ​ ​ ​ ​ ​ ​ ​ ​ 389,531 ​ ​ ​ ​ ​ (61,925) ​ ​ ​ ​ ​ ​ ​ ​ (75,622) ​ ​ ​ ​ ​ ​
Interest expense, net
​ ​ ​ ​ (27,021) ​ ​ ​ ​ ​ 2 ​ ​ ​
[n]
​ ​ ​ ​ (27,019) ​ ​ ​ ​ ​ ​ ​ ​ ​
[q]
​ ​ ​ ​ — ​ ​ ​ ​ ​ ​
Other income, net
​ ​ ​ ​ 7,631 ​ ​ ​ ​ ​ 3,068 ​ ​ ​
[n]
​ ​ ​ ​ 10,699 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[t]
​ ​
Income before income taxes ​ ​ ​ ​ 301,984 ​ ​ ​ ​ ​ 71,227 ​ ​ ​ ​ ​ ​ ​ ​ 373,211 ​ ​ ​ ​ ​ (61,925) ​ ​ ​ ​ ​ ​ ​ ​ (75,622) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Provision for income taxes
​ ​ ​ ​ 69,630 ​ ​ ​ ​ ​ (1,842) ​ ​ ​
[n]
​ ​ ​ ​ 85,293 ​ ​ ​ ​ ​ (13,624) ​ ​ ​
[r]
​ ​ ​ ​ (16,637) ​ ​ ​
[u]
​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 17,505 ​ ​ ​
[o]
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 232,354 ​ ​ ​ ​ $ 55,564 ​ ​ ​ ​ ​ ​ ​ $ 287,918 ​ ​ ​ ​ $ (48,301) ​ ​ ​ ​ ​ ​ ​ $ (58,985) ​ ​ ​ ​ ​ ​ ​ $ ​ ​
Net income per share, basic
and diluted
​ ​ ​ $ 4,647 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Weighted-average number
of shares used in
computing net income per
share, basic and diluted
​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pro forma net income per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic and diluted
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[v]
​ ​ ​ $       ​ ​
Pro forma number of shares
used in computing net
income per share:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic and diluted
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
[v]
​ ​ ​ ​           ​ ​
See accompanying “Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.”
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
1.
Description of the Transactions & Basis of Presentation
​
The unaudited pro forma condensed consolidated financial information was prepared in accordance with Article 11 of Regulation S-X and presents our pro forma financial condition and results of operations based upon the historical financial information after giving effect to the Transactions and related adjustments set forth in the notes to the unaudited pro forma condensed consolidated financial information. Management has made significant estimates and assumptions in its determination of the pro forma adjustments based on information available as of the date of this registration statement. As the unaudited pro forma condensed consolidated financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented as additional information becomes available. Management considers this basis of presentation to be reasonable under the circumstances. In addition, the unaudited pro forma condensed consolidated financial information does not reflect any cost savings or operating synergies that the consolidated company may achieve as a result of the Transactions.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2023 gives pro forma effect to the Transactions as if they occurred on March 31, 2023. The unaudited pro forma condensed and consolidated statements of income for the three months ended March 31, 2023 and the year ended December 31, 2022 give pro forma effect to the Transactions as if they occurred on January 1, 2022.
Refinancing
On or prior to the completion of the separation and distribution, we expect to obtain $     million from a new credit facility to replace our existing Facilities Agreement (as defined below). In connection with the separation, we expect to declare and pay a special cash dividend of $375.0 million to JS Global for the repayment of JS Global’s outstanding debt under the Facilities Agreement. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—​Indebtedness” and “Certain Relationships and Related Party Transactions—Related Party Transactions with JS Global—Loans, Contributions and Dividends.”
Separation and Distribution Transactions
Prior to the completion of the separation and distribution but subsequent to the three months ended March 31, 2023, we intend to enter into the Separation and Distribution Agreement with JS Global. We also intend to enter into various other agreements to provide a framework for our relationship with JS Global after the separation, including the Transition Services Agreement, the Employee Matters Agreement, the Brand License Agreement, the Sourcing Services Agreement (JS Global), the Sourcing Services Agreement (Joyoung) and the Product Development Agreement. The Brand License Agreement, the Transition Services Agreement, the Sourcing Services Agreement (JS Global) and the Product Development Agreement are the only agreements that have an impact on the unaudited pro forma condensed consolidated financial information.
As part of the separation, JS Global intends to effect a reorganization whereby: (i) JS Global forms a wholly owned subsidiary, SharkNinja, Inc., (ii) we and JS Global effect certain transfers and transactions such that, among other things, (a) JS Global directly owns all outstanding shares of SharkNinja SPV and (b) SNJP and our APAC distribution channels are transferred to JS Global and (iii) JS Global contributes all outstanding shares of SharkNinja SPV to SharkNinja, Inc. in exchange for shares of SharkNinja, Inc. (following which, we will be governed by New Memorandum and Articles of Association). In particular, we intend to complete the Divestitures and effect the Product Procurement Adjustment. The Divestitures and the Product Procurement Adjustment will be collectively referred to herein as the “Divestiture Transactions.”
Divestitures
SNJP was formed to distribute our products in the APAC region through SharkNinja Europe Ltd., which controls the applicable underlying intellectual property rights. As a result of the separation, JS
 
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Global would own and manage SNJP, as well as the distribution rights for certain of our products in the APAC region through the Brand License Agreement between us and JS Global. As a result of the separation, all sales in the APAC region would be managed by and reported to JS Global, and SNJP would purchase our products directly from JS Global. Pursuant to the Brand License Agreement, we would only be entitled to royalty revenue for sales of our products in the APAC region, through which we will earn royalty income of 3% of net sales for each unit of our products sold by or on behalf of JS Global in the APAC region, subject to certain adjustments. Further, in accordance with the Product Development Agreement, we will also be entitled to compensation for our product research and development and product management services provided to JS Global as it relates to our products sold in the APAC region, through which we will earn income of approximately $1.0 million annually, subject to certain adjustments.
Product Procurement Agreement
Historically, we have purchased the majority of our inventory from (i) one of our subsidiaries, SharkNinja (Hong Kong) Company Limited (“SNHK”), and (ii) JS Global Trading (“JSGTC”), a purchasing office wholly owned by JS Global. SNHK purchases inventory for our U.S. and European selling entities from suppliers in the APAC region and is responsible for managing the related supply chain operation and procurement process. In our consolidated statements of income for the three months ended March 31, 2023 and the year ended December 31, 2022 included elsewhere in this prospectus, the historical markup on inventory purchased from SNHK was eliminated in consolidation as an intercompany transaction, while the markup on inventory purchased from JS Global was included in cost of sales. As a result of the separation, we intend to purchase 100% of our inventory from SNHK and will no longer purchase inventory from JS Global. Thus, the markup on all inventory purchased will be completely eliminated in consolidation.
Autonomous Entity Adjustments
The following adjustments reflect the impact of certain agreements entered into with JS Global in connection with the separation and distribution in order to reflect the financial condition and results of operations as if we were a standalone entity (collectively, the “Autonomous Entity Adjustments”). These include:
•
The inclusion of incremental income that will be earned in connection with the Transition Services Agreement through which we will provide various transition services to JS Global following the separation (the “Transition Services Agreement Adjustment”).
​
•
The impact of additional costs for supply chain services that will be incurred in connection with the Sourcing Services Agreement (JS Global) through which JS Global will provide certain supply chain services, including supplier management and supply chain strategy, following the separation (the “Sourcing Services Agreement Adjustment”).
​
See “The Separation and Distribution Transactions—The Separation” and “Certain Relationships and Related Party Transactions” for additional information regarding the various agreements referred to above.
2.
Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
​
Transaction Accounting Adjustments include the following adjustments related to the unaudited pro forma condensed consolidated balance sheet as of March 31, 2023, as follows:
Transaction Accounting Adjustments for the Divestiture Transactions
a.
Reflects the transfer of the assets and liabilities of SNJP and certain APAC region distribution arrangements to JS Global upon the Divestitures. Included in the unaudited pro forma condensed consolidated balance sheet are adjustments of $3.0 million to cash and cash equivalents, $28.0 million to accounts receivable, net, $10.8 million to inventories, $0.1 million to prepaid expenses and other current assets, $1.8 million to property and equipment, net, $0.6 million to operating lease right-of-use assets, $3.1 million to deferred tax assets, noncurrent, $0.3 million to other assets, noncurrent, $17.7 million to accounts payable, $12.2 million to accrued expenses and other current liabilities and $0.3 million to operating lease liabilities, noncurrent, that are reflected in the consolidated balance sheet as of March 31, 2023. These adjustments represent the net book
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value of transferred assets and liabilities, with a corresponding adjustment to retained earnings of $17.4 million for the difference between the transferred assets and liabilities. Included in the adjustment of $10.8 million to inventories is the elimination of $0.2 million related to the markup applied to the cost of inventory purchased from JSGTC, as the pro forma balance sheet assumes our March 31, 2023 inventory balance consists entirely of inventory purchased from SNHK, with a corresponding decrease to accounts payable for the same amount.
Other Transaction Accounting Adjustments
b.
Represents repayment of approximately $8.8 million made by certain executives prior to the closing of the Transactions, but after March 31, 2023, which was applied to the outstanding balance of their 2021 Employee Notes.
​
See “Related Party Transactions with our Executive Officers” and Note 12 of our condensed consolidated financial statements as of and for the three months ended March 31, 2023 included elsewhere in this prospectus for additional information regarding the 2021 Employee Notes referred to above.
c.
Reflects settlement of approximately $48.8 million of transaction-related costs incurred in connection with the Transactions, of which $5.4 million were recorded in accrued expenses and other current liabilities in the historical consolidated balance sheets as of March 31, 2023 and the remaining estimated transaction costs of $43.4 million are recorded as a reduction to retained earnings in the unaudited pro forma condensed consolidated balance sheet.
​
d.
Reflects the proceeds received from a new credit facility of approximately $     million, of which $      million was used to refinance an existing term loan (the “Secured Term Loan”) and revolving credit agreement (the “Revolving Facility” and together with the Secured Term Loan, the “Facilities Agreement”), $      million was used to pay transaction costs associated with the new credit facility, $     million was used to pay a dividend to JS Global and $      million was used to pay withholding taxes associated with the dividend to JS Global.
​
Refer to Note 7 of our condensed consolidated financial statements as of and for the three months ended March 31, 2023 included elsewhere in this prospectus for additional information regarding the Secured Term Loan and Revolving Facility.
e.
Reflects the elimination of SharkNinja SPV’s ordinary shares and issuance of ordinary shares of SharkNinja, Inc. in accordance with the New Memorandum and Articles of Association, as described in Note 1 above, and the related impact on additional paid-in capital.
​
3.
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income
​
Transaction Accounting Adjustments and Autonomous Entity Adjustments include the following adjustments related to the unaudited pro forma condensed consolidated statement of income for the three months ended March 31, 2023, as follows:
Transaction Accounting Adjustments for the Divestiture Transactions
f.
Reflects the elimination of net sales of $19.1 million, cost of sales of $25.9 million, operating expenses of $6.1 million, interest expense, net, of less than $0.1 million, other expense, net, of less than $0.1 million and provision for income taxes of $0.2 million recorded during the three months ended March 31, 2023 related to SNJP and our APAC distribution channels, as if the Divestitures occurred on January 1, 2022. Included within the elimination of net sales is incremental royalty income of $0.6 million earned as a result of the Brand License Agreement pursuant to which we would have received royalty compensation from JS Global on a per unit sale basis for JS Global’s distribution in the APAC region, as if the Brand License Agreement was effective as of January 1, 2022. Further included within the elimination of other expense, net is incremental income of $     million earned as a result of the Product Development Agreement pursuant to which we would have received income from JS Global for our product research and development and product management services for our products sold in the APAC region, as if the Product
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Development Agreement was effective as of January 1, 2022. Included in the elimination of cost of sales is $12.9 million related to the Product Procurement Adjustment.
g.
Reflects the income tax effect of $3.0 million related to the Divestiture Transactions. Included in this adjustment is an increase in the provision for income taxes of $2.8 million related to the Product Procurement Adjustment, determined using an effective tax rate of 22.0%, an increase of $0.2 million for the incremental income tax on the royalty income as described in Note (f) above and an increase of $     million for the incremental income tax on the income received in connection with the Product DevelopmentAgreement as described in Note (f) above.
​
Other Transaction Accounting Adjustments
h.
Reflects the elimination of transaction-related costs of approximately $18.5 million in connection with the Transactions that were reflected in the historical consolidated statement of income for three months ended March 31, 2023. These transaction-related costs are reflected as if incurred on January 1, 2022, the date the Transactions occurred for purposes of the unaudited pro forma condensed consolidated statements of income.
​
Refer to Note (c) for the impact of the transaction-related costs on the unaudited pro forma condensed consolidated balance sheet and Note (p) for the impact of the transaction-related costs on the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2022.
i.
Reflects the incremental interest expense of $     million for the three months ended March 31, 2023 as a result of the proceeds received of $     million from a new credit facility as if such proceeds were received on January 1, 2022, offset by the reduction in interest expense of $     million for the three months ended March 31, 2023 as a result of the $     million repayment of the Secured Term Loan as if such repayment occurred on January 1, 2022. The incremental interest expense on the new credit facility was calculated assuming an interest rate of     %.
​
Refer to Note (d) for the impact of the repayment of the Secured Term Loan and receipt of proceeds under the new credit facility on the unaudited pro forma condensed consolidated balance sheet and Note (q) for the impact on the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2022.
j.
Reflects the income tax effect of $4.1 million related to the transaction accounting adjustments in Note (h) and Note (i). Included in this adjustment is an increase in the provision for income taxes of $4.1 million related to the elimination of $18.5 million transaction-related costs as described in Note (h) above and an increase of $     million for the incremental income tax on the additional interest expense as described in Note (i) above, both determined using an effective tax rate of 22.0%.
​
Autonomous Entity Adjustments
k.
Reflects the incremental cost of sales of $7.1 million that was not reflected in the historical consolidated statement of income for the three months ended March 31, 2023 related to the Sourcing Services Agreement Adjustment.
​
l.
Reflects the additional income of $     million that was not reflected in the historical consolidated statement of income for the three months ended March 31, 2023 related to the Transition Services Agreement Adjustment.
​
m.
Reflects the income tax effect of $1.6 million related to the Autonomous Entity Adjustments. Included in this adjustment is a decrease in the provision for income taxes of $1.6 million related to the Sourcing Services Agreement Adjustment as described in Note (k) above, determined using an effective tax rate of 22.0%. Offsetting this decrease is an increase in the provision for income taxes of $     million related to the additional income recognized as a result of the Transfer Services Agreement Adjustment as described in Note (l) above, determined using an effective tax rate of 22.0%.
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Transaction Accounting Adjustments and Autonomous Entity Adjustments include the following adjustments related to the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2022, as follows:
Transaction Accounting Adjustments for the Divestiture Transactions
n.
Reflects the elimination of net sales of $94.5 million, cost of sales of $134.8 million, operating expenses of $27.9 million, interest expense, net, of less than $0.1 million, other expense, net, of $3.1 million and provision for income taxes of $1.8 million recorded during the year ended December 31, 2022 related to SNJP and our APAC distribution channels, as if the Divestitures occurred on January 1, 2022. Included within the elimination of net sales is incremental royalty income of $2.9 million earned as a result of the Brand License Agreement pursuant to which we would have received royalty compensation from JS Global on a per unit sale basis for JS Global’s distribution in the APAC region, as if the Brand License Agreement was effective as of January 1, 2022. Further included within the elimination of other expense, net is incremental income of $     million earned as a result of the Product Development Agreement pursuant to which we would have received income from JS Global for our product research and development and product management services for our products sold in the APAC region, as if the Product Development Agreement was effective as of January 1, 2022. Included in the elimination of cost of sales is $70.3 million related to the Product Procurement Adjustment.
​
o.
Reflects the income tax effect of $17.5 million related to the Divestiture Transactions. Included in this adjustment is an increase in the provision for income taxes of $15.5 million related to the Product Procurement Adjustment, determined using an effective tax rate of 22.0%, an increase of $0.7 million for the incremental income tax on the royalty income as described in Note (n) above, an increase of $1.3 million as a result of certain transfer pricing deductions related to SNJP that will not be received by us going forward as a result of the Divestitures and an increase of $     million for the incremental income tax on the income received in connection with the Product Development Agreement, as described in Note (n) above.
​
Other Transaction Accounting Adjustments
p.
Represents incremental transaction-related costs of approximately $61.9 million in connection with the Transactions that were not reflected in the historical consolidated statement of income for the year ended December 31, 2022. These transaction-related costs are reflected as if incurred on January 1, 2022, the date the Transactions occurred for purposes of the unaudited pro forma condensed consolidated statements of income.
​
Refer to Note (c) for the impact of the transaction-related costs on the unaudited pro forma condensed consolidated balance sheet and Note (h) for the impact of the transaction-related costs on the unaudited pro forma condensed consolidated statement of income for the three months ended March 31, 2023.
q.
Reflects the incremental interest expense of $     million for the year ended December 31, 2022 as a result of the proceeds received of $     million from a new credit facility as if such proceeds were received on January 1, 2022 and the write-off of deferred financing costs of $2.1 million related to the extinguishment of the Secured Term Loan, offset by the reduction in interest expense of $     million for the year ended December 31, 2022 as a result of the $     million repayment of the Secured Term Loan as if such repayment occurred on January 1, 2022. The incremental interest expense on the new credit facility was calculated assuming an interest rate of     %.
​
Refer to Note (d) for the impact of the repayment of the Secured Term Loan and receipt of proceeds under the new credit facility on the unaudited pro forma condensed consolidated balance sheet and Note (i) for the impact on the unaudited pro forma condensed consolidated statement of income for the three months ended March 31, 2023.
r.
Reflects the income tax effect of $13.6 million related to the transaction accounting adjustments in Note (p) and Note (q). Included in this adjustment is a decrease in the provision for income taxes
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of $13.6 million related to the incremental transaction-related costs of $61.9 million as described in Note (p) above, offset by an increase of $     million for the incremental income tax on the additional interest expense as described in Note (q) above, both determined using an effective tax rate of 22.0%. Also included in this adjustment is withholding taxes of $     million associated with the dividend to JS Global.
Autonomous Entity Adjustments
s.
Reflects the incremental cost of sales of $75.6 million that was not reflected in the historical consolidated statement of income for the year ended December 31, 2022 related to the Sourcing Services Agreement Adjustment.
​
t.
Reflects the additional income of $     million that was not reflected in the historical consolidated statement of income for the year ended December 31, 2022 related to the Transition Services Agreement Adjustment.
​
u.
Reflects the income tax effect of $16.6 million related to the Autonomous Entity Adjustments. Included in this adjustment is a decrease in the provision for income taxes of $16.6 million related to the Sourcing Services Agreement Adjustment as described in Note (s) above, determined using an effective tax rate of 22.0%. Offsetting this decrease is an increase in the provision for income taxes of $     million related to the additional income recognized as a result of the Transfer Services Agreement Adjustment as described in Note (t) above, determined using an effective tax rate of 22.0%.
​
v.
The basic and diluted pro forma net income per share represents net income divided by the weighted average ordinary shares outstanding, using the historical weighted average shares outstanding.
​
The table below presents the computation of pro forma basic and dilutive net income per share for the three months ended March 31, 2023:
(in thousands, except share and per share data)
​ ​
Three Months
Ended
March 31,
2023
​
Numerator: ​ ​ ​ ​ ​ ​ ​
Pro forma net income, basic and diluted
​ ​ ​ $      ​ ​
Denominator: ​ ​ ​ ​ ​ ​ ​
Weighted-average shares used in computing pro forma net income per share—basic
and diluted(1) 		​ ​ ​ ​ ​ ​ ​
Pro forma net income per share—basic and diluted
​ ​ ​ $ ​ ​ ​
​
(1)
For the three months ended March 31, 2023, there were no potentially convertible instruments that would have a dilutive effect on the basic pro forma net income per share.
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The table below presents the computation of pro forma basic and dilutive net income per share for the year ended December 31, 2022:
(in thousands, except share and per share data)
​ ​
Year Ended
December 31,
2022
​
Numerator: ​ ​ ​ ​ ​ ​ ​
Pro forma net income, basic and diluted
​ ​ ​ $   ​ ​
Denominator: ​ ​ ​ ​ ​ ​ ​
Weighted-average shares used in computing pro forma net income per share—basic
and diluted(1) 		​ ​
     
​
Pro forma net income per share—basic and diluted
​ ​ ​ $ ​ ​ ​
​
(1)
For the year ended December 31, 2022, there were no potentially convertible instruments that would have a dilutive effect on the basic pro forma net income per share.
​
 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes and the other financial information included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual business, financial condition and results of operations could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly under “Risk Factors.” See also “Cautionary Note Regarding Forward-Looking Statements.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Overview
SharkNinja is a global product design and technology company that creates innovative 5-star rated lifestyle solutions for consumers around the world. We have built two billion-dollar brands that drive strong growth and innovation across the 27 sub-categories in which we compete today. We have a proven track record of entering and establishing leadership positions by disrupting the market across household product categories, including Cleaning, Cooking, Food Preparation and Other, which includes Home Environment and Beauty.
Our success is centered around our advanced engineering and innovation capabilities coupled with our deep understanding of consumer needs. We relentlessly seek to deliver innovative home appliances at compelling value in order to delight consumers. Our continued growth in sales and increasing market share demonstrate that our products deliver lifestyle solutions that meet our consumers’ evolving needs and desires.
We drive high brand engagement through our dynamic approach to solutions-driven storytelling in categories that we believe have not been historically known for high engagement. This solutions-driven approach focuses on educating the consumer on our innovative solution to a consumer problem that makes their experience more efficient and more enjoyable. Our differentiated storytelling complements our innovative products across a variety of channels, including in-store, online, on television and across social media. This approach engages current and new consumers, fueling demand for our solutions across a variety of categories. Utilizing this strategy, we have built a global community of passionate brand ambassadors who we believe value our innovation, quality and performance.
We sell our products using an omnichannel distribution strategy that consists primarily of retail and DTC channels. Our retail channel covers brick-and-mortar retailers, e-commerce platforms and multichannel retailers, which, in turn, sell our products to the end consumers. Some of the largest retailers we sell to include Walmart, Amazon, Target and Best Buy, as well as a significant number of independent retailers. Our DTC channel covers sales directly to consumers through our websites. The goal of our omnichannel distribution strategy is to be the most prominent and relevant brand wherever our consumers choose to shop.
We have built an agile and efficient supply chain over time and have made significant investments to optimize manufacturing and sourcing. Our supply chain infrastructure harnesses three differentiating factors: (i) long-standing factory partnerships that allow us to rapidly develop and produce our products, (ii) factory flexibility that allows us to incorporate insights and adapt at any stage of the production process and (iii) our volumes and long-term strategic partnerships with key shippers allow us to attain competitive inbound freight rates, even when the market is constrained. We have also made significant investments in local talent to help oversee the production process and ensure that our manufacturers’ products meet our strenuous quality standards.
Our ability to develop innovative consumer products, enter new categories and scale our business has created a compelling financial profile with rapid net sales growth. Our net sales increased from $2.8 billion for the year ended December 31, 2020 to $3.7 billion for the year ended December 31, 2022, representing a CAGR of 16.2%.
Key Factors Affecting Our Performance
We believe that our performance and results of operations have been and will continue to be, affected by a number of factors, including those described below and in the “Risk Factors” included elsewhere in this prospectus.
 
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Continued Product Innovation in Existing Categories and New Adjacent Categories
Our future growth depends, in part, on our ability to introduce new and enhanced products in our existing categories and enter adjacent categories. The success of our new products depends on many factors, including finding innovative solutions to consumer problems, differentiating our products from those of our competitors, obtaining protection for our intellectual property and anticipating consumer trends. By introducing new products, we appeal to a broader range of consumers, which expands our use cases and increases our presence in underserved or untapped markets. To continue with our rapid pace of innovation, we will need to continue to invest in R&D to enhance our product offerings. We believe that our consumer insight capabilities and robust in-house R&D teams, with dedicated engineering and development experts around the globe, enables us to maintain a product pipeline several years into the future. We are relentlessly focused on staying at the forefront of our product categories while entering new adjacent categories through our continuous innovation and ever-evolving consumer insights.
Ability to Attract and Retain Consumers and Increase Consumer Engagement
We believe that we are still in the early stages of growth across our markets and that we can significantly grow our consumer base and the number of our products per household. Our performance will depend on our continued ability to retain existing consumers and attract new consumers to purchase products across our portfolio, which is reliant on us maintaining consumer loyalty and satisfaction. Consumer engagement with our brands is integral to the continued growth and success of our business. We have strategically invested and will continue to invest, significant time and resources towards our marketing initiatives, including long-form advertising to the latest social media platforms, that educate consumers, highlight our quality and value, inspire conversion in-store and online. We have also invested and expect to continue to invest, in our ability to glean consumer insights from a variety of sources, including direct and indirect interactions with consumers and consumer reviews of our products. We believe that continued interactions with consumers allow us to understand their needs and desires, enhancing our product storytelling and inspiring purchases.
Continued Geographic Expansion Within Existing and New International Markets
We believe our ability to expand within existing international markets and enter new international markets will continue to play an integral role in our future growth. We have cultivated our presence in international markets for years, accumulating experience and local resources while building long-term, in-depth cooperation with key retailers. Our ability to grow our business in new international markets will depend on factors such as our marketing efforts, continued consumer satisfaction with our products and understanding consumer preferences in different markets. International expansion may require us to invest in sales and marketing, infrastructure and personnel. As we scale in new markets, we anticipate that we will leverage our existing relationships with key international retail partners and build partnerships with new retailers.
Ability to Manage Costs and Inventory
Our results of operations are affected by our ability to manage our manufacturing and supply costs effectively. Our product costs vary based on the category, level of technological innovation and complexity, as well as the arrangements with our manufacturing partners and the input costs they face. We have continuously expanded our supplier base as we have expanded into new categories and geographies. We ensure that we are multi-sourced across high-volume products to ensure sufficient product supply. Our supply chain remains highly agile with competitive bidding to secure favorable pricing, allowing us to offer greater value to our consumers. Further, we generally have long-standing relationships with our key suppliers that have solidified our supply chain infrastructure and enabled us to source our products effectively.
Continued Execution of Our Omni-channel Strategy
Since our inception, we have relentlessly focused on meeting our consumers where they shop. Our omnichannel strategy has continued to evolve as consumer shopping habits have evolved. We have established credibility through key retail channels, built numerous years’ worth of trust with leading retailers and have had success in our DTC channel, allowing us to gain deeper consumer insights. We have also invested and expect to continue to invest, in growing our teams of sales representatives to keep pace with increasing consumer demand
 
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and expand our relationships with both brick-and-mortar and online retailers. Our ability to execute this strategy will depend on various factors such as retailer satisfaction with the sales and profitability of our products, our ability to continue to innovate and our ability to maintain and expand the number of categories in which we are a category captain at key retailers.
Economic Conditions and Seasonality
Demand for our products is impacted by various economic factors that affect our consumers, such as consumer confidence, demographic trends, employment levels, inflation and other economic factors. These factors may influence the extent to which consumers purchase small household appliances. We believe that small appliances, such as our product offerings, are less cyclical than large appliances, which are typically more expensive and involve less frequent purchases by consumers. We also believe that consumers are attracted to our products because of the potential to save money; for instance, purchasing a Ninja Coffee Maker or Foodi Oven enables consumers to reduce spend on coffee and food away from home. In addition, we believe that our net sales include a seasonal component. We expect our net sales to be highest in our third and fourth quarters as retailers are buying products in advance of the holiday season and our online retail and DTC sales, in particular, increase during the holiday season. We expect this seasonality to continue to be a factor in our results of operations.
Key Components of Results of Operations
Net Sales
We offer a broad range of products that span 27 sub-categories primarily within small household appliances. We generate net sales from product sales to retailers, both brick-and-mortar and online, as well as through DTC sales and distributors. We recognize sales upon transfer of control of products to retailers, consumers and distributors, net of returns, discounts and allowances provided to retailers and funding provided to retailers for promotions and advertising of our products. Control is generally transferred upon shipment or delivery of the products, depending on shipping terms. Net sales are impacted by the effect of foreign exchange rates, competition, consumer spending habits and general economic conditions.
We disaggregate the net sales of our products across four categories:
•
Cleaning Appliances, which includes corded and cordless vacuums, including handheld and robotic vacuums, as well as other floorcare products including steam mops and wet/dry cleaning floor products;
​
•
Cooking and Beverage Appliances, which includes air fryers, multi-cookers, outdoor and countertop grills and ovens, coffee systems, cookware, cutlery, kettles, toasters and bakeware;
​
•
Food Preparation Appliances, which includes blenders, food processors, ice cream makers and juicers; and
​
•
Other, which includes beauty appliances such as hair dryers and stylers, home environment products, such as air purifiers and garment care products.
​
Gross Profit and Gross Margin
Gross profit reflects net sales less the cost of sales. Cost of sales primarily consists of the purchase cost of our products from third-party manufacturers, inbound freight costs, tariffs, product quality testing and inspection costs, the costs associated with receiving inventory into our warehouses, depreciation on molds and tooling that we own, warranty costs, damages, obsolescence and shrinkage costs and allocated overhead, including the service fee paid to JS Global for supply chain services.
We calculate gross margin as gross profit divided by net sales. Gross margin is generally impacted by changes in channel mix since our DTC sales usually generate a higher gross margin than sales to retailers and distributors. Additionally, gross margin is also impacted by product category mix, changes in foreign currency fluctuations, changes in tariff policies, fluctuations in inbound freight costs and fluctuations in commodity and component costs.
 
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Operating Expenses
Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. Advertising expenses are the most significant component of our operating expenses and consist of television advertising as well as digital advertising. Personnel-related expenses are the second most significant component of operating expenses and consist of salaries and bonuses, share-based compensation and employee benefit costs. Our operating expenses also include allocated overhead. Overhead costs that are not substantially dedicated for use by a specific functional group are allocated based on headcount. Allocated overhead costs include shared costs associated with facilities, including rent and utilities, information technology and related personnel and depreciation of property and equipment. We expect our operating expenses to increase on an absolute dollar basis for the foreseeable future as we continue to increase investments to support our growth including through increasing staff levels, expanding research and development and greater marketing activities. We also anticipate increased administrative and compliance costs as a result of becoming a public company.
Research and Development
Research and development costs primarily consist of salaries and related costs for our engineering and product development personnel responsible for the design, development and testing of our products, contractors and consulting expenses, the cost of components and test equipment used for product, tooling and prototype development, prototype expenses, overhead cost and amortization of intangible assets related to patents and amortization expenses related to capitalized development software.
Sales and Marketing
Sales and marketing expenses primarily consist of advertising, marketing and other brand-building costs, salaries and associated expenses for sales and marketing teams, shipping and fulfillment costs, including costs for third-party delivery services and shipping materials, overhead cost, amortization expenses of intangible assets related to customer relationships and depreciation expenses.
General and Administrative
General and administrative expenses primarily consist of salaries and associated costs for finance, legal, human resources, information technology and administrative functions, third-party professional service fees for external legal, accounting and other consulting services, depreciation expenses and overhead costs.
Following the separation and distribution, we expect to incur additional general and administrative expenses as a result of operating as a public company, including expenses to comply with the rules and regulations of the SEC and the listing rules of NYSE, as well as higher expenses for corporate insurance, director and officer insurance, investor relations and professional services.
Interest Expense, Net
Interest expense, net of any interest earned on our cash and cash equivalents and restricted cash, primarily consists of interest on our borrowings, including our term loan facility. See “—Liquidity and Capital Resources—Indebtedness.”
Other Income (Expense), Net
Other income (expense), net primarily consists of gains and losses on foreign currency transactions, equity method investments and foreign currency forward contracts. See “—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Risk.”
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes in the United States and other foreign jurisdictions in which we conduct our business.
 
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Results of Operations
The following table sets forth our selected consolidated statements of income information for each of the periods indicated:
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Net Sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ $ 809,626 ​ ​ ​ ​ $ 855,282 ​ ​
Cost of Sales
​ ​ ​ ​ 1,499,724 ​ ​ ​ ​ ​ 2,288,810 ​ ​ ​ ​ ​ 2,307,172 ​ ​ ​ ​ ​ 457,700 ​ ​ ​ ​ ​ 454,739 ​ ​
Gross Profit
​ ​ ​ ​ 1,253,442 ​ ​ ​ ​ ​ 1,438,184 ​ ​ ​ ​ ​ 1,410,194 ​ ​ ​ ​ ​ 351,926 ​ ​ ​ ​ ​ 400,543 ​ ​
Operating Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and Development(1)
​ ​ ​ ​ 159,635 ​ ​ ​ ​ ​ 200,641 ​ ​ ​ ​ ​ 215,660 ​ ​ ​ ​ ​ 51,971 ​ ​ ​ ​ ​ 58,725 ​ ​
Sales and Marketing(1)
​ ​ ​ ​ 445,084 ​ ​ ​ ​ ​ 619,162 ​ ​ ​ ​ ​ 621,953 ​ ​ ​ ​ ​ 125,541 ​ ​ ​ ​ ​ 152,120 ​ ​
General and Administrative(1)
​ ​ ​ ​ 183,286 ​ ​ ​ ​ ​ 180,124 ​ ​ ​ ​ ​ 251,207 ​ ​ ​ ​ ​ 52,025 ​ ​ ​ ​ ​ 67,068 ​ ​
Total Operating Expenses
​ ​ ​ ​ 788,005 ​ ​ ​ ​ ​ 999,927 ​ ​ ​ ​ ​ 1,088,820 ​ ​ ​ ​ ​ 229,537 ​ ​ ​ ​ ​ 277,913 ​ ​
Operating Income
​ ​ ​ ​ 465,437 ​ ​ ​ ​ ​ 438,257 ​ ​ ​ ​ ​ 321,374 ​ ​ ​ ​ ​ 122,389 ​ ​ ​ ​ ​ 122,630 ​ ​
Interest Expense, Net
​ ​ ​ ​ (40,279) ​ ​ ​ ​ ​ (16,287) ​ ​ ​ ​ ​ (27,021) ​ ​ ​ ​ ​ (4,004) ​ ​ ​ ​ ​ (8,489) ​ ​
Other Income (Expense), Net
​ ​ ​ ​ (5,692) ​ ​ ​ ​ ​ (7,644) ​ ​ ​ ​ ​ 7,631 ​ ​ ​ ​ ​ (3,909) ​ ​ ​ ​ ​ (2,780) ​ ​
Income Before Income Taxes
​ ​ ​ ​ 419,466 ​ ​ ​ ​ ​ 414,326 ​ ​ ​ ​ ​ 301,984 ​ ​ ​ ​ ​ 114,476 ​ ​ ​ ​ ​ 111,361 ​ ​
Provision for Income Taxes
​ ​ ​ ​ 92,268 ​ ​ ​ ​ ​ 83,213 ​ ​ ​ ​ ​ 69,630 ​ ​ ​ ​ ​ 25,565 ​ ​ ​ ​ ​ 24,265 ​ ​
Net Income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​
​
(1)
Includes share-based compensation as follows:
​
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Research and Development
​ ​ ​ $ 1,713 ​ ​ ​ ​ $ 2,918 ​ ​ ​ ​ $ 1,741 ​ ​ ​ ​ $ 821 ​ ​ ​ ​ $ 230 ​ ​
Sales and Marketing
​ ​ ​ ​ 1,866 ​ ​ ​ ​ ​ 1,755 ​ ​ ​ ​ ​ 459 ​ ​ ​ ​ ​ 257 ​ ​ ​ ​ ​ 101 ​ ​
General and Administrative
​ ​ ​ ​ 6,455 ​ ​ ​ ​ ​ 9,251 ​ ​ ​ ​ ​ 3,309 ​ ​ ​ ​ ​ 1,492 ​ ​ ​ ​ ​ 517 ​ ​
Total Share-Based Compensation
​ ​ ​ $ 10,034 ​ ​ ​ ​ $ 13,924 ​ ​ ​ ​ $ 5,509 ​ ​ ​ ​ $ 2,570 ​ ​ ​ ​ $ 848 ​ ​
 
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The following table sets forth our selected consolidated statements of income information as a percentage of our total net sales for each of the periods indicated:
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Net Sales
​ ​ ​ ​ 100.0% ​ ​ ​ ​ ​ 100.0% ​ ​ ​ ​ ​ 100.0% ​ ​ ​ ​ ​ 100.0% ​ ​ ​ ​ ​ 100.0% ​ ​
Cost of Sales
​ ​ ​ ​ 54.5 ​ ​ ​ ​ ​ 61.4 ​ ​ ​ ​ ​ 62.1 ​ ​ ​ ​ ​ 56.5 ​ ​ ​ ​ ​ 53.2 ​ ​
Gross Profit
​ ​ ​ ​ 45.5 ​ ​ ​ ​ ​ 38.6 ​ ​ ​ ​ ​ 37.9 ​ ​ ​ ​ ​ 43.5 ​ ​ ​ ​ ​ 46.8 ​ ​
Operating Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and Development
​ ​ ​ ​ 5.8 ​ ​ ​ ​ ​ 5.4 ​ ​ ​ ​ ​ 5.8 ​ ​ ​ ​ ​ 6.4 ​ ​ ​ ​ ​ 6.9 ​ ​
Sales and Marketing
​ ​ ​ ​ 16.2 ​ ​ ​ ​ ​ 16.6 ​ ​ ​ ​ ​ 16.7 ​ ​ ​ ​ ​ 15.5 ​ ​ ​ ​ ​ 17.8 ​ ​
General and Administrative
​ ​ ​ ​ 6.6 ​ ​ ​ ​ ​ 4.8 ​ ​ ​ ​ ​ 6.8 ​ ​ ​ ​ ​ 6.4 ​ ​ ​ ​ ​ 7.7 ​ ​
Total Operating Expenses
​ ​ ​ ​ 28.6 ​ ​ ​ ​ ​ 26.8 ​ ​ ​ ​ ​ 29.3 ​ ​ ​ ​ ​ 28.3 ​ ​ ​ ​ ​ 32.4 ​ ​
Operating Income
​ ​ ​ ​ 16.9 ​ ​ ​ ​ ​ 11.8 ​ ​ ​ ​ ​ 8.6 ​ ​ ​ ​ ​ 15.2 ​ ​ ​ ​ ​ 14.4 ​ ​
Interest Expense, Net
​ ​ ​ ​ (1.5) ​ ​ ​ ​ ​ (0.4) ​ ​ ​ ​ ​ (0.7) ​ ​ ​ ​ ​ (0.5) ​ ​ ​ ​ ​ (1.0) ​ ​
Other Income (Expense), Net
​ ​ ​ ​ (0.2) ​ ​ ​ ​ ​ (0.2) ​ ​ ​ ​ ​ 0.2 ​ ​ ​ ​ ​ (0.5) ​ ​ ​ ​ ​ (0.3) ​ ​
Income Before Income Taxes
​ ​ ​ ​ 15.2 ​ ​ ​ ​ ​ 11.2 ​ ​ ​ ​ ​ 8.1 ​ ​ ​ ​ ​ 14.2 ​ ​ ​ ​ ​ 13.1 ​ ​
Provision for Income Taxes
​ ​ ​ ​ 3.4 ​ ​ ​ ​ ​ 2.2 ​ ​ ​ ​ ​ 1.8 ​ ​ ​ ​ ​ 3.2 ​ ​ ​ ​ ​ 2.8 ​ ​
Net Income
​ ​ ​ ​ 11.8% ​ ​ ​ ​ ​ 9.0% ​ ​ ​ ​ ​ 6.3% ​ ​ ​ ​ ​ 11.0% ​ ​ ​ ​ ​ 10.3% ​ ​
Comparison of the Three Months Ended March 31, 2022 and 2023
Net Sales
​ ​ ​
Three Months Ended March 31,
​
($ in thousands, except %)
​ ​
2022
​ ​
2023
​ ​
$ Change
​ ​
% Change
​
Net Sales
​ ​ ​ $ 809,626 ​ ​ ​ ​ $ 855,282 ​ ​ ​ ​ $ 45,656 ​ ​ ​ ​ ​ 5.6% ​ ​
Our net sales increased by $45.7 million, or 5.6%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. The increase in net sales resulted primarily from strong sales growth in Europe, particularly in the United Kingdom, driven by demand for air fryers. Growth in Europe was offset by a decline in North America due to retailers reducing their inventory holdings as part of their cash flow management in an uncertain economy and softer consumer demand for some of our product categories.
Net sales in our product categories were as follows:
•
Cooking and Beverage Appliances net sales increased by $24.6 million, or 10.6%, to $256.7 million in the three months ended March 31, 2023, compared to $232.1 million for the three months ended March 31, 2022. This increase was driven by strong sales growth in Europe, specifically in the United Kingdom where we maintained and grew an already dominant market leading position, partially offset by modest declines in North America. Our global growth was further supported by the launch of our outdoor grill in the second half of 2022, which therefore realized a full quarter of sales in the three months ended March 31, 2023.
​
•
Cleaning Appliances net sales decreased by $22.1 million, or 5.1%, to $414.9 million in the three months ended March 31, 2023, compared to $437.0 million for the three months ended March 31, 2022. This decrease was a result of softness in the North America market, specifically in corded vacuums as consumers shifted towards cordless. This sales decline was partially offset by growth in the multi-floorcare sub-category driven by new product innovation.
​
•
Food Preparation Appliances net sales decreased by $10.6 million, or 8.3%, to $117.8 million in the three months ended March 31, 2023, compared to $128.5 million for the three months ended March 31, 2022. This decrease was primarily attributable to timing of retailer shipments and reduced retailer inventory, as overall consumer demand remained flat and our market share expanded slightly within this category.
​
 
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•
Other net sales increased by $53.8 million, or 445.2%, to $65.9 million in the three months ended March 31, 2023, compared to $12.1 million for the three months ended March 31, 2022. This increase was driven by strong sales of our new product launch in the beauty category, the Shark FlexStyle, at the end of 2022.
​
Gross Profit and Gross Margin
​ ​ ​
Three Months Ended March 31,
​
($ in thousands, except %)
​ ​
2022
​ ​
2023
​ ​
$ Change
​ ​
% Change
​
Gross Profit
​ ​ ​ $ 351,926 ​ ​ ​ ​ $ 400,543 ​ ​ ​ ​ ​ 48,617 ​ ​ ​ ​ ​ 13.8% ​ ​
Gross Margin
​ ​ ​ ​ 43.5% ​ ​ ​ ​ ​ 46.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Our gross profit increased by $48.6 million, or 13.8%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022.
Our gross margin increased by 330 basis points for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. The increase in gross margin was primarily attributable to cost tailwinds, including lower average inbound freight on major shipping lanes and favorable foreign exchange rates. We also drove strong sales through our higher margin DTC channel, specifically in the beauty category.
Operating Expenses
​ ​ ​
Three Months Ended March 31,
​
($ in thousands, except %)
​ ​
2022
​ ​
2023
​ ​
$ Change
​ ​
% Change
​
Research and Development
​ ​ ​ $ 51,971 ​ ​ ​ ​ $ 58,725 ​ ​ ​ ​ $ 6,754 ​ ​ ​ ​ ​ 13.0% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 6.4% ​ ​ ​ ​ ​ 6.9% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sales and Marketing
​ ​ ​ $ 125,541 ​ ​ ​ ​ $ 152,120 ​ ​ ​ ​ $ 26,579 ​ ​ ​ ​ ​ 21.2% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 15.5% ​ ​ ​ ​ ​ 17.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
General and Administrative
​ ​ ​ $ 52,025 ​ ​ ​ ​ $ 67,068 ​ ​ ​ ​ $ 15,043 ​ ​ ​ ​ ​ 28.9% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 6.4% ​ ​ ​ ​ ​ 7.7% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Operating Expenses
​ ​ ​ $ 229,537 ​ ​ ​ ​ $ 277,913 ​ ​ ​ ​ $ 48,376 ​ ​ ​ ​ ​ 21.1% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 28.3% ​ ​ ​ ​ ​ 32.4% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and Development
Research and development expenses increased by $6.8 million, or 13.0%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. This increase was primarily related to an increase of $2.9 million in personnel-related expenses driven by increased headcount to support new product categories and new market expansion and an increase of $2.5 million in depreciation and amortization expenses. The remainder of the overall increase, which amounted to $1.6 million, was attributable to other overhead costs associated with the product development process to support the continued expansion into new sub-categories in addition to developing new features and functionality for existing subcategories.
Sales and Marketing
Sales and marketing expenses increased by $26.6 million, or 21.2%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. This increase was primarily attributable to an increase of $11.5 million in advertising-related expenses to support our launch into new markets and new sub-categories, an increase of $6.3 million in fulfillment expenses to support increased sales, an increase of $4.1 million in personnel-related expenses driven by increased headcount to support the overall growth in the business and new market expansion and an increase of $2.2 million in depreciation and amortization expenses. The remainder of the overall increase, which amounted to $2.4 million, was attributable to other immaterial miscellaneous expenses.
 
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General and Administrative
General and administrative expenses increased by $15.0 million, or 28.9%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. This increase was due to an increase of $14.9 million in professional services, primarily driven by costs related to the separation and distribution. This increase was partially offset by a decrease of $2.7 million in depreciation and amortization expenses. The remainder of the overall increase, which amounted to $2.8 million, was attributable to other immaterial miscellaneous expenses.
Interest Expense, Net
​ ​ ​
Three Months Ended March 31,
​
($ in thousands, except %)
​ ​
2022
​ ​
2023
​ ​
$ Change
​ ​
% Change
​
Interest Expense, Net
​ ​ ​ $ (4,004) ​ ​ ​ ​ $ (8,489) ​ ​ ​ ​ $ 4,485 ​ ​ ​ ​ ​ 112.0% ​ ​
Percentage of Net Sales
​ ​ ​ ​ (0.5)% ​ ​ ​ ​ ​ (1.0)% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest expense, net increased by $4.5 million, or 112.0%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. This increase was primarily due to a $4.0 million increase in interest expense for the Secured Term Loan and Revolving Facility, which was driven by increases in LIBOR rates.
Other Expense, Net
​ ​ ​
Three Months Ended March 31,
​
($ in thousands, except %)
​ ​
2022
​ ​
2023
​ ​
$ Change
​ ​
% Change
​
Other Expense, Net
​ ​ ​ $ (3,909) ​ ​ ​ ​ $ (2,780) ​ ​ ​ ​ $ (1,129) ​ ​ ​ ​ ​ (28.9)% ​ ​
Percentage of Net Sales
​ ​ ​ ​ (0.5)% ​ ​ ​ ​ ​ (0.3)% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other expense, net decreased by $1.1 million, or 28.9% for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. The decrease was primarily attributable to reduced losses related to foreign currency, including losses on the change in fair value of foreign currency forward contracts.
Provision for Income Taxes
​ ​ ​
Three Months Ended March 31,
​
($ in thousands, except %)
​ ​
2022
​ ​
2023
​ ​
$ Change
​ ​
% Change
​
Provision for Income Taxes
​ ​ ​ $ 25,565 ​ ​ ​ ​ $ 24,265 ​ ​ ​ ​ $ 1,300 ​ ​ ​ ​ ​ (5.1)% ​ ​
Percentage of Income Before Income Taxes
​ ​ ​ ​ 22.3% ​ ​ ​ ​ ​ 21.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Provision for income taxes decreased by $1.3 million, or 5.1%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Our effective tax rate was 22.3% and 21.8% of our income before income taxes for the three months ended March 31, 2022 and 2023, respectively. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses.
Comparison of the Years Ended December 31, 2020, 2021 and 2022
Net Sales
​ ​ ​
Year Ended December 31,
​ ​
% Change
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2020 to 2021
​ ​
2021 to 2022
​
Net Sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ ​ 35.4% ​ ​ ​ ​ ​ (0.3)% ​ ​
2022 Compared to 2021
Our net sales decreased by $9.6 million, or 0.3%, for the year ended December 31, 2022, compared to the year ended December 31, 2021. We maintained net sales in 2022 by growing sales in categories that
 
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recently launched including air purification, personal care and ice cream makers. Those increases were offset by the impact of foreign currency as the Great British Pound, the Euro and the Japanese Yen were weaker throughout 2022 as compared to 2021. On a constant currency basis, our net sales would have been $3,805.9 million for the year ended December 31, 2022, an increase of 2.1% compared to the year ended December 31, 2021. In addition, we saw softer consumer demand for some of our product categories as well as retailers reducing their inventory holdings as part of their cash flow management in an uncertain economy.
Net sales in our product categories were as follows:
•
Cleaning Appliances net sales decreased by $18.2 million, or 0.9%, to $1,931.7 million in the year ended December 31, 2022, compared to $1,950.0 million in the same period in 2021. We largely maintained sales in this category as a result of market share gains and new product innovation, despite softer consumer demand for certain types of cleaning appliance products.
​
•
Cooking and Beverage Appliances net sales decreased by $94.8 million, or 8.1%, to $1,078.6 million in the year ended December 31, 2022, compared to $1,173.4 million in the same period in 2021. This decrease was a result of retailer destocking and softer consumer demand for the category, offset by market share gains.
​
•
Food Preparation Appliances net sales increased by $42.0 million, or 7.7%, to $590.4 million in the year ended December 31, 2022, compared to $548.4 million in the same period in 2021. The increase in sales was a result of growth within recent new sub-category launches including ice cream makers.
​
•
Other net sales increased by $61.4 million, or 111.1%, to $116.6 million in the year ended December 31, 2022, compared to $55.2 million in the same period in 2021. This increase was a result of growth within air purification and personal care products, both of which were new sub-categories that launched in the second half of 2021 and benefited from a full year of sales in 2022, along with an expanded product portfolio in existing sub-categories, which was launched throughout 2022.
​
2021 Compared to 2020
Our net sales increased by $973.8 million, or 35.4%, for the year ended December 31, 2021, compared to the year ended December 31, 2020. The increase in net sales across all four of our categories was primarily driven by the strong product launches that we brought to market in 2020 and 2021 coupled with overall market share gains and increased consumer demand for our product lines. In particular, we launched cookware in late 2020, which generated a full year of net sales in 2021 and we launched hair dryers, air purifiers and ice cream makers in late 2021, which also contributed to our increase in net sales.
Net sales in our product categories were as follows:
•
Cleaning Appliances net sales increased by $264.8 million, or 15.7%, to $1,950.0 million in the year ended December 31, 2021, compared to $1,685.1 million in the same period in 2020. This growth was attributable to market share gains in our various markets driven by the continuous innovation that we brought to this category, along with an increase in the underlying size of the market as consumers were spending more time in their homes. Cordless vacuums were the largest contributor of growth within this category where our market share is still less than in corded vacuums in North America and Europe, but is gaining.
​
•
Cooking and Beverage Appliances net sales increased by $489.0 million, or 71.5%, to $1,173.4 million in the year ended December 31, 2021, compared to $684.3 million in the same period in 2020. This growth came from several areas including cookware, which was launched in late 2020 and generated sales throughout 2021, cutlery, which was launched in 2021 with the Ninja Foodi NeverDull Premium Knife System and strong demand for other products within this category, including countertop grills and ovens, multi-cookers and air fryers. In addition, the market for the products in this category performed well as people spent more time at home throughout 2021, coupled with market share gains as a result of the strong product innovation that we brought to market during this time. New product offerings included the Ninja Foodi Smart XL 6-in-1 Indoor Grill and the Ninja Foodi Smart 10-in-1 XL Pro Air Fry Oven.
​
 
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•
Food Preparation Appliances net sales increased by $171.5 million, or 45.5%, to $548.4 million in the year ended December 31, 2021, compared to $377.0 million in the same period in 2020. Growth in this category came from both existing sub-categories, such as blenders and food processors, in which we grew our market share and benefited from a growing market, as well as from new sub-categories, such as ice cream makers, which were launched in late 2021.
​
•
Other net sales increased by $48.5 million, or 717.3%, to $55.2 million in the year ended December 31, 2021, compared to $6.8 million in the same period in 2020. This growth was mainly generated by strong sales within air purification and personal care products, which were both launched in late 2021.
​
Gross Profit and Gross Margin
​ ​ ​
Year Ended December 31,
​ ​
% Change
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2020 to 2021
​ ​
2021 to 2022
​
Gross Profit
​ ​ ​ $ 1,253,442 ​ ​ ​ ​ $ 1,438,184 ​ ​ ​ ​ $ 1,410,194 ​ ​ ​ ​ ​ 14.7% ​ ​ ​ ​ ​ (1.9)% ​ ​
Gross Margin
​ ​ ​ ​ 45.5% ​ ​ ​ ​ ​ 38.6% ​ ​ ​ ​ ​ 37.9% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
2022 Compared to 2021
Our gross profit decreased by $28.0 million, or 1.9%, for the year ended December 31, 2022, compared to the year ended December 31, 2021.
Our gross margin decreased by 70 basis points for the year ended December 31, 2022, compared to the year ended December 31, 2021. The decline in gross margin was primarily attributable to certain cost headwinds, including higher average inbound freight, component and commodity costs throughout 2022 as compared to 2021. Our products were also sold more often at promotional prices during 2022, as compared to 2021, in order to ensure strong retailer sell through and strong sales through our own DTC channels. These headwinds were partially offset by the benefit of tariff exclusions on most of the vacuums and air fryers that were imported into the United States from China.
2021 Compared to 2020
Our gross profit increased by $184.7 million, or 14.7%, for the year ended December 31, 2021, compared to the year ended December 31, 2020.
Our gross margin decreased by 690 basis points for the year ended December 31, 2021, compared to the year ended December 31, 2020. The decline in gross margin was primarily attributable to the following factors: a non-recurring tariff refund of $38.1 million, which was recognized in 2020 related to tariffs incurred in 2019, the expiration of tariff exclusions on most vacuums, air fryers and air purifiers imported into the United States from China in 2021, unfavorable foreign currency impacts in 2021 and higher inbound freight, component and commodity costs in 2021. Many of our products imported into the United States from China are subject to 25% Section 301 tariffs. Exclusions from most of the 25% Section 301 tariffs were made effective from October 21, 2021 through December 31, 2022.
Operating Expenses
​ ​ ​
Year Ended December 31,
​ ​
% Change
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2020 to 2021
​ ​
2021 to 2022
​
Research and Development
​ ​ ​ $ 159,635 ​ ​ ​ ​ $ 200,641 ​ ​ ​ ​ $ 215,660 ​ ​ ​ ​ ​ 25.7% ​ ​ ​ ​ ​ 7.5% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 5.8% ​ ​ ​ ​ ​ 5.4% ​ ​ ​ ​ ​ 5.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sales and Marketing
​ ​ ​ $ 445,084 ​ ​ ​ ​ $ 619,162 ​ ​ ​ ​ $ 621,953 ​ ​ ​ ​ ​ 39.1% ​ ​ ​ ​ ​ 0.5% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 16.2% ​ ​ ​ ​ ​ 16.6% ​ ​ ​ ​ ​ 16.7% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
General and Administrative
​ ​ ​ $ 183,286 ​ ​ ​ ​ $ 180,124 ​ ​ ​ ​ $ 251,207 ​ ​ ​ ​ ​ (1.7)% ​ ​ ​ ​ ​ 39.5% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 6.6% ​ ​ ​ ​ ​ 4.8% ​ ​ ​ ​ ​ 6.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Operating Expenses
​ ​ ​ $ 788,005 ​ ​ ​ ​ $ 999,927 ​ ​ ​ ​ $ 1,088,820 ​ ​ ​ ​ ​ 26.9% ​ ​ ​ ​ ​ 8.9% ​ ​
Percentage of Net Sales
​ ​ ​ ​ 28.6% ​ ​ ​ ​ ​ 26.8% ​ ​ ​ ​ ​ 29.3% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
 
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Research and Development
2022 Compared to 2021
Research and development expenses increased by $15.0 million, or 7.5%, for the year ended December 31, 2022, compared to the year ended December 31, 2021. This increase was primarily related to an increase of $16.8 million in personnel-related expenses driven by increased headcount to support new product categories and new market expansion, and an increase of $2.1 million in the cost of prototypes used in product development. The remainder of the overall increase, which amounted to $6.2 million was attributable to other overhead costs associated with the product development process to support the continued expansion into new sub-categories in addition to developing new features and functionality for existing sub-categories. These increases were partially offset by a decrease of $10.1 million in professional services related to third-party consulting fees.
2021 Compared to 2020
Research and development expenses increased by $41.0 million, or 25.7%, for the year ended December 31, 2021, compared to the year ended December 31, 2020. This increase was primarily related to an increase of $26.0 million in personnel-related expenses driven by increased headcount to support new product categories and new market expansion, and an increase of $5.7 million in the cost of prototypes used in product development. The remainder of the overall increase, which amounted to $9.3 million was attributable to other overhead costs associated with the product development process to support the continued expansion into new sub-categories in addition to developing new features and functionality for existing sub-categories.
Sales and Marketing
2022 Compared to 2021
Sales and marketing expenses increased by $2.8 million, or 0.5%, for the year ended December 31, 2022, compared to the year ended December 31, 2021. This increase was primarily related to an increase of $15.7 million in personnel-related expenses driven by increased headcount to support the overall growth in the business and new market expansion and an increase of $7.7 million in depreciation and amortization expenses. The remainder of the overall increase, which amounted to $6.1 million was attributable to other immaterial miscellaneous expenses. These increases were partially offset by a decrease of $26.7 million in marketing expenses due to optimization of media investments in certain channels and product categories.
2021 Compared to 2020
Sales and marketing expenses increased by $174.1 million, or 39.1%, for the year ended December 31, 2021, compared to the year ended December 31, 2020. This increase was primarily attributable to an increase of $95.3 million in fulfillment expenses to support increased sales, an increase of $39.7 million in advertising-related expenses to support our launch into new markets and new sub-categories, an increase of $25.9 million in personnel-related expenses driven by increased headcount to support the overall growth in the business and new market expansion, an increase of $6.2 million in professional services related to third-party consulting fees and an increase of $4.8 million in depreciation and amortization expenses. The remainder of the overall increase, which amounted to $2.2 million was attributable to other immaterial miscellaneous expenses.
General and Administrative
2022 Compared to 2021
General and administrative expenses increased by $71.1 million, or 39.5%, for the year ended December 31, 2022, compared to the year ended December 31, 2021. This increase was primarily attributable to an increase of $38.2 million in personnel-related expenses driven by increased headcount to support the overall growth in the business and a one-time discretionary bonus, an increase of $13.4 million in professional services related to third-party consulting fees, an increase of $6.7 million in insurance cost as a result of higher premiums
 
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for certain insurance lines and an increase of $5.8 million related to information technology expenses. The remainder of the overall increase, which amounted to $6.9 million was attributable to other immaterial miscellaneous expenses.
2021 Compared to 2020
General and administrative expenses decreased by $3.2 million, or 1.7%, for the year ended December 31, 2021, compared to the year ended December 31, 2020. This decrease was primarily due to a decrease of $5.7 million in depreciation and amortization expenses, a decrease of $5.3 million in legal fees and a decrease of $2.7 million in personnel-related expenses. These decreases were partially offset by an increase of $8.7 million in insurance cost as a result of higher insurance premiums to support increased sales and an increase of $3.3 million related to information technology expenses. The remainder of the decrease, which amounted to $1.5 million was attributable to other immaterial miscellaneous expenses.
Interest Expense, Net
​ ​ ​
Year Ended December 31,
​ ​
% Change
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2020 to 2021
​ ​
2021 to 2022
​
Interest Expense, Net
​ ​ ​ $ (40,279) ​ ​ ​ ​ $ (16,287) ​ ​ ​ ​ $ (27,021) ​ ​ ​ ​ ​ (59.6)% ​ ​ ​ ​ ​ 65.9% ​ ​
Percentage of Net Sales
​ ​ ​ ​ (1.5)% ​ ​ ​ ​ ​ (0.4)% ​ ​ ​ ​ ​ (0.7)% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
2022 Compared to 2021
Interest expense, net increased by $10.7 million, or 65.9%, for the year ended December 31, 2022, compared to the year ended December 31, 2021. This increase was primarily due to a $9.3 million increase in interest for the term loan and revolving credit facility, which was driven by increases in LIBOR rates year-over-year.
2021 Compared to 2020
Interest expense, net decreased by $24.0 million, or 59.6%, for the year ended December 31, 2021, compared to the year ended December 31, 2020. This decrease was primarily due to an additional $16.4 million in expense recorded in 2020 from write-offs of unamortized deferred financing costs related to a credit facility that was refinanced in March 2020. The decrease in interest expense was also due to a lower interest rate on outstanding debt as a result of the refinancing. See “—Liquidity and Capital Resources.”
Other Income (Expense), Net
​ ​ ​
Year Ended December 31,
​ ​
% Change
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2020 to 2021
​ ​
2021 to 2022
​
Other Income (Expense), Net
​ ​ ​ $ (5,692) ​ ​ ​ ​ $ (7,644) ​ ​ ​ ​ $ 7,631 ​ ​ ​ ​ ​ 34.3% ​ ​ ​ ​ ​ 199.8% ​ ​
Percentage of Net Sales
​ ​ ​ ​ (0.2)% ​ ​ ​ ​ ​ (0.2)% ​ ​ ​ ​ ​ 0.2% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
2022 Compared to 2021
Other income (expense), net increased by $15.3 million, or 199.8%, for the year ended December 31, 2022, compared to the year ended December 31, 2021. This increase was primarily attributable to the $22.7 million gains recognized on foreign currency forward contracts and a decrease of $4.1 million in losses incurred from the equity method investments. The increase was partially offset by $10.0 million foreign currency losses incurred during the period as a result of fluctuations between the Great British Pound (“GBP”) and Japanese Yen (“JPY”) against the U.S. Dollar during the year ended December 31, 2022 and an increase of $2.2 million losses recognized on disposal of assets.
2021 Compared to 2020
Other income (expense), net increased by $2.0 million, or 34.3%, for the year ended December 31, 2021, compared to the year ended December 31, 2020. This increase was primarily due to foreign currency
 
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losses incurred during the period as a result of fluctuations between the GBP and JPY against the U.S. Dollar during the year ended December 31, 2021 and an increase in losses from the equity method investments.
Provision for Income Taxes
​ ​ ​
Year Ended December 31,
​ ​
% Change
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2020 to 2021
​ ​
2021 to 2022
​
Provision for Income Taxes
​ ​ ​ $ 92,268 ​ ​ ​ ​ $ 83,213 ​ ​ ​ ​ $ 69,630 ​ ​ ​ ​ ​ (9.8)% ​ ​ ​ ​ ​ (16.3)% ​ ​
Percentage of Income Before Income Taxes ​ ​ ​ ​ 22.0% ​ ​ ​ ​ ​ 20.1% ​ ​ ​ ​ ​ 23.1% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
2022 Compared to 2021
Provision for income taxes decreased by $13.6 million, or 16.3%, for the year ended December 31, 2022, compared to the year ended December 31, 2021. Our effective tax rate was 20.1% and 23.1% of our income before income taxes for the years ended December 31, 2021 and 2022, respectively. The change in the effective tax rate was primarily due to an increase in the valuation allowance in certain jurisdictions, mainly related to Massachusetts tax credits. Our effective tax rate was also affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses.
2021 Compared to 2020
Provision for income taxes decreased by $9.1 million, or 9.8%, for the year ended December 31, 2021, compared to the year ended December 31, 2020. Our effective tax rate was 22.0% and 20.1% of our income before income taxes for the years ended December 31, 2020 and 2021, respectively. The change in the effective tax rate was primarily due to an increase in foreign-derived intangible income benefit and excess tax benefits from share-based compensation expenses. Our effective tax rate was also affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses.
Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements, we regularly review other financial measures, defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions.
The key non-GAAP financial measures we consider are Adjusted Net Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Income, Adjusted Net Income Per Diluted Share, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. These non-GAAP financial measures are used by both management and our Board, together with comparable GAAP information, in evaluating our current performance and planning our future business activities. These non-GAAP financial measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and/or which management considers to be unrelated to our core operations and excludes the financial results from the Divestitures, as well as the Product Procurement Adjustment. Management believes that tracking and presenting these non-GAAP financial measures provides management and the investment community with valuable insight into our ongoing core operations, our ability to generate cash and the underlying business trends that are affecting our performance. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry and to better understand and interpret the results of the ongoing business following the separation and distribution. These non-GAAP financial measures should not be viewed as a substitute for our financial results calculated in accordance with GAAP and you are cautioned that other companies may define these non-GAAP financial measures differently.
We define Adjusted Net Sales as net sales as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including net sales from our
 
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Divestitures. We believe that Adjusted Net Sales is an appropriate measure of our performance because it eliminates the impact of our Divestitures that do not relate to the ongoing performance of our business.
The following table reconciles Adjusted Net Sales to the most comparable GAAP measure, net sales, for the periods presented:
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Net Sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ $ 809,626 ​ ​ ​ ​ $ 855,282 ​ ​
Divested Subsidiary Adjustment(1)
​ ​ ​ ​ (63,458) ​ ​ ​ ​ ​ (101,695) ​ ​ ​ ​ ​ (97,434) ​ ​ ​ ​ ​ (20,080) ​ ​ ​ ​ ​ (19,649) ​ ​
Adjusted Net Sales
​ ​ ​ $ 2,689,708 ​ ​ ​ ​ $ 3,625,299 ​ ​ ​ ​ $ 3,619,932 ​ ​ ​ ​ $ 789,546 ​ ​ ​ ​ $ 835,633 ​ ​
​
(1)
Adjusted for net sales of $38.8 million, $63.5 million and $63.9 million from SNJP for the years ended December 31, 2020, 2021 and 2022, respectively; $24.7 million, $38.2 million and $33.5 million from the APAC distribution channels for the years ended December 31, 2020, 2021 and 2022, respectively; $14.0 million and $15.0 million from SNJP for the three months ended March 31, 2022 and 2023, respectively; and $6.1 million and $4.6 million from the APAC distribution channels for the three months ended March 31, 2022 and 2023, respectively, as if such Divestitures occurred on January 1, 2020.
​
We define Adjusted Gross Profit as gross profit as adjusted to exclude (i) the Tariff Refunds and (ii) certain items that we do not consider indicative of our ongoing operating performance following the separation, including the net sales and cost of sales from our Divestitures and the cost of sales from the Product Procurement Adjustment. We define Adjusted Gross Margin as Adjusted Gross Profit divided by Adjusted Net Sales. We believe that Adjusted Gross Profit and Adjusted Gross Margin are appropriate measures of our operating performance because each eliminates the impact our Divestitures and certain other adjustments that do not relate to the ongoing performance of our business.
The following table reconciles Adjusted Gross Profit and Adjusted Gross Margin to the most comparable GAAP measure, gross profit and gross margin, respectively, for the periods presented:
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Net Sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ $ 809,626 ​ ​ ​ ​ $ 855,282 ​ ​
Cost of Sales
​ ​ ​ ​ (1,499,724) ​ ​ ​ ​ ​ (2,288,810) ​ ​ ​ ​ ​ (2,307,172) ​ ​ ​ ​ ​ (457,700) ​ ​ ​ ​ ​ (454,739) ​ ​
Gross Profit
​ ​ ​ ​ 1,253,442 ​ ​ ​ ​ ​ 1,438,184 ​ ​ ​ ​ $ 1,410,194 ​ ​ ​ ​ $ 351,926 ​ ​ ​ ​ $ 400,543 ​ ​
Gross Margin %
​ ​
45.5%
​ ​
38.6%
​ ​
37.9%
​ ​
43.5%
​ ​
46.8%
​
Divested Subsidiary Net Sales Adjustment(1) ​ ​ ​ ​ (63,458) ​ ​ ​ ​ ​ (101,695) ​ ​ ​ ​ ​ (97,434) ​ ​ ​ ​ ​ (20,080) ​ ​ ​ ​ ​ (19,649) ​ ​
Divested Subsidiary Cost of Sales Adjustment(2) ​ ​ ​ ​ 39,512 ​ ​ ​ ​ ​ 63,931 ​ ​ ​ ​ ​ 64,506 ​ ​ ​ ​ ​ 11,945 ​ ​ ​ ​ ​ 13,027 ​ ​
Product Procurement Adjustment(3) ​ ​ ​ ​ 12,960 ​ ​ ​ ​ ​ 75,642 ​ ​ ​ ​ ​ 70,295 ​ ​ ​ ​ ​ 15,419 ​ ​ ​ ​ ​ 12,871 ​ ​
Tariff Refunds(4)
​ ​ ​ ​ (38,100) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Adjusted Gross Profit
​ ​ ​ $ 1,204,356 ​ ​ ​ ​ $ 1,476,062 ​ ​ ​ ​ $ 1,447,561 ​ ​ ​ ​ $ 359,210 ​ ​ ​ ​ $ 406,792 ​ ​
Adjusted Net Sales
​ ​ ​ ​ 2,689,708 ​ ​ ​ ​ ​ 3,625,299 ​ ​ ​ ​ ​ 3,619,932 ​ ​ ​ ​ ​ 789,546 ​ ​ ​ ​ ​ 835,633 ​ ​
Adjusted Gross Margin
​ ​
44.8%
​ ​
40.7%
​ ​
40.0%
​ ​
45.5%
​ ​
48.7%
​
​
(1)
Adjusted for net sales of $38.8 million, $63.5 million and $63.9 million from SNJP for the years ended December 31, 2020, 2021 and 2022, respectively; $24.7 million, $38.2 million and $33.5 million from the APAC distribution channels for the years ended December 31, 2020, 2021 and 2022, respectively; $14.0 million and $15.0 million from SNJP for the three months ended March 31, 2022 and 2023, respectively; and $6.1 million and $4.6 million from the APAC distribution channels for the three months ended March 31, 2022 and 2023, respectively, as if the Divestitures occurred on January 1, 2020.
​
 
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(2)
Adjusted for cost of sales of $20.1 million, $33.3 million and $38.9 million from SNJP for the years ended December 31, 2020, 2021 and 2022, respectively; $19.4 million, $30.6 million and $25.6 million from the APAC distribution channels for the years ended December 31, 2020, 2021 and 2022, respectively; $7.3 million and $9.4 million from SNJP for the three months ended March 31, 2022 and 2023, respectively; and $4.6 million and $3.7 million from the APAC distribution channels for the three months ended March 31, 2022 and 2023, respectively, as if the Divestitures occurred on January 1, 2020.
​
(3)
Represents cost of sales of $13.0 million, $75.6 million and $70.3 million for the years ended December 31, 2020, 2021 and 2022, respectively, and $15.4 million and $12.9 million for the three months ended March 31, 2022 and 2023, respectively, related to the Product Procurement Adjustment. As a result of the separation, we intend to purchase 100% of our inventory from one of our subsidiaries, SNHK, and will no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation will be completely eliminated in consolidation.
​
(4)
Represents the Tariff Refunds, while no such tariff refunds were recognized during the years ended December 31, 2021 and 2022 or the three months ended March 31, 2022 and 2023.
​
We define Adjusted Net Income as net income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) foreign currency gains and losses, (iv) amortization of certain deferred financing fees, (v) amortization of certain acquired intangible assets, (vi) the Tariff Refunds, (vii) certain separation and distribution costs, (viii) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment, (ix) a one-time discretionary bonus and (x) the tax impact of the adjusted items.
Adjusted Net Income Per Diluted Share is defined as Adjusted Net Income divided by the diluted weighted average number of ordinary shares.
The following table reconciles Adjusted Net Income and Adjusted Net Income Per Diluted Share to the most comparable GAAP measures, net income and net income per share, diluted, respectively, for the periods presented:
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands, except %, share and per share amounts)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Net Income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​
Share-Based Compensation(1)
​ ​ ​ ​ 10,034 ​ ​ ​ ​ ​ 13,924 ​ ​ ​ ​ ​ 5,509 ​ ​ ​ ​ ​ 2,570 ​ ​ ​ ​ ​ 848 ​ ​
Tariff Refunds(2)
​ ​ ​ ​ (38,100) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Litigation Costs(3)
​ ​ ​ ​ 5,304 ​ ​ ​ ​ ​ 10,602 ​ ​ ​ ​ ​ 4,513 ​ ​ ​ ​ ​ 161 ​ ​ ​ ​ ​ 174 ​ ​
Foreign Currency Losses (Gains), Net(4)
​ ​ ​ ​ 2,643 ​ ​ ​ ​ ​ 3,447 ​ ​ ​ ​ ​ (9,275) ​ ​ ​ ​ ​ 4,720 ​ ​ ​ ​ ​ 4,149 ​ ​
Loss on Extinguishment of Debt(5)
​ ​ ​ ​ 16,410 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Amortization of Acquired Intangible
Assets(6) 		​ ​ ​ ​ 19,587 ​ ​ ​ ​ ​ 19,587 ​ ​ ​ ​ ​ 19,587 ​ ​ ​ ​ ​ 4,897 ​ ​ ​ ​ ​ 4,897 ​ ​
Separation and Distribution Related Costs(7)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,896 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 18,468 ​ ​
Executive Bonus(8)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 34,000 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Product Procurement Adjustment(9)
​ ​ ​ ​ 12,960 ​ ​ ​ ​ ​ 75,642 ​ ​ ​ ​ ​ 70,295 ​ ​ ​ ​ ​ 15,419 ​ ​ ​ ​ ​ 12,871 ​ ​
Tax Impact of Adjusting Items(10)
​ ​ ​ ​ (6,344) ​ ​ ​ ​ ​ (27,104) ​ ​ ​ ​ ​ (28,056) ​ ​ ​ ​ ​ (6,109) ​ ​ ​ ​ ​ (9,109) ​ ​
Divested Subsidiary Net Income Adjustment(11) ​ ​ ​ ​ (202) ​ ​ ​ ​ ​ (3,969) ​ ​ ​ ​ ​ (1,458) ​ ​ ​ ​ ​ (1,289) ​ ​ ​ ​ ​ (395) ​ ​
Adjusted Net Income
​ ​ ​ $ 349,490 ​ ​ ​ ​ $ 423,242 ​ ​ ​ ​ $ 330,365 ​ ​ ​ ​ $ 109,280 ​ ​ ​ ​ $ 118,999 ​ ​
Net Income Per Share, diluted
​ ​ ​ $ 6,544 ​ ​ ​ ​ $ 6,622 ​ ​ ​ ​ $ 4,647 ​ ​ ​ ​ $ 1,778 ​ ​ ​ ​ $ 1,742 ​ ​
Adjusted Net Income Per Diluted Share
​ ​ ​ $ 6,990 ​ ​ ​ ​ $ 8,465 ​ ​ ​ ​ $ 6,607 ​ ​ ​ ​ $ 2,186 ​ ​ ​ ​ $ 2,380 ​ ​
Diluted Weighted-Average Number of Shares Used in Computing Adjusted Net Income Per Diluted Share ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​
​
(1)
Represents non-cash expense related to restricted stock unit awards issued from JS Global’s equity incentive plans.
​
(2)
Represents non-recurring tariff refunds of $38.1 million which were received and recognized in 2020 related to tariffs incurred in
​
 
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2019, while no such tariff refunds were recognized during the years ended December 31, 2021 and 2022 or the three months ended March 31, 2022 and 2023.
(3)
Represents litigation costs incurred for iRobot Corporation’s (“iRobot”) patent infringement claims and false advertising claims against us. As of the date of this registration statement, some patent infringement claims and false advertising claims remain outstanding.
​
(4)
Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments. The total net gain recognized on our derivative instruments related to forward contracts outstanding not designated as hedging instruments included in the total of foreign currency losses (gains), net during the year ended December 31, 2022 and the three months ended March 31, 2023 was $22.7 million and $1.9 million, respectively. There was no such gain or loss recognized on our derivative instruments related to forward contracts outstanding not designated as hedging instruments during the year ended December 31, 2020, the year ended December 31, 2021 or the three months ended March 31, 2022.
​
(5)
Represents the write-off of unamortized deferred financing costs upon repayment of the outstanding principal related to the term loans and revolving credit facility we entered into on September 29, 2017 with JP Morgan Chase Bank, N.A., as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks (the “2017 Credit Agreement”).
​
(6)
Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculated Adjusted Net Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations.
​
(7)
Represents certain costs incurred related to the separation and distribution.
​
(8)
Represents a one-time discretionary bonus.
​
(9)
Represents cost of sales of $13.0 million, $75.6 million and $70.3 million for the years ended December 31, 2020, 2021 and 2022, respectively, and $15.4 million and $12.9 million for the three months ended March 31, 2022 and 2023, respectively, related to the Product Procurement Adjustment. As a result of the separation, we intend to purchase 100% of our inventory from one of our subsidiaries, SNHK, and will no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation will be completely eliminated in consolidation.
​
(10)
Represents the income tax effects of the adjustments included in the reconciliation of net income to Adjusted Net Income determined using the tax rate of 22.0%, which approximates our effective tax rate, excluding the divested subsidiary net income adjustment described in footnote (11).
​
(11)
Adjusted for net income (loss) of $0.6 million, $(0.4) million and $1.1 million from SNJP for the years ended December 31, 2020, 2021 and 2022, respectively; $3.1 million, $4.4 million and $4.9 million from the APAC distribution channels for the years ended December 31, 2020, 2021 and 2022, respectively; $(3.5) million, $0.0 million and $(4.5) million as a result of certain transfer pricing adjustments related to SNJP that will not be recorded by us going forward for the years ended December 31, 2020, 2021 and 2022, respectively; $0.4 million and $(0.2) million from SNJP for the three months ended March 31, 2022 and 2023, respectively; and $0.9 million and $0.6 million from the APAC distribution channels for the three months ended March 31, 2022 and 2023, respectively, as if the Divestitures occurred on January 1, 2020.
​
We define EBITDA as net income excluding: (i) interest expense, (ii) income tax expense and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA excluding (i) share-based compensation cost, (ii) the Tariff Refunds, (iii) certain litigation costs, (iv) foreign currency gains and losses, (v) certain separation and distribution costs, (vi) a one-time discretionary bonus and (vii) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Adjusted Net Sales. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are appropriate measures because they facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results according to GAAP, we believe provide a more complete understanding of the factors and trends affecting our business than GAAP measures alone.
 
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The following table reconciles EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable GAAP measure, net income, for the periods presented:
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands, except %)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Net Income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​
Interest Expense, Net(1)
​ ​ ​ ​ 40,279 ​ ​ ​ ​ ​ 16,287 ​ ​ ​ ​ ​ 27,021 ​ ​ ​ ​ ​ 4,004 ​ ​ ​ ​ ​ 8,489 ​ ​
Provision for Income Taxes
​ ​ ​ ​ 92,268 ​ ​ ​ ​ ​ 83,213 ​ ​ ​ ​ ​ 69,630 ​ ​ ​ ​ ​ 25,565 ​ ​ ​ ​ ​ 24,265 ​ ​
Depreciation and Amortization
​ ​ ​ ​ 78,080 ​ ​ ​ ​ ​ 78,183 ​ ​ ​ ​ ​ 86,708 ​ ​ ​ ​ ​ 20,204 ​ ​ ​ ​ ​ 22,754 ​ ​
EBITDA
​ ​ ​ $ 537,825 ​ ​ ​ ​ $ 508,796 ​ ​ ​ ​ $ 415,713 ​ ​ ​ ​ $ 138,684 ​ ​ ​ ​ $ 142,604 ​ ​
Share-Based Compensation(2)
​ ​ ​ ​ 10,034 ​ ​ ​ ​ ​ 13,924 ​ ​ ​ ​ ​ 5,509 ​ ​ ​ ​ ​ 2,570 ​ ​ ​ ​ ​ 848 ​ ​
Tariff Refunds(3)
​ ​ ​ ​ (38,100) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Litigation Costs(4)
​ ​ ​ ​ 5,304 ​ ​ ​ ​ ​ 10,602 ​ ​ ​ ​ ​ 4,513 ​ ​ ​ ​ ​ 161 ​ ​ ​ ​ ​ 174 ​ ​
Foreign Currency Losses (Gains), Net(5) ​ ​ ​ ​ 2,643 ​ ​ ​ ​ ​ 3,447 ​ ​ ​ ​ ​ (9,275) ​ ​ ​ ​ ​ 4,720 ​ ​ ​ ​ ​ 4,149 ​ ​
Separation and Distribution Related
Costs(6) 		​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,896 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 18,468 ​ ​
Executive Bonus(7)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 34,000 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Product Procurement
Adjustment(8) 		​ ​ ​ ​ 12,960 ​ ​ ​ ​ ​ 75,642 ​ ​ ​ ​ ​ 70,295 ​ ​ ​ ​ ​ 15,419 ​ ​ ​ ​ ​ 12,871 ​ ​
Divested Subsidiary Adjusted EBITDA Adjustment(9) ​ ​ ​ ​ (2,967) ​ ​ ​ ​ ​ (9,282) ​ ​ ​ ​ ​ (4,037) ​ ​ ​ ​ ​ (2,319) ​ ​ ​ ​ ​ (1,098) ​ ​
Adjusted EBITDA
​ ​ ​ $ 527,699 ​ ​ ​ ​ $ 603,129 ​ ​ ​ ​ $ 519,614 ​ ​ ​ ​ $ 159,235 ​ ​ ​ ​ $ 178,016 ​ ​
Adjusted Net Sales
​ ​ ​ ​ 2,689,708 ​ ​ ​ ​ ​ 3,625,299 ​ ​ ​ ​ ​ 3,619,932 ​ ​ ​ ​ $ 789,546 ​ ​ ​ ​ $ 835,633 ​ ​
Adjusted EBITDA Margin
​ ​
19.6%
​ ​
16.6%
​ ​
14.4%
​ ​
20.2%
​ ​
21.3%
​
​
(1)
Included in the interest expense for the year ended December 31, 2020 is $16.4 million related to the write-off of unamortized deferred financing costs upon repayment of the outstanding principal related to the term loans and revolving credit facility under the 2017 Credit Agreement.
​
(2)
Represents non-cash expense related to restricted stock unit awards issued from JS Global’s equity incentive plans.
​
(3)
Represents the Tariff Refunds, while no such tariff refunds were recognized during the years ended December 31, 2021 and 2022 or the three months ended March 31, 2022 and 2023.
​
(4)
Represents litigation costs incurred for iRobot’s patent infringement claims and false advertising claims against us. As of the date of this registration statement, some patent infringement claims and false advertising claims remain outstanding.
​
(5)
Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments. The total net gain recognized on our derivative instruments related to forward contracts outstanding not designated as hedging instruments included in the total of foreign currency losses (gains), net during the year ended December 31, 2022 and the three months ended March 31, 2023 was $22.7 million and $1.9 million, respectively. There was no such gain or loss recognized on our derivative instruments related to forward contracts outstanding not designated as hedging instruments during the year ended December 31, 2020, the year ended December 31, 2021 or the three months ended March 31, 2022.
​
(6)
Represents certain costs incurred related to the separation and distribution.
​
(7)
Represents a one-time discretionary bonus.
​
(8)
Represents cost of sales of $13.0 million, $75.6 million and $70.3 million for the years ended December 31, 2020, 2021 and 2022, respectively, and $15.4 million and $12.9 million for the three months ended March 31, 2022 and 2023, respectively, related to the Product Procurement Adjustment. As a result of the separation, we intend to purchase 100% of our inventory from one of our subsidiaries, SNHK, and will no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation will be completely eliminated in consolidation.
​
(9)
Adjusted for Adjusted EBITDA of $3.3 million, $3.7 million and $3.6 million from SNJP for the years ended December 31, 2020, 2021 and 2022, respectively; and $4.0 million, $5.6 million and $6.3 million from the APAC distribution channels for the years ended December 31, 2020, 2021 and 2022, respectively; net of $4.3 million, $0.0 million and $5.8 million of certain transfer pricing adjustments related to SNJP that will not be recorded by us going forward for the years ended December 31, 2020, 2021
​
 
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and 2022, respectively; $1.2 million and $0.4 million from SNJP for the three months ended March 31, 2022 and 2023, respectively; and $1.1 million and $0.7 million from the APAC distribution channels for the three months ended March 31, 2022 and 2023, respectively, as if the Divestitures occurred on January 1, 2020. The divested subsidiary Adjusted EBITDA adjustment represents net (loss) income from our Divestitures excluding interest expense, income tax expense, depreciation and amortization expense and foreign currency gains and losses recorded at the subsidiary level.
Liquidity and Capital Resources
Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations. Our principal uses of cash in recent periods have been investing in international expansion, new product development, capital expenditures, repayment of debt and business acquisitions. As of March 31, 2023, our principal sources of liquidity were cash and cash equivalents of $181.5 million. Our cash and cash equivalents consist primarily of cash on deposits with banks.
We believe that our existing cash and cash equivalents together with cash provided by operations will be sufficient to meet our needs for at least the next 12 months. We plan to use our current cash on hand, cash generated by operations and additional financing raised through the Facilities Agreement to support our core business operations and strategic plan to accelerate our go-to-market strategy, invest in new product development and enhance our global distribution. We may be required to seek additional equity or debt financing to fund our activities. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, the results of operations and financial conditions of the business would be materially and adversely affected.
We have lease obligations and other contractual obligations and commitments as part of our ordinary course of business. See “Note 7—Operating Leases,” “Note 8—Debt” and “Note 9—Commitments and Contingencies” to our consolidated financial statements found elsewhere in this prospectus for information about our lease obligations and other contractual obligations. We did not have during the periods presented and we do not currently have, any off-balance sheet arrangements involving commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect on our business, financial condition, results of operations, liquidity, cash requirements or capital resources.
Indebtedness
In March 2020, we, along with JS Global, entered into a Facilities Agreement with Bank of China Limited and certain banks and financial institutions party thereto as lenders and issuing banks. The Facilities Agreement provided for a $500.0 million Secured Term Loan and $200.0 million Revolving Facility.
We are required to meet certain financial covenants customary with this type of agreement, including, but not limited to, maintaining a maximum ratio of indebtedness and a minimum specified interest coverage ratio. We may use the proceeds of future borrowings under the Facilities Agreement for refinancing other indebtedness, working capital, capital expenditures and other general corporate purposes, including permitted business acquisitions. As of March 31, 2023, we had $400.0 million of debt outstanding under the Secured Term Loan and we are currently in compliance with the covenants under the Facilities Agreement. The Secured Term Loan matures five years from the initial utilization date of March 20, 2020 and both facilities bear interest at a rate of LIBOR plus 1.80%.
During the years ended December 31, 2020, 2021 and 2022, we borrowed $171.0 million, $110.0 million and $260.0 million under the Revolving Facility, respectively, with such amounts being repaid within the same fiscal years. No amounts were borrowed or repaid under the Revolving Facility during the three months ended March 31, 2023. No amounts were outstanding under the Revolving Facility as of December 31, 2020, 2021 or 2022 or March 31, 2023, and therefore the available balance was $200.0 million at each respective date.
We intend to replace the Facilities Agreement on or prior to the completion of the separation and distribution with a new loan agreement governed by New York law (the “New Loan Agreement”) that provides for a senior secured term loan and revolving credit facilities (together, the “New Senior Credit Facilities”) that accrue interest based on the secured overnight financing rate (“SOFR”), instead of LIBOR.
 
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The New Senior Credit Facilities are anticipated to be sufficient to repay all amounts that remain outstanding under the Facilities Agreement and to provide liquidity for general corporate purposes. We expect the New Loan Agreement to contain customary representations, warranties, covenants and events of default for a financing of its type and other terms that will be determined based on market conditions. There can be no assurance that the proposed refinancing will be completed or that the New Loan Agreement or any facilities thereunder will become effective.
We do not expect to have any LIBOR-based debt after completing the refinancing described above. However, if such refinancing is not completed prior to June 30, 2023, which is the date when LIBOR will no longer be published by its administrator, we anticipate the Facilities Agreement will continue to be administered using an unrepresentative synthetic methodology for calculating LIBOR until the earliest of (i) an amendment to the Facilities Agreement to implement a benchmark replacement, (ii) the termination of the Facilities Agreement (including upon repayment of all outstanding amounts thereunder) and (iii) the unavailability of such synthetic LIBOR, which is currently anticipated to become unavailable in September 2024. Such synthetic LIBOR is expected to be calculated as the sum of the CME Term SOFR Reference Rate, as administered by the CME Group, and a spread adjustment recommended by the Alternative Reference Rates Committee for the relevant interest period. See “Risk Factors—Risks Related to Our Financial Condition—The phase-out of LIBOR may adversely affect a portion of our outstanding debt.”
Cash Flows
The following table summarizes our cash flows for the periods presented:
​ ​ ​
Year Ended December 31,
​ ​
Three Months Ended
March 31,
​
($ in thousands)
​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2022
​ ​
2023
​
Net Cash Provided by (Used in) Operating Activities ​ ​ ​ $ 293,435 ​ ​ ​ ​ $ 229,147 ​ ​ ​ ​ $ 204,964 ​ ​ ​ ​ $ (101,130) ​ ​ ​ ​ $ 89,762 ​ ​
Net Cash Used in Investing Activities
​ ​ ​ ​ (81,434) ​ ​ ​ ​ ​ (66,366) ​ ​ ​ ​ ​ (52,384) ​ ​ ​ ​ ​ (11,134) ​ ​ ​ ​ ​ (7,799) ​ ​
Net Cash Provided by (Used in) Financing Activities ​ ​ ​ ​ (120,668) ​ ​ ​ ​ ​ (54,500) ​ ​ ​ ​ ​ (160,170) ​ ​ ​ ​ ​ 8,026 ​ ​ ​ ​ ​ (98,631) ​ ​
Operating Activities
Net cash provided by operating activities for the three months ended March 31, 2023 of $89.8 million was primarily related to our net income of $87.1 million, adjusted for non-cash charges of $23.3 million and net cash outflows of $20.6 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $22.8 million, non-cash lease expenses of $3.9 million, share-based compensation of $0.8 million, provision for credit losses of $0.7 million and amortization of debt discount of $0.2 million, offset by deferred income tax of $5.1 million. The main drivers of the cash outflows derived from the changes in operating assets and liabilities were related to a decrease in accrued expenses and other liabilities of $75.2 million, a decrease in accounts payable of $54.0 million, an increase in accounts receivable of $8.8 million and a decrease in operating lease liabilities of $4.5 million, partially offset by a decrease in prepaid expenses and other assets of $74.5 million, a decrease in inventories of $40.6 million and an increase in tax payable of $6.8 million.
Net cash used in operating activities for the three months ended March 31, 2022 of $101.1 million was primarily related to net cash outflows of $214.8 million from changes in our operating assets and liabilities, partially offset by our net income of $88.9 million, adjusted for non-cash charges of $24.9 million. Non-cash charges primarily consisted of depreciation and amortization of $20.2 million, non-cash lease expenses of $6.3 million, share-based compensation of $2.6 million, provision for credit losses of $1.7 million, loss on equity investments of $0.7 million and amortization of debt discount of $0.2 million, offset by deferred income tax of $6.8 million. The main drivers of the cash outflows derived from the changes in operating assets and liabilities were related to a decrease in accrued expenses and other liabilities of $130.4 million, a decrease in accounts payable of $97.0 million, an increase in inventories of $62.6 million, an increase in prepaid expenses and other assets of $48.1 million and a decrease in operating lease liabilities
 
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of $5.6 million, partially offset by a decrease in accounts receivable of $109.7 million and an increase in tax payable of $19.2 million.
Net cash provided by operating activities for the year ended December 31, 2022 of $205.0 million was primarily related to our net income of $232.4 million, adjusted for non-cash charges of $100.8 million and net cash outflows of $128.2 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $86.7 million, non-cash lease expenses of $15.5 million, provision for credit losses of $9.0 million, share-based compensation of $5.5 million and amortization of debt discount of $0.9 million, offset by deferred income tax of $16.6 million and gain from equity method investments of $0.1 million. The main drivers of the cash outflows derived from the changes in operating assets and liabilities were related to a decrease in accounts payable of $118.2 million, an increase in prepaid expenses and other assets of $114.2 million, a decrease in operating lease liabilities of $14.3 million and a decrease in tax payable of $5.2 million, partially offset by an increase in accrued expenses and other liabilities of $69.2 million, a decrease in inventories of $53.9 million and a decrease in accounts receivable of $0.5 million.
Net cash provided by operating activities for the year ended December 31, 2021 of $229.1 million was primarily related to our net income of $331.1 million, adjusted for non-cash charges of $103.4 million and net cash outflows of $205.2 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $78.2 million, share-based compensation of $13.9 million, non-cash lease expenses of $13.1 million, provision for credit losses of $7.9 million, loss on equity investments of $4.5 million and amortization of debt discount of $0.9 million, offset by deferred income tax of $15.1 million. The main drivers of the cash outflows derived from the changes in operating assets and liabilities were related to an increase in inventories of $185.5 million, an increase in accounts receivable of $77.4 million, an increase in prepaid expenses and other assets of $47.7 million, a decrease in tax payable of $13.3 million and a decrease in operating lease liabilities of $12.6 million, partially offset by an increase in accrued expenses and other liabilities of $56.4 million and an increase in accounts payable of $74.9 million.
Net cash provided by operating activities for the year ended December 31, 2020 of $293.4 million was primarily related to our net income of $327.2 million, adjusted for non-cash charges of $122.9 million and net cash outflows of $156.8 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $78.1 million, a loss on extinguishment of debt of $16.4 million, non-cash lease expenses of $11.4 million, share-based compensation of $10.0 million, provision for credit losses of $9.4 million, loss on equity investments of $3.5 million and amortization of debt discount of $1.6 million, offset by deferred income tax of $7.5 million. The main drivers of the cash outflows derived from the changes in operating assets and liabilities were related to an increase in accounts receivable of $335.3 million, an increase in inventories of $179.4 million, an increase in prepaid expenses and other assets of $29.8 million and a decrease in operating lease liabilities of $10.8 million, partially offset by an increase in accounts payable of $198.7 million, an increase in accrued expenses and other liabilities of $185.4 million and an increase in tax payable of $14.4 million.
Investing Activities
Investing activities consist primarily of purchases of property and equipment and intangible assets and payments related to business acquisitions.
Cash used in investing activities for the three months ended March 31, 2023 of $7.8 million consisted of purchases of property and equipment of $21.7 million, purchase of intangible assets for $2.3 million, capitalized software development costs of $0.3 million and other investing activities, net of $0.3 million, which was partially offset by cash receipts on deferred payments in sold receivables of $16.8 million.
Cash used in investing activities for the three months ended March 31, 2022 of $11.1 million consisted of purchases of property and equipment of $8.3 million, purchase of intangible assets for $1.0 million, capitalized software development costs of $0.8 million, equity investments of $0.7 million and other investing activities, net for $0.3 million.
Cash used in investing activities for the year ended December 31, 2022, of $52.4 million consisted of purchases of property and equipment of $80.3 million, purchase of intangible assets for $7.3 million,
 
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capitalized software development costs of $6.8 million, equity investments of $0.1 million, and other investing activities, net of $0.1 million, which was partially offset by cash receipts on deferred payments in sold receivables of $42.4 million.
Cash used in investing activities for the year ended December 31, 2021, of $66.4 million consisted of purchases of property and equipment of $48.0 million, capitalized software development costs of $7.0 million, purchase of intangible assets for $5.1 million, equity investments of $4.5 million and other investing activities, net for $1.8 million.
Cash used in investing activities for the year ended December 31, 2020, of $81.4 million consisted of purchases of property and equipment of $54.5 million, the acquisition of Qfeeltech for $16.8 million, equity investments of $3.5 million, purchase of intangible assets for $3.4 million and capitalized software development costs of $3.2 million.
Financing Activities
Financing activities consist primarily of proceeds we receive from the issuance of debt and debt repayments, as well as contributions and distributions to and from JS Global.
Cash used in financing activities for the three months ended March 31, 2023 of $98.6 million consisted of distributions paid to JS Global of $60.3 million, repayment of debt of $37.5 million and recharge from JS Global for share-based compensation of $0.8 million.
Cash provided by financing activities for the three months ended March 31, 2022 of $8.0 million consisted of proceeds from the issuance of debt of $105.0 million, which was offset by a note payable to JS Global of $41.3 million, distributions paid to JS Global of $30.7 million and repayment of debt of $25.0 million.
Cash used in financing activities for the year ended December 31, 2022, of $160.2 million consisted of repayment of debt of $310.0 million, a note payable to JS Global of $49.3 million, distributions paid to JS Global of $45.4 million and recharge from JS Global for share-based compensation of $15.3 million, which was partially offset by proceeds from the issuance of debt of $259.8 million.
Cash used in financing activities for the year ended December 31, 2021, of $54.5 million consisted of repayment of debt of $122.5 million and a distribution paid to JS Global of $42.0 million, which was partially offset by proceeds from the issuance of debt of $110.0 million.
Cash used in financing activities for the year ended December 31, 2020, of $120.7 million consisted of repayment of debt of $927.9 million, which was partially offset by proceeds from issuance of debt of $727.2 million and a capital contribution from JS Global of $80.0 million.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is principally the result of fluctuations in interest rates and foreign currency exchange rates.
Interest Rate Risk
Our exposure to interest rate risk relates to the interest income generated by cash, cash equivalents and interest expense on the Secured Term Loan. Our interest rate sensitivity is affected by changes in the general level of U.S. interest rates, particularly because our cash equivalents are in the form of standard checking accounts in the United States. Interest income is sensitive to changes in the general level of interest rates. However, due to the short-term maturities of our cash equivalents and restricted cash, we believe a hypothetical 100 basis point increase or decrease in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements included elsewhere in this prospectus.
During the years ended December 31, 2020, 2021 and 2022 and three months ended March 31, 2022 and 2023, average debt borrowings excluding the impact of debt discounts totaled $598.6 million, $493.8 million,
 
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$462.5 million, $481.3 million and $431.3 million, respectively, with interest rates tied to LIBOR. A hypothetical 100 basis point fluctuation to interest rates would increase or decrease annual interest expense by $6.0 million, $4.9 million, $4.6 million, $4.8 million and $4.3 million for the years ended December 31, 2020, 2021 and 2022 and three months ended March 31, 2022 and 2023, respectively.
Foreign Currency Exchange Risk
Our international net sales, cost of sales and expenses are denominated in multiple currencies, including British Pounds, Canadian Dollars, Chinese Renminbi, Euros and Japanese Yen. As such, we have exposure to adverse changes in exchange rates associated with the net sales and operating expenses of our foreign operations. Any fluctuations in other currencies will have minimal direct impact on our international net sales.
The functional currency of our non-U.S. subsidiaries is generally the respective local currency, although there are some subsidiaries whose functional currency is not their respective local currency. Asset and liability balances denominated in non-U.S. Dollar currencies are translated into U.S. Dollars using period-end exchange rates, while translation of net sales and expenses is based on average monthly rates. Translation adjustments are recorded as a component of accumulated other comprehensive income and transaction gains and losses are recorded in other income (expense), net in our consolidated statements of income.
Our primary foreign currency exchange risk relates to the purchase of inventory from manufacturers located in China. Although our inventory purchases are denominated in U.S. Dollars, as the foreign exchange rate between the Chinese Yuan (“CNY”) and the U.S. Dollars fluctuates, the amount paid to suppliers for our inventory will generally fluctuate accordingly based on our contractual terms. Our subsidiaries in Europe conduct business in their local currencies but are exposed to fluctuations between their functional currency and the U.S. Dollar, in particular due to their inventory purchases being denominated in U.S. Dollars. We regularly monitor the forecast of non-U.S. Dollar expense and the level of non-U.S. Dollar monetary asset and liability balances to determine if any actions, including possibly entering into foreign currency contracts, should be taken to minimize the impact of fluctuating exchange rates on our results of operations.
We currently utilize foreign currency forward contracts, with financial institutions to protect against a portion of foreign exchange risks, mainly the exposure to changes in the exchange rate of the CNY and GBP against the U.S. dollar that are associated with future cash flows denominated in CNY and GBP. These contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the hedged CNY and GBP denominated cash flows. The fair value of outstanding derivative instruments and associated disclosure are presented within “Note 2—Significant Accounting Policies” and “Note 4—Fair Value Measurements” to our consolidated financial statements included elsewhere in this prospectus. We may in the future enter into other derivative financial instruments if it is determined that such hedging activities are appropriate to further reduce our foreign currency exchange risk.
The estimated translation impact to our consolidated financial statements of a hypothetical 10% change in foreign currency exchange rates would amount to $9.8 million, $4.7 million, $1.6 million, $0.2 million and $4.0 million for the years ended December 31, 2020, 2021 and 2022 and three months ended March 31, 2022 and 2023, respectively. During the years ended December 31, 2020, 2021 and 2022 and three months ended March 31, 2022, and 2023, approximately 18.3%, 18.4%, 18.7%, 17.9% and 27.6% of our net sales and approximately 26.7%, 27.5%, 26.0%, 29.5% and 26.7% of our expenses were denominated in non-U.S. Dollar currencies, respectively.
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses, as well as related disclosures. Estimates and assumptions are evaluated on an ongoing basis and are based on historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.
 
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Net Sales Recognition
We recognize net sales when control of our products is transferred to retailers, consumers and distributors. Generally, control transfers when products are shipped or delivered to the customer, depending on the terms of the contract. Net sales related to service-type warranties recognized ratably over the contract period is immaterial.
Sales are made primarily under agreements allowing for rights of return in limited circumstances and various incentive rebates. We have an established history for these arrangements, and we record the estimated reserves as a reduction to net sales at the time the related net sales are recognized. Depending on whether we have the right to offset, the allowance for sales returns and the allowance for rebates are recorded on the balance sheet as either contra accounts receivable or accrued liabilities. Sales returns and rebates are estimated based on relevant historical and current data. Any significant changes in experience as compared to historical returns and rebates will impact the estimate.
We recognized $47.6 million, $46.4 million, $45.5 million, $30.6 million and $27.0 million in accrued return liabilities and $177.7 million, $207.0 million, $230.2 million, $170.4 million and $234.0 million in accrued rebate liabilities as of December 31, 2020, 2021 and 2022 and as of March 31, 2022 and 2023, respectively. A hypothetical 10% change in the estimated ending liability balance would have resulted in a $4.8 million, $4.6 million, $4.6 million, $3.1 million and $2.7 million change in the estimated accrued return liability and a $17.8 million, $20.7 million, $23.0 million, $17.0 million and $23.4 million change in the estimated accrued rebate liability for the years ended December 31, 2020, 2021 and 2022 and three months ended March 31, 2022 and 2023, respectively, which would have been recognized as an increase or decrease to net sales.
Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination and has been assigned to our one reporting unit. Indefinite-lived intangible assets consist of trade name and trademarks acquired through business acquisitions. Goodwill and indefinite-lived intangible assets are not amortized but rather tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that they may be impaired. Evaluating goodwill and indefinite-lived intangible assets for impairment involves the determination of the fair value of our reporting unit in which goodwill and indefinite-lived intangible assets is recorded using a qualitative or quantitative analysis. If fair value exceeds the carrying value, impairment is not indicated. If the carrying amount of a reporting unit is higher than its estimated fair value, the excess is recorded as an impairment expense.
For the years ended December 31, 2020, 2021 and 2022, we elected to bypass the qualitative assessment process and proceed directly to comparing the fair value of our reporting unit to carrying value. For goodwill, quantitative testing consists of a comparison of our reporting unit’s fair value to its carrying value. For indefinite-lived intangible assets, quantitative testing consists of a comparison of the fair value of each indefinite-lived intangible asset with its carrying value. Management utilized a third-party valuation firm to assist in estimating the fair value, which used a combination of income and market approaches.
Our annual assessment for goodwill and indefinite-lived intangible asset impairment was performed on December 31. We have not experienced any conditions that would require a write-down of our other assets, including long-lived assets. The quantitative assessment indicated that the fair value exceeded the carrying value and no impairment charge was required as a result of the quantitative assessment. Therefore, we did not recognize any goodwill or indefinite-lived intangible asset impairments during the years ended December 31, 2020, 2021 or 2022 or three months ended March 31, 2023. Changes in economic and operating conditions that occur in the future, may result in a future goodwill or indefinite-lived intangible asset impairment charge.
Acquired intangible assets consist of identifiable intangible assets, primarily developed software technology, customer relationships and trade name and trademarks, resulting from business acquisitions. Other intangible assets consist of purchased patents. Intangible assets are initially recorded at fair value on the date of acquisition and are amortized over their estimated useful lives, with the exception of trade name and trademarks which were deemed to have an indefinite life and are tested for impairment as described above. We evaluate our intangible assets for indicators of possible impairment when events or changes in
 
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circumstances indicate the carrying amount of an asset or asset group may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset’s carrying amount may not be recoverable. When measuring the recoverability of these assets, we will make assumptions regarding our estimated future cash flows expected to be generated by the assets. If our estimates or related assumptions change in the future, we may be required to impair these assets. An asset is considered impaired if the carrying amount exceeds the undiscounted future net cash flows that the asset or asset group is expected to generate.
Recent Accounting Pronouncements
See “Summary of Significant Accounting Policies” in Note 2 of the notes to the consolidated financial statements included elsewhere in this prospectus for more information.
 
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BUSINESS
Company Overview
At SharkNinja, our mission is to positively impact people’s lives every day in every home in our Global Markets.
SharkNinja: World-Class Household Appliance Brands Built on Continuous, Disruptive Innovation
SharkNinja is a global product design and technology company that creates 5-star rated lifestyle solutions through innovative products for consumers around the world. We seek to leverage our global, agile and cross-functional engineering know-how, product development and manufacturing expertise along with our solutions-driven marketing to increase the efficiency, convenience and enjoyment of consumers’ daily tasks and improve everyday lives. We have built two billion-dollar brands, Shark and Ninja, and have a proven track record of establishing leadership positions by disrupting numerous household product categories, including Cleaning, Cooking, Food Preparation, Home Environment and Beauty. We have successfully gained market share across geographies, taking share from competitors priced both above and below our offerings. We believe our success is centered around our advanced engineering and innovation capabilities coupled with our deep understanding of consumer needs, enabling us to solve consumer problems that others either do not see or are unable to solve.
We are driven by our relentless pursuit of perfection to deliver innovative products at compelling value to delight consumers. We constantly analyze consumers’ interactions with small home appliances and leverage consumer reviews across multiple platforms, which we refer to as our “always-on” approach. Our global product design and engineering team applies these always-on consumer insights to create new technologies and intellectual property that differentiates our products. Further, we continuously enhance our products through rapid iteration and constant refinement with the goal of increasing the value of our legacy products while decreasing costs. We believe this constant pursuit of perfection through continuous innovation extends our product life cycles and differentiates us from competitors with longer innovation cycles. Our approach enables us to rapidly bring new products to market, grow share of shelf and market share and thus quickly establish leadership positions in both existing and new categories.
Our marketing strategies drive high brand engagement through our dynamic approach to solutions-driven storytelling in categories that we believe have not been historically known for high engagement. Our differentiated marketing complements our innovative solutions and fuels demand for our products. We advertise our differentiated products across various channels, driving sales at numerous retailers, online and offline, and on our DTC platform.
Today, we are a portfolio of trusted, global, billion-dollar brands driving strong growth and innovation across numerous categories. We are continuously launching new products, expanding into new categories, entering new markets and adding new channels of distribution. We believe this strategy has driven our growth in net sales from $1.5 billion in 2018 to $3.7 billion in 2022, representing a CAGR of 26%.
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Trusted Global Brands with Large and Growing Market Share
Our trusted global brands have established a firm reputation for industry-leading innovation and 5-star consumer reviews. Our unwavering consumer focus manifests in our leading market positions. Shark was the #1-selling floorcare brand in the United States in 2022, and Ninja was the #1-selling small kitchen appliance brand in the United States for the last three years, according to NPD.
Our proven track record of bringing disruptive products to market and developing one consumer solution after another has allowed us to enter into multiple product categories, driving significant growth and market share gains. As we continue to innovate, typically our legacy products continue to be sold at more accessible price points, which diversifies our product offering across price points within a category and creates increasing market share positions. We believe our products have broad appeal across income brackets as we aim to deliver industry-leading innovation, design and product quality at compelling value. As a result, we aim to acquire market share from higher and lower priced competitors. We believe our products are aspirational, offering the performance of more expensive competitor products, and attainable, representing a compelling value.
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Scaled Engineering Powerhouse Focused on Disruptive Innovation and Continuous Optimization
SharkNinja is built to continuously innovate products that exceed consumer expectations. Our global rapid innovation model is enabled by the following pillars:
Dynamic Global Engineering, Product Design and R&D
To win in the market, we leverage the diverse expertise of our cross-functional design and engineering teams to capitalize on our deep knowledge of consumer needs. We have a dynamic, in-house global product design team located across the United States, the United Kingdom and China that collaborates seamlessly around the clock to integrate unique local market insights into the design and functionality of our products. Our engineering prowess continuously drives our new product innovation, including design, construction, material performance requirements, manufacturing protocols, supplier selection, packaging specifications and quality assurance. Our scaled engineering organization possesses wide-ranging skillsets across mechanical design, mechatronics, electronics engineering, robotics, firmware, app and cloud, deep learning, algorithmic engineering and industrial design. Our team of over 700 cross-functional engineering and design associates is integrated across Shark and Ninja solutions, introducing disruptive technologies within our portfolio to new market segments, in addition to accessing the latest technologies from across the globe. The breadth of our engineering team’s competencies allows us to develop innovative products, while our continuous global collaboration produces a rapid and iterative development cycle.
As soon as we launch a first product within a category, our engineering teams are already working to enhance that product and develop ways of bringing even more innovation to that category. This intense focus on continuous innovation would not be possible without our in-house engineering organization, which
 
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differentiates us from other companies that rely heavily on third parties to provide engineering services. We regularly rotate our engineers and designers across product categories and locations to develop robust teams with diverse viewpoints and experience. The integration of a variety of skillsets across a broad range of market segments has created an idea-generation and consumer solution engine, which constantly produces award-winning products.
Continuous Consumer Engagement, Insights and Dynamic Testing
Our always-on consumer input fuels our world-class innovation. We deploy a wide variety of tools to understand what consumers need today and what will delight them tomorrow. In addition, through our development of local insights, we are able to design and develop products that are tailored for specific regions, and then leverage applicable insights across our global offering.
Our dynamic testing model tests our products to the extreme. We test across various environments, from our laboratories and simulated home facilities to restaurants, beauty salons and homes. This approach enables us to collect valuable input from category experts, professional users and everyday consumers. We use in-person consumer testing to gather direct observations and insights. We leverage internal software that scours product reviews to learn consumer likes and dislikes with existing solutions. Our constant qualitative and quantitative testing informs every stage of our design, engineering, manufacturing and marketing processes, during late-stage development and also through further refinements after product release.
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Delivering Critical Consumer Value Points with Every Product
SharkNinja is differentiated by our ability to innovate while identifying and solving consumer pain points that others either do not see or are unable to solve. SharkNinja strives to deliver on all four of the following critical consumer value points in every innovative product we bring to market:
Speed: Deliver first-to-market disruptive innovations
Our global consumer insights and product development approach enables us to discover some of the most pressing consumer problems and develop innovative solutions to solve them. Our global product development team collaborates around the world and around the clock, producing an ongoing cycle of development, thereby increasing our speed of innovation and ultimately our speed to market. Whether it is a first-to-market innovation in an emerging category or our disruption of a mature category with new technologies, we redefine what is possible. Our differentiated pace of innovation enables us to be first-to-market in many product sub-categories; we rapidly grow our market share and launch new products often faster than our competitors, creating competitive advantages that deliver strong and sustainable growth.
 
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Performance: Deliver innovative high-performing products that exceed expectations and improve consumers’ quality of life
Our scaled global team of designers and engineers is passionate about delivering a high level of performance that increases consumers’ quality of life. Our products are designed to solve existing problems, often problems consumers do not even know they have. We rigorously test our products against our high-performance expectations under extreme use cases. Our product development process allows us to deliver innovative, high-performance technologies that are designed to meet or exceed consumers’ expectations. This is product performance in the pursuit of unwavering consumer trust.
Quality: Deliver a 5-star quality product experience, winning over consumers one review at a time
We know a discerning and educated consumer never gives you a second chance. Therefore, we focus on quality in designing our products and test repeatedly, recreating extreme cases of use and misuse to deliver high-quality products with long-lasting reliability in the real world. We have rigorous sourcing and manufacturing standards, and we maintain high-quality standards to which our manufacturing partners must adhere, including through frequent quality checks and manufacturing score cards. We are quick to react to negative feedback that we receive through our call centers, online reviews or on social media. We strive to deliver a seamless consumer experience with our products to ensure our consumers have a 5-star experience across the entirety of their journey with our products, starting from the very first use out of the box. Our pursuit of excellence in overall quality not only leads to more highly satisfied consumers, but also produces an army of global brand ambassadors.
Value: Deliver products at accessible prices for incredible value
We are obsessed with delivering world-class, innovative products to every consumer in every home in our Global Markets at great value. With our consumers always in mind, we have built hyper-efficient, global product design and supply chain organizations designed to deliver the perfect product at a compelling price. We believe that, in purchasing our products, our consumers receive the greatest value and a high level of performance for every hard-earned dollar they spend. We accomplish this through our design and manufacturing engineering team and our on-the-ground sourcing organization in Asia, which facilitates a competitive bidding process across numerous manufacturers to secure favorable pricing terms. Furthermore, we are a crucial partner to many of our manufacturers given the scale of our brands. This allows us to enter new categories that are dominated by a few big players, disrupt them through innovation and compelling value and grow the overall market while gaining market share.
Open and Agile Manufacturing and Supply Chain
Our open and highly scalable manufacturing base and supply chain achieve competitive costs as well as high quality and performance. While competitors are limited by a traditional linear manufacturing model, our iterative method gives us continuous opportunities to optimize our products. We have developed and invested in this approach for years, in order to ensure maximum control and flexibility over production. This approach drives our goal of delivering 5-star products the first time off the line and at high global volumes.
Omni-channel Strategy Driven by Consumer-focused Storytelling
We have secured a leading position in most of our product sub-categories in the United States, in part, by establishing differentiated channel strategies and a robust omni-channel sales, marketing and distribution network. We adopt distribution channel strategies tailored to specific regions and deliver innovative products specific to local needs. Our products are available, often with disproportionate share of shelf, across retailers in each channel and online. Continuous innovation across our product offerings further drives our share of shelf and our category growth. Shark and Ninja serve as the category captains, the market leaders, in a majority of our most important sub-categories.
Our goal is to be the most relevant and prominent brand wherever consumers shop. Our always-on media strategy leverages the power of storytelling to educate consumers about our technologies and performance. We leverage many forms of media, including television, digital advertising, print and social
 
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media, to continuously create awareness and drive demand for our products. We believe our solutions-driven storytelling inspires consumers to seek out our products, online and in-store, driving traffic and conversion for our retailers.
Our Competitive Strengths
Category-leading trusted brands with a diverse product portfolio across the home
Our diverse product portfolio spans 27 household sub-categories, across Cleaning, Cooking, Food Preparation and Other, which includes Home Environment and Beauty. We are the leading brand across many of our product sub-categories according to NPD, garnering over 40 industry awards and recognitions since 2021 alone.
Ninja has been an innovative and trusted kitchen brand for well over a decade. In 2009, we launched the Ninja Master Prep blender, which enabled consumers to produce restaurant-quality, at-home frozen drinks. We rapidly emerged as a leading player in the mature blender category, and we have maintained our leading position by continuously evolving our products: Ninja has been the #1-selling blender brand in the United States by market share for the last four years, according to NPD. We have expanded Ninja into a portfolio of food preparation and cooking appliances (electric and non-electric). Today, we believe we are becoming the brand of choice for consumers: Ninja has been ranked the #1-selling brand in small kitchen appliances in the United States for the last three years, according to NPD. Ninja empowers consumers to achieve more than they thought possible and has transformed how consumers cook and utilize their kitchens.
Our Shark brand, which we believe is synonymous with power and versatility, has transcended across small household appliance sub-categories, leveraging the credibility of its award-winning brand. Shark has been the #1-selling vacuum brand by market share in the United States for the last four years. In 2022, we were the #1-selling multi-function robotic vacuum brand in the United States with 25% market share, according to NPD. In 2021, we extended the Shark brand beyond floorcare with a series of air purifiers, and we have achieved over 6% share of the United States air purifier market for the twelve months ended December 31, 2022, according to NPD. In late 2021, we launched the Shark HyperAIR hair dryer, marking our first entry into the beauty space, which quickly became the #1-selling hair dryer in the United States priced between $100 and $300 for the three months ended December 31, 2021 and remained the #1-selling hair dryer in the same category for the twelve months ended December 31, 2022, according to NPD.
Passion for uncompromising product performance and quality, at greatest value
We are deeply passionate about delivering performance that goes above and beyond in the pursuit of extreme consumer delight. Through our constant global engineering and innovation mechanism, which has been in the making for over a decade, we have created a broad portfolio of top-performing products.
Our Shark and Ninja products are differentiated through industry-leading performance on key attributes that our consumers value. For example, our Shark vacuum offering’s patented technology enables the strongest suction of any upright household vacuum at the hose, and Shark’s hair product offerings include patented technology that intelligently combines high-velocity heated air and adjustable concentrator technology for ultra-fast drying with no heat damage. Our Ninja NeverStick cookware delivers a 10-year won’t stick, chip or flake guarantee, and our Ninja Foodi 10-in-1 XL Pro Air Fry Oven provides up to 10x the convection power of traditional full-size convection ovens. With extended performance, enhanced efficiency and compelling designs, we believe our appliances are among the best performers in our consumer’s household.
We focus relentlessly on product testing, recreating extreme use and misuse cases, simulating everyday life to ensure we deliver the most durable and high quality products. In 2022, we interacted with over 122,000 consumers as part of our product development process to rigorously test and closely observe how consumers interact with our products before launch. As a result of our focus on testing and quality, we believe we have achieved low return rates, which we constantly strive to lower further.
Our consumers recognize our compelling value proposition and are advocates for our brands. We have received the #1 brand ranking for consumer satisfaction in the annual J.D. Power Highest User Satisfaction
 
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(upright vacuum category) on six occasions since 2014. Our average product rating is 4.5-stars across our brand websites in the United States and Europe, and over 74% of those reviews are 5-star rated. We continue to attract existing and new consumers to our brands, which enables us to maintain our leadership position in the marketplace.
Perpetual disruptive innovation rooted in consumer insights, redefining the possible
We have a dynamic, in-house global product design team across the United States, the United Kingdom and China that collaborates seamlessly around the clock to integrate unique local market insights into the design and functionality of our products. Our team of over 700 cross-functional engineering and design associates is integrated across Shark and Ninja solutions, introducing disruptive technologies from within our portfolio to new market segments, in addition to accessing the latest technologies from across the globe. The embedded nature of our engineering and design teams powers our idea-generation machine. Our R&D engine has been optimized over decades into the scalable innovation enterprise it is today, enabling rapid turnaround of ideas from sketch to global production across an ever-expanding portfolio.
We continuously work to understand what consumers need today and may desire tomorrow. We meet consumers in their homes, and in our simulated home environments, where our experts observe how they interact with their appliances, gleaning new consumer needs, even before our consumers identify them. This process has led us to:
Disrupt appliance categories with new technologies:
Our products often disrupt established incumbents, help drive growth in emerging categories and even pioneer new sub-categories. In 2021, we launched Ninja CREAMi, disrupting the $53 million home ice cream maker category in the United States with an offering that transforms frozen solid bases into ice cream, milkshakes and more, at the touch of a button. By the end of December 2022, our Ninja CREAMi offering had generated sales of $78 million, approximately doubling the category size. The Ninja CREAMi was the #1-selling ice cream maker in the United States for 2022, according to NPD.
Continuously optimize our existing offering:
We are passionate about driving incremental enhancements to our products in our quest for product perfection. Almost all of our original products, across 27 product sub-categories, are still in production today through continuous enhancements that make our products as relevant and innovative today as they were when introduced. For example, our original Shark Navigator vacuum, launched in 2009, featuring our No-Loss-of-Suction technology, and our Shark Lift-Away model, launched in 2010, for effortless cleaning on and above floors, are both still sold today, continuing to win awards and remain at the forefront of their respective sub-category. We have continued to expand our suite of industry-leading technologies, which are integrated across our vacuum offering, such as our DuoClean Brushroll (launched in 2017), our Self-Cleaning Brushroll (launched in 2018) and our Odor Neutralizer Technology (launched in 2022).
Innovate across price bands and introduce new ones:
We aim to offer the best experience per hard-earned dollar that our consumers can spend. Our product offering provides optionality for consumers looking at entry-level price points to increase spend for enhanced functionality and performance. Those consumers who seek products with premium positioning often realize they can receive similar, or even better, performance at much better value with SharkNinja. As a result, across our portfolio of products, we have innovated new price bands drawing consumers to the Shark and Ninja brands. For example, following Shark’s launch into hair dryers in the United States in the final quarter of 2021, the over $100 price segment of hair styling tools saw category growth of $132 million for the twelve months ended December 31, 2022, taking 7% of share from the under $100 segment, according to NPD. In the same period, Shark added the most dollar growth to the hair styling tools category, delivering growth of $66 million (1.5 times the growth of the next top growing brand in the same category), according to NPD.
 
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Our global marketing engine captivates consumers and creates demand
Our global marketing organization deploys marketing strategies that capture the hearts and minds of consumers worldwide. Our always-on omni-channel marketing strategy is underpinned by our in-house team of marketing and data insights experts and our production studio in Irvine, California. Our experts help educate consumers, build excitement and engage our communities. We do not wait for demand; we create it, driving traffic to online and brick-and-mortar retail.
We have mastered the art of storytelling over decades, tailoring our approach to appeal to the right audience through the right media format at the right time. Every year since 2009 we have run infomercials for our new and enhanced solutions-focused technologies for the Shark branded vacuum offering with clear storytelling centered around the consumer pain points we address. In our new category launches, we adapt our approach to target consumers across the most relevant media formats. For instance, our new short-form social media SharkBeauty campaign on TikTok rapidly raised awareness of our latest Beauty product, the Shark FlexStyle, achieving over 250 million views since launch on August 24, 2022. We deploy a cohesive marketing strategy across television, streaming services, social media, influencers, PR and online/in-store marketing to ensure we reach consumers wherever they are in their purchase journey, provide relevant information and drive conversion.
We have built incredibly engaged communities with the Ninja brand, as well. As of December 31, 2022, we have expanded our followership to over 1.9 million across Facebook, Instagram, TikTok, YouTube and Pinterest, representing over 120% growth relative to 2020 levels, and our “Likes” have increased by over 2,000% over the same time period. Many of our consumers share their Ninja product journey on social media, adding to our marketing content of recipes and “how-to” videos, with user-generated content. We are purposeful in our sub-branding to tap into key consumer trends. In 2018, we introduced our ‘Foodi’ sub-branded line to engage with our consumers who identify with “food culture” and draw excitement around our new product offerings, ultimately building new communities.
Omni-channel distribution strategy reaching consumers where they choose to shop—in-store and online
We focus on being everywhere our consumer shops. From mass retail to department stores to specialty retail, online through our own websites, leading e-commerce platforms and marketplaces, as well as through home shopping networks. We prioritize our SharkNinja Available Everywhere strategy, converting consumer demand across channels, domestically and internationally. Our Shark and Ninja branded websites help deepen consumer engagement and aid consumer education on product capabilities across our portfolio of offerings, while also providing us the ability to harness data insights.
We never practice channel or retailer exclusivity. Through retailer-specific strategies, we maintain and deepen relationships with our diverse base of leading U.S. retailers, including Walmart, Target, Costco, Best Buy, Kohls, Sam’s Club and Macy’s and key international retailers including Canadian Tire, Argos, Curry’s, MSH and Amazon, among others. We leverage our proven track record of launching category-leading products and our ability to execute through peak seasons to build retailer trust. As a result, we enjoy leading market share across numerous sub-categories, and we have seen rapid year-over-year increases in physical points of distribution (defined as the number of products placed at a specific store location, multiplied by the number of retail locations). For the twelve months ended December 31, 2022, we added over 113,000 new total points of distribution across North America and Europe, reflecting growth of 22% relative to the same period in the prior year, as we continue to focus on expanding our share of shelf with our retail partners to enable our future growth. The strength of our relationships allows us to achieve wide distribution and retail penetration for our new product launches, often driving immediate sales volume and further enhancing our retailer relationships.
Agile, scalable and competitive supply chain to support future growth and leading value proposition
Our agile, scalable and competitive supply chain is designed to support our growth and enables continuous product innovation. We leverage a dedicated team of employees co-located in regions with our largest suppliers to manage relationships with our diverse supplier base. Approximately 50% of our volume is produced by suppliers with which we have worked for over a decade. We have cultivated a robust supplier
 
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base built on longstanding relationships that share in our vision to deliver high-quality products and fast-paced development. We have continuously expanded our supplier base while also expanding into new geographies including Vietnam, Thailand and Hong Kong with our existing suppliers to ensure we are multi-sourced across our high-volume SKUs and maintain consistency of our product supply. We strive to ensure our supply chain remains highly competitive with competitive bidding processes to secure the most favorable pricing, which allows us to offer the best value to our consumers for new and legacy products.
Our supply chain management system provides us with enhanced visibility and controls. We collect and review performance data from the manufacturing facilities of our suppliers, and we work proactively with our suppliers to optimize product costs and increase overall operational efficiency. Our agile and scalable manufacturing and supply chain exceeds industry benchmarks for cost, quality and performance, and enables us to move with tremendous speed and accuracy to optimize our products.
Highly experienced management team with a consumer-centric mindset
We have assembled a world-class executive team that harnesses decades of strategic and operating experience at SharkNinja and across leading global consumer brands, combining a deep understanding of our culture with industry-leading perspectives. Our management team has a proven track record of building brands, leading market innovation, expanding distribution, driving best-in-class operations and delivering consistently strong financial results.
Our team is led by our CEO and second-generation founder, Mark Barrocas, who has led SharkNinja since 2008 and oversaw our transformation from an early-stage pioneer in small household appliances with less than $250 million in net sales to a leading global product design company with over $3.7 billion in net sales for the fiscal year ended December 31, 2022. Through his executive leadership and strategic vision, Mr. Barrocas is the driving force behind SharkNinja’s innovative and award-winning culture, establishing and activating success drivers that empower our highly skilled workforce to consistently deliver exceptional results. In recognition of our efforts to build a valued workplace, we have received numerous accolades, including Built In’s “2022 Best Places to Work: Boston” and “2022 Best Places to Work: 100 Best Large Companies.”
We win because when others say “it’s good enough,” we keep going; our deep bench of passionate and talented employees want to do everything possible to make our product offerings the best that they can possibly be. Our years of learning, constantly evolving and optimizing how best to deliver something great, fosters an environment across our business that embraces change and adaptability. Fail fast, learn, pivot, move on; we constantly challenge the status quo and always assess whether we can do it better and faster.
Compelling financial profile with consistent organic growth, attractive margins and strong cash flow generation
We have delivered strong consistent historical organic growth, increasing our net sales at a CAGR of 29% over the last three years and at a CAGR of 20% from March 2008 through 2022. Our organic growth has been driven by our continuous innovation expanding our consumer reach and distribution domestically and internationally. Our business maintains an industry-leading margin profile driven by our scale, our best-in-class supply chain and our continuous operational enhancements.
Our robust organic growth, strong margin and efficient capital intensity all contribute to our consistently strong free cash flow. Our strong free cash flow profile allows for significant capital allocation flexibility, enabling long-term shareholder value creation through multiple operating and financial strategies.
Our Growth Strategies
Our highly diversified business is powered by trusted brands, which enables us to drive sustainable long-term global growth. We continuously broaden our geographic footprint and scale into new product categories and markets that reach more consumers in the constant pursuit of our mission to positively impact people’s lives every day in every home in our Global Markets. Our goal is to expand and strengthen relationships with our existing consumers and cultivate relationships with new consumers to drive our continued growth and profitability.
We believe we are well-positioned for continued growth driven by the following strategies:
 
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1. Grow Share in Existing Categories
Innovation by using consumer insights to identify and develop solutions enables us to maintain and continuously grow share in our existing product categories
We build products to delight discerning, educated global consumers who only trust brands that have proven their worth. We aim to offer our consumers the technologies of tomorrow, today. Our global consumer insights and product development approach enable us to deliver innovative solutions for pressing consumer problems that others either do not see or are unable to solve. Combining our speed of innovation and engineering expertise with our ability to translate consumer insights into tangible outputs helps us gain a disproportionate share of the market, which propels and sustains our growth and profitability.
Our model of innovation and optimization enables us to consistently launch new technologically-advanced products in order to satisfy our consumers’ evolving needs and preferences. Once we have entered a category, we consistently launch new products with additional high-quality features and functionality while we simultaneously identify ways to optimize the cost of the existing products that we are selling. This approach allows us to reach additional price points, create a diversified lineup of products and expand our presence on retailers’ shelves.
We have a longstanding history of growing market share at a rapid pace. In Cordless Stick vacuums, one of our major sub-categories today, Shark has increased market share from 10% for the twelve months ended January 4, 2020 to 25% for the twelve months ended December 31, 2022, capturing 56% share of the category growth over that time period. Further, Ninja has captured 26% market share and 33% market share in Traditional Blending for the twelve months ended January 4, 2020 and the twelve months ended December 31, 2022, respectively, capturing 68% share of the category growth over that time period. We have consistently increased our market share in existing categories both in the United States and internationally.
Leveraging our always-on media marketing drives awareness and educates consumers on product technologies and innovative solutions across both new and existing categories
Our global marketing organization is designed to deploy 360-degree marketing strategies that capture the hearts and minds of consumers worldwide. By leveraging solution-based storytelling across omni-channel media, we educate and create awareness of our technology solutions and new products, ultimately driving high volumes of traffic and interest across all channels. When a consumer arrives at the shelf, in store or online, we want them to find SharkNinja products across a wide range of price points offering various solutions with clear benefit-oriented messaging. We believe in communicating for impact because consumer-relevant storytelling has the ability to make products go viral, enabling us to reach more consumers and drive our continued growth.
2. Expand Our Brand in New Categories
We believe SharkNinja is uniquely equipped to disrupt massive and fragmented markets through our proprietary consumer insights and innovative product development approach. We have a proven track record of launching game-changing innovations and rapidly capturing market share across sub-categories. We are not limited by our current categories, because our cross-functional design and engineering capabilities allow us to enter adjacent and altogether new categories. We intend to continue to enter new categories around the home by:
Leveraging our proprietary innovation process to identify new opportunities
Our proprietary innovation process enables us to proactively identify and develop consumer solutions. We incorporate constant and detailed consumer feedback in our dynamic product development process, allowing us to iterate on and improve our products throughout development and identify new adjacent opportunities. We scour ratings and reviews using proprietary software to find and understand opportunities to improve the consumer experience. This always-on dialogue with the consumer leads to our continuous identification of unsolved consumer pain points in multiple new categories.
 
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Adapting technologies and engineering new solutions to solve consumer problems in new areas
Our global, cross-functional product development and engineering teams are constantly improving our consumer solutions. Leveraging these teams’ expertise, we solve consumer problems that we have uncovered, adapt our technologies to new uses or solve new problems from scratch. For instance:
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We launched our Shark Cordless vacuums in 2014. Leveraging our No-Loss-of-Suction technology, we delivered a game-changing product that housed the cleaning performance of a corded vacuum in a lightweight cordless format. In addition to our No-Loss-of-Suction technology, our cordless vacuums boast impressive runtimes and Self-Cleaning Brushroll technology. In cordless sticks, we have captured 56% share of the category growth between the twelve months ended January 4, 2020 and the twelve months ended December 31, 2022, according to NPD.
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Ninja’s 2018 launch of Foodi not only showcased our ability to rapidly scale novel concepts, but also launched an entire category. Foodi was the first in the market to combine two popular cooking techniques, pressure cooking and air frying, into one multifunctional cooker, achieving food texture that is tender inside and crispy outside. Foodi has over 27% market share in multi-cookers in the United States as of December 31, 2022 and 60% market share in Electrical Cooking Pots in Great Britain as of December 31, 2022, according to NPD and GfK, respectively. The Foodi brand then expanded to Toaster Ovens, Electric Grills and Air Fryers capturing 23%, 43% and 27% market share in each category, respectively, as of December 31, 2022, according to NPD.
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We introduced the Ninja CREAMi, our revolutionary ice cream maker, in 2021 and were able to rapidly expand the ice cream maker market while capturing 60% market share, according to NPD, all within less than two years of entering the category.
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When we launched Ninja NeverStick Premium Cookware, we entered a new category with superior performance relative to the traditional non-stick design that had existed with limited innovation for decades. In the Food Preparation category, as of December 31, 2022, we had gained approximately 5% market share of the United States’ $2.5 billion cookware market according to NPD. We captured that market share within two years of entering the market and we believe we are just getting started.
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The success of our Foodi indoor heated cooking line has enabled us to enter outdoor cooking in 2022. Our innovative Ninja Woodfire outdoor grill relies on proprietary technology to cook low and slow or hot and fast, while adding massive woodfired flavor, with only a small amount of natural wood pellets, and also operates as an air-fryer.
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Expanding the product assortment and retailer placements of our new categories
Within the new categories we enter, we continuously expand our product assortment, further disrupting these markets and growing retailer placements of our new products. For example:
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We entered the Beauty category with the 2021 launch of Shark HyperAIR. Leveraging our air-movement technologies and broader engineering and design capabilities, we created an innovative hair drying and styling system within the $100-$300 price point. We have since expanded our product offering in the category through the launch of Shark FlexStyle, an innovative hair styler that enables consumers to dry while they style with no heat damage. This product has garnered significant consumer and retailer demand, further fueling our momentum in the Beauty category and earning us disproportionate share of shelf across retailers.
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In the Home Environment category, we launched our first generation of Shark air purifiers in 2021 with anti-allergen, odor lock and smart sensing monitor technology. In 2022, we launched our second generation of air purifiers, which feature HEPA filtration and a smaller, more versatile design. We have continued to expand our product assortment in this category with our recent launch of our 3-in-1 air purifier, which offers heating and cooling functionality in addition to our previous air purification technologies.
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In the multi floorcare sub-category, we wanted to continue our path of innovation by combining two historically separate products into one. We created the Shark HydroVac, a 3-in-1 vacuum, mop and
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self-cleaning system. The newest addition to our multi-floorcare lineup vacuums, mops and cleans itself at the same time as it deep cleans hard floors and area rugs.
We consistently launch into new categories to bring original consumer-centric innovations to market. Year after year, SharkNinja has accelerated its pace of growth by entering and capturing share in over 27 sub-categories, swiftly disrupting and gaining leading market share in many of them. In the past three years alone, we have entered and disrupted the following product sub-categories: Countertop Ovens, Indoor Grills, Cookware, Ice Cream Makers, Cutlery, Bakeware, Home Environment, Hair Dryers, Wet/Dry Floorcare and Outdoor Grilling. These new product sub-categories not only increase our household penetration but also expand use occasions, the number of products per home and our brand presence across households.
3. Globalize Our Brand
We will operate in 26 markets upon the completion of the separation and distribution and our international expansion remains a key area of strategic focus. In 2014, we transformed our United Kingdom model from a distributor model to a direct SharkNinja operation and unleashed a new phase of category expansion and market share gains. Since shifting to a direct SharkNinja operation, we have scaled the United Kingdom business to sales of over $490 million in 2022. With the success of our direct model in the United Kingdom, SharkNinja has captured significant share across all major categories in which we operate, and in 2020, we began leveraging our success in the United Kingdom to drive further expansion across Europe, particularly in Germany and France. We have been able to consistently leverage this model to successfully enter and meaningfully grow in new markets.
Our international presence enables us to develop local consumer insights to create new consumer-driven innovations that we are able to offer globally. We are confident that globalizing our brand will drive synergistic growth.
4. Drive Operating Margins and Efficiencies
At SharkNinja, we are rarely satisfied. That tenacious spirit extends beyond producing some of the world’s most innovative and technologically advanced household appliances, to our production processes and the way we operate. We have built an agile and quality-oriented supply chain with ample capacity to support future growth. We intend to grow our margins by enhancing our product mix through innovation and by pursuing additional cost-saving opportunities. We achieved a gross margin of over 45% for the year ended December 31, 2020 and we are highly focused on returning to approximately that margin level over the longer term; we view our gross margin as a competitive advantage providing us with significant flexibility over how much we invest in our R&D, selling and marketing and other growth-oriented investments.
Our Market Opportunity
We consider all households to be potential consumers, from students in their college dormitories to single adults and large families in starter or high-end homes. Our offering allows consumers to progress from lower price points to more premium offerings, and expand from one SharkNinja product to many. Further, we believe in the recession-resilient nature of our offerings, as we believe consumers may view expenditure on many of our products as potential cost-saving investments.
Our Addressable Market
We compete in a broad range of product sub-categories, which we continue to expand. Our Shark and Ninja brands primarily compete in the massive and growing small household appliance market. We consider our market opportunity in terms of a TAM, which we believe is the market we can reach over the long-term and is comprised of existing product categories in existing markets and potential new product categories and potential new markets. We consider our TAM to be represented by the small appliance market, as defined by Euromonitor, in the United States and international markets. This TAM is $112 billion and grew at 7.2% CAGR from 2017 through 2022 and is expected to grow at an 8.4% CAGR from 2022 through 2027. Our 2022 net sales of $3.7 billion represented 3.3% penetration of our TAM, calculated as our net sales divided by total TAM.
 
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We define the categories and markets which we currently serve as our SAM, which is $39 billion. This figure represents the aggregate retail value RSP in U.S. Dollars for all categories and all geographies in which SharkNinja currently has retail value RSP data available based on Euromonitor. We expect to continue to grow our SAM over time as we expand beyond our current markets into new adjacent categories and increase our number of products per household.
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Source: Euromonitor International Limited, Consumer Appliances 2023 edition. Market size and growth estimates based on Euromonitor retail value RSP in USD$ at current prices and fixed 2022 exchange rates.
Consumer Trends in Our Favor
Consumer aspirations for higher quality lifestyles; more time for leisure and less for chores
The rise in dual-income households has left consumers with less time for household tasks and increased disposable income to pay more for quality, time- and energy-saving devices. A 2022 study by Happy Money found that, across various income levels, those who made time-saving purchases, which reduce time spent on cooking, cleaning and household maintenance tasks, reported higher levels of happiness compared to those who did not. We believe SharkNinja products allow consumers to navigate daily tasks more efficiently without compromising on quality.
Emergence of millennials as the prominent consumer force
We believe our products have broad consumer appeal, especially among consumers seeking high quality products with advanced technological capabilities. The Millennial generation, in particular, has an affinity for advanced technological capabilities as the first generation of digital natives. Millennials currently comprise the largest living generation in the United States and are in their peak home-buying and consumption years. According to a 2022 National Association of Realtors study, Millennials currently comprise 43% of homebuyers, which we expect to be a tailwind for the small household appliance categories.
Increased importance of the home environment
A 2022 study by AT&T predicts the hybrid work model will grow to 81% of the American workforce in 2024. We believe that as consumers continue to spend more time at home and seek to elevate their home environment the demand for our products will increase.
 
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Increased availability and influence of product ratings and reviews
Product reviews and ratings have become critical measures of performance for consumer goods companies. According to a 2021 PowerReviews survey, more than 99.9% of U.S. consumers read reviews when shopping online and 57% read reviews when shopping in brick-and-mortar stores to assess potential purchases. The survey found that ratings and reviews have become the most important factor influencing purchase decisions for the first time, ranking above price, free shipping, brand and recommendations from family and friends. We believe SharkNinja is well-positioned to take advantage of this trend, with 74% of our reviews across our own websites rated 5-star.
Our History
SharkNinja has a proud history as a pioneer in small household appliances, and we continuously create a broad array of products that consumers love. With a legacy that dates back several decades, SharkNinja has transformed from its origins as an early-stage pioneer into a portfolio of trusted, global, billion-dollar brands driving rapid growth and innovation across the multiple categories in which we compete today.
SharkNinja includes product offerings under the Shark and Ninja brands. The Shark brand was founded in 2007 by entrepreneur Mark Rosenzweig with the launch of the No-Loss-of-Suction vacuum technology that spurred a new era in home cleaning. Shortly thereafter, the executive bench was expanded to include Mark Barrocas as SharkNinja’s President and second-generation co-founder driving the launch of the Ninja brand in 2009.
Mr. Barrocas established a foundational culture with roots in consumer-centric disruptive innovation that drives SharkNinja’s ethos each day. Under Mr. Barrocas’ leadership and strategic vision, we have grown from less than $250 million in net sales for the twelve months ended March 31, 2008 to over $3.7 billion in net sales for the fiscal year ended December 31, 2022, consistently expanding into new categories and geographies while remaining focused on our mission to positively impact people’s lives every day in every home in our Global Markets. Throughout this period, we have maintained an intense company-wide focus on building a highly scalable, yet nimble, supply chain that allows us to sustain our entrepreneurial approach to innovation. We further enhanced these capabilities through a strategic partnership with Joyoung in 2017, and, today, we possess relationships with a diversified supplier base to ensure that our supply chain remains highly competitive and adaptive to evolving market and economic conditions.
We are an innovation engine that delivers consumer solutions with brands that we believe are synonymous with quality, performance and value. Our consumers choose our products to enhance their everyday lives, and we aspire to delight consumers in all that they do with our products. Our brands are powered by our engineering and innovation capabilities, and we have cultivated a reputation for achieving industry-leading innovations and 5-star consumer reviews.
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Our Culture and People
At SharkNinja, we are intensely dedicated to delivering on our mission of positively impacting people’s lives, every day in every home. We succeed because when others say “it’s good enough” we keep going; we strive to do everything possible to make our products as good as they can possibly be. When we do this right, we have the opportunity to create something great: as a company, as a team and as individuals. Five success drivers permeate everything we do at SharkNinja:
We are rarely satisfied.   We “dream big” and set ambitious aspirations because we have high expectations for our own success. When we achieve a goal, we set the next “beacon” and align our entire team around it. We use our grit and resiliency to drive us to the next milestone and achieve success in the marketplace.
We believe in progress over perfection.   We believe that it is more important to make a decision, start executing and course-correct as needed. We encourage a highly proactive mindset which is centered around a policy to “fail fast,” learn, pivot and move on. Our engineers and designers embrace change and constantly evaluate feedback from consumers and professionals as part of our agile development process and continuous iteration, ensuring that when our products go to market we are confident that they are high-quality, will resonate with consumers and will deliver superior performance at great value relative to our competitors’ products.
We believe details make the difference.   We invest to understand how things really work, seek out new perspectives and inputs and feel compelled to challenge assumptions and ask the second- and third-order questions to find the best possible way of doing something. We constantly question everything and challenge the status quo, assessing whether we can do it faster or better.
We believe winning is a team sport.   We make better decisions when we bring our collective minds to the table. We align ourselves around clear expectations and own the big-picture outcomes, actively holding ourselves and others accountable for delivering exceptional results.
We believe that success comes when we communicate for impact.   We constantly share information and bring our broad teams together to iterate and align on our thinking. We challenge assumptions and are open to challenge without taking it personally.
As of December 31, 2022, more than 2,800 employees located in 9 countries and across 25 offices drive our success. We were voted one of the “Best Large Companies to Work For in Boston” and one of the “100 Best Large Companies to Work For” in 2022 by Built In. We believe that our award-winning culture ultimately drives our success across our brands and with our consumers.
Our Product Offering
Shark
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The Shark offerings cover an expansive and diverse assortment of categories including Floorcare (Corded and Cordless Vacuums, Robot Vacuums, Steam Mops and Wet/Dry Floor Cleaning), Home Environment and Beauty appliances and the Shark brand, we believe, is synonymous with power and versatility.
Shark Floorcare
Shark’s Floorcare product offering includes Corded, Cordless and Robotic Vacuum Cleaners as well as Steam Mops and Wet/Dry Floor Cleaning products. Our strong market position in this category, history of
 
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industry recognition and awards and consumer advocacy across our portfolio of products have established our relationship with leading retailers. Shark was the #1-selling Floorcare brand in the United States for 2022, according to NPD.
Corded & Cordless Vacuums
Shark has been the #1-selling Vacuum Brand in the United States for the last four consecutive years and has been the #1-selling Upright Vacuum Brand in the United States over the same period, according to NPD data. In addition, Shark’s WANDVAC handheld vacuum was the #1-selling Hand Vacuum in the United States in 2020, 2021 and 2022, according to NPD. Shark’s high-performing vacuums have received notable accolades including the Good Housekeeping 2021 Cleaning Awards for the Shark WANDVAC system for the “Slimmest Stick Vacuum,” the Shark Stratos Cordless Stick which was awarded “Best Small Appliance” by Tech Radar in 2022, and the Shark Apex Upright Vacuum that received the Reviewed Editor’s Choice Award for the Best Upright Vacuum Cleaners of 2022.
Our portfolio of Shark Corded and Cordless Vacuum products include upright, stick, canister and handheld vacuum variations. Our products have highly distinguished performance on key attributes that our consumers value, such as suction and self-cleaning brushrolls. For example, as of 2022, Shark’s patented suction technology featured within various vacuum products has the strongest suction of any upright vacuum at the hose and Shark’s patented WANDVAC Power Pet delivers the most suction of any other leading cordless hand vacuum option weighing under 1.5 pounds. Furthermore, Shark’s Self-Cleaning Brushroll technology, with powerful hair pickup without problematic hair wrap has been integrated into many Shark vacuums. In addition, Shark’s odor neutralizing technology guards against bad odors.
Our Corded and Cordless Vacuum category includes:
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Select key technologies across our Corded and Cordless Vacuum range include:
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Our Corded Vacuums typically range from $129 to $499 and our Cordless Vacuums range from $179 to $499. Across both Corded and Cordless Vacuums, the majority of our offering is priced in the range of $200 to $399.
Robot Vacuums
Shark was the #1-selling multi-function robotic vacuum brand in the United States in 2022, according to NPD. Our Robotic Vacuum offering has received numerous accolades since launching in 2017, with recent awards including winning the best bagless option on Spy’s “Best Robot Vacuum 2022” list for our Shark AI Ultra Robot Self-Empty, being selected as part of House Beautiful’s 2021 “Live Better Awards” for the Shark AI Robot Self-Empty XL and being named PC Magazine’s “Best Product of 2021” for the Smart Home, Robot Vacuum category for our Shark IQ Robot Vacuum. Our Auto Empty Robot Vacuum has over 17,000 5-star reviews on Amazon. We have leveraged our deep experience in the broader vacuum category to produce industry-leading performance. For example, our Shark AI Ultra 2-in-1 Robot Vacuum provides twice the level of suction relative to another leading Robot Vacuum brand.
Our Robot Vacuum offering includes:
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Select key technologies across our Robot Vacuum range include:
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Our Robot Vacuums are complemented by the SharkClean mobile app (rated 4.8-stars in Apple’s App Store with over 140,000 reviews as of December 31, 2022), which, through its precision home-mapping capabilities, including visual simultaneous location and mapping technology as well as 360-degree rotating light detection and ranging technology, enables users to customize where, when and how their robot cleans. Users can set cleaning schedules, send their robot to clean certain rooms or spots on-demand in UltraClean Mode, or mark areas for their robot to avoid altogether.
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Our Robot Vacuums typically range from $139 up to $699, with the majority of our Robot Vacuum offerings in the range of $200 to $499.
Steam Mops & Wet/Dry Floor Cleaning
Shark’s Mops and Wet/Dry Floor Cleaning products have garnered several industry awards in recent years, including Good Housekeeping’s 2021 awards for best “Deep-Cleaning Steam Mop” for the Shark Steam & Scrub Mop S7000 and the “Slimmest Stick Vacuum” for the Shark Wandvac System WS620 as well as Better Homes & Gardens’ 2021 award for “Best Vacuum-Mop Hybrid” for the Shark VacMop Pro.
 
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Our Steam Mop and Wet/Dry Floor Cleaning offering includes:
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Select key technologies across our Steam Mop and Wet/Dry Floor Cleaning offering include:
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Our Steam Mop and Wet/Dry Floor Cleaning offerings typically range from $49 to $359, with most of our products typically priced below $199.
Shark Home Environment
Our Home Environment product offering currently includes our air purification products. We launched our first series of Shark air purifiers in early 2021, which feature our anti-allergen and odor lock technologies, as well as our smart sensing monitor technology which enables consumers to measure product effectiveness. Our second-generation Home Environment products, launched in early 2022, feature HEPA filtration and a smaller and more versatile design. Later in 2022, we launched new products which include the ability to both heat and cool the home while simultaneously improving air quality. We have achieved rapid market share gains in the air purification market—we achieved 5% market share within 15 months of first launching into the category.
 
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Our Home Environment offering includes:
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Select key technologies across our Home Environment offering include:
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Our pricing across our Home Environment offering typically ranges from $189 up to $479, with most of our products in the range of $250 to $350.
Shark Beauty
Shark’s Beauty category was launched in 2021 with the Shark HyperAIR hair dryer. The product delivers premium air power and next-generation intelligence, giving consumers an easy, healthy and ultra-fast hair drying experience. Within a year of launch, the Shark HyperAIR became the #1-selling hair dryer priced in the $100-$300 range in the United States for the three months ended December 31, 2021 and remained the #1-selling hair dryer in the same category for the twelve months ended December 31, 2022, according to NPD. Shark HyperAIR was awarded “Best Hair Tool” from BestProducts.com for 2022. Our HyperAIR product launch was followed by the Shark FlexStyle hair dryer and styler in September 2022, which enables consumers to style while they dry without significant heat damage. With a simple twist, the FlexStyle transforms itself from being a powerful, fast hair dryer to an ultra-versatile multi-styler.
Our hair dryer and styler ranges are designed for all hair types, and our technology enables fast drying hair times while maintaining lower temperatures relative to most of our competitors. Our dryers measure and regulate temperatures 1,000 times per second to ensure consistent air temperature instead of getting hotter as it runs, which helps to prevent over heating hair.
 
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Our Beauty offering includes:
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Select key technologies across our Beauty offering include:
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Our Beauty offering typically ranges from $159 to $299 with most products priced between $229 to $269.
 
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Ninja
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Ninja was the #1-selling brand in small kitchen appliances in the United States in 2020, 2021 and 2022, according to NPD, and its diversified product offering spans across consumers’ kitchens, both indoors and outdoors, with leading products in Motorized Kitchen Appliances, Heated Cooking, Beverage Appliances and Kitchenware. For owners of Ninja products, we envision the kitchen as their stage and Ninja appliances as their top performers.
Ninja Motorized
We launched the Ninja brand in 2009 with the Ninja Master Prep blender. Today, the Ninja Motorized offering includes full size blenders, single service blenders, juicers, food processors and ice cream makers. Ninja’s Motorized offering is centered around ensuring convenience for the consumer while serving as a complement to a healthy lifestyle.
Our commitment to excellence has made us the #1-selling brand in blending appliances in the United States for four consecutive years through to 2022, according to NPD. This is further complemented by awards such as the Allrecipes “Best Blender” distinction in 2022. In addition to our blenders, our more recent Ninja Motorized launches have also been recognized for their outstanding design and performance. The Ninja CREAMi was the #1-selling ice cream maker in the United States for 2022, according to NPD, and the CREAMi has won numerous awards, including House Beautiful’s 2022 Live Better Awards “Entertain Better Category,” the 2022 Men’s Health Tech Awards “Best Ice Cream Maker” and Good Housekeeping’s 2021 Kitchen Gear Awards “Custom Ice Cream” distinction.
Our Motorized offering includes:
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Select key technologies across our Motorized offering include:
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Our blenders typically range from $69 for our entry level blenders to $250 for our blender systems. Ice cream makers typically range from $200 to $250. Most of our Motorized products are typically priced below $200.
Ninja Heated Cooking
In 2018, we established our Foodi sub-brand, which is comprised of innovative and groundbreaking appliances that merge various technologies to create highly versatile products. Our Foodi range of products eliminates the need for multiple appliances and is designed to make cooking various types of meals easier. Ninja was the #1-selling air fryer brand in the United States and the #1-selling Indoor Grill Brand in the United States for 2022, according to NPD. Our Ninja products have also won many awards, such as Allrecipes’ 2022 “Community Choice” for our air fryer, and the Popular Mechanics 2022 Gadget Awards “Best Appliance” for our Dual Heat Air Fry Countertop Oven. Our Ninja products have also received recognition in publications such as Bon Appetit, where our Ninja Foodi Digital Air Fry Oven was given the distinction of the toaster oven-air fryer combo of choice for consumers with limited counter space. Our Heated Cooking category includes air fryers, ovens, indoor grills, outdoor grills, multi-cookers, waffle makers and toasters.
Our Heated Cooking offering includes:
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Select key technologies across our Heated Cooking offering include:
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The majority of our Heated Cooking offering is typically priced between $100 to $300; we have entry level air fryer products priced below $100 such as the Ninja Mini Air Fryer, which has ranked amongst the best-selling Air Fryers on Amazon in 2022, while our more sophisticated air fryers are priced around $259.
 
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The most expensive products in our Heated Cooking offering include our Woodfire outdoor grill range, which typically range from $370 to $460.
Ninja Beverage
Ninja’s functional and sophisticated coffee systems, with both single-serve espresso capsules and coffee ground options, allow consumers to craft everything from classic, rich, over-ice brew to 10-minute cold-brew coffee and tea to matcha masterpieces, macchiato-style specialty brews and more. Our coffee systems have received numerous accolades. In 2022, Real Simple named our Ninja DualBrew Pro System Coffee Maker as the “Best Dual Coffee Maker” and Fatherly named our Ninja 12-Cup Programmable Coffee Maker as one of the “Best Coffee Machines.” In 2021, Rolling Stone Essentials named our Ninja DualBrew Pro Specialty Coffee Maker as the “Best Coffee Maker.” In addition to coffee systems, our Beverage category also includes electric kettles.
Our Beverage offering includes:
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Select key technologies across our Beverage offering include:
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The pricing within our Beverage offering typically ranges from $100 to $250.
Ninja Kitchenware
Durability, safety and quality are top of mind for our Ninja Kitchenware offering with cookware and cutlery that does not compromise—meal after meal, use after use, time after time. Our Kitchenware offering includes cookware, cutlery and bakeware sub-categories. According to NPD, Ninja was the #1-selling cookware set in the United States and the top-growing cookware brand in the United States for 2021 and 2022. In addition, over the same time period, two of the top three cookware sets in the United States are Ninja NeverStick and as of December 31, 2022, Ninja was the #1-selling cutlery set in the United States, according to NPD. In 2021, our NeverDull knives were awarded “All the Knives You Need” in Good Housekeeping’s “Kitchen Gear Awards.”
 
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Our Kitchenware offering includes:
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Select key technologies across our Kitchenware offering include:
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Our Kitchenware offerings typically range from $49 to $550.
Innovation & Product Development
At SharkNinja, our multi-layered approach to innovation and product development allows us to expand into new categories while also sustaining growth in existing products through continuous enhancements.
Disrupting Appliance Categories with New Technologies
We have an established track record of creating and defining market segments through disruptive innovation. Our product development engine has enabled us to launch numerous products with innovative features and functionality, which often originate entire categories and sub-categories for us to expand into. In 2022, 25.9% of our sales were derived from new products that were launched during 2021 and 2022.
 
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Continuous Optimization of Existing Offerings
We are passionate about implementing enhancements to our products to deliver design and functionality that meets and exceeds our consumers’ ever-evolving needs and expectations. We continuously refine and enhance our disruptive products over time to stay at the forefront of our respective categories. For example, within our most mature sub-categories, blenders and vacuums, all of our initial disruptors that were launched more than ten years ago are still core products today with refined capabilities and expanded product families around them.
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Our product development process is intensely consumer-driven, with data-led decisions consistently driving the outcome. We observe consumers in simulated home environments to glean insights on how they interact with our products and those of our competitors. These powerful insights fuel our innovation engine and enable us to adapt our product offerings to consumers’ evolving needs. In 2022, we interacted with over 122,000 consumers across the globe in our product development process. Before the launch of our first hair dryer product in 2021, Shark HyperAIR, we conducted extensive market research and product testing with over 12,000 unique consumers across the globe and we also tested the product in 35 salons to gather feedback from professionals. Constant qualitative and quantitative testing with real consumers informs every stage of our design, engineering, manufacturing and marketing processes, even during late-stage development and product release. We also intensely study consumer reviews in our relentless pursuit of a 5-star product experience across our portfolio; we have dedicated teams and technologies to evaluate
 
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consumer feedback irrespective of star rating; negative product sentiment is then put on an action register for an internal task force to assess and address.
Our global, in-house engineering and product design team of over 700 engineering and design experts collaborates around the clock across the United States, China and the United Kingdom. We have developed a unique matrix structure organized around our categories and key functional R&D disciplines. Our cross-functional approach to R&D creates an idea-generation machine that enables an exchange of ideas and technologies across product categories and in the process allows us the ability to maintain and expand our market share. Our organizational structure also provides an exciting career path for our engineers to continue to further develop their expertise, while allowing us to leverage skills and experience across categories.
In addition, our five global innovation centers across the United States, the United Kingdom and China allow us to access a wide breadth of skills and technologies. By having the ability to recruit top talent in the United States, the United Kingdom and China, we are better equipped to identify and acquire diverse skillsets and expertise than if we had a centralized engineering team in a single location.
In 2022, our total R&D costs were $215.7 million, representing a 7.5% increase from 2021. We believe our investments in R&D are critical to the success of our business—we win over consumers because when others say “it’s good enough,” we keep going. To protect our integrated R&D platform, we invest extensively in the development of our intellectual property, and, as of December 31, 2022, we possess a portfolio of over 3,000 patents in force in various jurisdictions, including the United States, Canada, China, Japan, South Korea, Australia, the United Kingdom, Germany and France. Our innovation process is constant—even after a product is launched, we continue to test how it can be improved, and we constantly push ourselves to find the next category we can disrupt. Our approach to hardware innovation more closely emulates software evolution; there is no start or end point to product development. We encourage our teams of engineers and designers to embrace change and view product development as a continuous process of enhancements that ultimately drives high consumer satisfaction.
Manufacturing, Supply Chain & Logistics
Our manufacturing, supply chain and logistics reflect our intensive focus on quality and performance. We distinguish ourselves not only through our products and our brands but also through our commitment to refining every detail across our manufacturing, supply chain and logistics. Our supply chain infrastructure harnesses three differentiating factors: factory partnerships, factory flexibility and inbound freight. Our partnerships enable us to move rapidly from an idea on a whiteboard to full production, collaborating to drive quality and reduce cost. Whenever possible, we require our factory partners to possess the flexibility to make changes to purchase orders if production has not yet occurred and typically only require purchase orders 30 days in advance of the cargo ready date for shipping. Lastly, our volumes and long-term strategic partnerships with key shippers allow us to attain competitive inbound freight rates, even when the market is constrained.
We manage the design of our products and oversee the quality assurance programs and manufacturing standards applied across our supply chain. Although we do not manufacture any of our own products, we have relationships with various third party suppliers, either directly or through JS Global or Joyoung, to manufacture our products. These suppliers are responsible for the assembly of our products and are primarily based in China. We also work with certain suppliers in various regions across Southeast Asia, including Vietnam, Malaysia, Thailand and Indonesia. Our suppliers are often responsible for the sourcing of components used to manufacture our products but in certain instances, we directly source these components from sub-suppliers and pay for and own certain tooling and equipment used by our suppliers in assembly. Further, we have made significant investments in local talent to manage production as well as ensure quality and competitive costs with employees on the ground in Asia who work directly with many of our suppliers. These employees work closely with owner-operated factories to ensure that our products meet our strenuous quality standards and to enable maximum flexibility and input in the manufacturing process.
There are no existing long-term manufacturing contracts on which we are substantially dependent. While we have selected suppliers for commercial and operational reasons, we believe that there are alternative firms that we can engage to supply products of the same or similar quality, in similar quantities and on substantially similar terms as our current suppliers. Further, most of our products are dual-sourced,
 
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enabling us to maintain a competitive sourcing environment among our suppliers, and we deploy a rigorous bidding process to secure favorable pricing across our entire supply chain. We have leveraged pre-existing supplier relationships to scale our supply chain and enter new categories more quickly. Today, we have established direct and strong relationships with our suppliers. We annually require and assist in processes to remove costs from production, allowing our legacy innovations to compete against less capable, lower-priced competitors.
Our global commitment to quality flows through every stage of the design, development, production and post-production process. This quality assurance program requires that inspection and testing are completed by SharkNinja employees prior to a product leaving the factory and feeds into ongoing product design and production improvement reviews.
To further manage our supply chain, we have developed a dedicated Supply Planning team that compares demand forecasts to inventory on hand and production and inbound forecasts. We relentlessly track our inventory with retailers to assess how each product is performing on the shelf. Through our proprietary data and tracking process, we understand when it is time to shift shelf space towards more in-demand models. This allows us to deliver a wide variety of solutions in a category and maintain our average price point across each brand by phasing out older models as we introduce newer ones. However, several of our legacy products, which we refine and optimize over time, continue to see strong demand, and remain prominently on shelves, including the Ninja Mega Kitchen System which was introduced in 2012 and the Shark Navigator Lift-Away which was introduced in 2010. By producing leading-edge innovations and leveraging our proprietary data and processes, we have been able to continuously reduce our obsolete inventory rates. In addition, we have numerous retail and DTC third-party logistics (“3PL”) distribution centers across North America and Europe: eight 3PL distribution centers in the United States, one in Canada and four in Europe.
Marketing & Consumer Engagement
We do not wait for demand to happen; we create it. Our global marketing organization deploys a variety of marketing strategies across outlets that capture the hearts and minds of our consumers. Today, our global marketing organization consists of over 350 employees in offices across North America, Europe and Asia, with functions spanning brand marketing, digital marketing and retail product marketing.
Our marketing strategy is focused on growing our army of ambassadors by leveraging large-scale, omni-channel media strategies, powerful consumer data and dynamic product storytelling to educate and create awareness of our solutions. Our differentiated storytelling complements our innovative products and has the ability to make our products go viral and attract new consumers to our brands. Just like our products, our marketing strategy is solutions-driven, focused on educating the consumer about a consumer problem and highlighting our innovative solution. We bring the consumer along in the story of the technology we have developed. This approach engages the consumer and fuels demand for our solutions, which span across our product offerings.
We leverage diverse and cost-effective means to educate consumers and inspire conversion across all our marketing channels. We run our always-on marketing campaign for both Shark and Ninja products. We run campaigns ranging from 28-minute long-form infomercials to 15 and 30 second short-form commercials. We additionally utilize social media on a variety of apps, display advertisements and engage in search engine optimization media and public relations. Further, we drive engagement on social / over-the-top platforms like YouTube, Pinterest, Instagram, Facebook and TikTok. Our marketing methods ensure that we support both our core categories and new product launches, rather than focusing on only the latest drop. Overall, we believe our media focus on solutions successfully creates a halo effect across Shark and Ninja, promoting both brands rather than a single product.
We possess a strong data-driven, fluid media planning and marketing strategy that is tailored to our various product offerings. When a consumer arrives at the shelf looking for a vacuum with a self-cleaning brushroll, or a blender with the ability to produce restaurant-quality drinks, we want the consumer to discover that solution in SharkNinja products at a variety of price points. The consumer can choose the right combination of attributes at the right price for their needs. This makes our marketing efforts exceptionally efficient, with advertising representing 7.3% of net sales in 2022 and 7.9% of net sales in 2021. Through our
 
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strategic marketing initiatives, we achieved aided brand awareness of 94%, based on surveys we conducted, for both Shark and Ninja brands in Q4 2022. In addition, our marketing efforts have fueled Shark’s unaided brand awareness of 42% and Ninja’s unaided brand awareness of 18% in Q4 2022.
Our Customers & Sales Organization
Our Customers
We believe we create category demand across our categories, which effectively positions us to sell our products at most major retailers, never practicing retail exclusivity. Our innovation, performance, quality and value make our products desirable to carry, and we can drive significant traffic into stores. We have low retailer concentration, with our largest customer representing 17% of retail sales. We have 14 key retail accounts in the United States, and we partner with 49 retailers across the United States and over 150 retailers globally. Our largest retailers include Walmart, Amazon and Costco, each of which accounted for more than 10% of our net sales, and together make up 42.9% of our net sales as of December 31, 2022. We are one of fewer than 50 brands selected to be part of the Amazon Global Vendor Management (“GVM”) program. Amazon’s GVM strategy intends to accelerate Amazon’s worldwide growth through prioritizing top-tier, globally important vendors via C-level engagement and formalized business planning, and we are capitalizing on market opportunities presented by our participation in this program. We also participate in a strategic joint business plan with Target, which enables us to work together on long term objectives and planning timelines.
Our retailers consistently recognize SharkNinja as a top vendor with awards including: the “2021 Product Launch Award” at Macy’s and the QStar for QVC Vendor of the Year for 2020.
Our Sales Organization
Today, our sales organization is made up of over 150 employees. Within our global sales organization we have dedicated team members working across e-commerce and retail marketing as well as strategic sales. E-commerce and retail marketing focus on e-commerce channels, retail digital strategy, e-commerce experience and co-op and trade marketing. Our strategic sales team members focus on pricing, channel and marketplace and sales, which focuses on replenishment, national accounts, sales operations, key accounts and account planning. We have developed a presence adjacent to many of our major retailers and growth regions, in Bentonville, Minneapolis, Toronto, Leeds, Munich and Paris in order to be in close contact with our key retailers.
Competition
We operate across numerous highly competitive product categories within the small appliance market. These categories are characterized by frequent product introductions and rapid technological advances. Our competitors vary by product category, and we operate across a diverse and growing range of product categories. We generally compete with other household appliances companies, which may also offer a wide variety of products, including vacuums, air purifiers, blenders, pressure cookers and other products. Given the breadth of our offerings across numerous categories, we compete with several established, well-known brands; however, there is no single competitor across all of the categories in which we compete.
Most of our competitors typically sell at a lower price point with some exceptions, such as Dyson and Vitamix. We have succeeded in the marketplace by capitalizing on the sale of product offerings situated in the mid-price range, taking market share from competitors who sell products at price points above and below our own. Shark competes with brands including Dyson, Hoover and Bissell. These competitors offer a broad array of vacuums and other floorcare appliances at different price points. Dyson also operates in Beauty, a category which we recently entered and within which we have rapidly grown our presence. Ninja competes with brands including Vitamix, De’Longhi, Breville, Hamilton Beach, Cuisinart and others. These competitors sell kitchen appliances such as blenders, food processors, pressure cookers, air fryers and other products at different price points.
Competition in the various product categories in which we operate is based on a number of factors, including product quality, performance, technology, ease of use, reliability, durability, styling, brand image and recognition, safety and price.
 
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Sustainability
Our mission is to positively impact people’s lives every day in every home around the world, and this includes our pursuit of a future-positive world. We are deeply committed to applying our strength in innovative thinking for the greater good through our commitment to being Product Positive, Planet Positive and People Positive, including through our Positive Impact Plan.
Product Positive:   We aspire to continue designing innovative, smart and safe products that make a meaningful and measurable difference to the environment, society and our consumers’ lives.
Planet Positive:   We pledge to use our deep knowledge to lead the way in remanufacturing and developing innovative and sustainable products that reduce landfill waste, minimize our carbon footprint and decrease our environmental impact.
People Positive:   We commit to fostering a culture of diversity, equity and inclusion (“DEI”) that empowers our people to achieve their personal and professional aspirations, while making a societal impact in all the communities and geographies we serve.
Our Positive Impact Plan:   As an organization, we are rarely satisfied. Progress for us is more important than perfection, which is why we believe that every small victory will make a big difference in bringing us closer to a future-positive world for all. Some of the ways in which we have implemented our Positive Impact Plan include product manufacturing to help keep our products out of landfills through refurbishing and remanufacturing, carbon offsetting by supporting high-quality, Verified Carbon Standard projects and DEI groups that focus on DEI initiatives across our business and operations.
Government Regulations
We are subject to many varying laws and regulations in the United States, the European Union, the United Kingdom and throughout the world, including those related to privacy, data protection, intellectual property, consumer protection, e-commerce, marketing, advertising, messaging, rights of publicity, health and safety, employment and labor, product liability, accessibility, competition and taxation. These laws and regulations are constantly evolving and may be interpreted, applied, created or amended in a manner that could harm our business, financial condition and results of operations. In addition, it is possible that certain governments may seek to block or limit our product features or products or otherwise impose other restrictions that may affect the accessibility or usability of any or all of our product features or products for an extended period of time or indefinitely.
We are also subject to U.S. and foreign laws and regulations that govern or restrict our business and activities in certain countries and with certain persons, including the U.S. Commerce Department’s Export Administration Regulations and economic and trade sanctions regulations maintained by OFAC, as well as anti-bribery and anti-corruption laws and regulations, including the FCPA and the U.K. Bribery Act 2010.
Data Privacy Laws and Regulations
Our business uses, collects, handles, stores, receives, transmits and otherwise processes consumer and other data. As a result, we are or will be subject to federal, state, local and international laws and regulations related to the privacy and protection of such data, such as the GDPR, the U.K. GDPR, the CCPA and the Data Protection Act (As Revised) of the Cayman Islands (the “Cayman Data Protections Act”)..
The GDPR and U.K. GDPR regulate the processing of personal data within the European Economic Area and the United Kingdom, respectively, that relates to a directly or indirectly identifiable individual and imposes stringent data protection requirements on organizations with significant penalties for noncompliance. Continuing to maintain compliance with the requirements of the GDPR and the U.K. GDPR, including monitoring and adjusting to any divergence between the European Union and United Kingdom data protection regimes following the exit of the United Kingdom from the European Union, may require changes to our products, policies, procedures, notices and business practices and may increase operating costs or limit our ability to operate or expand our business.
 
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We are also subject to evolving European Union and U.K. privacy laws on cookies and e-marketing. In the European Union and the United Kingdom, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced by an European Union regulation known as the ePrivacy Regulation, which will significantly increase fines for noncompliance.
In the United States, while there is not a single generally applicable federal law governing the processing of personal data, there are federal laws that apply to the processing of certain types of personal data, or the processing of personal data by certain types of entities, and the FTC and other enforcement agencies may bring enforcement actions against companies that engage in processing of personal data in a manner that constitutes an unfair or deceptive trade practice. In addition, all fifty states have enacted laws related to data privacy.
The CCPA grants California consumers robust data privacy rights and control over their personal information, including the right to notice, the right to disclosure, the right to delete, the right to opt-out of the sale or sharing of personal information that businesses collect, the right not to be discriminated against for exercise of CCPA rights, the right to request correction and the right to limit use and disclosure of sensitive personal information, as well as additional protections for minors. The CCPA applies to any enterprise that does business in California and has annual gross revenues in excess of $25 million (and meets certain other criteria), as well as certain other enterprises.
Regulators and legislators in jurisdictions around the world continue to propose and enact more stringent data protection and privacy laws. New laws as well as any significant changes to applicable laws, regulations, interpretations of laws or regulations, or market practices, regarding privacy and data protection, or regarding the manner in which we seek to comply with applicable laws and regulations, could require us to make modifications to our products, policies, procedures, notices and business practices, all of which may increase operating costs or limit our ability to operate or expand our business.
Any actual, alleged or perceived failure to comply with the laws of each jurisdiction or adequately protect personal data could result in damage to our reputation, negative publicity, loss of consumers and sales, loss of competitive advantages over our competitors, increased costs to remedy any problems, costs to provide any required notifications and consents (including to regulators and/or individuals) and otherwise respond to any incident, claims, regulatory investigations and enforcement actions, costly litigation, administrative fines and other liabilities.
Environmental, Health and Safety Matters
Our facilities and operations are subject to a limited number of environmental, health and safety laws and regulations in each of the jurisdictions in which we operate. Given that we rely on suppliers to manufacture our products, the principal environmental, health and safety laws that apply to our facilities and operations relate to safe use, storage and management of the few hazardous chemicals used in our operations, reporting inventories of certain hazardous chemicals stored at our facilities to state and local emergency responders and proper storage and management of batteries.
Product Safety
We are subject to laws regulating consumer products in the jurisdictions in which our products are sold. In the United States for instance, certain of our products are subject to the U.S. Consumer Product Safety Act, under which the U.S. Consumer Product Safety Commission may exclude products from the market that are found to be unsafe or hazardous, require repair, replacement or refunds of products, impose fines for noncompliance with requirements and impose fines for failure to timely notify them of potential safety hazards.
Intellectual Property
The protection of our brands, technology and intellectual property is an important aspect of our business. In particular, we believe the Shark and Ninja brands are significant to the success of our business. We protect our intellectual property, including our brands, through a combination of trademarks, patents,
 
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copyrights, trade secrets, contractual provisions, confidentiality procedures and non-disclosure agreements. For example, we generally enter into confidentiality agreements and invention or work product assignment agreements with our employees and consultants to control access to, and clarify ownership of, our proprietary information. We protect our intellectual property rights in the United States and certain international jurisdictions. We believe these intellectual property rights, combined with our innovation and distinctive product design, performance, brand names and reputation, contribute to our competitive position and success of our business.
As of December 31, 2022, we had approximately 3,000 trademark registrations and 4,750 issued patents and pending patent applications in the United States and other jurisdictions. As of December 31, 2022, we had approximately 650 issued U.S. patents and 350 U.S. patent applications pending. Our U.S. patents for our current products generally expire between 2023 and 2042, and cover rights related to the configuration, operation and design of many of our products, related subsystems and/or features. As of December 31, 2022, we also had approximately 2,900 issued foreign patents and 850 foreign patent applications pending.
We have a proactive online marketplace monitoring and seller/listing termination program to disrupt online counterfeit offerings. In addition, we work to shut down counterfeit stand-alone sites through litigation and administrative procedures.
We aggressively pursue and defend our intellectual property rights to protect our brands, designs and inventions. We have processes and procedures in place to identify, protect and optimize our intellectual property assets on a global basis. In the future, we intend to continue to seek intellectual property protection for our new products, technologies and processes that we believe are innovative and material, and we intend to take appropriate action to protect our intellectual property from those who infringe on these valuable assets.
Facilities
Our corporate headquarters is located in Needham, Massachusetts. It covers approximately 248,000 square feet pursuant to an operating lease that expires in 2030. Our headquarters is primarily used for accounting, finance, information technology, legal, human resources, sales and marketing, customer support, product development and supply chain management functions. As of December 31, 2022, we leased additional facilities totaling approximately 1,079,000 square feet in multiple locations in the United States and internationally. These additional facilities in the United States and Canada, which account for approximately 858,000 of the 1,079,000 square feet, are primarily used for sales and marketing, product quality assurance, distribution, supply chain management, finance and human resources. Our offices in Europe, which account for approximately 68,000 of the 1,079,000 square feet of additional facilities, are primarily used for accounting, finance, human resources, sales and marketing, customer support, product development and supply chain management. Our facilities in Asia, which account for approximately 153,000 of the 1,079,000 square feet of additional facilities, are primarily used for sales and marketing, product testing, product development, supply chain management, product quality assurance, distribution, finance, information technology and human resources. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations.
Legal Proceedings
From time to time, we may be involved in various legal proceedings arising from the ordinary course of business activities. We are not presently a party to any litigation the outcome of which we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition and results of operations.
 
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MANAGEMENT
Set forth below are the names, ages and positions as of the date hereof of our executive officers, directors and director nominees who are expected to join our Board upon the completion of the separation and distribution.
Name
​ ​
Age
​ ​
Position
​
Executive Officers ​ ​ ​ ​ ​ ​ ​
Mark Barrocas ​ ​
51
​ ​ Chief Executive Officer and Director ​
Larry Flynn ​ ​
43
​ ​ Interim Chief Financial Officer and Chief Accounting Officer ​
Pedro J. Lopez-Baldrich ​ ​
51
​ ​ Chief Legal Officer ​
Neil Shah ​ ​
43
​ ​ Chief Commercial Officer, EVP ​
Non-Employee Directors ​ ​ ​ ​ ​ ​ ​
Xuning Wang ​ ​
54
​ ​ Chairperson ​
Peter Feld ​ ​
58
​ ​ Director Nominee ​
Wendy Hayes ​ ​
53
​ ​ Director Nominee ​
Chi Kin Max Hui ​ ​
49
​ ​ Director Nominee ​
Dennis Paul ​ ​
50
​ ​ Director Nominee ​
Timothy R. Warner ​ ​
72
​ ​ Director Nominee ​
Mark Barrocas has served as our President since 2008, a member of our Board since 2023 and was our co-owner from 2008 to 2017. During his tenure, Mr. Barrocas has demonstrated consistent commitment to SharkNinja and has driven our net sales growth, profitability and strategic expansion into new product categories and markets. Since 2008, Mr. Barrocas has focused on leading our rapid product innovation, international expansion, continuous development of consumer insights and agile operations, while developing an award-winning corporate culture and team infrastructure that has driven our 5-star consumer experience and built a portfolio of trusted global brands. Under Mr. Barrocas’ leadership, our business has expanded to fifteen countries and twenty-one offices around the world. His belief and commitment to delivering speed, performance, quality and value to our global consumers has enabled us to achieve #1 in market share in the United States for small household appliances and #1 in market share in the United Kingdom for vacuum sales. Mr. Barrocas has also served as Global President of JS Global since 2019. Upon the completion of the separation and distribution, Mr. Barrocas will resign from his position as Global President of JS Global and he will become our Chief Executive Officer. Mr. Barrocas holds a Bachelor of General Studies from the University of Michigan. Prior to joining SharkNinja, Mr. Barrocas held several senior leadership positions, including as the President of Aramark Uniform Services and the President of Broder Bros Co. Mr. Barrocas also serves on the Board of the JCC of Greater Boston and is philanthropically committed to various other organizations in the Greater Boston community and nationally.
Larry Flynn has served as our interim Chief Financial Officer since June 2023 and Chief Accounting Officer since February 2023. Mr. Flynn served as Chief Accounting Officer at Wayfair from 2022 to 2023 and Vice President, Controller and Treasurer of Dunkin’ Brands from 2018 to 2022. He holds a Bachelor of Science in Business Administration from Babson College and a Masters of Science in Accounting from the Boston College Carroll School of Management.
Pedro J. Lopez-Baldrich has served as our Chief Legal Officer, EVP since 2018. Mr. Lopez-Baldrich holds a Masters of Law degree from Georgetown University, a Juris Doctorate from St. John’s University and a Bachelor of International Business from Drake University.
Neil Shah has served as our Chief Commercial Officer, EVP since 2018, previously serving as our EVP Sales & Marketing from 2016 to 2018, Senior Vice President, Strategic Sales from 2011 to 2016, VP of Strategic Sales & Corporate Planning from 2008 to 2011, Director of Strategic Sales & Marketing in 2008 and Manager—Sales Planning & Analysis from 2007 to 2008. Mr. Shah holds a Masters of Business Administration from Bentley University.
 
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Xuning Wang has served as the Chairperson of our Board since 2017 and as the Chairman and Chief Executive Officer of JS Global since 2019. He has also served as the Executive Director of JS Global since 2018. Mr. Wang is the founder of Joyoung. He invented the first fully automatic household soymilk maker in 1994 and has been instrumental in the development of soymilk maker industry. Mr. Wang served as the Chairman of Joyoung from 2007 to 2022 and General Manager and President of Joyoung from 2007 to 2019. Mr. Wang holds a Masters of Business Administration from China Europe International Business School (CEIBS) and a Bachelor of Electric Traction and Transmission Control from Beijing Jiaotong University.
Peter Feld is expected to join our Board upon the completion of the separation and distribution. Mr. Feld has served as Chief Executive Officer of Barry Callebaut Group since 2023. He previously served as Chief Executive Officer at Jacobs Holding AG in 2023 and Chief Executive Officer at GFK Group from 2017 to 2022. Mr. Feld holds a Masters in Mechanical Engineering from RWTH Aachen University.
Wendy Hayes is expected to join our Board upon the completion of the separation and distribution. Ms. Hayes currently serves as a member of the board of directors of Apollomics Inc., TuSimple Holdings Inc., SciClone Pharmaceuticals (Holdings) Ltd, Gracell Biotechnologies Inc., iHuman Inc., Burning Rock Biotech Limited and TuanChe Limited. She previously served as a member of the board of directors of Xinyuan Real Estate Co., Ltd. in 2020 and Mogu Inc. in 2019. From 2013 to 2018, Ms. Hayes served as the Inspections Leader at the Public Company Accounting Oversight Board in the United States. She holds a Bachelor’s of International Finance from University of International Business and Economics and an executive Masters of Business Administration from Cheung Kong Graduate School of Business. Ms. Hayes was a Senior Fellow of Advanced Leadership Initiative at Harvard University from 2021 to 2022. Ms. Hayes is a certified public accountant in the United States (California) and China.
Chi Kin Max Hui is expected to join our Board upon the completion of the separation and distribution. Mr. Hui previously served as a director of our Board from 2017 to 2020 and has served a member of the JS Global Board since 2019. Mr. Hui intends to step down from the JS Global Board in connection with joining our Board. He has also served as a director of Nova Credit Limited since 2022, a managing director of CDH Investments since 2012 and an investment committee member of its private equity division since 2018. He also serves as a director of multiple private companies. Mr. Hui previously served as the Chief Executive Officer of CDH Investment Advisory Private Limited from 2013 to 2022. Mr. Hui holds a Bachelor of Science, Chemical Engineering from the University of California, Berkeley and a Master of Engineering from Princeton University.
Dennis Paul is expected to join our Board upon the completion of the separation and distribution. Mr. Paul has served as a Senior Advisor at Blackstone Inc. since 2018 and as the Founder and Managing Member of Thyra Global Management since 2012. Mr. Paul has served as a member of the board of directors of Rubicon Technology, Inc. since 2023. He also serves as a director of multiple private companies and non-profit organizations. Mr. Paul holds a Bachelor of Arts from Columbia University.
Timothy R. Warner is expected to join our Board upon the completion of the separation and distribution. Mr. Warner has served as a member of the JS Global Board since 2019 and he intends to step down from the JS Global Board in connection with joining our Board. He is currently the Vice Provost for Budget and Auxiliaries Management at Stanford University, a position held since 1994. He served as Co-President of the Board of Trustees of Western Reserve Academy in Hudson, Ohio from 2010 to 2021. Mr. Warner holds a Bachelor of Arts from Wesleyan University and a Master of Business Administration from the Graduate School of Business at Stanford University.
Director Overlap
Upon the completion of the separation and distribution, Mr. Wang will be appointed to serve as the Chairperson of our Board and Mr. Hui and Mr. Warner are expected to serve as directors on our Board. Mr. Wang is also the Chairman, Executive Director and Chief Executive Officer of JS Global. Mr. Hui and Mr. Warner currently serve on the JS Global Board; however, Mr. Hui and Mr. Warner intend to step down from the JS Global Board in connection with joining our Board.
Composition of Our Board
Upon the completion of the separation and distribution, our Board will be comprised of 7 members. Our New Memorandum and Articles of Association will provide that the number of directors of our Board
 
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shall be established from time to time by our Board, but shall not be less than two directors. Our New Memorandum and Articles of Association will provide that Mr. Wang, so long as he and/or his affiliates (as defined in our New Memorandum and Articles of Association) continue to remain beneficial owners (as such term is defined in the Exchange Act) of at least 30.0% of our share capital, shall have the right to appoint a director and that director will serve as Chairperson of our Board. Should no such director be appointed, the Chairperson of our Board shall be decided by a majority of the directors then in office. Mr. Wang will serve as the initial Chairperson of our Board. See “Description of Share Capital — Directors — Appointment, Disqualification and Removal of Directors.”
Director Independence
Our Board has undertaken a review of the independence of our directors and considered whether any director has a material relationship with us that could compromise that director’s ability to exercise independent judgment in carrying out that director’s responsibilities. Our Board has affirmatively determined that Mr. Feld, Ms. Hayes, Mr. Warner, Mr. Paul and Mr. Hui are each an “independent director,” as defined under the NYSE rules. In making these determinations, our Board considered the current and prior relationships that each director has with our company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our share capital by each director and the transactions involving them described in “Certain Relationships and Related Party Transactions.” In addition to determining whether each director satisfies the director independence requirements set forth in the NYSE listing requirements, in the case of members of the audit committee and compensation committee, our Board made an affirmative determination that such members also satisfy separate independence requirements and current standards imposed by the SEC and NYSE.
There are no family relationships among any of our directors or executive officers.
Controlled Company Exemption
Upon the completion of the separation and distribution, Mr. Wang, the Chairperson of our Board, will hold or have the ability to control approximately    % of the voting power of our outstanding share capital. As a result, upon the completion of the separation and distribution, we will be a “controlled company” as defined under the corporate governance rules of NYSE. As long as Mr. Wang continues to hold or has the ability to control a majority of the voting power of our outstanding shares, he will generally be able to control significant corporate activities, subject to applicable laws, including the composition of our Board and approval of significant corporate transactions. Mr. Wang’s controlling interest may discourage or prevent a change in control of our company that other holders of our ordinary shares may favor. We have currently elected not to avail ourselves of any “controlled company” exemptions. See “Risk Factors—Risks Related to Ownership of Our Ordinary Shares—We will be a “controlled company” within the meaning of the rules of NYSE and, as a result, will qualify for exemptions from certain corporate governance requirements. Although we do not intend to rely on these exemptions at this time, we may do so in the future and you may not have the same protections afforded to shareholders of companies that are subject to such requirements.”
Foreign Private Issuer Status
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
Committees of Our Board
Our Board will have an audit committee, a compensation committee and a nominating and corporate governance committee, each of which will have the composition and responsibilities described below.
 
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Audit Committee
Our audit committee will be responsible for, among other things:
•
appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm;
​
•
discussing with our independent registered public accounting firm their independence from management;
​
•
reviewing with our independent registered public accounting firm the scope and results of their audit;
​
•
approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;
​
•
overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the quarterly and annual financial statements that we file with the SEC;
​
•
overseeing our financial and accounting controls and compliance with legal and regulatory requirements;
​
•
reviewing our policies on risk assessment and risk management;
​
•
reviewing related person transactions; and
​
•
establishing procedures for the confidential, anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.
​
Upon the completion of the separation and distribution, our audit committee will consist of Ms. Hayes, Mr. Warner and Mr. Paul, with Ms. Hayes serving as chair. Rule 10A-3 under the Exchange Act and the NYSE rules require that our audit committee have at least one independent member upon the listing of our ordinary shares, have a majority of independent members within 90 days of the date of this prospectus and be composed entirely of independent members within one year of the date of this prospectus. Our Board has affirmatively determined that Ms. Hayes, Mr. Warner and Mr. Paul each meet the definition of “independent director” for purposes of serving on the audit committee under Rule 10A-3 under the Exchange Act and the NYSE rules. Each member of our audit committee also meets the financial literacy requirements of NYSE. In addition, our Board has determined that Ms. Hayes will qualify as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. Our Board will adopt a written charter for the audit committee, which will be available on our principal corporate website at www.sharkninja.com substantially concurrently with the completion of the separation and distribution. The information contained on, or that can be accessed through, our website is not a part of this prospectus; we have included this website address solely as an inactive textual reference.
Compensation Committee
Our compensation committee will be responsible for, among other things:
•
reviewing, modifying and approving our overall compensation strategy and policies;
​
•
reviewing and approving the terms of any employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers;
​
•
overseeing our compensation and employee benefit plans; and
​
•
appointing and overseeing any compensation consultants.
​
Upon the completion of the separation and distribution, our compensation committee will consist of Mr. Warner, Ms. Hayes and Mr. Feld, with Mr. Warner serving as chair. Our board has determined that Mr. Warner, Ms. Hayes and Mr. Feld each meet the definition of “independent director” for purposes of serving on the compensation committee under the NYSE rules. All members of our compensation committee are “non-employee directors” as defined in Rule 16b-3 under the Exchange Act. Our Board will adopt a written charter for the compensation committee, which will be available on our principal corporate website at www.sharkninja.com substantially concurrently with the completion of the separation and distribution.
 
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The information contained on, or that can be accessed through, our website is not a part of this prospectus; we have included this website address solely as an inactive textual reference.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee will be responsible for, among other things:
•
identifying individuals qualified to become members of our Board, consistent with criteria approved by our Board;
​
•
evaluating the overall effectiveness of our Board and its committees; and
​
•
developing and recommending to our Board a set of corporate governance principles, reviewing and assessing these principles and their application and recommending to our Board any changes to such principles.
​
Upon the completion of the separation and distribution, our nominating and corporate governance committee will consist of Mr. Hui, Mr. Feld and Mr. Paul, with Mr. Hui serving as chair. Our Board has determined that Mr. Hui, Mr. Feld and Mr. Paul each meet the definition of “independent director” for purposes of serving on the nominating and corporate governance committee under the NYSE rules. Our Board will adopt a written charter for the nominating and corporate governance committee, which will be available on our principal corporate website at www.sharkninja.com substantially concurrently with the completion of the separation and distribution. The information contained on, or that can be accessed through, our website is not a part of this prospectus; we have included this website address solely as an inactive textual reference.
Our Board may, from time to time, establish other committees.
Compensation Committee Interlocks and Insider Participation
None of the members of our compensation committee is or has been one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board or compensation committee.
Compensation of Directors and Executive Officers
During the year ended December 31, 2022, we paid an aggregate of approximately $64.6 million to our directors and executive officers, which includes annual salaries, bonuses, long term incentive compensation paid, vested restricted share units and forgiveness of amounts due under promissory notes issued to certain executives. For more information on the loan forgiveness, see “Certain Relationships and Related Party Transactions—Related Party Transactions with our Executive Officers—Recourse Promissory Notes.” We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
For so long as we qualify as a foreign private issuer, we will not be required to comply with the proxy rules applicable to U.S. domestic companies regarding disclosure of the compensation of certain executive officers on an individual basis. Pursuant to applicable Cayman Laws, we are not required to disclose compensation paid to our senior management on an individual basis and we have not otherwise publicly disclosed this information elsewhere.
Employment Agreements
We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a continuous term unless either we or the executive officer gives prior notice to terminate such employment. We may terminate employment for cause, at any time, for certain acts of the executive officer, such as conviction of a felony or gross negligence, willful misconduct or willful malfeasance in connection with the performance of his or her duties. We may also terminate an executive officer’s employment without cause upon advance written notice. The executive officer may resign at any time for any reason including good reason with advance written notice. The executive officers are entitled to a fixed salary and
 
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to participate in our equity incentive plans, if any, and other company benefits, each as determined by our Board or the compensation committee.
Equity Incentive Plan
Subject to the completion of the separation and distribution, we plan to adopt an equity incentive plan (the “Equity Incentive Plan”) to enhance our value by linking the personal interests of our directors, employees and consultants to those of our shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to our shareholders. The Equity Incentive Plan will be administered by the compensation committee of our Board (the “Committee”)
The Equity Incentive Plan will permit the grant of incentive share options, nonstatutory share options, share appreciation rights, restricted shares, restricted share units, performance awards and other awards; however, at this time we only intend to grant restricted share units under the Equity Incentive Plan. Each award of restricted share units will be granted pursuant to a form of award agreement that will contain such terms and conditions as the Committee deems appropriate. Other forms of awards may be granted in the future under the Equity Incentive Plan.
Subject to adjustment upon changes in our capitalization, the total number of our ordinary shares that will be reserved and made available for issuance under the Equity Incentive Plan will not exceed 10% of the total number of ordinary shares outstanding as of the distribution date; provided that such share reserve will, unless otherwise determined by our Board, automatically increase on January 1 of each year for 9 years commencing on January 1, 2025 and ending on (and including) January 1, 2033 in an amount equal to 0.6% of the total number of ordinary shares outstanding on December 31 of the preceding year.
The Committee may amend or terminate the Equity Incentive Plan at any time, except that our shareholders must approve an amendment if such approval is required in order to comply with the Code, applicable laws, or applicable stock exchange requirements. Unless terminated sooner by the Committee or extended with shareholder approval, the Equity Incentive Plan will terminate automatically upon the expiration of the tenth anniversary of its adoption date.
Employee Share Purchase Plan
Subject to the completion of the separation and distribution, we plan to adopt an employee share purchase plan (the “ESPP”) to provide our employees with an opportunity to purchase our ordinary shares through contributions in the form of payroll deductions. The ESPP will be administered by the Committee. The ESPP will permit two types of offerings: (1) an offering intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Code; and (2) an offering not intended to be tax qualified under Section 423 of the Code to facilitate participation for employees who are not eligible to benefit from favorable U.S. federal tax treatment and, to the extent applicable, to provide flexibility to comply with non-U.S. law and other considerations.
Subject to adjustment upon changes in our capitalization, the total number of our ordinary shares that will be reserved and made available for sale under the ESPP will not exceed 1% of the total number of ordinary shares outstanding as of the distribution date; provided that the share reserve under the ESPP will, unless otherwise etermined by our Board, automatically increase on January 1 of each year for 9 years commencing on January 1, 2025 and ending on (and including) January 1, 2033 in an amount equal to 0.15% of the total number of ordinary shares outstanding on December 31 of the preceding year.
The ESPP will provide for six-month offering periods during which we will grant rights to purchase our ordinary shares to eligible employees. The percentage of compensation designated by an eligible employee as payroll deductions for participation in an offering may not be more than 15% of his or her gross base compensation. Amounts contributed and accumulated by the participant will be used to purchase our ordinary shares at the end of each offering period. Unless otherwise determined by the Committee, the purchase price of the shares will be 85% of the lower of the fair market value of our ordinary shares on (i) the first trading day of the offering period or (ii) the last trading day of the offering period (and may not be lower than such amount with respect to the Section 423 component). A participant may withdraw all but not less than all the contributions credited to his or her account and not yet used to exercise his or her option
 
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under the ESPP at any time. Upon a participant’s ceasing to be an eligible employee, for any reason, he or she will be deemed to have elected to withdraw from the ESPP.
Our Board or the Committee, in its sole discretion, may amend, suspend or terminate the ESPP, or any part thereof, at any time and for any reason. However, shareholder approval shall be required to amend the ESPP to increase the aggregate number or change the class of shares that may be sold pursuant to rights under the ESPP (other than an adjustment as provided above) or as may otherwise be required under Section 423 of the Code or as may otherwise be required by applicable stock exchange requirements.
Cash Incentive Plans
In addition to the Equity Incentive Plan and the ESPP, we also plan to adopt certain cash-based plans. One such plan is a long-term incentive plan (the “LTIP”) that will be available to our senior leadership. The LTIP will be maintained to award senior team members with cash-based installment payments upon the achievement of certain specified performance targets. Another such plan is our global annual bonus plan (the “Bonus Plan”), designed to provide an effective means to motivate and compensate eligible associates, on an annual basis, based on the achievement of business and individual performance objectives during each fiscal year. The Bonus Plan is intended to be our primary vehicle for the granting of bonuses although we may permit the grant of bonuses outside this program from time to time in our sole discretion. Lastly, we may adopt one or more sales incentive plans (each, a “SIP”) in the United States, European Union and United Kingdom regions. Each SIP will provide for cash commission opportunities with respect to sales effectuated by eligible employees.
Indemnification and Insurance
We will obtain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers. Our New Memorandum and Articles of Association will provide, to the fullest extent permissible under Cayman Law, that our directors and officers shall be indemnified against any liability, action, proceeding, claim, demand, costs damages or expenses, including legal expenses, incurred in their capacities as such unless such liability (if any) arises from actual fraud, willful neglect or willful default, as determined by a court of competent jurisdiction in a final non-appealable order. In addition, prior to the completion of the separation and distribution, we expect to enter into indemnification agreements with all of our directors and executive officers that provide them and certain of their affiliated parties with additional indemnification and related rights. See “Description of Share Capital—Limitation on Liability and Indemnification.”
Code of Business Conduct and Ethics
Prior to the completion of the separation and distribution, we will adopt a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A copy of the code will be posted on our principal corporate website at www.sharkninja.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus; we have included this website address solely as an inactive textual reference. In addition, we intend to post on our website all disclosures that are required by law or the rules of NYSE concerning any amendments to, or waivers from, any provision of the code.
 
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In addition to the director and executive officer compensation arrangements discussed above in “Management,” this section describes each transaction or series of related transactions since January 1, 2020, and each currently proposed transaction in which:
•
we are, were or will be a participant;
​
•
the amount involved exceeded or will exceed $120,000; and
​
•
any of our directors, executive officers or beneficial owners of more than 5% of any class of our share capital, or any members of the immediate family of or any entity affiliated with any such person, had or will have a direct or indirect material interest.
​
Related Party Transactions with JS Global
Prior to the separation, we have operated as part of JS Global’s broader corporate organization rather than as a stand-alone public company and we have engaged in various transactions with JS Global entities. Following the separation, we intend to continue certain relationships with JS Global entities. Our arrangements with JS Global entities and/or other related persons or entities as of the separation are described below.
Joint Venture
In 2018, we entered into a joint venture agreement with Joyoung for the purpose of distributing our products within the Chinese market. We owned 49.0% of the joint venture and Joyoung owned 51.0%. In 2022, we agreed to transfer our equity interest in the joint venture to Joyoung for zero consideration. For the years ended December 31, 2020, 2021 and 2022, we made equity contributions of $3.5 million, $3.8 million and $0, respectively, to this joint venture entity. Additionally, we sold $20.5 million, $12.1 million and $1.5 million of finished goods to this entity during the years ended December 31, 2020, 2021 and 2022, respectively, and $0.8 million during the three months ended March 31, 2023.
Loans, Contributions and Dividends
On June 11, 2020, we received a contribution from JS Global of $80.0 million to facilitate the refinancing of our Facilities Agreement. On March 18, 2021, we declared and paid a special cash dividend of $42.0 million to JS Global. On May 26, 2022, we declared and paid a special cash dividend of $83.5 million to JS Global. On May 26, 2022, we also entered into a loan agreement and transferred a total of $49.3 million to JS Global in 2022, on which $0.8 million of interest had accrued through December 31, 2022. On February 15, 2023, we declared and paid a special cash dividend of $15.5 million to JS Global. On February 27, 2023, we declared and paid a special dividend of $94.9 million to JS Global, which consisted of a cash dividend of $44.5 million and amounts receivable of $50.4 million under an intercompany note in satisfaction of such note. In connection with the separation, we expect to declare and pay a special cash dividend of $375.0 million to JS Global for the repayment by JS Global of its portion of the outstanding debt under the Facilities Agreement.
Recharge for Share-Based Compensation
For the year ended December 31, 2022 and the three months ended March 31, 2023, we reimbursed JS Global $18.7 million and $0.8 million, respectively, million for expenses related to restricted stock units of JS Global that were issued by JS Global to our employees pursuant to an equity compensation plan.
Distribution and License Agreements
We have entered into a series of distribution and license agreements with JS Global entities. The purpose of these agreements has been to facilitate the distribution by JS Global entities of our products to certain international markets. For the years ended December 31, 2020, 2021 and 2022, we paid $4.3 million, $0 and $5.9 million, respectively, and for the three months ended March 31, 2023, we paid $0, for market support payments to JS Global entities under these agreements. In addition, for the years ended December 31, 2020,
 
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2021 and 2022, JS Global entities purchased $20.5 million, $1.4 million and $0.2 million, respectively, and for the three months ended March 31, 2023, JS Global entities purchased $0, of finished goods from us to distribute in those international markets.
In connection with the separation, to replace our existing agreements described above, we intend to enter into a brand license agreement with JS Global entities, pursuant to which we will grant to JS Global entities the non-exclusive rights to obtain, produce and source, and the exclusive rights to distribute and sell, our brands of products in certain international markets (and, in connection with the foregoing, each of us and JS Global entities will grant the other certain licenses in certain intellectual property related to products sold under our brands).
In addition, since November 2017, we have been party to a distribution agreement with Mann & Noble Pty. Ltd. (“M&N”) to facilitate the distribution of our products to certain markets in the Asia Pacific Region. On April 11, 2023, JS Global purchased M&N. We intend to continue to rely on this distribution agreement with M&N until the separation.
Supplier Agreements
We have historically relied on JS Global entities to source finished goods on our behalf and to provide certain procurement and quality control services to us. For the years ended December 31, 2020, 2021 and 2022, we purchased $188.5 million, $1,381.8 million and $1,444.8 million, respectively, of finished goods from JS Global entities. For the three months ended March 31, 2023, we purchased $298.8 million of finished goods from JS Global entities. In connection with these agreements, we have incurred costs related to certain procurement and quality control activities, which were reimbursed by JS Global entities. For the years ended December 31, 2020, 2021 and 2022, JS Global entities paid us $0, $23.0 million and $31.7 million, respectively, for services rendered under these agreements. For the three months ended March 31, 2023, JS Global entities paid us $7.6 million for services rendered under these agreements.
In connection with the separation, we intend to continue to rely on JS Global for certain supply chain services, including supplier management and supply chain strategy, and intend to enter into an agreement with JS Global with respect to such services.
In addition, we are party to certain supplier agreements with entities that are wholly owned by Joyoung. For the years ended December 31, 2020, 2021 and 2022, we paid $108.3 million, $46.5 thousand and $0, respectively, to these entities for finished goods inventory. For the three months ended March 31, 2023, we paid $0 to these entities for finished goods inventory. In connection with the separation, we intend to continue to rely on Joyoung for certain supply chain services, including product procurement, and intend to enter into an agreement with Joyoung with respect to such services.
Furthermore, we entered into a supplier agreement with Hangzhou Lexiu Electronic Technology Co., LTD (“Lexiu”) in 2022. The immediate family of Mr. Wang indirectly owns 8.9% of Lexiu and Joyoung owns 1.5% of Lexiu. For the year ended December 31, 2022, we paid $17.6 million, and for the three months ended March 31, 2023, we paid $20.6 million, to Lexiu for finished goods inventory. In connection with the separation and distribution, we intend to continue to rely on Lexiu as a supplier.
Research and Development Agreements
We have historically utilized Joyoung and its wholly-owned subsidiaries for research and development services. For the years ended December 31, 2020, 2021 and 2022, we paid $0, $4.0 million and $3.6 million, respectively, and for the three months ended March 31, 2023, we paid $0.9 million, to these entities for these services. We expect to remain party to these agreements following the separation.
In connection with the separation, we also intend to enter into an agreement with JS Global to provide certain research and development, and related product management, services to JS Global entities.
Separation and Distribution Agreement
We intend to enter into a Separation and Distribution Agreement with JS Global. The Separation and Distribution Agreement will set forth our agreements with JS Global regarding the principal actions to be
 
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taken in connection with the separation and the distribution. It will also set forth other agreements that govern certain aspects of our relationship with JS Global following the separation.
Transfer of Assets and Assumption of Liabilities
The Separation and Distribution Agreement will identify assets to be transferred, liabilities to be assumed and contracts to be assigned to each of JS Global and us as part of the separation, and will describe when and how these transfers, assumptions and assignments will occur. Some of these transfers, assumptions and assignments may occur prior to the parties’ entering into the Separation and Distribution Agreement. The Separation and Distribution Agreement will provide for those transfers of assets and assumptions of liabilities that are necessary in connection with the separation so that we and JS Global retain the assets necessary to operate our respective businesses and retain or assume the liabilities allocated in accordance with the separation. The Separation and Distribution Agreement will also provide for the settlement or extinguishment of certain liabilities and other obligations between us and JS Global. In particular, the Separation and Distribution Agreement will provide that, subject to the terms and conditions contained in the Separation and Distribution Agreement:
•
“SharkNinja Assets” ​(as defined in the Separation and Distribution Agreement), including, but not limited to, the equity interests of our subsidiaries, assets reflected on our pro forma balance sheet and assets primarily (or in the case of intellectual property, exclusively) relating to the SharkNinja Business, will be retained by or transferred to us or one of our subsidiaries, except as set forth in the Separation and Distribution Agreement or one of the other agreements described herein;
​
•
“SharkNinja Liabilities” ​(as defined in the Separation and Distribution Agreement), including, but not limited to, the following will be retained by or transferred to us or one of our subsidiaries:
​
•
all of the liabilities (whether accrued, contingent or otherwise, and subject to certain exceptions) to the extent related to, arising out of or resulting from the SharkNinja Business;
​
•
liabilities (whether accrued, contingent or otherwise) reflected on our pro forma balance sheet;
​
•
liabilities (whether accrued, contingent or otherwise) relating to, arising out of, or resulting from, any infringement, misappropriation or other violation of any intellectual property of any other person related to the conduct of the SharkNinja Business;
​
•
any product liability claims or other claims of third parties to the extent relating to, arising out of or resulting from any product developed, manufactured, marketed, distributed, leased or sold by the SharkNinja Business;
​
•
liabilities relating to, arising out of, or resulting from any indebtedness of any subsidiary of ours or any indebtedness secured exclusively by any of SharkNinja Assets;
​
•
liabilities (whether accrued, contingent or otherwise) relating to, arising out of or resulting from any form, registration statement, schedule or similar disclosure document filed or furnished with the SEC, to the extent the liability arising therefrom related to matters related to the SharkNinja Business; and
​
•
all other liabilities (whether accrued, contingent or otherwise) relating to, arising out of or resulting from disclosure documents filed or furnished with the SEC that are related to the separation (including the registration statement of which this prospectus forms a part).
​
All assets and liabilities (whether accrued, contingent or otherwise) of JS Global will be retained by or transferred to JS Global or one of its subsidiaries (other than us or one of our subsidiaries), except as set forth in the Separation and Distribution Agreement or one of the other agreements described below and except for other limited exceptions that will result in us retaining or assuming certain other specified liabilities.
Except as expressly set forth in the Separation and Distribution Agreement or any ancillary agreement, all assets will be transferred on an “as is,” “where is” basis and the respective transferees will bear the economic and legal risks that any conveyance will prove to be insufficient to vest in the transferee good title, free and clear of any security interest, that any necessary consents or governmental approvals are not obtained and that any requirements of laws or judgments are not complied with. In general, neither we nor JS Global will make
 
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any representations or warranties regarding any assets or liabilities transferred or assumed, any consents or approvals that may be required in connection with such transfers or assumptions or any other matters.
Certain of the liabilities and obligations to be assumed by one party or for which one party will have an indemnification obligation under the Separation and Distribution Agreement and any ancillary agreements are, and following the separation may continue to be, the legal or contractual liabilities or obligations of another party. Each such party that continues to be subject to such legal or contractual liability or obligation will rely on the applicable party that assumed the liability or obligation or the applicable party that undertook an indemnification obligation with respect to the liability or obligation, as applicable, under the Separation and Distribution Agreement, to satisfy the performance and payment obligations or indemnification obligations with respect to such legal or contractual liability or obligation.
Further Assurances; Separation of Guarantees
To the extent that any transfers of assets or assumptions of liabilities contemplated by the Separation and Distribution Agreement have not been consummated on or prior to the date of the distribution, the parties will agree to cooperate with each other to effect such transfers or assumptions while holding such assets or liabilities for the benefit of the appropriate party so that all the benefits and burdens relating to such asset or liability inure to the party entitled to receive or assume such asset or liability. Each party will agree to use commercially reasonable efforts to take or to cause to be taken all actions, and to do, or to cause to be done, all things reasonably necessary under applicable law or contractual obligations to consummate and make effective the transactions contemplated by the Separation and Distribution Agreement and other transaction agreements. Additionally, we and JS Global will use commercially reasonable efforts to remove us and our subsidiaries as a guarantor of liabilities retained by JS Global and its subsidiaries and to remove JS Global and its subsidiaries as a guarantor of liabilities to be assumed by us.
Treatment of Certain Contracts
Certain contracts are to be assigned, novated, amended or cloned to facilitate the separation of our business from JS Global. If such contracts may not be assigned, novated, amended or cloned, the parties are required to take reasonable actions to cause the appropriate party to receive the benefit of the contract for a specified period of time after the separation is complete.
Release of Claims and Indemnification
Except as otherwise provided in the Separation and Distribution Agreement or any ancillary agreement, each party will release and forever discharge the other party and its subsidiaries and affiliates from all liabilities existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the separation. The releases will not extend to obligations or liabilities under any agreements between the parties that remain in effect following the separation pursuant to the Separation and Distribution Agreement or any ancillary agreement. These releases will be subject to certain exceptions set forth in the Separation and Distribution Agreement.
The Separation and Distribution Agreement will provide for cross-indemnities that, except as otherwise provided in the Separation and Distribution Agreement, are principally designed to place financial responsibility for the obligations and liabilities allocated to us under the Separation and Distribution Agreement with us and financial responsibility for the obligations and liabilities allocated to JS Global under the Separation and Distribution Agreement. Specifically, each party will indemnify, defend and hold harmless the other party, its affiliates and subsidiaries and each of its officers, directors, employees and agents for any losses arising out of or due to:
•
the liabilities or alleged liabilities the indemnifying party assumed or retained pursuant to the Separation and Distribution Agreement;
​
•
the assets the indemnifying party assumed or retained pursuant the Separation and Distribution Agreement;
​
•
the operation of the indemnifying party’s business, whether prior to, at, or after the distribution; and
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•
any breach by the indemnifying party of any provision of the Separation and Distribution Agreement or any ancillary agreement unless such other agreement expressly provides for separate indemnification therein.
​
Each party’s aforementioned indemnification obligations will be uncapped; provided that the amount of each party’s indemnification obligations will be subject to reduction by any insurance proceeds (net of premium increases) received by the party being indemnified. The Separation and Distribution Agreement will also specify procedures with respect to claims subject to indemnification and related matters.
Insurance
Following the separation, we will continue to maintain at our own cost our own insurance coverage.
Additional Covenants
We and JS Global have both agreed to comply with the following additional covenants until the date on which the distribution occurs (except with respect to the third covenant listed below, which the parties have agreed to comply with until the expiration of the term of the Brand License Agreement):
•
to the extent that either party is a party to any contracts that provide that certain actions or inactions of its affiliates may result in our being in breach of such contracts, such party may not take any actions that reasonably could result in it being in breach of such contracts;
​
•
without the other party’s prior written consent, no member of a party shall enter into any contract that binds or imposes any liabilities on any member (or any director, officer or employee of any member) of its group; and
​
•
each party is required to take certain actions to comply with anti-corruption law.
​
Dispute Resolution
If a dispute arises between us and JS Global under the Separation and Distribution Agreement, the counsels of the parties and such other representatives as the parties may designate will negotiate to resolve any disputes for a reasonable period of time. If the parties are unable to resolve the dispute in this manner then, unless otherwise agreed by the parties and except as otherwise set forth in the Separation and Distribution Agreement, the dispute will be resolved through binding confidential arbitration.
Term/Termination
The Separation and Distribution Agreement may be terminated at any time prior to the distribution by JS Global in its sole discretion, and at any time after the distribution by an agreement in writing signed by us and JS Global.
Treatment of Intercompany Loans and Advances
Upon the completion of the separation, all loans and advances between JS Global or any subsidiary of JS Global (other than us and our subsidiaries), on the one hand, and us or any of our subsidiaries, on the other hand, will be terminated other than certain loans and advances that are scheduled to the Separation and Distribution Agreement to remain outstanding following the separation.
Other Matters Governed by the Separation and Distribution Agreement
Other matters governed by the Separation and Distribution Agreement include, but are not limited to, confidentiality and access to and provision of records and treatment of outstanding guarantees and similar credit support.
Conditions
The Separation and Distribution Agreement will also provide that the following conditions must be satisfied or waived by JS Global, in its sole and absolute discretion after consulting in good faith with us and after reasonably considering our views (which we shall promptly provide in good faith), before the separation can occur:
•
the JS Global Board shall have authorized and approved the distribution and not withdrawn such authorization and approval, and shall have declared the dividend of our ordinary shares to JS Global Shareholders;
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•
JS Global shall have obtained the approval of the distribution by its shareholders;
​
•
the Separation and Distribution Agreement and the ancillary agreements contemplated by the Separation and Distribution Agreement shall have been executed by each party to those agreements;
​
•
the internal reorganization contemplated by the Separation and Distribution Agreement shall have been completed;
​
•
the SEC shall have declared effective our registration statement on Form F-1, of which this prospectus forms a part, and no stop order suspending the effectiveness of our registration statement shall be in effect and no proceedings for that purpose shall be pending before, or threatened by, the SEC;
​
•
no order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition preventing consummation of the distribution shall be in effect, and no other event outside the control of JS Global shall have occurred or failed to occur that prevents the consummation of the distribution;
​
•
NYSE shall have approved our listing application, subject to official notice of issuance; and
​
•
all necessary actions and filings with regard to applicable state securities or “blue sky” laws shall have been taken.
​
The foregoing description of the Separation and Distribution Agreement is subject to and qualified in its entirety by reference to the full text of the Separation and Distribution Agreement, the form of which is filed as Exhibit 10.4 to this registration statement.
Transition Services Agreement
In connection with the separation, we intend to enter into a transition services agreement with JS Global pursuant to which we will provide certain transition services to JS Global, and (if needed) JS Global will provide certain transition services to us.
Employee Matters Agreement
In connection with the separation, we intend to enter into an employee matters agreement with JS Global that will govern our and JS Global’s respective rights, responsibilities and obligations with respect to the employees and other service providers of each company, and generally will allocate assets, liabilities and responsibilities relating to employees, employment matters and employee compensation and benefit plans and programs.
Other Related Party Transactions
Tax Payments
JS Global acquired us on September 29, 2017 from New Euro Pro Holdings LLC (“NEPH”), an entity that is 14.1% owned by Mr. Barrocas. As part of the terms of that acquisition, any tax refunds that we received related to periods prior to the acquisition date were owed by us to NEPH and any tax liabilities that we incurred related to periods prior to the acquisition date were owed by NEPH to us. For the year ended December 31, 2020, we paid $6.0 million to NEPH, of which Mr. Barrocas received $0.8 million.
Recourse Promissory Notes
On May 29, 2020, we issued recourse promissory notes (the “2020 Employee Notes”) to certain employees, including certain of our executive officers, to satisfy their individual tax withholding requirements in connection with the vesting of restricted stock units under the JS Global Lifestyle Company Limited Restricted Share Unit Plan (the “JS Global RSU Plan”). Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich were issued $1.0 million, $414.5 thousand, and $74.1 thousand of 2020 Employee Notes, respectively. The 2020 Employee Notes bore an interest rate of 0.25%, which accrued and were due at maturity in March 2021. Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich repaid the full amount of the 2020 Employee Notes issued to each of them, including accrued interest of $2.0 thousand, $0.8 thousand and $0.1 thousand, respectively.
 
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On April 29, 2021, we issued recourse promissory notes (the “2021 Employee Notes”) to certain employees, including certain of our executive officers, to satisfy their individual tax withholding requirements in connection with the vesting of restricted stock units under the JS Global RSU Plan. Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich were issued $13.2 million, $1.8 million and $420.6 thousand of 2021 Employee Notes, respectively. On March 27, 2022 and April 12, 2022, we amended the terms and conditions of the 2021 Employee Notes to certain employees, including Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich. As amended, the 2021 Employee Notes to Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich bore an interest rate of 0.12% to 1.26%, which accrued and were due at maturity, ranging from April 29, 2024 to March 15, 2025. As of December 31, 2022, we have forgiven $4.4 million, $611.1 thousand and $140.7 thousand of the 2021 Employee Notes to issued Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich, including $15.9 thousand, $2.2 thousand and $0.5 thousand in interest, respectively. In March 2023, Mr. Shah and Mr. Lopez-Baldrich repaid the remaining amount of the 2021 Employee Notes issued to each of them, including accrued interest of $12.7 thousand and $3.2 thousand, respectively. In May 2023, Mr. Barrocas repaid the remaining amount of his 2021 Employee Note, including accrued interest of $10.7 thousand.
In May 2022, we issued recourse promissory notes (the “2022 Employee Notes”) to certain employees, including certain of our executive officers, to satisfy their individual tax withholding requirements in connection with the vesting of restricted stock units under the JS Global RSU Plan. Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich were issued $4.8 million, $639.3 thousand and $185.1 thousand of 2022 Employee Notes, respectively. The 2022 Employee Notes bore an interest rate of 1.85%, which accrued and were due at maturity in March 2023. In March 2023, Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich repaid the full amount of the 2022 Employee Notes issued to each of them, including accrued interest of $75.5 thousand, $9.9 thousand and $2.9 thousand, respectively.
Share Buybacks
Certain JS Global Shareholders cannot receive the distribution of our ordinary shares due to practical limitations and restrictions (the “Non-Qualifying Shareholders”), specifically (i) Mainland China southbound trading investors holding JS Global ordinary shares through either the Shanghai-Hong Kong Stock Connect or the Shenzhen-Hong Kong Stock Connect, who together held approximately 4.7% of the total share capital of JS Global as of June 23, 2023, and (ii) certain overseas JS Global Shareholders residing in jurisdictions where it would be illegal for such JS Global Shareholders to receive our ordinary shares due to restrictions under the relevant overseas securities laws and regulations. The JS Global Board will direct the distribution of our ordinary shares that would otherwise be directly distributed to the Non-Qualifying Shareholders (the “Non-Qualifying Shareholders Shares”) to a purpose trust to be established specifically to facilitate the sale of the Non-Qualifying Shareholders Shares (the “Purpose Trust”). The trustee of the Purpose Trust (the “Trustee”) will enter into a sell-down program with one or more independent securities firms in Hong Kong (the “Qualified Brokers”) who will cooperate with their licensed partners in the U.S. to sell the Non-Qualifying Company Shareholders Shares on the open market, on a best-efforts basis, at or close to the intraday volume-weighted average price for any trading day within 90 days of the separation and distribution (the “Trading Period”). Given that the Non-Qualifying Shareholders Shares will be sold on a best-efforts basis during the Trading Period, there may be unsold Non-Qualifying Shareholders Shares at the end of the Trading Period (such shares, the “Remaining Shares”). In the event that there are Remaining Shares, we will repurchase the Remaining Shares from the Purpose Trust within 10 business days after the Trading Period at a price equal to the average price for the sell-down of the Non-Qualifying Shareholders Shares sold during the Trading Period (before the deduction of relevant fees charged by the Qualified Brokers and their licensed partners, fees charged by the Trustee and fees charged for the setup of the Purpose Trust) multiplied by the number of Remaining Shares. The Purpose Trust will then provide to the Non-Qualifying Shareholders the net sale proceeds received from (i) the Qualified Brokers during the Trading Period and (ii) the share repurchase by us, if applicable.
Additionally, after the separation and distribution, we intend to repurchase up to    % of our outstanding share capital from certain of our current and past employees, including Mr. Barrocas, Mr. Shah and Mr. Lopez-Baldrich, in order to permit such individuals to pay taxes owed in connection with the separation and distribution. We have not determined the expected timing or purchase price at this time.
 
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Indemnification Agreements
Our New Memorandum and Articles of Association will provide, to the fullest extent permissible under Cayman Law, that our directors and officers shall be indemnified against any liability, action, proceeding, claim, demand, costs damages or expenses, including legal expenses, incurred in their capacities as such unless such liability (if any) arises from actual fraud, willful neglect or willful default, as determined by a court of competent jurisdiction in a final non-appealable order. In addition, prior to the completion of the separation and distribution, we will enter into indemnification agreements with each of our directors and executive officers. See “Description of Share Capital—Limitation on Liability and Indemnification.”
Our Policy Regarding Related Party Transactions
Our Board recognizes the fact that transactions with related persons present a heightened risk of conflicts of interest (or the perception thereof). Prior to the completion of the separation and distribution, our Board will adopt a written policy on transactions with related persons that is in conformity with the requirements for companies having ordinary shares that are listed on NYSE. This policy will cover any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, that meets the disclosure requirements set forth in Item 404 of Regulation S-K under the Securities Act, in which we were or are to be a participant and in which a “related person,” as defined in Item 404 of Regulation S-K, had, has or will have a direct or indirect material interest.
 
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PRINCIPAL SHAREHOLDERS
All of our outstanding ordinary shares are currently owned by JS Global. After the separation and distribution, JS Global will not own any of our ordinary shares. The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of       , 2023, after giving effect to the separation and distribution, by:
•
each person or group of affiliated persons known by us to own beneficially more than 5% of our ordinary shares;
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•
each of our directors and director nominees;
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•
each of our executive officers; and
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•
all of our directors, director nominees and executive officers as a group.
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The amounts and percentages of our ordinary shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities and such information is not necessarily indicative of beneficial ownership for any other purpose. Under SEC rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power over such security, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are not deemed to be outstanding for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
We have based percentage ownership of our ordinary shares on       ordinary shares outstanding as of            , 2023.
Unless otherwise indicated, the business address of each of our directors, executive officers and principal shareholders listed below is c/o SharkNinja, Inc., 89 A Street, Needham, MA 02494.
Name of Beneficial Owner
​ ​
Number of
Ordinary Shares
Beneficially Owned
​ ​
Percentage of
Ordinary
Shares
​
Directors, Director Nominees and Executive Officers ​ ​ ​ ​ ​ ​ ​
Mark Barrocas(1)
​ ​ ​ ​ ​ ​ ​
Larry Flynn
​ ​ ​ ​ ​ ​ ​
Pedro J. Lopez-Baldrich(2)
​ ​ ​ ​ ​ ​ ​
Neil Shah(3)
​ ​ ​ ​ ​ ​ ​
Xuning Wang(4)
​ ​ ​ ​ ​ ​ ​
Peter Feld
​ ​ ​ ​ ​ ​ ​
Wendy Hayes
​ ​ ​ ​ ​ ​ ​
Chi Kin Max Hui(5)
​ ​ ​ ​ ​ ​ ​
Dennis Paul
​ ​ ​ ​ ​ ​ ​
Timothy R. Warner
​ ​ ​ ​ ​ ​ ​
All directors, director nominees and executive officers as a group (10 persons) ​ ​ ​ ​ ​ ​ ​
5% Shareholders ​ ​ ​ ​ ​ ​ ​
Entities affiliated with CDH(6)​
​ ​ ​ ​ ​
​
​
*
Denotes less than 1.0% of beneficial ownership.
​
(1)
Consists of      ordinary shares held by Mr. Barrocas.
​
(2)
Consists of      ordinary shares held by Mr. Lopez-Baldrich.
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(3)
Consists of (i)     ordinary shares held of record by PR2, LLC, which is managed by Mr. Shah, and (ii)      ordinary shares held directly by Mr. Shah. Mr. Shah has sole voting and dispositive power over the shares held by PR2, LLC.
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(4)
Consists of (i)      ordinary shares held of record by JS Holding, (ii)       ordinary shares held of record by Sol Omnibus and (iii)     ordinary shares held by Mr. Wang. The general partner of JS Holding is ultimately controlled by Mr. Wang. Mr. Wang also ultimately controls Sol Omnibus.
​
(5)
Mr. Hui disclaims all beneficial ownership over the shares held by entities affiliated with CDH for the purposes of Section 13(d) and 13(g) of the Exchange Act, except to the extent he has a pecuniary interest therein. See footnote (6).
​
(6)
Consists of (i)       ordinary shares held of record by Easy Home Limited and (ii)       ordinary shares held of record by Comfort HomeLimited. The voting and dispositive power of the ordinary shares held by Easy Home Limited and Comfort Home Limited is exercised by the investment committee of CDH V Holdings Company Limited, which consists of Shangzhi Wu, Shuge Jiao and Xinlai Liu. Both Easy Home Limited and Comfort Home Limited are wholly owned by CDH FUND V, L.P. , a private equity fund managed by CDH V Holdings Company Limited. The address of the foregoing CDH entities is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Mr. Hui disclaims ownership of all such shares for the purposes of Sections 13(d) and 13(g) of the Exchange Act except to the extent that he has a pecuniary interest therein.
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DESCRIPTION OF SHARE CAPITAL
General
Our affairs are governed principally by: (i) our New Memorandum and Articles of Association, (ii) the Companies Act and (iii) Cayman Law. As provided in our New Memorandum and Articles of Association, subject to Cayman Law, we have full capacity to carry on or undertake any business or activity, do any act or enter into any transaction, and, for such purposes, full rights, powers and privileges.
The following description summarizes certain important terms of our share capital and our New Memorandum and Articles of Association and highlights certain differences in corporate law in the Cayman Islands and Delaware.
We expect that our New Memorandum and Articles of Association will become effective immediately prior to the completion of the separation and distribution, and this description summarizes the provisions that are expected to be included in such documents. Because this is only a summary, it does not contain all the information that may be important to you. For a complete description of the matters set forth in this section, you should refer to our New Memorandum and Articles of Association, which are included as exhibits to the registration statement of which this prospectus forms a part, and to the applicable provisions of corporate law in the Cayman Islands and Delaware.
Upon the completion of the separation and distribution, after giving effect to our New Memorandum and Articles of Association, our authorized share capital will consist of:
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1,000,000,000 ordinary shares, par value $0.0001 per share; and
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100,000,000 preferred shares, par value $0.0001 per share.
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Ordinary Shares
Voting Rights
Holders of our ordinary shares are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Generally, all matters to be voted on by shareholders must be approved by either (i) an ordinary resolution, which requires the affirmative vote of at least a majority of the votes entitled to be cast by all holders of ordinary shares present at a general meeting in person or represented by proxy, or (ii) a special resolution, which requires the affirmative vote of at least two thirds of the votes entitled to be cast by all holders of ordinary shares present at a general meeting in person or represented by proxy.
Dividends
Subject to preferences that may apply to any ordinary shares outstanding at the time, the holders of our ordinary shares are entitled to receive dividends as may be declared from time to time at the discretion of our Board out of lawfully available funds. See “Dividend Policy” for additional information.
No Preemptive or Similar Rights
Holders of our ordinary shares do not have preemptive, subscription or redemption rights. There will be no redemption or sinking fund provisions applicable to our ordinary shares.
Fully Paid and Non-Assessable
All of the outstanding ordinary shares are fully paid and non-assessable.
Preferred Shares
Under the terms of our New Memorandum and Articles of Association, our Board will have the authority, without shareholder approval except as required by the listing standards of NYSE or applicable law, to issue preferred shares in one or more series. Our Board has the discretion to determine the rights,
 
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preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred shares. The rights with respect to a series of preferred shares may be greater than the rights attached to our ordinary shares. It is not possible to state the actual effect of the issuance of any preferred shares on the rights of holders of our ordinary shares until our Board determines the specific rights attached to any preferred shares so issued. The effect of issuing preferred shares could include, among other things, one or more of the following:
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restricting dividends in respect of the ordinary shares;
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diluting the voting power of the ordinary shares or providing that holders of preferred shares have the right to vote on matters as a class;
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impairing the liquidation rights of the ordinary shares; or
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delaying or preventing a change of control of our company.
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The purpose of authorizing our Board to issue preferred shares and determine the rights and preferences is to eliminate delays associated with a shareholder vote on specific issuances. The issuance of preferred shares could adversely affect the voting power of holders of our ordinary shares and the likelihood that such holders will receive dividend payments and payments upon liquidation. The issuance of preferred shares, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting shares.
Our New Memorandum and Articles of Association
Amendment of Governing Documents
As permitted by Cayman Law, our New Memorandum and Articles of Association may only be amended by a special resolution of the shareholders (requiring the affirmative vote of at least two thirds of the shareholders present in person or by proxy at a general meeting where there is a quorum).
General Meetings and Shareholder Proposals
As a Cayman Islands exempted company, we are not obliged by the Companies Act to call annual general meetings; however, the New Memorandum and Articles of Association will provide that in each year we will hold an annual general meeting of shareholders, at a time determined by our Board, provided that our Board has the discretion whether or not to hold an annual general meeting in the year of the completion of the separation and distribution. The agenda for an annual general meeting of shareholders will only include such items as have been included therein by our Board or Chairperson, or properly brought by a shareholder in accordance with our New Memorandum and Articles of Association.
Also, we may, but are not required to (unless required by Cayman Law), hold other extraordinary general meetings during the year.
An extraordinary general meeting may be called by our Board or any other person authorized to do so in the governing documents. The Companies Act provides shareholders with limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal before a general meeting, subject to a company’s articles of association. Our New Memorandum and Articles of Association will provide for the ability of shareholders to nominate candidates for election as directors under certain conditions (as described below), and will allow shareholders to bring business before an annual general meeting where the procedure provided in our New Memorandum and Articles of Association is complied with. Our New Memorandum and Articles of Association will provide that the shareholders have no right to requisition an extraordinary general meeting.
Cumulative Voting
Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled
 
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on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under Cayman Law, our New Memorandum and Articles of Association will not provide for cumulative voting.
Dissolution; Winding Up
Under Cayman Law, a company may be wound up by either an order of the Cayman Courts or by a special resolution of its shareholders or, if the company is unable to pay its debts as they fall due, by an ordinary resolution (which requires the affirmative vote of at least a majority of shareholders present in person or by proxy at a general meeting) of its shareholders. Cayman Courts have authority to order winding up in a number of specified circumstances, including where it is, in the opinion of the court, just and equitable to do so.
Our New Memorandum and Articles of Association will provide that if we are wound up, the liquidator may distribute the surplus assets available for distribution amongst our shareholders in proportion to the par value of the ordinary shares held by them at the commencement of the winding up, subject to a deduction from those ordinary shares in respect of which there are monies due, of all monies payable to us for unpaid calls or otherwise.
Rights of Non-Resident or Foreign Shareholders
There are no limitations imposed by our New Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our New Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.
Directors’ Power to Issue Shares
Subject to applicable law, our Board has general and unconditional authority to issue or allot shares or grant options over shares, issue rights, options, warrants or convertible securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of shares or other securities in the company or otherwise deal with or dispose of any unissued shares in our capital without the approval of our shareholders (whether forming part of the original or any increased share capital), either at a premium or at par, with or without preferred, deferred or other rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, on such terms and conditions, and at such times as the directors may decide, but so that no share shall be issued at a discount, except in accordance with the provisions of the Companies Act. In accordance with our New Memorandum and Articles of Association, we shall not issue bearer shares.
Inspection of Books and Records
Holders of shares have no general right under Cayman Law to inspect or obtain copies of our register of members or our corporate records. However, our Board may determine from time to time whether and to what extent our accounting records and books shall be open to inspection by shareholders who are not members of our Board. Notwithstanding the above, our New Memorandum and Articles of Association will provide shareholders with the right to receive annual financial statements. Such right to receive annual financial statements may be satisfied by publishing the same on our website or filing such annual reports as we are required to file with the SEC.
Directors
Appointment, Disqualification and Removal of Directors
Our New Memorandum and Articles of Association will provide that our Board shall consist of such number of directors as determined by a majority of the directors then in office, but not less than two directors.
Our New Memorandum and Articles of Association will provide that Mr. Wang, so long as he and/or his affiliates (as defined in our New Memorandum and Articles of Association) continue to remain beneficial
 
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owners (as such term is defined in the Exchange Act) of at least 30.0% of our share capital, shall have the right, but not the obligation, to appoint one director to our Board by providing written notice of such appointment to us. Such director, where appointed, shall act as Chairperson of our Board and may be removed or replaced by Mr. Wang, so long as Mr. Wang and/or his affiliates (as defined in our New Memorandum and Articles of Association) continue to remain beneficial owners (as such term is defined in the Exchange Act) of at least 30.0% of our share capital, providing written notice of such removal or replacement to us. The remainder of the directors may be appointed by an ordinary resolution of our shareholders, which requires the affirmative vote of a simple majority of the votes cast on the resolution by the shareholders entitled to vote who are present, in person or by proxy, at the meeting or by the Board. Each director, other than the director appointed by Mr. Wang, shall be appointed for an annual term until our next annual general meeting or such other term as the resolution appointing him or her may determine or until his or her death, resignation or removal pursuant to our New Memorandum and Articles of Association.
Our New Memorandum and Articles of Association will include the right of shareholders to nominate directors for appointment where the appropriate notice, as provided in our New Memorandum and Articles of Association, of such nomination is provided to our Board ahead of an annual general meeting by any shareholder holding at least 15% of the issued and outstanding share capital.
Under our New Memorandum and Articles of Association, a director may be removed from office without shareholder approval for cause, being where (i) a director has been convicted of a felony or criminal offense by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (ii) such director has been found by a court of competent jurisdiction to have been guilty of willful misconduct in the performance of such director’s duties to us in a matter of substantial importance to us; or (iii) such director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects such director’s ability to perform their obligations as a director (as more fully defined in our New Memorandum and Articles of Association). Our New Memorandum and Articles of Association will provide that directors may be removed with or without cause by a special resolution of our shareholders and that the director appointed by Mr. Wang may be removed or replaced by Mr. Wang, so long as Mr. Wang and/or his affiliates (as defined in our New Memorandum and Articles of Association) continue to remain beneficial owners (as such term is defined in the Exchange Act) of at least 30.0% of our share capital. A director will also cease to be a director if such director (i) gives notice in writing to us of such director’s resignation, (ii) dies, becomes bankrupt or makes any arrangement or composition with such director’s creditors, (iii) is prohibited, by any applicable law or relevant code applicable to the listing of shares on NYSE, from being a director, or (iv) is absent from meetings of our Board (for the avoidance of doubt, without being represented by proxy) for six consecutive months without special leave of absence from our Board, and our Board passes a resolution that such director has by reason of such absence vacated office. There are no provisions under our New Memorandum and Articles of Association relating to retirement of directors upon reaching any age limit.
Filling Vacancies on our Board
Vacancies on our Board may be filled by the majority of the directors then in office, even if less than a quorum, or by a sole remaining director (subject to the Companies Act, applicable law or any rights of any preference shares).
A director appointed to fill a vacancy resulting from the death, resignation or removal of a director will serve the remainder of the full term of the director whose death, resignation or removal created the vacancy until his or her successor shall have been appointed (or until his or her death, resignation or removal) pursuant to our New Memorandum and Articles of Association.
Directors’ Fiduciary Duties
As a matter of Cayman Law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company. Accordingly, directors and officers owe the following fiduciary duties:
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duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
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duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
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directors should not improperly fetter the exercise of future discretion;
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duty to exercise powers fairly as between different sections of shareholders;
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duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
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duty to exercise independent judgment.
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In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Proceedings of our Board
Our New Memorandum and Articles of Association will provide that our business is to be managed and conducted by our Board. Our New Memorandum and Articles of Association will provide that the quorum necessary for the board meeting shall be a majority of the directors then in office (subject to there being a minimum of two directors appointed) and business at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the Chairperson shall have a casting vote.
Subject to the provisions of the New Memorandum and Articles of Association, our Board may regulate its proceedings as they determine is appropriate.
Register of Members
Under the Companies Act, we must keep a register of members, and there should be entered therein:
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the names and addresses of our shareholders, together with a statement of the shares held by each shareholder, and such statement shall confirm (i) the amount paid or agreed to be considered as paid, on the shares of each shareholder, (ii) the number and category of shares held by each shareholder, and (iii) whether each relevant category of shares held by a shareholder carries voting rights under Our New Memorandum and Articles of Association, and if so, whether such voting rights are conditional;
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the date on which the name of any person was entered on the register as a shareholder; and
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the date on which any person ceased to be a shareholder.
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Under the Companies Act, our register of members is prima facie evidence of the matters set out therein (that is, the register of members will raise a presumption of fact on the matters referred to above unless rebutted), and a shareholder registered in the register of members is deemed as a matter of the Companies Act to have legal title to the shares as set against its name in the register of members.
If the name of any person is incorrectly entered in or omitted from our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any person having ceased to be a shareholder of our company, the person or shareholder aggrieved (or any shareholder of our company or our company itself) may apply to the Grand Court of the Cayman Islands for an order that the register be rectified, and such court may either refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.
 
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Exempted Company
We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company, except that an exempted company:
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does not have to file an annual return of its shareholders with the Registrar of Companies;
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is not required to open its register of members for inspection;
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does not have to hold an annual general meeting;
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may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
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may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
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may register as a limited duration company; and
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may register as a segregated portfolio company.
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“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder’s shares of the company.
Choice of Forum
Our New Memorandum and Articles of Association will provide that unless we consent in writing to the selection of an alternative forum, the Cayman Courts will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of our company, (ii) any action asserting a claim of breach of a fiduciary or other duty owed by any director, shareholder, officer or other employee of our company to us or our shareholders, (iii) any action arising pursuant to any provision of the Companies Act or our New Memorandum and Articles of Association (as each may be amended from time to time) or (iv) any action asserting a claim otherwise implicating the internal affairs of our company (as such concept is recognized under the laws of the United States), and that each shareholder irrevocably submits to the exclusive jurisdiction of the Cayman Courts over all such claims or disputes, including with respect to service of process. Our New Memorandum and Articles of Association will also provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the federal securities laws of the United States, including those arising under the Securities Act or Exchange Act.
This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits. The enforceability of similar exclusive forum provisions (including exclusive federal forum provisions for actions, suits or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provisions in our New Memorandum and Articles of Association. Additionally, our shareholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
For more information on the risks associated with our choice of forum provision, see “Risk Factors—​Risks Related to Ownership of Our Ordinary Shares—Our New Memorandum and Articles of Association will designate the courts of the Cayman Islands as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.”
Anti-Takeover Provisions
Our New Memorandum and Articles of Association will contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized
 
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below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our Board, which we believe may result in an improvement of the terms of any such acquisition in favor of our shareholders. However, they also give our Board the power to discourage acquisitions that some shareholders may favor. See “Risk Factors—Risks Related to Ownership of Our Ordinary Shares—Our New Memorandum and Articles of Association, as well as Cayman Law, will contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our ordinary shares.”
Limitation on Liability and Indemnification
Cayman Law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by Cayman Courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our New Memorandum and Articles of Association will provide, to the fullest extent permissible under Cayman Law, that our directors and officers shall be indemnified against any liability, action, proceeding, claim, demand, costs damages or expenses, including legal expenses, incurred in their capacities as such unless such liability (if any) arises from actual fraud, willful neglect or willful default, as determined by a court of competent jurisdiction in a final non-appealable order.
In addition to such indemnification, we will obtain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.
Prior to the completion of the separation and distribution, we will enter into indemnification agreements with each of our directors and officers that will provide for, among other things, indemnification to the fullest extent permitted by law against any and all expenses, judgments, fines, penalties and amounts paid in settlement (with our consent) of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative. The indemnification agreements will also provide for the advancement or payment of all expenses to our directors and officers and for reimbursement of such advanced expenses to us if it is found that such director or officer is not entitled to such indemnification under applicable law.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to us, our directors, our officers or persons who control us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Certain Differences in Corporate Law
The Companies Act is derived, to a large extent, from the older Companies Acts of England, but does not follow many recent English law statutory enactments. In addition, the Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in Delaware.
Mergers and Similar Arrangements
The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (i) “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (ii) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (i) a special resolution of the shareholders of each constituent company, and (ii) such other authorization, if any, as may be specified in such constituent company’s articles of association. The written plan of merger or consolidation must be filed with the
 
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Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a declaration as to the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the shareholders and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.
A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every shareholder of that Cayman subsidiary to be merged unless that shareholder agrees otherwise. For this purpose a company is a “parent” of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.
The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.
Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of such shareholder’s shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provided that the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.
Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:
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the statutory provisions as to the required majority vote have been met;
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the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;
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the arrangement is such that may be reasonably approved by an intelligent and honest individual of that class acting in respect of his interest; and
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the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”
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The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the “squeeze out” of a dissenting minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of 90.0% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.
If an arrangement and reconstruction is thus approved, or if a tender offer is made and accepted, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares. However, appraisal rights would also not be available to shareholders of a Delaware target in a business combination transaction if the shares of the target were listed on a national securities exchange or held by record of more than 2,000 holders or target shareholders
 
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receive only shares of a corporation which shares are also listed on a national securities exchange or which shares are held of record by more than 2,000 holders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through other means than these statutory provisions, such as a share capital exchange, asset acquisition or control, through contractual arrangements, of an operating business.
Shareholders’ Suits
Our Cayman Islands counsel is not aware of any reported class action having been brought in Cayman Courts. Derivative actions have been brought in Cayman Courts, and Cayman Courts have confirmed the availability for such actions. In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, Cayman Courts can be expected to follow and apply common law principles that permit a minority shareholder to commence a class action against or derivative actions in the name of the company to challenge actions where:
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a company acts or proposes to act illegally or ultra vires;
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the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and
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those who control the company are perpetrating a “fraud on the minority.”
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A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Indemnification of Directors and Officers and Limitation of Liability
Cayman Law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held Cayman Courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our New Memorandum and Articles of Association will provide, to the fullest extent permissible under Cayman Law, that our directors and officers shall be indemnified against any liability, action, proceeding, claim, demand, costs damages or expenses, including legal expenses, incurred in their capacities as such unless such liability (if any) arises from actual fraud, willful neglect or willful default, as determined by a court of competent jurisdiction in a final non-appealable order. This standard of conduct for indemnification is generally the same as permitted under the Delaware General Corporation Law (the “DGCL”) for a Delaware corporation.
In addition to such indemnification, we will obtain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.
Prior to the completion of the separation and distribution, we will enter into indemnification agreements with each of our directors and officers that will provide such persons with additional indemnification beyond that provided in our New Memorandum and Articles of Association.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to us, our directors, our officers or persons who control us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ Fiduciary Duties
Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, directors must inform themselves of all material
 
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information reasonably available regarding a significant transaction. The duty of loyalty requires that directors act in a manner they reasonably believe to be in the best interests of the corporation. They must not use their corporate positions for personal gain or advantage. This duty prohibits self-dealing by directors and mandates that the best interest of a corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation and accomplished through fair process.
As a matter of Cayman Law, directors of a Cayman Islands company are in the position of fiduciaries with respect to the company, and therefore it is considered that they owe the following duties to the company: a duty to act bona fide in the best interests of the company, a duty not to make a profit based on their position as directors (unless the company permits them to do so), a duty not to put themselves in a position where the interests of the company conflict with their personal interests or their duties to third parties and a duty to exercise powers for the purpose for which such powers were intended. Directors of a Cayman Islands company owe to the company a duty to act with skill and care. It was previously considered that directors need not exhibit in the performance of their duties a greater degree of skill than may reasonably be expected from people of their knowledge and experience. However, English and Commonwealth courts have moved toward an objective standard with regard to the required skill and care, and these authorities are likely to be followed in the Cayman Islands.
Shareholder Action by Written Consent
Under the DGCL, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. The Companies Act provides that our shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held, however our New Memorandum and Articles of Association provide that our shareholders shall not be permitted to approve corporate matters by way of a unanimous written resolution and therefore all shareholder action must be taken at a general meeting.
Shareholder Proposals
Under the DGCL, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The Companies Act provides shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our New Memorandum and Articles of Association will not allow our shareholders to requisition an extraordinary general meeting. Our New Memorandum and Articles of Association will provide for the ability of shareholders to nominate candidates for election as directors under certain conditions, and will allow shareholders to bring business before an annual general meeting where the procedure provided in our New Memorandum and Articles of Association is complied with.
Cumulative Voting
Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. Under the DGCL, cumulative voting for elections of directors is only permitted if the corporation’s certificate of incorporation specifically provides for it.
 
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There are no prohibitions in relation to cumulative voting under Cayman Law, but our New Memorandum and Articles of Association will not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
Under the DGCL, a director of a corporation may be removed with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Our New Memorandum and Articles of Association will provide that a director may be removed from office without shareholder approval for cause, being where (i) a director has been convicted of a felony or criminal offense by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (ii) such director has been found by a court of competent jurisdiction to have been guilty of willful misconduct in the performance of such director’s duties to us in a matter of substantial importance to us; or (iii) such director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects such director’s ability to perform their obligations as a director (as more fully defined in our New Memorandum and Articles of Association). Our New Memorandum and Articles of Association will provide that directors may be removed by a special resolution of our shareholders and that the director appointed by Mr. Wang may be removed or replaced by Mr. Wang, so long as Mr. Wang and/or his affiliates (as defined in our New Memorandum and Articles of Association) continue to remain beneficial owners (as such term is defined in the Exchange Act) of at least 30.0% of our share capital. A director will also cease to be a director if such director (i) gives notice in writing to us of such director’s resignation, (ii) dies, becomes bankrupt or makes any arrangement or composition with such director’s creditors, (iii) is prohibited, by any applicable law or relevant code applicable to the listing of shares on NYSE, from being a director, or (iv) is absent from meetings of our Board (for the avoidance of doubt, without being represented by proxy) for six consecutive months without special leave of absence from our Board, and our Board passes a resolution that such director has by reason of such absence vacated office.
Transactions with Interested Shareholders
The DGCL contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Law does not regulate transactions between a company and its significant shareholders, our directors are required to comply with fiduciary duties which they owe to us under Cayman Law, including the duty to ensure that, in their opinion, any such transactions must be entered into bona fide in the best interests of the company and are entered into for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding Up
Under the DGCL, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s
 
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outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
Under Cayman Law, a company may be wound up by either an order of the Cayman Courts or by a special resolution of its shareholders or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its shareholders. Cayman Courts have the authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so. Under the Companies Act and our New Memorandum and Articles of Association, our company may be dissolved, liquidated or wound up by a special resolution of our shareholders.
Variation of Rights of Shares
Under the DGCL, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Law and our New Memorandum and Articles of Association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of the holders of at least two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.
Amendment of Governing Documents
Under the DGCL, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act and our New Memorandum and Articles of Association, our New Memorandum and Articles of Association generally (and save for certain amendments to share capital described in this section) may only be amended by special resolution of shareholders (requiring a two-thirds majority vote of those shareholders attending and voting at a quorate meeting).
Rights of Non-Resident or Foreign Shareholders
There are no limitations imposed by our New Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our New Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.
Data Protection — Cayman Islands
We have certain duties under the Cayman Data Protection Act based on internationally accepted principles of data privacy.
Introduction
This privacy notice puts our members on notice that through your investment in us you will provide us with certain personal information which constitutes personal data within the meaning of the Cayman Data Protection Act (“personal data”). In the following discussion, the “company,” “us,” “our” and “we” refers to SharkNinja, Inc. and its affiliates and/or delegates, except where the context requires otherwise.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the Cayman Data Protection Act and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
 
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In our use of this personal data, we will be characterized as a “data controller” for the purposes of the Cayman Data Protection Act, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the Cayman Data Protection Act or may process personal information for their own lawful purposes in connection with services provided to us.
We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a member and/or any individuals connected with a member as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details,source of funds details and details relating to the member’s investment activity.
Who This Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation your investment in the company, this will be relevant for those individuals and you should transmit the content of this privacy notice to such individuals or otherwise advisethem of its content.
How We May Use a Member’s Personal Data
We, as the data controller, may collect, store and use personal data for lawful purposes, including, in particular:
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where this is necessary for the performance of our rights and obligations under any agreements;
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where this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money laundering and Foreign Account Tax Compliance Act/​Common Reporting Standard requirements); and/or
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where this is necessary for the purposes of our legitimate interests and such interests are not over ridden by your interests, fundamental rights or freedoms.
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Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to the company and their respective affiliates (which may include certain entities located outside the United States, the Cayman Islands, the United Kingdom or the European Economic Area), who will process your personal data on our behalf.
The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the Cayman Data Protection Act.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
 
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Registered Office; Handling of Mail
Our registered office is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Mail addressed to us and received at our registered office will be forwarded unopened to the forwarding address, which will be supplied by us. None of us, our directors, officers, advisors or service providers (including the organization which provides registered office services in the Cayman Islands) will bear any responsibility for any delay in mail reaching the forwarding address.
Transfer Agent and Registrar
The transfer agent and registrar for our ordinary shares will be Computershare Trust Company, N.A. The transfer agent and registrar’s address is 150 Royall Street, Canton, MA 02021.
Listing
We intend to apply to list our ordinary shares on NYSE under the symbol “SN.”
 
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SHARES ELIGIBLE FOR FUTURE SALE
Prior to the separation and distribution, there has been no public market for our ordinary shares, and we cannot predict the effect, if any, that sales of our ordinary shares or the availability of our ordinary shares for sale will have on the market price of our ordinary shares prevailing from time to time. Future sales of our ordinary shares in the public market, or the anticipation of such sales, could adversely affect market prices prevailing from time to time.
Upon the completion of the separation and distribution,         ordinary shares will be issued and outstanding.
All of the ordinary shares distributed to JS Global Shareholders will be freely transferable, except for shares received by our affiliates, as that term is defined in Rule 144 under the Securities Act. Affiliates will be permitted to sell their ordinary shares only pursuant to an effective registration statement under the Securities Act or an exemption from registration, such as Rule 144 under the Securities Act, which is summarized below.
Rule 144
In general, under Rule 144 as currently in effect, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the ordinary shares proposed to be sold for at least six months is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the ordinary shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person would be entitled to sell those ordinary shares without complying with any of the requirements of Rule 144.
In general, under Rule 144, as currently in effect, our affiliates or persons selling ordinary shares on behalf of our affiliates are entitled to sell, within any three-month period, a number of ordinary shares that does not exceed the greater of:
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1% of the number of ordinary shares then outstanding; and
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the average weekly trading volume of our ordinary shares on NYSE during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.
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Sales under Rule 144 by our affiliates or persons selling ordinary shares on behalf of our affiliates are also subject to certain manner-of-sale provisions and notice requirements and to the availability of current public information about us.
Registration Statement on Form S-8
We intend to file one or more registration statements on Form S-8 under the Securities Act to register ordinary shares subject to the ordinary shares reserved for future issuance under our Equity Incentive Plan and ESPP. The registration statement on Form S-8 is expected to become effective immediately upon filing, and subject to the satisfaction of vesting conditions, the ordinary shares covered by the registration statement will then become eligible for sale in the public market, subject to the Rule 144 limitations applicable to affiliates.
 
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CERTAIN INCOME TAX CONSIDERATIONS
The following summary contains a description of Cayman Islands and U.S. federal income tax consequences of the ownership and disposition of our ordinary shares. This summary should not be considered a comprehensive description of all the tax considerations that may be relevant to ownership of our ordinary shares, it is not applicable to all categories of investors, some of which may be subject to special rules, and does not address all of the Cayman Islands and U.S. federal income tax considerations applicable to any particular holder. The summary is based upon the tax laws of the Cayman Islands and the United States and regulations thereunder as of the date hereof, which are subject to change.
Holders of our ordinary shares should consult their tax advisors about the particular Cayman Islands and U.S. federal, state, local and other tax consequences to them of the ownership and disposition of our ordinary shares, including any other tax consequences under the laws of their country of citizenship, residence or domicile.
Cayman Islands Tax Considerations
The following is a discussion of certain Cayman Islands tax consequences of an investment in our ordinary shares. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances and does not consider tax consequences other than those arising under Cayman Law.
Under Existing Cayman Law
Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of interest and principal or a dividend or capital to any holder of ordinary shares, as the case may be, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax. The Cayman Islands currently have no income, corporation or capital gains tax and no estate duty, inheritance tax or gift tax.
No stamp duty is payable in respect of the issuance of our ordinary shares or on an instrument of transfer in respect of an ordinary share.
We have been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, have obtained an undertaking from the Financial Secretary of the Cayman Islands in the following form:
THE TAX CONCESSIONS ACT UNDERTAKING AS TO TAX CONCESSIONS
In accordance with the Tax Concessions Act the following undertaking is hereby given to the Company:
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That no Act which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the Company or its operations; and
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In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable
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on or in respect of the shares, debentures or other obligations of the Company; or
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by way of the withholding in whole or in part of any relevant payment as defined in the Tax Concessions Law.
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These concessions shall be for a period of TWENTY years from the 30th day of March, 2023.
 
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U.S. Federal Income Tax Considerations of the Distribution to U.S. Holders
The following discussion summarizes the anticipated U.S. federal income tax considerations generally applicable to a U.S. Holder (as defined below) of the distribution, and ownership and disposition, of SharkNinja ordinary shares to U.S. Holders (as defined below) of JS Global ordinary shares that hold those JS Global shares as “capital assets” ​(generally, property held for investment purposes).
This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, U.S. Treasury regulations promulgated thereunder, published positions of the IRS, court decisions and other applicable authorities, all as in effect on the date hereof, and all of which may be repealed, revoked or modified (possibly with retroactive effect) so as to result in U.S. federal income tax consequences different from those discussed below. This summary does not purport to be a complete analysis of all the potential U.S. federal income tax considerations that may be relevant to U.S. Holders in light of their particular circumstances, such as the alternative minimum tax or the 3.8% Medicare contribution tax imposed on certain net investment income. Further, it does not address any aspect of foreign, state or local taxation or federal estate or gift taxation. Except as specifically set forth below, this summary does not discuss applicable income tax reporting requirements. U.S. Holders should consult their tax advisors regarding such matters.
No ruling from the IRS has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the distribution and other transactions described herein. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the discussion set forth in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and U.S. courts could disagree with one or more of the positions taken in this summary.
This summary does not purport to address all U.S. federal income tax consequences that may be relevant to a U.S. Holder, nor does it take into account the specific circumstances of any particular holder, some of which may be subject to special tax rules, including, but not limited to: tax exempt organizations, partnerships and other pass-through entities and their owners, banks or other financial institutions, insurance companies, regulated investment companies, real estate investment trusts, qualified retirement plans, individual retirement accounts or other tax-deferred accounts, persons that hold the ordinary shares as part of a straddle, hedging transaction, conversion transaction, constructive sale or other similar arrangements, persons that acquired ordinary shares in connection with the exercise of employee share options or otherwise as compensation for or in connection with services, dealers in securities or foreign currencies, traders in securities electing to mark to market, U.S. persons whose functional currency is not the U.S. dollar, U.S. expatriates, persons that own, directly, indirectly or constructively by application of the constructive ownership rules of the Code, 10% or more of the equity of JS Global (including JS Global’s ordinary shares) by voting power or by value, or persons that own or will own, directly, indirectly or constructively by application of the constructive ownership rules of the Code, 10% or more of the equity of SharkNinja (including SharkNinja’s ordinary shares).
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of JS Global ordinary shares or SharkNinja ordinary shares, as applicable, who, for U.S. federal income tax purposes, is: (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity classified as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate whose income is subject to U.S. federal income tax regardless of its source, or (iv) a trust (a) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) that has elected to be treated as a U.S. person for U.S. federal income tax purposes.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds JS Global ordinary shares or SharkNinja ordinary shares, the tax treatment of a partner in the partnership (or other entity or arrangement) will generally depend upon the status of the partner and the activities of the partnership. Partners in partnerships (or other entities or arrangements treated as partnerships for U.S. federal income tax purposes) that are beneficial owners of JS Global ordinary shares are urged to consult their tax advisors regarding the U.S. federal income tax treatment of the distribution and of the ownership and disposition of SharkNinja shares.
 
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JS Global Shareholders are urged to consult their tax advisors regarding the U.S. federal, state and local and other tax considerations of the distribution in light of their particular circumstances.
U.S. Federal Income Tax Consequences to JS Global
The distribution of SharkNinja ordinary shares will be treated as a taxable disposition by JS Global for U.S. federal income tax purposes. Gain recognized by JS Global in the distribution will generally increase JS Global’s current earnings and profits for U.S. federal income tax purposes, which, as discussed below, will be relevant to the treatment of the distribution to holders of JS Global ordinary shares.
U.S. Federal Income Tax Consequences to U.S. Holders of the Distribution
Subject to the passive foreign investment company (“PFIC”) rules discussed below, the distribution of SharkNinja ordinary shares will be treated as a taxable distribution for U.S. federal income tax purposes. An amount equal to the fair market value on the distribution date of SharkNinja ordinary shares received by a U.S. Holder (plus any cash received in lieu of fractional shares) will generally be treated as a taxable dividend to the extent of such U.S. Holder’s allocable portion of JS Global’s current or accumulated earnings and profits as determined for U.S. federal income tax purposes. To the extent that the amount of a distribution received by the U.S. Holder exceeds the U.S. Holder’s allocable portion of JS Global’s current and accumulated earnings and profits, such distribution will be treated first as a tax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in its shares of JS Global ordinary shares, and thereafter as capital gain, which will be long-term capital gain if the U.S. Holder’s holding period for its shares of JS Global ordinary shares exceeds one year at the time of the distribution. JS Global does not calculate its earnings and profits for U.S. federal income tax purposes. In addition, as discussed above, JS Global is likely to generate substantial earnings and profits in the distribution itself. Accordingly, U.S. Holders should assume that the entire amount of the distribution will be treated as a dividend.
Subject to the PFIC rules discussed below, the amount treated as a dividend will be taxable as ordinary income; JS Global is not a qualified foreign corporation and, accordingly, dividends by JS Global are not eligible for preferential rates of taxation. A dividend from JS Global will also not be eligible for the dividends-received deduction generally allowed to corporations in respect of dividends received from U.S. corporations. For U.S. foreign tax credit purposes, a dividend by JS Global will generally be treated as income from sources outside the United States and will generally constitute “passive category income.”
Following the distribution, a U.S. Holder will have an initial tax basis in the shares of SharkNinja ordinary shares equal to the fair market value on the distribution date of such shares and a new holding period that begins on the day of the distribution.
Because JS Global does not currently believe it is, or has ever been, a PFIC, the tax consequences discussed above in this section are expected to apply to the distribution of SharkNinja ordinary shares. If, contrary to expectation, JS Global were to be treated as a PFIC under the rules discussed below under “—Passive Foreign Investment Company Considerations,” the distribution of SharkNinja ordinary shares would be subject to the rules discussed in that section regarding excess distributions, and the tax consequences of the distribution could be materially different from those described above.
Backup Withholding and Information Reporting
Generally, we must report annually to the IRS the amount of dividends paid to the shareholder, the shareholder’s name and address, and the amount of tax withheld, if any. A similar report will be sent to the shareholder. Payments of dividends on JS Global’s ordinary shares (including the amount of cash received in lieu of fractional shares) may be subject to additional information reporting and backup withholding at a current rate of 24% unless the shareholder: provides their correct taxpayer identification number (employer identification number or Social Security number) to the distribution agent or establishes an exemption from backup withholding and complies with applicable requirements of the backup withholding rules.
Backup withholding is not an additional tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment
 
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of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.
U.S. Federal Income Tax Consequences to U.S. Holders of Ownership and Disposition of SharkNinja Ordinary Shares
Distributions
In general, subject to the PFIC rules discussed below, the gross amount of any distribution received by a U.S. Holder with respect to its SharkNinja ordinary shares will be included in the gross income of the U.S. Holder as a dividend to the extent attributable to our current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Because, as discussed above, SharkNinja does not expect to maintain calculations of its earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should expect that a distribution will generally be treated as a dividend for U.S. federal income tax purposes. Any dividend from SharkNinja will not be eligible for the dividends-received deduction generally allowed to corporations in respect of dividends received from U.S. corporations. For U.S. foreign tax credit purposes, dividends received on SharkNinja ordinary shares by a U.S. Holder will generally be treated as income from sources outside the United States and will generally constitute “passive category income.” A portion of such dividends, however, will be treated as U.S. source income, subject to certain exceptions, in proportion to SharkNinja’s U.S. source earnings and profits if U.S. persons collectively own, directly or indirectly, 50% or more of the voting power or value of SharkNinja’s shares.
U.S. Holders that are individuals and certain other non-corporate U.S. Holders will be subject to tax on dividend income from a “qualified foreign corporation” at preferential rates of taxation provided that certain holding period and other requirements are met. For this purpose, a foreign corporation (other than a corporation that is classified as a PFIC (as discussed below) for the taxable year in which the dividend is paid or the preceding taxable year) will generally be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (ii) with respect to any dividend it pays on stock which is readily tradable on an established securities market in the United States. SharkNinja ordinary shares have been approved for listing on NYSE, which is an established securities market in the United States, and are expected to be readily tradable. Thus, SharkNinja expects that dividends paid on its ordinary shares will meet the conditions above required for the preferential tax rates, provided we are not a PFIC in the year such dividend is paid or the preceding taxable year.
Sale, Exchange or Other Taxable Disposition
Subject to the PFIC rules discussed below, upon a sale, exchange or other taxable disposition of SharkNinja ordinary shares, a U.S. Holder will generally recognize a capital gain or loss equal to the difference between the amount realized on such sale, exchange or other taxable disposition and the adjusted tax basis of such ordinary shares. As discussed above, a U.S. Holder’s initial tax basis in its SharkNinja ordinary shares will generally equal the fair market value on the distribution date of such shares. Such gain or loss will be a long-term capital gain or loss if the SharkNinja ordinary shares have been held for more than one year and will be a short-term gain or loss if the holding period is equal to or less than one year. Such gain or loss will generally be considered U.S. source gain or loss for U.S. foreign tax credit purposes. Long-term capital gains of certain non-corporate U.S. Holders are eligible for reduced rates of taxation. For both corporate and non-corporate U.S. Holders, limitations apply to the deductibility of capital losses.
Passive Foreign Investment Company Considerations
A foreign corporation will be considered a PFIC for any taxable year in which (i) 75 percent or more of its gross income is “passive income” or (ii) 50 percent or more of the average quarterly value of its assets produce (or are held for the production of) “passive income.” For this purpose, “passive income” generally includes interest, dividends, rents, royalties and certain gains. Based on the current composition of SharkNinja’s income, assets and operations, SharkNinja currently does not anticipate that it will be a PFIC in the current taxable year or in the foreseeable future. The determination of PFIC status for any taxable
 
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year, however, is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and is not determinable until after the end of such taxable year. Further, the determination is based in part on the mix, use and value of our assets, which values may be treated as changing for U.S. federal income tax purposes as SharkNinja’s market capitalization changes. Because of the above described uncertainties, there can be no assurance that the IRS will not challenge SharkNinja’s PFIC status or that SharkNinja will not be a PFIC for any taxable year. If SharkNinja is classified as a PFIC in any year a U.S. Holder owns ordinary shares, certain materially adverse tax consequences could apply to such U.S. Holder. Certain elections may be available (including a mark-to-market election) to U.S. Holders that may mitigate some of the adverse consequences resulting from our treatment as a PFIC. U.S. Holders are urged to consult their tax advisors regarding the application of the PFIC rules to their investments in ordinary shares and the availability of, and advisability of making, any election or protective election under the Code with respect to their investment in SharkNinja ordinary shares.
Required Disclosure with Respect to Foreign Financial Assets
Certain U.S. Holders are required to report information relating to their holding an interest in SharkNinja ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions), if the aggregate value of all of a U.S. Holder’s specified foreign financial assets exceeds a certain threshold amount, by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in SharkNinja ordinary shares. U.S. Holders are urged to consult their tax advisors regarding information reporting requirements relating to their ownership of SharkNinja ordinary shares.
 
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LEGAL MATTERS
The validity of our ordinary shares being distributed in the separation and distribution and certain matters of Cayman law will be passed upon for us by Maples and Calder (Cayman) LLP. Certain matters of U.S. federal law will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP.
EXPERTS
The consolidated financial statements of SharkNinja Global SPV, Ltd. at December 31, 2022 and 2021, and for each of the three years in the period ended December 31, 2022, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
ENFORCEMENT OF CIVIL LIABILITIES
We are a public limited company organized under the laws of the Cayman Islands. As a result, the rights of holders of our ordinary shares will be governed by Cayman Law and our New Memorandum and Articles of Association. The rights of shareholders under Cayman Law may differ from the rights of shareholders of companies incorporated in other jurisdictions. Certain of our assets are located outside the United States. As a result, it may be difficult for investors to enforce in the United States judgments obtained in U.S. courts against us based on the civil liability provisions of the U.S. securities laws.
We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize, or enforce against us, judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the securities laws of the United States or any State, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement (including amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement. The rules and regulations of the SEC allow us to omit certain information from this prospectus that is included in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement.
Statements made in this prospectus concerning the contents of any contract, agreement or other document are not necessarily complete descriptions of all terms of these documents. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed for a complete description of its terms. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit. You should read this prospectus and the documents that we have filed as exhibits to the registration statement of which this prospectus forms a part completely.
 
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Upon the effectiveness of the registration statement of which this prospectus forms a part, we will become subject to the informational requirements of the Exchange Act. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. The SEC maintains a website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov. We also maintain a website at www.sharkninja.com at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained on, or that can be accessed through, these websites is not a part of this prospectus. We have included these website addresses in this prospectus solely as an inactive textual references.
As a foreign private issuer, we are exempt under the Exchange Act from the rules prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
 
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SHARKNINJA GLOBAL SPV, LTD.
INDEX TO FINANCIAL STATEMENTS
​ ​ ​
Page
​
Audited Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ F-2 ​ ​
​ ​ ​ ​ F-4 ​ ​
​ ​ ​ ​ F-5 ​ ​
​ ​ ​ ​ F-6 ​ ​
​ ​ ​ ​ F-7 ​ ​
​ ​ ​ ​ F-8 ​ ​
​ ​ ​ ​ F-9 ​ ​
Unaudited Condensed Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ F-38 ​ ​
​ ​ ​ ​ F-39 ​ ​
​ ​ ​ ​ F-40 ​ ​
​ ​ ​ ​ F-41 ​ ​
​ ​ ​ ​ F-42 ​ ​
​ ​ ​ ​ F-43 ​ ​
 
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of SharkNinja Global SPV, Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SharkNinja Global SPV, Ltd. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.​
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to those charged with governance and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
​ ​ ​ ​ Revenue Recognition—Variable Consideration for Sales Discounts and Rebates ​
​
Description of the Matter
​ ​ As described in Note 2 to the consolidated financial statements, the Company has contractual programs and practices with customers that can give rise to elements of variable consideration, including discount and rebate programs. The Company accounts for consideration payable to customers under these programs as a reduction of net sales and if the consideration payable to a customer includes a variable amount, the Company estimates the transaction price using the most likely amount method. As of December 31, 2022, the Company had accrued sales incentives of $230.2 million. ​
 
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​ ​ ​ ​ Auditing the Company’s accounting for variable consideration for certain non-contractual discount and rebate programs was challenging and subjective due to the degree of estimation involved in measuring the variable consideration. Given the nature and significance of the reserves associated with these discount and rebate programs, subjective auditor judgment was required to evaluate completeness of the amounts accrued for sales incentives. ​
​
How We
Addressed the Matter
in Our Audit
​ ​ To test variable consideration related to sales discounts and rebates, our audit procedures included, among others, testing the completeness and accuracy of the underlying data used in the Company’s calculation. For a sample of customers, we agreed sales to underlying support and the terms of the rebate program to the underlying contract and tested the calculation of discount and rebate reserves. We tested management’s lookback analysis over historical reserves compared to actuals and a sample of credit memos issued to customers for sales discounts and rebates compared to the reserves. To test the completeness of the reserve we compared a sample of credit notes issued after December 31, 2022 to the Company’s estimate. ​
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2022.
Boston, Massachusetts
March 30, 2023
 
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SHARKNINJA GLOBAL SPV, LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
​ ​ ​
As of December 31,
​
​ ​ ​
2021
​ ​
2022
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 225,362 ​ ​ ​ ​ $ 192,890 ​ ​
Restricted cash
​ ​ ​ ​ 15,235 ​ ​ ​ ​ ​ 25,880 ​ ​
Accounts receivable, net(1)
​ ​ ​ ​ 841,547 ​ ​ ​ ​ ​ 766,503 ​ ​
Inventories
​ ​ ​ ​ 602,482 ​ ​ ​ ​ ​ 548,588 ​ ​
Prepaid expenses and other current assets(2)
​ ​ ​ ​ 86,426 ​ ​ ​ ​ ​ 181,831 ​ ​
Total current assets
​ ​ ​ ​ 1,771,052 ​ ​ ​ ​ ​ 1,715,692 ​ ​
Property and equipment, net
​ ​ ​ ​ 109,101 ​ ​ ​ ​ ​ 137,341 ​ ​
Operating lease right-of-use assets
​ ​ ​ ​ 73,277 ​ ​ ​ ​ ​ 67,321 ​ ​
Intangible assets, net
​ ​ ​ ​ 510,169 ​ ​ ​ ​ ​ 492,709 ​ ​
Goodwill
​ ​ ​ ​ 840,825 ​ ​ ​ ​ ​ 840,148 ​ ​
Deferred tax assets, noncurrent
​ ​ ​ ​ 7,892 ​ ​ ​ ​ ​ 6,291 ​ ​
Other assets, noncurrent(3)
​ ​ ​ ​ 44,040 ​ ​ ​ ​ ​ 35,389 ​ ​
Total assets
​ ​ ​ $ 3,356,356 ​ ​ ​ ​ $ 3,294,891 ​ ​
Liabilities and Shareholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accounts payable(4)
​ ​ ​ $ 442,564 ​ ​ ​ ​ $ 328,122 ​ ​
Accrued expenses and other current liabilities(5)
​ ​ ​ ​ 494,782 ​ ​ ​ ​ ​ 552,023 ​ ​
Tax payable
​ ​ ​ ​ 6,751 ​ ​ ​ ​ ​ 1,581 ​ ​
Current portion of long-term debt
​ ​ ​ ​ 49,402 ​ ​ ​ ​ ​ 86,972 ​ ​
Total current liabilities
​ ​ ​ ​ 993,499 ​ ​ ​ ​ ​ 968,698 ​ ​
Long-term debt
​ ​ ​ ​ 435,953 ​ ​ ​ ​ ​ 349,169 ​ ​
Operating lease liabilities, noncurrent
​ ​ ​ ​ 63,906 ​ ​ ​ ​ ​ 61,779 ​ ​
Deferred tax liabilities, noncurrent
​ ​ ​ ​ 81,828 ​ ​ ​ ​ ​ 60,976 ​ ​
Other liabilities, noncurrent
​ ​ ​ ​ 19,807 ​ ​ ​ ​ ​ 25,980 ​ ​
Total liabilities
​ ​ ​ $ 1,594,993 ​ ​ ​ ​ $ 1,466,602 ​ ​
Commitments and contingencies (Note 9) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Shareholders’ equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Ordinary shares, $0.20 par value per share, 250,000 shares authorized, 50,000 shares issued and outstanding as of December 31, 2021 and 2022
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 10 ​ ​
Additional paid-in capital
​ ​ ​ ​ 954,435 ​ ​ ​ ​ ​ 941,210 ​ ​
Retained earnings
​ ​ ​ ​ 797,970 ​ ​ ​ ​ ​ 896,738 ​ ​
Accumulated other comprehensive income (loss)
​ ​ ​ ​ 8,948 ​ ​ ​ ​ ​ (9,669) ​ ​
Total shareholders’ equity
​ ​ ​ ​ 1,761,363 ​ ​ ​ ​ ​ 1,828,289 ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 3,356,356 ​ ​ ​ ​ $ 3,294,891 ​ ​
​
(1)
Including amounts from a related party of $11,846 and $1,033 as of December 31, 2021 and 2022, respectively.
​
(2)
Including amounts from a related party of $38,012 and $20,069 as of December 31, 2021 and 2022, respectively.
​
(3)
Including amounts from a related party of $18,665 and $0 as of December 31, 2021 and 2022, respectively.
​
(4)
Including amounts to a related party of $303,033 and $231,805 as of December 31, 2021 and 2022, respectively.
​
(5)
Including amounts to a related party of $9,640 and $8,399 as of December 31, 2021 and 2022, respectively.
​
The accompanying notes are an integral part of these consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
Net sales(1)
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ $ 3,717,366 ​ ​
Cost of sales(2)
​ ​ ​ ​ 1,499,724 ​ ​ ​ ​ ​ 2,288,810 ​ ​ ​ ​ ​ 2,307,172 ​ ​
Gross profit
​ ​ ​ ​ 1,253,442 ​ ​ ​ ​ ​ 1,438,184 ​ ​ ​ ​ ​ 1,410,194 ​ ​
Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and development(3)
​ ​ ​ ​ 159,635 ​ ​ ​ ​ ​ 200,641 ​ ​ ​ ​ ​ 215,660 ​ ​
Sales and marketing
​ ​ ​ ​ 445,084 ​ ​ ​ ​ ​ 619,162 ​ ​ ​ ​ ​ 621,953 ​ ​
General and administrative
​ ​ ​ ​ 183,286 ​ ​ ​ ​ ​ 180,124 ​ ​ ​ ​ ​ 251,207 ​ ​
Total operating expenses
​ ​ ​ ​ 788,005 ​ ​ ​ ​ ​ 999,927 ​ ​ ​ ​ ​ 1,088,820 ​ ​
Operating income
​ ​ ​ ​ 465,437 ​ ​ ​ ​ ​ 438,257 ​ ​ ​ ​ ​ 321,374 ​ ​
Interest expense, net
​ ​ ​ ​ (40,279) ​ ​ ​ ​ ​ (16,287) ​ ​ ​ ​ ​ (27,021) ​ ​
Other income (expense), net
​ ​ ​ ​ (5,692) ​ ​ ​ ​ ​ (7,644) ​ ​ ​ ​ ​ 7,631 ​ ​
Income before income taxes
​ ​ ​ ​ 419,466 ​ ​ ​ ​ ​ 414,326 ​ ​ ​ ​ ​ 301,984 ​ ​
Provision for income taxes
​ ​ ​ ​ 92,268 ​ ​ ​ ​ ​ 83,213 ​ ​ ​ ​ ​ 69,630 ​ ​
Net income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​
Net income per share, basic and diluted
​ ​ ​ $ 6,544 ​ ​ ​ ​ $ 6,622 ​ ​ ​ ​ $ 4,647 ​ ​
Weighted-average number of shares used in computing net income per share, basic and diluted ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​
​
(1)
Including amounts from a related party of $20,496, $12,107 and $1,451 for the years ended December 31, 2020, 2021 and 2022, respectively.
​
(2)
Including amounts to a related party of $296,744, $1,358,827 and $1,413,098 for the years ended December 31, 2020, 2021 and 2022, respectively.
​
(3)
Including amounts to a related party of $0, $4,030 and $3,561 for the years ended December 31, 2020, 2021 and 2022, respectively.
​
The accompanying notes are an integral part of these consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
Net income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​
Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Foreign currency translation adjustments
​ ​ ​ ​ 10,507 ​ ​ ​ ​ ​ 541 ​ ​ ​ ​ ​ (18,617) ​ ​
Comprehensive income
​ ​ ​ $ 337,705 ​ ​ ​ ​ $ 331,654 ​ ​ ​ ​ $ 213,737 ​ ​
The accompanying notes are an integral part of these consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands, except share data)
​ ​ ​
Ordinary shares
​ ​
Additional
Paid-in Capital
​ ​
Accumulated
Other
Comprehensive
Income (Loss)
​ ​
Retained
Earnings
​ ​
Total
Shareholder’s
Equity
​
​ ​ ​
Shares
​ ​
Amount
​
Balance as of December 31, 2019
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 850,466 ​ ​ ​ ​ $ (2,100) ​ ​ ​ ​ $ 181,659 ​ ​ ​ ​ $ 1,030,035 ​ ​
Contribution from parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 80,011 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 80,011 ​ ​
Share-based compensation cost
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 10,034 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 10,034 ​ ​
Other comprehensive income, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 10,507 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 10,507 ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 327,198 ​ ​ ​ ​ ​ 327,198 ​ ​
Balance as of December 31, 2020
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 940,511 ​ ​ ​ ​ $ 8,407 ​ ​ ​ ​ $ 508,857 ​ ​ ​ ​ $ 1,457,785 ​ ​
Distribution paid to parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (42,000) ​ ​ ​ ​ ​ (42,000) ​ ​
Share-based compensation cost
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13,924 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13,924 ​ ​
Other comprehensive income, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 541 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 541 ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 331,113 ​ ​ ​ ​ ​ 331,113 ​ ​
Balance as of December 31, 2021
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 954,435 ​ ​ ​ ​ $ 8,948 ​ ​ ​ ​ $ 797,970 ​ ​ ​ ​ $ 1,761,363 ​ ​
Distribution paid to parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (83,450) ​ ​ ​ ​ ​ (83,450) ​ ​
Intercompany note to parent (Note 10)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (50,136) ​ ​ ​ ​ ​ (50,136) ​ ​
Recharge from parent for share-based compensation
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (18,734) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (18,734) ​ ​
Share-based compensation cost
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,509 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,509 ​ ​
Other comprehensive loss, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (18,617) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (18,617) ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 232,354 ​ ​ ​ ​ ​ 232,354 ​ ​
Balance as of December 31, 2022
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 941,210 ​ ​ ​ ​ $ (9,669) ​ ​ ​ ​ $ 896,738 ​ ​ ​ ​ $ 1,828,289 ​ ​
The accompanying notes are an integral part of these consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​
Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Depreciation and amortization
​ ​ ​ ​ 78,080 ​ ​ ​ ​ ​ 78,183 ​ ​ ​ ​ ​ 86,708 ​ ​
Share-based compensation cost
​ ​ ​ ​ 10,034 ​ ​ ​ ​ ​ 13,924 ​ ​ ​ ​ ​ 5,509 ​ ​
Provision for credit losses
​ ​ ​ ​ 9,391 ​ ​ ​ ​ ​ 7,913 ​ ​ ​ ​ ​ 8,965 ​ ​
Non-cash lease expense
​ ​ ​ ​ 11,441 ​ ​ ​ ​ ​ 13,062 ​ ​ ​ ​ ​ 15,475 ​ ​
Amortization of debt discount
​ ​ ​ ​ 1,568 ​ ​ ​ ​ ​ 906 ​ ​ ​ ​ ​ 932 ​ ​
Loss on extinguishment of debt
​ ​ ​ ​ 16,410 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Deferred income taxes, net
​ ​ ​ ​ (7,506) ​ ​ ​ ​ ​ (15,127) ​ ​ ​ ​ ​ (16,646) ​ ​
Loss (gain) from equity method investment
​ ​ ​ ​ 3,495 ​ ​ ​ ​ ​ 4,492 ​ ​ ​ ​ ​ (141) ​ ​
Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accounts receivable(1)
​ ​ ​ ​ (335,285) ​ ​ ​ ​ ​ (77,444) ​ ​ ​ ​ ​ 519 ​ ​
Inventories
​ ​ ​ ​ (179,375) ​ ​ ​ ​ ​ (185,474) ​ ​ ​ ​ ​ 53,894 ​ ​
Prepaid expenses and other assets(2)
​ ​ ​ ​ (29,755) ​ ​ ​ ​ ​ (47,725) ​ ​ ​ ​ ​ (114,163) ​ ​
Accounts payable(3)
​ ​ ​ ​ 198,746 ​ ​ ​ ​ ​ 74,850 ​ ​ ​ ​ ​ (118,161) ​ ​
Tax payable
​ ​ ​ ​ 14,414 ​ ​ ​ ​ ​ (13,343) ​ ​ ​ ​ ​ (5,170) ​ ​
Operating lease liability
​ ​ ​ ​ (10,771) ​ ​ ​ ​ ​ (12,629) ​ ​ ​ ​ ​ (14,316) ​ ​
Accrued expenses and other liabilities(4)
​ ​ ​ ​ 185,350 ​ ​ ​ ​ ​ 56,446 ​ ​ ​ ​ ​ 69,205 ​ ​
Net cash provided by operating activities
​ ​ ​ ​ 293,435 ​ ​ ​ ​ ​ 229,147 ​ ​ ​ ​ ​ 204,964 ​ ​
Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of property and equipment
​ ​ ​ ​ (54,497) ​ ​ ​ ​ ​ (47,992) ​ ​ ​ ​ ​ (80,257) ​ ​
Purchase of intangible asset
​ ​ ​ ​ (3,389) ​ ​ ​ ​ ​ (5,068) ​ ​ ​ ​ ​ (7,348) ​ ​
Capitalized internal-use software development
​ ​ ​ ​ (3,193) ​ ​ ​ ​ ​ (7,014) ​ ​ ​ ​ ​ (6,829) ​ ​
Cash receipts on deferred payment in sold receivables
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 42,416 ​ ​
Business acquisition of Qfeeltech, net of cash acquired
​ ​ ​ ​ (16,860) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Investment in equity method investment
​ ​ ​ ​ (3,495) ​ ​ ​ ​ ​ (4,492) ​ ​ ​ ​ ​ (66) ​ ​
Other investing activities, net
​ ​ ​ ​ — ​ ​ ​ ​ ​ (1,800) ​ ​ ​ ​ ​ (300) ​ ​
Net cash used in investing activities
​ ​ ​ ​ (81,434) ​ ​ ​ ​ ​ (66,366) ​ ​ ​ ​ ​ (52,384) ​ ​
Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from issuance of debt, net of issuance cost
​ ​ ​ ​ 727,263 ​ ​ ​ ​ ​ 110,000 ​ ​ ​ ​ ​ 259,854 ​ ​
Repayment of debt
​ ​ ​ ​ (927,942) ​ ​ ​ ​ ​ (122,500) ​ ​ ​ ​ ​ (310,000) ​ ​
Contribution from parent
​ ​ ​ ​ 80,011 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Intercompany note to parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (49,286) ​ ​
Distribution paid to parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ (42,000) ​ ​ ​ ​ ​ (45,438) ​ ​
Recharge from parent for share-based compensation
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (15,300) ​ ​
Net cash used in financing activities
​ ​ ​ ​ (120,668) ​ ​ ​ ​ ​ (54,500) ​ ​ ​ ​ ​ (160,170) ​ ​
Effect of exchange rates changes on cash
​ ​ ​ ​ 8,433 ​ ​ ​ ​ ​ (704) ​ ​ ​ ​ ​ (14,237) ​ ​
Net increase (decrease) in cash, cash equivalents, and restricted cash
​ ​ ​ ​ 99,766 ​ ​ ​ ​ ​ 107,577 ​ ​ ​ ​ ​ (21,827) ​ ​
Cash, cash equivalents, and restricted cash at beginning of year
​ ​ ​ ​ 33,254 ​ ​ ​ ​ ​ 133,020 ​ ​ ​ ​ ​ 240,597 ​ ​
Cash, cash equivalents, and restricted cash at end of year
​ ​ ​ $ 133,020 ​ ​ ​ ​ $ 240,597 ​ ​ ​ ​ $ 218,770 ​ ​
Supplemental disclosures of cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash paid for income taxes
​ ​ ​ $ 74,513 ​ ​ ​ ​ $ 91,892 ​ ​ ​ ​ $ 90,027 ​ ​
Cash paid for interest
​ ​ ​ ​ 17,828 ​ ​ ​ ​ ​ 12,005 ​ ​ ​ ​ ​ 16,322 ​ ​
Supplemental disclosures of noncash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of property and equipment accrued and not yet paid
​ ​ ​ $ 731 ​ ​ ​ ​ $ 4,226 ​ ​ ​ ​ $ 1,235 ​ ​
Deferred payments related to business acquisition
​ ​ ​ ​ — ​ ​ ​ ​ ​ 600 ​ ​ ​ ​ ​ — ​ ​
Share-based compensation recharge not yet paid
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3,434) ​ ​
Deferred payment received for sold receivables
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (64,710) ​ ​
Reconciliation of cash, cash equivalents and restricted cash within the Consolidated Balance Sheets to the amounts shown in the Statements of Cash Flows above: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 129,928 ​ ​ ​ ​ $ 225,362 ​ ​ ​ ​ $ 192,890 ​ ​
Restricted cash
​ ​ ​ ​ 3,092 ​ ​ ​ ​ ​ 15,235 ​ ​ ​ ​ ​ 25,880 ​ ​
Total cash, cash equivalents and restricted cash
​ ​ ​ $ 133,020 ​ ​ ​ ​ $ 240,597 ​ ​ ​ ​ $ 218,770 ​ ​
​
(1)
Including changes in related party balances of $2,319, $(389) and $(10,813) as of December 31, 2020, 2021 and 2022, respectively.
​
(2)
Including changes in related party balances of $0, $56,677 and $(38,734) as of December 31, 2020, 2021 and 2022, respectively.
​
(3)
Including changes in related party balances of $101,150, $198,825 and $(71,228) as of December 31, 2020, 2021 and 2022, respectively.
​
(4)
Including changes in related party balances of $7,956, $1,684 and $(1,241) as of December 31, 2020, 2021 and 2022, respectively.
​
The accompanying notes are an integral part of these consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
Organization and Description of Business
​
SharkNinja Global SPV, Ltd. (together with its subsidiaries, “SharkNinja” or the “Company”) was incorporated in the Cayman Islands on June 27, 2017. SharkNinja is a global product design and technology company that creates innovative lifestyle product solutions across multiple sub-categories, including Cleaning Appliances, Cooking and Beverage Appliances, Food Preparation Appliances and Other products under the brands of “Shark” and “Ninja.” The Company operates as a combination of wholly-owned businesses of JS Global Lifestyle Company Limited (the “Parent” or “JS Global”), which is a listed entity on the Hong Kong Stock Exchange.
SharkNinja is headquartered in Needham, Massachusetts, and its operations have been primarily in the United States and the United Kingdom (“UK”).
2.
Summary of Significant Accounting Policies
​
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of SharkNinja Global SPV, Ltd. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of net sales and expenses during the reporting periods and accompanying notes. Significant items subject to such estimates and assumptions include but are not limited to variable consideration for returns, sales rebates and discounts, the allowance for credit losses, reserve for product warranties, the fair value of financial assets and liabilities including accounting and fair value of derivatives and deferred purchase price (“DPP”) receivable, valuation of inventory, the fair value of acquired intangible assets and goodwill, the useful lives of acquired intangible assets, determination of incremental borrowing rate for leases, share-based compensation and the valuation of deferred tax assets and uncertain tax positions. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.
Due to uncertainty in the macroeconomic environment, including effects of the novel coronavirus (“COVID-19”) and inflation, there is ongoing disruption in the global economy and financial markets. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates or judgments or adjust the carrying value of its assets or liabilities. These estimates, judgments and assumptions may change in the future as new events occur or additional information is obtained.
Joint Venture
The Company had an investment in a joint venture, SharkNinja (China) Technology Co. Ltd., in which the Company was not the primary beneficiary. The governance structures of this entity did not allow the Company to direct the activities that would significantly affect their economic performance. Therefore, the Company accounted for this investment as an equity method investment and the Company’s share of the post-acquisition results and other comprehensive income is included in other income (expense), net within the consolidated statements of income.
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company incurred additional investments to offset joint venture operating losses of $3.5 million, $4.5 million and $0.4 million in the years ended December 31, 2020, 2021 and 2022, respectively, which is included in other income (expense), net within the consolidated statements of income.
In July 2022, the Company transferred its equity method investment in SharkNinja (China) Technology Co. Ltd to an entity controlled by JS Global. Such investment had a carrying amount of zero and was transferred for nominal consideration.
Foreign Currency
The Company’s reporting currency is the United States dollar (“USD”). The Company’s functional currency is USD and generally the functional currency of its international subsidiaries is the local currency of the country in which the subsidiary operates. The Company translates the assets and liabilities of non-USD functional currency subsidiaries into USD using exchange rates in effect at the end of each reporting period. Net sales and expenses for these subsidiaries are translated using average exchange rates prevailing during the period. Gains and losses from these translations are recognized as a cumulative translation adjustment and are included in accumulated other comprehensive income within the consolidated balance sheets.
For transactions that are not denominated in the local functional currency, the transactions are recorded at the exchange rate in effect on the day the transaction occurred. The Company remeasures monetary assets and liabilities denominated in a foreign currency at exchange rates in effect at the end of each reporting period. Transaction gains and losses from the remeasurement are recognized in other income (expense), net within the consolidated statements of income. Foreign currency transaction losses were $2.6 million, $3.4 million and $13.4 million for the years ended December 31, 2020, 2021 and 2022, respectively.
Concentration of Credit Risks
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, restricted cash and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash with high-quality financial institutions, the composition and maturities of which are regularly monitored by the Company.
The Company has outstanding accounts receivable balances with retailers, distributors and direct-to-consumer (“DTC”) customers. The Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded in the consolidated balance sheets. The Company extends different levels of credit to customers, without requiring collateral deposits, and when necessary, maintains reserves for potential credit losses based upon the expected collectability of accounts receivable. The Company manages credit risk related to its customers by performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures.
The Company sells a significant portion of its products through retailers and, as a result, maintains individually significant receivable balances with these parties. If the financial condition or operations of these retailers deteriorates substantially, the Company’s operating results could be adversely affected.
The following table summarizes the Company’s customers that represented 10% or more of accounts receivable, net and net sales:
​ ​ ​
Accounts Receivable, Net
​ ​
Net Sales
​
​ ​ ​
As of December 31,
​ ​
Year Ended December 31,
​
​ ​ ​
2021
​ ​
2022
​ ​
2020
​ ​
2021
​ ​
2022
​
Customer A
​ ​ ​ ​ 16.1% ​ ​ ​ ​ ​ 15.1% ​ ​ ​ ​ ​ 14.5% ​ ​ ​ ​ ​ 16.0% ​ ​ ​ ​ ​ 17.0% ​ ​
Customer B
​ ​ ​ ​ 10.0 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​
Customer C
​ ​ ​ ​ * ​ ​ ​ ​ ​ 19.8 ​ ​ ​ ​ ​ 16.6 ​ ​ ​ ​ ​ 16.1 ​ ​ ​ ​ ​ 15.7 ​ ​
Customer D
​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 10.2 ​ ​
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
​
*
Represents less than 10%
​
Supplier Concentration
The Company relies on third parties to supply and manufacture its products, as well as third-party logistics providers. In instances where these parties fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to its customers on time, if at all.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of cash in banks and bank deposits. The Company considers all highly liquid investments, with an original maturity of three months or less at the date of purchase, to be cash equivalents. The Company maintains certain cash amounts restricted as to its withdrawal or use. The Company’s restricted cash primarily consists of deposits collateralizing a letter of credit for the Company’s custom bonds and operating leases.
Fair Value Measurements
Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair values are therefore determined using model-based techniques that include discounted cash flow models, and similar techniques.
Financial instruments consist of cash and cash equivalents, restricted cash, accounts receivables, derivative financial instruments, DPP receivable, accounts payables, interest-bearing bank loans and accrued liabilities. Derivative financial instruments and DPP receivable are stated at fair value on a recurring basis. Cash and cash equivalents, restricted cash, accounts receivables, accounts payables, interest-bearing bank loans and accrued liabilities are stated at their carrying value, which approximates fair value due to their short-term nature.
Accounts Receivable, Net
Accounts receivable are presented net of allowance for credit losses and allowance for chargebacks. Accounts receivable are presented net of liabilities when a right of setoff exists. The Company determined the allowance for customer incentives and allowance for sales returns should be recorded as a liability.
The Company maintains an allowance related to customer incentives based on specific terms and conditions included in the customer agreements or based on historical experience and the Company’s expectation of discounts.
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. To estimate the allowance for credit losses the Company applied the loss-rate method using relevant available information including historical write-off activity, current conditions and reasonable and supportable forecasts. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, the Company considered various risk characteristics, including geographic location and industry of the customer.
Expected credit losses are estimated over the contractual term of the financial assets. For the years ended December 31, 2020, 2021 and 2022, the Company recorded a credit loss expense of $9.4 million, $7.9 million and $9.0 million, respectively, within general and administrative expenses in the consolidated statements of income. Write-offs of accounts receivable are recorded to the allowance for credit losses. Any subsequent recoveries of previously written off balances are recorded as a reduction to credit loss expense.
Transfer of Financial Instruments
On August 31, 2022, the Company entered into a Receivable Purchase Agreement (“RPA”) with a financial institution (“Purchaser”) to sell its accounts receivable for a cash advanced payment and a deferred payment in the form of a deferred purchase price receivable. All transfers under the RPA meet the criteria of sales accounting and are accounted for as a true sale in accordance with ASC 860, Transfers and Servicing. The Company sells, conveys, transfers and assigns to the Purchaser all its rights, title and interest in the receivables upon the sale and transfer of the receivables to the Purchaser. The Company continues to service, administer and collect the receivables on behalf of the Purchaser. The financial statement impact associated with the servicing liability was immaterial for all periods presented.
As part of the RPA transaction, accounts receivable sold are derecognized from the consolidated balance sheets and a DPP receivable is recognized at fair value. The DPP represents the difference between the fair value of the trade receivables sold and the cash purchase price. The DPP is subsequently remeasured each reporting period to account for activity during the period, such as the seller’s interest in any newly transferred receivables, collections on previously transferred receivables attributable to the DPP and changes in estimates. The DPP is valued using unobservable inputs such as Level 3 inputs, primarily discounted cash flows. Due to the short maturity of the instruments, the carrying value of the DPP receivable approximates the fair value of the DPP. Please refer to Note 4—Fair Value Measurement for additional details.
For the year ended December 31, 2022, the Company sold and derecognized receivables of $371.5 million, in exchange for a cash advanced payment of $304.2 million and a deferred purchase price receivable recorded at fair value of $64.7 million to prepaid expenses and other current assets in the consolidated balance sheets. Upon the sale and transfer of receivables, the cash advanced payment received was reflected as operating activities and the DPP receivable was reflected as a non-cash investing activity in the consolidated statements of cash flows. As the Company received cash collections from customers on the DPP receivable, these were reflected as investing activities in the consolidated statements of cash flows. In addition, a loss of $2.6 million was recognized in connection with the sale of the receivables, which was recorded within other income (expense), net in the consolidated statements of income.
Cash collections from customers on receivables sold were $269.7 million during the year ended December 31, 2022, of which the cash collections on the DPP receivable were $42.4 million. As of December 31, 2022, the outstanding principal on receivables sold was $101.8 million, and the Company’s risk of loss following the sale of the receivables was limited to the uncollected portion of the DPP at $22.3 million.
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the activity related to the DPP receivable:
​ ​ ​
Year Ended
December 31,
​
​ ​ ​
2022
​
​ ​ ​
(in thousands)
​
Beginning balance
​ ​ ​ $ — ​ ​
Non-cash addition to DPP receivable
​ ​ ​ ​ 64,710 ​ ​
Cash collected on DPP receivable
​ ​ ​ ​ (42,416) ​ ​
Ending balance
​ ​ ​ $ 22,294 ​ ​
Derivative Financial Instruments
The Company enters into foreign currency forward contracts with financial institutions to protect against foreign exchange risks largely attributable to its exposure to changes in the exchange rate of the Chinese Yuan (“CNY”) and Great British Pound (“GBP”) against the USD that are associated with forecasted future cash flows. The Company’s primary objective in entering into these contracts is to reduce the volatility of cash flows associated with changes in foreign currency exchange rates. The Company does not use derivative instruments for trading or speculative purposes.
The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, are recorded either within prepaid expenses and other current assets or accrued expenses and other current liabilities in the consolidated balance sheets. The Company records changes in the fair value of these derivatives in accumulated other comprehensive income in the consolidated balance sheets until the forecasted transaction occurs upon which the Company reclassifies the related gain or loss on the derivative to the same financial statements line item in the consolidated statements of income to which the derivative relates. The Company did not have any forward contracts designated as hedging instruments for any period presented.
Derivative instruments that hedge the exposure to variability in expected future cash flows or the fair value of assets or liabilities that are not currently designated as hedges for financial reporting purposes, are recorded either within prepaid expenses and other current assets or accrued expenses and other current liabilities in the consolidated balance sheets. The Company records changes in the fair value of these derivatives in other income (expense), net in the consolidated statements of income. The notional amounts of outstanding forward contracts that were not designated as hedging instruments as of December 31, 2022 were $956.2 million. The total gain recognized from these derivatives was $22.7 million for the year ended December 31, 2022. The Company did not have any material forward contracts that were not designated as hedging instruments for the years ended December 31, 2020 or 2021.
Inventories
Inventory primarily consists of finished goods and, to a lesser extent, components, which are purchased from manufacturers. Inventory is stated at the lower of cost or net realizable value with cost being determined using the standard cost method, which approximates actual costs determined on the first-in, first-out basis. Inventories include indirect acquisition and production costs that are incurred to bring the inventories to their present condition and location, including shipping costs. The Company writes down its inventory for estimated obsolescence or excess inventory based upon assumptions around market conditions and estimates of future demand. Net realizable value is defined as estimated selling prices less reasonably predictable costs of completion, disposal and transportation. Adjustments to reduce inventory to net realizable value are recognized in cost of sales.
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Included within inventories are adjustments of $2.2 million, $2.9 million and $2.7 million for the years ended December 31, 2020, 2021 and 2022, respectively, to record inventory to net realizable value.
Property and Equipment, Net
Property and equipment are stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets. Expenditures for maintenance and repairs are expensed as incurred.
The estimated useful lives of the Company’s property and equipment are as follows:
​ Molds and tooling ​ ​
3 years
​
​ Computer and software ​ ​
3 years
​
​ Displays ​ ​
2 years
​
​ Equipment ​ ​
5 years
​
​ Furniture and fixtures ​ ​
7 years
​
​ Leasehold improvements ​ ​
Shorter of remaining lease
term or estimated useful life
​
Construction in progress includes computer and software, furniture and fixtures, equipment and leasehold improvements, not yet placed in service, which is stated at cost, and is not depreciated until completed and ready for use.
Capitalized Internal-Use Software Costs
The Company capitalizes internal-use software development costs that are incurred during the application development stage. Capitalized costs of internal-use software development are included within property and equipment, net in the consolidated balance sheets, and amortized on a straight-line basis over the software’s estimated useful life. As of December 31, 2021 and 2022, the Company has capitalized $7.0 million and $13.8 million, respectively, of costs to develop internal-use software. Of those amounts, $6.8 million and $1.5 million of capitalized expenses relate to assets not placed in service as of December 31, 2021 and 2022, respectively. Amortization expenses were immaterial for all periods presented.
Cloud Computing Arrangement Implementation Costs
The Company capitalizes costs to implement cloud computing arrangements that are service contracts. Capitalized implementation costs are included within other assets, noncurrent in the consolidated balance sheets, and amortized on a straight-line basis over the term of the service contract, which includes reasonably certain renewals. As of December 31, 2021 and 2022, the Company has capitalized $14.5 million and $26.2 million, respectively, of costs to implement cloud computing arrangements. Of those amounts, $14.5 million and $23.6 million of capitalized expenses relate to assets not placed in service as of December 31, 2021 and 2022, respectively. Amortization expenses were immaterial for all periods presented.
Leases
The Company determines if an arrangement is a lease at inception of the contract. For all leases, the Company recognizes on the consolidated balance sheets a liability as of the lease commencement date for its obligation related to the lease and a corresponding asset representing its right to use the underlying asset over the period of use (“ROU asset”). The Company recognizes the lease liability for each lease based on the present value of the lease payments not yet paid at the commencement date of the lease. The ROU asset for each lease is recorded at the amount equal to the initial measurement of the lease liability, adjusted for balances of prepaid rent, lease incentives received and initial direct costs incurred. For operating leases, expense is recognized on a straight-line basis over the lease term. Short-term leases with an initial term of
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12 months or less are not recorded on the consolidated balance sheets and are recognized on a straight-line basis over the lease term.
As the leases generally do not provide a readily determinable implicit rate, the Company uses an estimated incremental borrowing rate determined based on the information available at the lease commencement date in determining the present value of lease payments. The determination of the incremental borrowing rate requires judgment and is primarily based on publicly available information for companies within the same industry and with similar credit profiles. When determining the lease term, the Company considers renewal options that it is reasonably certain to exercise and termination options that the Company is reasonably certain not to exercise, in addition to the non-cancellable period of the lease.
The Company enters into operating leases for real estate spaces and motor vehicles. For real estate spaces, lease terms range from 2 to 12 years. For motor vehicles, lease terms range from 2 to 5 years. The Company had no finance leases during the periods presented.
Certain of the Company’s real estate leasing agreements include terms requiring the Company to reimburse the lessor for its share of real estate taxes, insurance, operating costs and utilities, as well as payment of sales tax to authorities. The Company accounts for these payments as variable lease costs when incurred because the Company has elected to not separate lease and non-lease components. As a result, such costs are not included in the initial measurement of the lease liability. There are no restrictions or covenants imposed by any of the leases, and none of the Company’s leases contain material residual value guarantees.
Business Acquisitions
When the Company acquires a business, the purchase price is allocated to the tangible and identifiable intangible assets, net of liabilities assumed. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable. During the measurement period, which may be up to one year from the acquisition date, adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of income.
Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business acquisition and has been assigned to the Company’s one reporting unit. Indefinite-lived intangible assets consist of trade name and trademarks acquired through business acquisitions. Goodwill and indefinite-lived intangible assets are not amortized but rather tested for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate they may be impaired. Qualitative factors are first assessed to determine whether it is more likely than not that goodwill or indefinite-lived intangible assets are impaired, and quantitative testing would then be performed if necessary. For indefinite-lived intangible assets, quantitative testing would consist of a comparison of the fair value of each indefinite-lived intangible asset with its carrying value, with any excess of carrying value over fair value being recognized as an impairment loss. For goodwill, quantitative testing consists of a comparison of the reporting unit’s fair value to its carrying value. If the carrying value of a reporting unit exceeds its fair value, goodwill impairment is calculated as the difference between the carrying value of the reporting unit and its fair value, up to the amount of goodwill. There was no impairment of goodwill or indefinite-live intangible assets during the years ended December 31, 2020, 2021 and 2022.
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Intangible assets subject to amortization consist of identifiable intangible assets resulting from business acquisitions and purchased patents. Acquired intangible assets from business acquisitions are initially recorded at fair value and purchased patents are initially carried at cost. Intangible assets subject to amortization are amortized on a straight-line basis over their estimated useful lives. Amortization expense is recognized within research and development expenses for developed technology and patents and sales and marketing expenses for customer relationships in the consolidated statements of income.
Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization, or whether the indefinite life assessment continues to be supportable for trade name and trademarks.
The estimated useful lives of the Company’s intangible assets are as follows:
​ Developed technology ​ ​
12 years
​
​ Patents ​ ​
10 years
​
​ Customer relationships ​ ​
9 years
​
​ Trade name and trademarks ​ ​
Indefinite and assessed
annually for impairment
​
Impairment of Long-Lived Assets
The Company evaluates the recoverability of long-lived assets, including property and equipment and intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. Recognition and measurement of a potential impairment is performed on assets grouped with other assets and liabilities at the lowest level where identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these asset groups is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of long-lived assets is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the assets exceeds the fair value, which is determined based on expected discounted future cash flows arising from those assets. The Company determined that there were no events or changes in circumstances that indicated that its long-lived assets were impaired during the years ended December 31, 2020, 2021 and 2022.
Revenue Recognition
The Company is a designer, marketer and distributor of small household appliances which are sold under two brands: Shark and Ninja. The Shark offerings cover an expansive and diverse assortment of categories including Floorcare including Corded and Cordless Vacuums, Robot Vacuums, Steam Mops and Wet/Dry Floor Cleaning, Home Environment and Beauty appliances. Ninja is a top brand in small kitchen appliances in the United States and its diversified product offering spans across consumers’ kitchens, both indoors and outdoors, with leading products in Motorized Kitchen Appliances, Heated Cooking, Beverage Appliances and Kitchenware.
In accordance with ASC 606, the Company recognizes net sales for both brands at the amount to which it expects to be entitled when a contract exists with a customer that specifies the products to be provided at an agreed upon sales price and the performance obligation is satisfied when control of the products are transferred to its customers. The performance obligation for most of the Company’s sales transactions is considered complete when control transfers, which is determined when products are shipped or delivered to the customer depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery of point-of-sale transactions. Customers primarily consist of retailers, distributors and DTC customers.
Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from net sales. Shipping charges billed to customers are included within net sales and related
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
shipping costs are included within sales and marketing expenses in the consolidated statements of income. The Company has elected to account for shipping and handling activities performed after control has been transferred to the customer as a fulfillment cost.
The Company determines the amount of net sales to be recognized through the application of the following steps:
1.
Identification of the contract, or contracts, with the customer
​
The Company determines that it has a contract with a customer when each party’s rights regarding the products to be transferred can be identified, the payment terms for the products can be identified, the Company has determined the customer has the ability and intent to pay and the contract has commercial substance.
The Company enters into contractual arrangements with customers in the form of individual customer orders which specify the goods, quantity, pricing and associated order terms. The Company does not have significant long-term contracts that are satisfied over time. Due to the nature of the contracts, no significant judgment exists in relation to the identification of the customer contract or satisfaction of the performance obligation. The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts.
2.
Identification of the performance obligations in the contract
​
Performance obligations promised in a contract are identified based on the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the products either on their own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products is separately identifiable from other promises in the contract.
The Company also offers assurance-type warranties relating to its products sold to consumers that are accounted for under ASC 460, Guarantees. In certain contracts, the Company provides extended, service-type warranties. Such warranties are accounted for as separate performance obligations to which the Company recognizes contract liabilities for the unfulfilled extended warranties by allocating a portion of the transaction price based on the relative stand-alone selling price.
3.
Determination of the transaction price
​
The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring products or delivery of services to the customer. Payment terms and conditions generally include a requirement to pay within 30 to 60 days, but such terms and conditions can vary by contract type. In instances where the timing of net sales recognition differs from the timing of invoicing, the Company has determined its contracts generally do not include a significant financing component as generally payment terms are less than one year.
The Company has certain contractual programs and practices with customers that can give rise to elements of variable consideration, such as rights of return and volume incentive rebates. The Company estimates the variable consideration using the expected value method or most likely amount method, based on sales and contractual rates with each customer and records the estimated amount of credits for these programs as a reduction to net sales.
The Company accounts for consideration payable to a customer as a reduction of net sales unless the payment to the customer is in exchange for a distinct good that the customer transfers to the Company. If the consideration payable to a customer includes a variable amount, the Company estimates the transaction price using the most likely amount method.
Net sales are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4.
Allocation of the transaction price to the performance obligations in the contract
​
When a contract contains multiple performance obligations, the contract transaction price is allocated on a relative standalone selling price (“SSP”) basis to each performance obligation. The Company typically determines SSP based on observable selling prices of its products and services. In instances where SSP is not directly observable, SSP is determined using information that may include market conditions and other observable inputs, or by using the residual approach.
5.
Recognition of the revenue when, or as, a performance obligation is satisfied
​
Net sales are recognized at the time the related performance obligation is satisfied by transferring the promised product to the customer. Net sales are recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those products or services.
The performance obligation for most of the Company’s sales transactions is considered complete when control transfers, which is determined when products are shipped or delivered to the customer depending on the terms of the contract. Net sales related to service-type warranties are recognized ratably over the contract period.
Disaggregation of Net Sales
The following table summarizes net sales by region based on the billing address of customers:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​
​ ​ ​
(in thousands, except percentages)
​
North America(1)
​ ​ ​ $ 2,210,988 ​ ​ ​ ​ ​ 80.3% ​ ​ ​ ​ $ 2,954,327 ​ ​ ​ ​ ​ 79.3% ​ ​ ​ ​ $ 2,922,680 ​ ​ ​ ​ ​ 78.6% ​ ​
Europe(2) ​ ​ ​ ​ 428,345 ​ ​ ​ ​ ​ 15.6 ​ ​ ​ ​ ​ 610,942 ​ ​ ​ ​ ​ 16.4 ​ ​ ​ ​ ​ 629,364 ​ ​ ​ ​ ​ 16.9 ​ ​
Rest of World
​ ​ ​ ​ 113,833 ​ ​ ​ ​ ​ 4.1 ​ ​ ​ ​ ​ 161,725 ​ ​ ​ ​ ​ 4.3 ​ ​ ​ ​ ​ 165,322 ​ ​ ​ ​ ​ 4.5 ​ ​
Total net sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ ​ 100% ​ ​
​
(1)
Net sales from the United States represented 76.4%, 74.5% and 72.8% of total net sales for the years ended December 31, 2020, 2021 and 2022, respectively.
​
(2)
Net sales from the UK represented 14.8%, 14.1% and 13.3% of total net sales for the years ended December 31, 2020, 2021 and 2022, respectively.
​
The following table presents net sales by brand:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​
​ ​ ​
(in thousands, except percentages)
​
Shark
​ ​ ​ $ 1,691,877 ​ ​ ​ ​ ​ 61.5% ​ ​ ​ ​ $ 2,005,183 ​ ​ ​ ​ ​ 53.8% ​ ​ ​ ​ $ 2,047,972 ​ ​ ​ ​ ​ 55.1% ​ ​
Ninja
​ ​ ​ ​ 1,061,289 ​ ​ ​ ​ ​ 38.5 ​ ​ ​ ​ ​ 1,721,811 ​ ​ ​ ​ ​ 46.2 ​ ​ ​ ​ ​ 1,669,394 ​ ​ ​ ​ ​ 44.9 ​ ​
Total net sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ ​ 100% ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents net sales by product category:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​
​ ​ ​
(in thousands, except percentages)
​
Cleaning Appliances
​ ​ ​ $ 1,685,120 ​ ​ ​ ​ ​ 61.2% ​ ​ ​ ​ $ 1,949,950 ​ ​ ​ ​ ​ 52.3% ​ ​ ​ ​ $ 1,931,732 ​ ​ ​ ​ ​ 52.0% ​ ​
Cooking and Beverage Appliances ​ ​ ​ ​ 684,331 ​ ​ ​ ​ ​ 24.9 ​ ​ ​ ​ ​ 1,173,365 ​ ​ ​ ​ ​ 31.5 ​ ​ ​ ​ ​ 1,078,610 ​ ​ ​ ​ ​ 29.0 ​ ​
Food Preparation Appliances ​ ​ ​ ​ 376,958 ​ ​ ​ ​ ​ 13.7 ​ ​ ​ ​ ​ 548,447 ​ ​ ​ ​ ​ 14.7 ​ ​ ​ ​ ​ 590,438 ​ ​ ​ ​ ​ 15.9 ​ ​
Other
​ ​ ​ ​ 6,757 ​ ​ ​ ​ ​ 0.2 ​ ​ ​ ​ ​ 55,232 ​ ​ ​ ​ ​ 1.5 ​ ​ ​ ​ ​ 116,586 ​ ​ ​ ​ ​ 3.1 ​ ​
Total net sales
​ ​ ​ $ 2,753,166 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 3,726,994 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 3,717,366 ​ ​ ​ ​ ​ 100% ​ ​
Contract Liabilities
Contract liabilities consist of deferred net sales related to extended, service-type warranties that are included within accrued expenses and other current liabilities and other liabilities, noncurrent in the consolidated balance sheets. Net sales are deferred when the Company invoices in advance of performance under a contract. The current portion of deferred net sales balances is recognized during the following 12-month period. As of and for the years ended December 31, 2020, 2021 and 2022, ending contract liabilities and revenue recognized associated with service-type warranties were immaterial.
Remaining Performance Obligation
The Company’s remaining performance obligations are comprised of product net sales not yet delivered. As of December 31, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was immaterial.
Warranty Costs
The Company accrues the estimated cost of product warranties at the time it recognizes net sales and records warranty expense to cost of goods sold. The Company’s standard warranty provides for repair or replacement of the associated products during the warranty period. The amount of the provision for the warranties is estimated based on sales volume and past experience of the level of repairs and returns. If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty obligation may be required.
Product warranty liabilities and changes were as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Beginning balance
​ ​ ​ $ 9,370 ​ ​ ​ ​ $ 18,157 ​ ​ ​ ​ $ 17,828 ​ ​
Accruals for warranties issued during the period
​ ​ ​ ​ 19,094 ​ ​ ​ ​ ​ 22,147 ​ ​ ​ ​ ​ 21,210 ​ ​
Changes in liability for pre-existing warranties during the period
​ ​ ​ ​ 3,649 ​ ​ ​ ​ ​ (4,555) ​ ​ ​ ​ ​ 5,964 ​ ​
Settlements made during the period
​ ​ ​ ​ (13,956) ​ ​ ​ ​ ​ (17,921) ​ ​ ​ ​ ​ (24,044) ​ ​
Ending balance
​ ​ ​ $ 18,157 ​ ​ ​ ​ $ 17,828 ​ ​ ​ ​ $ 20,958 ​ ​
 
F-19
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Research and Development
Research and development expenses include personnel-related expenses associated with the Company’s engineering personnel responsible for the design, development and testing of its products, cost of development environments and tools and allocated overhead. Research and development expenses are expensed as incurred.
Advertising Costs
Advertising costs are expensed as incurred and include direct marketing, events, public relations, sales collateral materials and partner programs. Advertising costs amounted to $254.0 million, $296.0 million and $270.8 million for the years ended December 31, 2020, 2021 and 2022, respectively, and are included within sales and marketing expenses in the consolidated statements of income.
Share-Based Compensation
The Company’s employees participate in JS Global’s equity incentive plans. The Company uses the fair market value of JS Global’s ordinary shares on the grant date to measure fair value for service-based and performance-based restricted share units. Forfeitures are accounted for as they occur.
For share-based awards that include performance criteria, compensation cost is recorded when the achievement of the performance criteria is probable and is recognized over the performance and vesting service periods using the accelerated attribution method.
Tariffs
On March 23, 2022, the Office of the United States Trade Representative announced in a “Notice of Reinstatement of Certain Exclusions: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” that the United States Trade Representative had determined to reinstate exclusions of certain products from additional duties to be applied as of October 12, 2021 and be extended through December 31, 2022. According to management’s preliminary assessment, these exclusions cover the majority of vacuums, air purifiers and air fryers that the Company imports from China to the United States. For the year ended December 31, 2022, the Company recorded $25.9 million in refunds related to 2021 purchases and $43.7 million in refunds related to 2022 purchases, which are included as a reduction to cost of sales in the consolidated statements of income. Of these recorded amounts, $45.4 million remains open to be received as of December 31, 2022.
Income Taxes
The Company is subject to income taxes in the United States and other jurisdictions. These other jurisdictions may have different statutory rates than the United States. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax basis as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized.
The Company recognizes income tax benefits from uncertain tax positions only if it believes that it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such uncertain tax positions are then measured based on the largest benefit that is more likely than not to be realized upon the ultimate settlement.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Net Income Per Share
The Company’s basic net income per share is calculated by dividing net income by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net income per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net income per share is the same as basic net income per share in periods when the effects of potentially dilutive shares of common shares are anti-dilutive. The Company’s diluted net income per share is the same as basic net income per share as there were no dilutive securities outstanding during the periods presented.
Segment Information
The Company operates in one operating and reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the Company’s chief executive officer (“CEO”), in deciding how to allocate resources and assessing performance. The Company’s CEO allocates resources and assesses performance based upon discrete financial information at the consolidated level.
Net sales by geographical region can be found in the disaggregation of net sales in Note 2 above. The following table presents the Company’s property and equipment, net of depreciation and amortization, by geographic region:
​ ​ ​
As of December 31,
​
​ ​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
United States
​ ​ ​ $ 58,901 ​ ​ ​ ​ $ 74,054 ​ ​
China
​ ​ ​ ​ 42,736 ​ ​ ​ ​ ​ 55,170 ​ ​
Rest of World
​ ​ ​ ​ 7,464 ​ ​ ​ ​ ​ 8,117 ​ ​
Total property and equipment, net
​ ​ ​ $ 109,101 ​ ​ ​ ​ $ 137,341 ​ ​
Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires a financial asset measured at an amortized cost basis to be presented at the net amount expected to be collected, with further clarifications made more recently. For trade receivables, loans and other financial instruments, the Company is required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities are required to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The Company adopted ASU 2016-13 as of January 1, 2020 on a modified retrospective basis, and the guidance did not have a material impact on the Company’s consolidated financial statements.
In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting. This is a simplification that involves several aspects of accounting for nonemployee share-based payments resulting from expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company adopted ASU 2018-07 as of January 1, 2020, and the guidance did not have a material impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which removes certain
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted ASU 2018-13 as of January 1, 2020 and have applied to all the periods presented on its consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing a variety of exceptions within the framework of ASC 740. These exceptions include the exception to the incremental approach for intraperiod tax allocation in the event of a loss from continuing operations and income or a gain from other items and the exception to using general methodology for the interim period tax accounting for year-to-date losses that exceed anticipated losses. The Company adopted ASU 2019-12 as of January 1, 2020, and the guidance did not have a material impact on the Company’s consolidated financial statements.
In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity, and clarifies the guidance on the computation of earnings per share for those financial instruments. The Company adopted ASU 2019-12 as of January 1, 2020, and the guidance did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The standard is effective for the Company beginning after January 1, 2023, including interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU may have on its consolidated financial statements but does not expect it to have a material impact.
In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815), Fair Value Hedging—Portfolio Layer Method, which clarifies the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets. The standard is effective for the Company beginning after January 1, 2023, including interim periods within those fiscal years. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements but does not expect it to have a material impact.
3.
Consolidated Balance Sheet Components
​
Property and Equipment, Net
Property and equipment, net consisted of the following:
​ ​ ​
December 31,
​
​ ​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Molds and tooling
​ ​ ​ $ 177,038 ​ ​ ​ ​ $ 209,984 ​ ​
Computer and software
​ ​ ​ ​ 71,486 ​ ​ ​ ​ ​ 88,483 ​ ​
Displays
​ ​ ​ ​ 66,576 ​ ​ ​ ​ ​ 90,722 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
​ ​ ​
December 31,
​
​ ​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Equipment
​ ​ ​ ​ 10,646 ​ ​ ​ ​ ​ 14,653 ​ ​
Furniture and fixtures
​ ​ ​ ​ 9,894 ​ ​ ​ ​ ​ 11,418 ​ ​
Leasehold improvements
​ ​ ​ ​ 23,701 ​ ​ ​ ​ ​ 31,315 ​ ​
Total property and equipment
​ ​ ​ ​ 359,341 ​ ​ ​ ​ ​ 446,575 ​ ​
Less: accumulated depreciation and amortization
​ ​ ​ ​ (265,582) ​ ​ ​ ​ ​ (322,022) ​ ​
Construction in progress
​ ​ ​ ​ 15,342 ​ ​ ​ ​ ​ 12,788 ​ ​
Property and equipment, net
​ ​ ​ $ 109,101 ​ ​ ​ ​ $ 137,341 ​ ​
​
Depreciation and amortization expenses were $57.4 million, $56.8 million and $64.2 million for the years ended December 31, 2020, 2021 and 2022, respectively.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
​ ​ ​
December 31,
​
​ ​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Prepaid expenses
​ ​ ​ $ 22,010 ​ ​ ​ ​ $ 86,274 ​ ​
Related party receivables
​ ​ ​ ​ 38,012 ​ ​ ​ ​ ​ 20,069 ​ ​
Derivative assets
​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,676 ​ ​
DPP receivable
​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,294 ​ ​
Other receivables
​ ​ ​ ​ 26,404 ​ ​ ​ ​ ​ 30,518 ​ ​
Prepaid expenses and other current assets
​ ​ ​ $ 86,426 ​ ​ ​ ​ $ 181,831 ​ ​
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
​ ​ ​
December 31,
​
​ ​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Accrued customer incentives
​ ​ ​ $ 207,040 ​ ​ ​ ​ $ 230,195 ​ ​
Accrued expenses
​ ​ ​ ​ 92,400 ​ ​ ​ ​ ​ 95,785 ​ ​
Accrued compensation and benefits
​ ​ ​ ​ 60,596 ​ ​ ​ ​ ​ 71,762 ​ ​
Accrued returns
​ ​ ​ ​ 46,436 ​ ​ ​ ​ ​ 45,529 ​ ​
Accrued tax payables
​ ​ ​ ​ 34,646 ​ ​ ​ ​ ​ 43,243 ​ ​
Accrued warranty
​ ​ ​ ​ 17,828 ​ ​ ​ ​ ​ 20,958 ​ ​
Operating lease liabilities, current
​ ​ ​ ​ 14,491 ​ ​ ​ ​ ​ 13,038 ​ ​
Accrued professional fees
​ ​ ​ ​ 3,079 ​ ​ ​ ​ ​ 4,177 ​ ​
Other
​ ​ ​ ​ 18,266 ​ ​ ​ ​ ​ 27,336 ​ ​
Accrued expenses and other current liabilities
​ ​ ​ $ 494,782 ​ ​ ​ ​ $ 552,023 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4.
Fair Value Measurements
​
There were no financial instruments that are measured at fair value on a recurring basis as of December 31, 2021.
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022:
​ ​ ​
December 31, 2022
​
​ ​ ​
Fair Value
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​
​ ​ ​
(in thousands)
​
Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Derivatives not designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Forward contracts included in prepaid expenses and other current assets
​ ​ ​ $ 22,676 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 22,676 ​ ​ ​ ​ $ — ​ ​
DPP receivable included in prepaid expenses and other current assets ​ ​ ​ ​ 22,294 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,294 ​ ​
Total financial assets
​ ​ ​ $ 44,970 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 22,676 ​ ​ ​ ​ $ 22,294 ​ ​
The Company classifies its derivative financial instruments within Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. The Company classifies its DPP receivable within Level 3 because it is valued using unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. There were no transfers into or out of Level 3 fair value measurement for the year ended December 31, 2022.
Because no market exists for a DPP in sold receivables, fair value estimates are based on judgments regarding current economic conditions and the risk characteristics of the expected collection percentage of the remaining receivables outstanding. Those estimates that are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision are included in Level 3. Changes in assumptions could significantly affect the fair value of the DPP receivable presented.
5.
Business Acquisitions
​
2020 Acquisition Activity
In January 2020, the Company entered into an agreement to acquire Qfeeltech (Beijing) Co., Ltd. (“Qfeeltech”) for a total consideration of approximately $18.0 million. Intangible assets acquired were $17.9 million, consisting of developed technology with an estimated useful life of 12 years. Transaction costs incurred in connection with this acquisition were immaterial. In addition, there are contingent considerations that were not included within the total purchase price that are contingent upon the attainment of certain employees’ retention, which the Company will record as post-combination compensation expense over the respective service periods. The Company recognized $6.8 million, $3.7 million and $1.6 million in compensation expense related to attainment of certain employees’ retention subject to service conditions for the years ended December 31, 2020, 2021 and 2022, respectively.
2021 Acquisition Activity
During the year ended December 31, 2021, the Company completed an acquisition for total consideration of approximately $2.4 million, of which the total amount of goodwill expected to be deductible for tax purposes is $0.8 million. Intangible assets acquired was $1.6 million, consisting of developed technology with an estimated useful life of 10 years. Transaction costs incurred in connection with this acquisition were immaterial.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The effects of these acquisitions on the Company’s consolidated total net sales and net income were immaterial. As a result, pro forma results of operations for these acquisitions have not been presented.
6.
Intangible Assets, Net and Goodwill
​
Intangible Assets, Net
Intangible assets consisted of the following as of December 31, 2021:
​ ​ ​
Gross Carrying
Value
​ ​
Accumulated
Amortization
​ ​
Net Carrying
Value
​ ​
Weighted-
Average
Remaining
Useful Life
​
​ ​ ​
(in thousands)
​ ​
(in years)
​
Intangible assets subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Customer relationships
​ ​ ​ $ 143,083 ​ ​ ​ ​ $ (67,567) ​ ​ ​ ​ $ 75,516 ​ ​ ​
4.8
​
Patents
​ ​ ​ ​ 45,347 ​ ​ ​ ​ ​ (15,678) ​ ​ ​ ​ ​ 29,669 ​ ​ ​
6.5
​
Developed technology
​ ​ ​ ​ 23,653 ​ ​ ​ ​ ​ (2,709) ​ ​ ​ ​ ​ 20,944 ​ ​ ​
10.2
​
Total intangible assets subject to amortization
​ ​ ​ $ 212,083 ​ ​ ​ ​ $ (85,954) ​ ​ ​ ​ $ 126,129 ​ ​ ​ ​ ​
Intangible assets not subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade name and trademarks
​ ​ ​ ​ 384,040 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 384,040 ​ ​ ​
Indefinite
​
Total intangible assets, net
​ ​ ​ $ 596,123 ​ ​ ​ ​ $ (85,954) ​ ​ ​ ​ $ 510,169 ​ ​ ​ ​ ​
Intangible assets consisted of the following as of December 31, 2022:
​ ​ ​
Gross Carrying
Value
​ ​
Accumulated
Amortization
​ ​
Net Carrying
Value
​ ​
Weighted-
Average
Remaining
Useful Life
​
​ ​ ​
(in thousands)
​ ​
(in years)
​
Intangible assets subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Customer relationships
​ ​ ​ $ 143,083 ​ ​ ​ ​ $ (83,465) ​ ​ ​ ​ $ 59,618 ​ ​ ​
3.8
​
Patents
​ ​ ​ ​ 52,695 ​ ​ ​ ​ ​ (19,874) ​ ​ ​ ​ ​ 32,821 ​ ​ ​
6.2
​
Developed technology
​ ​ ​ ​ 21,381 ​ ​ ​ ​ ​ (5,151) ​ ​ ​ ​ ​ 16,230 ​ ​ ​
9.2
​
Total intangible assets subject to amortization
​ ​ ​ $ 217,159 ​ ​ ​ ​ $ (108,490) ​ ​ ​ ​ $ 108,669 ​ ​ ​ ​ ​
Intangible assets not subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade name and trademarks
​ ​ ​ ​ 384,040 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 384,040 ​ ​ ​
Indefinite
​
Total intangible assets, net
​ ​ ​ $ 601,199 ​ ​ ​ ​ $ (108,490) ​ ​ ​ ​ $ 492,709 ​ ​ ​ ​ ​
Amortization expenses for intangible assets were as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Research and development
​ ​ ​ $ 4,800 ​ ​ ​ ​ $ 5,443 ​ ​ ​ ​ $ 6,637 ​ ​
Sales and marketing
​ ​ ​ ​ 15,898 ​ ​ ​ ​ ​ 15,898 ​ ​ ​ ​ ​ 15,898 ​ ​
Total amortization expenses
​ ​ ​ $ 20,698 ​ ​ ​ ​ $ 21,341 ​ ​ ​ ​ $ 22,535 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The expected future amortization expenses related to the intangible assets as of December 31, 2022 were as follows:
​ ​ ​
Amount
​
​ ​ ​
(in thousands)
​
Year Ending December 31, ​ ​ ​ ​ ​ ​ ​
2023
​ ​ ​ $ 24,024 ​ ​
2024
​ ​ ​ ​ 22,851 ​ ​
2025
​ ​ ​ ​ 22,851 ​ ​
2026
​ ​ ​ ​ 18,877 ​ ​
2027
​ ​ ​ ​ 6,031 ​ ​
Thereafter
​ ​ ​ ​ 14,035 ​ ​
Total
​ ​ ​ $ 108,669 ​ ​
Goodwill
The following table represents the changes to goodwill:
​ ​ ​
Carrying Amount
​
​ ​ ​
(in thousands)
​
Balance as of December 31, 2020
​ ​ ​ $ 839,767 ​ ​
Addition from acquisition
​ ​ ​ ​ 830 ​ ​
Effect of foreign currency translation
​ ​ ​ ​ 228 ​ ​
Balance as of December 31, 2021
​ ​ ​ $ 840,825 ​ ​
Effect of foreign currency translation
​ ​ ​ ​ (677) ​ ​
Balance as of December 31, 2022
​ ​ ​ $ 840,148 ​ ​
​
7.
Operating Leases
​
The components of total lease costs for operating leases for the period presented were as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Operating lease cost
​ ​ ​ $ 14,406 ​ ​ ​ ​ $ 16,201 ​ ​ ​ ​ $ 18,886 ​ ​
Variable lease cost
​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 5,294 ​ ​ ​ ​ ​ 7,024 ​ ​
Short-term lease cost
​ ​ ​ ​ 141 ​ ​ ​ ​ ​ 450 ​ ​ ​ ​ ​ 603 ​ ​
Total lease cost
​ ​ ​ $ 15,455 ​ ​ ​ ​ $ 21,945 ​ ​ ​ ​ $ 26,513 ​ ​
The supplemental cash flow information related to operating leases for the periods presented were as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Cash payment for operating lease liabilities
​ ​ ​ $ 13,624 ​ ​ ​ ​ $ 16,020 ​ ​ ​ ​ $ 16,834 ​ ​
Operating lease liabilities arising from obtaining new operating lease ROU assets during the period ​ ​ ​ $ 28,388 ​ ​ ​ ​ $ 19,343 ​ ​ ​ ​ $ 11,089 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The weighted-average remaining lease terms and discount rates for operating leases were as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Weighted-average remaining lease term (years)
​ ​ ​ ​ 6.9 ​ ​ ​ ​ ​ 6.5 ​ ​ ​ ​ ​ 6.4 ​ ​
Weighted-average discount rate
​ ​ ​ ​ 4.0% ​ ​ ​ ​ ​ 4.3% ​ ​ ​ ​ ​ 4.4% ​ ​
Future minimum lease payments under non-cancellable leases as of December 31, 2022, were as follows:
​ ​ ​
Amount
​
​ ​ ​
(in thousands)
​
Year Ending December 31, ​ ​ ​ ​ ​ ​ ​
2023
​ ​ ​ $ 16,099 ​ ​
2024
​ ​ ​ ​ 14,984 ​ ​
2025
​ ​ ​ ​ 9,757 ​ ​
2026
​ ​ ​ ​ 9,992 ​ ​
2027
​ ​ ​ ​ 10,166 ​ ​
Thereafter
​ ​ ​ ​ 26,178 ​ ​
Total undiscounted lease payments
​ ​ ​ ​ 87,176 ​ ​
Less: Imputed interest
​ ​ ​ ​ (12,359) ​ ​
Total operating lease liabilities
​ ​ ​ $ 74,817 ​ ​
​
8.
Debt
​
On September 29, 2017, the Company entered into a term loan and revolving credit agreement (“2017 Credit Agreement” or “Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The Credit Agreement provided for a Tranche A $225.0 million term loan (“Term Loan A”), a Tranche B $455.0 million term loan (“Term Loan B”) and a $225.0 million revolving credit facility (“JPM Revolving Facility”).
On March 17, 2020, the Company entered into a term loan and revolving credit agreement (“Facilities Agreement”) with Bank of China Limited, Macau Branch, as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The Facilities Agreement provided for a $500.0 million term loan facility (the “Secured Term Loan”) and $200.0 million revolving credit facility (“Revolving Facility”). The Secured Term Loan matures five years from the initial utilization date on March 20, 2020, and both facilities bear interest at a rate of LIBOR plus 1.8%. The Company may request to increase the total commitments related to the Revolving Facility in amounts not to exceed $50.0 million for each financial year. The Facilities Agreement replaced the Company’s 2017 Credit Agreement in its entirety. The Company repaid the remaining principal of $659.1 million and accrued interest of $2.1 million and wrote off $16.4 million in unamortized deferred financing costs related to the term loans and revolving credit facility under the 2017 Credit Agreement on March 20, 2020.
The Company is required to meet certain financial covenants customary with this type of agreement, including, but not limited to, maintaining a maximum ratio of indebtedness and a minimum specified interest coverage ratio. As of December 31, 2022, the Company was in compliance with the covenants under the Facilities Agreement.
The obligations under the Facilities Agreement with respect to the Secured Term Loan and the Revolving Facility are secured by substantially all the Company’s US assets, except for goodwill and
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
investments in subsidiaries, and are required to be guaranteed by certain material subsidiaries of the Company if, at the end of future financial quarters, certain conditions are not met. The Secured Term Loan is secured by equity interests in certain of the Company’s subsidiaries and substantially all of the Company’s US entity assets.
Long-term debt related to the Secured Term Loan consisted of the following:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Secured Term Loan with principal payments due on March 20 each year; interest
at LIBOR plus 1.8%; final balance due on maturity date of March 19, 2025 		​ ​ ​ $ 487,500 ​ ​ ​ ​ $ 437,500 ​ ​
Less: deferred financing costs
​ ​ ​ ​ (2,145) ​ ​ ​ ​ ​ (1,359) ​ ​
Less: current portion
​ ​ ​ ​ (49,402) ​ ​ ​ ​ ​ (86,972) ​ ​
Long-term debt, net of current portion
​ ​ ​ $ 435,953 ​ ​ ​ ​ $ 349,169 ​ ​
Aggregate maturities of long-term debt as of December 31, 2022, were as follows:
​ ​ ​
Amount
​
​ ​ ​
(in thousands)
​
Year Ending December 31, ​ ​ ​ ​ ​ ​ ​
2023
​ ​ ​ $ 87,500 ​ ​
2024
​ ​ ​ ​ 150,000 ​ ​
2025
​ ​ ​ ​ 200,000 ​ ​
Total future principal payments
​ ​ ​ $ 437,500 ​ ​
The Company recognizes and records interest expense related to the above term loans in interest expense, net. The Company recorded interest expense related to the above term loans of $38.8 million, including $16.4 million from write-offs of unamortized deferred financing costs, in the year ended December 31, 2020. The Company recorded interest expense related to the term loans of $12.5 million and $21.8 million in the years ended December 31, 2021 and 2022, respectively.
9.
Commitments and Contingencies
​
Non-Cancelable Purchase Obligations
In the normal course of business, the Company enters into non-cancelable purchase commitments. As of December 31, 2022, the outstanding non-cancelable purchase obligations with a term of 12 months or longer were immaterial.
Indemnifications and Contingencies
The Company enters into indemnification provisions under certain agreements with other parties in the ordinary course of business. In its customer agreements, the Company has agreed to indemnify, defend and hold harmless the indemnified party for third-party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party intellectual property infringement claims. For certain large or strategic customers, the Company has agreed to indemnify, defend and hold harmless the indemnified party for non-compliance with certain additional representations and warranties made by the Company.
Legal Proceedings
From time to time, the Company may be involved in various legal proceedings arising from the normal course of business activities. The Company investigates these claims as they arise. The Company is not
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
presently a party to any litigation the outcome of which the Company believes, if determined adversely to the Company, would individually or taken together, have a material adverse effect on its business, financial condition and results of operations.
10.
Shareholders’ Equity and Equity Incentive Plan
​
Ordinary Shares
The Company has 50,000 ordinary shares with a par value of $0.20 per share issued and outstanding as of December 31, 2021 and 2022. All outstanding shares of the Company’s ordinary shares are of the same class and have equal rights and attributes. The holders of the Company’s ordinary shares are entitled to one vote per share on all matters submitted to a vote of the shareholders for the Company. Holders of the Company’s ordinary shares will be entitled to receive any dividends if and when dividends are declared by the Company. In the event of liquidation, dissolution or winding up of the Company, the holders of the Company’s ordinary shares are entitled to share ratably in all the Company’s assets remaining after payment of all liabilities.
The prior approval of the holders of a majority of the outstanding ordinary shares is required in order for the Company to take certain actions, including amending, altering or changing the powers preferences or special rights of the ordinary shares in a manner adverse to such series, increasing or decreasing the number of ordinary shares, appointing or removing any directors, taking any action that would result in a liquidation, declaring or paying any dividends on the ordinary shares, redeeming or repurchasing any ordinary shares, transferring any ordinary shares, converting any paid-up shares into stock, waiving or changing any provision of the Company’s Amended and Restated Memorandum and Articles of Association.
Contribution from Parent
During the year ended December 31, 2020, the Company received a contribution from Parent of $80.0 million to facilitate the refinancing of the Facilities Agreement.
Distribution to Parent
During the years ended December 31, 2021 and 2022, the Company issued distributions to Parent of $42.0 million and $133.6 million, respectively, to pursue Parent’s business plan. The $133.6 million distribution to Parent during the year ended December 31, 2022 included an intercompany note to Parent. Please refer to Intercompany Note to Parent discussed below.
Intercompany Note to Parent
In 2022, the Company entered into a note agreement (the “2022 Intercompany Note to Parent”) with Parent in which SharkNinja can transfer up to $43.3 million on the day the note was entered into. Parent can subsequently request up to $36.3 million of funds on or prior to January 1, 2023. The Company initially transferred $41.3 million to JS Global. Subsequently, in September 2022, the Company transferred an additional $8.0 million to JS Global. The note bears interest at a blended Applicable Federal Rate. The receivable on the note is due on May 26, 2025. Due to the nature of the note receivable, the Company considered it to be an in-substance distribution to its Parent accounted for as contra-equity. As of December 31, 2022, the outstanding balance of the note, including interest, recorded as a reduction to retained earnings was $50.1 million.
Restricted Share Units
The Company’s employees participate in JS Global’s restricted share units plan (“JS RSU Plan”). The restricted share units (“RSUs”) are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. Grantees are not entitled to any rights of a shareholder,
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
including voting and dividend rights, until the JS Global ordinary shares underlying the RSUs are transferred to them upon vesting.
Each RSU under the JS RSU Plan was granted to directors and employees with no consideration and with the vesting conditions as below:
•
30% of the RSUs awarded vest solely based upon continued employment over a specific period of time, generally four years (“Time-based RSUs”).
​
•
70% of the RSUs awarded vest based upon the achievement of the performance conditions as defined in the JS RSU Plan, over time, generally four years (“Performance-based RSUs”).
​
For Performance-based RSUs, the Company monitors the probability of achieving the performance targets on a quarterly basis and may periodically adjust share-based compensation cost accordingly based on its determination of the likelihood to reach targets. Performance conditions generally include the achievement of financial performance targets.
RSU activities for the years ended December 31, 2020, 2021 and 2022 for RSUs granted to the Company’s employees were as follows:
​ ​ ​
Number of
Shares
​ ​
Weighted
Average
Grant Date
Fair Value
per share
​
Unvested as of January 1, 2020
​ ​ ​ ​ 39,369,904 ​ ​ ​ ​ $ 0.63 ​ ​
Granted
​ ​ ​ ​ — ​ ​ ​ ​ $ — ​ ​
Vested
​ ​ ​ ​ (9,842,476) ​ ​ ​ ​ $ 0.63 ​ ​
Cancelled/Forfeited
​ ​ ​ ​ (1,062,138) ​ ​ ​ ​ $ 0.63 ​ ​
Unvested as of December 31, 2020
​ ​ ​ ​ 28,465,290 ​ ​ ​ ​ $ 0.63 ​ ​
Granted
​ ​ ​ ​ 7,828,742 ​ ​ ​ ​ $ 2.40 ​ ​
Vested
​ ​ ​ ​ (11,641,344) ​ ​ ​ ​ $ 0.97 ​ ​
Cancelled/Forfeited
​ ​ ​ ​ (2,834,565) ​ ​ ​ ​ $ 1.62 ​ ​
Unvested as of December 31, 2021
​ ​ ​ ​ 21,818,123 ​ ​ ​ ​ $ 0.96 ​ ​
Granted
​ ​ ​ ​ 808,000 ​ ​ ​ ​ $ 1.00 ​ ​
Vested
​ ​ ​ ​ (11,039,443) ​ ​ ​ ​ $ 0.97 ​ ​
Cancelled/Forfeited
​ ​ ​ ​ (1,331,946) ​ ​ ​ ​ $ 0.88 ​ ​
Unvested as of December 31, 2022
​ ​ ​ ​ 10,254,734 ​ ​ ​ ​ $ 0.97 ​ ​
Share-Based Compensation
The share-based compensation cost by line item in the accompanying consolidated statements of income is summarized as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Research and development
​ ​ ​ $ 1,713 ​ ​ ​ ​ $ 2,918 ​ ​ ​ ​ $ 1,741 ​ ​
Sales and marketing
​ ​ ​ ​ 1,866 ​ ​ ​ ​ ​ 1,755 ​ ​ ​ ​ ​ 459 ​ ​
General and administrative
​ ​ ​ ​ 6,455 ​ ​ ​ ​ ​ 9,251 ​ ​ ​ ​ ​ 3,309 ​ ​
Total share-based compensation cost
​ ​ ​ $ 10,034 ​ ​ ​ ​ $ 13,924 ​ ​ ​ ​ $ 5,509 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2022, the unrecognized share-based compensation cost related to RSUs granted under the JS RSU Plan was $1.4 million, which is expected to be recognized over a weighted average period of 0.4 years.
During the year ended December 31, 2022, the Company entered into a share-based compensation recharge agreement with Parent for the reimbursement of share-based compensation costs to Parent in the amount of $18.7 million.
11.
Income Taxes
​
The components of income before income taxes were as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
United States
​ ​ ​ $ 345,614 ​ ​ ​ ​ $ 386,023 ​ ​ ​ ​ $ 250,421 ​ ​
Foreign
​ ​ ​ ​ 73,852 ​ ​ ​ ​ ​ 28,303 ​ ​ ​ ​ ​ 51,563 ​ ​
Total income before income taxes
​ ​ ​ $ 419,466 ​ ​ ​ ​ $ 414,326 ​ ​ ​ ​ $ 301,984 ​ ​
The provision for income taxes was as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Current: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Federal
​ ​ ​ $ 67,712 ​ ​ ​ ​ $ 65,586 ​ ​ ​ ​ $ 62,838 ​ ​
State
​ ​ ​ ​ 15,968 ​ ​ ​ ​ ​ 15,478 ​ ​ ​ ​ ​ 13,362 ​ ​
Foreign
​ ​ ​ ​ 16,094 ​ ​ ​ ​ ​ 17,276 ​ ​ ​ ​ ​ 10,076 ​ ​
Total current income tax expense
​ ​ ​ ​ 99,774 ​ ​ ​ ​ ​ 98,340 ​ ​ ​ ​ ​ 86,276 ​ ​
Deferred: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Federal
​ ​ ​ ​ (5,349) ​ ​ ​ ​ ​ (4,913) ​ ​ ​ ​ ​ (24,970) ​ ​
State
​ ​ ​ ​ (138) ​ ​ ​ ​ ​ (2,621) ​ ​ ​ ​ ​ 3,020 ​ ​
Foreign
​ ​ ​ ​ (2,019) ​ ​ ​ ​ ​ (7,593) ​ ​ ​ ​ ​ 5,304 ​ ​
Total deferred income tax benefit
​ ​ ​ ​ (7,506) ​ ​ ​ ​ ​ (15,127) ​ ​ ​ ​ ​ (16,646) ​ ​
Total provision for income taxes
​ ​ ​ $ 92,268 ​ ​ ​ ​ $ 83,213 ​ ​ ​ ​ $ 69,630 ​ ​
A reconciliation of the Company’s statutory income tax expense to effective income tax provision is as follows:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in percentage)
​
Federal statutory income tax rate
​ ​ ​ ​ 21.0% ​ ​ ​ ​ ​ 21.0% ​ ​ ​ ​ ​ 21.0% ​ ​
State tax, net of federal benefit
​ ​ ​ ​ 3.0 ​ ​ ​ ​ ​ 2.6 ​ ​ ​ ​ ​ 2.0 ​ ​
Permanent differences
​ ​ ​ ​ (0.2) ​ ​ ​ ​ ​ (0.3) ​ ​ ​ ​ ​ (0.4) ​ ​
Foreign-derived intangible income
​ ​ ​ ​ (0.9) ​ ​ ​ ​ ​ (1.6) ​ ​ ​ ​ ​ 0.0 ​ ​
Research and development credits, net
​ ​ ​ ​ (1.0) ​ ​ ​ ​ ​ (1.3) ​ ​ ​ ​ ​ (3.0) ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in percentage)
​
Tax uncertainties
​ ​ ​ ​ (0.1) ​ ​ ​ ​ ​ 0.0 ​ ​ ​ ​ ​ 0.4 ​ ​
Deferred tax adjustments
​ ​ ​ ​ 0.1 ​ ​ ​ ​ ​ 0.4 ​ ​ ​ ​ ​ (0.2) ​ ​
Excess tax benefits from share-based compensation
​ ​ ​ ​ (0.2) ​ ​ ​ ​ ​ (1.3) ​ ​ ​ ​ ​ (0.2) ​ ​
Change in valuation allowance
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2.6 ​ ​
Foreign rate differential
​ ​ ​ ​ (0.6) ​ ​ ​ ​ ​ (0.3) ​ ​ ​ ​ ​ (0.3) ​ ​
Other tax rate items
​ ​ ​ ​ 0.9 ​ ​ ​ ​ ​ 0.9 ​ ​ ​ ​ ​ 1.2 ​ ​
Total
​ ​ ​ ​ 22.0% ​ ​ ​ ​ ​ 20.1% ​ ​ ​ ​ ​ 23.1% ​ ​
​
The difference between the U.S. federal statutory tax rate of 21.0% and the Company’s effective tax rate for the years ended December 31, 2020, 2021 and 2022, is primarily due to state taxes, benefits from U.S. research and development credits and U.S. tax benefits from share-based compensation deductions. Although the Parent is domiciled outside of the United States, as the most significant activity is driven and managed in the United States, the Company has utilized the statutory tax rate of 21.0% as the federal statutory rate in the rate reconciliation. Please refer to Note 1—Organization and Description of Business for additional details.
The following table presents the significant components of the Company’s deferred tax assets and liabilities as of December 31, 2021 and 2022:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​
Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accrued expenses and reserves
​ ​ ​ $ 41,526 ​ ​ ​ ​ $ 33,778 ​ ​
Operating lease liabilities
​ ​ ​ ​ 17,647 ​ ​ ​ ​ ​ 15,401 ​ ​
Share-based compensation
​ ​ ​ ​ 3,431 ​ ​ ​ ​ ​ 2,215 ​ ​
Net operating loss carryforwards
​ ​ ​ ​ 1,198 ​ ​ ​ ​ ​ 6,587 ​ ​
Capitalized research and development expenditures
​ ​ ​ ​ — ​ ​ ​ ​ ​ 37,180 ​ ​
Other
​ ​ ​ ​ 3,982 ​ ​ ​ ​ ​ 7,463 ​ ​
Gross deferred tax assets
​ ​ ​ ​ 67,784 ​ ​ ​ ​ ​ 102,624 ​ ​
Valuation allowance
​ ​ ​ ​ — ​ ​ ​ ​ ​ (7,903) ​ ​
Total deferred tax assets, net of valuation allowance
​ ​ ​ $ 67,784 ​ ​ ​ ​ $ 94,721 ​ ​
Deferred tax liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Goodwill and intangible assets
​ ​ ​ ​ (125,545) ​ ​ ​ ​ ​ (128,712) ​ ​
Property and equipment, net
​ ​ ​ ​ (1,309) ​ ​ ​ ​ ​ (3,887) ​ ​
Derivative financial instruments
​ ​ ​ ​ — ​ ​ ​ ​ ​ (4,367) ​ ​
Right-of-use assets
​ ​ ​ ​ (14,866) ​ ​ ​ ​ ​ (12,439) ​ ​
Total deferred tax liabilities
​ ​ ​ ​ (141,720) ​ ​ ​ ​ ​ (149,405) ​ ​
Net deferred tax liabilities
​ ​ ​ $ (73,936) ​ ​ ​ ​ $ (54,685) ​ ​
A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
tax assets. Based on the weight of the available evidence, which includes the Company’s historical operating profits and substantial taxable temporary differences, the Company has not recorded a valuation allowance against the deferred tax assets for the U.S. and the international jurisdictions as of December 31, 2021. A valuation allowance has been established in certain jurisdictions as of December 31, 2022, where attributes are not more-likely-than-not to be utilized, primarily in relation to Massachusetts tax credits.
As of December 31, 2021, the Company had a foreign net operating loss carryforward of $8.0 million, which will begin to expire in 2025. As of December 31, 2022, the Company had foreign net operating loss carryforwards of $26.3 million, which will begin to expire in 2023. As of December 31, 2021 and 2022, the Company also had state research and development credit carryforwards of $3.4 million and $7.7 million, respectively, all of which begin to expire in 2041.
Federal and state laws impose restrictions on the utilization of net operating loss carryforwards and research and development credit carryforwards in the event of a change in ownership of the Company, which constitutes an ‘ownership change’ as defined by Internal Revenue Code Section 382 and 383. The Company experienced an ownership change in the past that does not materially impact the availability of its net operating losses and tax credits. Should there be an ownership change in the future, the Company’s ability to utilize existing carryforwards could be substantially restricted.
As of December 31, 2021 and 2022, the Company did not have unremitted earnings when evaluating the outside basis difference relating to its U.S. investment in foreign subsidiaries. However, there could be local withholding taxes payable due to various foreign countries if certain lower tier earnings are distributed. Withholding taxes and state income taxes that would be payable upon remittance of these lower tier earnings were not material as of December 31, 2021 and 2022.
A reconciliation of the beginning and ending balance of total unrecognized tax position is as follows:
​ ​ ​
Unrecognized
Tax Positions
​
​ ​ ​
(in thousands)
​
Balance – January 1, 2020
​ ​ ​ $ 3,875 ​ ​
Statute of limitations release
​ ​ ​ ​ (876) ​ ​
Balance – December 31, 2020
​ ​ ​ $ 2,999 ​ ​
Additions related to current year tax positions
​ ​ ​ ​ 12 ​ ​
Statute of limitations release
​ ​ ​ ​ (903) ​ ​
Balance – December 31, 2021
​ ​ ​ $ 2,108 ​ ​
Additions related to prior year tax positions
​ ​ ​ ​ 982 ​ ​
Statute of limitations release
​ ​ ​ ​ (673) ​ ​
Balance – December 31, 2022
​ ​ ​ $ 2,417 ​ ​
As of December 31, 2020, 2021 and 2022, an immaterial amount of the unrecognized tax benefits would affect the Company’s effective tax rate, if recognized. As of December 31, 2022, the Company believes it is reasonably possible that $1.0 million of its unrecognized tax benefits will significantly reverse in the next twelve months.
The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. There was $2.1 million, $1.9 million and $1.4 million of accrued interest and penalties related to unrecognized tax benefits as of December 31, 2020, 2021 and 2022, respectively. The Company recorded a benefit for the accrual of interest and penalties in the amount of $0.3 million, $0.5 million and $0.1 million for the years ended December 31, 2020, 2021 and 2022, respectively.
The Company’s material income tax jurisdictions are the United States (federal) and UK. The Company is not currently under audit in the United States, but is currently under audit in the UK for the 2020 tax year.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company’s tax years open for examination are 2019 through 2022 in the United States and 2020 through 2022 in the UK. There are open tax years which remain subject to examination in various other jurisdictions that are not material to the Company’s financial statements with open tax years ranging from 2012 to 2022.
12.
Employee Benefit Plans
​
Defined Contribution Plan
The Company has a defined-contribution plan in the United States intended to qualify under Section 401k of the Internal Revenue Code (the “401k Plan”). The 401k Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company makes contributions to the 401k Plan up to 4% of the participating employee’s eligible compensation. During the years ended December 31, 2020, 2021 and 2022, the Company recorded $3.2 million, $4.1 million and $4.7 million, respectively, of expenses related to the 401k Plan.
People’s Republic of China (“PRC”) Contribution Plan
The Company’s subsidiaries in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which pension benefits, unemployment insurance, medical care, employee housing fund and other welfare benefits are provided to employees. The relevant labor regulations require the Company’s subsidiaries in the PRC to pay the local labor and social welfare authorities monthly contributions based on the applicable benchmarks and rates stipulated by the local government. The relevant local labor and social welfare authorities are responsible for meeting all retirement benefits obligations and the Company’s subsidiaries in the PRC have no further commitments beyond their monthly contributions. The contributions to the plan are expensed as incurred. During the years ended December 31, 2020, 2021 and 2022, the Company recorded $2.7 million, $8.4 million and $10.6 million, respectively, of total expenses related to these benefits.
Certain of the Company’s other non-U.S. subsidiaries sponsor or participate in local defined benefit pension plans. The obligations, contributions and associated expense of such plans for the years ended December 31, 2020, 2021 and 2022 were immaterial.
13.
Net Income Per Share
​
The following table sets forth the computation of basic and diluted net income per share for the periods presented:
​ ​ ​
Year Ended December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands, except share and per share data)
​
Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 327,198 ​ ​ ​ ​ $ 331,113 ​ ​ ​ ​ $ 232,354 ​ ​
Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Weighted-average shares used in computing net income per share, basic and diluted
​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​
Net income per share, basic and diluted
​ ​ ​ $ 6,544 ​ ​ ​ ​ $ 6,622 ​ ​ ​ ​ $ 4,647 ​ ​
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14.
Related Party Transactions
​
The Company entered into transactions in the ordinary course of business with related parties detailed below that are under common control of JS Global.
​ ​ ​
Year Ended December 31,
​ ​
Balance Outstanding
as of December 31,
​
​ ​ ​
2020
​ ​
2021
​ ​
2022
​ ​
2021
​ ​
2022
​
​ ​ ​
(in thousands)
​ ​
(in thousands)
​
Balances and transactions with joint venture ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sale of goods
​ ​ ​ $ 20,496 ​ ​ ​ ​ $ 12,107 ​ ​ ​ ​ $ 766 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
Accounts receivable, net
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 11,846 ​ ​ ​ ​ ​ — ​ ​
Balances and transactions with other entities controlled by JS Global ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sale of goods
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 685 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
Purchase of goods
​ ​ ​ ​ 296,744 ​ ​ ​ ​ ​ 1,381,815 ​ ​ ​ ​ ​ 1,444,777 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Purchase of services
​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,030 ​ ​ ​ ​ ​ 3,561 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Accounts receivable, net
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,033 ​ ​
Prepaid expenses and other current assets
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 28,000 ​ ​ ​ ​ ​ 2,886 ​ ​
Other assets, noncurrent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,196 ​ ​ ​ ​ ​ — ​ ​
Accounts payable
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 303,033 ​ ​ ​ ​ ​ 231,805 ​ ​
Accrued expenses and other current liabilities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,466 ​ ​ ​ ​ ​ 861 ​ ​
Balances with JS Global ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Prepaid expenses and other current assets
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 10,012 ​ ​ ​ ​ $ — ​ ​
Accrued expenses and other current liabilities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,174 ​ ​ ​ ​ ​ 7,538 ​ ​
Supplier Agreements
The Company has historically relied on JS Global entities to provide certain procurement and quality control services to us. In connection with these agreements, the Company incurred costs which were reimbursed by JS Global entities. For the years ended December 31, 2020, 2021 and 2022, JS Global entities paid us $0, $23.0 million and $31.7 million, respectively, recorded as a reduction to cost of sales for services rendered under these agreements.
Recourse Promissory Notes
On May 29, 2020, the Company issued recourse promissory notes of $2.2 million to certain employees (the “2020 Employee Notes”) to satisfy their individual tax withholding requirements. These promissory notes bear an interest of 0.3%. The receivables under the 2020 Employee Notes are due on the earlier of (i) March 15, 2021, or (ii) the date of the employee’s termination of employment with the Company. The outstanding balances, inclusive of interest, of the 2020 Employee Notes were paid off during the year ended December 31, 2021.
On April 29, 2021, the Company issued recourse promissory notes of $17.6 million to certain employees (the “2021 Employee Notes”) to satisfy their individual tax withholding requirements. These promissory notes bear an interest of 0.1%. The receivables under the 2021 Employee Notes are due on the earlier of (i) March 15, 2022, or (ii) the date of the employee’s termination of employment with the Company. As of December 31, 2021, the outstanding balance of the 2021 Employee Notes, including interest, was $16.5 million
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in other assets, noncurrent. As of December 31, 2022, the outstanding balance of 2021 Employee Notes, including interest, was $11.2 million in prepaid expenses and other current assets. The outstanding balance is of those executives whose notes were amended in 2022.
On March 27, 2022, the terms and conditions of the 2021 Employee Notes issued to one executive were amended. The amended promissory note agreement allowed for the forgiveness of the principal amount, plus all accrued and unpaid interest, over a three-year period beginning April 30, 2022, provided that the employee must remain continuously employed by the Company through the forgiveness dates. On April 30, 2022, a total of $4.4 million of the 2021 Employee Notes was forgiven and recorded as compensation expense.
On April 12, 2022, the terms and conditions of the 2021 Employee Notes issued to three executives were modified. These modified recourse promissory notes amended the interest rate to 1.3% from 0.1% and extended the maturity date to April 29, 2024, from March 15, 2022. The amended promissory note agreements allowed for the forgiveness of the principal amount, plus all accrued and unpaid interest, over a three-year period beginning April 29, 2022, provided that the employees must remain continuously employed by the Company through the forgiveness dates. On April 29, 2022, a total of $0.8 million of the 2021 Employee Notes was forgiven and recorded as compensation expense.
In 2022, the Company issued recourse promissory notes of $6.0 million to certain employees (the “2022 Employee Notes”) to satisfy their individual tax withholding requirements. These promissory notes bear an interest of 1.9%. The receivables on the 2022 Employee Notes are due on the earlier of (i) March 15, 2023, or (ii) the date of the employee’s termination of employment with the Company. As of December 31, 2022, the outstanding balance of the 2022 Employee Notes, including interest, was $6.0 million in prepaid expenses and other current assets.
Transactions with Parent
Please see Note 10—Shareholders’ Equity and Equity Incentive Plan for details on the Company’s equity transaction with Parent including contribution from Parent, distribution to Parent, intercompany note to Parent, and share-based compensation recharge from Parent.
15.
Subsequent Events
​
The Company has evaluated subsequent events from the balance sheet date through March 30, 2023, the date on which the consolidated financial statements were available to be issued.
Dividend to Parent
On February 15, 2023, the Company declared and paid a special cash dividend of $15.5 million to JS Global.
On February 27, 2023, the Company declared and paid a special cash dividend of $99.9 million to JS Global, which JS Global used, in part, to repay 2022 Intercompany Note to Parent in full.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 2020, 2021 and 2022
The table below details the activity of the allowance for credit losses and sales returns for the years ended December 31, 2020, 2021 and 2022 (in thousands):
​ ​ ​
Balance at
Beginning of
Year
​ ​
Charges to
Net sales
​ ​
Charges
(Benefits) to
Expense
​ ​
Deductions/
Write-offs
​ ​
Balance at
End of Year
​
Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Year ended December 31, 2022
​ ​ ​ $ 1,783 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 8,965 ​ ​ ​ ​ $ (3,750) ​ ​ ​ ​ $ 6,998 ​ ​
Year ended December 31, 2021
​ ​ ​ ​ 1,422 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 7,913 ​ ​ ​ ​ ​ (7,552) ​ ​ ​ ​ ​ 1,783 ​ ​
Year ended December 31, 2020
​ ​ ​ ​ 580 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9,391 ​ ​ ​ ​ ​ (8,549) ​ ​ ​ ​ ​ 1,422 ​ ​
Allowance for sales returns: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Year ended December 31, 2022
​ ​ ​ $ 46,436 ​ ​ ​ ​ $ 201,453 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ (202,360) ​ ​ ​ ​ $ 45,529 ​ ​
Year ended December 31, 2021
​ ​ ​ ​ 47,633 ​ ​ ​ ​ ​ 190,108 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (191,305) ​ ​ ​ ​ ​ 46,436 ​ ​
Year ended December 31, 2020
​ ​ ​ ​ 32,271 ​ ​ ​ ​ ​ 142,471 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (127,109) ​ ​ ​ ​ ​ 47,633 ​ ​
All other schedules have been omitted because they are not required, not applicable, or the required information is otherwise included.
 
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SHARKNINJA GLOBAL SPV, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 192,890 ​ ​ ​ ​ $ 181,537 ​ ​
Restricted cash
​ ​ ​ ​ 25,880 ​ ​ ​ ​ ​ 25,914 ​ ​
Accounts receivable, net(1)
​ ​ ​ ​ 766,503 ​ ​ ​ ​ ​ 780,558 ​ ​
Inventories
​ ​ ​ ​ 548,588 ​ ​ ​ ​ ​ 510,472 ​ ​
Prepaid expenses and other current assets(2)
​ ​ ​ ​ 181,831 ​ ​ ​ ​ ​ 80,436 ​ ​
Total current assets
​ ​ ​ ​ 1,715,692 ​ ​ ​ ​ ​ 1,578,917 ​ ​
Property and equipment, net
​ ​ ​ ​ 137,341 ​ ​ ​ ​ ​ 144,942 ​ ​
Operating lease right-of-use assets
​ ​ ​ ​ 67,321 ​ ​ ​ ​ ​ 65,552 ​ ​
Intangible assets, net
​ ​ ​ ​ 492,709 ​ ​ ​ ​ ​ 488,518 ​ ​
Goodwill
​ ​ ​ ​ 840,148 ​ ​ ​ ​ ​ 840,183 ​ ​
Deferred tax assets, noncurrent
​ ​ ​ ​ 6,291 ​ ​ ​ ​ ​ 5,017 ​ ​
Other assets, noncurrent
​ ​ ​ ​ 35,389 ​ ​ ​ ​ ​ 43,699 ​ ​
Total assets
​ ​ ​ $ 3,294,891 ​ ​ ​ ​ $ 3,166,828 ​ ​
Liabilities and Shareholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accounts payable(3)
​ ​ ​ $ 328,122 ​ ​ ​ ​ $ 275,955 ​ ​
Accrued expenses and other current liabilities(4)
​ ​ ​ ​ 552,023 ​ ​ ​ ​ ​ 483,643 ​ ​
Tax payable
​ ​ ​ ​ 1,581 ​ ​ ​ ​ ​ 8,539 ​ ​
Current portion of long-term debt
​ ​ ​ ​ 86,972 ​ ​ ​ ​ ​ 99,503 ​ ​
Total current liabilities
​ ​ ​ ​ 968,698 ​ ​ ​ ​ ​ 867,640 ​ ​
Long-term debt
​ ​ ​ ​ 349,169 ​ ​ ​ ​ ​ 299,340 ​ ​
Operating lease liabilities, noncurrent
​ ​ ​ ​ 61,779 ​ ​ ​ ​ ​ 61,242 ​ ​
Deferred tax liabilities, noncurrent
​ ​ ​ ​ 60,976 ​ ​ ​ ​ ​ 54,546 ​ ​
Other liabilities, noncurrent
​ ​ ​ ​ 25,980 ​ ​ ​ ​ ​ 26,053 ​ ​
Total liabilities
​ ​ ​ $ 1,466,602 ​ ​ ​ ​ $ 1,308,821 ​ ​
Commitments and contingencies (Note 8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Shareholders’ equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Ordinary shares, $0.20 par value per share, 250,000 shares authorized, 50,000
shares issued and outstanding as of December 31, 2022 and March 31, 2023
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 10 ​ ​
Additional paid-in capital
​ ​ ​ ​ 941,210 ​ ​ ​ ​ ​ 941,210 ​ ​
Retained earnings
​ ​ ​ ​ 896,738 ​ ​ ​ ​ ​ 923,551 ​ ​
Accumulated other comprehensive loss
​ ​ ​ ​ (9,669) ​ ​ ​ ​ ​ (6,764) ​ ​
Total shareholders’ equity
​ ​ ​ ​ 1,828,289 ​ ​ ​ ​ ​ 1,858,007 ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 3,294,891 ​ ​ ​ ​ $ 3,166,828 ​ ​
​
(1)
Including amounts from a related party of $1,033 and $5,466 as of December 31, 2022 and March 31, 2023, respectively.
​
(2)
Including amounts from a related party of $20,069 and $10,366 as of December 31, 2022 and March 31, 2023, respectively.
​
(3)
Including amounts to a related party of $231,805 and $196,857 as of December 31, 2022 and March 31, 2023, respectively.
​
(4)
Including amounts to a related party of $8,399 and $9,129 as of December 31, 2022 and March 31, 2023, respectively.
​
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(unaudited)
​ ​ ​
Three Months Ended March 31,
​
​ ​ ​
2022
​ ​
2023
​
Net sales(1)
​ ​ ​ $ 809,626 ​ ​ ​ ​ $ 855,282 ​ ​
Cost of sales(2)
​ ​ ​ ​ 457,700 ​ ​ ​ ​ ​ 454,739 ​ ​
Gross profit
​ ​ ​ ​ 351,926 ​ ​ ​ ​ ​ 400,543 ​ ​
Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Research and development(3)
​ ​ ​ ​ 51,971 ​ ​ ​ ​ ​ 58,725 ​ ​
Sales and marketing
​ ​ ​ ​ 125,541 ​ ​ ​ ​ ​ 152,120 ​ ​
General and administrative
​ ​ ​ ​ 52,025 ​ ​ ​ ​ ​ 67,068 ​ ​
Total operating expenses
​ ​ ​ ​ 229,537 ​ ​ ​ ​ ​ 277,913 ​ ​
Operating income
​ ​ ​ ​ 122,389 ​ ​ ​ ​ ​ 122,630 ​ ​
Interest expense, net
​ ​ ​ ​ (4,004) ​ ​ ​ ​ ​ (8,489) ​ ​
Other expense, net
​ ​ ​ ​ (3,909) ​ ​ ​ ​ ​ (2,780) ​ ​
Income before income taxes
​ ​ ​ ​ 114,476 ​ ​ ​ ​ ​ 111,361 ​ ​
Provision for income taxes
​ ​ ​ ​ 25,565 ​ ​ ​ ​ ​ 24,265 ​ ​
Net income
​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​
Net income per share, basic and diluted
​ ​ ​ $ 1,778 ​ ​ ​ ​ $ 1,742 ​ ​
Weighted-average number of shares used in computing net income per share, basic and diluted ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​
​
(1)
Including amounts from a related party of $500 and $758 for the three months ended March 31, 2022 and 2023, respectively.
​
(2)
Including amounts to a related party of $325,364 and $291,199 for the three months ended March 31, 2022 and 2023, respectively.
​
(3)
Including amounts to a related party of $956 and $861 for the three months ended March 31, 2022 and 2023, respectively.
​
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
​ ​ ​
Three Months Ended March 31,
​
​ ​ ​
2022
​ ​
2023
​
Net income
​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​
Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Foreign currency translation adjustments
​ ​ ​ ​ (4,606) ​ ​ ​ ​ ​ 5,257 ​ ​
Unrealized loss on derivative instruments, net
​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,352) ​ ​
Comprehensive income
​ ​ ​ $ 84,305 ​ ​ ​ ​ $ 90,001 ​ ​
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands, except share data and per share amount)
(unaudited)
​ ​ ​
Three Months Ended March 31, 2022
​
​ ​ ​
Ordinary shares
​ ​
Additional
Paid-in
Capital
​ ​
Accumulated
Other
Comprehensive
Income
​ ​
Retained
Earnings
​ ​
Total
Shareholders’
Equity
​
​ ​ ​
Shares
​ ​
Amount
​
Balance as of December 31, 2021
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 954,435 ​ ​ ​ ​ $ 8,948 ​ ​ ​ ​ $ 797,970 ​ ​ ​ ​ $ 1,761,363 ​ ​
Distribution paid to Parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (30,700) ​ ​ ​ ​ ​ (30,700) ​ ​
Intercompany note to parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (41,274) ​ ​ ​ ​ ​ (41,274) ​ ​
Share-based compensation cost
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,570 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,570 ​ ​
Other comprehensive loss, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4,606) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4,606) ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 88,911 ​ ​ ​ ​ ​ 88,911 ​ ​
Balance as of March 31, 2022
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 957,005 ​ ​ ​ ​ $ 4,342 ​ ​ ​ ​ $ 814,907 ​ ​ ​ ​ $ 1,776,264 ​ ​
​ ​ ​
Three Months Ended March 31, 2023
​
​ ​ ​
Ordinary shares
​ ​
Additional
Paid-in
Capital
​ ​
Accumulated
Other
Comprehensive
Loss
​ ​
Retained
Earnings
​ ​
Total
Shareholders’
Equity
​
​ ​ ​
Shares
​ ​
Amount
​
Balance as of December 31, 2022
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 941,210 ​ ​ ​ ​ $ (9,669) ​ ​ ​ ​ $ 896,738 ​ ​ ​ ​ $ 1,828,289 ​ ​
Distribution paid to Parent
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (60,283) ​ ​ ​ ​ ​ (60,283) ​ ​
Share-based compensation cost
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 848 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 848 ​ ​
Recharge from Parent for share-based compensation
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (848) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (848) ​ ​
Other comprehensive income, net
of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,905 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,905 ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 87,096 ​ ​ ​ ​ ​ 87,096 ​ ​
Balance as of March 31, 2023
​ ​ ​ ​ 50,000 ​ ​ ​ ​ $ 10 ​ ​ ​ ​ $ 941,210 ​ ​ ​ ​ $ (6,764) ​ ​ ​ ​ $ 923,551 ​ ​ ​ ​ $ 1,858,007 ​ ​
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
​ ​ ​
Three Months Ended March 31,
​
​ ​ ​
2022
​ ​
2023
​
Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​
Adjustments to reconcile net income to net cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Depreciation and amortization
​ ​ ​ ​ 20,204 ​ ​ ​ ​ ​ 22,754 ​ ​
Share-based compensation cost
​ ​ ​ ​ 2,570 ​ ​ ​ ​ ​ 848 ​ ​
Provision for credit losses
​ ​ ​ ​ 1,701 ​ ​ ​ ​ ​ 744 ​ ​
Non-cash lease expense
​ ​ ​ ​ 6,271 ​ ​ ​ ​ ​ 3,881 ​ ​
Amortization of debt discount
​ ​ ​ ​ 218 ​ ​ ​ ​ ​ 202 ​ ​
Deferred income taxes, net
​ ​ ​ ​ (6,839) ​ ​ ​ ​ ​ (5,115) ​ ​
Loss from equity method investment
​ ​ ​ ​ 719 ​ ​ ​ ​ ​ — ​ ​
Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accounts receivable(1)
​ ​ ​ ​ 109,677 ​ ​ ​ ​ ​ (8,813) ​ ​
Inventories
​ ​ ​ ​ (62,622) ​ ​ ​ ​ ​ 40,644 ​ ​
Prepaid expenses and other assets(2)
​ ​ ​ ​ (48,114) ​ ​ ​ ​ ​ 74,452 ​ ​
Accounts payable(3)
​ ​ ​ ​ (97,001) ​ ​ ​ ​ ​ (54,003) ​ ​
Tax payable
​ ​ ​ ​ 19,227 ​ ​ ​ ​ ​ 6,764 ​ ​
Operating lease liabilities
​ ​ ​ ​ (5,620) ​ ​ ​ ​ ​ (4,480) ​ ​
Accrued expenses and other liabilities(4)
​ ​ ​ ​ (130,432) ​ ​ ​ ​ ​ (75,212) ​ ​
Net cash provided by (used in) operating activities
​ ​ ​ ​ (101,130) ​ ​ ​ ​ ​ 89,762 ​ ​
Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of property and equipment
​ ​ ​ ​ (8,268) ​ ​ ​ ​ ​ (21,655) ​ ​
Purchase of intangible asset
​ ​ ​ ​ (1,015) ​ ​ ​ ​ ​ (2,288) ​ ​
Capitalized internal-use software development
​ ​ ​ ​ (832) ​ ​ ​ ​ ​ (333) ​ ​
Cash receipts on deferred payment in sold receivables
​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,777 ​ ​
Investment in equity method investment
​ ​ ​ ​ (719) ​ ​ ​ ​ ​ — ​ ​
Other investing activities, net
​ ​ ​ ​ (300) ​ ​ ​ ​ ​ (300) ​ ​
Net cash used in investing activities
​ ​ ​ ​ (11,134) ​ ​ ​ ​ ​ (7,799) ​ ​
Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from issuance of debt, net of issuance cost
​ ​ ​ ​ 105,000 ​ ​ ​ ​ ​ — ​ ​
Repayment of debt
​ ​ ​ ​ (25,000) ​ ​ ​ ​ ​ (37,500) ​ ​
Intercompany note to Parent
​ ​ ​ ​ (41,274) ​ ​ ​ ​ ​ — ​ ​
Distribution paid to Parent
​ ​ ​ ​ (30,700) ​ ​ ​ ​ ​ (60,283) ​ ​
Recharge from Parent for share-based compensation
​ ​ ​ ​ — ​ ​ ​ ​ ​ (848) ​ ​
Net cash provided by (used in) financing activities
​ ​ ​ ​ 8,026 ​ ​ ​ ​ ​ (98,631) ​ ​
Effect of exchange rates changes on cash
​ ​ ​ ​ (2,215) ​ ​ ​ ​ ​ 5,349 ​ ​
Net decrease in cash, cash equivalents, and restricted cash
​ ​ ​ ​ (106,453) ​ ​ ​ ​ ​ (11,319) ​ ​
Cash, cash equivalents, and restricted cash at beginning of year
​ ​ ​ ​ 240,597 ​ ​ ​ ​ ​ 218,770 ​ ​
Cash, cash equivalents, and restricted cash at end of year
​ ​ ​ $ 134,144 ​ ​ ​ ​ $ 207,451 ​ ​
Supplemental disclosures of noncash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of property and equipment accrued and not yet paid
​ ​ ​ $ 1,644 ​ ​ ​ ​ $ 2,822 ​ ​
Unrealized loss on cash flow hedges
​ ​ ​ ​ — ​ ​ ​ ​ ​ (2,352) ​ ​
Reconciliation of cash, cash equivalents and restricted cash within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows above: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 116,828 ​ ​ ​ ​ $ 181,537 ​ ​
Restricted cash
​ ​ ​ ​ 17,316 ​ ​ ​ ​ ​ 25,914 ​ ​
Total cash, cash equivalents and restricted cash
​ ​ ​ $ 134,144 ​ ​ ​ ​ $ 207,451 ​ ​
​
(1)
Including changes in related party balances of $(46) and $(4,433) for the three months ended March 31, 2022 and 2023, respectively.
​
(2)
Including changes in related party balances of $(375) and $8,279 for the three months ended March 31, 2022 and 2023, respectively.
​
(3)
Including changes in related party balances of $(42,606) and $(34,948) for the three months ended March 31, 2022 and 2023, respectively.
​
(4)
Including changes in related party balances of $(496) and $730 for the three months ended March 31, 2022 and 2023, respectively.
​
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1.   Organization and Description of Business
SharkNinja Global SPV, Ltd. (together with its subsidiaries, “SharkNinja” or the “Company”) was incorporated in the Cayman Islands on June 27, 2017. SharkNinja is a global product design and technology company that creates innovative lifestyle product solutions across multiple sub-categories, including Cleaning Appliances, Cooking and Beverage Appliances, Food Preparation Appliances and Other products under the brands of “Shark” and “Ninja.” The Company operates as a combination of wholly-owned businesses of JS Global Lifestyle Company Limited (the “Parent” or “JS Global”), which is a listed entity on the Hong Kong Stock Exchange.
SharkNinja is headquartered in Needham, Massachusetts, and its operations have been primarily in the United States and the United Kingdom (“UK”).
2.   Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements that accompany these notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of SharkNinja Global SPV, Ltd. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements as of that date, but does not include all of the disclosures, including certain notes required by U.S. GAAP on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022.
In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of March 31, 2023 and the Company’s condensed consolidated statements of income, shareholders’ equity and cash flows for the three months ended March 31, 2022 and 2023. The financial data and other financial information disclosure in the notes to these condensed consolidated financial statements for the three months ended March 31, 2022 and 2023 are also unaudited. The results for the three months ended March 31, 2023 are not necessarily indicative of the operating results expected for the year ended December 31, 2023 or any future operating periods.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of net sales and expenses during the reporting periods and accompanying notes. Significant items subject to such estimates and assumptions include but are not limited to variable consideration for returns, sales rebates and discounts, the allowance for credit losses, reserve for product warranties, the fair value of financial assets and liabilities including accounting and fair value of derivatives and deferred purchase price (“DPP”) receivable, the valuation of acquired intangible assets and goodwill, share-based compensation and the valuation of deferred tax assets and uncertain tax positions. Actual results could differ from those estimates.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Concentration of Credit Risks
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, restricted cash and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash with high-quality financial institutions, the composition and maturities of which are regularly monitored by the Company.
The Company has outstanding accounts receivable balances with retailers, distributors and direct-to-consumer (“DTC”) customers. The Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded in the condensed consolidated balance sheets. The Company extends different levels of credit to customers, without requiring collateral deposits, and when necessary, maintains reserves for potential credit losses based upon the expected collectability of accounts receivable. The Company manages credit risk related to its customers by performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures.
The Company sells a significant portion of its products through retailers and, as a result, maintains individually significant receivable balances with these parties. If the financial condition or operations of these retailers deteriorates substantially, the Company’s operating results could be adversely affected.
The following table summarizes the Company’s customers that represented 10% or more of accounts receivable, net and net sales:
​ ​ ​
Accounts Receivable, Net
​ ​
Net Sales
​
​ ​ ​
As of
​ ​
Three Months Ended
​
​ ​ ​
December 31, 2022
​ ​
March 31, 2023
​ ​
March 31, 2022
​ ​
March 31, 2023
​
Customer A
​ ​ ​ ​ 15.1% ​ ​ ​ ​ ​ 18.8% ​ ​ ​ ​ ​ 15.7% ​ ​ ​ ​ ​ 15.2% ​ ​
Customer B
​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​
Customer C
​ ​ ​ ​ 19.8 ​ ​ ​ ​ ​ 15.7 ​ ​ ​ ​ ​ 14.3 ​ ​ ​ ​ ​ 15.3 ​ ​
Customer D
​ ​ ​ ​ * ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 12.7 ​ ​ ​ ​ ​ 11.6 ​ ​
​
*
Represents less than 10%
​
Accounts Receivable, Net
Accounts receivable are presented net of allowance for credit losses and allowance for chargebacks. Accounts receivable are presented net of liabilities when a right of setoff exists. The Company determined the allowance for customer incentives and allowance for sales returns should be recorded as a liability.
The Company maintains an allowance related to customer incentives based on specific terms and conditions included in the customer agreements or based on historical experience and the Company’s expectation of discounts.
The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. To estimate the allowance for credit losses the Company applied the loss-rate method using relevant available information including historical write-off activity, current conditions and reasonable and supportable forecasts. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, the Company considered various risk characteristics, including geographic location and industry of the customer.
Expected credit losses are estimated over the contractual term of the financial assets. For the three months ended March 31, 2022 and 2023, the Company recorded a credit loss expense of $1.7 million and $0.7 million, respectively, within general and administrative expenses in the condensed consolidated
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
statements of income. Write-offs of accounts receivable are recorded to the allowance for credit losses. Any subsequent recoveries of previously written off balances are recorded as a reduction to credit loss expense.
Below is a rollforward of the Company’s allowance for credit losses:
​ ​ ​
Three Months Ended
March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
(in thousands)
​
Beginning balance
​ ​ ​ $ 1,783 ​ ​ ​ ​ $ 6,998 ​ ​
Provision for credit losses
​ ​ ​ ​ 1,701 ​ ​ ​ ​ ​ 744 ​ ​
Write-offs and other adjustments
​ ​ ​ ​ (1,502) ​ ​ ​ ​ ​ 325 ​ ​
Ending balance
​ ​ ​ $ 1,982 ​ ​ ​ ​ $ 8,067 ​ ​
Transfer of Financial Instruments
On August 31, 2022, the Company entered into a Receivable Purchase Agreement (“RPA”) with a financial institution (“Purchaser”) to sell its accounts receivable for a cash advanced payment and a deferred payment in the form of a deferred purchase price receivable. All transfers under the RPA meet the criteria of sales accounting and are accounted for as a true sale in accordance with ASC 860, Transfers and Servicing. The Company sells, conveys, transfers and assigns to the Purchaser all its rights, title and interest in the receivables upon the sale and transfer of the receivables to the Purchaser. The Company continues to service, administer and collect the receivables on behalf of the Purchaser. The financial statement impact associated with the servicing liability was immaterial for all periods presented.
As part of the RPA transaction, accounts receivable sold are derecognized from the condensed consolidated balance sheets and a DPP receivable is recognized at fair value. The DPP represents the difference between the fair value of the trade receivables sold and the cash purchase price. The DPP is subsequently remeasured each reporting period to account for activity during the period, such as the seller’s interest in any newly transferred receivables, collections on previously transferred receivables attributable to the DPP and changes in estimates. The DPP is valued using unobservable inputs such as Level 3 inputs, primarily discounted cash flows. Due to the short maturity of the instruments, the carrying value of the DPP receivable approximates the fair value of the DPP. Please refer to Note 4 — Fair Value Measurement for additional details.
Cash collections from customers on receivables sold were $96.3 million during the three months ended March 31, 2023, of which the cash collections on the DPP receivable were $16.8 million. As of December 31, 2022, the outstanding principal on receivables sold was $101.8 million, and the Company’s risk of loss following the sale of the receivables was limited to the uncollected portion of the DPP at $22.3 million. All amounts on sold receivables were collected as of March 31, 2023.
The following table summarizes the activity related to the DPP receivable:
​ ​ ​
As of
March 31, 2023
​
​ ​ ​
(in thousands)
​
Beginning balance
​ ​ ​ $ 22,294 ​ ​
Non-cash addition to DPP receivable
​ ​ ​ ​ — ​ ​
Cash collected on DPP receivable
​ ​ ​ ​ (16,777) ​ ​
Non-cash adjustments
​ ​ ​ ​ (5,517) ​ ​
Ending balance
​ ​ ​ $ — ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Disaggregation of Net Sales
The following table summarizes net sales by region based on the billing address of customers:
​ ​ ​
Three Months Ended March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​
​ ​ ​
(in thousands, except percentages)
​
North America(1)
​ ​ ​ $ 642,891 ​ ​ ​ ​ ​ 79.4% ​ ​ ​ ​ $ 601,293 ​ ​ ​ ​ ​ 70.3% ​ ​
Europe(2) ​ ​ ​ ​ 130,648 ​ ​ ​ ​ ​ 16.1 ​ ​ ​ ​ ​ 219,889 ​ ​ ​ ​ ​ 25.7 ​ ​
Rest of World
​ ​ ​ ​ 36,087 ​ ​ ​ ​ ​ 4.5 ​ ​ ​ ​ ​ 34,100 ​ ​ ​ ​ ​ 4.0 ​ ​
Total net sales
​ ​ ​ $ 809,626 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 855,282 ​ ​ ​ ​ ​ 100% ​ ​
The following table presents net sales by brand:
​ ​ ​
Three Months Ended March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​
​ ​ ​
(in thousands, except percentages)
​
Shark
​ ​ ​ $ 448,667 ​ ​ ​ ​ ​ 55.4% ​ ​ ​ ​ $ 480,752 ​ ​ ​ ​ ​ 56.2% ​ ​
Ninja
​ ​ ​ ​ 360,959 ​ ​ ​ ​ ​ 44.6 ​ ​ ​ ​ ​ 374,530 ​ ​ ​ ​ ​ 43.8 ​ ​
Total net sales
​ ​ ​ $ 809,626 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 855,282 ​ ​ ​ ​ ​ 100% ​ ​
The following table presents net sales by product category:
​ ​ ​
Three Months Ended March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
Amount
​ ​
Percentage of
Net Sales
​ ​
Amount
​ ​
Percentage of
Net Sales
​
​ ​ ​
(in thousands, except percentages)
​
Cleaning Appliances
​ ​ ​ $ 436,960 ​ ​ ​ ​ ​ 54.0% ​ ​ ​ ​ $ 414,869 ​ ​ ​ ​ ​ 48.5% ​ ​
Cooking and Beverage Appliances
​ ​ ​ ​ 232,103 ​ ​ ​ ​ ​ 28.7 ​ ​ ​ ​ ​ 256,682 ​ ​ ​ ​ ​ 30.0 ​ ​
Food Preparation Appliances
​ ​ ​ ​ 128,479 ​ ​ ​ ​ ​ 15.9 ​ ​ ​ ​ ​ 117,849 ​ ​ ​ ​ ​ 13.8 ​ ​
Other
​ ​ ​ ​ 12,084 ​ ​ ​ ​ ​ 1.4 ​ ​ ​ ​ ​ 65,882 ​ ​ ​ ​ ​ 7.7 ​ ​
Total net sales
​ ​ ​ $ 809,626 ​ ​ ​ ​ ​ 100% ​ ​ ​ ​ $ 855,282 ​ ​ ​ ​ ​ 100% ​ ​
Warranty Costs
The Company accrues the estimated cost of product warranties at the time it recognizes net sales and records warranty expense to cost of goods sold. The Company’s standard warranty provides for repair or replacement of the associated products during the warranty period. The amount of the provision for the warranties is estimated based on sales volume and past experience of the level of repairs and returns. If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty obligation may be required.
​
(1)
Net sales from the United States represented 74.6% and 65.4% of total net sales for the three months ended March 31, 2022 and 2023, respectively.
​
(2)
Net sales from the UK represented 13.0% and 21.3% of total net sales for the three months ended March 31, 2022 and 2023, respectively.
​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Product warranty liabilities and changes were as follows:
​ ​ ​
Three Months Ended
March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
(in thousands)
​
Beginning balance
​ ​ ​ $ 17,828 ​ ​ ​ ​ $ 20,958 ​ ​
Accruals for warranties issued
​ ​ ​ ​ 4,421 ​ ​ ​ ​ ​ 6,071 ​ ​
Changes in liability for pre-existing warranties
​ ​ ​ ​ 1,004 ​ ​ ​ ​ ​ — ​ ​
Settlements made
​ ​ ​ ​ (7,985) ​ ​ ​ ​ ​ (6,954) ​ ​
Ending balance
​ ​ ​ $ 15,268 ​ ​ ​ ​ $ 20,075 ​ ​
Segment Information
The Company operates in one operating and reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the Company’s chief executive officer (“CEO”), in deciding how to allocate resources and assessing performance. The Company’s CEO allocates resources and assesses performance based upon discrete financial information at the consolidated level.
Net sales by geographical region can be found in the disaggregation of net sales in Note 2 above. The following table presents the Company’s property and equipment, net of depreciation and amortization, by geographic region:
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
​ ​ ​
(in thousands)
​
United States
​ ​ ​ $ 74,054 ​ ​ ​ ​ $ 68,592 ​ ​
China
​ ​ ​ ​ 55,170 ​ ​ ​ ​ ​ 65,425 ​ ​
Rest of World
​ ​ ​ ​ 8,117 ​ ​ ​ ​ ​ 10,925 ​ ​
Total property and equipment, net
​ ​ ​ $   137,341 ​ ​ ​ ​ $   144,942 ​ ​
Recently Adopted Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The Company adopted ASU 2021-08 as of January 1, 2023, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815), Fair Value Hedging — Portfolio Layer Method, which clarifies the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets. The Company adopted ASU 2022-01 as of January 1, 2023, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
3.   Condensed Consolidated Balance Sheet Components
Property and Equipment, Net
Property and equipment, net consisted of the following:
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
​ ​ ​
(in thousands)
​
Molds and tooling
​ ​ ​ $   209,984 ​ ​ ​ ​ $   223,852 ​ ​
Computer and software
​ ​ ​ ​ 88,483 ​ ​ ​ ​ ​ 89,619 ​ ​
Displays
​ ​ ​ ​ 90,722 ​ ​ ​ ​ ​ 93,991 ​ ​
Equipment
​ ​ ​ ​ 14,653 ​ ​ ​ ​ ​ 16,569 ​ ​
Furniture and fixtures
​ ​ ​ ​ 11,418 ​ ​ ​ ​ ​ 11,645 ​ ​
Leasehold improvements
​ ​ ​ ​ 31,315 ​ ​ ​ ​ ​ 32,451 ​ ​
Total property and equipment
​ ​ ​ ​ 446,575 ​ ​ ​ ​ ​ 468,127 ​ ​
Less: accumulated depreciation and amortization
​ ​ ​ ​ (322,022) ​ ​ ​ ​ ​ (339,154) ​ ​
Construction in progress
​ ​ ​ ​ 12,788 ​ ​ ​ ​ ​ 15,969 ​ ​
Property and equipment, net
​ ​ ​ $ 137,341 ​ ​ ​ ​ $ 144,942 ​ ​
Depreciation and amortization expenses were $14.6 million and $17.1 million for the three months ended March 31, 2022 and 2023, respectively.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
​ ​ ​
(in thousands)
​
Prepaid expenses
​ ​ ​ $    86,274 ​ ​ ​ ​ $    18,589 ​ ​
Related party receivables
​ ​ ​ ​ 20,069 ​ ​ ​ ​ ​ 10,366 ​ ​
Derivative assets
​ ​ ​ ​ 22,676 ​ ​ ​ ​ ​ 16,055 ​ ​
DPP receivable
​ ​ ​ ​ 22,294 ​ ​ ​ ​ ​ — ​ ​
Other receivables
​ ​ ​ ​ 30,518 ​ ​ ​ ​ ​ 35,426 ​ ​
Prepaid expenses and other current assets
​ ​ ​ $ 181,831 ​ ​ ​ ​ $ 80,436 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
​ ​ ​
(in thousands)
​
Accrued customer incentives
​ ​ ​ $   230,195 ​ ​ ​ ​ $   234,146 ​ ​
Accrued expenses
​ ​ ​ ​ 99,962 ​ ​ ​ ​ ​ 101,076 ​ ​
Accrued compensation and benefits
​ ​ ​ ​ 71,762 ​ ​ ​ ​ ​ 30,616 ​ ​
Accrued returns
​ ​ ​ ​ 45,529 ​ ​ ​ ​ ​ 26,994 ​ ​
Accrued tax payables
​ ​ ​ ​ 43,243 ​ ​ ​ ​ ​ 31,865 ​ ​
Accrued warranty
​ ​ ​ ​ 20,958 ​ ​ ​ ​ ​ 20,075 ​ ​
Operating lease liabilities, current
​ ​ ​ ​ 13,038 ​ ​ ​ ​ ​ 11,961 ​ ​
Other
​ ​ ​ ​ 27,336 ​ ​ ​ ​ ​ 26,910 ​ ​
Accrued expenses and other current liabilities
​ ​ ​ $ 552,023 ​ ​ ​ ​ $ 483,643 ​ ​
4.   Fair Value Measurements
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022:
​ ​ ​
December 31, 2022
​
​ ​ ​
Fair Value
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​
​ ​ ​
(in thousands)
​
Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Derivatives not designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Forward contracts included in prepaid expenses and other current assets (Note 5)
​ ​ ​ $  22,676 ​ ​ ​ ​ $        — ​ ​ ​ ​ $ 22,676 ​ ​ ​ ​ $ — ​ ​
DPP receivable included in prepaid expenses and other current assets ​ ​ ​ ​ 22,294 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,294 ​ ​
Total financial assets
​ ​ ​ $ 44,970 ​ ​ ​ ​ $ — ​ ​ ​ ​ $  22,676 ​ ​ ​ ​ $  22,294 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2023:
​ ​ ​
March 31, 2023
​
​ ​ ​
Fair Value
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​
​ ​ ​
(in thousands)
​
Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Derivatives not designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Forward contracts included in prepaid expenses and other current assets (Note 5)
​ ​ ​ $ 16,055 ​ ​ ​ ​ $       — ​ ​ ​ ​ $ 16,055 ​ ​ ​ ​ $       — ​ ​
Total financial assets
​ ​ ​ $ 16,055 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 16,055 ​ ​ ​ ​ $ — ​ ​
Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Forward contracts included in accrued expenses and other current liabilities (Note 5)
​ ​ ​ $ 2,352 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 2,352 ​ ​ ​ ​ $ — ​ ​
Total financial liabilities
​ ​ ​ $ 2,352 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 2,352 ​ ​ ​ ​ $ — ​ ​
   The Company classifies its derivative financial instruments within Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. The Company classifies its DPP receivable within Level 3 because it is valued using unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. There were no transfers into or out of Level 3 fair value measurement for the periods ended December 31, 2022 and March 31, 2023.
Because no market exists for a DPP in sold receivables, fair value estimates are based on judgements regarding current economic conditions and the risk characteristics of the expected collection percentage of the remaining receivables outstanding. Those estimates that are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision are included in Level 3. Changes in assumptions could significantly affect the fair value of the DPP receivable presented.
5.   Derivative Financial Instruments and Hedging
Notional Amount of Forward Contracts
The gross notional amounts of the Company’s forward contracts are USD denominated. The notional amounts of outstanding forward contracts in USD as of the periods presented were as follows:
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
​ ​ ​
(in thousands)
​
Derivatives Designated as Hedging Instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Forward contracts
​ ​ ​ $ — ​ ​ ​ ​ $ 237,500 ​ ​
Derivatives Not Designated as Hedging Instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Forward contracts
​ ​ ​ ​ 956,191 ​ ​ ​ ​ ​ 640,360 ​ ​
Total derivative instruments
​ ​ ​ $ 956,191 ​ ​ ​ ​ $ 877,860 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Effect of Forward Contracts on the Condensed Consolidated Statements of Income
Total gain recognized from derivatives that were not designated as hedging instruments was $1.9 million for the three months ended March 31, 2023, and it was recorded in other expense, net within the condensed consolidated statements of income. The Company did not have any material forward contracts that were not designated as hedging instruments for the three months ended March 31, 2022.
Effect of Forward Contracts on Accumulated Other Comprehensive Income
The following table represents the unrealized losses of forward contracts that were designated as hedging instruments, net of tax effects, that were recorded in accumulated other comprehensive income as of March 31, 2023, and their effect on other comprehensive income for the three months ended March 31, 2023:
​ ​ ​
Three months
ended
March 31, 2023
​
​ ​ ​
(in thousands)
​
Beginning balance
​ ​ ​ $ — ​ ​
Amount of losses recorded in other comprehensive income, net of tax
​ ​ ​ ​ (2,352) ​ ​
Ending balance
​ ​ ​ $ (2,352) ​ ​
The Company did not have any forward contracts that were designated as hedging instruments for the three months ended March 31, 2022.
6.   Intangible Assets, Net and Goodwill
Intangible Assets, Net
Intangible assets consisted of the following as of December 31, 2022:
​ ​ ​
Gross Carrying
Value
​ ​
Accumulated
Amortization
​ ​
Net Carrying
Value
​ ​
Weighted-
Average
Remaining
Useful Life
​
​ ​ ​
(in thousands)
​ ​
(in years)
​
Intangible assets subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Customer relationships
​ ​ ​ $ 143,083 ​ ​ ​ ​ $ (83,465) ​ ​ ​ ​ $ 59,618 ​ ​ ​
3.8
​
Patents
​ ​ ​ ​ 52,695 ​ ​ ​ ​ ​ (19,874) ​ ​ ​ ​ ​ 32,821 ​ ​ ​
6.2
​
Developed technology
​ ​ ​ ​ 21,381 ​ ​ ​ ​ ​ (5,151) ​ ​ ​ ​ ​ 16,230 ​ ​ ​
9.2
​
Total intangible assets subject to amortization
​ ​ ​ $ 217,159 ​ ​ ​ ​ $ (108,490) ​ ​ ​ ​ $ 108,669 ​ ​ ​ ​ ​
Intangible assets not subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade name and trademarks
​ ​ ​ ​ 384,040 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 384,040 ​ ​ ​
Indefinite
​
Total intangible assets, net
​ ​ ​ $ 601,199 ​ ​ ​ ​ $ (108,490) ​ ​ ​ ​ $ 492,709 ​ ​ ​ ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Intangible assets consisted of the following as of March 31, 2023:
​ ​ ​
Gross Carrying
Value
​ ​
Accumulated
Amortization
​ ​
Net Carrying
Value
​ ​
Weighted-
Average
Remaining
Useful Life
​
​ ​ ​
(in thousands)
​ ​
(in years)
​
Intangible assets subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Customer relationships
​ ​ ​ $ 143,083 ​ ​ ​ ​ $ (87,440) ​ ​ ​ ​ $ 55,643 ​ ​ ​
3.5
​
Patents
​ ​ ​ ​ 51,593 ​ ​ ​ ​ ​ (21,096) ​ ​ ​ ​ ​ 30,497 ​ ​ ​
6.0
​
Developed technology
​ ​ ​ ​ 23,914 ​ ​ ​ ​ ​ (5,576) ​ ​ ​ ​ ​ 18,338 ​ ​ ​
8.9
​
Total intangible assets subject to amortization
​ ​ ​ $ 218,590 ​ ​ ​ ​ $ (114,112) ​ ​ ​ ​ $ 104,478 ​ ​ ​ ​ ​
Intangible assets not subject to amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Trade name and trademarks
​ ​ ​ ​ 384,040 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 384,040 ​ ​ ​
Indefinite
​
Total intangible assets, net
​ ​ ​ $ 602,630 ​ ​ ​ ​ $ (114,112) ​ ​ ​ ​ $ 488,518 ​ ​ ​ ​ ​
Amortization expenses for intangible assets were as follows:
​ ​ ​
Three Months Ended
March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
(in thousands)
​
Research and development
​ ​ ​ $    1,583 ​ ​ ​ ​ $    1,647 ​ ​
Sales and marketing
​ ​ ​ ​ 3,975 ​ ​ ​ ​ ​ 3,975 ​ ​
Total amortization expenses
​ ​ ​ $ 5,558 ​ ​ ​ ​ $ 5,622 ​ ​
The expected future amortization expenses related to the intangible assets as of March 31, 2023 were as follows:
​ ​ ​
Amount
​
​ ​ ​
(in thousands)
​
Year Ending December 31, ​ ​ ​ ​ ​ ​ ​
Remainder of 2023
​ ​ ​ $ 17,878 ​ ​
2024
​ ​ ​ ​ 23,043 ​ ​
2025
​ ​ ​ ​ 23,043 ​ ​
2026
​ ​ ​ ​ 19,068 ​ ​
2027
​ ​ ​ ​ 6,222 ​ ​
Thereafter
​ ​ ​ ​ 15,224 ​ ​
Total
​ ​ ​ $ 104,478 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Goodwill
The following table represents the changes to goodwill:
​ ​ ​
Carrying Amount
​
​ ​ ​
(in thousands)
​
Balance as of December 31, 2022
​ ​ ​ $ 840,148 ​ ​
Effect of foreign currency translation
​ ​ ​ ​ 35 ​ ​
Balance as of March 31, 2023
​ ​ ​ $ 840,183 ​ ​
7.   Debt
On September 29, 2017, the Company entered into a term loan and revolving credit agreement (“2017 Credit Agreement” or “Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The Credit Agreement provided for a Tranche A $225.0 million term loan (“Term Loan A”), a Tranche B $455.0 million term loan (“Term Loan B”) and a $225.0 million revolving credit facility (“JPM Revolving Facility”).
On March 17, 2020, the Company entered into a term loan and revolving credit agreement (“Facilities Agreement”) with Bank of China Limited, Macau Branch, as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The Facilities Agreement provided for a $500.0 million term loan facility (the “Secured Term Loan”) and $200.0 million revolving credit facility (“Revolving Facility”). The Secured Term Loan matures five years from the initial utilization date on March 20, 2020, and both facilities bear interest at a rate of LIBOR plus 1.8%. The Company may request to increase the total commitments related to the Revolving Facility in amounts not to exceed $50.0 million for each financial year. The Facilities Agreement replaced the Company’s 2017 Credit Agreement in its entirety. The Company repaid the remaining principal of $659.1 million and accrued interest of $2.1 million and wrote off $16.4 million in unamortized deferred financing costs related to the term loan and revolving credit facility under the 2017 Credit Agreement on March 20, 2020.
The Company is required to meet certain financial covenants customary with this type of agreement, including, but not limited to, maintaining a maximum ratio of indebtedness and a minimum specified interest coverage ratio. As of March 31, 2023, the Company was in compliance with the covenants under the Facilities Agreement.
The obligations under the Facilities Agreement with respect to the Secured Term Loan and the Revolving Facility are secured by substantially all the Company’s U.S. assets, except for goodwill and investments in subsidiaries, and are required to be guaranteed by certain material subsidiaries of the Company if, at the end of future financial quarters, certain conditions are not met. The Secured Term Loan is secured by equity interests in certain of the Company’s subsidiaries and substantially all of the Company’s U.S. entity assets.
No amounts were outstanding under the Revolving Facility as of December 31, 2022 or March 31, 2023.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Long-term debt related to the Secured Term Loan consisted of the following:
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
​ ​ ​
(in thousands)
​
Secured Term Loan with principal payments due on March 20 each
year; interest at LIBOR plus 1.8%; final balance due on maturity date
of March 19, 2025 		​ ​ ​ $ 437,500 ​ ​ ​ ​ $ 400,000 ​ ​
Less: deferred financing costs
​ ​ ​ ​ (1,359) ​ ​ ​ ​ ​ (1,157) ​ ​
Less: current portion
​ ​ ​ ​ (86,972) ​ ​ ​ ​ ​ (99,503) ​ ​
Long-term debt, net of current portion
​ ​ ​ $ 349,169 ​ ​ ​ ​ $ 299,340 ​ ​
Aggregate maturities of long-term debt as of March 31, 2023 were as follows:
​ ​ ​
Amount
​
​ ​ ​
(in thousands)
​
Years Ending December 31, ​ ​ ​ ​ ​ ​ ​
Remainder of 2023
​ ​ ​ $ 50,000 ​ ​
2024
​ ​ ​ ​ 150,000 ​ ​
2025
​ ​ ​ ​ 200,000 ​ ​
Total future principal payments
​ ​ ​ $ 400,000 ​ ​
The Company recognizes and records interest expense related to the above term loans in interest expense, net. The Company recorded interest expense related to the above term loans of $3.0 million and $7.0 million for the three months ended March 31, 2022 and 2023, respectively.
8.   Commitments and Contingencies
Non-Cancelable Purchase Obligations
In the normal course of business, the Company enters into non-cancelable purchase commitments. As of March 31, 2023, the outstanding non-cancelable purchase obligations with a term of 12 months or longer were immaterial.
Indemnifications and Contingencies
The Company enters into indemnification provisions under certain agreements with other parties in the ordinary course of business. In its customer agreements, the Company has agreed to indemnify, defend and hold harmless the indemnified party for third-party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party intellectual property infringement claims. For certain large or strategic customers, the Company has agreed to indemnify, defend and hold harmless the indemnified party for non-compliance with certain additional representations and warranties made by the Company.
Legal Proceedings
From time to time, the Company may be involved in various legal proceedings arising from the normal course of business activities. The Company investigates these claims as they arise. The Company is not presently a party to any litigation the outcome of which the Company believes, if determined adversely to
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
the Company, would individually or taken together, have a material adverse effect on its business, financial condition and results of operations.
9.   Shareholders’ Equity and Equity Incentive Plan
Distribution to Parent
During the year ended December 31, 2022, the Company entered into a note agreement with Parent (the “2022 Intercompany Note to Parent”) in which SharkNinja transferred $49.3 million to its Parent. Due to the nature of the note receivable, the Company considered it to be an in-substance distribution to its Parent accounted for as contra-equity at inception. During the three months ended March 31, 2023, the Company declared and issued distributions to Parent of $110.4 million, which included amounts receivable of $50.4 million under the 2022 Intercompany Note, including interest, in satisfaction of such note.
Restricted Share Units
Restricted share unit (“RSU”) activities for the three months ended March 31, 2023 for RSUs granted under JS Global’s restricted share units plan (“JS RSU Plan”) to the Company’s employees were as follows:
​ ​ ​
Number of
Shares
​ ​
Weighted
Average
Grant Date
Fair Value
per share
​
Unvested as of December 31, 2022
​ ​ ​ ​ 10,254,734 ​ ​ ​ ​ $ 0.97 ​ ​
Cancelled/Forfeited
​ ​ ​ ​ (1,076,747) ​ ​ ​ ​ $ 0.97 ​ ​
Unvested as of March 31, 2023
​ ​ ​ ​ 9,177,987 ​ ​ ​ ​ $ 0.97 ​ ​
Share-Based Compensation
The share-based compensation cost by line item in the accompanying condensed consolidated statements of income is summarized as follows:
​ ​ ​
Three Months Ended
March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
(in thousands)
​
Research and development
​ ​ ​ $ 821 ​ ​ ​ ​ $ 230 ​ ​
Sales and marketing
​ ​ ​ ​ 257 ​ ​ ​ ​ ​ 101 ​ ​
General and administrative
​ ​ ​ ​ 1,492 ​ ​ ​ ​ ​ 517 ​ ​
Total share-based compensation cost
​ ​ ​ $ 2,570 ​ ​ ​ ​ $ 848 ​ ​
As of March 31, 2023, the unrecognized share-based compensation cost related to RSUs granted under the JS RSU Plan was $0.6 million, which is expected to be recognized over a weighted average period of 0.2 years.
Pursuant to the share-based compensation recharge agreement with Parent entered into in the year ended December 31, 2022, the Company reimbursed share-based compensation costs to Parent in the amount of $0.8 million during the three months ended March 31, 2023.
10.   Income Taxes
The Company recorded income tax expenses of $25.6 million and $24.3 million for the three months ended March 31, 2022 and 2023, respectively. The Company’s effective tax rate was 22.3% and 21.8% for the three months ended March 31, 2022 and 2023, respectively.
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For interim periods, the Company’s income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including jurisdiction mix of earnings, changes in income before taxes, non-deductible expenses, tax credits, uncertain tax positions and other items.
11. Net Income Per Share
The following table sets forth the computation of basic and diluted net income per share for the periods presented:
​ ​ ​
Three Months Ended
March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
(in thousands, except share
and
per share data)
​
Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 88,911 ​ ​ ​ ​ $ 87,096 ​ ​
Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Weighted-average shares used in computing net income per share, basic and diluted
​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 50,000 ​ ​
Net income per share, basic and diluted
​ ​ ​ $ 1,778 ​ ​ ​ ​ $ 1,742 ​ ​
12.   Related Party Transactions
The Company entered into transactions in the ordinary course of business with related parties detailed below that are under common control of JS Global.
​ ​ ​
As of
​
​ ​ ​
December 31,
2022
​ ​
March 31,
2023
​
​ ​ ​
(in thousands)
​
Related party assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balances and transactions with other entities controlled by JS Global
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accounts receivable, net
​ ​ ​ $ 1,033 ​ ​ ​ ​ $ 5,466 ​ ​
Prepaid expenses and other current assets
​ ​ ​ ​ 2,886 ​ ​ ​ ​ ​ 1,366 ​ ​
Related party liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balances and transactions with other entities controlled by JS Global
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accounts payable
​ ​ ​ $ 231,805 ​ ​ ​ ​ $ 196,857 ​ ​
Accrued expenses and other current liabilities
​ ​ ​ ​ 861 ​ ​ ​ ​ ​ 1,558 ​ ​
Balances with JS Global
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accrued expenses and other current liabilities
​ ​ ​ $ 7,538 ​ ​ ​ ​ $ 7,571 ​ ​
 
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SHARKNINJA GLOBAL SPV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
​ ​ ​
Three Months Ended
March 31,
​
​ ​ ​
2022
​ ​
2023
​
​ ​ ​
(in thousands)
​
Related party revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balances and transactions with joint venture
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sale of goods
​ ​ ​ $ 500 ​ ​ ​ ​ $ — ​ ​
Balances and transactions with other entities controlled by JS Global
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sale of goods
​ ​ ​ $ — ​ ​ ​ ​ $ 758 ​ ​
Related party expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balances and transactions with other entities controlled by JS Global
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of goods
​ ​ ​ $ 333,170 ​ ​ ​ ​ $ 298,752 ​ ​
Purchase of services
​ ​ ​ ​ 956 ​ ​ ​ ​ ​ 861 ​ ​
Supplier Agreements
The Company has historically relied on JS Global entities to provide certain procurement and quality control services to the Company. In connection with these agreements, the Company incurred costs which were reimbursed by JS Global entities. For the three months ended March 31, 2022 and 2023, JS Global entities paid the Company $7.8 million and $7.6 million, respectively, recorded as a reduction to cost of sales for services rendered under these agreements.
Recourse Promissory Notes
During the year ended December 31, 2021, the Company issued recourse promissory notes of $17.6 million to certain employees (the “2021 Employee Notes”) to satisfy their individual tax withholding requirements. As of December 31, 2022 and March 31, 2023, the outstanding balance of 2021 Employee Notes, including interest, was $11.2 million and $8.9 million, respectively, and was included in prepaid expenses and other current assets.
During the year ended December 31, 2022, the Company issued recourse promissory notes of $6.0 million to certain employees (the “2022 Employee Notes”) to satisfy their individual tax withholding requirements. As of December 31, 2022 and March 31, 2023, the outstanding balance of 2022 Employee Notes, including interest, was $6.0 million and $0.1 million, respectively, and was included in prepaid expenses and other current assets.
Transactions with Parent
See Note 9 — Shareholders’ Equity and Equity Incentive Plan for details on the Company’s equity transaction with Parent including distribution to Parent and share-based compensation recharge from Parent.
13.   Subsequent Events
The Company has evaluated subsequent events from the balance sheet date through May 16, 2023, the date on which these condensed consolidated financial statements were available to be issued.
 
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6.   Indemnification of Directors and Officers
Cayman Law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of directors and officers, except to the extent any such provision may be held by Cayman Courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. The Registrant’s New Memorandum and Articles of Association will provide, to the fullest extent permissible under Cayman Law, that its directors and officers shall be indemnified against any liability, action, proceeding, claim, demand, costs damages or expenses, including legal expenses, incurred in their capacities as such unless such liability (if any) arises from actual fraud, willful neglect or willful default, as determined by a court of competent jurisdiction in a final non-appealable order.
Prior to the separation and distribution, the Registrant will enter into indemnification agreements with each of its directors and officers that will provide for, among other things, indemnification to the fullest extent permitted by law against any and all expenses, judgments, fines, penalties and amounts paid in settlement (with the Registrant’s consent) of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative. The indemnification agreements will also provide for the advancement or payment of all expenses to the Registrant’s directors and officers and for reimbursement of such advanced expenses to the Registrant if it is found that such director or officer is not entitled to such indemnification under applicable law.
The Registrant will obtain a general liability insurance policy that covers certain liabilities of its directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to the Registrant, its directors, its officers or persons who control the Registrant pursuant to the foregoing provisions, the Registrant has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 7.   Recent Sales of Unregistered Securities
The Registrant has not sold any securities, registered or otherwise, within the past three years, except for the shares issued to JS Global in connection with the separation and distribution.
Item 8.   Exhibits
(a)
Exhibits
​
The exhibit index attached hereto is incorporated herein by reference.
(b)
Financial Statement Schedules
​
No financial statement schedules are provided because the information called for is not applicable or is shown in the financial statements or notes thereto.
Item 9.   Undertakings
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
 
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submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
​
(2)
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
​
 
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INDEX TO EXHIBITS
The following exhibits are filed as part of this registration statement.
​
Exhibit
No.
​ ​ ​ ​
​ 3.1 ​ ​ Amended and Restated Memorandum and Articles of Association. ​
​ 4.1* ​ ​ Specimen Share Certificate, evidencing the ordinary shares of the Registrant. ​
​ 5.1* ​ ​ Opinion of Maples and Calder (Cayman) LLP. ​
​ 10.1† ​ ​ ​
​ 10.2† ​ ​ ​
​ 10.3† ​ ​ ​
​ 10.4+ ​ ​ ​
​ 10.5+ ​ ​ ​
​ 10.6+ ​ ​ ​
​ 10.7+ ​ ​ ​
​ 10.8+ ​ ​ ​
​ 10.9+ ​ ​ ​
​ 10.10+ ​ ​ ​
​ 21.1 ​ ​ ​
​ 23.1* ​ ​ Consent of Maples and Calder (Cayman) LLP (included in Exhibit 5.1). ​
​ 23.2 ​ ​ ​
​ 24.1 ​ ​ ​
​ 99.1 ​ ​ ​
​ 99.2 ​ ​ ​
​ 99.3 ​ ​ ​
​ 99.4 ​ ​ ​
​ 99.5 ​ ​ ​
​ 99.6 ​ ​ ​
​ 107 ​ ​ ​
​
*
To be filed by amendment.
​
†
Indicates a management contract or compensatory plan.
​
+
Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon its request.
​
 
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Needham, state of Massachusetts, on June 28, 2023.
SHARKNINJA, INC.
By: /s/ Mark Barrocas
 
​
Mark Barrocas
Chief Executive Officer
Each person whose signature appears below constitutes and appoints each of Mark Barrocas and Larry Flynn as his or her true and lawful attorney-in-fact and agent, each acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and to sign any related registration statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
​
Signature
​ ​
Title
​ ​
Date
​
​
/s/ Mark Barrocas
​
Mark Barrocas
​ ​
Chief Executive Officer and Director
(Principal Executive Officer)
​ ​
June 28, 2023
​
​
/s/ Larry Flynn
​
Larry Flynn
​ ​
Interim Chief Financial Officer and Chief Accounting Officer
(Principal Financial Officer and Principal Accounting Officer)
​ ​
June 28, 2023
​
​
/s/ Xuning Wang
​
Xuning Wang
​ ​
Director
​ ​
June 28, 2023
​
 
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SIGNATURE OF AUTHORIZED U.S. REPRESENTATIVE OF THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned certifies that it is the duly authorized United States representative of the Registrant and has duly caused this registration statement to be signed by the undersigned, thereunto duly authorized, in the city of Needham, state of Massachusetts, on June 28, 2023.
SHARKNINJA, INC.
By: /s/ Mark Barrocas
 
​
Mark Barrocas
Chief Executive Officer
 
II-5

 

Exhibit 3.1

 

THE COMPANIES ACT (AS REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

 

AMENDED AND RESTATED

MEMORANDUM AND ARTICLES OF ASSOCIATION

 

OF

 

SHARKNINJA, INC.

(adopted by special resolution dated [*] and effective on [*])

 

 

 

 

THE COMPANIES ACT (AS REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

 

AMENDED AND RESTATED

MEMORANDUM OF ASSOCIATION

OF

 

SHARKNINJA, INC.

 

(adopted by special resolution dated [*] and effective on [*])

 

1The name of the Company is SharkNinja, Inc.

 

2The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place as the Directors may decide.

 

3The 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 laws of the Cayman Islands.

 

4The liability of each Member is limited to the amount unpaid on such Member's shares.

 

5The authorised share capital of the Company is US$110,000 divided into 1,000,000,000 ordinary shares of a par value of US$0.0001 each and 100,000,000 preferred shares of a par value of US$0.0001 each.

 

6The Company has the power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

 

7Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear the same meaning as those given in the Amended and Restated Articles of Association of the Company.

 

1

 

 

THE COMPANIES ACT (AS REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

 

AMENDED AND RESTATED

ARTICLES OF ASSOCIATION

 

OF

 

SHARKNINJA, INC.

(adopted by special resolution dated [*] and effective on [*])

 

1Interpretation

 

1.1In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith:

 

"Affiliate"

 

 means (i) in the case of a natural person, such person's parents, parents-in-law, spouse, children or grandchildren, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by such person or any of the foregoing, and (ii) in the case of a corporation, partnership or other entity or any natural person or entity 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 per cent (50%) of the voting power of the corporation, or the partnership or other entity (other than, in the case of a corporation, shares 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.
"Applicable Law" means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person.

 

2

 

 

"Articles"

 

 means the Amended and Restated Articles of Association of the Company, as from time to time altered or added to in accordance with the Statute and the Articles.
"Audit Committee" means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.
"Auditor" means the person for the time being performing the duties of auditor of the Company (if any).

"Business Day"

 

 means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City.
"Cause" means, for removal of a Director, where (a) the Director has been convicted of a felony or criminal offence by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (b) such Director has been found by a court of competent jurisdiction, to have been guilty of willful misconduct in the performance of such Director's duties to the Company in a matter of substantial importance to the Company; or (c) such Director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects such director's ability to perform their obligations as a Director
"Chairperson" means the chairperson of the board of Directors appointed pursuant to Article 30.9.
"Clearing House" means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction.
"Company" means the above named company.
"Company's Website" means the website of the Company, the address or domain name of which has been notified to Members.
"Compensation Committee" means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.

 

3

 

 

"Controlled Company" has the meaning given to it in the rules of the Designated Stock Exchange.
"Designated Stock Exchange" means any United States national securities exchange on which the securities of the Company are listed for trading, including the New York Stock Exchange.
"Directors" means the directors for the time being of the Company.
"Dividend" means any dividend (whether interim or final) resolved to be paid on shares pursuant to the Articles.

"electronic communication"

 

 means a communication sent by electronic means, including electronic posting to the Company's Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors.

"electronic record"

 

 has the same meaning as in the Electronic Transactions Act.
"Electronic Transactions Act" means the Electronic Transactions Act (As Revised) of the Cayman Islands.

"Exchange Act"

 

 means the United States Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time.
"Independent Director" has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, as the case may be.
"Majority Shareholder" means Mr. Xuning Wang.
"Majority Shareholder Affiliates" means (a) each of the Majority Shareholder's legal spouse, parents, children and other lineal descendants (each, an "Immediate Family Member"); and (b) any trust for the benefit of the Majority Shareholder and/or any of the Immediate Family Members as defined under (a), and any corporation, partnership or any other entity ultimately controlled by the Majority Shareholder and/or any of the Immediate Family Members as defined under (a) through possession of voting power or investment power over Shares held by any such entity. For the avoidance of doubt, the terms "voting power" and "investment power" shall have such meanings as defined under Rule 13d-3 of the Exchange Act.

 

4

 

 

"Member" has the same meaning as in the Statute.
"Memorandum of Association" means the amended and restated memorandum of association of the Company.
"Nominating and Corporate Governance Committee" means the nominating and corporate governance committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.
"Officer" means a person appointed to hold an office in the Company.

"Ordinary Resolution"

 

 means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and does not include a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles.

"Ordinary Share"

 

 means an ordinary share in the share capital of the Company of US$0.0001 nominal or par value designated as Ordinary Shares, and having the rights provided for in the Articles.

"Preferred Share"

 

 means a preferred share in the share capital of the Company of US$0.0001 nominal or par value designated as Preferred Shares, and having the rights provided for in the Articles.

"Register of Members"

 

 means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members.
"Registered Office" means the registered office for the time being of the Company.

"Seal"

 

 means the common seal of the Company and includes every duplicate seal.
"Securities and Exchange Commission" means the United States Securities and Exchange Commission.

"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 Securities and Exchange Commission thereunder, all as the same shall be in effect at the time.

 

5

 

 

"Share"

 

 means any share in the capital of the Company, including the Ordinary Shares, Preferred Shares and shares of other classes.

"signed"

 

 means 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 resolution passed by at least two thirds of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and does not include a unanimous written resolution. In computing the approval when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles.
"Statute" means the Companies Act (As Revised) of the Cayman Islands.
"Treasury Share" means a share held in the name of the Company as a treasury share in accordance with the Statute.

 

1.2In the Articles, save where the context requires otherwise:

 

(a)words importing the singular number include the plural number and vice versa;

 

(b)words importing the masculine gender include the feminine gender;

 

(c)words importing persons include corporations as well as any other legal or natural person;

 

(d)"written" and "in writing" include all modes of representing or reproducing words in visible form, including in the form of an electronic record;

 

(e)"shall" shall be construed as imperative and "may" shall be construed as permissive;

 

(f)references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced;

 

6

 

 

(g)any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

 

(h)the term "and/or" is used to mean both "and" as well as "or." The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or "or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not be interpreted to require the conjunctive (in each case, unless the context otherwise requires);

 

(i)headings are inserted for reference only and shall be ignored in construing the Articles;

 

(j)any requirements as to delivery under the Articles include delivery in the form of an electronic record;

 

(k)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;

 

(l)sections 8 and 19(3) of the Electronic Transactions Act shall not apply;

 

(m)the term "clear days" in relation to the period of a notice means that period excluding the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect; and

 

(n)the term "holder" in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share.

 

2Formation Expenses

 

The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company including the expenses of registration.

 

3Issue of Shares and other Securities

 

3.1Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice to any rights attached to any existing Shares, the Directors may, in their absolute discretion and without approval of the holders of Ordinary Shares, allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividend or other distribution, voting, return of capital or otherwise, any or all of which may be greater than the powers and rights associated with the Ordinary Shares, to such persons, at such times and on such other terms as they think proper, which shall be conclusively evidenced by their approval of the terms thereof, and may also (subject to the Statute and the Articles) vary such rights.

 

7

 

 

3.2The Company may issue rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company on such terms as the Directors may from time to time determine.

 

3.3The Company shall not issue Shares in bearer form and shall only issue Shares as fully paid.

 

4Ordinary Shares

 

4.1The holders of the Ordinary Shares shall be:

 

(a)entitled to dividends in accordance with the relevant provisions of the Articles;

 

(b)entitled to and are subject to the provisions in relation to winding up of the Company provided for in the Articles;

 

(c)entitled to attend general meetings of the Company and shall be entitled to one vote for each Ordinary Share registered in their name in the Register of Members, both in accordance with the relevant provisions of the Articles.

 

4.2All Ordinary Shares shall rank pari passu with each other in all respects.

 

5Preferred Shares

 

5.1Preferred Shares may be issued from time to time in one or more series, each of such series to have such voting powers (full or limited or without voting powers), designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as are stated and expressed, or in any resolution or resolutions providing for the issue of such series adopted by the Directors as hereinafter provided.

 

5.2Authority is hereby granted to the Directors, subject to the provisions of the Memorandum, the Articles and applicable law, to create one or more series of Preferred Shares and, with respect to each such series, to fix by resolution or resolutions, without any further vote or action by the Members of the Company providing for the issue of such series:

 

(a)the number of Preferred Shares to constitute such series and the distinctive designation thereof;

 

(b)the dividend rate on the Preferred Shares of such series, the dividend payment dates, the periods in respect of which dividends are payable ("Dividend Periods"), whether such dividends shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate;

 

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(c)whether the Preferred Shares of such series shall be convertible into, or exchangeable for, Shares of any other class or classes or any other series of the same or any other class or classes of Shares and the conversion price or prices or rate or rates, or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated and expressed or provided in such resolution or resolutions;

 

(d)the preferences, if any, and the amounts thereof, which the Preferred Shares of such series shall be entitled to receive upon the winding up of the Company;

 

(e)the voting power, if any, of the Preferred Shares of such series;

 

(f)transfer restrictions and rights of first refusal with respect to the Preferred Shares of such series; and

 

(g)such other terms, conditions, special rights and provisions as may seem advisable to the Directors.

 

5.3Notwithstanding the fixing of the number of Preferred Shares constituting a particular series upon the issuance thereof, the Directors at any time thereafter may authorise the issuance of additional Preferred Shares of the same series subject always to the Statute and the Memorandum of Association.

 

5.4No dividend shall be declared and set apart for payment on any series of Preferred Shares in respect of any Dividend Period unless there shall likewise be or have been paid, or declared and set apart for payment, on all Preferred Shares of each other series entitled to cumulative dividends at the time outstanding which rank senior or equally as to dividends with the series in question, dividends rateably in accordance with the sums which would be payable on the said Preferred Shares through the end of the last preceding Dividend Period if all dividends were declared and paid in full.

 

5.5If, upon the winding up of the Company, the assets of the Company distributable among the holders of any one or more series of Preferred Shares which (a) are entitled to a preference over the holders of the Ordinary Shares upon such winding up; and (b) rank equally in connection with any such distribution, shall be insufficient to pay in full the preferential amount to which the holders of such Preferred Shares shall be entitled, then such assets, or the proceeds thereof, shall be distributed among the holders of each such series of the Preferred Shares rateably in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full.

 

6Register of Members

 

6.1The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute, provided that for so long as the securities of the Company are listed for trading on the Designated Stock Exchange, title to such securities may be evidenced and transferred in accordance with the laws applicable to and the rules and regulations of the Designated Stock Exchange.

 

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6.2The Directors may determine that the Company shall maintain one or more branch registers of Members in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register and which shall constitute the branch register or registers, and to vary such determination from time to time.

 

7Closing Register of Members or Fixing Record Date

 

7.1For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed newspaper or any other newspaper or by any other means in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed forty days.

 

7.2In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose.

 

7.3If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.

 

8Certificates for Shares

 

8.1A Member shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled and, subject to the Articles, no new certificate shall be issued until the former certificate representing a like number of relevant Shares shall have been surrendered and cancelled.

 

8.2The Company shall not be bound to issue more than one certificate for Shares held jointly by more than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.

 

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8.3If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.

 

8.4Every share certificate sent in accordance with the Articles will be sent at the risk of the Member or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the course of delivery.

 

8.5Share certificates shall be issued within the relevant time limit as prescribed by the Statute, if applicable, or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter, after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgement of a Share transfer with the Company.

 

9Transfer of Shares

 

9.1Subject to the terms of the Articles any Member may transfer all or any of their Shares by an instrument of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. If the Shares in question were issued in conjunction with rights, options or warrants issued pursuant to the Articles on terms that one cannot be transferred without the other, the Directors shall refuse to register the transfer of any such Share without evidence satisfactory to them of the like transfer of such option or warrant.

 

9.2The instrument of transfer of any Share shall be in writing in the usual or common form or in a form prescribed by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members.

 

9.3The Directors may, in their absolute discretion, decline to register any transfer of Shares, subject to any applicable requirements imposed from time to time by the Commission and the Designated Stock Exchange.

 

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10Redemption, Repurchase and Surrender of Shares, Treasury Shares

 

10.1Subject to the provisions, if any, in the Articles, the Memorandum, applicable law, including the Statute, and the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Company may:

 

(a)issue Shares on terms that they are to be redeemed or are liable to be redeemed at the option of the Company or the Member on such terms and in such manner as the Directors may, before the issue of such Shares, determine; and

 

(b)purchase its own Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member, provided that the manner of purchase is in accordance with any applicable requirements imposed from time to time by the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law;

 

10.2For the avoidance of doubt, redemptions, repurchases and surrenders of Shares in the circumstances described in the Article above shall not require further approval of the Members.

 

10.3The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Statute, including out of capital.

 

10.4The Directors may accept the surrender for no consideration of any fully paid Share.

 

10.5The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.

 

10.6The 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).

 

11Variation of Rights of Shares

 

11.1Subject to Article 3.1, if at any time the share capital of the Company is divided into different classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class, or with the sanction of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except that the necessary quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll.

 

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11.2For the purposes of a separate class meeting, the Directors may treat two or more or all the classes of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate classes of Shares.

 

11.3The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking in priority to or pari passu therewith.

 

12Commission on Sale of Shares

 

The Company may, in so far as the Statute permits, pay a commission to any person in consideration of that person subscribing or agreeing to subscribe (whether absolutely or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as may be lawful.

 

13Non Recognition of Trusts

 

The Company shall not be bound by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share, or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an absolute right to the entirety thereof in the holder.

 

14Lien on Shares

 

14.1The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or their estate, either alone or jointly with any other person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's lien on a Share shall also extend to any amount payable in respect of that Share.

 

14.2The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within 14 clear days after notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold.

 

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14.3To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or their nominee shall be registered as the holder of the Shares comprised in any such transfer, and they shall not be bound to see to the application of the purchase money, nor shall their title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company's power of sale under the Articles.

 

14.4The net proceeds of such sale after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale.

 

15Call on Shares

 

15.1Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall (subject to receiving at least 14 clear days' notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls made upon them notwithstanding the subsequent transfer of the Shares in respect of which the call was made.

 

15.2A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed.

 

15.3The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof.

 

15.4If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine (and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive payment of the interest or expenses wholly or in part.

 

15.5An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions of the Articles shall apply as if that amount had become due and payable by virtue of a call.

 

15.6The Directors may issue Shares with different terms as to the amount and times of payment of calls, or the interest to be paid.

 

15.7The Directors may, if they think fit, receive an amount from any Member willing to advance all or any part of the monies uncalled and unpaid upon any Shares held by that Member, and may (until the amount would otherwise become payable) pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance.

 

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15.8No such amount paid in advance of calls shall entitle the Member paying such amount to any portion of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such payment, become payable.

 

16Forfeiture of Shares

 

16.1If a call or instalment of a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than 14 clear days' notice requiring payment of the amount unpaid together with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited.

 

16.2If the notice is not complied with, any Share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture.

 

16.3A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favour of that person.

 

16.4A person any of whose Shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to the Company all monies which at the date of forfeiture were payable by that person to the Company in respect of those Shares together with interest at such rate as the Directors may determine, but that person's liability shall cease if and when the Company shall have received payment in full of all monies due and payable by them in respect of those Shares.

 

16.5A certificate in writing under the hand of one Director or Officer that a Share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if any, nor shall their title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share.

 

16.6The provisions of the 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 payable at a fixed time, whether on account of the par value of the Share or by way of premium as if it had been payable by virtue of a call duly made and notified.

 

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17Transmission of Shares

 

17.1If a Member dies, the survivor or survivors (where they were a joint holder) or their legal personal representatives (where they were a sole holder), shall be the only persons recognised by the Company as having any title to the deceased Member's Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which that Member was a joint or sole holder.

 

17.2Any person becoming entitled to a Share in consequence of the death or bankruptcy, liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by the Directors, elect, by a notice in writing sent by that person to the Company, either to become the holder of such Share or to have some person nominated by them registered as the holder of such Share. If they elect to have another person registered as the holder of such Share they shall sign an instrument of transfer of that Share to that person. 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 relevant Member before their death or bankruptcy, liquidation or dissolution, as the case may be.

 

17.3A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages to which they would be entitled if they were the holder of such Share. However, they shall not, before becoming a Member in respect of a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company and the Directors may at any time give notice requiring any such person to elect either to be registered or to have some person nominated by them be registered as the holder of the Share (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 relevant Member before their death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is not complied with within 90 days of being received or deemed to be received (as determined pursuant to the Articles) the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with.

 

18Alteration of Capital

 

18.1The Company may by Ordinary Resolution:

 

(a)increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;

 

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(b)consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares;

 

(c)convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares of any denomination;

 

(d)by subdivision of its existing Shares or any of them divide the whole or any part of its share capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and

 

(e)cancel any Shares that at the date of the passing of the Ordinary 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.

 

18.2All new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital.

 

18.3Subject to the provisions of the Statute and the provisions of the Articles as regards the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution:

 

(a)change its name;

 

(b)alter or add to the Articles;

 

(c)alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and

 

(d)reduce its share capital or any capital redemption reserve fund.

 

19Offices and Places of Business

 

Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition to its Registered Office, maintain such other offices or places of business as the Directors determine.

 

20General Meetings

 

20.1All general meetings of the Company other than annual general meetings shall be called extraordinary general meetings.

 

20.2For so long as the Company's securities are traded on a Designated Stock Exchange, the Company shall in each year hold a general meeting as its annual general meeting at such time and place as may be determined by the Directors. Save that the Company may, but shall not be required to, hold an annual general meeting in the year in which these Articles were adopted.

 

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20.3Extraordinary general meetings may be called by a majority of the Directors or by the Chairperson, except that the Chairperson may not call an extraordinary general meeting for the purposes of appointing and/or removing Directors. If an extraordinary general meeting is called by the Directors, such extraordinary general meeting shall be held at such time and place as may be determined by the Directors, and if an extraordinary general meeting is called by the Chairperson, such extraordinary general meeting shall be held at such time and place as may be determined by the Chairperson.

 

20.4The Members shall have no ability to call or requisition an extraordinary general meeting.

 

20.5A person may participate at a general meeting by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting.

 

21Notice of General Meetings

 

21.1At least ten (10) clear days' notice shall be given of any general meeting. Every notice shall specify the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting 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 the 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 Members (or their proxies) entitled to attend and vote thereat; and

 

(b)in the case of an extraordinary general meeting, by the Members (or their proxies) having a right to attend and vote at the meeting, together holding not less than a majority of the Shares giving that right.

 

21.2The notice convening an annual general meeting shall specify the meeting as such, and the notice convening a meeting to pass a Special Resolution shall specify the intention to propose the resolution as a Special Resolution. Notice of every general meeting shall be given to all Members other than such as, under the provisions hereof or the terms of issue of the Shares they hold, are not entitled to receive such notice from the Company.

 

21.3In cases where instruments of proxy are sent out with a notice of general meeting, the accidental omission to send such instrument of proxy to, or the non-receipt of any such instrument of proxy by, any person entitled to receive notice shall not invalidate any resolution passed or any proceeding at any such meeting.

 

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21.4No business may be transacted at any general meeting, other than business that is either (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Directors (or any duly authorised committee thereof) or, except in respect of the appointment and/or removal of Directors, the Chairperson, (B) otherwise properly brought before an annual general meeting by or at the direction of the Directors (or any duly authorised committee thereof) or, except in respect of the appointment and/or removal of Directors, the Chairperson, (C) otherwise properly brought before an annual general meeting by any Member who (1) is a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting and (2) complies with the notice procedures set forth in this Article.

 

(a)In addition to any other applicable requirements, for business to be brought properly before an annual general meeting by a Member, such Member must have given timely notice thereof in proper written form to the Secretary of the Company and comply with Article 21.4(c) and (f).

 

(b)All notices of general meetings shall be sent or otherwise given in accordance with this Article not less than ten (10) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and (i) in the case of an extraordinary general meeting, the purpose or purposes for which the meeting is called (no business other than that specified in the notice may be transacted) or (ii) in the case of the annual general meeting, those matters which the Directors, at the time of giving the notice, intends to present for action by the members (but any proper matter may be presented at the meeting for such action). The notice of any meeting at which Directors are to be elected shall include the name of any nominee or nominees who, at the time of the notice, the Directors intend to present for election.

 

(c)For matters other than for the nomination for election of a Director to be made by a Member, to be timely, such Member's notice shall be delivered to the Company at the principal executive offices of the Company not less than ninety (90) days and not more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year's annual general meeting; provided, however, that if the Company's annual general meeting occurs on a date more than thirty (30) days earlier or later than the Company's prior year's annual general meeting, then the Directors shall determine a date a reasonable period prior to the Company's annual general meeting by which date the Members notice must be delivered and publicise such date in a filing pursuant to the Exchange Act, or via press release. Such publication shall occur at least ten (10) days prior to the date set by the Directors.

 

(d)To be in proper written form, a Member's notice to the Company must set forth as to such matter such Member proposes to bring before the annual general meeting:

 

(i)a reasonably brief description of the business desired to be brought before the annual general meeting, including the text of the proposal or business, and the reasons for conducting such business at the annual general meeting;

 

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(ii)the name and address, as they appear on the Company's Register of Members, of the Member proposing such business and any Member Associated Person (as defined below);

 

(iii)the class or series and number of shares of the Company that are held of record or are beneficially owned by such Member or any Member Associated Person and any derivative positions held or beneficially held by the Member or any Member Associated Person;

 

(iv)whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of such Member or any Member Associated Person with respect to any securities of the Company, and a description of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of Shares), the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, such Member or any Member Associated Person with respect to any securities of the Company;

 

(v)any material interest of the Member or a Member Associated Person in such business, including a reasonably detailed description of all agreements, arrangements and understandings between or among any of such Members or between or among any proposing Members and any other person or entity (including their names) in connection with the proposal of such business by such Member; and

 

(vi)a statement as to whether such Member or any Member Associated Person will deliver a proxy statement and form of proxy to holders of at least the percentage of the Company's voting Shares required under rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law to carry the proposal.

 

For purposes of this Article 21.4(d), a "Member Associated Person" of any Member shall mean (x) any Affiliate; or person acting in concert with, such Member, (y) any beneficial owner of shares of the Company owned of record or beneficially by such Member and on whose behalf the proposal or nomination, as the case may be, is being made, or (z) any person controlling, controlled by or under common control with such person referred to in the preceding clauses (x) and (y).

 

(e)In addition to any other applicable requirements, for a nomination for election of a Director to be made by a Member (other than Directors to be nominated by any series of Preferred Shares, voting separately as a class), such Member must (A) be a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting, and on each such date beneficially own more than 15% of the issued and outstanding Shares (unless otherwise required by the applicable Exchange Act or the rules and regulations of the Securities and Exchange Commission) and (B) have given timely notice thereof in proper written form to the Secretary of the Company. If a Member is entitled to vote only for a specific class or category of directors at a meeting of the Members, such Member's right to nominate one or more persons for election as a director at the meeting shall be limited to such class or category of directors.

 

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(f)To be timely for purposes of Article 21.4(e), a Member's notice shall be delivered to or mailed and received at the principal executive offices of the Company not less than ninety (90) nor more than one hundred twenty (120) days prior to the meeting; provided, however, that in the event less than one hundred thirty (130) days' notice or prior public disclosure of the date of the meeting is given or made to Members, notice by the Member to be timely must be so received not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice of the date of the meeting was mailed or such public disclosure was made.

 

(g)To be in proper written form for purposes of Article 21.4(f), a Nominating Member's notice to the Secretary must be set forth:

 

(i)as to each Nominating Member:

 

(A)the information that is requested in Article 21.4(d)(ii)-(vi); and

 

(B)any other information relating to such Member that would be required to be disclosed pursuant to the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law.

 

(ii)as to each person whom the Member proposes to nominate for election as a director:

 

(A)all information that would be required by Article 21.4(d)(ii)-(vi) if such nominee was a Nominating Member, except such information shall also include the business address and residence address of the person;

 

(B)the principal occupation or employment of the person;

 

(C)all information relating to such person that is required to be disclosed in solicitations of proxies for appointment of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act or any successor provisions thereto, and any other information relating to the person that would be required to be disclosed pursuant to the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law; and

 

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(D)a description of all direct and indirect compensation and other material monetary arrangements and understandings during the past three years, and any other material relationship, between or among any Nominating Member and their Affiliates and associates, on the one hand, and each proposed nominee, their respective Affiliates and associates, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K of the Exchange Act if such Nominating Member were the "registrant" for purposes of such rule and the proposed nominee were a director or executive officer of such registrant.

 

Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. The Company may require any proposed nominee to furnish such other information as may be reasonably required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law.

 

(h)Unless otherwise provided by the terms of the Articles, any series of Preferred Shares or any agreement among Members or other agreement approved by the Directors, only persons who are nominated in accordance with the procedures set forth above shall be eligible to serve as Directors. If the chairperson of a general meeting determines that a proposed nomination was not made in compliance with the Articles, they shall declare to the general meeting that nomination is defective and such defective nomination shall be disregarded. Notwithstanding the foregoing provisions of the Articles, if the Nominating Member (or a qualified representative of the Nominating Member) does not appear at the general meeting to present the nomination, such nomination shall be disregarded.

 

21.5Subject to the Articles, a Director appointed pursuant to this Article 21 shall hold office until the expiry of their term as contemplated by Article 31.1 or until such time as they are removed from office pursuant to Article 31.3 or they vacate office in accordance with Article 32.

 

21.6No person shall be eligible for election as a director of the Company under to this Article 21 unless nominated in accordance with the procedures set forth in this Article. If the chairperson of an annual general meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairperson shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

 

21.7The accidental omission to give notice of a meeting to or the non receipt of a notice of a meeting by any Member shall not invalidate the proceedings at any meeting.

 

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22Proceedings at General Meetings

 

22.1No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business. Members holding in aggregate not less than a one-third of all voting share capital of the Company in issue present in person or by proxy and entitled to vote shall be a quorum. A person may participate at a general meeting by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting. If, however, such quorum is not present or represented at any general meeting, then either (i) the chairperson of the meeting or (ii) the Members entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting.

 

22.2When a meeting is adjourned to another time and place, unless the Articles otherwise require, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Company may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote at the meeting.

 

22.3A determination of the Members of record entitled to notice of or to vote at a general meeting shall apply to any adjournment of such meeting unless the Directors fix a new record date for the adjourned meeting, but the Directors shall fix a new record date if the meeting is adjourned for more than thirty (30) days from the date set for the original meeting.

 

22.4The Chairperson shall preside as chairperson at every general meeting of the Company. If at any meeting the Chairperson is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairperson, the Directors present shall elect one of their number as chairperson of the meeting or if all the Directors present decline to take the chair, the Members present shall choose one of their own number to be the chairperson of the meeting.

 

22.5At any general meeting a resolution put to the vote of the meeting shall be decided on a poll.

 

22.6A poll shall be taken in such manner as the chairperson of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting.

 

22.7In the case of an equality of votes, the chairperson of the meeting shall not be entitled to a second or casting vote.

 

23Votes of Members

 

23.1Subject to any rights and restrictions for the time being attached to any class or classes of Shares, every Member present in person and every person representing a Member by proxy at a general meeting of the Company shall have one vote for each Share registered in such Member's name in the Register of Members. No cumulative voting shall be allowed.

 

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23.2In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the Register of Members.

 

23.3A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by their committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court, and any such committee, receiver, curator bonis or other person may vote by proxy.

 

23.4No person shall be entitled to vote at any general meeting unless they are registered as a Member on the record date for such meeting nor unless all calls or other monies then payable by them in respect of Shares have been paid.

 

23.5No objection shall be raised as to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time in accordance with this Article shall be referred to the chairperson of the meeting whose decision shall be final and conclusive.

 

23.6On a poll votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall state which proxy is entitled to vote on a show of hands and shall specify the number of Shares in respect of which each proxy is entitled to exercise the related votes.

 

23.7On a poll, a Member holding more than one Share need not cast the votes in respect of their Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing the proxy, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which they are appointed either for or against a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which they are appointed.

 

24Proxies

 

24.1The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of their attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under the hand of its duly authorised representative. A proxy need not be a Member.

 

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24.2The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting or adjourned meeting to commence at which the person named in the instrument proposes to vote.

 

24.3The chairperson of the meeting may in any event at their discretion declare 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, or which has not been declared to have been duly deposited by the chairperson, shall be invalid.

 

24.4The instrument appointing a proxy may be in any usual or common form (or such other form as the Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.

 

24.5Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy.

 

25Corporate Members

 

Any corporation or other non-natural person which is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which they represent as the corporation could exercise if it were an individual Member.

 

26Clearing Houses

 

If a clearing house or depository (or its nominee) is a Member it may, by resolution of its directors, other governing body or authorised individual(s) or by power of attorney, authorise such person or persons as it thinks fit to act as its representative or representatives at any general meeting of the Company or at any general meeting of any class of Members; provided that, if more than one person is so authorised, the authorisation shall specify the number and class of Shares in respect of which each such person is so authorised. A person so authorised pursuant to this provision shall be entitled to exercise the same powers on behalf of the clearing house (or its nominee) which they represents as that clearing house (or its nominee) could exercise if it were an individual Member holding the number and class of Shares specified in such authorisation.

 

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27Shares that May Not be Voted

 

Shares in the Company that are beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding Shares at any given time.

 

28Directors

 

28.1There shall be a board of Directors consisting of such number of Directors as fixed by the Directors from time to time (but no less than two Directors). So long as Shares are listed on the Designated Stock Exchange, the board of Directors shall include such number of "independent directors" as the relevant rules applicable to the listing of any Shares on the Designated Stock Exchange require (subject to any applicable exceptions or exemptions).

 

28.2The Directors by the affirmative vote of a simple majority of the remaining Directors present and voting at a meeting of the Directors, even if less than a quorum, shall have the power from time to time and at any time to appoint any person as a Director to fill a casual vacancy on the board of Directors or as an addition to the existing board of Directors, subject to the Articles, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. Any Director so appointed shall hold office until the earlier of: (i) the expiry of the term of the Director they replaced; (ii) such time as they are removed from office pursuant to Article 31.3; or (iii) they vacate office in accordance with Article 32.

 

28.3The Directors may, from time to time, and except as required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives, which shall be intended to set forth the policies of the Company and the Directors on various corporate governance related matters, as the Directors shall determine by resolution from time to time.

 

28.4A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a Member shall nevertheless be entitled to receive notice of and to attend and speak at general meetings of the Company and all classes of shares of the Company.

 

29Directors' Fees and Expenses

 

29.1The Directors may receive such remuneration as the Directors may from time to time determine. The Directors may be entitled to be repaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred by that Director in attending meetings of the Directors or committees of the Directors or general meetings or separate meetings of any class of securities of the Company or otherwise in connection with the discharge of their duties as a Director.

 

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29.2Any Director who performs services which in the opinion of the Directors go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Directors may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration provided for, by or pursuant to any other Article.

 

30Powers and Duties of Directors

 

30.1Subject to the provisions of the Statute, the Memorandum and the Articles and to any resolutions made 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 made by the Company in a general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been made.

 

30.2The Directors may delegate any of their powers, authorities and discretions, including the power to sub-delegate, to any committees consisting of such member or members of their body as they think fit (including, without limitation, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee (provided that the Compensation Committee and the Nominating and Corporate Governance Committee may be combined into a single committee); provided that any committee so formed shall include amongst its members at least two Directors unless otherwise required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law (subject to any applicable exceptions or exemptions); provided further that no committee shall have the power of authority to (a) recommend to the Members an amendment of the Articles (except that a committee may, to the extent authorised in the resolution or resolutions providing for the issuance of Shares adopted by the Directors as provided under the laws of the Cayman Islands, fix the designations and any of the preferences or rights of such Shares relating to dividends, redemption, dissolution, any distribution of assets of the Company or the conversion into, or the exchange of such Shares for, Shares of any other class or classes or any other series of the same or any other class or classes of shares of the Company); (b) adopt an agreement of merger or consolidation; (c) recommend to the Members the sale, lease or exchange of all or substantially all of the Company's property and assets; (d) recommend to the Members a dissolution of the Company or a revocation of a dissolution; (e) recommend to the Members an amendment of the Memorandum of Association of the Company; or (f) declare a dividend or authorise the issuance of Shares unless the resolution establishing such committee (or the charter of such committee approved by the Directors) or the Memorandum of Association or the Articles so provide. 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. The Directors may also delegate to any Director such of their powers as they consider desirable to be exercised by them. Any such delegation may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers, and may be revoked or altered.

 

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30.3The Directors may from time to time and at any time by power of attorney 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 of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under the Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to delegate all or any of the powers, authorities and discretion vested in them.

 

30.4The 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 following paragraphs shall be without prejudice to the general powers conferred by this paragraph.

 

30.5The Directors from time to time and at any time may establish any advisory committees, local boards or agencies for managing any of the affairs of the Company and may appoint any persons to be members of such advisory committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any of the aforesaid.

 

30.6The Directors from time to time and at any time may delegate to any such advisory committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such local board, or any of them to fill up 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 person 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.

 

30.7The Directors may adopt formal written charters for committees and, if so adopted, shall review and assess the adequacy of such formal written charters on an annual basis. Each of these committees shall be empowered to do all things necessary to exercise the rights of such committee set forth in the Articles and shall have such powers as the Directors may delegate pursuant to the Articles and as required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. Each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, if established, shall consist of such number of Directors as the Directors shall from time to time determine (or such minimum number as may be required from time to time by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law (subject to any applicable exceptions or exemptions)). For so long as any class of Shares is listed on the Designated Stock Exchange, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, if established, shall be made up of such number of Independent Directors as is required from time to time by the rules and regulations of the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law (subject to any applicable exceptions or exemptions).

 

30.8Any such delegates as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities, and discretions for the time being vested to them.

 

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30.9The Director appointed by the Majority Shareholder pursuant to Article 31.2 shall be appointed as Chairperson. Where no Director has been appointed by the Majority Shareholder, the Directors may elect, by the affirmative vote of a majority of the Directors then in office, a Chairperson, such Chairperson may be a director or an officer of the Company. Subject to the provisions of the Articles and the direction of the Directors, the Chairperson shall perform all duties and have all powers which are commonly incident to the position of chairperson of a board or which are delegated to them by the Directors, preside at all general meetings and meetings of the Directors at which they are present and have such powers and perform such duties as the Directors may from time to time prescribe.

 

31Appointment and Removal of Directors

 

31.1Save as provided in Articles 28.2 and 31.2, Directors shall be appointed by Ordinary Resolution. Every Director appointed pursuant to this Article 31.1 on or after the effective date of these Articles shall hold office for an annual term until the next annual general meeting of the Company or such other term as the Ordinary Resolution appointing such Directors may provide. Directors are eligible for re-election.

 

31.2The Majority Shareholder, so long as he and/or the Majority Shareholder Affiliates continue to remain beneficial owners (as such term is defined in the Exchange Act) of at least thirty per cent (30.0%) of the issued and outstanding Shares, shall have the right, but not the obligation, to appoint one Director to the board of Directors by providing written notice of such appointment to the Company. Such Director, where appointed, shall act as Chairperson of the board of Directors pursuant to Article 30.9 and may be removed or replaced by the Majority Shareholder, so long as he and/or the Majority Shareholder Affiliates continue to remain beneficial owners (as such term is defined in the Exchange Act) of at least thirty per cent (30.0%) of the issued and outstanding Shares, providing written notice of such removal or replacement to the Company.

 

31.3A Director may be removed from office by the Members by Special Resolution. A vacancy on the board of Directors created by the removal of a Director under the provisions of the Articles may be filled by the remaining Directors pursuant to Article 28.2.

 

32Vacation of Office of Directors

 

Subject to the Articles, the office of a Director shall be vacated:

 

(a)where the Director's removal has been proposed by the remaining Directors for Cause and such Cause has been proven; or

 

(b)if the Director gives notice in writing to the Company that they resign the office of Director; or

 

(c)if the Director dies, becomes bankrupt or makes any arrangement or composition with their creditors generally; or

 

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(d)if the Director is prohibited by applicable law or the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law from being a director; or

 

(e)if the Director, without special leave of absence from the Directors, is absent from meetings of the Directors for six consecutive months and the Directors resolve that their office be vacated; or

 

(f)if the Director shall be removed from office pursuant to the Articles.

 

33Proceedings of Directors

 

33.1Subject to the Articles, the Directors may meet together for the dispatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit. Such meetings may be held at any place within or outside the Cayman Islands that has been designated by the Directors. In the absence of such a designation, meetings of the Directors shall be held at the principal executive office of the Company. Questions arising at any meeting of the Directors shall be decided by the method set forth in Article 33.4.

 

33.2The Chairperson or the Secretary on request of a Director, may, at any time summon a meeting of the Directors by twenty-four (24) hour notice to each Director in person, by telephone, facsimile, electronic email, or in such other manner as the Directors may from time to time determine, which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held. Notice of a meeting need not be given to any Director (i) who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or (ii) who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Directors. All such waivers, consents, and approvals shall be filed with the corporate records or made part of the minutes of the meeting. A waiver of notice need not specify the purpose of any regular or special meeting of the Directors.

 

33.3A Director or Directors may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director or Directors are members, by means of telephone or similar communication equipment by way of which all persons participating in such meeting can hear each other and such participation shall be deemed to constitute presence in person at the meeting.

 

33.4The quorum necessary for the transaction of the business of the Directors shall be a majority of the Directors appointed at the time of the meeting. Every act or decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Directors, subject to the provisions of the Articles and other applicable law. In the case of an equality of votes, the Chairperson shall have an additional tie-breaking vote.

 

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33.5A meeting of the Directors may be held by means of telephone or teleconferencing or any other telecommunications facility provided that all participants are thereby able to communicate immediately by voice with all other participants.

 

33.6Subject to the Articles, a Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of their interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that they are a member of any specified company or firm and is to be regarded as interested in any contract 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. A Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that they may be interested therein and if they do so their vote shall be counted and they may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration.

 

33.7A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with their 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 their office from contracting with the Company either with regard to their 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 realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding their interest, may be counted in the quorum present at any meeting whereat that 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 they may vote on any such appointment or arrangement. Any Director who enters into a contract or arrangement or has a relationship that is reasonably likely to be implicated under this Article 33.7 or that would reasonably be likely to affect a Director's status as an "Independent Director" under the rules and regulations of the Designated Stock Exchange, Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law shall disclose the nature of their interest in any such contract or arrangement in which they are interested or any such relationship.

 

33.8Any Director may act by themselves or their firm in a professional capacity for the Company, and that Director or their firm shall be entitled to reasonable expense reimbursement consistent with the Company's policies in connection with such Directors service in their official capacity; provided that nothing herein contained shall authorise a Director or their firm to act as auditor to the Company.

 

33.9The Directors shall cause minutes to be made in books kept for the purpose of recording:

 

(a)all appointments of officers made by the Directors;

 

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(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.

 

33.10When the Chairperson 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.

 

33.11A resolution signed by all the Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors duly called and constituted. When signed, a resolution may consist of several documents each signed by one or more of the Directors.

 

33.12The continuing Directors may act notwithstanding any vacancy in their body but if and so long as their number is reduced below the number fixed by or pursuant to the 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.

 

33.13A committee appointed by the Directors may elect a chairperson of its meetings. If no such chairperson is elected, or if at any meeting the chairperson is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairperson of the meeting.

 

33.14A committee appointed by the Directors may meet and adjourn as it thinks proper. 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 chairperson of such committee shall have a second or casting vote.

 

33.15Meetings and actions of committees of the Directors shall be governed by, and held and taken in accordance with, the provisions of Article 33.1 (place of meetings), Article 33.2 (notice), Article 33.3 (telephonic meetings), and Article 33.4 (quorum), with such changes in the context of the Articles as are necessary to substitute the committee and its members for the Directors; provided, however, that the time of regular meetings of committees may be determined either by resolution of the Directors or by resolution of the committee, that special meetings of committees may also be called by resolution of the Directors, and that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Directors may adopt rules for the government of any committee not inconsistent with the provisions of the Articles.

 

33.16All 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.

 

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34Presumption of Assent

 

A Director of the Company who is present at a meeting of the Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless their dissent or abstention shall be entered in the Minutes of the meeting or unless they shall file their written dissent or abstention from such action with the person acting as the chairperson or Secretary of the meeting before the adjournment thereof or shall forward such dissent or abstention by registered post to such person immediately after the adjournment of the meeting. Such right to dissent or abstain shall not apply to a Director who voted in favour of such action.

 

35Dividends, Distributions and Reserve

 

35.1Subject to any rights and restrictions for the time being attached to any class or classes of Shares and the Articles, the Directors may from time to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorise payment of the same out of the funds of the Company lawfully available therefor. All dividends unclaimed for one (1) year after having been declared may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. Subject to any applicable unclaimed property or other laws, any dividend unclaimed after a period of six (6) years from the date of declaration shall be forfeited and shall revert to the Company. The payment by the Directors of any unclaimed dividend or other sums payable on or in respect of a Share into a separate account shall not constitute the Company a trustee in respect thereof.

 

35.2The 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, at the discretion of the Directors be applicable for meeting contingencies, or for equalising dividends or for any other purpose to which those funds be properly applied and pending such application may, at the like discretion, 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. The Directors shall establish an account to be called the "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 in the Company. Unless otherwise provided by the provisions of the Articles, the Directors may apply the share premium account in any manner permitted by the Statute and the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. The Company shall at all times comply with the provisions of the Articles, the Statute and the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law in relation to the share premium account.

 

35.3Any dividend may be paid by cheque or warrant sent through the post to the registered address of the Member or person entitled thereto, or in the case of joint holders, to any one of such joint holders at their registered address or to such person and such address as the Member or person entitled, or such joint holders as the case may be, may direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to the order of such other person as the Member or person entitled, or such joint holders as the case may be, may direct. Notwithstanding the foregoing, dividends may also be paid electronically to the account of the Members or persons entitled thereto or in such other manner approved by the Directors.

 

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35.4The Directors when paying dividends to the Members in accordance with the foregoing provisions may make such payment either in cash or in specie.

 

35.5No dividend shall be paid otherwise than out of profits or, subject to the restrictions of the Statute, the share premium account.

 

35.6Subject to the rights of persons, if any, entitled to Shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid or credited as fully paid on the Shares, but if and so long as nothing is paid up on any of the Shares in the Company dividends may be declared and paid according to the amounts 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.

 

35.7If several persons are registered as joint holders of any Share, any of them may give effectual receipts for any dividend or other moneys payable on or in respect of the Share.

 

35.8No dividend shall bear interest against the Company.

 

36Book of Accounts

 

36.1The 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.

 

36.2The books of account shall be kept at such place or places as the Directors think fit, and shall always be open to the inspection of the Directors.

 

36.3The Directors shall cause to be prepared and to be provided to the Members (satisfied by publishing on the Company's website or filing such annual reports as we are required to file with the Securities and Exchange Commission) the annual financial statements of the Company in such form as the Directors may determine or as may required by law.

 

36.4Except as provided in Article 36.2 and 36.3, the Directors shall 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 Members not being Directors, and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Statute or authorised by the Directors.

 

36.5The 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.

 

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37Audit

 

37.1The Directors or, if authorised to do so, the Audit Committee of 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 their remuneration.

 

37.2Every 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.

 

37.3Auditors 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 in the case of a company which is registered with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during their term of office, upon request of the Directors or any general meeting of the Members.

 

38Seal

 

38.1The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has been affixed shall be signed by at least one person who shall be either a Director or some officer of the Company or other person appointed by the Directors for the purpose.

 

38.2The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a fax of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.

 

38.3A Director or officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over their signature alone to any document of the Company required to be authenticated by them under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.

 

39Officers

 

Subject to the Articles, the Directors may from time to time appoint any person, whether or not a director of the Company, to hold the office of the Chief Executive Officer, the President, the Chief Financial Officer, one or more Vice Presidents or such other officers as the Directors may think necessary for the administration of the Company, 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.

 

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40Register of Directors and Officers

 

The Company shall cause to be kept in one or more books at its office a Register of Directors and Officers in which there shall be entered the full names and addresses of the Directors and Officers and such other particulars as required by the Statute. The Company shall send to the Registrar of Companies in the Cayman Islands a copy of such register, and shall from time to time notify the said Registrar of any change that takes place in relation to such Directors and Officers as required by the Statute.

 

41Capitalisation of Profits

 

Subject to the Statute and the Articles, the Directors may capitalise any sum standing to the credit of any of the Company's reserve accounts (including a share premium account or a capital redemption reserve fund) or any sum standing to the credit of profit and loss account or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power to the Directors to make such provisions as they think fit for the case of Shares becoming distributable in fractions (including provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

 

42Notices

 

42.1Except as otherwise provided in the Articles, any notice or document may be served by the Company or by the person entitled to give notice to any Member either personally, by facsimile, by email or by sending it through the post in a prepaid letter or via a recognised courier service, fees prepaid, addressed to the Member at their address as appearing in the Register of Members or, to the extent permitted by all applicable laws and regulations, by electronic means by transmitting it to any electronic number or address or website supplied by the Member to the Company or by placing it on the Company's Website, provided that, (i) with respect to notification via electronic means, the Company has obtained the Member's prior express positive confirmation in writing to receive or otherwise have made available to them notices in such fashion, and (i) with respect to posting to Company's Website, notification of such posting is provided to such Member. 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 of Members in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders.

 

42.2An affidavit of the mailing or other means of giving any notice of any general meeting, executed by the Secretary, Assistant Secretary or any transfer agent of the Company giving the notice, shall be prima facie evidence of the giving of such notice.

 

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42.3Any Member 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.

 

42.4Any notice or other document, if served by (a) post, shall be deemed to have been served when the letter containing the same is posted, or (b) facsimile or email, shall be deemed to have been served upon confirmation of successful transmission, or (c) recognised courier service, shall be deemed to have been served when the letter containing the same is delivered to the courier service and in proving such service it shall be sufficient to provide that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier, or (d) electronic means as provided herein shall be deemed to have been served and delivered on the day on which it is successfully transmitted or at such later time as may be prescribed by any applicable laws or regulations.

 

42.5Any notice or document delivered or sent to any Member in accordance with the terms of the Articles shall notwithstanding that such Member be then dead or bankrupt, and whether or not the Company has notice of their death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Member as sole or joint holder, unless their name shall at the time of the service of the notice or document, have been removed from the Register of Members 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 them) in the Share.

 

42.6Notice of every general meeting shall be given to:

 

(a)all Members who have supplied to the Company an address for the giving of notices to them, except that in case of joint holders, the notice shall be sufficient if given to the joint holder first named in the Register of Members; and

 

(b)each Director.

 

42.7No other person shall be entitled to receive notices of general meetings.

 

43Information

 

43.1No 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 Directors would not be in the interests of the members of the Company to communicate to the public.

 

43.2The Directors shall be entitled (but not required, except as provided by law) 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 of Members and transfer books of the Company.

 

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44Indemnity

 

44.1The Company shall indemnify every Director and officer of the Company or any predecessor to the Company (which for the avoidance of doubt, shall not include auditors of the Company), together with every former Director and former officer of the Company or any predecessor to the Company, and may indemnify any person (other than current and former Directors and officers) (any such Director, officer or other person, an "Indemnified Person"), out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions in connection with the Company other than such liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default. No Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or indirect) of the carrying out of their functions unless that liability arises through the actual fraud, wilful neglect or wilful default of such Indemnified Person. No person shall be found to have committed actual fraud or wilful default under this Article unless or until a court of competent jurisdiction shall have made a finding to that effect. Each Member agrees to waive any claim or right of action they might have, whether individually or by or in the right of the Company, against any Director on account of any action taken by such Director, or the failure of such Director to take any action in the performance of their duties with or for the Company; provided that such waiver shall not extend to any matter in respect of any actual fraud or wilful default which may attach to such Director.

 

44.2The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall be returned to the Company (without interest) by the Indemnified Person.

 

44.3The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or other officer of the Company against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company.

 

44.4Neither any amendment nor repeal of the Articles set forth under this heading of "Indemnity" (the "Indemnification Articles"), nor the adoption of any provision of the Company's Articles or Memorandum of Association inconsistent with the Indemnification Articles, shall eliminate or reduce the effect of the Indemnification Articles, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for these Indemnification Articles, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

 

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45Financial Year

 

Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31 in each year and shall begin on the day following.

 

46Winding Up

 

46.1If the Company shall be wound up the liquidator shall apply the assets of the Company in satisfaction of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding up:

 

(a)if the assets available for distribution amongst the Members shall be insufficient to repay the whole of the Company's issued 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; or

 

(b)if the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the Company's issued 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.

 

46.2If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares and with the sanction of a Special Resolution of the Company and any other sanction required by the Statute, divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets 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.

 

47Amendment of Memorandum and Articles of Association and Name of Company

 

Subject to the provisions of the Statute and the provisions of the Articles as regards the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution:

 

(a)change its name;

 

(b)alter or add to the Articles;

 

(c)alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and

 

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(d)reduce its share capital or any capital redemption reserve fund.

 

48Registration by Way of Continuation

 

Subject to the Articles, 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.

 

49Mergers and Consolidations

 

49.1The Company shall, with the approval of a Special Resolution, have the power to merge or consolidate with one or more constituent companies (as defined in the Statute), upon such terms as the Directors may determine.

 

49.2The Company shall not, without the prior approval of a Special Resolution, agree to:

 

(a)enter into an amalgamation, arrangement or scheme of arrangement:

 

(i)in which the Company will not be the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated; or

 

(ii)following which the holders of the issued and outstanding Ordinary Shares immediately prior to such event will not continue to hold more than 50% of the combined voting power of the ordinary shares of the surviving entity.

 

50Restriction on Sale of Assets

 

The Company shall not, without the prior approval of a Special Resolution, sell, transfer or otherwise dispose of all or substantially all of the assets of the Company.

 

51Business Opportunities

 

51.1It is expected and understood that there will be overlap between those holding roles as a Director and/or Officer ("DO Role") of the Company, and those holding a DO Role in JS Global Lifestyle Company Limited and/or any of its Affiliates ("JS Global").

 

51.2To the fullest extent permitted by Applicable Law:

 

(a)no individual serving in a DO Role of the Company, who is also serving in a DO Role of JS Global ("Joint Role(s)"), shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Company;

 

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(b)the Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for JS Global or a person having Joint Roles, on the one hand, and the Company, on the other.

 

(c)except to the extent expressly assumed by contract, a person having Joint Roles shall have no duty to communicate or offer any such corporate opportunity to the Company and shall not be liable to the Company or its Members for breach of any fiduciary duty as a Member, Director and/or Officer because such party pursues or acquires such corporate opportunity for itself, himself or herself, directs such corporate opportunity to another person, or does not communicate information regarding such corporate opportunity to the Company.

 

51.3Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for both the Company and the Joint Role holder, or the Company and JS Global, about which a person who has a Joint Role acquires knowledge.

 

51.4To the extent a court might hold that the conduct of any activity related to a corporate opportunity that is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the fullest extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities. To the fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in the future and that have been conducted in the past.

 

51.5Neither:

 

(a)the alteration, amendment, termination or repeal of this Article 51; nor

 

(b)the adoption of any provision inconsistent with this Article 51,

 

shall eliminate or reduce the effect of this Article 51 in respect of any matter arising prior to such alteration, amendment, termination, repeal or adoption.

 

52Exclusive Jurisdiction and Forum

 

52.1Unless the Company consents in writing to the selection of an alternative forum, the courts of the Cayman Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with the Memorandum, the Articles or otherwise related in any way to each Member's shareholding in the Company, including but not limited to:

 

(a)any derivative action or proceeding brought on behalf of the Company;

 

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(b)any action asserting a claim of breach of any fiduciary or other duty owed by any current or former Director, Officer or other employee of the Company to the Company or the Members;

 

(c)any action asserting a claim arising pursuant to any provision of the Statute, the Memorandum or the Articles; or

 

(d)any action asserting a claim against the Company governed by the "Internal Affairs Doctrine" (as such concept is recognised under the laws of the United States of America).

 

52.2Each Member irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands over all such claims or disputes.

 

52.3Without prejudice to any other rights or remedies that the Company may have, each Member acknowledges that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum and that accordingly the Company shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum.

 

52.4This Article 52 shall not apply to any action or suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act or any claim for which the federal district courts of the United States of America are, as a matter of the laws of the United States, the sole and exclusive forum for determination of such a claim.

 

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Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and effective as of [              ], 2023, by and between SharkNinja, Inc., an exempted limited company incorporated in the Cayman Islands (the “Company”), and [             ] (“Indemnitee”).

 

WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, Indemnitee is a director and/or officer of the Company;

 

WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of public companies;

 

WHEREAS, the Company’s Amended and Restated Memorandum and Articles of Association, as amended from time to time (“Memorandum and Articles of Association”) requires the Company to indemnify and advance expenses to its directors and officers to the extent provided therein, and Indemnitee serves as a director and/or officer of the Company, in part, in reliance on such provisions in the Memorandum and Articles of Association;

 

WHEREAS, the Company has determined that its inability to retain and attract as directors and officers the most capable persons would be detrimental to the interests of the Company and that the Company therefore should seek to assure such persons that indemnification and insurance coverage will be available in the future; and

 

WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal liability in order to enhance Indemnitee’s continued service to the Company in an effective manner and Indemnitee’s reliance on the Memorandum and Articles of Association, and in part to provide Indemnitee with specific contractual assurance that the protection promised by the Memorandum and Articles of Association will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of the applicable provisions of the Memorandum and Articles of Association, any change in the composition of the Board of Directors, or any acquisition transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of, and the advancing of expenses to, Indemnitee to the maximum extent (whether partial or complete) permitted by law and as set forth in this Agreement, and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the directors’ and officers’ liability insurance policy of the Company.

 

 

 

NOW, THEREFORE, in consideration of the foregoing, the covenants and agreements contained in this Agreement, and of Indemnitee’s continuing to serve the Company directly or on its behalf or at its request as an officer, director, employee, manager, member, partner, tax matters partner, partnership representative, agent, fiduciary, or trustee of, or in any other capacity with, another Person (as defined below) or any employee benefit plan, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.              Certain Definitions:

 

(a)            Affiliate: means (i) each of such person’s legal spouse, parents, children and other lineal descendants (each, an “Immediate Family Member”); and (ii) any trust for the benefit of such person and/or any of the Immediate Family Members as defined under (i), and any corporation, partnership or any other entity ultimately controlled by such person and/or any of the Immediate Family Members as defined under (i) through possession of voting power or investment power over securities of the company held by any such entity. For the avoidance of doubt, the terms “voting power” and “investment power” shall have such meanings as defined under Rule 13d-3 of the Exchange Act.

 

(b)            Change in Control: shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than Mr. Xuning Wang and his Affiliates and a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the total voting power represented by the Company’s then outstanding Voting Securities, or (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors and any new director whose election by the Board of Directors or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the shareholders of the Company approve a merger or consolidation of the Company with any other entity, other than a merger or consolidation that would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Company’s assets.

 

(c)            Board of Directors: means the Board of Directors of the Company.

 

(d)            Claim: means any threatened, asserted, pending, or completed civil, criminal, administrative, investigative, or other action, suit, or proceeding of any kind whatsoever, including any arbitration or other alternative dispute resolution mechanism, or any appeal of any kind thereof, or any inquiry or investigation, whether instituted by the Company, any governmental agency, or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit, or proceeding, whether civil, criminal, administrative, investigative, or other, including any arbitration or other alternative dispute resolution mechanism.

 

(e)            Exchange Act: means the Securities Exchange Act of 1934, as amended.

 

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(f)             ERISA: means the Employee Retirement Income Security Act of 1974, as amended.

 

(g)            Expenses: means all direct or indirect costs, expenses, and obligations, including attorneys’ fees and disbursements (including, without limitation, experts’ fees, court costs, retainers, appeal bond premiums, transcript fees, duplicating, printing, and binding costs, as well as telecommunications, postage, and courier charges) paid or reasonably incurred in connection with investigating, prosecuting, defending, being a witness in, or participating in (including on appeal), or preparing to investigate, prosecute, defend, be a witness in, or participate in, any Claim relating to any Indemnifiable Event, and shall include (without limitation) all attorneys’ fees and all other expenses reasonably incurred by or on behalf of Indemnitee in connection with preparing and submitting any requests or statements for indemnification, advancement, or any other right provided by this Agreement (including, without limitation, such fees or expenses incurred in connection with legal proceedings contemplated by Section 2(e) hereof).

 

(h)            Indemnifiable Amounts: means (i) any and all liabilities, Expenses, damages, judgments, fines, penalties, ERISA excise taxes, and amounts paid in settlement (including all interest, assessments, and other charges paid or payable in connection with or in respect of such liabilities, Expenses, damages, judgments, fines, penalties, ERISA excise taxes, or amounts paid in settlement) arising out of or resulting from any Claim relating to an Indemnifiable Event, (ii) any liability pursuant to a loan, guaranty or otherwise, for any indebtedness of the Company or any subsidiary of the Company, including, without limitation, any indebtedness that the Company or any subsidiary of the Company has assumed or taken subject to, and (iii) any liability that an Indemnitee incurs as a result of acting on behalf of the Company (whether as a fiduciary or otherwise) in connection with the operation, administration, or maintenance of an employee benefit plan or any related trust or funding mechanism (whether such liability is in the form of an excise tax assessed by the United States Internal Revenue Service, a penalty assessed by the Department of Labor, restitution to such a plan or trust or other funding mechanism or to a participant or beneficiary of such plan, trust, or other funding mechanism, or otherwise).

 

(i)             Indemnifiable Event: means any event or occurrence, whether occurring before, on, or after the date of this Agreement, related to the fact that Indemnitee is or was a director or officer, employee, agent or fiduciary of the Company, or is or was serving on behalf of the Company or at the request of the Company as a director, officer, employee, manager, member, partner, tax matters partner or partnership representative, trustee, agent, fiduciary, or similar capacity, of another corporation, limited liability company, partnership, joint venture, employee benefit plan, trust, or other entity or enterprise, or by reason of any act or omission by Indemnitee in any such capacity (in all cases whether or not Indemnitee is acting or serving in any such capacity or has such status at the time any Indemnifiable Amount is incurred for which indemnification, advancement or any other right can be provided by this Agreement). The term “Company,” where the context requires when used in this Agreement, shall be construed to include such other corporation, limited liability company, partnership, joint venture, employee benefit plan, trust, or other entity or enterprise.

 

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(j)            Independent Legal Counsel: means an attorney or firm of attorneys, selected pursuant to and in accordance with the provisions of Section 3, who is experienced in matters of corporate law and who shall not have otherwise performed services for the Company or Indemnitee within the last three (3) years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).

 

(k)            Person: means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity, or other entity.

 

(l)             Reviewing Party: means any appropriate person or body consisting of a member or members of the Board of Directors or any other person or body appointed by the Board of Directors who is not a party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal Counsel.

 

(m)           Voting Securities: means any securities of the Company that are entitled to vote generally in the election of directors.

 

2.              Basic Indemnification Arrangement; Advancement of Expenses.

 

(a)            In the event that Indemnitee was, is or becomes subject to, a party to or witness or other participant in, or is threatened to be made subject to, a party to or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event (other than a Claim by or in the right of the Company to procure a judgment in the Company’s favor), the Company shall indemnify Indemnitee, or cause Indemnitee to be indemnified to the maximum extent permitted by law as soon as practicable but in any event no later than thirty (30) days after written demand is presented to the Company, and hold Indemnitee harmless against actually and reasonably incurred Indemnifiable Amounts if the Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interest of the Company and, in the case of a criminal Claim, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

 

(b)            In the event that Indemnitee was, is or becomes subject to, a party to or witness or other participant in, or is threatened to be made subject to, a party to or witness or other participant in, a Claim by or in the right of the Company to procure a judgement in the Company’s favor by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee, or cause Indemnitee to be indemnified to the maximum extent permitted by law as soon as practicable but in any event no later than thirty (30) days after written demand is presented to the Company, and hold Indemnitee harmless against actually and reasonably incurred Indemnifiable Amounts if Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company; except that no indemnification under this Section 2(b) shall be made in respect of any Claim as to which such person shall have been adjudicated by final judgment by a court of competent jurisdiction to be liable to the Company for willful misconduct in the performance of his/her duty to the Company, unless and only to the extent that the court in which such Claim is or was pending shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such amounts which such court shall deem proper.

 

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(c)            If so requested by Indemnitee, the Company shall advance, or cause to be advanced (within five (5) business days of such request), any and all Expenses incurred by Indemnitee (an “Expense Advance”), provided, however, that Indemnitee shall set forth in such request reasonable evidence that such Expenses have been incurred by Indemnitee in connection with the Claim. The Company shall, in accordance with such request (but without duplication), pay, or cause to be paid, such Expenses on behalf of Indemnitee, unless Indemnitee shall have elected to pay such Expenses and have such Expenses reimbursed, in which case the Company shall reimburse, or cause to be reimbursed, Indemnitee for such Expenses. Subject to Section 2(e), Indemnitee’s right to an Expense Advance is absolute and shall not be subject to any prior determination by the Reviewing Party that Indemnitee has satisfied any applicable standard of conduct for indemnification. Indemnitee hereby undertakes to repay any amounts advanced (without interest) to the extent it is ultimately determined in accordance with this Agreement that Indemnitee is not entitled under this Agreement to be indemnified by the Company in respect thereof. No other form of undertaking shall be required of Indemnitee other than execution of this Agreement.

 

(d)            Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification or advancement of Expenses pursuant to this Agreement in connection with any Claim initiated by Indemnitee unless (i) the Company has joined in, or the Board of Directors has authorized or consented to, the initiation of such Claim or (ii) the Claim is one to enforce Indemnitee’s rights under this Agreement (including an action pursued by Indemnitee to secure a determination that Indemnitee should be indemnified under applicable law).

 

(e)            Notwithstanding the foregoing, (i) the obligations of the Company under Sections 2(a) and 2(b) shall be subject to the condition that the Reviewing Party shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel referred to in Section 3 is involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 2(c) shall be subject to the condition that, if, when, and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who, by execution of this Agreement, hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that, if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). If there has not been a Change in Control, the Reviewing Party shall be selected by the Board of Directors, and if there has been a Change in Control (other than a Change in Control that has been approved by a majority of the members of the Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 3. If there has been no determination by the Reviewing Party, or if the Reviewing Party determines that Indemnitee would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in the State of Delaware having subject matter jurisdiction thereof and in which venue is proper seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee.

 

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(f)            No payments pursuant to this Agreement shall be made by the Company: (i) to indemnify or advance funds to the Indemnitee for Expenses with respect to Expenses incurred by Indemnitee in connection with preparing to serve or serving, prior to a Change in Control, as a witness in cooperation with any party or entity who or which has threatened or commenced any action or proceeding against the Company, or any director, officer, employee, trustee, agent, representative, subsidiary, parent corporation or affiliate of the Company, but such indemnification or advancement of Expenses in each such case may be provided by the Company if the board of directors of the Company finds it to be appropriate; (ii) to indemnify Indemnitee for any Indemnifiable Amount sustained in any Claim for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act or similar provisions of any foreign or United States federal, state or local statute or regulation; or (iii) to indemnify Indemnitee in connection with Indemnitee’s personal tax matter.

 

3.             Change in Control. The Company agrees that, if there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Board of Directors who were directors immediately prior to such Change in Control), then with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or under any provision of the Memorandum and Articles of Association now or hereafter in effect relating to Claims for Indemnifiable Events, the Company shall seek legal advice only from Independent Legal Counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld, delayed or conditioned). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to indemnify fully such counsel against any and all expenses (including attorneys’ fees), claims, liabilities, and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

4.             Indemnification for Additional Expenses. The Company shall indemnify, or cause the indemnification of, Indemnitee against any and all Expenses and, if requested by Indemnitee, shall advance such Expenses to Indemnitee, subject to and in accordance with Section 2, that are incurred by Indemnitee in connection with any action brought by Indemnitee for (a) indemnification or an Expense Advance by the Company under this Agreement or any provision of the Memorandum and Articles of Association now or hereafter in effect relating to Claims for Indemnifiable Events and (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advance, or insurance recovery, as the case may be; provided that Indemnitee shall be required to reimburse such Expenses in the event that a final judicial determination is made (as to which all rights of appeal therefrom have been exhausted or lapsed) that such action brought by Indemnitee, or the defense by Indemnitee of an action brought by the Company or any other Person, as applicable, was frivolous or in bad faith.

 

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5.             Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses or other Indemnifiable Amounts in respect of a Claim but not, however, for the entire amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

6.             Burden of Proof. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the Reviewing Party, court, or other finder of fact or appropriate Person shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, the burden of proof shall be on the Company (or its representative) to establish by clear and convincing evidence that Indemnitee is not so entitled.

 

7.             Reliance as Safe Harbor. For purposes of this Agreement, and without creating any presumption as to a lack of good faith if the following circumstances do not exist, Indemnitee shall be deemed to have acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company if Indemnitee’s actions or omissions to act are taken in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports, or statements furnished to Indemnitee by the officers or employees of the Company or any of its subsidiaries in the course of their duties, or by committees of the Board of Directors, or by any other Person (including legal counsel, accountants, and financial advisors) as to matters Indemnitee reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company. In addition, the knowledge and actions, or failures to act, of any director, officer, agent, or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnity hereunder.

 

8.             No Other Presumptions. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval), or conviction, or upon a plea of nolo contendere or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief.

 

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9.             Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Memorandum and Articles of Association, the Companies Act (As Revised) of the Cayman Islands, or otherwise. To the extent that a change in the applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Memorandum and Articles of Association or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. To the extent that there is a conflict or inconsistency between the terms of this Agreement and the Memorandum and Articles of Association, it is the intent of the parties hereto that Indemnitee shall enjoy the greater benefits regardless of whether contained herein or in the Memorandum and Articles of Association. No amendment or alteration of the Memorandum and Articles of Association or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.

 

10.            Liability Insurance. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer. If the Company has such insurance in effect at the time the Company receives from Indemnitee any notice of the commencement of an action, suit, or proceeding, the Company shall give prompt notice of the commencement of such action, suit, or proceeding to the insurers in accordance with the procedures set forth in the applicable policy. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.

 

11.            Amendments, Etc. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

12.            Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. The Company shall pay or reimburse all Expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

 

13.            No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy or any provision of the Memorandum and Articles of Association or otherwise) of the amounts otherwise indemnifiable hereunder.

 

15.            Notification and Defense of Claims.

 

(a)            Indemnitee shall notify the Company in writing as soon as practicable of any Claim that could relate to an Indemnifiable Event or for which Indemnitee could seek Expense Advances, including a brief description (based upon information then available to Indemnitee) of the nature of, and the facts underlying, such Claim. The failure by Indemnitee to timely notify the Company hereunder shall not relieve the Company from any liability hereunder, unless the Company shall have lost significant substantive or procedural rights with respect to the defense of any Claim as a result of such omission to so notify and except that the Company shall not be liable to indemnify Indemnitee under this Agreement with respect to any judicial award in a Claim related to an Indemnifiable Event if the Company was not given a reasonable and timely opportunity to participate at its expense in the defense of such action.

 

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(b)            The Company shall be entitled to participate in the defense of any Claim relating to an Indemnifiable Event or to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee; provided that, if Indemnitee believes, after consultation with counsel selected by Indemnitee, that (a) the use of counsel chosen by the Company to represent Indemnitee would present such counsel with an actual or potential conflict of interest, (b) the named parties in any such Claim (including any impleaded parties) include the Company or any subsidiary of the Company, on the one hand, and Indemnitee, on the other hand, and Indemnitee concludes, after consultation with counsel selected by Indemnitee, that there may be one or more legal defenses available to him that are different from or in addition to those available to the Company or any subsidiary of the Company, or (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law firm, plus, if applicable, local counsel in respect of any particular Claim) at the Company’s expense. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any Claim relating to an Indemnifiable Event effected without the Company’s prior written consent. The Company shall not, without the prior written consent of Indemnitee, effect any settlement of any Claim relating to an Indemnifiable Event to which Indemnitee is or could have been a party unless such settlement involves solely the payment of money and includes a complete and unconditional release of Indemnitee from all liability on all claims that are the subject matter of such Claim. Neither the Company nor Indemnitee shall unreasonably withhold, condition, or delay its consent to any proposed settlement; provided that Indemnitee may withhold consent to any settlement that does not provide a complete and unconditional release of Indemnitee. In no event shall Indemnitee be required to waive, prejudice, or limit attorney-client privilege or work-product protection or other applicable privilege or protection.

 

16.            No Adverse Settlement. The Company shall not seek, nor shall it agree to, consent to, support, or agree not to contest any settlement or other resolution of any Claim(s), or settlement or other resolution of any other claim, action, proceeding, demand, investigation, or other matter that has the actual or purported effect of extinguishing, limiting, or impairing Indemnitee’s rights hereunder, including without limitation the entry of any bar order or other order, decree, or stipulation, pursuant to 15 U.S.C. § 78u-4 (the Private Securities Litigation Reform Act), or any similar foreign, federal, or state statute, regulation, rule, or law.

 

17.            Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), spouses, heirs, executors, and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer or director of the Company or of any other enterprise at the Company’s request. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company and its subsidiaries (on a consolidated basis), by written agreement in form and substance satisfactory to Indemnitee and Indemnitee’s counsel, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

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18.            Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, illegal, void, or otherwise unenforceable in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired and shall remain enforceable to the maximum extent permitted by law.

 

19.            Notices. All notices, requests, consents, and other communications hereunder to any party shall be deemed to be sufficient if contained in a written document delivered in person or sent by facsimile, e-mail or other electronic transmission, nationally recognized overnight courier, or personal delivery, addressed to such party at the address set forth below or such other address as may hereafter be designated on the signature pages of this Agreement or in writing by such party to the other party:

 

(a)            If to the Company, to:

 

SharkNinja, Inc.

89 A Street

Needham, MA 02494

E-mail: PJLopez-Baldrich@sharkninja.com

Attn: Pedro J. Lopez-Baldrich

 

(b)            If to Indemnitee, to the address set forth on the signature page hereof.

 

All such notices, requests, consents, and other communications shall be deemed to have been given or made if and when received (including by overnight courier) by the parties at the above addresses, sent by electronic transmission (including e-mail) to the e-mail addresses specified above, or sent by facsimile transmission to the facsimile numbers specified above (or at such other address, e-mail address, or facsimile number for a party as shall be specified by like notice). Any notice delivered by any party hereto to any other party hereto shall also be delivered to each other party hereto simultaneously with delivery to the first party receiving such notice.

 

20.            Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof.

 

21.            Counterparts. This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought need be produced to evidence the existence of this Agreement.

 

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22.            Specific Performance. The parties recognize that if any provision of this Agreement is violated by the parties hereto, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute proceedings, either at law or in equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue.

 

23.            Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed thereunder without giving effect to the principles of conflicts of laws.

 

[Remainder of page left intentionally blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement this [           ] day of [           ], 2023.

 

  SHARKNINJA, INC.
   
  By                              
  Name:  
  Title:  
   
   
  [Indemnitee]
  [ADDRESS]

 

[Signature Page to Indemnification Agreement]

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Exhibit 10.2

 

SHARKNINJA, INC.

 

2023 EQUITY INCENTIVE PLAN

 

1. General.

 

1.1. Purpose. The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company and any Affiliates that exist now or in the future, by offering eligible persons an opportunity to participate in the Company’s future performance through the grant of Awards.

 

1.2. Available Awards. The Plan provides for the grant of the following Awards: (a) Incentive Share Options, (b) Nonstatutory Share Options, (c) Share Appreciation Rights, (d) Restricted Share Awards, (e) Restricted Share Unit Awards, (f) Performance Awards, and (g) Other Awards.

 

2. Shares Subject to the Plan.

 

2.1. Number of Shares Available. Subject to any Capitalization Adjustment (as defined in Section 2.3 below) and any other applicable provisions in the Plan, the total number of Shares reserved and available for grant and issuance pursuant to this Plan will not exceed _________ Shares1 (the “Share Reserve”); provided that such share reserve will, unless otherwise determined by the Board, automatically increase on January 1 of each year for nine years commencing on January 1, 2025 and ending on (and including) January 1, 2033 in an amount equal to zero point six percent (0.6)% of the total number of ordinary shares outstanding on December 31 of the preceding year. Notwithstanding the foregoing, the Board may act prior to the first day of a given calendar year to provide that there will be no increase in the number of Shares available for issuance under the Plan for such year or that the increase in the number of Shares available for issuance under the Plan for such year will be a lesser number of Shares than would otherwise occur pursuant to the preceding sentence. Subject to the provisions relating to Capitalization Adjustments, the maximum number of Shares that may be issued pursuant to the exercise of ISOs is _________ Shares2 (the “ISO Limit”).

 

2.2. Share Recycling. Following the Adoption Date, any shares subject to an outstanding Award or any portion thereof granted under the Plan will be returned to the Share Reserve and will be available for issuance in connection with subsequent Awards under this Plan to the extent such Shares: (a) are cancelled, forfeited, or settled in cash; (b) are surrendered pursuant to an Exchange Program; (c) expire by their terms at any time; or (d) are reacquired by the Company pursuant to a forfeiture provision or repurchase right by the Company (“Returning Shares”). Accordingly, the Share Reserve is a limitation on the number of Shares that may be issued or purchased on the open market pursuant to the Plan and does not limit the granting of Awards, since Returning Shares can be granted subject to Awards more than once. Shares subject to Substitute Awards (as defined in Section 13.2) will not be deducted from the Share Reserve; provided that Shares subject to any Substitute Award may not be returned to the Share Reserve as Returning Shares.

 

2.3. Adjustment of Shares. After the Adoption Date, if the number of outstanding Shares is changed or the value of the Shares is otherwise affected by a share dividend, extraordinary dividend or extraordinary distribution (whether in cash, shares or other property, other than a regular cash dividend) recapitalization, share split, reverse share split, subdivision, combination, consolidation, reclassification, spin-off or similar change in the capital structure of the Company or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), without consideration (a “Capitalization Adjustment”), then (a) the maximum number and class of Shares or type of security reserved for issuance and future grant from the Share Reserve set forth in Section 2.1, including Returning Shares, (b) the Exercise Price, the Purchase Price, and number and class of Shares or type of security subject to outstanding Awards, and (c) the ISO Limit set forth in Section 2.1 will be proportionately adjusted by the Board, and, if required by applicable laws, by the shareholders of the Company and in compliance with Applicable Laws; provided that fractions of a Share will not be issued.

 

 

1 Note to Draft: To be equal to 10% of the total outstanding shares as of the distribution date.

2 Note to Draft: To be equal to 10% of the total outstanding shares as of the distribution date.

 

 

 

 

2.4. Source of Shares; Use of Proceeds. The Shares issuable under the Plan will be authorized but unissued or forfeited shares, treasury shares or shares reacquired by the Company in any manner. At all times the Company will reserve and keep available a sufficient number of Shares as are reasonably required to satisfy the requirements of all Awards granted and outstanding under this Plan. Proceeds from the sale of Shares pursuant to Awards will constitute general funds of the Company.

 

3. Eligibility.

 

Awards may be granted to Employees, Consultants and Directors; provided that ISOs may be granted only to Employees.

 

4. Options and Share Appreciation Rights.

 

Each Option or SAR will be in such form and will contain such terms and conditions as the Committee deems appropriate. Each SAR will be denominated in Share equivalents. The provisions of separate Options or SARs need not be identical; provided, however, that each Award Agreement will conform (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) to the substance of each of the following provisions.

 

4.1. Type of Option Grant. All Options will be separately designated as ISOs or NSOs at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for Shares purchased on exercise of each type of Option. If an Option is not specifically designated as an ISO, or if an Option is designated as an ISO but some portion or all of the Option fails to qualify as an ISO under Applicable Law, then the Option (or portion thereof) will be an NSO.

 

4.2. Exercise Period; Term. Options and SARs may be exercisable within the times or upon the events determined by the Committee and as set forth in the Award Agreement governing such Award. No Option or SAR will be exercisable after the expiration of ten (10) years from the date the Option or SAR is granted, or such shorter period specified in the Award Agreement. In addition, in the case of an ISO granted to a person who, at the time the ISO is granted, directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any Parent or Subsidiary (“Ten Percent Shareholder”), such Option may not be exercisable after the expiration of five (5) years from the date the ISO is granted. The Committee also may provide for Options or SARs to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.

 

4.3. Exercise Price. The Exercise Price of an Option or SAR will be determined by the Committee when the Award is granted; provided that: (a) the Exercise Price of an Option or SAR will be not less than one hundred percent (100%) of the Fair Market Value of the Shares on the date of grant and (b) the Exercise Price of any ISO granted to a Ten Percent Shareholder will not be less than one hundred ten percent (110%) of the Fair Market Value of the Shares on the date of grant. Notwithstanding the foregoing, an Option or SAR may be granted with an Exercise Price lower than 100% of the Fair Market Value in connection with an assumption of or substitution for another award as provided in Section 13.2 of the Plan.

 

4.4. Method of Exercise. An Option or SAR will be deemed exercised when the Company receives: (a) notice of exercise (in such form as the Plan Administrator may specify from time to time, including via electronic execution through an authorized third-party administrator) from the person entitled to exercise the Option or SAR; (b) in the case of an Option, full payment of the applicable Exercise Price in accordance with Section 9 of the Plan and the applicable Award Agreement, and (c) payment of applicable Tax-Related Items, as determined by the Plan Administrator. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except in connection with a Capitalization Adjustment. Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

4.5. Settlement of a SAR. Upon exercise of a SAR, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying (a) the difference between the Fair Market Value of a Share on the date of exercise over the Exercise Price, by (b) the number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment from the Company for the SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

 

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4.6. Post-Termination Exercise Period. Unless explicitly provided otherwise in a Participant’s Award Agreement, if a Participant’s Continuous Service Status is terminated, the Participant (or his or her legal representative, in the case of death) may exercise his or her Option or SAR (to the extent such Award was exercisable on the termination date) within the following period of time following the termination of the Participant’s Continuous Service Status:

 

(a) three (3) months following a termination of a Participant’s Continuous Service Status by the Company without Cause or by the Participant for any reason (other than due to death or Disability);

(b) six (6) months following a termination due to the Participant’s Disability;

(c) twelve (12) months following a termination due to the Participant’s death; and

(d) twelve (12) months following the Participant’s death, if such death occurs following the date of such termination but during the period such Award is otherwise exercisable (as provided in clauses (a) or (b) above).

 

Following the termination date, to the extent the Participant does not exercise such Award within the applicable post-termination exercise period (or, if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right, title or interest in the terminated Award.

 

4.7. Termination for Cause. If a Participant’s Continuous Service Status is terminated for Cause, the Participant’s Options or SARs will terminate and be forfeited immediately upon such Participant’s termination of Continuous Service Status, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service Status. If a Participant’s Continuous Service Status is suspended pending an investigation of whether the Participant’s Continuous Service Status will be terminated for Cause, all of the Participant’s rights under any Option or SAR, including the right to exercise such Awards, shall be suspended during the investigation period.

 

4.8. Automatic Extension of Termination Date. Except as otherwise provided in the Award Agreement, if a Participant’s Continuous Service Status terminates for any reason other than for Cause and, at any time during the last thirty (30) days of the applicable post-termination exercise period: (i) the exercise of the Participant’s Option or SAR would be prohibited solely because the issuance of Shares upon such exercise would violate Applicable Law, or (ii) the immediate sale of any Shares issued upon such exercise would violate the Trading Policy, then the applicable post-termination exercise period will be extended to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions); provided, however, that in no event may such Award be exercised after the expiration of its maximum term.

 

4.9. Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any Shares until at least six months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Notwithstanding the foregoing, in accordance with the provisions of the U.S. Worker Economic Opportunity Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the event of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted, or (iii) such Participant’s retirement (as such term may be defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Company’s then current employment policies and guidelines). The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.

 

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4.10. Limitations on Exercise. Options and SARs may be exercised only with respect to whole Shares. The Plan Administrator may also specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option or SAR, provided that such minimum number will not prevent Participant from exercising the Option or SAR for the full number of Shares for which it is then exercisable. The Committee may, or may authorize the Plan Administrator to, prohibit the exercise of any Option or SAR during a period of up to thirty (30) days prior to the consummation of any pending Capitalization Adjustment or Corporate Transaction, or any other change affecting the Shares or the Fair Market Value, for reasons of administrative convenience.

 

4.11. Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under this Plan or under any other incentive share option plan of the Company or any Parent or Subsidiary of the Company) will not exceed One Hundred Thousand Dollars ($100,000). If the Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a Participant during any calendar year exceeds One Hundred Thousand Dollars ($100,000), then the Options for the first One Hundred Thousand Dollars ($100,000) worth of Shares to become exercisable in such calendar year will be ISOs and the Options for the amount in excess of One Hundred Thousand Dollars ($100,000) that become exercisable in that calendar year will be NSOs.

 

4.12. Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding Options or SARs, and authorize the grant of new Options or SARs in substitution therefor, including in connection with an Exchange Program. Any such action may not, without the written consent of a Participant, impair any of such Participant’s rights under any Award previously granted, except that the Committee may reduce the Exercise Price of an outstanding Option or SAR without the consent of a Participant by a written notice (notwithstanding any adverse tax consequences to the Participant arising from the repricing); provided, however, that the Exercise Price may not be reduced below the Fair Market Value on the date the action is taken to reduce the Exercise Price. Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code.

 

5. Restricted Share Awards.

 

A Restricted Share Award is an offer by the Company to sell or issue (with no payment required) Shares to a Participant that are subject to certain specified restrictions (“Restricted Shares”). Each Restricted Share Award will be in such form and will contain such terms and conditions as the Committee will deem appropriate. The terms and conditions of Restricted Share Awards may change from time to time, and the terms and conditions of separate Award Agreements need not be identical, but each Award Agreement will conform to (through incorporation of the provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions.

 

5.1. Acceptance Procedures. Except as otherwise provided in an Award Agreement, a Restricted Share Award will be accepted by the Participant’s execution and delivery of the Award Agreement and full payment of the Purchase Price for the Shares to the Company (if applicable) within thirty (30) days from the date the Award Agreement is delivered to the Participant. If the Participant does not execute and deliver the Award Agreement along with full payment for the Shares (if applicable) to the Company within such thirty (30) days, then the offer will terminate, unless otherwise determined by the Committee.

 

5.2. Purchase Price. The Purchase Price for Shares issued pursuant to a Restricted Share Award, if any, will be determined by the Committee on the date the Restricted Share Award is granted and, if permitted by Applicable Law, no cash consideration will be required in connection with the payment for the Purchase Price where the Committee provides that payment shall be in the form of services previously rendered. Payment of the Purchase Price shall be made in accordance with Section 9 of the Plan and the applicable Award Agreement.

 

5.3. Dividends and Other Distributions. Participants holding Restricted Share Awards will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Committee provides otherwise at the time the Award is granted. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Restricted Share Awards with respect to which they were paid.

 

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6. Restricted Share Unit Awards.

 

6.1. General. An RSU Award is an Award covering a number of Shares that may be settled in cash, or by issuance of those Shares or purchase the Shares on the open market at a date in the future. Each RSU Award will be in such form and will contain such terms and conditions as the Committee will deem appropriate. The terms and conditions of RSU Awards may change from time to time, and the terms and conditions of separate Award Agreements need not be identical, but each RSU Award will conform to (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) the substance of each of the following provisions.

 

6.2. Purchase Price. The Committee may determine the form(s) in which payment of the amount owing upon settlement of any Award may be made, provided that, such payment shall be made in accordance with Section 9 of the Plan and the applicable Award Agreement.

 

6.3. Form and Timing of Settlement. Payment of vested RSUs shall be made as soon as practicable after the date(s) determined by the Committee and set forth in the Award Agreement. The Committee, in its sole discretion, may settle vested RSUs in cash, Shares, or a combination of both.

 

6.4. Dividend Equivalent Rights. The Committee may permit Participants holding RSUs to receive Dividend Equivalent Rights on outstanding RSUs if and when dividends are paid to shareholders on Shares. In the discretion of the Committee, such Dividend Equivalent Rights may be paid in cash or Shares, and may either be paid at the same time as dividend payments are made to shareholders or delayed until Shares are issued or purchased on the open market pursuant to the underlying RSUs, and may be subject to the same vesting or performance requirements as the RSUs. If the Committee permits Dividend Equivalent Rights to be made on RSUs, the terms and conditions for such Dividend Equivalent Rights will be set forth in the applicable Award Agreement.

 

7. Performance Awards.

 

7.1. Types of Performance Awards. A Performance Award is an Award that may be granted, may vest or may become eligible to vest contingent upon the attainment during a Performance Period of certain Performance Goals. Performance Awards may be granted as Options, SARs, Restricted Shares, RSUs or Other Awards, including cash-based Awards.

 

7.2. Terms of Performance Awards. Performance Awards will be based on the attainment of Performance Goals that are established by the Committee for the relevant Performance Period. Prior to the grant of any Performance Award, the Committee will determine and each Award Agreement shall set forth the terms of each Performance Award, including, without limitation: (a) the nature, length and starting date of any Performance Period; (b) the Performance Criteria and Performance Goals that shall be used to determine the time and extent to which a Performance Award has been earned; (c) amount of any cash bonus, or the number of Shares deemed subject to a Performance Award, and (d) the effect of a termination of Participant’s Continuous Service Status on a Performance Award. Participants may participate simultaneously with respect to Performance Awards that are subject to different Performance Periods and Performance Goals. A Performance Award may but need not require the Participant’s completion of a specified period of service.

 

7.3. Determination of Achievement. The Committee shall determine the extent to which a Performance Award has been earned in its sole discretion, including the manner of calculating the Performance Criteria and the measure of whether and to what degree such Performance Goals have been attained. The Committee may reduce or waive any criteria with respect to a Performance Goal, or adjust a Performance Goal (or method of calculating the attainment of a Performance Goal) to take into account unanticipated events, including changes in law and accounting or tax rules, as the Committee deems necessary or appropriate, or to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships. The Committee may also adjust or eliminate the compensation or economic benefit due upon attainment of Performance Goals in its sole discretion, subject to any limitations contained in the Award Agreement and compliance with Applicable Law.

 

8. Other Awards.

 

Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Shares, including the appreciation in value thereof (e.g., options or share rights with an exercise price or strike price less than 100% of the Fair Market Value of the Shares at the time of grant) may be granted either alone or in addition to Other Awards provided for in the Plan. Subject to the provisions of the Plan and Applicable Law, the Committee may determine the persons to whom and the time or times at which such Other Awards will be granted, the number of Shares (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and conditions of such Other Awards.

 

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9. Payment for Purchases and Exercises.

 

Payment from a Participant for Shares acquired pursuant to this Plan may be made in cash or cash equivalents or, where approved for the Participant by the Committee and where permitted by Applicable Law (and to the extent not otherwise set forth in the applicable Award Agreement):

 

(a)by cancellation of indebtedness of the Company owed to the Participant;

(b)by surrender of Shares held by the Participant that are clear of all liens, claims, encumbrances or security interests and that have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which said Award will be exercised or settled;

(c)by waiver of compensation due or accrued to the Participant for services rendered or to be rendered to the Company or an Affiliate;

(d)by consideration received by the Company pursuant to a broker-assisted or other form of cashless exercise program implemented by the Plan Administrator in connection with the Plan;

(e)by any combination of the foregoing; or

(f)by any other method of payment as is permitted by Applicable Law.

 

The Committee or the Plan Administrator may limit the availability of any method of payment, to the extent the Committee or the Plan Administrator determines, in its discretion, that such limitation is necessary or advisable to comply with Applicable Law or facilitate the administration of the Plan. Payment of any Exercise Price or Purchase Price shall be made in accordance with any procedures established by the Plan Administrator.

 

10. Taxes.

 

10.1. Responsibility for Taxes. Regardless of any action taken by the Company or any Affiliate, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant, including any employer liability for which the Participant is liable (the “Tax-Related Items”) is the Participant’s responsibility and may exceed the amount, if any, withheld by the Company or an Affiliate. If the Participant is subject to Tax-Related Items in more than one jurisdiction, the Company or an Affiliate may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

10.2. Withholding Methods. Unless otherwise provided in the Participant’s Award Agreement, the Committee, or its delegate(s), as permitted by Applicable Law, in its sole discretion and pursuant to such procedures as it may specify from time to time and subject to limitations of Applicable Law, may require or permit a Participant to satisfy any applicable withholding obligations for Tax-Related Items, in whole or in part by (without limitation) (a) requiring the Participant to make a cash payment, (b) withholding from the Participant’s wages or other cash compensation paid to the Participant by the Company or any Affiliate; (c) withholding from the Shares otherwise issuable pursuant to an Award; (d) permitting the Participant to deliver to the Company already-owned Shares or (e) withholding from the proceeds of the sale of otherwise deliverable Shares acquired pursuant to an Award either through a voluntary sale or through a mandatory sale arranged by the Company. By adoption of the Plan, the Committee delegates to the Plan Administrator the authority to adopt policies and procedures, in consultation with the Company’s tax accountants and legal advisors, to determine the Fair Market Value of the Shares solely for purposes of withholding and reporting Tax-Related Items related to Awards granted under the Plan.

 

10.3. Withholding Tax Rates. The Company or an Affiliate may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including up to the maximum applicable rate in the Participant’s jurisdiction. If the obligation for Tax-Related Items is satisfied by withholding a number of Shares, for tax purposes, a Participant is deemed to have been issued the full number of Shares, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items. In the event the Company withholds less than it is obligated to withhold in connection with an Award, the Participant will indemnify and hold the Company harmless from any liability for Tax-Related Items.

 

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11. Restrictions on Awards and Shares.

 

11.1. Transferability of Awards. Except as expressly provided in the Plan or an applicable Award Agreement, or otherwise determined by the Committee or the Plan Administrator, Awards granted under the Plan will not be transferable or assignable by the Participant, other than by will or by the laws of descent and distribution. Any Options, SARs, RSUs or Other Awards that are exercisable may only be exercised: (a) during the Participant’s lifetime only by (i) the Participant, or (ii) the Participant’s guardian or legal representative; (b) after the Participant’s death, by the legal representative of the Participant’s heirs or legatees. The Committee or the Plan Administrator may permit transfer of Awards in a manner that is not prohibited by Applicable Law.

 

11.2. Shareholder Rights. No Participant will have any of the rights of a shareholder with respect to any Shares until the Shares are issued or transferred to the Participant, except for any Dividend Equivalent Rights permitted by an applicable Award Agreement. After Shares are issued or transferred to the Participant, the Participant will be a shareholder and have all the rights of a shareholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares, subject to any repurchase or forfeiture provisions in any Restricted Share Award, the terms of the Trading Policy, and Applicable Law.

 

11.3. Escrow; Pledge of Shares. To enforce any restrictions on a Participant’s Shares, the Committee may require the Participant to deposit all written or electronic certificate(s) representing Shares, together with share powers or other instruments of transfer approved by the Plan Administrator, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Plan Administrator may cause a legend or legends referencing such restrictions to be placed on the certificate(s). Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan may be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of Participant’s obligation to the Company under the promissory note.

 

11.4. Exchange and Buyout of Awards. Without prior shareholder approval, the Committee may conduct an Exchange Program, subject to consent of an affected Participant and compliance with Applicable Law.

 

11.5. Securities Law and Other Regulatory Compliance. An Award will not be effective unless such Award is in compliance with Applicable Law, including all applicable U.S. and foreign federal and state securities and exchange control laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver written or electronic certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any state or federal or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable. The Company will be under no obligation to register the Shares or to effect compliance with the registration, qualification or listing requirements of any foreign, national or state securities laws, exchange control laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.

 

11.6. Clawback/Recovery Policy. All Awards granted under the Plan will be subject to clawback or recoupment under any clawback or recoupment policy adopted by the Board or the Committee or required by Applicable Law during the term of Participant’s employment or other service with the Company that is applicable to Officers, Employees, Directors or other service providers of the Company. In addition, the Committee may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Committee determines necessary or appropriate. No recovery of compensation under such a clawback or recoupment policy will be an event giving rise to a right to voluntarily terminate employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan or agreement with the Company.

 

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12. General Provisions Applicable to Awards.

 

12.1. Vesting. The total number of Shares subject to an Award may vest in periodic installments that may or may not be equal. The Committee may impose such restrictions on or conditions to the vesting and/or exercisability of an Award as determined by the Committee, and which may vary.

 

12.2. Termination of Continuous Service Status. Except as otherwise provided in the applicable Award Agreement or as determined by the Committee, if a Participant’s Continuous Service Status terminates for any reason, vesting of an Award will cease and such portion of an Award that has not vested will be forfeited, and the Participant will have no further right, title or interest in any then-unvested portion of the Award. In addition, the Company may receive through a forfeiture condition or a repurchase right any or all of the Shares held by the Participant under a Restricted Share Award that have not vested as of the date of such termination, subject to the terms of the applicable Award Agreement.

 

12.3. No Employment or Other Service Rights. Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or an Affiliate or limit in any way the right of the Company or an Affiliate to terminate Participant’s employment or other relationship at any time. Furthermore, to the extent the Company is not the employer of a Participant, the grant of an Award will not establish or amend an employment or other service relationship between the Company and the Participant. Nothing in the Plan or any Award will constitute any promise or commitment by the Company or an Affiliate regarding future work assignments, future compensation or any other term or condition of employment or service.

 

12.4. Effect on Other Employee Benefit Plans. The value of and income from any Award granted under the Plan, as determined upon grant, vesting or settlement, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

 

12.5. Leaves of Absence. To the extent permitted by Applicable Law, the Committee or the Plan Administrator, in that party’s sole discretion, may determine whether Continuous Service Status will be considered interrupted in the case of any leave of absence. Continuous Service Status as an Employee for purposes of ISOs shall not be considered interrupted or terminated in the case of: (a) Company approved sick leave; (b) military leave; (c) any other bona fide leave of absence approved by the Company, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy. In the case of an approved leave of absence, the Plan Administrator may make such provisions respecting suspension of vesting and crediting of service (including pursuant to a formal policy adopted from time to time by the Company) as it may deem appropriate, except that in no event may an Option or SAR be exercised after the expiration of the term set forth in the Award Agreement.

 

12.6. Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company or any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from full-time to part-time or takes an extended leave of absence) after the date of grant of any Award, the Committee or the Plan Administrator, in that party’s sole discretion, may (x) make a corresponding reduction in the number of Shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting schedule applicable to such Award (in accordance with Section 409A of the Code, as applicable). In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so amended.

 

12.7. Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

 

12.8. Deferrals. To the extent permitted by Applicable Law, the Committee, in its sole discretion, may determine that the delivery of Shares or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code, if applicable, and any other Applicable Law.

 

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12.9. Compliance with Section 409A of the Code. Unless otherwise expressly provided in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Committee determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. To the extent that any amount constituting deferred compensation under Section 409A of the Code would become payable under this Plan by reason of a Corporate Transaction, such amount shall become payable only if the event constituting a Corporate Transaction would also qualify as a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 409A. If a Participant holding an Award that constitutes deferred compensation under Section 409A of the Code is a specified employee within the meaning of Section 409A of the Code, no distribution or payment of any amount that is payable because of a separation from service (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six months following the date of such Participant’s separation from service or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule. In no event will any Participant have a right to payment or reimbursement or otherwise from the Company or its Affiliates, or their successors or assigns, for any taxes imposed or other costs incurred as a result of Section 409A of the Code.

 

12.10. Execution of Additional Documents. The Company may require a Participant to execute any additional documents or instruments necessary or desirable, as determined by the Plan Administrator, to carry out the purposes or intent of the Award, or facilitate compliance with securities, tax and/or other regulatory requirements, at the Plan Administrator’s request.

 

13. Other Corporate Events.

 

13.1. Corporate Transaction. In the event that the Company is subject to a Corporate Transaction, outstanding Awards acquired under the Plan shall be subject to the agreement evidencing the Corporate Transaction, which need not treat all outstanding Awards in an identical manner. Such agreement, without the Participant’s consent, shall provide for one or more of the following with respect to all outstanding Awards as of the effective date of such Corporate Transaction:

 

(a)The continuation of an outstanding Award by the Company (if the Company is the successor entity).

(b)The assumption of an outstanding Award by the successor or acquiring entity (if any) of such Corporate Transaction (or by its parents, if any), which assumption, will be binding on all selected Participants; provided that the Exercise Price and the number and nature of shares issuable upon exercise of any Option or SAR, or any award that is subject to Section 409A of the Code, will be adjusted appropriately pursuant to Section 424(a) of the Code and/or Section 409A of the Code, as applicable.

(c)The substitution by the successor or acquiring entity in such Corporate Transaction (or by its parents, if any) of equivalent awards with substantially the same terms for such outstanding Awards (except that the Exercise Price and the number and nature of shares issuable upon exercise of any Option or SAR, or any award that is subject to Section 409A of the Code, will be adjusted appropriately pursuant to Section 424(a) of the Code and/or Section 409A of the Code, as applicable).

(d)The full or partial acceleration of exercisability or vesting and accelerated expiration of an outstanding Award and lapse of the Company’s right to repurchase or re-acquire shares acquired under an Award or lapse of forfeiture rights with respect to shares acquired under an Award.

 

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(e)The settlement of such outstanding Award (whether or not then vested or exercisable) in cash, cash equivalents, or securities of the successor entity (or its parent, if any) with a Fair Market Value equal to the required amount provided in the definitive agreement evidencing the Corporate Transaction, followed by the cancellation of such Awards; provided however, that such Award may be cancelled without consideration if such Award has no value, as determined by the Committee in its sole discretion. Subject to compliance with Section 409A of the Code, such payment may be made in installments and may be deferred until the date or dates the Award would have become exercisable or vested. Such payment may be subject to vesting based on the Participant’s Continuous Service Status, provided that the vesting schedule shall not be less favorable to the Participant than the schedule under which the Award would have become vested or exercisable. For purposes of this paragraph, the Fair Market Value of any security shall be determined without regard to any vesting conditions that may apply to such security.

(f)The cancellation of outstanding Awards in exchange for no consideration.

 

The Board shall have full power and authority to assign the Company’s right to repurchase or re-acquire or forfeiture rights to such successor or acquiring corporation. In addition, in the event such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, the Committee will notify the Participant in writing or electronically that such Award will be exercisable (to the extent vested and exercisable pursuant to its terms) for a period of time determined by the Committee in its sole discretion, and such Award will terminate upon the expiration of such period.

 

13.2. Assumption of Awards by the Company. The Company, from time to time, may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (a) granting an Award under this Plan in substitution of such other company’s award; or (b) assuming such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this Plan (a “Substitute Award”). Such substitution or assumption will be permissible if the holder of the Substitute Award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant. The Exercise Price and the number and nature of Shares issuable upon exercise or settlement of any such Substitute Award will be adjusted appropriately pursuant to Section 424(a) of the Code and/or Section 409A of the Code, as applicable.

 

14. Administration.

 

14.1. Committee Authority. This Plan will be administered by the Committee or by the Board acting as the Committee. Subject to the general purposes, terms and conditions of this Plan, and any charter adopted by the Board governing the actions of the Committee, the Committee will have full power to implement and carry out this Plan. Without limitation, the Committee will have the authority to:

 

(a)construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;

(b)prescribe, amend, expand, modify and rescind or terminate rules and regulations relating to this Plan or any Award;

(c)approve persons to receive Awards;

(d)determine the form, terms and conditions of Awards;

(e)determine the number of Shares or other consideration subject to Awards;

(f)determine the Fair Market Value in good faith and interpret the applicable provisions of this Plan and the definition of Fair Market Value in connection with circumstances that impact the Fair Market Value, if necessary;

(g)determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, Other Awards under this Plan or awards under any other incentive or compensation plan of the Company or any Affiliate;

(h)grant waivers of any conditions of this Plan or any Award;

(i)determine the vesting, exercisability and payment of Awards;

(j)correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;

(k)determine whether an Award has been earned or has vested;

 

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(l)determine the terms and conditions of any, and to institute any Exchange Program;

(m)adopt or revise rules and/or procedures (including the adoption or revision of any subplan under this Plan) relating to the operation and administration of the Plan to facilitate compliance with requirements of local law and procedures outside the United States, (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement made to ensure or facilitate compliance with the laws or regulations of the relevant foreign jurisdiction);

(n)delegate any of the foregoing to one or more Officers pursuant to a specific delegation as permitted by the terms of the Plan and Applicable Law, including Section 157(c) of the Delaware General Corporation Law; and

(o)make all other determinations necessary or advisable in connection with the administration of this Plan.

 

14.2. Committee Interpretation and Discretion. Any determination made by the Committee with respect to any Award shall be made in its sole discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination shall be final and binding on the Company and all persons having an interest in any Award under the Plan. Any dispute regarding the interpretation of the Plan or any Award Agreement shall be submitted by the Participant or Company to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on the Company and the Participant. The Committee may delegate to the Plan Administrator or one or more Officers the authority to review and resolve disputes with respect to Awards held by Participants who are not Insiders, and such resolution shall be final and binding on the Company and the Participant.

 

14.3. Section 16 of the Exchange Act. Awards granted to Participants who are subject to Section 16 of the Exchange Act must be approved by a committee of the Board that at all times consists solely of two or more Non-Employee Directors. Nothing herein shall create an inference that an Award is not validly granted under the Plan in the event Awards are not granted under the Plan by a committee of the Board that does not at all times consist solely of two or more Non-Employee Directors.

 

14.4. Plan Administrator. The Committee may appoint a Plan Administrator, who will have the authority to administer the day-to-day operations of the Plan and to make certain ministerial decisions without Committee approval as provided in the Plan or pursuant to resolutions adopted by the Committee. The Plan Administrator may not grant Awards.

 

14.5. Foreign Award Recipients. Notwithstanding any provision of the Plan to the contrary, in order to facilitate compliance with the Applicable Laws and practices in other countries in which the Company and its Affiliates operate or have Employees or other persons eligible for Awards, the Committee, in its sole discretion, shall have the power and authority to: (a) determine which Affiliates shall be covered by the Plan; (b) determine which individuals outside the United States are eligible to participate in the Plan, which may include individuals who provide services to the Company or an Affiliate under an agreement with a foreign nation or agency; (c) modify the terms and conditions of any Award granted to individuals outside the United States or foreign nationals to comply with Applicable Laws or foreign policies, customs and practices; (d) establish sub-plans, modify exercise procedures and adopt other rules and/or procedures relating to the operation and administration of the Plan in jurisdictions other than the United States (including to qualify Awards for special tax treatment under laws of jurisdictions other than the United States); provided, however, that no such sub-plans and/or modifications shall increase the share limitations contained in Section 2.1; and (e) take any action, before or after an Award is made, that the Committee determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Law in the United States.

 

14.6. Non-Exclusivity of the Plan. Neither the adoption of this Plan by the Board, the submission of this Plan to the shareholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of share options and other equity awards and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

 

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14.7. Governing Law. This Plan and all Awards granted hereunder shall be governed by and construed in accordance with the laws of Delaware, without giving effect to that body of laws pertaining to conflict of laws.

 

15. Effectiveness, Amendment and Termination of the Plan.

 

15.1. Adoption and Shareholder Approval. The Plan will come into existence on the date the Plan is adopted by the Board (the “Adoption Date”). In addition, no Option or SAR may be exercised, and no other type of Award may be granted, unless and until the Plan has been approved by the shareholders of the Company, which approval will be within twelve (12) months after the Adoption Date.

 

15.2. Amendment of the Plan. The Committee may amend the Plan in any respect the Committee deems necessary or advisable, subject to the limitations of Applicable Law and this section. If required by Applicable Law, the Company will seek shareholder approval of any amendment of the Plan that (a) materially increases the number of Shares available for issuance under the Plan (excluding any Capitalization Adjustment), (b) materially expands the class of individuals eligible to receive Awards under the Plan, (c) materially increases the benefits accruing to Participants under the Plan, (d) materially reduces the price at which Shares may be issued or purchased under the Plan, (e) materially extends the term of the Plan, (f) materially expands the types of Awards available for issuance under the Plan, or (g) as otherwise required by Applicable Law.

 

15.3. Suspension or Termination of the Plan. The Plan shall terminate automatically upon the expiration of the tenth anniversary since the Adoption Date. No Award will be granted pursuant to the Plan after such date, but Awards previously granted may extend beyond that date. The Committee may suspend or terminate the Plan at any earlier date at any time. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

15.4. No Impairment. No amendment, suspension or termination of the Plan or any Award may materially impair a Participant’s rights under any outstanding Award, except with the written consent of the affected Participant or as otherwise expressly permitted in the Plan. Subject to the limitations of Applicable Law, if any, the Committee may amend the terms of any one or more Awards without the affected Participant’s consent (a)  to maintain the qualified status of the Award as an ISO under Section 422 of the Code; (b) to change the terms of an ISO, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an ISO; (c) to clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code; or (d) to facilitate compliance with other Applicable Laws.

 

16. Definitions.

 

As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

 

“Affiliate” means a Parent, a Subsidiary or any corporation or other Entity that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company.

 

“Applicable Law” means any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any governmental or regulatory body or self-regulatory organization (including the New York Stock Exchange, Nasdaq Stock Market and the Financial Industry Regulatory Authority).

 

“Award” means any award granted under the Plan, including any Option, Restricted Share Award, Restricted Share Unit Award, Share Appreciation Right, Performance Award or Other Award.

 

“Award Agreement” means a written or electronic agreement between the Company and a Participant documenting the terms and conditions of an Award. The term “Award Agreement” will also include any other written agreement between the Company or an Affiliate and a Participant containing additional terms and conditions of, or amendments to, an Award.

 

“Board” means the Board of Directors of the Company.

 

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“Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (a) Participant’s unauthorized misuse of the Company’s trade secrets or proprietary information; (b) Participant’s conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude; (c) Participant’s committing an act of fraud against the Company; (d) Participant’s gross negligence or willful misconduct in the performance of his or her duties; or (e) Participant’s material violation of any Company handbook or policy, or any restrictive covenant agreement between Participant and the Company. For purposes of this definition, the term “Company” will be interpreted to include any Subsidiary, Parent or Affiliate of the Company, as appropriate.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

 

“Committee” means the Compensation Committee of the Board, or those persons to whom administration of the Plan, or part of the Plan, has been delegated as permitted by Applicable Law and in accordance with the Plan.

 

“Company” means SharkNinja, Inc., an exempted company incorporated under the laws of the Cayman Islands, or any successor corporation.

 

“Consultant” means any natural person, including an advisor or independent contractor, that is engaged to render services to the Company or an Affiliate.

 

“Continuous Service Status” means continued service as an Employee, Director or Consultant. Continuous Service Status shall not be considered interrupted or terminated in the case of a transfer between locations of the Company or between the Company, its Affiliates, or their respective successors, or a change in status (for example, from an Employee to a Consultant). The Committee or the Plan Administrator, in that party’s sole discretion, shall determine whether a Participant’s Continuous Service Status has ceased and the effective date of such termination.

 

“Corporate Transaction” means:

 

(a)the consummation of any consolidation or merger of the Company with any other entity, other than transaction which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such consolidation or merger;

(b)any Exchange Act Person becomes the “beneficial owner” (as defined in Rule 13d-3of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then-outstanding voting securities; provided, however, that for purposes of this subclause (b) the acquisition of additional securities by any one Person who is considered to own more than fifty percent (50%) of the total voting power of the securities of the Company will not be considered a Corporate Transaction;

(c)the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets, except where such sale, lease, transfer or other disposition is made to the Company or one or more wholly owned Subsidiaries of the Company; or

(d)a change in the effective control of the Company that occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by members of the Board whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purpose of this subclause (d), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Corporate Transaction.

 

For purposes of this definition, Persons will be considered to be acting as a group if they are owners of an Entity that enters into a merger, consolidation, purchase or acquisition of shares, or similar business transaction with the Company.

 

“Director” means a member of the Board.

 

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“Disability” means (a) in the case of ISOs, total and permanent disability as defined in Section 22(e)(3) of the Code, and (b) in the case of other Awards, unless the applicable Award Agreement provides otherwise, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an ISO, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.

 

“Dividend Equivalent Right” means the right of a Participant, granted at the discretion of the Committee or as otherwise provided by the Plan, to receive a credit for the account of such Participant in an amount equal to the cash, shares or other property dividends for each Share represented by an Award held by such Participant.

 

“Employee” means any person employed by the Company, or any Affiliate, with the status of employment determined pursuant to such factors as are deemed appropriate by the Plan Administrator in its sole discretion, subject to any requirements of Applicable Law, including the Code. Service as a Director or payment by the Company or an Affiliate of a director’s fee shall not be sufficient to constitute “employment” of such Director by the Company or any Affiliate.

 

“Entity” means a corporation, partnership, limited liability company or other entity.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Adoption Date, is the owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities.

 

“Exchange Program” means a program pursuant to which (a) outstanding Awards are surrendered, cancelled or exchanged for cash, the same type of Award or a different Award (or combination thereof) or (b) the Exercise Price of an outstanding Award is increased or reduced.

 

“Exercise Price” means, with respect to an Option, the price per Share at which a holder may purchase the Shares issuable upon exercise of an Option, and with respect to a SAR, the price per share at which the SAR is granted to the holder thereof.

 

“Fair Market Value” means, as of any date, the value of the Shares determined as follows:

 

(a)If such Shares are publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Shares are listed or admitted to trading as reported in The Wall Street Journal or such other source as the Plan Administrator deems reliable, unless another method is approved by the Committee and subject to compliance with Applicable Law (including Section 409A of the Code).

(b)If such Shares are publicly traded but is neither listed nor admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal or such other source as the Plan Administrator deems reliable.

(c)If none of the foregoing is applicable, by the Board or the Committee in good faith (and in accordance with Section 409A of the Code, as applicable).

 

“Group” means the Company and its subsidiaries.

 

“Incentive Share Option” or “ISO” means an Option granted pursuant to the Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

 

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“Insider” means an officer or Director of the Company or any other person whose transactions in the Shares are subject to Section 16 of the Exchange Act.

 

“Non-Employee Director” means a Director who is not an Employee of the Company or any Affiliate, and who satisfies the requirements of a “non-employee director” within the meaning of Section 16 of the Exchange Act.

 

“Nonstatutory Share Option” or “NSO” means any Option granted pursuant to the Plan that does not qualify as an ISO.

 

“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

 

“Option” means a contract right to purchase Shares at a fixed exercise price per share, subject to certain conditions, if applicable, granted pursuant to the Plan.

 

“Other Award” means an Award based in whole or in part by reference to Shares that is granted pursuant to the terms and conditions of the Plan.

 

“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations other than the Company owns shares possessing fifty percent (50%) or more of the total combined voting power of all classes of shares in one of the other corporations in such chain.

 

“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.

 

“Performance Award” means an award that may vest or may be earned or exercised, in whole or in part, contingent upon the attainment during a Performance Period of one or more Performance Goals and which is granted pursuant to the terms and conditions of the related award agreements.

 

“Performance Criteria” means one or more objective or subjective criteria either individually, alternatively or in any combination applied to the Participant, the Company, any business unit or Subsidiary, that the Committee selects for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Committee: net earnings or net income (before or after taxes); basic or diluted earnings per share (before or after taxes); net revenues or net revenue growth; adjusted net revenues or net revenue growth; gross revenue or gross revenue growth; gross profit or gross profit growth; gross bookings or gross booking growth; net operating profit (before or after taxes); return on assets, capital, invested capital, equity or sales; cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital); earnings before or after taxes, interest, depreciation and/or amortization; adjusted earnings before or after taxes, interest, depreciation and/or amortization; gross or operating margins; improvements in capital structure; budget and expense management; debt levels or reduction; productivity ratios; economic value added or other value-added measurements; share price (including, but not limited to, growth measures and total shareholder return); expense targets; margins; operating efficiency; working capital targets; enterprise value; active platform consumers or active platform consumer growth, trips; category market position; implementation or completion of projects or processes; completion of acquisitions or business expansion; sustainability; customer satisfaction; compliance; workforce diversity; workforce hiring or attrition; employee satisfaction; partner growth measures; or partner satisfaction; or any other criteria determined by the Committee.

 

“Performance Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices.

 

“Performance Period” means the period of time selected by the Committee over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to vesting, exercise and/or settlement of an Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Committee.

 

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“Plan” means this SharkNinja, Inc. 2023 Equity Incentive Plan, as it may be amended from time to time.

 

“Plan Administrator” means one or more Officers or Employees designated by the Committee to administer the day-to-day operations of the Plan and the Company’s other equity incentive programs.

 

“Purchase Price” means the price to be paid for Shares acquired under the Plan, other than Shares acquired upon the settlement of an RSU Award or the exercise of an Option or SAR.

 

“Restricted Share Award” means an award of Shares that is granted pursuant to the terms and conditions of the Plan.

 

“Restricted Share Unit Award” or “RSU Award” means a right to receive Shares that is granted pursuant to the terms and conditions of the Plan.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended.

 

“Share” means an ordinary share of the Company.

 

“Share Appreciation Right” or “SAR” means a right to receive the appreciation value on the Shares subject to the Award that is granted pursuant to the terms and conditions of the Plan.

 

“Subsidiary” means any corporation (other than the Company) in an unbroken chain of Entities beginning with the Company if each of the corporation other than the last corporation in the unbroken chain owns shares possessing fifty percent (50%) or more of the total combined voting power of all classes of shares in one of the other corporations in such chain.

 

“Trading Policy” means the Company’s policy permitting certain individuals to sell Company shares only during certain “window” periods and/or otherwise restricts the ability of certain individuals to transfer or encumber shares of the Company’s capital shares, as in effect from time to time.

 

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SHARKNINJA, INC.

 

2023 EQUITY INCENTIVE PLAN

 

Notice of Restricted Share Unit Award

 

SharkNinja, Inc. (the “Company”) has awarded to you (“Participant”) restricted share units (“RSUs”) covering the number of Shares set forth below (the “RSU Award”) under its SharkNinja, Inc. 2023 Equity Incentive Plan (the “Plan”). Capitalized terms used but not defined in this Notice of Restricted Share Unit Award (this “Notice”) or the attached RSU Terms and Conditions (including any appendices and exhibits attached thereto) will have the same meanings specified in the Plan. The Notice and the RSU Terms and Conditions are collectively referred to as the “Award Agreement” applicable to the RSUs.

 

Participant Name: ____________________________________________________

 

Date of Grant: ____________________________________________________

 

Number of RSUs: ____________________________________________________

 

Vesting Commencement Date: ______________________________________________

 

Vesting Schedule: ____________________________________________________

 

By accepting (whether electronically or otherwise) the RSU Award, Participant acknowledges and agrees to the following:

 

1.The RSU Award is governed by the terms and conditions of this Award Agreement and the Plan. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.

 

2.Participant has received a copy of the Plan, this Award Agreement, and the Trading Policy, and represents that he or she has read these documents and is familiar with their terms. Participant further agrees to accept as binding, conclusive, and final all decisions and interpretations of the Committee and the Plan Administrator regarding any questions relating to the RSU Award and the Plan.

 

3.Vesting of the RSUs is subject to Participant’s Continuous Service Status as an Employee, Director, or Consultant, which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement or the Plan changes the nature of that relationship.

 

4.The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. Participant should consult with his or her own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.

 

5.Participant consents to electronic delivery and participation as set forth in the Plan and this Award Agreement.

 

6.If Participant does not accept or decline this RSU Award within 90 days of the Date of Grant or by such other date that may be communicated Participant by the Company, the Company will accept this RSU Award on Participant’s behalf and Participant will be deemed to have accepted the terms and conditions of the RSUs set forth in the Plan and this Award Agreement. If Participant wishes to decline this RSU Award, Participant should promptly notify the Company at Compensation@sharkninja.com. If Participant declines this RSU Award, the RSUs will be cancelled and no benefits from the RSUs nor any compensation or benefits in lieu of the RSUs will be provided to Participant.

 

SharkNinja, Inc.   Participant
         
By:                          Signature:                    
         
Title:     Date:  

 

 

 

 

SHARKNINJA, INC.

 

2023 EQUITY INCENTIVE PLAN

 

RSU Terms and Conditions

 

1.Grant of RSUs. An RSU is a non-voting unit of measurement which is deemed solely for bookkeeping purposes to be equivalent to one outstanding Share (a “Share”). The RSUs are used solely as a device to determine the number of Shares to eventually be issued or transferred to Participant if such RSUs vest. The RSUs shall not be treated as property or as a trust fund of any kind. The grant of RSU under the Plan is a one-time benefit and does not create any contractual or other right to receive an award of RSUs or benefits in lieu of RSUs in the future. Future awards of RSUs, if any, will be at the sole discretion of the Committee. In the event of any material demotion in the Participant's roles and responsibilities in the Group, the number of the RSUs granted under this Agreement may be amended by the Committee at its sole discretion, in line with any of the Group's existing, proposing or future remuneration or other related policy to be implemented.

 

2.Settlement.

 

(a)On or as soon as administratively practical (and within thirty (30) days) following the applicable date of vesting under the Vesting Schedule set forth in the Notice (a “Vesting Date”), the Company will deliver to Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its discretion) equal to the number of RSUs subject to the RSU Award that vest on the applicable Vesting Date, subject to the satisfaction of any applicable withholding obligations for Tax-Related Items. No fractional RSUs or rights for fractional Shares shall be created pursuant to this Award Agreement.

 

(b)The Company reserves the right to issue to Participant the cash equivalent of Shares, in part or in full satisfaction of the delivery of Shares, upon vesting of the RSUs, and to the extent applicable, references in this Award Agreement to Shares issuable in connection with the RSUs will include the potential issuance of its cash equivalent pursuant to such right, unless otherwise provided for any country applicable to Participant in the Appendix.

 

3.Dividend and Voting Rights. Unless and until such time as Shares are issued or transferred in settlement of vested RSUs, Participant will have no ownership of the Shares allocated to the RSUs, and will have no rights to vote such Shares and no rights to dividends.

 

4.Non-Transferability of RSUs. The RSUs and any interest therein will not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order. The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs, successors, and assigns of Participant.

 

5.Termination. Unless otherwise set out in the Award Agreement, if Participant’s Continuous Service Status terminates for any reason, all unvested RSUs will be forfeited to the Company, and all rights of Participant to such RSUs will immediately terminate without payment of any consideration to Participant; provided that all RSUs, vested and unvested, will be forfeited immediately without payment of any consideration if Participant's Continuous Service Status terminates with Cause. The Committee shall have the exclusive discretion to determine when Participant is no longer providing services for purposes of his or her RSU grant (including whether Participant may still be considered to be providing services while on a leave of absence). The RSUs which have been vested but yet to be settled by the Company shall be immediately forfeited upon the date when, whichever is earlier, (1) the Participant's Continuous Service Status terminates with Cause, or (2) the Participant commits a breach of the non-competition clause or non-solicitation clause stipulated in the employee agreement entered into between the Participant and the Company or any member of the Group.

 

 

 

 

6.Taxes.

 

(a)Responsibility for Taxes. By accepting this RSU Award, Participant acknowledges that, regardless of any action taken by the Company or, if different, any Parent, Subsidiary, or Affiliate that employs Participant (the “Employer”), the ultimate liability for all Tax-Related Items is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSU Award, including, but not limited to, the grant, vesting, or settlement of the RSU Award, the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSU Award to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver the Shares, or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

 

(b)Withholding. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

 

(i)withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer or any Parent, Subsidiary, or Affiliate;

 

(ii)withholding from proceeds of the sale of Shares acquired on settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without further consent);

 

(iii)withholding Shares to be issued upon settlement of the RSUs, provided the Company only withholds a number of Shares necessary to satisfy no more than the withholding amounts determined based on the maximum permitted statutory rate applicable in Participant’s jurisdiction;

 

(iv)Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or

 

(v)any other arrangement approved by the Committee and permitted under Applicable Law.

 

Withholding for Tax-Related Items will be made in accordance with Section 10 of the Plan and such rules and procedures as may be established by the Plan Administrator, and in compliance with the Trading Policy, if applicable. In the event the Company or the Employer withholds more than the Tax-Related Items using one of the methods described above, Participant may receive a refund of any over-withheld amount in cash but will have no entitlement to the Shares sold or withheld.

 

7.Code Section 409A. It is intended that the terms of the RSU Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Payments pursuant to this RSU Award are intended to constitute separate payments for purposes of Section 409A of the Code.

 

8.Governing Law and Venue. This Award Agreement shall be governed by and construed and interpreted in accordance with the laws of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of Massachusetts and agree that such litigation shall be conducted only in the courts of Massachusetts, or the federal courts for the United States for the District of Massachusetts, and no other courts, where this grant is made and/or to be performed.

 

 

 

 

9.Entire Agreement; Enforcement of Rights. This Award Agreement, together with the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior discussions, agreements, commitments, or negotiations between the parties. No adverse modification of, or adverse amendment to, this Award Agreement, nor any waiver of any rights under this Award Agreement, will be effective unless in writing and signed by the parties to this Award Agreement (which may be electronic). The failure by either party to enforce any rights under this Award Agreement will not be construed as a waiver of any rights of such party.

 

10.Severability. If one or more provisions of this Award Agreement are held to be unenforceable under Applicable Laws, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement, (b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.

 

11.Consent to Electronic Delivery and Participation. By accepting the RSUs, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, and all other documents, communications, or information related to the RSUs and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail to Share Administration.

 

12.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the RSU Award and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

 

 

 

SHARKNINJA, INC.

 

2023 EQUITY INCENTIVE PLAN

 

Notice of Share-Settled Cash Award

 

SharkNinja, Inc. (the “Company”) has awarded to you (“Participant”) a Share-Settled Cash Award in the cash amount set forth below (the “Cash Award”) under its SharkNinja, Inc. 2023 Equity Incentive Plan (the “Plan”). Capitalized terms used but not defined in this Notice of Restricted Share Unit Award (this “Notice”) or the attached Share-Settled Cash Award Terms and Conditions (including any appendices and exhibits attached thereto) will have the same meanings specified in the Plan. The Notice and the Share-Settled Cash Award Terms and Conditions are collectively referred to as the “Award Agreement” applicable to the Cash Award.

 

Participant Name: ____________________________________________________

 

Date of Grant: ____________________________________________________

 

Cash Amount: ____________________________________________________

 

Vesting Commencement Date: ______________________________________________

 

Vesting Schedule: ____________________________________________________

 

By accepting (whether electronically or otherwise) the Cash Award, Participant acknowledges and agrees to the following:

 

1.The Cash Award is governed by the terms and conditions of this Award Agreement and the Plan. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.

 

2.Participant has received a copy of the Plan, this Award Agreement, and the Trading Policy, and represents that he or she has read these documents and is familiar with their terms. Participant further agrees to accept as binding, conclusive, and final all decisions and interpretations of the Committee and the Plan Administrator regarding any questions relating to the Cash Award and the Plan.

 

3.Vesting of the Cash Award is subject to Participant’s Continuous Service Status as an Employee, Director, or Consultant, which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement or the Plan changes the nature of that relationship.

 

4.The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. Participant should consult with his or her own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.

 

5.Participant consents to electronic delivery and participation as set forth in the Plan and this Award Agreement.

 

6.If Participant does not accept or decline this Cash Award within 90 days of the Date of Grant or by such other date that may be communicated to Participant by the Company, the Company will accept this Cash Award on Participant’s behalf and Participant will be deemed to have accepted the terms and conditions of the Cash Award set forth in the Plan and this Award Agreement. If Participant wishes to decline this Cash Award, Participant should promptly notify the Company at Compensation@sharkninja.com. If Participant declines this Cash Award, the Cash Award will be cancelled and no benefits from the Cash Award nor any compensation or benefits in lieu of the Cash Award will be provided to Participant.

 

SharkNinja, Inc.   Participant
         
By:                          Signature:                    
         
Title:     Date:  

 

 

 

 

SHARKNINJA, INC.

 

2023 EQUITY INCENTIVE PLAN

 

Share-Settled Cash Award Terms and Conditions

 

1.Grant of Share-Settled Cash Award. A Share-Settled Cash Award, or Cash Award, is a U.S. dollar denominated Award which settles in Shares subject to these Terms and Conditions. Neither the U.S. dollar amount of the Award nor the Shares issuable upon settlement shall be treated as property or as a trust fund of any kind. The grant of a Share-Settled Cash Award under the Plan is a one-time benefit and does not create any contractual or other right to receive an Award of any kind or benefits in lieu of any Award in the future. Future Awards, if any, will be at the sole discretion of the Committee. In the event of any material demotion in the Participant's roles and responsibilities in the Group, the number of the Awards granted under this Agreement may be amended by the Committee at its sole discretion, in line with any of the Group's existing, proposing or future remuneration or other related policy to be implemented.

 

2.Settlement.

 

(a)On or as soon as administratively practical (and within thirty (30) days) following the applicable date of vesting under the Vesting Schedule set forth in the Notice (a “Vesting Date”), the Company will deliver to Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its discretion) equal to the U.S. dollar amount of the Award which vested on such date divided by the Fair Market Value of a Share on the Vesting Date, subject to the satisfaction of any applicable withholding obligations for Tax-Related Items. No fractional Shares shall be created pursuant to this Award Agreement.

 

(b)The Company reserves the right to issue to Participant the cash equivalent of Shares, in part or in full satisfaction of the delivery of Shares, upon vesting of the Award, and to the extent applicable, references in this Award Agreement to Shares issuable in connection with this Award will include the potential issuance of its cash equivalent pursuant to such right, unless otherwise provided for any country applicable to Participant in the Appendix.

 

3.Dividend and Voting Rights. Unless and until such time as Shares are issued in settlement of the vested portion of this Award, Participant will have no ownership of the Shares allocated to the Award, and will have no rights to vote such Shares and no rights to dividends.

 

4.Non-Transferability of RSUs. This Share-Settled Cash Award and any interest therein will not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order. The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs, successors, and assigns of Participant.

 

5.Termination. Unless otherwise set out in the Award Agreement, if Participant’s Continuous Service Status terminates for any reason, the unvested portions of this Award will be forfeited to the Company, and all rights of Participant to such portions will immediately terminate without payment of any consideration to Participant; provided that the entire Award, vested and unvested, will be forfeited immediately without payment of any consideration if Participant's Continuous Service Status terminates with Cause. The Committee shall have the exclusive discretion to determine when Participant is no longer providing services for purposes of his or her Share-Settled Cash Award (including whether Participant may still be considered to be providing services while on a leave of absence). The portion of this Award which has vested but yet to be settled by the Company shall be immediately forfeited upon the date when, whichever is earlier, (1) the Participant's Continuous Service Status terminates with Cause, or (2) the Participant commits a breach of the non-competition clause or non-solicitation clause stipulated in the employee agreement entered into between the Participant and the Company or any member of the Group.

 

 

 

 

6.Taxes.

 

(a)Responsibility for Taxes. By accepting this Award, Participant acknowledges that, regardless of any action taken by the Company or, if different, any Parent, Subsidiary, or Affiliate that employs Participant (the “Employer”), the ultimate liability for all Tax-Related Items is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including, but not limited to, the grant, vesting, or settlement of this Award, the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this Award to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver the Shares, or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

 

(b)Withholding. Prior to the relevant taxable or tax withholding event, if any, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

 

(i)withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer or any Parent, Subsidiary, or Affiliate;

 

(ii)withholding from proceeds of the sale of Shares acquired on settlement of this Award either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without further consent);

 

(iii)withholding Shares to be issued upon settlement of this Award, provided the Company only withholds a number of Shares necessary to satisfy no more than the withholding amounts determined based on the maximum permitted statutory rate applicable in Participant’s jurisdiction;

 

(iv)Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or

 

(v)any other arrangement approved by the Committee and permitted under Applicable Law.

 

Withholding for Tax-Related Items will be made in accordance with Section 10 of the Plan and such rules and procedures as may be established by the Plan Administrator, and in compliance with the Trading Policy, if applicable. In the event the Company or the Employer withholds more than the Tax-Related Items using one of the methods described above, Participant may receive a refund of any over-withheld amount in cash but will have no entitlement to the Shares sold or withheld.

 

7.Code Section 409A. It is intended that the terms of this Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Payments pursuant to this Award are intended to constitute separate payments for purposes of Section 409A of the Code.

 

8.Governing Law and Venue. This Award Agreement shall be governed by and construed and interpreted in accordance with the laws of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of Massachusetts and agree that such litigation shall be conducted only in the courts of Massachusetts, or the federal courts for the United States for the District of Massachusetts, and no other courts, where this grant is made and/or to be performed.

 

 

 

 

9.Entire Agreement; Enforcement of Rights. This Award Agreement, together with the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior discussions, agreements, commitments, or negotiations between the parties. No adverse modification of, or adverse amendment to, this Award Agreement, nor any waiver of any rights under this Award Agreement, will be effective unless in writing and signed by the parties to this Award Agreement (which may be electronic). The failure by either party to enforce any rights under this Award Agreement will not be construed as a waiver of any rights of such party.

 

10.Severability. If one or more provisions of this Award Agreement are held to be unenforceable under Applicable Laws, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement, (b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.

 

11.Consent to Electronic Delivery and Participation. By accepting this Award, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, and all other documents, communications, or information related to this Award and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail to Share Administration.

 

12.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on this Award and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

 

Exhibit 10.3

 

SHARKNINJA, INC.

 

2023 EMPLOYEE SHARE PURCHASE PLAN

 

1.             Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Companies with an opportunity to purchase Shares through accumulated Contributions. The Company intends for the Plan to have two components: a Code Section 423 Component (“423 Component”) and a non-Code Section 423 Component (“Non-423 Component”). The Company’s intention is to have the 423 Component of the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. The provisions of the 423 Component, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code. In addition, this Plan authorizes the grant of an option to purchase Shares under the Non-423 Component that does not qualify as an “employee stock purchase plan” under Section 423 of the Code; such an option will be granted pursuant to rules, procedures or sub-plans adopted by the Administrator designed to achieve tax, securities laws or other objectives for Eligible Employees and the Company. Except as otherwise provided herein, the Non-423 Component will operate and be administered in the same manner as the 423 Component.

 

2.             Definitions.

 

(a)           “Administrator” means the Board or any Committee designated by the Board to administer the Plan pursuant to Section 14 of the Plan.

 

(b)           “Affiliate” means any entity, other than a Subsidiary, that is an “affiliate” within the meaning of Rule 12b-2 promulgated under Section 12 of the Exchange Act.

 

(c)           “Applicable Laws” means the requirements relating to the administration of equity-based awards and the related issuance of Shares under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Shares are listed or quoted and the applicable securities and exchange control laws of any foreign country or jurisdiction where options are, or will be, granted under the Plan.

 

(d)           “Beneficial Owner” means a beneficial owner as determined under Rule 13d-3 under the Exchange Act.

 

(e)           “Board” means the Board of Directors of the Company.

 

(f)            “Business Combination” means (x) a merger or consolidation involving the Company or its shares or (y) an acquisition by the Company, directly or through one or more subsidiaries, of another entity or its shares or assets.

 

(g)           “Change in Control” means the occurrence of any of the following events:

 

(i)           50% Ownership Change: Any Person, the Company, or an Affiliate makes an acquisition of Outstanding Voting Shares and is, immediately thereafter, the Beneficial Owner of 50% or more of the then Outstanding Voting Shares, unless such acquisition is made directly from the Company in a transaction approved by a majority of the Incumbent Directors; or any group is formed that is the beneficial owner of 50% or more of the Outstanding Voting Shares; or

 

 

 

 

(ii)          Major Mergers and Acquisitions: Consummation of a Business Combination unless, immediately following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Voting Shares immediately before such Business Combination beneficially own, directly or indirectly, more than 50% of the then outstanding shares of voting shares of the Parent Corporation Resulting From Such Business Combination in substantially the same relative proportions as their ownership, immediately before such Business Combination, of the Outstanding Voting Shares, (ii) no Person (other than any corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of the then outstanding shares of voting shares of the Parent Corporation Resulting From Such Business Combination and (iii) a majority of the members of the board of directors of the Parent Corporation Resulting From Such Business Combination were Incumbent Directors of the Company immediately before consummation of such Business Combination; or

 

(iii)         Major Asset Dispositions: Consummation of a Major Asset Disposition unless, immediately following such Major Asset Disposition, (i) individuals and entities that were beneficial owners of the Outstanding Voting Shares immediately before such Major Asset Disposition beneficially own, directly or indirectly, more than 70% of the then outstanding shares of voting shares of the Company (if it continues to exist) and of the entity that acquires the largest portion of such assets (or the entity, if any, that owns a majority of the outstanding voting shares of such acquiring entity) and (ii) a majority of the members of the Board (if it continues to exist) and of the entity that acquires the largest portion of such assets (or the entity, if any, that owns a majority of the outstanding voting shares of such acquiring entity) were Incumbent Directors of the Company immediately before consummation of such Major Asset Disposition; or

 

(iv)         Liquidation or Dissolution: The Company’s shareholders approve a liquidation or dissolution of the Company.

 

(h)           “Code” means the U.S. Internal Revenue Code of 1986, as amended. Reference to a specific Section of the Code or U.S. Treasury Regulation thereunder will include such Section or regulation, any valid regulation or other official applicable guidance promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.

 

(i)            “Committee” means the Compensation Committee of the Board, and any successor committee thereto or such other committee of the Board as may be designated by the Board to administer this Plan in whole or in part, including any subcommittee of the Board as designated by the Board in accordance with Section 14 hereof.

 

(j)            “Company” means SharkNinja, Inc., an exempted company incorporated under the laws of the Cayman Islands, or any successor thereto.

 

(k)           “Compensation” means an Eligible Employee’s base salary or hourly wages. The Administrator, in its discretion, may, on a uniform and nondiscriminatory basis, establish a different definition of Compensation for a subsequent Offering Period.

 

 - 2 - 

 

 

(l)            “Contributions” means the payroll deductions and other additional payments that the Company may permit to be made by a Participant to fund the exercise of options granted pursuant to the Plan.

 

(m)          “Designated Company” means any Subsidiary or Affiliate that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan. For purposes of the 423 Component, only the Company and its Subsidiaries may be Designated Companies; provided, that at any given time, a Subsidiary that is a Designated Company under the 423 Component shall not be a Designated Company under the Non-423 Component.

 

(n)           “Director” means a member of the Board.

 

(o)           “EEA” shall have the meaning set forth in Section 8(c) of the Plan.

 

(p)           “EEA Limit” shall have the meaning set forth in Section 8(c) of the Plan.

 

(q)           “Eligible Employee” means any individual who is a common law employee providing services to the Company or a Designated Company and is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the Employer, or any lesser number of hours per week and/or number of months in any calendar year established by the Administrator (if required under Applicable Law) for purposes of any separate Offering or for an Eligible Employee participating in the Non-423 Component. For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves or is legally protected under Applicable Laws. Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and one (1) day following the commencement of such leave. The Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date in an Offering, determine (for each Offering under the 423 Component, on a uniform and nondiscriminatory basis or as otherwise permitted by Treasury Regulation Section 1.423-2) that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the Code, or (v) is a highly compensated employee within the meaning of Section 414(q) of the Code with compensation above a certain level or is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act; provided, that the exclusion is applied with respect to each Offering under the 423 Component in an identical manner to all highly compensated employees of the Employer whose employees are participating in that Offering. Each exclusion shall be applied with respect to an Offering under a 423 Component in a manner complying with U.S. Treasury Regulation Section 1.423-2(e)(2)(ii). Such exclusions may be applied with respect to an Offering under the Non-423 Component without regard to the limitations of Treasury Regulation Section 1.423-2.

 

 - 3 - 

 

 

(r)            “Employer” means the employer of the applicable Eligible Employee(s).

 

(s)           “Enrollment Date” means the first Trading Day of each Offering Period.

 

(t)            “Enrollment Window” is defined in Section 5(a) of the Plan.

 

(u)           “EU Prospectus Directive” shall have the meaning set forth in Section 8(c) of the Plan.

 

(v)           “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.

 

(w)          “Exercise Date” means the first Trading Day on or after the last day of the Offering Period.

 

(x)           “Fair Market Value” of a Share means, as of a particular date, (1) if the Shares are listed on a national securities exchange, the closing sales price per Share on the consolidated transaction reporting system for the principal national securities exchange on which the Shares are listed on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported, (2) if the Shares are not so listed, the average of the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be available, as reported by an inter-dealer quotation system, or (3) if none of the above are applicable, the Fair Market Value of a Share as determined in good faith by the Committee.

 

(y)           “Fiscal Year” means the fiscal year of the Company.

 

(z)           “423 Component” is defined in Section 1 of the Plan.

 

(aa)         “Group” shall have the meaning given the term for purposes of Section 13(d)(3) of the Exchange Act.

 

(bb)         “Incumbent Director” means a director of the Company (x) who was a director of the Company on the effective date of the Plan or (y) who becomes a director after such date and whose election, or nomination for election by the Company’s shareholders, was approved by a vote of a majority of the Incumbent Directors at the time of such election or nomination, except that any such director will not be deemed an Incumbent Director if his or her initial assumption of office occurs as a result of an actual or threatened solicitation of proxies by or on behalf of a Person other than the Board.

 

(cc)         “Major Asset Disposition” means the sale or other disposition in one transaction or a series of related transactions of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis.

 

(dd)         “New Exercise Date” means a new Exercise Date if the Administrator shortens any Offering Period then in progress.

 

(ee)         “Non-423 Component” is defined in Section 1 of the Plan.

 

 - 4 - 

 

 

(ff)           “Offering” means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4 of the Plan. For purposes of the Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees of one or more Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering. To the extent permitted by U.S. Treasury Regulation Section 1.423-2(a)(1), the terms of each Offering need not be identical; provided, that the terms of the Plan and an Offering together satisfy U.S. Treasury Regulation Section 1.423-2(a)(2) and (a)(3).

 

(gg)         “Offering Periods” means the periods of approximately six (6) months or such other period or periods set by the Administrator during which an option may be granted pursuant to the Plan and may be exercised, as determined under Section 4 of the Plan. The duration and timing of Offering Periods may be changed pursuant to Sections 4 and 20 of the Plan.

 

(hh)         “Other Extraordinary Event” is defined in Section 19(a) of the Plan.

 

(ii)           “Outstanding Voting Shares” means outstanding voting securities of the Company entitled to vote generally in the election of directors; and any specified percentage or portion of the Outstanding Voting Shares (or of other voting shares) is determined based on the combined voting power of such securities.

 

(jj)           “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

(kk)         “Parent Corporation Resulting From Such Business Combination” means the Company if its shares are not acquired or converted in the Business Combination and otherwise means the entity which as a result of such Business Combination owns the Company or all or substantially all the Company’s assets either directly or through one or more subsidiaries.

 

(ll)           “Participant” means an Eligible Employee that participates in the Plan.

 

(mm)       “Person” means an individual, entity or group.

 

(nn)        “Plan” means this SharkNinja, Inc. 2023 Employee Share Purchase Plan.

 

(oo)         “Proceeding” is defined in Section 30 of the Plan.

 

(pp)        “Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair Market Value of a Share on the Enrollment Date or on the Exercise Date, whichever is lower; provided, that the Purchase Price may be determined for subsequent Offering Periods by the Administrator subject to compliance with Section 423 of the Code (or any successor rule or provision or any other Applicable Law, regulation or stock exchange rule) or pursuant to Section 20 of the Plan.

 

(qq)        “Share” means an ordinary share of the Company.

 

(rr)          “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

 - 5 - 

 

 

(ss)         “Trading Day” means a day on which the national stock exchange upon which the Shares are listed is open for trading.

 

(tt)          “U.S. Treasury Regulations” means the Treasury regulations of the Code. Reference to a specific Treasury Regulation or Section of the Code shall include such Treasury Regulation or Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.

 

3.             Eligibility.

 

(a)           First Offering Period. In order to participate in the first Offering Period, an Eligible Employee must complete a subscription agreement during the applicable Enrollment Window before the first Offering Period begins.

 

(b)           Subsequent Offering Periods. Any Eligible Employee must complete a subscription agreement during the prescribed Enrollment Window before any given subsequent Offering Period in order to participate in the Plan, subject to the requirements of Section 5 of the Plan.

 

(c)           Non-U.S. Employees. Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Eligible Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code. In the case of the Non-423 Component, an Eligible Employee may be excluded from participation in the Plan or an Offering if the Administrator has determined that participation of such Eligible Employee is not advisable or practicable.

 

(d)           Limitations. Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose shares would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital shares of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such shares possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital shares of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase shares under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate that exceeds twenty-five thousand dollars ($25,000) worth of shares (determined at the Fair Market Value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.

 

4.             Offering Periods.

 

(a)           Frequency and Duration. The Administrator may establish Offering Periods of such frequency and duration as it may from time to time determine as appropriate.

 

 - 6 - 

 

 

(b)           First Offering Period. .The first Offering Period under the Plan shall commence on the date determined by the Administrator and shall end on the last Trading Day on or immediately preceding the earlier to occur of June 15 or December 15 of the year in which the first Offering Period commences (or at such other times as may be determined by the Administrator).

 

(c)           Successive Offering Periods. Unless the Administrator determines otherwise, a new Offering Period shall commence on the first Trading Day following the last Exercise Date of the immediately preceding Offering Period.

 

(d)           Additional Offering Periods. At the discretion of the Committee, additional Offering Periods may be conducted under the Plan. Such additional Offering Periods may, but need not, qualify under Section 423 of the Code. The Administrator shall determine the commencement and duration of each additional Offering Period, and additional Offering Periods may be consecutive or overlapping. The other terms and conditions of each additional Offering Period shall be those set forth in this Plan document, with such changes or additional features as the Administrator determines necessary to comply with Section 423 of the Code (or any successor rule or provision or any other Applicable Law, regulation or stock exchange rule). The Administrator shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future Offerings without shareholder approval.

 

(e)           Offering Period Limit. No Offering Period may last more than twenty-seven (27) months.

 

(f)            Applicable Offering Period. For purposes of calculating the Purchase Price, the applicable Offering Period shall be determined as follows:

 

(A)  Once a Participant is enrolled in the Plan for an Offering Period, such Offering Period shall continue to apply to him or her until the earliest of (x) the end of such Offering Period, (y) the end of his or her participation under Section 10 of the Plan or (z) re-enrollment for a subsequent Offering Period under Paragraph (B), below.

 

(B)  In the event that the Fair Market Value of a Share on the first trading day of the Offering Period for which the Participant is enrolled is higher than on the first trading day of any subsequent Offering Period, the Participant shall automatically be re-enrolled for such subsequent Offering Period.

 

5.             Participation.

 

(a)           First Offering Period. An Eligible Employee will be entitled to participate in the first Offering Period pursuant to Section 3(a) of the Plan only if such individual submits a subscription agreement authorizing Contributions in a form determined by the Administrator (which may be similar to the form attached hereto as Exhibit A) to the Company’s designated plan administrator (i) no earlier than the effective date of the Form S-8 registration statement that registers the offer and sale of Shares under this Plan and (ii) no later than ten (10) business days following the effective date of such S-8 registration statement or such other period of time as the Administrator may determine (the “Enrollment Window”).

 

 - 7 - 

 

 

(b)           Subsequent Offering Periods. An Eligible Employee may participate in the Plan pursuant to Section 3(b) of the Plan by (i) submitting to the Company’s share administration office (or its designee), on or before a date determined by the Administrator prior to an applicable Enrollment Date, a properly completed subscription agreement authorizing Contributions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment procedure determined by the Administrator.

 

6.             Contributions.

 

(a)           At the time a Participant enrolls in the Plan pursuant to Section 5 of the Plan, he or she will elect to have Contributions (in the form of payroll deductions or otherwise, to the extent permitted by the Administrator) made on each pay day during the Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation, which he or she receives on each pay day during the Offering Period (for illustrative purposes, should a pay day occur on an Exercise Date, a Participant will have any payroll deductions made on such day applied to his or her account under the then-current Offering Period). The Administrator, in its sole discretion, may permit all Participants in a specified Offering to contribute amounts to the Plan through payment by cash, check or other means set forth in the subscription agreement prior to each Exercise Date. A Participant’s subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.

 

(b)           In the event Contributions are made in the form of payroll deductions, such payroll deductions for a Participant will commence on the first pay day following the Enrollment Date and will end on the last pay day prior to the Exercise Date of such Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 10 hereof; provided, that for the first Offering Period, payroll deductions will commence on the first pay day on or following the end of the Enrollment Window.

 

(c)           All Contributions made for a Participant will be credited to his or her account under the Plan, and Contributions will be made in whole percentages of Compensation only. A Participant may not make any additional payments into such account.

 

(d)           A Participant may discontinue his or her participation in the Plan as provided in Section 10 of the Plan. Except as may be permitted by the Administrator, as determined in its sole discretion, a Participant may not change the rate of his or her Contributions during an Offering Period.

 

(e)           Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(d) hereof, a Participant’s Contributions may be decreased to zero percent (0%) at any time. Subject to Section 423(b)(8) of the Code and Section 3(d) hereof, Contributions will recommence at the rate originally elected by the Participant effective as of the beginning of next Offering Period, unless terminated by the Participant as provided in Section 10 of the Plan. A Participant may elect to decrease, but not increase, his or her Contributions to any amount less than fifteen percent (15%) of the Compensation only once during any then-current Offering Period.

 

 - 8 - 

 

 

(f)            Notwithstanding any provisions to the contrary in the Plan, the Administrator may allow Eligible Employees to participate in the Plan via cash contributions instead of payroll deductions if (i) payroll deductions are not permitted under applicable local law, (ii) the Administrator determines that cash contributions are permissible under Section 423 of the Code or (iii) for Participants participating in the Non-423 Component.

 

(g)           At the time the option is exercised, in whole or in part, or at the time some or all of the Shares issued under the Plan is disposed of (or any other time that a taxable event related to the Plan occurs), the Participant must make adequate provision for the Company’s or the Employer’s federal, state, local or any other tax liability payable to any authority including taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Shares (or any other time that a taxable event related to the Plan occurs). At any time, the Company or the Employer may, but will not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable to sale or early disposition of Shares by the Eligible Employee. In addition, the Company or the Employer may, but will not be obligated to, withhold from the proceeds of the sale of Shares or any other method of withholding the Company or the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).

 

7.             Grant of Option. On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of Shares determined by dividing such Eligible Employee’s Contributions accumulated prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date by the applicable Purchase Price; provided, that in no event will an Eligible Employee be permitted to purchase during each Offering Period, more than _________ Shares (subject, in each case, to any adjustment pursuant to Section 19 of the Plan); provided, further, that such purchase will be subject to the limitations set forth in Sections 3(d) and 13 of the Plan. The Eligible Employee may accept the grant of such option (i) with respect to the first Offering Period by submitting a properly completed subscription agreement in accordance with the requirements of Section 5 of the Plan on or before the last day of the Enrollment Window, and (ii) with respect to any subsequent Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5 of the Plan. The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of Shares that an Eligible Employee may purchase during each Offering Period. Exercise of the option will occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10 of the Plan. To the extent not otherwise exercised in full, the option will expire on the last day of the Offering Period.

 

8.             Exercise of Option.

 

(a)           Unless a Participant withdraws from the Plan as provided in Section 10 of the Plan, his or her option for the purchase of Shares will be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the option will be purchased for such Participant at the applicable Purchase Price with the accumulated Contributions from his or her account. No fractional Shares will be purchased; any Contributions accumulated in a Participant’s account, which are not sufficient to purchase a full share will be retained in the Participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the Participant as provided in Section 10. Any other funds left over in a Participant’s account after the Exercise Date will be returned to the Participant. During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by him or her.

 

 - 9 - 

 

 

(b)           If the Administrator determines that, on a given Exercise Date, the number of Shares with respect to which options are to be exercised may exceed (i) the number of Shares that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of Shares available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the Shares available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all Participants exercising options to purchase Shares on such Exercise Date, and continue all Offering Periods then in effect or (y) provide that the Company will make a pro rata allocation of the shares available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Shares on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 of the Plan. The Company may make a pro rata allocation of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the Company’s shareholders subsequent to such Enrollment Date.

 

(c)           Further, with respect to any Offering under the Non-423 Component that is made to Participants of Designated Companies within the European Economic Area (the “EEA”), if a prospectus may be required to be filed in accordance with EU Prospectus Directive No. 2003/71/EC, as currently and hereinafter amended (the “EU Prospectus Directive”), then until such time as a valid prospectus is on file or a prospectus is not required or is no longer required under the EU Prospectus Directive in connection with such Offerings under the Plan, the total Purchase Price payable for the aggregate number of Shares offered under this Plan under all Offerings that are not otherwise exempt from the EU Prospectus Directive made to Participants of Designated Companies within the EEA for any twelve (12)-month period shall not exceed EUR 5 million (the “EEA Limit”). If the Administrator determines that, on a given Enrollment Date, the total Purchase Price payable for the number of Shares with respect to which options are to be exercised may cause the EEA Limit to be exceeded, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the Shares available for purchase and under the EEA Limit on such Enrollment Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all Participants of Designated Companies within the EEA exercising options to purchase Shares by reference to the Offering Period beginning on that Enrollment Date, and continue all Offering Periods then in effect or (y) provide that the Company will make a pro rata allocation of the Shares available for purchase and under the EEA Limit on such Enrollment Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all Participants of Designated Companies within the EEA exercising options to purchase Shares by reference to the Offering Period beginning on that Enrollment Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 of the Plan.

 

 - 10 - 

 

 

9.             Delivery. As soon as reasonably practicable after each Exercise Date on which a purchase of Shares occurs, the Company will arrange the delivery to each Participant of the shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The Company may permit or require that shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. No Participant will have any voting, dividend, or other shareholder rights with respect to Shares subject to any option granted under the Plan until such shares have been purchased and delivered to the Participant as provided in this Section 9 of the Plan.

 

10.           Withdrawal.

 

(a)           A Participant may withdraw all but not less than all the Contributions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company’s share administration office (or its designee) a written notice of withdrawal in the form determined by the Administrator for such purpose (which may be similar to the form attached hereto as Exhibit B), or (ii) following an electronic or other withdrawal procedure determined by the Administrator. All of the Participant’s Contributions credited to his or her account will be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of shares will be made for such Offering Period. If a Participant withdraws from an Offering Period, Contributions will not resume at the beginning of the succeeding Offering Period, unless the Participant re-enrolls in the Plan in accordance with the provisions of Section 5 of the Plan.

 

(b)           A Participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or in succeeding Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.

 

11.           Termination of Employment. Upon a Participant’s ceasing to be an Eligible Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such Participant’s account during the Offering Period but not yet used to purchase Shares under the Plan will be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 of the Plan, and such Participant’s option will be automatically terminated. Unless determined otherwise by the Administrator in a manner that, with respect to an Offering under the 423 Component, is permitted by, and compliant with, Section 423 of the Code, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company shall not be treated as terminated under the Plan; however, no Participant shall be deemed to switch from an Offering under the Non-423 Component to an Offering under the 423 Component or vice versa unless (and then only to the extent) such switch would not cause the 423 Component or any Option thereunder to fail to comply with Section 423 of the Code.

 

 - 11 - 

 

 

12.           Interest. No interest will accrue on the Contributions of a participant in the Plan, except as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction, shall, with respect to Offerings under the 423 Component, apply to all Participants in the relevant Offering, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).

 

13.           Shares.

 

(a)           Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of Shares that will be made available for sale under the Plan will be _________ Shares.1 In addition, the number of Shares available for sale under the Plan will automatically increase on the first day of each year, for a period of nine years from the date the Plan is approved by the shareholders of the Company, commencing on January 1, 2025, and ending on (and including) January 1, 2033, in an amount equal to the lesser of (i) zero point fifteen percent (0.15)% of the total number of shares of the Company’s ordinary shares outstanding on December 31 of the preceding year; (ii) _________ Shares; or (iii) such lesser number of Shares as determined by the Board at any time prior to the first day of a given calendar year. The Shares available for sale under the Plan may be authorized but unissued Shares or reacquired Shares, including Shares purchased on the open market.

 

(b)           Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a Participant will only have the rights of an unsecured creditor with respect to such shares, and no right to vote or receive dividends or any other rights as a shareholder will exist with respect to such shares.

 

(c)           Shares to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse.

 

14.           Administration. The Plan will be administered by the Board or a Committee appointed by the Board, which Committee will be constituted to comply with Applicable Laws. The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to designate separate Offerings under the Plan, to designate Subsidiaries and Affiliates as participating in the 423 Component or Non-423 Component, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for the administration of the Plan (including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which sub-plans may take precedence over other provisions of this Plan, with the exception of Section 13(a) hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan). Unless otherwise determined by the Administrator, the employees eligible to participate in each sub-plan will participate in a separate Offering and will be in the Non-423 Component, unless such designation would cause the 423 Component to violate the requirements of Section 423 of the Code. Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share certificates that vary with applicable local requirements. The Administrator also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering to employees resident solely in the U.S. Every finding, decision and determination made by the Administrator will, to the full extent permitted by law, be final and binding upon all parties.

 

 

1 Note to Draft: To be equal to 1% of the total outstanding shares as of the distribution date.

 

 - 12 - 

 

 

15.           Designation of Beneficiary.

 

(a)           If permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any Shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such Participant of such shares and cash. In addition, if permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option. If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.

 

(b)           Such designation of beneficiary may be changed by the Participant at any time by notice in a form determined by the Administrator. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

 

(c)           All beneficiary designations will be in such form and manner as the Administrator may designate from time to time. Notwithstanding Sections 15(a) and (b) above, the Company and/or the Administrator may decide not to permit such designations by Participants in non-U.S. jurisdictions to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).

 

16.           Transferability. Neither Contributions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.

 

 - 13 - 

 

 

17.           Use of Funds. The Company may use all Contributions received or held by it under the Plan for any corporate purpose, and the Company will not be obligated to segregate such Contributions except under Offerings or for Participants in the Non-423 Component for which Applicable Laws require that Contributions to the Plan by Participants be segregated from the Company’s general corporate funds and/or deposited with an independent third party. Until Shares are issued, Participants will only have the rights of an unsecured creditor with respect to such shares.

 

18.           Reports. Individual accounts will be maintained for each Participant in the Plan. Statements of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the number of Shares purchased and the remaining cash balance, if any.

 

19.           Adjustments, Dissolution, Liquidation, Merger or Change in Control.

 

(a)           Adjustments. In the event that any subdivision or consolidation of outstanding Shares, declaration of a dividend payable in Shares or other share split, other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting the Shares or any distribution to holders of Shares of securities or property (other than normal cash dividends or dividends payable in Shares), the Administrator, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will, in such manner as it may deem equitable, adjust the number and class of Shares that may be delivered under the Plan, the Purchase Price per share and the number of Shares covered by each option under the Plan that has not yet been exercised, and the numerical limits of Sections 7 and 13 of the Plan.

 

(b)           Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, any Offering Period then in progress will be shortened by setting a New Exercise Date, and will terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date will be before the date of the Company’s proposed dissolution or liquidation. The Administrator will notify each Participant in writing or electronically, prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.

 

(c)           Merger or Change in Control. In the event of a merger or Change in Control, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period with respect to which such option relates will be shortened by setting a New Exercise Date on which such Offering Period shall end. The New Exercise Date will occur before the date of the Company’s proposed merger or Change in Control. The Administrator will notify each Participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.

 

 - 14 - 

 

 

20.           Amendment or Termination.

 

(a)           The Board or the Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason. If the Plan is terminated, the Board or the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of Shares on the next Exercise Date (which may be sooner than originally scheduled, if determined by the Administrator in its discretion), or may elect to permit Offering Periods to expire in accordance with their terms (and subject to any adjustment pursuant to Section 19 hereof). If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants’ accounts that have not been used to purchase Shares will be returned to the Participants (without interest thereon, except as otherwise required under Applicable Laws, as further set forth in Section 12 hereof) as soon as administratively practicable.

 

(b)           Without shareholder consent and without limiting Section 20(a) hereof, the Administrator will be entitled to change the Offering Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit Contributions in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed Contribution elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Shares for each Participant properly correspond with Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable that are consistent with the Plan.

 

(c)           In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:

 

(i)           amending the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), including with respect to an Offering Period underway at the time;

 

(ii)          altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;

 

(iii)         shortening any Offering Period by setting a New Exercise Date, including an Offering Period underway at the time of the Administrator action;

 

(iv)         reducing the maximum percentage of Compensation a Participant may elect to set aside as Contributions; and

 

(v)          reducing the maximum number of Shares a Participant may purchase during any Offering Period.

 

Such modifications or amendments will not require shareholder approval or the consent of any Plan Participants.

 

 - 15 - 

 

 

21.           Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

 

22.           Conditions Upon Issuance of Shares. Shares will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any share exchange upon which the shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.

 

23.           Code Section 409A. The 423 Component of the Plan is exempt from the application of Code Section 409A and any ambiguities herein will be interpreted to so be exempt from Code Section 409A. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Code Section 409A or that any provision in the Plan would cause an option under the Plan to be subject to Code Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Code Section 409A, but only to the extent any such amendments or action by the Administrator would not violate Code Section 409A. Notwithstanding the foregoing, the Company shall have no liability to a Participant or any other party if the option to purchase Shares under the Plan that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for any action taken by the Administrator with respect thereto. The Company makes no representation that the option to purchase Shares under the Plan is compliant with Code Section 409A.

 

24.           Term of Plan. The Plan will become effective upon the earlier to occur of its adoption by the Board or its approval by the shareholders of the Company. It will continue in effect for a term of ten years, unless sooner terminated under Section 20 of the Plan.

 

25.           Shareholder Approval. The Plan will be subject to approval by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted by the Board. Such shareholder approval will be obtained in the manner and to the degree required under Applicable Laws.

 

26.           Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of Delaware (except its choice-of-law provisions).

 

 - 16 - 

 

 

27.           No Right to Employment. Participation in the Plan by a Participant shall not be construed as giving a Participant the right to be retained as an employee of the Company or a Subsidiary or Affiliate, as applicable. Furthermore, the Employer may dismiss a Participant from employment at any time, free from any liability or any claim under the Plan.

 

28.           Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.

 

29.           Compliance with Applicable Laws. The terms of this Plan are intended to comply with all Applicable Laws and will be construed accordingly.

 

30.           Jurisdiction; Waiver of Jury Trial. Any suit, action or proceeding with respect to the Plan, or any judgment entered by any court of competent jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Massachusetts and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, the Company and each Participant shall irrevocably and unconditionally (a) submit in any proceeding relating to the Plan or any option, or for the recognition and enforcement of any judgment in respect thereof (a “Proceeding”), to the exclusive jurisdiction of the courts of the State of Massachusetts, the court of the United States of America for the District of Massachusetts, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and determined in such Massachusetts State court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Company and each Participant may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) waive all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to the Plan or any option, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, in the case of a Participant, at the Participant’s address shown in the books and records of the Company or, in the case of the Company, at the Company’s principal offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of the State of Delaware.

 

 - 17 - 

 

 

EXHIBIT A

 

SHARKNINJA, INC.

 

2023 EMPLOYEE SHARE PURCHASE PLAN

 

SUBSCRIPTION AGREEMENT

 

Original Application Offering Date:

 

Change in Payroll Deduction Rate

 

Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the SharkNinja, Inc. 2023 Employee Share Purchase Plan.

 

1.   I,                    , hereby elect to participate in the SharkNinja, Inc. (the “Company”) 2023 Employee Share Purchase Plan (the “Plan”) and subscribe to purchase shares of the Company’s Shares in accordance with this 2023 Employee Share Purchase Plan Subscription Agreement (the “Subscription Agreement”) and the Plan.

 

2.   I hereby authorize payroll deductions from each paycheck in the amount of % of my Compensation on each payday (from 0 to 15%) during the Offering Period in accordance with the Plan. (Please note that no fractional percentages are permitted.)

 

3.   I understand that said payroll deductions will be accumulated for the purchase of Shares at the applicable Purchase Price determined in accordance with the Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option and purchase Shares under the Plan at the end of each applicable Offering Period.

 

4.   I have received a copy of the complete Plan and its accompanying prospectus. I understand that my participation in the Plan is in all respects subject to the terms of the Plan. The Company reserves the right to modify the Plan and to impose other requirements on my participation in the Plan, on the option and on any Shares purchased under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons. I agree to be bound by such modifications regardless of whether notice is given to me of such event, subject, in any case, to my right to withdrawal from participation in the Plan. I further agree to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

 - 18 - 

 

 

5.   I understand the following paragraph applies to me if I am a U.S. taxpayer or subject to U.S. taxation: If I dispose of any shares received by me pursuant to an offering of the Plan in the United States within two (2) years after the Offering Date (the first day of the Offering Period during which I purchased such shares) or one (1) year after the Exercise Date, I will be treated for U.S. federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the Fair Market Value of the shares at the time such shares were purchased by me over the Purchase Price. I hereby agree to notify the Company in writing within thirty (30) days after the date of any disposition of my shares and I will make adequate provision for U.S. federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Shares. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Shares by me. If I dispose of such shares at any time after the expiration of the two (2)-year and one (1)-year holding periods, I understand that I will be treated for U.S. federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (a) the excess of the Fair Market Value of the shares at the time of such disposition over the Purchase Price, or (b) 15% of the Fair Market Value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.

 

6.   The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. I hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

7.   The Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to its conflict of laws provisions). For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties, I hereby submit and consent to the exclusive jurisdiction of the State of Massachusetts and agree that such litigation shall be conducted only in the courts of Boston, Massachusetts, or the federal courts for the U.S. for the District of Massachusetts, and no other courts.

 

8.   I hereby agree to be bound by the terms of the Plan and this Subscription Agreement. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan.

 

Employee’s Tax ID Number:  
   
Employee’s Address:  
   
   
   
   

 

 - 19 - 

 

 

I ACKNOWLEDGE AND UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT INCLUDING ITS APPENDICES AND MY PARTICIPATION IN THE PLAN WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS AFFIRMATIVELY TERMINATED BY ME.

 

Dated:    

 

Signature of Employee:    

 

 - 20 - 

 

 

APPENDIX B

 

SHARKNINJA, INC.

 

2023 EMPLOYEE SHARE PURCHASE PLAN NOTICE OF WITHDRAWAL

 

The undersigned participant in the Offering Period of the SharkNinja, Inc. 2023 Employee Share Purchase Plan that began on               ,               (the “Offering Date”) hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the Contributions credited to his or her account at the time of withdrawal with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned will be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.

 

  Name and Address of Participant:
   
   
   
   
   
   
   
   
  Signature:
   
   
   
  Date:                        

 

 - 21 - 

Exhibit 10.4

 

SEPARATION AND DISTRIBUTION AGREEMENT

 

by and among

 

JS GLOBAL LIFESTYLE COMPANY LIMITED,

 

SHARKNINJA GLOBAL SPV. LTD.

 

and

 

SHARKNINJA, INC.

 

Dated as of [•], 2023

 

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

Section 1.1 General 2
Section 1.2 References; Interpretation 26
     
ARTICLE II
     
THE SEPARATION
     
Section 2.1 General 27
Section 2.2 Restructuring: Transfer of Assets; Assumption of Liabilities 27
Section 2.3 Treatment of Shared Contracts 30
Section 2.4 Intercompany Accounts, Loans and Agreements 32
Section 2.5 Limitation of Liability; Intercompany Contracts 33
Section 2.6 Transfers Not Effected at or Prior to the SharkNinja TopCo Contribution; Transfers Deemed Effective as of the SharkNinja TopCo Contribution 34
Section 2.7 Conveyancing and Assumption Instruments 37
Section 2.8 Further Assurances; Ancillary Agreements 37
Section 2.9 Novation of Liabilities; Indemnification 39
Section 2.10 Guarantees; Releases; Payoffs 40
Section 2.11 Disclaimer of Representations and Warranties 42
Section 2.12 Cash Management 43
     
ARTICLE III
     
Certain Actions at or prior to the distribution
     
Section 3.1 Securities Law Matters 43
Section 3.2 Ancillary Agreements 44
Section 3.3 Stock Exchange Listing Application. 44
Section 3.4 Governance 45
Section 3.5 Distribution Agent 46
Section 3.6 Transfer Agent 46
Section 3.7 JS Global Shareholder Approval 46
Section 3.8 SharkNinja Repurchase 46

 

i

 

 

ARTICLE IV
     
The Distribution
     
Section 4.1 Form of Distribution 46
Section 4.2 Manner of Distribution 46
Section 4.3 Distribution; Delivery of Shares 46
Section 4.4 No Fractional Shares 47
Section 4.5 Conditions to Distribution 47
Section 4.6 Additional Matters 48
Section 4.7 Tax Withholding 49
     
ARTICLE V
     
CERTAIN COVENANTS
     
Section 5.1 Cooperation 49
Section 5.2 Retained Names 50
Section 5.3 No Hire and No Solicitation of Employees 51
Section 5.4 Corporate Opportunities 52
Section 5.5 Dividend 52
Section 5.6 Non-Assertion 52
     
ARTICLE VI
     
Financial and Other Covenants
     
Section 6.1 Disclosure and Financial Controls 53
Section 6.2 Auditors and Audits; Annual Statements and Accounting 56
Section 6.3 Other Covenants of SharkNinja 57
Section 6.4 Other Covenants of JS Global 58
     
ARTICLE VII
     
Mutual release; INDEMNIFICATION
     
Section 7.1 Release of Pre-Disposition Date Claims 59
Section 7.2 Indemnification by JS Global 62
Section 7.3 Indemnification by SharkNinja 62
Section 7.4 Procedures for Indemnification 63
Section 7.5 Cooperation in Defense and Settlement 65
Section 7.6 Indemnification Payments 67
Section 7.7 Indemnification Obligations Net of Insurance Proceeds and Other Amounts 67
Section 7.8 Contribution 69
Section 7.9 Additional Matters; Survival of Indemnities 69

 

ii

 

 

ARTICLE VIII
     
PRESERVATION OF RECORDS; ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE
     
Section 8.1 Preservation of Corporate Records 69
Section 8.2 Access to Information 70
Section 8.3 Disposition of Information 72
Section 8.4 Witness Services 73
Section 8.5 Reimbursement; Other Matters 73
Section 8.6 Confidentiality; Non-Use 73
Section 8.7 Privilege Matters 75
Section 8.8 Ownership of Information 78
Section 8.9 Personal Data 78
Section 8.10 Other Agreements 78
     
ARTICLE IX
     
DISPUTE RESOLUTION
     
Section 9.1 Negotiation 79
Section 9.2 Arbitration 79
Section 9.3 Specific Performance 81
Section 9.4 Treatment of Arbitration 81
Section 9.5 Continuity of Service and Performance 81
Section 9.6 Consolidation 81
     
ARTICLE X
     
INSURANCE
     
Section 10.1 Insurance Matters 81
     
ARTICLE XI
     
MISCELLANEOUS
     
Section 11.1 Entire Agreement; Construction 82
Section 11.2 Ancillary Agreements 83
Section 11.3 Counterparts 83
Section 11.4 Survival of Agreements 83
Section 11.5 Expenses 83
Section 11.6 Notices 84
Section 11.7 Waivers; Consents 85
Section 11.8 Assignment 85
Section 11.9 Successors and Assigns 85
Section 11.10 Termination and Amendment 85

 

iii

 

 

Section 11.11 Payment Terms 86
Section 11.12 No Circumvention 86
Section 11.13 Subsidiaries 86
Section 11.14 Third Party Beneficiaries 87
Section 11.15 Title and Headings 87
Section 11.16 Exhibits and Schedules 87
Section 11.17 Governing Law 87
Section 11.18 Severability 87
Section 11.19 Public Announcements 87
Section 11.20 No Duplication; No Double Recovery 88
Section 11.21 Tax Treatment of Payments 88
Section 11.22 No Admission of Liability 88
Section 11.23 Advisors 89

 

List of Exhibits

 

Exhibit A Employee Matters Agreement
Exhibit B Transition Services Agreement
Exhibit C Brand License Agreement
Exhibit D Sourcing Services Agreement – Joyoung
Exhibit E Product Development Agreement
Exhibit F Sourcing Services Agreement – JS Global
Exhibit G Amended and Restated Memorandum and Articles of Association of SharkNinja

 

iv

 

 

SEPARATION AND DISTRIBUTION AGREEMENT

 

This SEPARATION AND DISTRIBUTION AGREEMENT (this “Agreement”), dated as of [•], 2023 is entered into by and among JS Global Lifestyle Company Limited, an exempted company with limited liability incorporated in the Cayman Islands (“JS Global”), and SharkNinja Global SPV Ltd., an exempted company with limited liability incorporated in the Cayman Islands and a wholly owned subsidiary of JS Global (“SharkNinja”) and SharkNinja, Inc., an exempted company with limited liability incorporated in the Cayman Islands and a wholly owned subsidiary of JS Global (“SharkNinja TopCo”). “Party” or “Parties” means JS Global, SharkNinja or SharkNinja TopCo, individually or collectively, as the case may be. Capitalized terms used and not defined herein shall have the meaning set forth in Section 1.1.

 

W I T N E S S E T H:

 

WHEREAS, JS Global, acting through its direct and indirect Subsidiaries, currently conducts the JS Global Business and the SharkNinja Business;

 

WHEREAS, the Board of Directors of JS Global (the “JS Global Board”) has determined that it is appropriate, desirable and in the best interests of JS Global and its shareholders to separate JS Global into two separate, publicly traded companies, one for each of (i) the JS Global Business, which, following the Disposition Date, shall be owned and conducted, directly or indirectly, by JS Global and its Subsidiaries (other than SharkNinja TopCo and its Subsidiaries) and (ii) the SharkNinja Business, which, following the Disposition Date, shall be owned and conducted, directly or indirectly, by SharkNinja TopCo and its Subsidiaries following the Distribution;

 

WHEREAS, in order to effect such separation, the JS Global Board has determined that it is appropriate, desirable and in the best interests of JS Global and its shareholders for JS Global to undertake the Internal Reorganization and, in connection therewith, effect the Internal Reorganization Contribution and the Internal Reorganization Distribution;

 

WHEREAS, in connection with (but separate and apart from) the Internal Reorganization, JS Global (i) formed SharkNinja TopCo, and (ii) shall, following such formation and at least one day after the Internal Reorganization Date, and at least one day before the Distribution (as defined below), contribute all of its interests in SharkNinja to SharkNinja TopCo in exchange for shares in SharkNinja TopCo (the “SharkNinja TopCo Contribution”);

 

WHEREAS, on the Disposition Date, JS Global will transfer all of its SharkNinja Ordinary Shares to (i) each holder of JS Global Ordinary Shares (each a “JS Global Shareholder” and collectively, the “JS Global Shareholders”) that is (a) a Record Holder and (b) legally permitted to hold such SharkNinja Ordinary Shares, which includes the JS Global Insider Shareholders (the “Eligible Persons”), and (ii) the Trust on behalf of each JS Global Shareholder who is (A) a Record Holder and (B) is not legally permitted to hold such SharkNinja Ordinary Shares (the “Ineligible Persons”), by means of a distribution by JS Global to the (x) Eligible Persons and (y) the Trust on behalf of the Ineligible Persons of all of its SharkNinja Ordinary Shares (the “Distribution”);

 

 

 

WHEREAS, the trustee of the Trust (the “Trustee”) will engage one or more licensed brokers to sell the SharkNinja Ordinary Shares of the Ineligible Persons promptly after the Disposition Date over the Stock Exchange at or close to the intraday volume-weighted average price for any trading day within the ninety (90) day period following the Distribution (the “Sell Down Period”), with the sale of such SharkNinja Ordinary Shares being subject to sufficient liquidity in the trading of the SharkNinja Ordinary Shares on the Stock Exchange and general market conditions in the United States (the “Sell Down”);

 

WHEREAS, the Trustee will transfer the net sale proceeds from the Sell Down (the “Net Proceeds”) back to the Hong Kong Securities Clearing Company Limited, a wholly owned subsidiary of Hong Kong Exchange and Clearing Limited, which will subsequently transfer the Net Proceeds (i) to China Securities Depository and Clearing Corporation Limited, which will subsequently transfer the Net Proceeds to the Ineligible Persons on a pro rata basis or (ii) directly to the Ineligible Persons on a pro rata basis;

 

WHEREAS, (i) the JS Global Board has (w) determined that the transactions contemplated by this Agreement and the Ancillary Agreements, including the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution and the Distribution, have a valid business purpose, are in furtherance of and consistent with its business strategy and are in the best interests of JS Global and its shareholders as a whole, (x) approved this Agreement and each of the Ancillary Agreements to which it is party, (y) directed that the approval of the transactions contemplated by this Agreement and the Connected Transactions by the JS Global Shareholders be sought and (z) recommended the approval of the transactions contemplated hereby and thereby by the JS Global Shareholders, (ii) the Board of Directors of SharkNinja (the “SharkNinja Board”) has approved this Agreement and each of the Ancillary Agreements (to the extent SharkNinja is a party thereto) and (iii) the Board of Directors of SharkNinja TopCo (the “SharkNinja TopCo Board”) has approved this Agreement and each of the Ancillary Agreements (to the extent SharkNinja TopCo is a party thereto); and

 

WHEREAS, the Parties desire to set forth the principal corporate transactions required to effect the Internal Reorganization Distribution, the Internal Reorganization Contribution, the SharkNinja TopCo Contribution, the Internal Reorganization and the Distribution (collectively, the “Transactions”), and certain other agreements relating to the relationship of JS Global and SharkNinja and their respective Subsidiaries following the Distribution.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, the Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

Section 1.1      General. As used in this Agreement, the following terms shall have the following meanings:

 

(1)          “AAA” shall have the meaning set forth in Section 9.2.

 

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(2)          “Acceptable Alternative Arrangement” shall have the meaning set forth in Section 2.3(a).

 

(3)          “Action” shall mean any demand, action, claim, suit, countersuit, arbitration, inquiry, subpoena, case, litigation, proceeding or investigation (whether civil, criminal, administrative or investigative) by or before any court or grand jury, any Governmental Entity or any arbitration or mediation tribunal.

 

(4)          “Affiliate” shall mean, when used with respect to a specified Person and at a point in, or with respect to a period of, time, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person at such point in or during such period of time. For the purposes of this definition, “control”, when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that, from and after the Disposition Date, solely for purposes of this Agreement, (i) no member of the SharkNinja Group shall be deemed an Affiliate of any member of the JS Global Group and (ii) no member of the JS Global Group shall be deemed an Affiliate of any member of the SharkNinja Group. The Parties agree and acknowledge that the obligations of the Parties and their respective Affiliates pursuant to this Agreement shall not be impacted by way of (i) Wang Xuning’s ownership of SharkNinja or JS Global or (ii) Wang Xuning, Timothy Roberts Warner or Hui Chi Kin Max serving as a director, officer or employee of any member of the SharkNinja Group or the JS Global Group, in each case of the foregoing clauses (i)-(ii), except as otherwise expressly set forth in this Agreement.

 

(5)          “Agreement” shall have the meaning set forth in the Preamble.

 

(6)          “Ancillary Agreements” shall mean the Transition Services Agreement, the Employee Matters Agreement, the Brand License Agreement, the Sourcing Services Agreement – Joyoung, the Sourcing Services Agreement – JS Global, the Product Development Agreement, the Memorandum and Articles, any Continuing Arrangements, any and all Conveyancing and Assumption Instruments, and any other agreements to be entered into by and between any member of the JS Global Group, on one hand, and any member of the SharkNinja Group, on the other hand, at, prior to or after the Disposition Date in connection with the Distribution.

 

(7)          “APAC Region” shall mean the following: Australia, China (including the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan), India, Indonesia, Japan, Republic of Korea, New Zealand, Singapore, Thailand, Vietnam and other member countries, as of the Disposition Date, of the Association of Southeast Asian Nations.

 

(8)          “Arbitral Tribunal” shall have the meaning set forth in Section 9.2(a).

 

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(9)           “Asset Transferors” shall mean the entities transferring Assets to SharkNinja or JS Global, as the case may be, or one of their respective Subsidiaries in order to consummate the transactions contemplated hereby.

 

(10)          “Assets” shall mean all rights (including Intellectual Property), title and ownership interests in and to all properties, claims, Contracts, businesses or assets (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible or intangible, whether accrued, contingent or otherwise, in each case, whether or not recorded or reflected on the books and records or financial statements of any Person.

 

(11)          “Assume” shall have the meaning set forth in Section 2.2(c); and the terms “Assumed” and “Assumption” shall have their correlative meanings.

 

(12)          “BOC-JS Global Facilities” shall mean, collectively, the term loan facility and the revolver facility described on Schedule 1.1(12).

 

(13)          “BOC Released Facilities” shall mean, collectively, the BOC-JS Global Facilities and the BOC-SharkNinja Facilities.

 

(14)          “BOC-SharkNinja Facilities” shall mean, collectively, the term loan facility and the revolver facility described on Schedule 1.1(14).

 

(15)          “Brand License Agreement” shall mean the Brand License Agreement by and between JS Global Trading and SharkNinja Europe Ltd., a private limited company incorporated under the laws of England and Wales with company number 8492819, having its registered office at 1st/2nd Floor Building 3150, Thorpe Park, Century Way, Leeds, West Yorkshire, LS15 8ZB, United Kingdom, in the form attached hereto as Exhibit C.

 

(16)          “Business” shall mean the JS Global Business or the SharkNinja Business, as applicable.

 

(17)          “Business Day” shall mean any day other than Saturday or Sunday and any other day on which commercial banking institutions located in New York, New York, Hong Kong and the People’s Republic of China are required or authorized by Law, to remain closed.

 

(18)          “Business Entity” shall mean any corporation, partnership, limited liability company, joint venture or other entity which may legally hold title to Assets.

 

(19)          “Cash Equivalents” shall mean (i) cash and (ii) checks, certificates of deposit having a maturity of less than one year, money orders, marketable securities, money market funds, commercial paper, short-term instruments and other cash equivalents, funds in time and demand deposits or similar accounts, and any evidence of Indebtedness issued or guaranteed by any Governmental Entity, minus the amount of any outbound checks, plus the amount of any deposits in transit.

 

(20)          “Chairman” shall have the meaning set forth in Section 3.4(b)(i)(3).

 

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(21)          “Change of Control” shall mean, as applicable, the occurrence after the Distribution of any of the following: (a) the sale, conveyance, transfer or other disposition (however accomplished), in one or a series of related transactions, of all or substantially all of the assets of such party’s Group to a third Person that is not an Affiliate of such party prior to such transaction or the first of such related transactions; (b) the consolidation, merger or other business combination of such party with or into any other entity, immediately following which the stockholders or shareholders of such party immediately prior to such transaction fail to own in the aggregate at least a majority of the voting power in the election of directors of all the outstanding voting securities of the surviving party in such consolidation, merger or business combination or of its ultimate publicly traded parent entity; (c) a transaction or series of transactions in which any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) acquires at least thirty-five percent (35%) of the outstanding voting securities of such party and effective control of such party (other than (i) a reincorporation, holding company merger or similar corporate transaction in which each of such party’s stockholders or shareholders owns, immediately thereafter, interests in the new parent company in substantially the same percentage as such stockholder or shareholder owned in such party immediately prior to such transaction, or (ii) in connection with a transaction described in clause (b), which shall be governed by such clause (b)); or (d) a majority of the board of directors of such party ceasing to consist of individuals who have become directors as a result of being nominated or elected by a majority of such party’s directors. For the avoidance of doubt, the previous determination that a “Change of Control” has occurred shall not prejudice the determination as to whether any other subsequent events, on one or more occasions, meet the definition of “Change of Control.”

 

(22)          “Code” shall mean the United States Internal Revenue Code of 1986, as amended.

 

(23)          “Collective Benefit Services” shall mean the legal and other professional services that have been and will be provided prior to the Distribution for the collective benefit of each of the members of both Parties.

 

(24)          “Commission” shall mean the United States Securities and Exchange Commission.

 

(25)          “Company Policies” shall mean all insurance policies, insurance contracts and claim administration contracts of any kind of any member of the JS Global Group, which are in effect at the Disposition Date, except all insurance policies, insurance contracts and claim administration contracts established in contemplation of the Internal Reorganization Contribution and the Internal Reorganization Distribution to cover any member of the SharkNinja Group after the Disposition Date.

 

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(26)          “Confidential Information” shall mean all non-public, confidential or proprietary Information to the extent concerning a Party, its Group and/or its Subsidiaries or with respect to SharkNinja, the SharkNinja Business, any SharkNinja Assets or any SharkNinja Liabilities or with respect to JS Global, the JS Global Business, any JS Global Assets or any JS Global Liabilities, including any such Information that was acquired by any Party after the Disposition Date pursuant to Article VIII or otherwise in accordance with this Agreement, or that was provided to a Party or its Group by a Third Party in confidence, including (a) any and all technical information relating to the design, operation, testing, test results, development and manufacture of any Party’s product (including product specifications and documentation; engineering, design and manufacturing drawings, diagrams and illustrations; formulations and material specifications; laboratory studies and benchmark tests; quality assurance policies procedures and specifications; evaluation and/validation studies; assembly code, software, firmware, programming data, databases and all information referred to in the same); product costs, margins and pricing; as well as product marketing studies and strategies; all other methodologies, procedures, techniques and Know-How related to research, engineering, development and manufacturing; (b) information, documents and materials relating to the Party’s financial condition, management and other business conditions, prospects, plans, procedures, infrastructure, security, information technology procedures and systems, and other business or operational affairs; (c) pending unpublished patent applications and trade secrets; and (d) any other data or documentation resident, existing or otherwise provided in a database or in a storage medium, permanent or temporary, intended for confidential, proprietary and/or privileged use by a Party, which, prior to or following the Disposition Date, has been disclosed by a Party or its Subsidiaries to another Party or its Subsidiaries, or otherwise has come into the possession of, the other, including pursuant to the access provisions of Section 8.2 or Section 6.2(c) or any other provision of this Agreement. Notwithstanding the foregoing, Confidential Information (a) (x) comprising or included in SharkNinja Intellectual Property shall be deemed to be the Confidential Information of SharkNinja and (y) comprising or included in the JS Global Retained IP shall be deemed to be the Confidential Information of the JS Global Group, and in each case (b) shall not include any Information that is (i) in the public domain, (ii) lawfully acquired after the Disposition Date by such Party or its Subsidiaries from a Third Party not known to be subject to confidentiality obligations with respect to such Information or (iii) independently developed by the receiving Party after the Disposition Date without reference to any Confidential Information.

 

As used herein, by example and without limitation, Confidential Information shall mean any information of a Party intended or marked as confidential, proprietary and/or privileged.

 

(27)          “Connected Transactions” shall mean the transactions with the JS Global Group under this Agreement and the Ancillary Agreements that will constitute connected transactions under the Hong Kong Listing Rules upon completion of the Distribution and which will be subject to the independent shareholders’ approval requirement under the Hong Kong Listing Rules.

 

(28)          “Consent” shall mean any consent, waiver, notice, report or other filing obtained, made or to be obtained from or made, including with respect to any Contract, or any registration, notification, dossier, appendices, license, permit, approval, authorization to be obtained from, or approval from, or notification requirement to, any third parties, including any Third Party to a Contract and any Governmental Entity.

 

(29)          “Continuing Arrangements” shall mean:

 

(i)          those arrangements set forth on Schedule 1.1(29)(i);

 

(ii)         this Agreement and the Ancillary Agreements (and each other Contract expressly contemplated by this Agreement or any Ancillary Agreement to be entered into or continued by any of the Parties or any of the members of their respective Groups); and

 

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(iii)        any Contracts or intercompany accounts solely between or among members of the SharkNinja Group.

 

(30)          “Contract” shall mean any agreement, contract, subcontract, obligation, binding understanding, note, indenture, instrument, option, lease, sublease, promise, arrangement, release, warranty, license, sublicense, insurance policy, benefit plan, purchase order or legally binding commitment or undertaking of any nature (whether written or oral and whether express or implied).

 

(31)          “Controlling Shareholder” when used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise.

 

(32)          “Conveyancing and Assumption Instruments” shall mean, collectively, the various Contracts, including any related asset transfer agreements and share transfer agreements, and other documents (including bills of sale, stock powers, share transfer forms, certificates of title, assignments of Contracts, assignments of Intellectual Property, Consents (to the extent obtained), permits, easements, leases, deeds and other instruments of conveyance) entered into prior to the Disposition Date and to be entered into to effect the Transfer of Assets and the Assumption of Liabilities in the manner contemplated by this Agreement pursuant to New York Law, the Laws of one of the other states of the U.S. or the Laws of foreign jurisdictions, or otherwise relating to, arising out of or resulting from the transactions contemplated by this Agreement, in such form or forms as the applicable Parties thereto agree.

 

(33)          “Credit Support Instruments” shall mean any letters of credit, performance bonds, surety bonds, bankers acceptances, or other similar arrangements.

 

(34)          “Data Controller” shall have the meaning of the term “controller” set forth in the Data Protection Laws.

 

(35)          “Data Protection Laws” shall mean any and all Laws concerning the privacy, protection and security of personal information Laws throughout the world, including the GDPR and any national law supplementing the GDPR, the UK GDPR, and any regulations, or regulatory requirements, and guidance applicable to the Processing of Personal Data (as amended and/or replaced from time to time).

 

(36)          “Decision on Interim Relief” shall have the meaning set forth in Section 9.2(d).

 

(37)          “Disposition Date” shall mean the date, as determined by the JS Global Board, on which the Distribution occurs.

 

(38)          “Dispute Notice” shall have the meaning set forth in Section 9.1.

 

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(39)          “Disputes” shall have the meaning set forth in Section 9.1.

 

(40)          “Distribution” shall have the meaning set forth in the Recitals.

 

(41)          “Distribution Agent” shall mean Computershare Inc., a Delaware company and Computershare Trust Company, N.A., a federally chartered trust company.

 

(42)          “Distribution Disclosure Documents” shall mean (a) any registration statement filed or to be filed by SharkNinja or SharkNinja TopCo with the Commission to effect the registration of SharkNinja Ordinary Shares in connection with the Distribution and the Sell Down (including any registration statement on Form 10 or Form F-1 or Form F-8 related to securities to be offered under any employee benefit plan), and also includes any amendment or supplement thereto, information statement, prospectus, offering memorandum, offering circular, periodic report or similar disclosure document, whether or not filed with the Commission or any other Governmental Entity, and (b) any current reports on Form 6-K filed or furnished with the Commission by SharkNinja or SharkNinja TopCo in connection with the Distribution.

 

(43)          “Duplicate” shall mean the entry by one Party or a member of its Group into a Contract with a Third Party on identical terms and conditions to a separate Contract which already exists between such Third Party and the other Party or a member of its Group.

 

(44)          “Eligible Persons” shall have the meaning set forth in the Recitals.

 

(45)          “Emergency Arbitrator” shall mean an emergency arbitrator appointed by the AAA in accordance with the AAA Rules, as specified in Section 9.2(e).

 

(46)          “Employee Matters Agreement” shall mean the Employee Matters Agreement by and between JS Global and SharkNinja TopCo, in the form attached hereto as Exhibit A.

 

(47)          “Environmental Laws” shall mean all Laws relating to pollution or protection of human health or safety or the environment, including Laws relating to the exposure to, or Release, threatened Release or the presence of Hazardous Substances, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, transport or handling of Hazardous Substances and all Laws with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Substances, and all Laws relating to endangered or threatened species of fish, wildlife and plants and the management or use of natural resources.

 

(48)          “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

 

(49)          “Extraordinary General Meeting” shall mean the meeting of the JS Global Shareholders entitled to vote as of the Record Date approving the transactions contemplated by this Agreement and the Connected Transactions.

 

(50)          “Final Determination” shall mean the final resolution of liability for any Tax for any Tax Period, which resolution may be for a specific issue or adjustment or for a Tax Period, by or as a result of (i) a final decision, judgment, decree or other order by a court of competent jurisdiction that can no longer be appealed, (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the Laws of a state, local or foreign taxing jurisdiction, (iii) any allowance of a refund or credit in respect of an overpayment of a Tax, but only after the expiration of all periods during which such refund or credit may be recovered (including by way of withholding or offset) by the jurisdiction imposing such Tax, (iv) a final settlement resulting from a treaty-based competent authority determination, or (v) any other final disposition, including by reason of the expiration of the applicable statute of limitations, the execution of a pre-filing agreement with the IRS or other Taxing Authority, or by mutual agreement of the Parties.

 

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(51)          “Financial Delivery Practices” shall have the meaning set forth in Section 6.1(c).

 

(52)          “Financial Statements” shall mean the SharkNinja Semi-Annual Financial Statements.

 

(53)          “Force Majeure Event” shall mean, with respect to any Person, an event beyond the reasonable control of such Person (or any Person acting on its behalf), which by its nature could not have been foreseen by such Person (or such Person acting on its behalf), or, if it could have been foreseen, was unavoidable, and includes acts of God, storms, floods, riots, pandemics, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities or other national or international calamity or one or more acts of terrorism or failure of energy sources or distribution facilities.

 

(54)          “Former Business” shall mean any corporation, partnership, entity, division, business unit or business (in each case, including any assets and liabilities comprising the same) that has been sold, conveyed, assigned, transferred, spun-off, split-off or otherwise disposed of or divested (in whole or in part) to a Person or Persons that is not a member of the SharkNinja Group or the JS Global Group or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated (in whole or in part), in each case, prior to the Disposition Date.

 

(55)          “GDPR” shall mean the General Data Protection Regulation (EU) 2016/679.

 

(56)          “Government Official” shall mean (i) any elected or appointed governmental official (e.g., a member of a ministry of health), (ii) any employee or person acting for or on behalf of a governmental official, agency or enterprise performing a governmental function, (iii) any candidate for public office, political party officer, employee or person acting for or on behalf of a political party or candidate for public office or (iv) any person otherwise categorized as a Government Official under local Law. As used in this definition, “Government” is meant to include all levels and subdivisions of U.S. and non-U.S. governments (i.e., local, regional or national and administrative, legislative or executive).

 

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(57)          “Governmental Approvals” shall mean any notices or reports to be submitted to, or other registrations or filings to be made with, or any consents, approvals, licenses, permits or authorizations to be obtained from, any Governmental Entity.

 

(58)          “Governmental Entity” shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission, department, board, bureau or court, whether domestic, foreign, multinational or supranational exercising executive, legislative, judicial, regulatory, self-regulatory or administrative functions of or pertaining to government and any executive official thereof.

 

(59)          “Governmental Filing” shall have the meaning set forth in Section 7.5(c).

 

(60)          “Group” shall mean (i) with respect to JS Global, the JS Global Group and (ii) with respect to SharkNinja, the SharkNinja Group.

 

(61)          “Hazardous Substances” shall mean (a) any substances defined, listed, classified or regulated as “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants,” “pollutants,” “wastes,” “radioactive materials,” “petroleum,” “oils” or designations of similar import under any Environmental Law, or (b) any other chemical, material or substance that is regulated or for which liability can be imposed under any Environmental Law.

 

(62)          “Hong Kong Listing Rules” refers to the rules governing the listing of securities on The Stock Exchange of Hong Kong Limited.

 

(63)          “IFRS” means international financial reporting standards, consistently applied.

 

(64)          “Indebtedness” shall mean, with respect to any Person, (i) the principal amount, prepayment and redemption premiums and penalties (if any), unpaid fees and other monetary obligations in respect of any indebtedness for borrowed money, whether short-term or long term, and all obligations evidenced by bonds, debentures, notes, other debt securities or similar instruments, (ii) any indebtedness arising under any capital leases (excluding, for the avoidance of doubt, any real estate leases), whether short-term or long term, (iii) all liabilities secured by any Security Interest on any assets of such Person, (iv) all liabilities under any interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements, (v) all liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect such Person against fluctuations in interest rates, (vi) all obligations for the deferred purchase price of property or services, (vii) all liabilities under any Credit Support Instruments, (viii) all interest, fees and other expenses owed with respect to indebtedness described in the foregoing clauses (i) through (vii), and (ix) without duplication, all guarantees of indebtedness referred to in the foregoing clauses (i) through (viii).

 

(65)          “Indemnifiable Loss” and “Indemnifiable Losses” shall mean any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder).

 

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(66)          “Indemnifying Party” shall have the meaning set forth in Section 7.4(a).

 

(67)          “Indemnitee” shall have the meaning set forth in Section 7.4(a).

 

(68)          “Indemnity Payment” shall have the meaning set forth in Section 7.7(a).

 

(69)          “Ineligible Persons” shall have the meaning set forth in the Recitals.

 

(70)          “Information” shall mean information, content and data (including Personal Data) in written, oral, electronic, computerized, digital or other tangible or intangible media, including (i) books and records, whether accounting, legal or otherwise, ledgers, studies, reports, surveys, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, marketing plans, customer names and information (including prospects), technical information relating to these design, operation, testing, test results, development and manufacture of any Party’s or its Group’s products or facilities (including product or facility specifications and documentation; engineering, design and manufacturing drawings, diagrams, layouts, maps and illustrations; formulations and material specifications; laboratory studies and benchmark tests; quality assurance policies procedures and specifications; evaluation and/validation studies; process control and/or shop-floor control strategy, logic or algorithms; assembly code, software, firmware, programming data, databases and all information referred to in the same); product costs, margins and pricing; as well as product marketing studies and strategies; all other methodologies, procedures, techniques and Know-How related to research, engineering, development and manufacturing; communications, correspondence, materials, product literature, artwork, files, documents; and (ii) financial and business information, including earnings reports and forecasts, macro-economic reports and forecasts, all cost information (including supplier records and lists), sales and pricing data, business plans, market evaluations, surveys, credit-related information and other such information as may be needed for reasonable compliance with reporting, disclosure, filing or other requirements, including under applicable securities laws or regulations of securities exchanges.

 

(71)          “Insurance Proceeds” shall mean those monies (i) received by an insured from an insurance carrier (excluding any captive insurance maintained by JS Global or its Subsidiaries) or (ii) paid by an insurance carrier (excluding any captive insurance maintained by JS Global or its Subsidiaries) on behalf of an insured, in either case net of any applicable deductible or retention.

 

(72)          “Intellectual Property” shall mean any and all rights in or to all intellectual property, including all U.S. and foreign: (i) trademarks, trade dress, service marks, certification marks, logos, slogans, design rights, names, corporate names, trade names, Internet domain names, social media accounts and addresses and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (collectively, “Trademarks”); (ii) patents and patent applications, and any and all related national or international counterparts thereto, including any divisionals, continuations, continuations-in-part, reissues, reexaminations, substitutions and extensions thereof, and any utility models, petty patents and similar rights (collectively, “Patents”); (iii) copyrights and copyrightable subject matter; (iv) rights in or with respect to computer programs (whether in source code, object code or other form), algorithms, databases, compilations and data; (v) trade secrets, and all other confidential or proprietary information, know-how, inventions, processes, formulae, models and methodologies (collectively, “Know-How”); (vi) all applications and registrations for any of the foregoing; and (vii) all rights and remedies against past, present and future infringement, misappropriation or other violation of any of the foregoing.

 

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(73)          “Interim Relief” shall have the meaning set forth in Section 9.2(d).

 

(74)          “Internal Reorganization” shall mean the allocation and transfer or assignment of Assets and Liabilities (including, but not limited to, entities holding Assets and/or Liabilities, the Internal Reorganization Contribution and the Internal Reorganization Distribution), including by means of the Conveyancing and Assumption Instruments, resulting in (i) the SharkNinja Group owning and operating the SharkNinja Business, and (ii) the JS Global Group continuing to own and operate the JS Global Business, as described in the Separation Plan (provided that, for purposes of this Agreement, the SharkNinja TopCo Contribution shall not constitute a part of the Internal Reorganization, except as otherwise specified herein).

 

(75)          “Internal Reorganization Contributed JS Global Assets” shall mean the Assets (including the Contracts and the rights and obligations thereunder) listed on Schedule 1.1(75).

 

(76)          “Internal Reorganization Contribution” shall mean the Transfer and Duplication, directly or indirectly, of Assets (including the Internal Reorganization Contributed JS Global Assets) from a member or members of the JS Global Group to a member, or members, of the SharkNinja Group and the Assumption of Liabilities, directly or indirectly, by a member, or members, of the SharkNinja Group pursuant to the Internal Reorganization or otherwise relating to, arising out of or resulting from the transactions contemplated by this Agreement.

 

(77)          “Internal Reorganization Date” shall mean the date on which (i) the transfer of SharkNinja Japan described the Separation Plan occurs, (ii) all of the other transactions described in the Separation Plan (except the SharkNinja TopCo Contribution) have occurred and (iii) the Internal Reorganization Contribution and the Internal Reorganization Distribution occur.

 

(78)          “Internal Reorganization Distributed SharkNinja Assets” shall mean (i) SharkNinja Japan and (ii) the Assets (including the Contracts and the rights and obligations thereunder) set forth on Schedule 1.1(78).

 

(79)          “Internal Reorganization Distribution” shall mean the Transfer and Duplication, directly or indirectly, of the Internal Reorganization Distributed SharkNinja Assets from a member, or members, of the SharkNinja Group to a member or members of the JS Global Group and the Assumption of Liabilities, directly or indirectly, by a member, or members, of the JS Global Group pursuant to the Internal Reorganization or otherwise relating to, arising out of or resulting from the transactions contemplated by this Agreement.

 

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(80)          “IRS” shall mean the U.S. Internal Revenue Service or any successor agency, including, but not limited, to its agents, representatives and attorneys.

 

(81)          “IT Assets” shall mean all software, computer systems, telecommunications equipment, databases, Internet Protocol addresses, data rights and documentation, reference, resource and training materials to the extent relating thereto, and all Contracts (including Contract rights) to the extent relating to any of the foregoing (including software license agreements, source code escrow agreements, support and maintenance agreements, electronic database access contracts, domain name registration agreements, website hosting agreements, software or website development agreements, outsourcing agreements, service provider agreements, interconnection agreements, governmental permits, radio licenses and telecommunications agreements), excluding in all cases any Intellectual Property covering, embodied in or connected to any of the foregoing.

 

(82)          “Joyoung Group” shall mean Joyoung Co., Ltd. (九阳股份有限公司) and its Subsidiaries.

 

(83)          “JS Global” shall have the meaning set forth in in the Preamble.

 

(84)          “JS Global Assets” shall mean:

 

(i)          the Assets listed or described on Schedule 1.1(84)(i) and any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets to be retained by JS Global or a member of the JS Global Group, including for the avoidance of doubt all JS Global Retained IP;

 

(ii)         any and all Assets that are owned, leased or licensed, at or prior to the Disposition Date, by JS Global and/or any of its Subsidiaries, that are not SharkNinja Assets (except for the Internal Reorganization Distributed SharkNinja Assets, which shall be distributed to JS Global or a member of the JS Global Group);

 

(iii)        all product safety certifications (including ownership thereof and applications therefor) owned by a member of the JS Global Group and that are not used by any member of the SharkNinja Group in connection with any products, services or materials offered under or bearing a SharkNinja Retained Name outside of the APAC Region; and

 

(iv)        any and all Assets that are acquired or otherwise becomes an Asset of the JS Global Group after the Disposition Date.

 

Notwithstanding anything to the contrary herein, the JS Global Assets shall not include (i) any Assets that are expressly contemplated by this Agreement or by any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by or Transferred to any member of the SharkNinja Group (including all SharkNinja Assets) or (ii) any Assets that are expressly listed on Schedule 1.1(140).

 

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(85)          “JS Global Asset Transferee” shall mean any Business Entity that is or will be a member of the JS Global Group or a Subsidiary of JS Global to which JS Global Assets shall be or have been transferred at or prior to the Disposition Date, or which is contemplated by the Internal Reorganization or this Agreement or the Ancillary Agreements to occur after the Disposition Date, by an Asset Transferor in order to consummate the transactions contemplated hereby.

 

(86)          “JS Global Auditors” shall mean the independent certified public accountants of JS Global.

 

(87)          “JS Global Board” shall have the meaning set forth in the Recitals.

 

(88)          “JS Global Business” shall mean (i) those businesses operated by the JS Global Group prior to the Disposition Date other than the SharkNinja Business, (ii) those Business Entities or businesses acquired or established by or for any member of the JS Global Group after the Disposition Date and (iii) any JS Global Former Business; provided that JS Global Business shall not include any SharkNinja Former Business (except for any business comprised of the Internal Reorganization Distributed SharkNinja Assets, which shall be distributed to JS Global or a member of the JS Global Group).

 

(89)          “JS Global Former Business” shall mean any Former Business (other than the SharkNinja Business or the SharkNinja Former Businesses) that, at the time of sale, conveyance, assignment, transfer, disposition, divestiture (in whole or in part) or discontinuation, abandonment, completion or termination of the operations, activities or production thereof, was primarily managed by or associated with the JS Global Business as then conducted.

 

(90)          “JS Global Group” shall mean (i) JS Global, the JS Global Business and each Person that is a direct or indirect Subsidiary of JS Global as of immediately following the Disposition Date and (ii) each Business Entity that becomes a Subsidiary of JS Global after the Disposition Date.

 

(91)          “JS Global Indemnitees” shall mean each member of the JS Global Group and each of their respective Affiliates from and after the Disposition Date and each member of the JS Global Group’s and such Affiliates’ respective current, former and future directors, officers, employees and agents (solely in their respective capacities as current, former and future directors, officers, employees or agents of any member of the JS Global Group or their respective Affiliates) and each of the heirs, executors, successors and assigns of any of the foregoing, except, for the avoidance of doubt, the SharkNinja Indemnitees.

 

(92)          “JS Global Insider Shareholders” shall mean the insiders (including directors, officers employees and Controlling Shareholders) of JS Global who are JS Global Shareholders.

 

(93)          “JS Global Liabilities” shall mean:

 

(i)          any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained or assumed by JS Global or a member of the JS Global Group, and all agreements, obligations and other Liabilities of JS Global or any member of the JS Global Group under this Agreement or any of the Ancillary Agreements;

 

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(ii)         any and all Liabilities of a member of the JS Global Group to the extent relating to, arising out of or resulting from any JS Global Assets (other than Liabilities arising under any Shared Contracts to the extent such Liabilities relate to the SharkNinja Business);

 

(iii)        the Liabilities listed on Schedule 1.1(93);

 

(iv)        any and all Liabilities of JS Global and each of its Subsidiaries that are not SharkNinja Liabilities (except for any Liabilities to the extent relating to, arising out of or resulting from the Internal Reorganization Distributed SharkNinja Assets, which shall be distributed to JS Global or a member of the JS Global Group);

 

(v)         subject to Section 2.3 and Section 2.6, any and all Liabilities to the extent relating to, arising out of or resulting from the operation of any business conducted by or on behalf of any member of the JS Global Group at any time after the Distribution (including any Liability relating to, arising out of or resulting from any act or failure to act by any Person, whether or not such act or failure to act is within such Person’s authority, with respect to such business); and

 

(vi)        any Actions brought by or on behalf of any JS Global Shareholders relating to any Laws or fiduciary claims relating to, arising out of or resulting from the transactions contemplated by this Agreement or of the Ancillary Agreements (other than the Liabilities described in Section (151)(vi)).

 

(94)          “JS Global Ordinary Shares” shall mean the ordinary shares of JS Global, par value $0.00001 per share.

 

(95)          “JS Global Payoff Amount” shall mean the total amount required to be paid to fully satisfy all principal, interest, prepayment premiums, penalties, breakage costs and any other monetary obligations then due and payable under the BOC-JS Global Facilities as of the anticipated Payoff Date (and, if applicable, the daily accrual thereafter).

 

(96)          “JS Global Personal Data” shall mean Personal Data of the JS Global Group to the extent used in or by, or otherwise related to, any JS Global Business.

 

(97)          “JS Global Public Filings” shall have the meaning set forth in Section 6.1(h).

 

(98)          “JS Global Released Liabilities” shall have the meaning set forth in Section 7.1(a)(i).

 

(99)          “JS Global Retained IP” shall mean all Intellectual Property owned by a member of the JS Global Group or the SharkNinja Group other than SharkNinja Intellectual Property, including the JS Global Retained Names.

 

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(100)          “JS Global Retained Names” shall mean (i) the Trademarks set forth in Schedule 1.1(100) and (ii) any Trademarks owned by JS Global and/or any of its Subsidiaries as of the Disposition Date that do not constitute SharkNinja Retained Names or SharkNinja Intellectual Property, in each case, and any Trademarks containing or comprising any of such names or marks, and any Trademarks confusingly similar thereto, or any telephone numbers or other alphanumeric addresses or mnemonics containing any of the foregoing names or marks, and any translations or transliterations of any of the foregoing.

 

(101)          “JS Global Semi-Annual Financial Statements” shall have the meaning set forth in Section 6.2(a).

 

(102)          “JS Global Shareholder” shall have the meaning set forth in the Recitals.

 

(103)          “JS Global Shareholder Approval” shall mean the approval, at the Extraordinary General Meeting where a quorum is present, of the transactions contemplated by this Agreement and the Connected Transactions, by an ordinary resolution of JS Global Shareholders requiring the affirmative vote of the holders of the requisite number of JS Global Ordinary Shares entitled to vote thereon, whether in person or by proxy at the Extraordinary General Meeting (or any adjournment or postponement thereof), in accordance with the memorandum and articles of association of JS Global and applicable Law (including the Hong Kong Listing Rules).

 

(104)          “JS Global Trading” shall mean JS Global Trading HK Limited, a private company limited by shares incorporated in Hong Kong.

 

(105)          “Law” shall mean any applicable U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, stock exchange regulations or rules, code, income tax treaty, order, requirement or rule of law (including common law) or other binding directives promulgated, issued, entered into or taken by any Governmental Entity.

 

(106)          “Liabilities” shall mean any and all Indebtedness, liabilities, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, reserved or unreserved, or determined or determinable, including those arising under any Law (including Environmental Law), Action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity and those arising under any Contract or any fines, damages or equitable relief which may be imposed and including all costs and expenses related thereto.

 

(107)          “Liable Party” shall have the meaning set forth in Section 2.9(b).

 

(108)          “Manufacturing Intellectual Property” shall mean all SharkNinja Intellectual Property (except for any Trademarks) that is used as of the Distribution Date by or on behalf of JS Global Group to manufacture products in connection with the portion of the JS Global Business described in Section 1.1(88)(i) hereof (but not any SharkNinja Intellectual Property that is exclusively used in connection with the manufacture of products offered under or bearing a SharkNinja Retained Name).

 

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(109)          “Memorandum and Articles” shall mean the Amended and Restated Memorandum and Articles of Association of SharkNinja TopCo, in the form attached hereto as Exhibit G.

 

(110)          “Negotiation Period” shall have the meaning set forth in Section 9.1.

 

(111)          “Net Proceeds” shall have the meaning set forth in the Recitals.

 

(112)          “Notice Recipient” shall have the meaning set forth in Section 2.3(e).

 

(113)          “Notifying Party” shall have the meaning set forth in Section 2.3(e).

 

(114)          “Other Party” shall have the meaning set forth in Section 2.9(a).

 

(115)          “Partial Assignment” shall have the meaning set forth in Section 2.3(a).

 

(116)          “Party” and “Parties” shall have the meanings set forth in the Preamble.

 

(117)          “Payoff Amount” shall mean the total amount required to be paid to fully satisfy all principal, interest, prepayment premiums, penalties, breakage costs and any other monetary obligations then due and payable under the BOC Released Facilities as of the applicable payoff date (and, if applicable, the daily accrual thereafter).

 

(118)          “Person” shall mean any natural person, firm, individual, corporation, business trust, joint venture, association, bank, land trust, trust company, company, limited liability company, partnership or other organization or entity, whether incorporated or unincorporated, or any Governmental Entity.

 

(119)          “Personal Data” shall have the meaning set forth in the Data Protection Law.

 

(120)          “Policies” shall mean insurance policies and insurance contracts of any kind (other than life and benefits policies or contracts), including primary, excess and umbrella policies, commercial general liability policies, fiduciary liability, directors and officers liability, automobile, property and casualty, workers’ compensation and employee dishonesty insurance policies and bonds, together with the rights, benefits and privileges thereunder.

 

(121)          “Prime Rate” shall mean the rate last quoted as of the time of determination by The Wall Street Journal as the “Prime Rate” in the United States or, if the Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate as of such time, or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by JS Global) or any similar release by the Federal Reserve Board (as determined by JS Global).

 

(122)          “Privilege” shall have the meaning set forth in Section 8.7(a).

 

(123)          “Privileged Information” shall have the meaning set forth in Section 8.7(a).

 

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(124)          “Processing” (and its cognates) shall have the meaning set forth in the Data Protection Laws.

 

(125)          “Product Development Agreement” shall mean the Product Development Agreement by and between JS Global Trading and SharkNinja, in the form attached hereto as Exhibit E.

 

(126)          “Record” shall mean any Contract, document, book, record or file.

 

(127)          “Record Date” shall mean the close of business on the date to be determined by the JS Global Board as the record date for determining JS Global Shareholders entitled to receive shares of SharkNinja Ordinary Shares in the Distribution.

 

(128)          “Record Holders” shall mean the holders of record of JS Global Ordinary Shares as of the close of business on the Record Date.

 

(129)          “Release” shall mean any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment (including ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Substances through or in the air, soil, surface water, groundwater or property.

 

(130)          “Remaining Ineligible Person Shares” shall have the meaning set forth in Section 3.8.

 

(131)          “Rules” shall have the meaning set forth in Section 9.2.

 

(132)          “Securities Act” shall mean the Securities Act of 1933, together with the rules and regulations promulgated thereunder.

 

(133)          “Security Interest” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-entry, covenant, condition, easement, encroachment, restriction on transfer or other encumbrance of any nature whatsoever, excluding restrictions on transfer under securities Laws.

 

(134)          “Sell Down” shall have the meaning set forth in the Recitals.

 

(135)          “Sell Down Period” shall have the meaning set forth in the Recitals.

 

(136)          “Separation Plan” shall mean the step plan set forth on Schedule 1.1(136), as it may be updated in accordance with Section 2.2(f).

 

(137)          “Shared Contract” shall have the meaning set forth in Section 2.3(a).

 

(138)          “SharkNinja” shall have the meaning set forth in the Preamble.

 

(139)          “SharkNinja Asset Transferee” shall mean any Business Entity that is or will be a member of the SharkNinja Group or a Subsidiary of SharkNinja to which SharkNinja Assets shall be or have been transferred at or prior to the Disposition Date, or which is contemplated by the Internal Reorganization or this Agreement or the Ancillary Agreements to occur after the Disposition Date, by an Asset Transferor in order to consummate the transactions contemplated hereby.

 

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(140)        “SharkNinja Assets” shall mean, without duplication:

 

(i)          all interests in the capital stock or share capital of, or any other equity interests in, the members of the SharkNinja Group (other than SharkNinja TopCo) held, directly or indirectly, by JS Global immediately prior to the Disposition Date;

 

(ii)         the equity interests in the entities set forth on Schedule 1.1(140)(ii) held, directly or indirectly, by JS Global immediately prior to the Disposition Date;

 

(iii)        the Assets set forth on Schedule 1.1(140)(iii) (which for the avoidance of doubt is not a comprehensive listing of all SharkNinja Assets and is not intended to limit other clauses of this definition of “SharkNinja Assets”);

 

(iv)        any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets which have been or are to be Transferred to or retained by any member of the SharkNinja Group (including the Internal Reorganization Contributed JS Global Assets which shall be contributed to SharkNinja or a member of the SharkNinja Group);

 

(v)         any and all Assets (other than Cash Equivalents, which shall be governed solely by Section 2.12, and Assets listed on Schedule 1.1(140)(v)) reflected on the SharkNinja Balance Sheet or the accounting records supporting such balance sheet and any Assets acquired by or for SharkNinja or any member of the SharkNinja Group subsequent to the date of the SharkNinja Balance Sheet which, had they been so acquired on or before such date and owned as of such date, would have been reflected on the SharkNinja Balance Sheet if prepared on a consistent basis, subject to any dispositions of any of such Assets subsequent to the date of the SharkNinja Balance Sheet;

 

(vi)        all rights, title and interest in, to and under the leases or subleases of the real property set forth on Schedule 1.1(140)(vi) and other leases primarily related to SharkNinja Business, including, to the extent provided for in the SharkNinja Group’s leases, any land and land improvements, structures, buildings and building improvements, other improvements and appurtenances (the “SharkNinja Leased Real Property”);

 

(vii)       all Contracts primarily related to the SharkNinja Business and any rights or claims arising thereunder, including any Contracts set forth on Schedule 1.1(140)(vii) (the “SharkNinja Contracts”);

 

(viii)      all Intellectual Property owned by a member of the JS Global Group or SharkNinja Group that is (A) primarily related to the SharkNinja Business, (B) that is used in connection with products, services or materials offered under or bearing a SharkNinja Retained Name, including the SharkNinja Retained Names or (C) the applications, registrations and other Intellectual Property set forth on Schedule 1.1(140)(viii) (the “SharkNinja Intellectual Property”);

 

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(ix)        subject to Section 1.1(84)(iii), all product safety certifications (including ownership thereof and applications therefor) that are used in connection with products, services or materials offered under or bearing a SharkNinja Retained Name;

 

(x)          all licenses, permits, registrations, certifications, approvals and authorizations which have been issued by any Governmental Entity and are held by a member of the SharkNinja Group, or to the extent transferable, relate primarily to or, are used primarily in the SharkNinja Business (other than to the extent that any member of the JS Global Group benefits from such licenses, permits, registrations, certifications, approvals and authorizations in connection with the JS Global Business);

 

(xi)         all Information primarily related to, or primarily used or primarily held for use in, the SharkNinja Business;

 

(xii)        the IT Assets that are primarily used or primarily held for use in the SharkNinja Business, including the IT Assets listed on Schedule 1.1(140)(xii) (“SharkNinja IT Assets”);

 

(xiii)       all office equipment and furnishings located at the physical site of which the ownership or a leasehold or sub leasehold interest is being transferred to or retained by a member of the SharkNinja Group, and which as of the Disposition Date is not subject to a lease or sublease back to a member of the JS Global Group (excluding any office equipment and furnishings owned by persons other than JS Global and its Subsidiaries);

 

(xiv)      subject to Article X, any rights of any member of the SharkNinja Group under any insurance policies held solely by one or more members of the SharkNinja Group and which provide coverage solely to one or more members of the SharkNinja Group (excluding any insurance policies issued by any captive insurance company of the JS Global Group); and

 

(xv)       all other Assets that are held by the SharkNinja Group or the JS Global Group immediately prior to the Disposition Date and that are primarily used or primarily held for use in the SharkNinja Business as conducted immediately prior to the Disposition Date (the intention of this clause (xv) is only to rectify an inadvertent omission of transfer or assignment of any Asset that, had the Parties given specific consideration to such Asset as of the date of this Agreement, would have otherwise been classified as a SharkNinja Asset based on the principles of this Section 1.1(140)); provided that no Asset shall be a SharkNinja Asset solely as a result of this clause (xv) unless a written claim with respect thereto is made by SharkNinja on or prior to the date that is eighteen (18) months after the Disposition Date.

 

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Notwithstanding anything to the contrary herein, the SharkNinja Assets shall not include (i) any Assets that are expressly contemplated by this Agreement or by any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by or Transferred to any member of the JS Global Group (including all JS Global Assets), or (ii) any Assets that are expressly listed on Schedule 1.1(84).

 

(141)          “SharkNinja Auditors” shall mean the independent certified public accountants of the SharkNinja Group.

 

(142)          “SharkNinja Balance Sheet” shall mean the unaudited pro forma combined condensed balance sheet, including the notes thereto, as of March 31, 2023, of SharkNinja as included in the Distribution Disclosure Documents (as applicable).

 

(143)          “SharkNinja Board” shall have the meaning set forth in the Recitals.

 

(144)          “SharkNinja Business” shall mean the businesses comprising of JS Global’s SharkNinja segment, including the businesses and operations conducted prior to the Disposition Date by any member of the SharkNinja Group and any other businesses or operations conducted primarily through the use of the SharkNinja Assets, as such businesses are described in the Distribution Disclosure Documents, or established by or for SharkNinja or any of its Subsidiaries after the Disposition Date and shall include the SharkNinja Former Businesses; provided that, other than any SharkNinja Former Businesses listed on Schedule 1.1(146), the SharkNinja Business shall not include (i) any JS Global Former Business (except for any business comprised of the Internal Reorganization Contributed JS Global Assets, which shall be contributed to SharkNinja or a member of the SharkNinja Group) and (ii) the Internal Reorganization Distributed SharkNinja Assets, which shall be distributed to JS Global or a member of the JS Global Group on or prior to the Disposition Date.

 

(145)          “SharkNinja Disclosure” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) filed with or furnished to the Commission, including in connection with SharkNinja TopCo’s obligations under the Securities Act and the Exchange Act, any other Governmental Entity, or holders of any securities of any member of the SharkNinja Group, in each case, on or after the Disposition Date by or on behalf of any member of the SharkNinja Group in connection with the registration, sale or distribution of securities or disclosure related thereto (including periodic disclosure obligations).

 

(146)          “SharkNinja Former Businesses” shall mean (i) any Former Business that, at the time of sale, conveyance, assignment, transfer, disposition, divestiture (in whole or in part) or discontinuation, abandonment, completion or termination of the operations, activities or production thereof, was (a) primarily managed by or associated with the SharkNinja Business as then conducted or (b) part of a business the majority of which as of the Disposition Date is or was transferred to SharkNinja and (ii) the Former Businesses set forth on Schedule 1.1(146), whether or not such Former Business would meet the standard set forth in clause (i) of this definition.

 

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(147)        “SharkNinja Group” shall mean SharkNinja, SharkNinja TopCo and each Person that is a direct or indirect Subsidiary of SharkNinja TopCo as of the Disposition Date (but after giving effect to the Internal Reorganization, including, for the avoidance of doubt, the Transfer of SharkNinja Japan to a member of the JS Global Group), and each Person that becomes a Subsidiary of SharkNinja TopCo after the Disposition Date.

 

(148)        “SharkNinja Hong Kong” shall mean SharkNinja (Hong Kong) Limited, a private company limited by shares incorporated in Hong Kong.

 

(149)        “SharkNinja Indemnitees” shall mean each member of the SharkNinja Group and each of their respective Affiliates from and after the Disposition Date and each member of the SharkNinja Group’s and such respective Affiliates’ respective current, former and future directors, officers, employees and agents (solely in their respective capacities as current, former and future directors, officers, employees or agents of any member of the SharkNinja Group or their respective Affiliates) and each of the heirs, executors, administrators, successors and assigns of any of the foregoing, except, for the avoidance of doubt, the JS Global Indemnitees.

 

(150)        “SharkNinja Japan” shall mean SharkNinja Co., Ltd., a Japanese company.

 

(151)        “SharkNinja Liabilities” shall mean:

 

(i)          any and all Liabilities to the extent relating to, arising out of or resulting from (a) the operation or conduct of the SharkNinja Business, as conducted at any time prior to, at or after the Disposition Date (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority) of the SharkNinja Group and any and all Liability relating to, arising out of or resulting from any unclaimed property); (b) the operation or conduct of any business conducted by any member of the SharkNinja Group at any time prior to, at or after the Disposition Date (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority) of the SharkNinja Group and any and all Liability relating to, arising out of or resulting from any unclaimed property); or (c) any SharkNinja Asset, whether arising before, at or after the Disposition Date (including, but not limited to, any Liability relating to, arising out of or resulting from SharkNinja Contracts, Shared Contracts (to the extent such Liability relates to the SharkNinja Business) and any SharkNinja Leased Real Property):

 

(ii)         the Liabilities set forth on Schedule 1.1(151)(ii);

 

(iii)        any and all other Liabilities that are expressly contemplated by this Agreement or any of the Ancillary Agreements as Liabilities to be assumed by SharkNinja or a member of the SharkNinja Group, and all agreements, obligations and other Liabilities of SharkNinja or a member of the SharkNinja Group under this Agreement or any of the Ancillary Agreements;

 

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(iv)        any and all Liabilities reflected on the SharkNinja Balance Sheet (other than those in Schedule 1.1(151)(iv)) or the accounting records supporting such balance sheet and any Liabilities incurred by or for SharkNinja or any member of the SharkNinja Group subsequent to the date of the SharkNinja Balance Sheet which, had they been so incurred on or before such date, would have been reflected on the SharkNinja Balance Sheet if prepared on a consistent basis, subject to any discharge of any of such Liabilities subsequent to the date of the SharkNinja Balance Sheet;

 

(v)         any and all Liabilities to the extent relating to, arising out of, or resulting from, whether prior to, at or after the Disposition Date, any infringement, misappropriation or other violation of any Intellectual Property of any other Person to the extent related to the conduct of the SharkNinja Business;

 

(vi)        any and all Liabilities (including under applicable federal and state securities Laws) relating to, arising out of or resulting from (A) the Distribution Disclosure Documents, (B) any SharkNinja Disclosure or (C) the Stock Exchange Listing Application;

 

(vii)       for the avoidance of doubt, and without limiting any other matters that may constitute SharkNinja Liabilities, any Liabilities relating to, arising out of or resulting from any Action primarily related to the SharkNinja Business, including all Actions listed on Schedule 1.1(151)(vii);

 

(viii)      any product liability claims or other claims of third parties, including any and all product liabilities, whether such product liabilities are known or unknown, contingent or accrued, relating to loss of life or injury to persons due to exposure to asbestos prior to, at or after the Disposition Date, primarily relating to, arising out of or resulting from any product developed, designed, manufactured, marketed, distributed, leased or sold by the SharkNinja Business;

 

(ix)        all Liabilities relating to, arising out of or resulting from any Indebtedness of any member of the SharkNinja Group or any Indebtedness secured exclusively by any of the SharkNinja Assets; and

 

(x)          any and all other Liabilities that are held by the SharkNinja Group, or the JS Global Group immediately prior to the Disposition Date and that were inadvertently omitted or assigned that, had the parties given specific consideration to such Liability as of the date of this Agreement, would have otherwise been classified as a SharkNinja Liability based on the principles set forth in this Section 1.1(151); provided that no Liability shall be a SharkNinja Liability solely as a result of this clause (ix) unless a claim with respect thereto is made by JS Global on or prior to the date that is eighteen (18) months after the Disposition Date.

 

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Notwithstanding the foregoing, the SharkNinja Liabilities shall not include any Liabilities that are (A) expressly contemplated by this Agreement or by any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be Assumed by any member of the JS Global Group, (B) expressly discharged pursuant to Section 2.4(c) of this Agreement or (C) JS Global Liabilities (except for any Liabilities to the extent relating to, arising out of or resulting from the Internal Reorganization Contributed JS Global Assets, which shall be contributed to SharkNinja or a member of the SharkNinja Group).

 

(152)          “SharkNinja Ordinary Shares” shall mean the ordinary shares, par value $0.0001 per share, of SharkNinja TopCo.

 

(153)          “SharkNinja Payoff Amount” shall mean the total amount required to be paid to fully satisfy all principal, interest, prepayment premiums, penalties, breakage costs and any other monetary obligations then due and payable under the BOC-SharkNinja Facilities as of the applicable payoff date (and, if applicable, the daily accrual thereafter).

 

(154)          “SharkNinja Personal Data” shall mean Personal Data of the SharkNinja Group to the extent used in or by, or otherwise related to, any SharkNinja Business.

 

(155)          “SharkNinja Released Liabilities” shall have the meaning set forth in Section 7.1(a)(ii).

 

(156)          “SharkNinja Retained Names” shall mean the Trademarks set forth in Schedule 1.1(156), and any Trademarks containing or comprising any of such names or marks, and any Trademarks confusingly similar thereto, or any telephone numbers or other alphanumeric addresses or mnemonics containing any of the foregoing names or marks, and any translations or transliterations of any of the foregoing.

 

(157)          “SharkNinja Semi-Annual Financial Statements” shall have the meaning set forth in Section 6.1(d).

 

(158)          “SharkNinja TopCo” shall have the meaning set forth in the Preamble.

 

(159)          “SharkNinja TopCo Board” shall have the meaning set forth in the Recitals.

 

(160)          “SharkNinja TopCo Contribution” shall have the meaning set forth in the Recitals.

 

(161)          “Sourcing Service Agreement – Joyoung” shall mean the Sourcing Services Agreement by and between [Joyoung] and SharkNinja Hong Kong, in the form attached hereto as Exhibit D.

 

(162)          “Sourcing Services Agreement – JS Global” shall mean the Sourcing Services Agreement by and between JS Global Trading and SharkNinja Hong Kong, in the form attached hereto as Exhibit F.

 

(163)          “Spin Off Recipients” shall mean (i) the Eligible Persons who are Record Holders and (ii) the Trust on behalf of the Ineligible Persons who are Record Holders.

 

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(164)          “Stock Exchange” shall mean the New York Stock Exchange or any successor thereto.

 

(165)          “Stock Exchange Listing Application” shall have the meaning set forth in Section 3.3(a).

 

(166)          “Subsidiary” shall mean with respect to any Person (i) a corporation, fifty percent (50%) or more of the voting or capital shares of which is, as of the time in question, directly or indirectly owned by such Person and (ii) any other Person in which such Person, directly or indirectly, owns fifty percent (50%) or more of the equity or economic interest thereof or has the power to elect or direct the election of fifty percent (50%) or more of the members of the governing body of such entity. It is expressly agreed that, from and after the Disposition Date, solely for purposes of this Agreement, neither SharkNinja nor a member of the SharkNinja Group shall be deemed a Subsidiary of JS Global or a member of the JS Global Group.

 

(167)          “Tax” or “Taxes” shall mean any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, unemployment, disability, property, ad valorem, value added, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, alternative minimum, estimated, or other tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax), imposed by any Governmental Entity, and any interest, penalty, additions to tax, or additional amounts in respect of the foregoing.

 

(168)          “Tax Contest” shall mean any pending or threatened audit, examination, claim, dispute, suit, action, proposed assessment, or other proceeding concerning any Taxes for which the other Party may be liable pursuant to this Agreement.

 

(169)          “Tax Period” shall mean, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.

 

(170)          “Tax Returns” shall mean any return, report, certificate, form, or similar statement or document (including any related supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated tax) supplied to or filed with, or required to be supplied to or filed with, a Taxing Authority, or any bill for or notice related to ad valorem or other similar Taxes received from a Taxing Authority, in each case, in connection with the determination, assessment, or collection of any Tax or the administration of any laws, regulations, or administrative requirements relating to any Tax.

 

(171)          “Taxing Authority” shall mean any Governmental Entity having jurisdiction over the assessment, determination, collection, or imposition of any Tax (including the IRS).

 

(172)          “Third Party” shall mean any Person other than the members of the JS Global Group or the SharkNinja Group.

 

(173)          “Third Party Agreements” shall mean any Contracts (other than Shared Contracts) between or among a Party (or any member of its Group) and any other Persons (other than either Party or any member of its respective Groups) (it being understood that to the extent that the rights and obligations of the Parties and the members of their respective Groups under any such Contracts (or portions thereof) constitute SharkNinja Assets or SharkNinja Liabilities, or JS Global Assets or JS Global Liabilities, such Contracts (or portions thereof) shall be assigned or retained pursuant to Article II).

 

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(174)          “Third Party Claim” shall have the meaning set forth in Section 7.4(b).

 

(175)          “Third Party Proceeds” shall have the meaning set forth in Section 7.7(a).

 

(176)          “Transaction-related Expenses” shall have the meaning set forth in Section 11.5(a).

 

(177)          “Transactions” shall have the meaning set forth in the Recitals.

 

(178)          “Transfer” shall have the meaning set forth in Section 2.2(b)(i); and the term “Transferred” shall have its correlative meaning.

 

(179)          “Transfer Agent” shall mean Computershare Inc., a Delaware company and Computershare Trust Company, N.A., a federally chartered trust company.

 

(180)          “Transition Services Agreement” shall mean the Transition Services Agreements by and between JS Global Trading and SharkNinja TopCo, in the form attached hereto as Exhibit B.

 

(181)          “Trust” shall mean the Tiger Purpose Trust

 

(182)          “Trustee” shall have the meaning set forth in the Recitals.

 

(183)          “UK GDPR” shall mean the UK General Data Protection Regulation as defined by the Data Protection Act 2018 as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019.

 

(184)          “U.S.” shall mean the United States of America.

 

Section 1.2      References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. References to the definitions contained in this Agreement are applicable to the other grammatical forms of such terms. Unless the context otherwise requires, the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections, Annexes, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. The words “written request” when used in this Agreement shall include email. Reference in this Agreement to any time shall be to New York City, New York time unless otherwise expressly provided herein. Unless the context requires otherwise, references in this Agreement to “JS Global” shall also be deemed to refer to the applicable member of the JS Global Group, references to “SharkNinja” and “SharkNinja TopCo” (as applicable) shall also be deemed to refer to the applicable member of the SharkNinja Group and, in connection therewith, any references to actions or omissions to be taken, or refrained from being taken, as the case may be, by JS Global or SharkNinja or SharkNinja TopCo (as applicable) shall be deemed to require JS Global or SharkNinja or SharkNinja TopCo (as applicable), as the case may be, to cause the applicable members of the JS Global Group or the SharkNinja Group, respectively, to take, or refrain from taking, any such action. Unless otherwise expressly provided herein, whenever JS Global’s consent is required under this Agreement, such consent may be withheld, delayed or conditioned by JS Global in its sole and absolute discretion, and whenever any action hereunder is at JS Global’s discretion, such action shall be at JS Global’s sole and absolute discretion. In the event of any inconsistency or conflict which may arise in the application or interpretation of any of the definitions set forth in Section 1.1, for the purpose of determining what is and is not included in such definitions, any item explicitly included on a Schedule referred to in any such definition shall take priority over any provision of the text thereof.

 

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ARTICLE II

 

THE SEPARATION

 

Section 2.1           General. Subject to the terms and conditions of this Agreement, the Parties shall use, and shall cause their respective Affiliates to use, their respective commercially reasonable efforts to consummate the transactions contemplated hereby, including the completion of the Internal Reorganization, a portion of which may have already been implemented prior to the date hereof.

 

Section 2.2           Restructuring: Transfer of Assets; Assumption of Liabilities.

 

(a)          Internal Reorganization. Prior to the SharkNinja TopCo Contribution, except for Transfers contemplated by the Internal Reorganization or this Agreement or the Ancillary Agreements to occur after the Disposition Date, the Parties shall complete the Internal Reorganization, including by taking the actions referred to in Sections 2.2(b) and 2.2(c) below.

 

(b)          Transfer and Assignment of Assets. At least one day prior to the SharkNinja TopCo Contribution (it being understood that some of such Transfers may occur following the SharkNinja TopCo Contribution in accordance with Section 2.2(a) and Section 2.6), pursuant to the Conveyancing and Assumption Instruments and in connection with the Internal Reorganization Contribution and the Internal Reorganization Distribution:

 

(i)          SharkNinja and JS Global shall, and shall cause the applicable Asset Transferors to, transfer, contribute, distribute, novate, assign and/or convey or cause to be transferred, contributed, distributed, novated, assigned and/or conveyed (“Transfer”) to (A) the respective JS Global Asset Transferees, all of its and the applicable Asset Transferors’ right, title and interest in and to the JS Global Assets, and the applicable JS Global Asset Transferee shall accept from JS Global or SharkNinja and the applicable members of the JS Global Group or SharkNinja Group all of JS Global’s, SharkNinja’s and the other members of the JS Global Group’s or SharkNinja Group’s respective direct or indirect rights, title and interest in and to the applicable JS Global Assets, including all of the outstanding ordinary shares or other ownership interests, that are included in the JS Global Assets and (B) SharkNinja and/or the respective SharkNinja Asset Transferees, all of its and the applicable Asset Transferors’ right, title and interest in and to the SharkNinja Assets, and the applicable SharkNinja Asset Transferees shall accept from JS Global and the applicable members of the JS Global Group, all of JS Global’s and the other members of the JS Global Group’s respective direct or indirect rights, title and interest in and to the applicable SharkNinja Assets, including all of the outstanding shares of capital stock, share capital or other ownership interests, that are included in the SharkNinja Assets.

 

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(ii)          Any costs and expenses incurred after the Disposition Date to effect any Transfer contemplated by this Section 2.2(b) (including any transfer effected pursuant to Section 2.6) shall be paid by the Parties as set forth in Section 11.5(b). Other than costs and expenses incurred in accordance with the foregoing sentence, nothing in this Section 2.2(b) shall require any member of any Group to incur any material obligation or grant any material concession for the benefit of any member of any other Group in order to effect any transaction contemplated by this Section 2.2(b).

 

(c)          Acceptance and Assumption of Liabilities. Except as otherwise specifically set forth in this Agreement or any Ancillary Agreement, in connection with the Internal Reorganization, the Internal Reorganization Contribution and the Internal Reorganization Distribution (i) pursuant to this Agreement or the applicable Conveyancing and Assumption Instruments, JS Global shall, or shall cause a member of the JS Global Group to, accept, assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance with their respective terms (“Assume”), all of the JS Global Liabilities and (ii) pursuant to this Agreement or the applicable Conveyancing and Assumption Instruments, SharkNinja shall, or shall cause a member of the SharkNinja Group to, Assume all of the SharkNinja Liabilities, in each case, regardless of (A) when or where such Liabilities arose or arise, (B) whether the facts upon which they are based occurred prior to, at or subsequent to the Disposition Date, (C) whether accruals for such Liabilities have been transferred to SharkNinja or included on a combined balance sheet of the SharkNinja Business or whether any such accruals are sufficient to cover such Liabilities, (D) where or against whom such Liabilities are asserted or determined, (E) whether arising from or alleged to arise from negligence, gross negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the JS Global Group or the SharkNinja Group, as the case may be, or any of their past or present respective directors, officers, employees, agents, Subsidiaries or Affiliates, (F) which entity is named in any Action associated with any Liability, or (G) any benefits, or lack thereof, that have been or may be obtained by the JS Global Group or the SharkNinja Group in respect of such Liabilities.

 

(d)          Consents. The Parties shall use their commercially reasonable efforts to obtain the Consents required to Transfer or Partially Assign (or Duplicate, as applicable) any Assets, Contracts, licenses, permits and authorizations issued by any Governmental Entity or parts thereof as contemplated by this Agreement. Notwithstanding anything herein to the contrary, (i) no Contract or other Asset shall be Transferred or Partially Assigned if it would violate applicable Law or, in the case of any Contract, the rights of any Third Party to such Contract; provided that Section 2.3(a) and Section 2.6, to the extent provided therein, shall apply thereto and (ii) in no event shall a Party or any of its Affiliates be required to commence, defend or participate in any Action, or offer or grant any additional consideration or other accommodation (financial or otherwise) to any Third Party in connection with obtaining any consents or waivers in order to consummate the transactions contemplated hereby.

 

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(e)          It is understood and agreed by the Parties that certain of the Transfers referenced in Section 2.2(b) or Assumptions referenced in Section 2.2(c) have occurred prior to the date hereof and, as a result, no additional Transfers or Assumptions by any member of the JS Global Group or the SharkNinja Group, as applicable, shall be deemed to occur upon the execution of this Agreement with respect thereto. Moreover, to the extent that any member of the JS Global Group or the SharkNinja Group, as applicable, is liable for any JS Global Liability or SharkNinja Liability, respectively, by operation of law immediately following any Transfer in accordance with this Agreement or any Conveyancing and Assumption Instruments, there shall be no need for any other member of the JS Global Group or the SharkNinja Group, as applicable, to Assume such Liability in connection with the operation of Section 2.2(c) and, accordingly, no other member of such Group shall Assume such Liability in connection with Section 2.2(c).

 

(f)          The Parties shall keep each other reasonably informed, on a regular basis, about the progress of implementing the Separation Plan. Without limiting any other provision hereof, each of JS Global and SharkNinja will take, and will cause each member of its respective Group to take, such actions as are reasonably necessary to consummate the transactions expressly contemplated by the Separation Plan (whether prior to, at or after the time of the Disposition Date).

 

(g)          At least one day after the Internal Reorganization (including the Internal Reorganization Contribution and the Internal Reorganization Distribution as described herein), and one day prior to the Distribution, the Parties shall effect the SharkNinja TopCo Contribution.

 

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Section 2.3           Treatment of Shared Contracts. Without limiting the generality of the obligations set forth in Sections 2.2(a) and (b):

 

(a)          Unless the Parties otherwise agree or the benefits of any Contract described in this Section 2.3 are expressly conveyed to the applicable Party pursuant to an Ancillary Agreement, any Contract that is listed on Schedule 2.3(a) (a “Shared Contract”) shall be assigned in part to the applicable member(s) of the applicable Group, if so assignable, or appropriately amend, bifurcate, replicate or otherwise modify such Shared Contract (in a form reasonably acceptable to JS Global and SharkNinja) prior to, at or after the Disposition Date, so that each Party or the members of their respective Groups shall be entitled to the rights and benefits, and shall Assume the related portion of any Liabilities, inuring to their respective Businesses (each, a “Partial Assignment”); provided, however, that (x) in no event shall any member of any Group be required to assign (or amend) any Shared Contract in its entirety or to assign a portion of any Shared Contract (including any Policy) which is not assignable (or cannot be amended) by its terms (including any terms imposing consents or conditions on an assignment where such consents or conditions have not been obtained or fulfilled, subject to Section 2.2(d)), and (y) if any Shared Contract cannot be so partially assigned by its terms or otherwise (including, but not limited to, a requirement that a Third Party’s Consent is required to partially assign), cannot be amended or has not for any other reason been assigned or amended, or if such assignment or amendment would impair the benefit the parties thereto derive from such Shared Contract, (A) at the reasonable request of the Party (or the member of such Party’s Group) to which the benefit of such Shared Contract inures in part, the Party for which such Shared Contract is, as applicable, a JS Global Asset or SharkNinja Asset shall, and shall cause each of its respective Subsidiaries to, for a period ending not later than six (6) months after the Disposition Date (unless the term of a Shared Contract ends at a later date, in which case for a period ending on such date), take such other reasonable and permissible actions to cause such member of the SharkNinja Group or the JS Global Group, as the case may be, to receive the benefit of that portion of each Shared Contract that relates to the SharkNinja Business or the JS Global Business, as the case may be (in each case, to the extent so related) as if such Shared Contract had been assigned to (or amended to allow) a member of the applicable Group pursuant to this Section 2.3 (including, enforcing on the applicable Group’s behalf any and all of such Group’s rights against such Third Party under such Shared Contract solely to the extent related to the applicable Group’s respective Business (or applicable portion thereof); provided that, notwithstanding anything herein to the contrary, such enforcement shall be at the sole expense of the Group requesting the other Group to enforce its rights under the Shared Contract) and to bear the burden of the corresponding Liabilities (including any Liabilities that may arise by reason of such arrangement) as if such Liabilities had been Assumed by a member of the applicable Group pursuant to this Section 2.3; provided that the Party for which such Shared Contract is a JS Global Asset or a SharkNinja Asset, as applicable, shall be indemnified for all Indemnifiable Losses or other Liabilities (i) arising out of any actions (or omissions to act) of such retaining Party taken at the direction of the other Party (or relevant member of its Group) or (ii) arising out of or related to such other Party’s gross negligence, fraud or willful misconduct, in each case, in connection with and relating to such Shared Contract, as the case may be, (for the avoidance of doubt, in the event that any rights in connection with a Force Majeure Event or similar event are exercised under a Shared Contract, the benefits and burdens with respect to such Shared Contract (as modified by such Force Majeure Event or similar event) shall, if reasonably practicable, be shared proportionally or, if not reasonably practicable, in such other manner as would be most equitable, among the Groups related to such Contract (or in any other manner as may be agreed in good faith by the Parties), in each case, to the extent so related to the JS Global Business or the SharkNinja Business), and (B) to the extent that the Parties cannot effect a Partial Assignment in accordance with this Section 2.3(a), or if a Party so elects, within 180 days of the Disposition Date, the Parties shall use commercially reasonable efforts to seek mutually acceptable alternative arrangements (including subcontracting, sublicensing, subleasing or back-to-back agreement) for the purpose of allocating rights and liabilities and obligations to each Group under such Shared Contract reflecting the principles set forth in clause (A) of this provision (an “Acceptable Alternative Arrangement”); provided, further, that the Party for which such Shared Contract is, as applicable, a JS Global Asset or SharkNinja Asset, and such Party’s applicable Subsidiaries shall not be liable for any actions or omissions taken in accordance with clause (y) of this Section 2.3(a).

  

(b)          Each Party shall, and shall cause the other members of its Group to, use its commercially reasonable efforts to obtain the required Consents to complete a Partial Assignment of any Shared Contract as contemplated by this Agreement. Notwithstanding anything herein to the contrary, (i) no Partial Assignment of any Shared Contract or Acceptable Alternative Arrangement shall be completed if it would violate any applicable Law or the rights of any Third Party to such Shared Contract and (ii) in no event shall a Party or any of its Affiliates be required to commence, defend or participate in any Action, or offer or grant any additional consideration or other accommodation (financial or otherwise) to any Third Party in connection with obtaining any consents or waivers in connection with such Partial Assignment of any Shared Contract or Acceptable Alternative Arrangement.

 

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(c)          Unless otherwise determined by JS Global in its sole discretion, after consulting in good faith with SharkNinja and after reasonably considering the views of SharkNinja (which SharkNinja shall promptly provide in good faith), each of JS Global and SharkNinja shall, and shall cause the members of its Group to, (A) treat for all Tax purposes the portion of each Shared Contract inuring to its respective Businesses as Assets owned by, and/or Liabilities of, as applicable, such Party as of the SharkNinja TopCo Contribution and (B) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law or good faith resolution of a Tax Contest).

 

(d)          With respect to Liabilities pursuant to, under or relating to a Shared Contract to the extent relating to occurrences from and after the Distribution, such Liabilities shall, unless otherwise allocated pursuant to this Agreement or any Ancillary Agreement, be allocated among SharkNinja and JS Global as follows:

 

(i)          If such Liability is incurred exclusively in respect of the JS Global Business or exclusively in respect of the SharkNinja Business, such Liability shall be allocated to JS Global or the applicable member of its Group (in respect of the JS Global Business) or SharkNinja or the applicable member of its Group (in respect of the SharkNinja Business);

 

(ii)         If such Liability cannot be so allocated under clause (i) above, such Liability shall be allocated to SharkNinja or JS Global, as the case may be, based on the relative proportions of total benefit received (over the term of the Shared Contract remaining as of the Disposition Date) by the SharkNinja Business and JS Global Business, respectively, under the relevant Shared Contract after the Distribution; and

 

(iii)        Notwithstanding the foregoing in clauses (i) and (ii) above, each of SharkNinja or JS Global shall be responsible for any and all such Liabilities to the extent arising from its (or its or a member of its Group’s) breach after the Distribution of the relevant Shared Contract (except to the extent (i) such Liabilities arise or result from the actions or inactions of the other Party or (ii) arising out of or related to such other Party’s gross negligence, fraud or willful misconduct, and in each case, such other Party shall bear such Liabilities).

 

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(e)          From and after the Disposition Date, the Party to whose Group a Shared Contract has been allocated shall not (and shall cause the other members of its Group not to), without the consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed) (x) waive any rights under such Shared Contract to the extent related to the Business, Assets or Liabilities of such other Party, (y) terminate (or consent to be terminated by the counterparty) such Shared Contract except in connection with (1) the expiration of such Shared Contract in accordance with its terms (it being understood, for the avoidance of doubt, that sending a notice of non-renewal to the counterparty to such Shared Contract in accordance with the terms of such Shared Contract is expressly permitted) or (2) a partial termination of such Shared Contract that would not reasonably be expected to impact any rights under such Shared Contract related to the Business, Assets or Liabilities of such other Party or Parties or any of its or their respective Subsidiaries, or (z) amend, modify or supplement such Shared Contract in a manner material (relative to the existing rights and obligations related to such other Party’s Business, Assets or Liabilities under such Shared Contract) and adverse to the Business, Assets or Liabilities of such other Party or any of its Subsidiaries. From and after the Disposition Date, as applicable, if a member of a Group (the “Notice Recipient”) receives from a counterparty to a Shared Contract a formal notice of breach of such Shared Contract that would reasonably be expected to impact the other Group, the Notice Recipient shall provide written notice to the other Party as soon as reasonably practicable (and in no event later than five (5) Business Days following receipt of such notice) and the Parties shall consult in good faith with respect to the actions proposed to be taken regarding the alleged breach. If a Group (the “Notifying Party”) sends to a counterparty to a Shared Contract a formal notice of breach of such Shared Contract that would reasonably be expected to impact another Group, the Notifying Party shall provide written notice to the other Party as soon as reasonably practicable (and in any event no less than five (5) Business Days prior to sending such notice of breach to the counterparty), and the Parties shall consult in good faith with each other regarding such alleged breach. From and after the Disposition Date, as applicable, no Party shall (and shall cause the other members of its Group not to) breach any Shared Contract to the extent such breach would reasonably be expected to result in a loss of rights, or acceleration of obligations, of any member of the other Party’s Group (or related to its Business, Assets or Liabilities under such Shared Contract) pursuant to (X) such Shared Contract, (Y) any Partial Assignment related to such Shared Contract or (Z) any other Contract with the counterparty to such Shared Contract (or any of its Affiliates) in existence at the Disposition Date that contains cross-default or similar provisions related to such Shared Contract.

 

Section 2.4           Intercompany Accounts, Loans and Agreements.

 

(a)          Except as set forth in Section 7.1(b), all intercompany receivables and payables (other than (x) intercompany loans (which shall be governed by Section 2.4(c)), (y) receivables or payables otherwise specifically provided for on Schedule 2.4(a), and (z) payables created or required by this Agreement, any Ancillary Agreement or any Continuing Arrangements) and intercompany balances, including in respect of any cash balances, any cash balances representing deposited checks or drafts or any cash held in any centralized cash management system between any member of the JS Global Group, on the one hand, and any member of the SharkNinja Group, on the other hand, which exist and are reflected in the accounting records of the relevant Parties immediately prior to the SharkNinja TopCo Contribution, shall continue to be outstanding after the SharkNinja TopCo Contribution and thereafter (i) shall be an obligation of the relevant Party (or the relevant member of such Party’s Group), each responsible for fulfilling its (or a member of such Party’s Group’s) obligations in accordance with the terms and conditions applicable to such obligation or if such terms and conditions are not set forth in writing, such obligation shall be satisfied within 30 days of a written request by the beneficiary of such obligation given to the corresponding obligor thereunder, and (ii) shall be for each relevant Party (or the relevant member of such Party’s Group) an obligation to a Third Party and shall no longer be an intercompany account.

 

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(b)          As between the Parties (and the members of their respective Group) all payments and reimbursements received after the SharkNinja TopCo Contribution by one Party (or member of its Group) that relate to a Business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto (at the expense of the Party entitled thereto) and, promptly upon receipt by such Party of any such payment or reimbursement, such Party shall pay or shall cause the applicable member of its Group to pay over to the Party entitled thereto the amount of such payment or reimbursement without right of set-off.

 

(c)          Except as set forth on Schedule 2.4(c), each of JS Global or any member of the JS Global Group, on the one hand, and SharkNinja or any member of the SharkNinja Group, on the other hand, will settle with the other Party, as the case may be, all intercompany loans, including any promissory notes, owned or owed by the other Party prior to the SharkNinja TopCo Contribution, except as otherwise agreed to in good faith by the Parties in writing on or after the date hereof, it being understood and agreed by the Parties that all guarantees shall be governed by Section 2.10.

 

Section 2.5           Limitation of Liability; Intercompany Contracts.

 

(a)          No Party nor any Subsidiary thereof shall be liable to the other Party or any Subsidiary of the other Party based upon, arising out of or resulting from any Contract, arrangement, course of dealing or understanding between or among it or a member of its Group and the other Party or a member of its Group existing at or prior to the Disposition Date (other than as set forth on Schedule 2.5(a), pursuant to this Agreement, any Ancillary Agreement, any Continuing Arrangements, any Third Party Agreements, as set forth in Section 2.4 or Section 7.1(b) or pursuant to any other Contract entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby) and each Party hereby terminates any and all Contracts, arrangements, courses of dealing or understandings between or among it (or a member of its Group) and the other Party (or a member of its Group) effective as of the Disposition Date (other than as set forth on Schedule 2.5(a), this Agreement, any Ancillary Agreement, any Continuing Arrangements, any Third Party Agreements, as set forth in Section 2.4 or Section 7.1(b) or pursuant to any Contract entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby); provided, however, that with respect to any Contract, arrangement, course of dealing or understanding between or among the Parties or any Subsidiaries thereof discovered after the Disposition Date, the Parties agree that such Contract, arrangement, course of dealing or understanding shall nonetheless be deemed terminated as of the Disposition Date with the only liability of the Parties in respect thereof to be the obligations incurred between the Parties pursuant to such Contract, arrangement, course of dealing or understanding between the Disposition Date and the time of discovery or later termination of any such Contract, arrangement, course of dealing or understanding.

 

(b)          If any Contract, arrangement, course of dealing or understanding is terminated pursuant to Section 2.5(a), and, but for the mistake or oversight of any Party, would have been listed as continuing and is reasonably necessary for such affected Party to be able to continue to operate its Business in substantially the same manner in which such Businesses were operated immediately prior to the Distribution, then, at the request of such affected Party made within eighteen (18) months following the Disposition Date, the Parties shall negotiate in good faith to determine whether and to what extent (including the terms and conditions relating thereto), if any, notwithstanding such termination, such Contract, arrangement, course of dealing or understanding should continue, or as appropriate, be re-instated, following the Distribution; provided, however, that the foregoing shall not obligate either Party to enter into an agreement to continue or re-instate such Contract, arrangement, course of dealing or understanding.

 

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Section 2.6           Transfers Not Effected at or Prior to the SharkNinja TopCo Contribution; Transfers Deemed Effective as of the SharkNinja TopCo Contribution.

 

(a)          To the extent that any Transfers, Duplications (as applicable) or Assumptions contemplated by this Article II shall not have been consummated at or prior to the SharkNinja TopCo Contribution, the Parties shall, except as set forth (i) in Schedule 2.6 or (ii) as contemplated by the Internal Reorganization, use commercially reasonable efforts to effect such Transfers, Duplications (as applicable) or Assumptions as promptly following the SharkNinja TopCo Contribution as shall be practicable. Nothing herein shall be deemed to require or constitute the Transfer (or Duplication, as applicable) of any Assets or the Assumption of any Liabilities which by their terms or operation of Law cannot be Transferred (or Duplicated, as applicable); provided, however, that the Parties and their respective Subsidiaries shall comply at all times with Section 2.2(d) in respect of the Transfer (or Duplication, as applicable) of all Assets and Assumption of all Liabilities contemplated to be Transferred and Assumed pursuant to this Article II to the fullest extent permitted by applicable Law. In the event that any such Transfer (or Duplication, as applicable) of Assets or Assumption of Liabilities has not been consummated, from and after the SharkNinja TopCo Contribution, except as set forth in Schedule 2.6, (i) the Party (or relevant member in its Group) retaining such Asset shall thereafter, insofar as reasonably possible and to the extent permitted by applicable Law, hold (or shall cause such member in its Group to hold) such Asset in trust for the use and benefit of the Party entitled thereto (at the expense of the Party entitled thereto) and (ii) the Party intended to Assume such Liability shall, or shall cause the applicable member of its Group to, pay or reimburse the Party retaining such Liability for all amounts paid or incurred in connection with the retention of such Liability. To the extent the foregoing applies to any Contracts (other than Shared Contracts, which shall be governed solely by Section 2.3) to be assigned for which any necessary Consents or Governmental Approvals are not received prior to the SharkNinja TopCo Contribution, the treatment of such Contracts shall, for the avoidance of doubt, be subject to Section 2.8 and Section 2.9, to the extent applicable. In addition, the Party retaining such Asset or Liability (or relevant member of its Group) shall (or shall cause such member in its Group to) treat, insofar as reasonably possible and to the extent permitted by applicable Law, such Asset or Liability in the ordinary course of business and take such other actions as may be reasonably requested by the Party to which such Asset is to be Transferred (or Duplication, as applicable) or by the Party Assuming such Liability in order to place such Party, insofar as reasonably possible and to the extent permitted by applicable Law, in the same position as if such Asset or Liability had been Transferred (or Duplication, as applicable) or Assumed as contemplated hereby and so that all the benefits and burdens relating to such Asset or Liability, including possession, use, risk of loss, potential for income and gain, and dominion, control and command over such Asset or Liability, are to inure from and after the SharkNinja TopCo Contribution to the relevant member or members of the JS Global Group or the SharkNinja Group entitled to the receipt of such Asset or required to Assume such Liability. In furtherance of the foregoing, the Parties agree that, as of the SharkNinja TopCo Contribution, except as set forth in Schedule 2.6 and subject to Section 2.2(c) and Section 2.9(b), each Party (i) shall be deemed to have acquired complete and sole beneficial ownership over all of the Assets, together with all rights, powers and privileges incident thereto, (ii) shall be deemed to have Assumed in accordance with the terms of this Agreement all of the Liabilities, and all duties, obligations and responsibilities incident thereto, which such Party is entitled to acquire or required to Assume pursuant to the terms of this Agreement, and (iii) shall (A) enforce at another Party’s (or relevant member of its Group’s) reasonable request any rights of the Party or its Group under such Assets and Liabilities against any other Persons (at the sole cost of the Party requesting enforcement of its rights), (B) not waive any rights related to such Assets or Liabilities to the extent related to the Business, Assets or Liabilities of another Party’s Group (except with the consent of such Party (which shall not be unreasonably withheld, conditioned or delayed)), (C) not terminate (or consent to be terminated by the counterparty) any Contract that constitutes such Asset except (1) in connection with the expiration of such Contract in accordance with its terms (it being understood, for the avoidance of doubt, that sending a notice of non-renewal to the counterparty in accordance with the terms of such Contract is expressly permitted) or (2) with the consent of the other Party (which shall not be unreasonably withheld, conditioned or delayed), (D) not amend, modify or supplement any Contract that constitutes such Asset in a manner material (relative to the existing rights and obligations related to such other Party’s Business, Assets, or Liabilities under such Contract) and adverse to the Business, Assets or Liabilities of such other Party or any of its Subsidiaries, and (E) provide written notice to the applicable other Party as soon as reasonably practicable (and in no event later than five (5) Business Days following receipt) after receipt of any formal notice of breach received from a counterparty to any Contract that constitutes such Asset; provided that the costs and expenses incurred by the responding Party or its Group in respect of any request by another Party in respect of such Assets or Liabilities shall be borne solely by the requesting Party or its Group.

 

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(b)          If and when the Consents, Governmental Approvals and/or conditions, the potential violation, conflict, absence or non-satisfaction or existence of which caused the deferral of Transfer (or Duplication, as applicable) of any Asset or deferral of the Assumption of any Liability pursuant to Section 2.6(a), are obtained or satisfied, the Transfer, Duplication (as applicable), assignment, Assumption or novation of the applicable Asset or Liability shall be effected as promptly as reasonably practicable without the payment or provision of any further consideration in accordance with and subject to the terms of this Agreement (including Section 2.2) and/or the applicable Ancillary Agreement, and shall, to the extent possible without the imposition of any undue cost on any Party, be deemed to have become effective as of the Disposition Date.

 

(c)          The Party (or relevant member of its Group) retaining any Asset or Liability due to the deferral of the Transfer (or Duplication, as applicable) of such Asset or the deferral of the Assumption of such Liability pursuant to Section 2.6(a) or otherwise, except as set forth in Schedule 2.6, shall (i) not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced, assumed or agreed in advance to be reimbursed by the Party (or relevant member of its Group) entitled to such Asset or the Person intended to be subject to such Liability, other than reasonable attorneys’ fees and recording or similar or other incidental fees, all of which shall be reasonably promptly reimbursed by the Party (or relevant member of its Group) entitled to such Asset or the Person intended to be subject to such Liability and (ii) be indemnified for all Indemnifiable Losses or other Liabilities (A) arising out of any actions (or omissions to act) of such retaining Party taken at the direction of the other Party (or relevant member of its Group) or (B) arising out of or related to such other Party’s gross negligence, fraud or willful misconduct, in each case, in connection with and relating to such retained Asset or Liability, as the case may be. Neither SharkNinja nor JS Global or any of their respective Affiliates shall be required to commence any Action, or offer or grant any additional consideration or other accommodation (financial or otherwise) to any Third Party with respect to any Assets or Liabilities not Transferred (or Duplicated, as applicable) as of the Disposition Date.

 

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(d)          After the Disposition Date, each Party (or any member of its Group) may receive mail, packages, electronic mail and any other written communications properly belonging to another Party (or any member of its Group). Accordingly, at all times after the Disposition Date, each Party is hereby authorized to receive and, if reasonably necessary to identify the proper recipient in accordance with this Section 2.6(d), open all mail, packages, electronic mail and any other written communications received by such Party that belongs to such other Party, and to the extent that they do not relate to the business of the receiving Party, the receiving Party shall promptly deliver such mail, packages, electronic mail or any other written communications (or, in case the same also relates to the business of the receiving Party or another Party, copies thereof) to such other Party as provided for in Section 11.6; it being understood that if a Party (or any member of its Group and any of its or their respective then-Affiliates) receives any claim or demand against any other Party (or any member of such other Party’s Group), or any notice or other communication regarding any Action involving any other Party (or any member of such other Party’s Group), such Party shall and shall cause the other members of its Group to, as promptly as practicable (and, in any event, use commercially reasonable efforts to do so within fifteen (15) days after receipt thereof) notify such other Party (including such other Party’s legal department) of the receipt of such claim, demand, notice or other communication, and shall promptly deliver such claim, demand, notice or other communication (or, in case the same also relates to the business of the receiving Party or another Party, copies thereof) to such other Party; provided, however, that the failure to provide such notice shall not constitute a breach of this Section 2.6(d) except to the extent, if any, that any such Party shall have been actually prejudiced as a result of such failure. The provisions of this Section 2.6(d) are not intended to, and shall not, be deemed to constitute an authorization by any Party or any other member of any Group (or any of their Affiliates from time to time) to permit the other to accept service of process on its behalf and no Party is or shall be deemed to be the agent of any other Party or any other member of any Group or any of their respective then-Affiliates for service of process purposes.

 

(e)          Subject to this Section 2.6 (Transfers Not Effected at or Prior to the SharkNinja TopCo Contribution; Transfers Deemed Effective as of the SharkNinja TopCo Contribution) and Section 2.3(a) (Treatment of Shared Contracts), (i) if at any time within twenty-four (24) months after the Distribution any Party discovers that any SharkNinja Asset is held by any member of the JS Global Group or any of their respective then-Affiliates, JS Global shall, and shall cause the other members of its respective Group and its respective then-Affiliates to, use their respective reasonable best efforts to promptly procure the transfer of the relevant SharkNinja Asset to SharkNinja TopCo or an Affiliate of SharkNinja TopCo designated by SharkNinja TopCo without the payment or provision of any further consideration or (ii) if at any time within twenty-four (24) months after the Distribution, any Party discovers that any JS Global Asset is held by any member of the SharkNinja Group or any of their respective then-Affiliates, SharkNinja TopCo shall, and shall cause the other members of its respective Group and its respective then-Affiliates to, use their respective reasonable best efforts to promptly procure the transfer of the relevant JS Global Asset to JS Global or an Affiliate of JS Global designated by JS Global without the payment or provision of any further consideration; provided that, notwithstanding anything contained herein to the contrary, in the case of clause (i), neither JS Global nor any of its respective Affiliates, or in the case of clause (ii), neither SharkNinja TopCo nor any of its respective Affiliates, shall be required to commence, defend or participate in any Action, or offer or grant any additional consideration or other accommodation (financial or otherwise) to any Third Party. If reasonably practicable and permitted under applicable Law, such Transfer may be effected by rescission of the applicable portion of a Conveyancing and Assumption Instrument as may be agreed by the relevant Parties.

 

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(f)          With respect to Assets and Liabilities described in Section 2.6(a), each of JS Global and SharkNinja TopCo shall, and shall cause the members of its respective Group to, (i) treat for all Tax purposes (A) the deferred Assets as assets having been Transferred to and owned by the Party entitled to such Assets not later than the SharkNinja TopCo Contribution and (B) the deferred Liabilities as liabilities having been Assumed and owned by the Person intended to be subject to such Liabilities not later than the SharkNinja TopCo Contribution and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by a change in applicable Law or good faith resolution of a Tax Contest).

 

(g)          The failure to obtain a Consent shall not in and of itself constitute a breach of this Agreement; provided that the foregoing shall not preclude consideration of a Party’s efforts in pursuing such Consent for purposes of determining compliance with this Section 2.6.

 

Section 2.7            Conveyancing and Assumption Instruments. In connection with, and in furtherance of, the Transfers (or Duplications, as applicable) of Assets and the Assumptions of Liabilities contemplated by this Agreement, the Parties shall execute or cause to be executed, on or after the date hereof by the appropriate entities to the extent not executed prior to the date hereof, any Conveyancing and Assumption Instruments necessary to evidence the valid Transfer (or Duplication, as applicable) to the applicable Party or member of such Party’s Group of all right, title, and interest in and to its accepted (or Duplicated, as applicable) Assets and the valid and effective Assumption by the applicable Party of its Assumed Liabilities for Transfers and Assumptions to be effected pursuant to New York Law or the Laws of the jurisdictions in which such Assets or Assumptions relate and in such form as the Parties shall reasonably agree. The Transfer of capital stock or share capital shall be effected by means of executed stock powers or share transfer forms, as applicable, and notation on the stock record books of the corporation or other legal entities involved, or by such other means as may be required in any non-U.S. jurisdiction to Transfer title to stock or shares and, only to the extent required by applicable Law, by notation on public registries.

 

Section 2.8           Further Assurances; Ancillary Agreements.

 

(a)          In addition to and without limiting the actions specifically provided for elsewhere in this Agreement and subject to the limitations expressly set forth in this Agreement, including Section 2.6, each of the Parties shall cooperate with each other and use (and shall cause its respective Subsidiaries and Affiliates to use) commercially reasonable efforts, at and after the Disposition Date, to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

 

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(b)          Without limiting the foregoing, at and after the Disposition Date, each Party shall cooperate with the other Party, but at the expense of the requesting Party (except as provided in Sections 2.2(b)(ii) and 2.6(c)) from and after the Disposition Date, to execute and deliver, or use commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of Transfer (or Duplication, as applicable) or title, and to make all filings with, and to obtain all Consents and/or Governmental Approvals, any permit, license, Contract, indenture or other instrument (including any Consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by any other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the Transfers (or Duplications, as applicable) of the applicable Assets and the assignment and Assumption of the applicable Liabilities and the other transactions contemplated hereby and thereby; provided that, for the avoidance of doubt, such obligation shall always be subject to the limitations set forth in Sections 2.2(d) and 2.6(c). Without limiting the foregoing, each Party shall, at the reasonable request, cost and expense of any other Party (except as provided in Sections 2.2(b)(ii) and 2.6(c)), take such other actions as may be reasonably necessary to vest in such other Party such title and such rights as possessed by the transferring Party (or Party to which a Contract is Duplicated for) to the Assets allocated to such other Party under this Agreement or any of the Ancillary Agreements, free and clear of any Security Interest.

 

(c)          Without limiting the foregoing, in the event that any Party (or member of such Party’s Group) receives any Assets (including the receipt of payments made pursuant to Contracts and proceeds from accounts receivable with respect to such Asset) or is liable for any Liability that is otherwise allocated to any Person that is a member of the other Group pursuant to this Agreement or the Ancillary Agreements, such Party agrees to promptly Transfer, or cause to be Transferred such Asset or Liability to the other Party so entitled thereto (or member of such other Party’s Group as designated by such other Party) at such other Party’s expense. Prior to any such Transfer, such Asset or Liability, as the case may be, shall be held in accordance with the provisions of Section 2.6.

 

(d)          At or prior to the date of the SharkNinja TopCo Contribution, each of JS Global and SharkNinja shall enter into, and/or (where applicable) shall cause a member or members of their respective Groups to enter into, the Ancillary Agreements and any other Contracts reasonably necessary or appropriate in connection with the transactions contemplated hereby and thereby.

 

(e)          On or prior to the Disposition Date, JS Global and SharkNinja (or SharkNinja TopCo, to the extent on or after the SharkNinja TopCo Contribution) in their respective capacities as direct or indirect shareholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by any Subsidiary of JS Global or Subsidiary of SharkNinja (or SharkNinja TopCo, to the extent on or after the SharkNinja TopCo Contribution), as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.

 

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Section 2.9            Novation of Liabilities; Indemnification.

 

(a)          Each Party, at the request of any member of the other Party’s Group (such other Party, the “Other Party”), shall use commercially reasonable efforts to obtain, or to cause to be obtained, any Consent, Governmental Approval, substitution or amendment required to novate or assign to the fullest extent permitted by applicable Law all obligations under Contracts (other than Shared Contracts, which shall be governed by Section 2.3) and Liabilities (other than with regard to guarantees, which shall be governed by Section 2.10), but solely to the extent that the Parties are jointly or each severally liable with regard to any such Contracts or Liabilities and such Contracts or Liabilities have been, in whole, but not in part, allocated to the first Party, or, if permitted by applicable Law, to obtain in writing the unconditional release of the applicable Other Party so that, in any such case, the members of the applicable Group shall be solely responsible for such Contracts or Liabilities; provided, however, that no Party or any of its Affiliates shall be required to commence, defend or participate in any Action, or obligated or required to offer or grant any consideration or other accommodation (financial or otherwise) to any Third Party from whom any such Consent, Governmental Approval, substitution or amendment is requested. In addition, with respect to any Action where any Party hereto is a defendant, when and if requested by such Party, the Other Party at its own cost will use commercially reasonable efforts to remove the requesting Party as a defendant to the extent that such Action relates solely to Assets or Liabilities that the Other Party (or any member of such requesting Party’s Group) has been allocated pursuant to this Article II, and the Other Party will cooperate and assist in any required communication with any plaintiff or other related Third Party.

 

(b)          If the Parties are unable to obtain, or to cause to be obtained, any such required Consent, Governmental Approval, release, substitution or amendment referenced in Section 2.9(a), the Other Party or a member of such Other Party’s Group shall continue to be bound by such Contract, license or other obligation that does not constitute a Liability of such Other Party and, unless not permitted by Law or the terms thereof, as agent or subcontractor for such Party, the Party or member of such Party’s Group who Assumed or retained such Liability as set forth in this Agreement (the “Liable Party”) shall, or shall cause a member of its Group to, pay, perform and discharge fully all the obligations or other Liabilities of such Other Party or member of such Other Party’s Group thereunder from and after the Disposition Date. For the avoidance of doubt, in furtherance of the foregoing, the Liable Party or a member of such Liable Party’s Group, as agent or subcontractor of the Other Party or a member of such Other Party’s Group, to the extent reasonably necessary to pay, perform and discharge fully any Liabilities, or retain the benefits (including pursuant to Section 2.6) associated with such Contract or license, is hereby granted the right to, among other things, (i) prepare, execute and submit invoices under such Contract or license in the name of the Other Party (or the applicable member of such Other Party’s Group), (ii) send correspondence relating to matters under such Contract or license in the name of the Other Party (or the applicable member of such Other Party’s Group), (iii) file Actions in the name of the Other Party (or the applicable member of such Other Party’s Group) in connection with such Contract or license and (iv) otherwise exercise all rights in respect of such Contract or license in the name of the Other Party (or the applicable member of such Other Party’s Group); provided that (y) such actions shall be taken in the name of the Other Party (or the applicable member of such Other Party’s Group) only to the extent reasonably necessary or advisable in connection with the foregoing and (z) to the extent that there shall be a conflict between the provisions of this Section 2.9(b) and the provisions of any more specific arrangement between a member of such Liable Party’s Group and a member of such Other Party’s Group, such more specific arrangement shall control. The Liable Party shall indemnify each Other Party and hold each of them harmless against any Liabilities (other than Liabilities of such Other Party) arising in connection therewith; provided that the Liable Party shall have no obligation to indemnify the Other Party with respect to any matter to the extent that such Liabilities arise from (i) any actions (or omissions to act) of the Liable Party taken at the direction of the Other Party (or relevant member of its Group) or (ii) such Other Party’s willful breach, knowing violation of Law, fraud, misrepresentation or gross negligence in connection therewith, in which case such Other Party shall be responsible for such Liabilities; it being understood that any exercise of rights under this Agreement by such Other Party shall not be deemed to be willful breach, knowing violation of Law, fraud, misrepresentation or gross negligence. The Other Party shall, without further consideration, promptly pay and remit, or cause to be promptly paid or remitted, to the Liable Party or, at the direction of the Liable Party, to another member of the Liable Party’s Group, all money, rights and other consideration received by it or any member of its Group in respect of such performance by the Liable Party (unless any such consideration is an Asset of such Other Party pursuant to this Agreement). If and when any such Consent, Governmental Approval, release, substitution or amendment shall be obtained or such agreement, lease, license or other rights or obligations shall otherwise become assignable or able to be novated, the Other Party shall, to the fullest extent permitted by applicable Law, promptly Transfer or cause the Transfer of all rights, obligations and other Liabilities thereunder of such Other Party or any member of such Other Party’s Group to the Liable Party or to another member of the Liable Party’s Group without payment of any further consideration and the Liable Party, or another member of such Liable Party’s Group, without the payment of any further consideration, shall Assume such rights and Liabilities to the fullest extent permitted by applicable Law. Each of the applicable Parties shall, and shall cause their respective Subsidiaries to, take all actions and do all things reasonably necessary on its part, or such Subsidiaries’ part, under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Section 2.9.

 

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Section 2.10         Guarantees; Releases; Payoffs.

 

(a)          Except as otherwise specified in any Ancillary Agreement or in this Section 2.10, at or prior to the date of the SharkNinja TopCo Contribution or as soon as practicable thereafter, (i) JS Global shall (with the reasonable cooperation of the applicable member of the SharkNinja Group) use its commercially reasonable efforts to have each member of the SharkNinja Group removed as guarantor of or obligor for any JS Global Liability to the fullest extent permitted by applicable Law and (ii) SharkNinja shall (with the reasonable cooperation of the applicable member of the JS Global Group) use its commercially reasonable efforts to have each member of the JS Global Group removed as guarantor of or obligor for any SharkNinja Liability, to the fullest extent permitted by applicable Law to the extent that they relate to SharkNinja Liabilities.

 

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(b)          If JS Global or SharkNinja is unable to obtain, or to cause to be obtained, any such required removal as set forth in clause (a) of this Section 2.10, (i) JS Global, to the extent a member of the JS Global Group has assumed the underlying Liability with respect to such guaranties or SharkNinja, to the extent a member of the SharkNinja Group has assumed the underlying Liability with respect to such guaranties, as the case may be, shall indemnify and hold harmless the remaining guarantors or obligors for any Indemnifiable Loss arising from or relating thereto (in accordance with the provisions of Article VI) and shall or shall cause one of its Subsidiaries, as agent or subcontractor for such guarantors or obligors to pay, perform and discharge fully all the obligations or other Liabilities of such guarantors or obligors thereunder, (ii) the expenses of the Parties incurred by each arising out of or related to the release from any such guaranty shall be borne by the Parties in accordance with Section 11.5, and (iii) each of JS Global and SharkNinja, on behalf of themselves and the members of their respective Groups, agree not to voluntarily renew or extend the term of, increase its obligations under, or Transfer to a Third Party, any loan, guaranty, lease, Contract or other obligation for which the other Party or other member of such other Party’s Group is or may be liable without the prior written consent of such other Party, unless all obligations of such other Party and the other members of such other Party’s Group with respect thereto are thereupon terminated by documentation (or otherwise subject to indemnification arrangements) reasonably satisfactory in form and substance to such other Party.

 

(c)          JS Global and SharkNinja shall take all necessary actions (including, but not limited to, those contemplated by clause (d) below) to assure the full release and discharge of (i) SharkNinja and the other members of the SharkNinja Group from any and all obligations pursuant to the BOC Released Facilities and the release of all liens and encumbrances against all Assets of SharkNinja and the other members of the SharkNinja Group previously securing the BOC Released Facilities and (ii) JS Global and the other members of the JS Global Group from any and all obligations pursuant to the BOC Released Facilities and the release of all liens and encumbrances against all Assets of JS Global and the other members of the JS Global Group previously securing the BOC Released Facilities. The expenses of the Parties incurred by each arising out of or related to the release from any such guaranty shall be borne by the Parties in accordance with Section 11.5.

 

(d)          JS Global and SharkNinja shall, and shall cause each other member of such Party’s Group to, in each case, provide all customary cooperation reasonably requested by SharkNinja or JS Global in connection with the repayment of the outstanding obligations under the BOC Released Facilities (including (A) the execution of any payoff letter, confirmation letter or letter of direction relating to the JS Global Payoff Amount, the SharkNinja Payoff Amount or any distributions in respect thereof, as applicable, and (B) obtaining evidence of all filings and executed terminations and releases as are reasonably necessary to release any liens or guarantees in connection therewith (including the return of any possessory collateral)).

 

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Section 2.11         Disclaimer of Representations and Warranties.

 

(a)          EACH OF JS GLOBAL (ON BEHALF OF ITSELF AND EACH MEMBER OF THE JS GLOBAL GROUP) AND SHARKNINJA (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SHARKNINJA GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN ANY ANCILLARY AGREEMENT OR IN ANY CONTINUING ARRANGEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENTS OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY, AND HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, AS TO THE ASSETS, BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, AS TO NONINFRINGEMENT, VALIDITY OR ENFORCEABILITY OR ANY OTHER MATTER CONCERNING, ANY ASSETS OR BUSINESS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST AND (II) ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

 

(b)          Each of JS Global (on behalf of itself and each member of the JS Global Group) and SharkNinja (on behalf of itself and each member of the SharkNinja Group) further understands and agrees that if the disclaimer of express or implied representations and warranties contained in Section 2.11(a) is held unenforceable or is unavailable for any reason under the Laws of any jurisdiction outside the United States or if, under the Laws of a jurisdiction outside the United States, both JS Global or any member of the JS Global Group, on the one hand, and SharkNinja or any member of the SharkNinja Group, on the other hand, are jointly or severally liable for any JS Global Liability or any SharkNinja Liability, respectively, then, the Parties intend that, notwithstanding any provision to the contrary under the Laws of such foreign jurisdictions, the provisions of this Agreement and the Ancillary Agreements (including the disclaimer of all representations and warranties, allocation of Liabilities among the Parties and their respective Subsidiaries, releases, indemnification and contribution of Liabilities) shall prevail for any and all purposes among the Parties and their respective Subsidiaries.

 

(c)          JS Global hereby waives compliance by itself and each and every member of the JS Global Group with the requirements and provisions of any “bulk-sale” or “bulk transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the JS Global Assets to JS Global or any member of the JS Global Group.

 

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(d)          SharkNinja hereby waives compliance by itself and each and every member of the SharkNinja Group with the requirements and provisions of any “bulk-sale” or “bulk transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the SharkNinja Assets to SharkNinja or any member of the SharkNinja Group.

 

Section 2.12         Cash Management.

 

(a)          From the date of this Agreement until the Disposition Date, JS Global and its Subsidiaries shall be entitled to use, retain or otherwise dispose of all cash and cash equivalents generated by the SharkNinja Business and the SharkNinja Assets in JS Global’s discretion, after consulting in good faith with SharkNinja and after reasonably considering the views of SharkNinja (which SharkNinja shall promptly provide in good faith); provided that JS Global shall not use, retain or otherwise dispose of any cash or cash equivalents generated by the SharkNinja Business and the SharkNinja Assets if such use, retention or disposition is not described in the Distribution Disclosure Documents (other than in the ordinary course of business). Except as provided in this Section 2.12, all Cash Equivalents held by any member of the SharkNinja Group as of the Disposition Date shall be a SharkNinja Asset and all Cash Equivalents held by any member of the JS Global Group as of the Disposition Date shall be a JS Global Asset. To the extent that following the Disposition Date any Cash Equivalents are required to be transferred from any member of the JS Global Group to any member of the SharkNinja Group or from any member of the SharkNinja Group to any member of the JS Global Group to make effective the Internal Reorganization, the Internal Reorganization Contribution or the Internal Reorganization Distribution pursuant to this Agreement and the Ancillary Agreements (including if required by Law or regulation to effect the foregoing), but excluding for the avoidance of doubt, the transfer of Cash Equivalents contemplated by Section 2.12(b), the Party receiving such Cash Equivalents shall promptly transfer an amount in cash equal to such transferred Cash Equivalents back to the transferring Party so as not to override the allocations of Assets, Liabilities and expenses related to the Internal Reorganization, the Internal Reorganization Contribution and the Internal Reorganization Distribution contemplated by this Agreement and the Ancillary Agreements.

 

(b)          Any payment made in accordance with this Section 2.12 shall be treated in accordance with the terms of Section 11.21.

 

ARTICLE III

 

Certain Actions at or prior to the distribution

 

Section 3.1           Securities Law Matters.

 

(a)          SharkNinja shall cooperate with JS Global to accomplish the Distribution, including in connection with the preparation of all documents and the making of all filings required in connection with the Distribution. JS Global shall direct and control the efforts of the Parties in connection with the Distribution, after consulting in good faith with SharkNinja and after reasonably considering the views of SharkNinja (which SharkNinja shall promptly provide in good faith), and SharkNinja shall take, or cause to be taken, all actions and to do, or cause to be done, all other things necessary to facilitate the Distribution as directed by JS Global in good faith and in accordance with the applicable terms and subject to the conditions of this Agreement and the other Ancillary Agreements. Without limiting the generality of the foregoing, SharkNinja will, and will cause the members of its Group and its and their respective employees, advisors, agents, accountants, counsel and other representatives to, as reasonably directed by JS Global, reasonably cooperate in and take the following actions: (i) participating in meetings, drafting sessions, due diligence sessions, management presentation sessions, “road shows” and similar meetings or sessions in connection with the Distribution (including any marketing efforts); and (ii) furnishing all historical and forward-looking financial and other financial and other information that is available to SharkNinja and is required in connection with the Distribution.

 

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(b)          In furtherance and not in limitation of the obligations set forth in Section 3.1(a), SharkNinja and SharkNinja TopCo (as applicable) shall file the Distribution Disclosure Documents and any amendments or supplements thereto as may be necessary or advisable in order to cause the Distribution Disclosure Documents to become and remain effective as required by the Commission or federal, state or other applicable securities Laws (but shall not make any such filing prior to the Distribution without the prior written consent of JS Global). JS Global and SharkNinja (as applicable) shall prepare and mail or otherwise make available, prior to the Disposition Date, to the holders of JS Global Ordinary Shares, such information concerning the SharkNinja Group (as applicable), the SharkNinja Business, the SharkNinja Group’s operations and management, the Distribution, the Sell Down and such other matters as JS Global shall reasonably determine and as may be required by Law. The Parties will prepare, and SharkNinja TopCo will, to the extent required by applicable Law (and previously consented to in writing by JS Global), file with the Commission, any such documentation and any requisite no-action letters which JS Global determines are necessary or desirable to effectuate the Distribution, and the Parties shall use their respective reasonable best efforts to obtain all necessary approvals from the Commission with respect thereto as soon as practicable. The Parties shall take all such actions as may be necessary or appropriate under the securities or “blue sky” Laws of states or other political subdivisions of the United States and shall use commercially reasonable efforts to comply with all applicable foreign securities Laws in connection with the transactions contemplated by this Agreement and the other Ancillary Agreements.

 

Section 3.2           Ancillary Agreements. On or prior to the Disposition Date, each of JS Global and SharkNinja shall enter into, and/or (where applicable) shall cause the applicable member or members of its respective Group to enter into, the Ancillary Agreements and any other Contracts in respect of the Distribution reasonably necessary or appropriate in connection with the transactions contemplated hereby and thereby.

 

Section 3.3           Stock Exchange Listing Application.

 

(a)          Prior to the Disposition Date and subject to Section 3.1, the Parties shall prepare and file an application for the listing on the Stock Exchange of SharkNinja Ordinary Shares to be issued to the Spin Off Recipients in the Distribution (the “Stock Exchange Listing Application”).

 

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(b)           Prior to the Disposition Date and subject to Section 3.1, the SharkNinja Group shall use reasonable best efforts to cause the Stock Exchange Listing Application to be approved by the Stock Exchange, subject to official notice of issuance.

 

Section 3.4            Governance.

 

(a)           Memorandum and Articles. On or prior to the Disposition Date, the Parties shall take all necessary action so that, as of the Disposition Date, SharkNinja TopCo will have adopted the Memorandum and Articles, substantially in the form filed by SharkNinja TopCo with the Commission as an exhibit to the relevant Distribution Disclosure Document.

 

(b)           Officers and Directors.

 

(i)           On or prior to the Disposition Date, the Parties shall take all necessary action (including providing written resignations, effective as of the Disposition Date) to cause:

 

(1)          the individuals identified as officers of SharkNinja TopCo in the relevant Distribution Disclosure Document to be officers of SharkNinja TopCo on or prior to the Disposition Date;

 

(2)          the individuals identified as directors of SharkNinja TopCo in the relevant Distribution Disclosure Document to be directors of SharkNinja TopCo on or prior to the Disposition Date;

 

(3)          Wang Xuning identified as the chairman of the board of directors of SharkNinja TopCo (the “Chairman”) in the relevant Distribution Disclosure Document to be the Chairman on or prior to the Disposition Date, and thereafter until such time as reflected in the Memorandum and Articles;

 

(4)          The resignation or removal of all employees and Affiliates of the JS Global Group that serve as directors and members of the board of directors, board of managers or similar governing body, officers and authorized signatories of SharkNinja, SharkNinja TopCo or any of their respective Subsidiaries, except as set forth on Schedule 3.4(b)(i)(4); provided that no Person shall be required by any Party to resign from any position or office with another Party if such Person is disclosed in the Distribution Disclosure Document as a Person who is to hold such position or office following the Disposition Date; and

 

(5)          The resignation or removal of all employees and Affiliates of the SharkNinja Group that serve as directors and members of the board of directors, board of managers or similar governing body, officers and authorized signatories of JS Global or any of its Subsidiaries, except as set forth on Schedule 3.4(b)(i)(5); provided that no Person shall be required by any Party to resign from any position or office with another Party if such Person is disclosed in the Distribution Disclosure Document as a Person who is to hold such position or office following the Disposition Date.

 

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Section 3.5            Distribution Agent. JS Global shall enter into a distribution agent agreement with the Distribution Agent or otherwise provide instructions to the Distribution Agent regarding the Distribution in furtherance of Section 4.2, Section 4.3 and Section 4.4.

 

Section 3.6            Transfer Agent. SharkNinja shall enter into a transfer agency agreement with the Transfer Agent.

 

Section 3.7            JS Global Shareholder Approval. JS Global shall take any and all actions necessary to duly call, give notice of, convene and hold a meeting of the JS Global Shareholders to seek the JS Global Shareholder Approval.

 

Section 3.8            SharkNinja Repurchase. If after the expiration of the Sell Down Period there remains an outstanding portion of SharkNinja Ordinary Shares of the Ineligible Persons held by the Trust which have not been sold through the Sell Down (the “Remaining Ineligible Person Shares”), then, within ten (10) Business Days following the Sell Down Period, SharkNinja TopCo shall repurchase with cash the Remaining Ineligible Person Shares from the Trust for an amount equal to (i) the average price per SharkNinja Ordinary Share sold in the Sell Down (before the deduction of relevant fees charged by the licensed brokers and their licensed partners assisting the Trust with the Sell Down, fees charged by the Trustee and the costs and expenses in connection with the formation of the Trust), multiplied by (ii) the number of Remaining Ineligible Person Shares.

 

ARTICLE IV

 

The Distribution

 

Section 4.1            Form of Distribution. JS Global will effect the Distribution as a pro rata distribution to the Spin Off Recipients.

 

Section 4.2            Manner of Distribution. Each Spin Off Recipient (other than JS Global or a member of the JS Global Group) will be entitled to receive one (1) SharkNinja Ordinary Share for every twenty-five (25) JS Global Ordinary Shares held by such Spin Off Recipient as of the Record Date. Prior to the Disposition Date, the JS Global Board, in accordance with applicable Law, shall establish (or designate a committee of the JS Global Board to establish) the Record Date for the Distribution and any appropriate procedures in connection with the Distribution.

 

Section 4.3            Distribution; Delivery of Shares.

 

(a)          On or prior to the Disposition Date, JS Global shall, or shall cause the applicable member of its Group to, execute and deliver an instrument of transfer and make the appropriate entries in the register of members of JS Global, or otherwise make available to the Distribution Agent, for the benefit of the Spin Off Recipients, such number of issued and outstanding SharkNinja Ordinary Shares as is necessary to effect the Distribution and provide to the Distribution Agent book-entry authorizations and any information required in order to complete the Distribution.

 

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(b)          On the Disposition Date, JS Global will direct the Distribution Agent to distribute, effective as of the Disposition Date, the SharkNinja Ordinary Shares being distributed in the Distribution for the account of the Spin Off Recipients that are entitled thereto pursuant to Section 4.2, a book-entry authorization representing the SharkNinja Ordinary Shares being distributed in the Distribution for the account of such Spin Off Recipients. All such SharkNinja Ordinary Shares to be so distributed shall be distributed by way of direct registration in book-entry form. No certificates therefor shall be distributed.

  

Section 4.4            No Fractional Shares. Notwithstanding anything herein to the contrary, no fractional SharkNinja Ordinary Shares shall be issued in connection with the Distribution, and any such fractional share interests to which a Spin Off Recipient would otherwise be entitled shall not entitle such Spin Off Recipient to vote or to any other rights as a shareholder of SharkNinja TopCo. In lieu of any such fractional shares, each Spin Off Recipient who, but for the provisions of this section, Section 4.1 and Section 4.2, would be entitled to receive a fractional share interest of SharkNinja Ordinary Shares pursuant to the Distribution, shall be paid cash, without any interest thereon, as hereinafter provided. JS Global will direct the Distribution Agent to determine the number of whole and fractional SharkNinja Ordinary Shares allocable to each Spin Off Recipient, to aggregate all such fractional shares into whole shares, to sell the whole shares obtained thereby in the open market at the then-prevailing prices on behalf of each Spin Off Recipient who otherwise would be entitled to receive fractional share interests and to distribute to each such Spin Off Recipient his, her or its ratable share of the total proceeds of such sale, after making appropriate deductions of the amounts required for any applicable withholding and transfer Taxes. The costs and expenses of such sale and distribution, including brokers fees and commissions will be paid by a member of the SharkNinja Group. The sales of fractional shares shall occur as soon after the Disposition Date as practicable and as determined by the Distribution Agent. None of JS Global, SharkNinja TopCo or the Distribution Agent shall guarantee any minimum sale price for the fractional SharkNinja Ordinary Shares. Neither JS Global nor SharkNinja shall pay any interest on the proceeds from the sale of fractional shares. The Distribution Agent shall have the sole discretion to select the broker-dealers through which to sell the aggregated fractional shares and to determine when, how and at what price to sell such shares. Neither the Distribution Agent nor the broker-dealers through which the aggregated fractional shares are sold shall be Affiliates of JS Global or SharkNinja TopCo.

 

Section 4.5            Conditions to Distribution. The obligation of JS Global to effect the Distribution pursuant to this Agreement shall be subject to the prior or simultaneous satisfaction, or, to the extent permitted by applicable Law, waiver by JS Global, in its sole and absolute discretion, after consulting in good faith with SharkNinja and after reasonably considering the views of SharkNinja (which SharkNinja shall promptly provide in good faith), of the following conditions:

 

(a)          the Internal Reorganization shall have been completed substantially in accordance with the Separation Plan (other than any of such steps that are expressly contemplated to occur at or after the Distribution);

 

(b)          all Distribution Disclosure Documents filed in connection with the Distribution shall be effective under the Securities Act, no stop order relating to the Distribution Disclosure Documents will be in effect, no proceedings seeking such stop order shall be pending before or threatened by the Commission, and the requisite information shall have been distributed to the JS Global Shareholders;

 

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(c)          the Stock Exchange shall have approved the Stock Exchange Listing Application, subject to official notice of issuance;

 

(d)          this agreement and each of the Ancillary Agreements shall have been duly executed and delivered by the parties thereto;

 

(e)          the actions and filings with regard to state securities and “blue sky” Laws of states or other political subdivisions of the United States (and any comparable Laws under any foreign jurisdictions) described in Section 3.1(b) shall have been taken and, where applicable, have become effective or been accepted;

 

(f)          no order, injunction or decree issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the Distribution shall be pending, issued or in effect, and no other event outside the control of the Parties shall have occurred or failed to occur that prevents the consummation of all or any portion of the Distribution or any related transactions contemplated hereby, including the Internal Reorganization;

 

(g)          the JS Global Board shall have approved the Distribution and shall have not determined, in the sole and absolute judgment of the JS Global Board, that any events or developments shall have occurred that make it inadvisable to effect the Internal Reorganization, Distribution and other transactions contemplated by this Agreement or the Ancillary Agreements or would result in the Internal Reorganization, Distribution and other transactions contemplated by this Agreement or the Ancillary Agreements not being in the best interest of JS Global or the JS Global Shareholders; and

 

(h)          the JS Global Shareholder Approval shall have been obtained.

 

Section 4.6            Additional Matters.

 

(a)          No action by a Spin Off Recipient shall be necessary for JS Global to distribute the applicable number of SharkNinja Ordinary Shares such Spin Off Recipient (or such Spin Off Recipient’s designated transferee or transferees) is entitled to in the Distribution.

 

(b)          No member of the JS Global Group, SharkNinja Group or any of their respective Affiliates, will be liable to any Person in respect of any SharkNinja Ordinary Shares (or dividends or distributions with respect thereto) that are properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

 

(c)          JS Global may at any time and from time to time, in its sole and absolute discretion, until the completion of the Distribution abandon, modify or change any or all of the terms of the Internal Reorganization, the Distribution and other transactions contemplated by this Agreement and the Ancillary Agreements, including, without limitation, by accelerating or delaying the timing of the consummation of all or part of the Internal Reorganization, Distribution or the other transactions contemplated by this Agreement and the Ancillary Agreements, after consulting in good faith with SharkNinja and after reasonably considering the views of SharkNinja (which SharkNinja shall promptly provide in good faith).

 

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(d)          SharkNinja shall cooperate with JS Global in all respects to accomplish the Internal Reorganization, the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements. SharkNinja shall, at JS Global’s direction, promptly take any and all actions necessary or desirable to effect the Internal Reorganization, the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements, after JS Global consults in good faith with SharkNinja and after JS Global reasonably considers the views of SharkNinja (which SharkNinja shall promptly provide in good faith). JS Global shall select, and SharkNinja shall cooperate in good faith to select, any investment bank(s), manager(s), underwriter(s) or dealer-manager(s) in connection with the Distribution, as applicable, as well as any financial printer, solicitation and/or exchange agent and financial, legal, accounting, tax and other advisors and service providers in connection with the Distribution, as applicable, after JS Global consults in good faith with SharkNinja and after JS Global reasonably considers the views of SharkNinja (which SharkNinja shall promptly provide in good faith). SharkNinja and JS Global, as the case may be, will provide to the exchange agent all share certificates (to the extent certificated) or book-entry authorizations (to the extent not certificated) and any information required in order to complete the Distribution.

 

Section 4.7            Tax Withholding. The Parties shall be entitled to deduct and withhold from amounts payable pursuant to this Agreement any Taxes required to be deducted and withheld under any provision of federal, state, local or foreign Tax Law. Upon becoming aware of any such withholding obligation, the Party so deducting and withholding shall provide reasonable advance notice of such withholding and shall reasonably cooperate with the Party in respect of which such deduction and withholding is made to eliminate or reduce any such required deduction or withholding.

 

ARTICLE V

 

CERTAIN COVENANTS

 

Section 5.1            Cooperation. From the Disposition Date until the date that is the fourth (4th) anniversary of the Disposition Date, and subject to the terms of and limitations contained in this Agreement and the Ancillary Agreements, each Party shall, and shall cause each of its respective Affiliates and employees to, (i) provide reasonable cooperation and assistance to the other Party (and any member of its respective Group) in connection with the completion of the transactions contemplated herein and in each Ancillary Agreement, (ii) reasonably assist the other Party in the orderly and efficient transition in becoming a separate company to the extent set forth in any of the Ancillary Agreements (as applicable) or as otherwise set forth herein (including, but not limited to, complying with Articles VII, VIII and X) and (iii) reasonably assist the other Party to the extent such Party is providing or has provided services, as applicable, pursuant to any of the Ancillary Agreements (as applicable) in connection with requests for information from, audits or other examinations of, such other Party by a Governmental Entity; in each case, except as otherwise set forth in this Agreement or may otherwise be agreed to by the Parties in writing, at no additional cost to the Party requesting such assistance other than for the actual out-of-pocket costs (which shall not include the costs of salaries and benefits of employees of such Party or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service with respect to the foregoing) incurred by any such Party, if applicable.

 

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Section 5.2            Retained Names.

 

(a)          No later than ninety (90) days following the Disposition Date, SharkNinja shall, and shall cause the members of the SharkNinja Group, to change their names and cause their certificates of incorporation and bylaws (or equivalent organizational documents), as applicable, to be amended to remove any reference to the JS Global Retained Names. Following the Disposition Date, unless otherwise directed by JS Global, SharkNinja TopCo shall, and shall cause the members of the SharkNinja Group, to (i) immediately cease to hold themselves out as having any affiliation with JS Global or any members of the JS Global Group, and (ii) as soon as practicable, but in no event later than sixty (60) days following the Disposition Date, cease to make any public-facing or publicly accessible use of any JS Global Retained Names (provided that these obligations shall not apply to inventory or other physical assets of printed materials of the SharkNinja Group existing as of the Disposition Date). In furtherance thereof, as soon as practicable but in no event later than six (6) months following the Disposition Date, SharkNinja TopCo shall, and shall cause the members of the SharkNinja Group to, remove, strike over, or otherwise obliterate all JS Global Retained Names from all public-facing or publicly accessible assets and other materials owned by or in the possession of any member of the SharkNinja Group, including any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, websites, email, computer software and other materials and system. Any use by the members of the SharkNinja Group of any of the JS Global Retained Names as permitted in this Section 5.2(a) is subject to their use of the JS Global Retained Names in a form and manner, and with standards of quality, of that in effect for the JS Global Retained Names as of the Disposition Date. SharkNinja TopCo and the members of the SharkNinja Group shall not use the JS Global Retained Names in a manner that may reflect negatively on such name and marks or on JS Global or any member of the JS Global Group.

 

(b)          Subject to Section 5.2(c), no later than ninety (90) days following the Disposition Date, JS Global shall, and shall cause the members of the JS Global Group, to change their names and cause their certificates of incorporation and bylaws (or equivalent organizational documents), as applicable, to be amended to remove any reference to the SharkNinja Retained Names. Subject to Section 5.2(c), following the Disposition Date, unless otherwise directed by SharkNinja TopCo or its Subsidiaries, JS Global shall, and shall cause the members of the JS Global Group, to (i) immediately cease to hold themselves out as having any affiliation with SharkNinja or any members of the SharkNinja Group and (ii) as soon as practicable, but in no event later than sixty (60) days following the Disposition Date, cease to make any public-facing or publicly accessible use of any SharkNinja Retained Names (provided that these obligations shall not apply to inventory or other physical assets of printed materials of the JS Global Group existing as of the Disposition Date). Subject to Section 5.2(c), in furtherance thereof, as soon as practicable but in no event later than six (6) months following the Disposition Date, JS Global shall, and shall cause the members of the JS Global Group to, remove, strike over, or otherwise obliterate all SharkNinja Retained Names from all public-facing or publicly accessible assets and other materials owned by or in the possession of any member of the JS Global Group, including any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, websites, email, computer software and other materials and system. Any use by the members of the JS Global Group of any of the SharkNinja Retained Names as permitted in this Section 5.2(b) is subject to their use of the SharkNinja Retained Names in a form and manner, and with standards of quality, of that in effect for the SharkNinja Retained Names as of the Disposition Date. JS Global and the members of the JS Global Group shall not use the SharkNinja Retained Names in a manner that may reflect negatively on such name and marks or on SharkNinja TopCo or any member of the SharkNinja Group.

 

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(c)          Notwithstanding anything to the contrary, the foregoing Sections 5.2(a) and (b) shall be without limitation to any rights to (i) the JS Global Retained Names or SharkNinja Retained Names expressly granted to the SharkNinja Group or JS Global Group, respectively, under an Ancillary Agreement, (ii) make use of such Trademarks in a manner that would constitute “fair use” under applicable Law if any unaffiliated Third Party made such use or would otherwise be legally permissible for any unaffiliated Third Party without the consent of the Party owning such Trademark, or (iii) make references in internal historical and tax records.

 

(d)          The Parties agree that irreparable damage may occur in the event that the provisions of this Section 5.2 were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or injunctions to enforce specifically the terms and provisions of this Section 5.2 in any court having jurisdiction, and without posting any bond or other undertaking, this being in addition to any other remedy to which they are entitled at law or in equity.

 

Section 5.3            No Hire and No Solicitation of Employees. Except as otherwise specifically set forth in any Ancillary Agreement, from and after the Disposition Date until twelve (12) months from the Disposition Date, none of JS Global, SharkNinja TopCo or any member of their respective Groups will, without the prior written consent of the other applicable Party, either directly or indirectly, on their own behalf or in the service or on behalf of others, agree to an employment, contractual or other relationship or otherwise hire, retain or employ any employee of any other Party’s respective Group. For and during the twelve (12) month period following the Disposition Date, none of JS Global, SharkNinja TopCo or any member of their respective Groups will, without the prior written consent of the other applicable Party, either directly or indirectly, on their own behalf or in the service or on behalf of others, solicit, aid, induce or encourage any employee of any other Party’s respective Group to leave his or her employment. Notwithstanding the foregoing, nothing in this Section 5.3 shall restrict or preclude JS Global, SharkNinja TopCo or any member of their respective Groups from soliciting or hiring during the twelve (12) month non-solicitation period referenced above (i), any employee who responds to a general solicitation or advertisement by a recruiter, whether in-house or external, that is not specifically targeted or focused on the employees employed by any other Party’s respective Group (and nothing shall prohibit such generalized searches for employees through various means, including, but not limited to, the use of advertisements in the media (including trade media) or the engagement of search firms to engage in such searches); provided that the applicable Party has not encouraged or advised such firm to specifically approach any such employee; (ii) any employee whose employment has been terminated by the other Party’s respective Group after six (6) months from the date of termination of such employee’s employment; or (iii) any employee whose employment has been terminated by such employee after twelve (12) months from the date of termination of such employee’s employment.

 

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Section 5.4            Corporate Opportunities.

 

(a)          From and after the Disposition Date, each Party will, to the fullest extent permissible by applicable Law, in accordance with the Laws of the Cayman Islands, renounce any interest or expectancy of such Party, or in being offered an opportunity to participate in, any corporate opportunities of any member of the other Party that are presented to any member of the other Party or any of its directors, officers or employees.

 

(b)          For the purposes of this Section 5.4, “corporate opportunities” of a Group shall include, but not be limited to, business opportunities which either the JS Global Group or the SharkNinja Group, as applicable, is financially able to undertake, which are, from their nature, in the line of the JS Global Group’s or SharkNinja Group’s, as applicable, business, are of practical advantage to it and are ones in which the JS Global Group or the SharkNinja Group, as applicable, would have an interest or a reasonable expectancy, and in which, by embracing the opportunities or allowing such opportunities to be embraced by the JS Global Group or the SharkNinja Group, as applicable, or its directors, officers or employees, the self-interest of the JS Global Group or the SharkNinja Group, as applicable, or any of its directors, officers or employees will or could be brought into conflict with that of the JS Global Group or SharkNinja Group, as applicable.

 

(c)          Notwithstanding anything in this Section 5.4, none of the obligations or restrictions contained in this Section 5.4 shall apply to Wang Xuning (so long as Wang Xuning remains (i) a direct or indirect Controlling Shareholder or (ii) a director, in each case, of the JS Global Group and the SharkNinja Group); provided, however, that Wang Xuning determines in good faith which corporate opportunities are most appropriate for the JS Global Group or the SharkNinja Group; provided, further, that nothing in this Section 5.4 shall relieve or exculpate, as applicable, Wang Xuning from any obligations or liabilities arising from or related to his fiduciary duties as a director of the JS Global Group and the SharkNinja Group, in each case, under applicable Law.

 

Section 5.5            Dividend. SharkNinja and SharkNinja TopCo agree that, on or prior to the Internal Reorganization Date, the applicable member (or members, as applicable) of the SharkNinja Group shall effect one or multiple distributions of immediately available funds to JS Global or one of its Subsidiaries in the aggregate amount of $[•] after reduction for any applicable U.S. federal withholding Taxes.

 

Section 5.6            Non-Assertion. Effective as of the Distribution Date, SharkNinja TopCo, on behalf of itself and the applicable members of the SharkNinja Group, hereby agrees not to assert (and shall cause its and their respective successors, assigns, licensees or other transferees not to assert) against the JS Global Group, its successors, assigns, manufacturers, licensees (of rights reasonably necessary for manufacturing products in connection with the portion of the JS Global Business described in Section 1.1(88)(i) hereof) or transferees any Manufacturing Intellectual Property with respect to its use in manufacturing products in connection with the portion of the JS Global Business described in Section 1.1(88)(i) hereof.

 

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ARTICLE VI

 

Financial and Other Covenants1

 

Section 6.1            Disclosure and Financial Controls. SharkNinja agrees that, until the Disposition Date:

 

(a)          Financial Controls. SharkNinja will, and will cause each other member of the SharkNinja Group to, maintain internal systems and procedures that will provide reasonable assurance that (i) the Financial Statements are reliable and timely prepared in accordance with IFRS and applicable Law, (ii) all transactions of members of the SharkNinja Group are recorded as necessary to permit the preparation of the Financial Statements, (iii) the receipts and expenditures of members of the SharkNinja Group are authorized at the appropriate level within SharkNinja, and (iv) unauthorized use or disposition of the assets of any member of the SharkNinja Group that could have a material effect on the Financial Statements is prevented or detected in a timely manner. It is understood and agreed that references in this Section 6.1(a) to reporting or other obligations of SharkNinja shall be deemed to assume, for purposes hereof, that SharkNinja is subject to the same rules and regulations as JS Global.

 

(b)          Fiscal Year. SharkNinja will, and will cause each member of the SharkNinja Group to, maintain a fiscal year and fiscal quarters that commence and end on the same calendar days as JS Global’s fiscal year and fiscal quarters commence and end, and maintain monthly accounting periods that commence and end on the same calendar days as JS Global’s monthly accounting periods commence and end.

 

(c)          Semi-Annual Financial Information. SharkNinja will deliver or make available to JS Global a consolidated income statement and balance sheet, or the information required to prepare a consolidated income statement and balance sheet, and supplemental data related to cash flows and other necessary disclosures, on a semi-annual basis, or through the Disposition Date, if earlier, in the same format and manner, with the same detail, in the same timeframe and otherwise consistent with past practices among SharkNinja and JS Global, as the SharkNinja Business delivered or made available such information to JS Global prior to the Disposition Date (such practices, the “Financial Delivery Practices”). SharkNinja will be responsible for reviewing its results and data and for informing JS Global promptly of any post-closing adjustments that come to its attention.

 

(d)          SharkNinja Semi-Annual Financial Statements. As soon as practicable, in accordance with the Financial Delivery Practices, and in any event on a semi-annual basis, SharkNinja will deliver to JS Global drafts of (i) the consolidated financial statements of the SharkNinja Group (and notes thereto) for each semi-annual fiscal period from the beginning of the current fiscal year (or the beginning of the current semi-annual period) to the end of the semi-annual period or the Disposition Date, if earlier, setting forth in each case in comparative form for each such semi-annual fiscal period of SharkNinja the consolidated figures (and notes thereto) for the corresponding periods of the previous semi-annual fiscal period and all in reasonable detail and prepared in accordance with IFRS, and (ii) a discussion and analysis by management of the SharkNinja Group’s financial condition and results of operations for such semi-annual fiscal period, including an explanation of any material period-to-period changes and any off-balance sheet transactions, all in reasonable detail. The information set forth in clauses (i) and (ii) above is referred to in this Agreement as the “SharkNinja Semi-Annual Financial Statements.”

 

 
1Note to Draft: Article VI and reference to Article VI to be deleted if this Agreement is entered into substantially concurrently with the Distribution.

 

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(e)          Conformance with JS Global Financial Presentation. All information provided by any member of the SharkNinja Group to JS Global pursuant to Section 6.1(c) and Section 6.1(d) will be consistent in terms of format and detail and otherwise with JS Global’s policies with respect to the application of IFRS and practices in effect on the Disposition Date with respect to the provision of such financial information by such member of the SharkNinja Group to JS Global (and, where appropriate, as presently presented in financial reports to the JS Global Board), with such changes therein as may be requested by JS Global from time to time consistent with changes in such accounting principles and practices, including any changes in the interpretation or application of IFRS.

 

(f)          Budgets and Financial Projections. Prior to the Disposition Date, SharkNinja will, as promptly as practicable, deliver to JS Global copies of all annual budgets and financial projections (consistent in terms of format and detail with JS Global’s historical practices, except as mutually agreed upon by the Parties) relating to SharkNinja on a consolidated basis and will provide JS Global an opportunity to meet with management of SharkNinja to discuss such budgets and projections. In addition, to the extent requested by JS Global, SharkNinja will participate in JS Global’s annual strategic review planning and other similar meetings and processes in a manner consistent with past practices or with such changes as JS Global may reasonably request.

 

(g)          Press Releases and Similar Information. Prior to the Disposition Date, SharkNinja and JS Global will consult with each other as to the timing of their annual, semi-annual and quarterly earnings releases (as applicable) and any interim financial guidance for a current or future period and SharkNinja will give JS Global the opportunity to review and comment on such materials. JS Global and SharkNinja shall coordinate the timing of (i) their respective earnings release conference calls and (ii) their respective public earnings release issuance and filings with the Commission, in each case as directed by JS Global in its sole discretion. No later than one (1) Business Day prior to the time and date that SharkNinja intends to publish its regular annual, semi-annual or quarterly earnings release (as applicable) or any financial guidance for a current or future period, SharkNinja will deliver to JS Global copies of substantially final drafts of all related press releases and other statements to be made available by any member of the SharkNinja Group to employees of any member of the SharkNinja Group or to the public concerning any matters that could be reasonably likely to have a material financial impact on the earnings, results of operations, financial condition or prospects of any member of the SharkNinja Group. In addition, prior to the issuance of any such press release or public statement that meets the criteria set forth in the preceding sentence, SharkNinja will consult with JS Global regarding any changes (other than typographical or other similar minor changes) to such substantially final drafts. Immediately following the issuance thereof, the SharkNinja will deliver to JS Global copies of final drafts of all press releases and other public statements. SharkNinja shall obtain the written consent of JS Global prior to issuing, and JS Global shall have the right without needing SharkNinja’s consent to issue, any press releases or otherwise making public statements with respect to the Transactions or any of the other transactions contemplated hereby and in the Ancillary Agreements and prior to making any filings with any Governmental Entity with respect thereto.

 

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(h)          Cooperation on JS Global Filings. SharkNinja will reasonably cooperate, and cause SharkNinja Auditors to reasonably cooperate, with JS Global to the extent requested by JS Global in the preparation of JS Global’s public earnings or other press releases, quarterly reports, semi-annual and annual reports to shareholders, annual reports, any current reports and any other proxy, information and registration statements, reports, notices, prospectuses and any other filings made by JS Global with The Stock Exchange of Hong Kong Limited, any national or international securities exchange or otherwise made publicly available (collectively, the “JS Global Public Filings”). SharkNinja agrees to provide to JS Global all information that JS Global requests in connection with any JS Global Public Filings or that, in the judgment of JS Global’s counsel, is required to be disclosed or incorporated by reference therein under any Law. SharkNinja will provide such information in a timely manner on the dates requested by JS Global (which may be earlier than the dates on which SharkNinja otherwise would be required hereunder to have such information available) to enable JS Global to prepare, print and release all JS Global Public Filings on such dates as JS Global will determine but in no event later than as required by applicable Law. SharkNinja will use its commercially reasonable efforts to cause SharkNinja Auditors to consent to any reference to them as experts in any JS Global Public Filings required under any Law. If and to the extent requested by JS Global, SharkNinja will diligently and promptly review all drafts of such JS Global Public Filings and prepare in a diligent and timely fashion any portion of such JS Global Public Filing pertaining to SharkNinja. Prior to any printing or public release of any JS Global Public Filing, an appropriate executive officer of SharkNinja will, if requested by JS Global, certify that the information relating to any member of the SharkNinja Group or the SharkNinja Business in such JS Global Public Filing is accurate, true, complete and correct in all material respects. Unless required by Law, SharkNinja will not publicly release any financial or other information which conflicts with the information with respect to any member of the SharkNinja Group or the SharkNinja Business that is included in any JS Global Public Filing without JS Global’s prior written consent. Prior to the release or filing thereof, JS Global will provide SharkNinja with a draft of any portion of a JS Global Public Filing containing information relating to the SharkNinja Group and will give SharkNinja an opportunity to review such information and comment thereon; provided that JS Global will determine in its sole and absolute discretion the final form and content of all JS Global Public Filings. For the avoidance of doubt, SharkNinja’s obligations under this Section 6.1(h) shall continue after the Disposition Date to the extent the applicable JS Global Public Filing is related to a period prior to the Disposition Date. For the avoidance of doubt, each Party’s obligations under this Section 6.1(h) shall continue after the Disposition Date to the extent the applicable release is related to a period prior to the Disposition Date.

 

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Section 6.2            Auditors and Audits; Annual Statements and Accounting. SharkNinja agrees that, until the Disposition Date, it shall comply with the following additional obligations:

 

(a)          Information Needed by JS Global. SharkNinja will provide to JS Global on a timely basis all information that JS Global requires to meet its schedule for the preparation, printing, filing and public dissemination of the JS Global’s semi-annual financial statements (the “JS Global Semi-Annual Financial Statements”) in accordance with Section 6.1(a) hereof and as required by applicable Law. Without limiting the generality of the foregoing, SharkNinja will provide all required financial information with respect to the SharkNinja Group to SharkNinja Auditors in a sufficient and reasonable time and in sufficient detail to permit SharkNinja Auditors to take all steps and perform all reviews necessary to provide sufficient assistance to JS Global Auditors with respect to information to be included or contained in the JS Global Semi-Annual Financial Statements.

 

(b)          Access to SharkNinja Auditors. SharkNinja will authorize SharkNinja Auditors to make available to the JS Global Auditors both the personnel who performed, or are performing, the annual audit and quarterly reviews of SharkNinja and work papers related to the annual audit and quarterly reviews of SharkNinja, in all cases within a reasonable time prior to SharkNinja Auditors’ opinion date, so that the JS Global Auditors are able to perform the procedures they consider necessary to take responsibility for the work of SharkNinja Auditors as it relates to the JS Global Auditors’ report on JS Global’s statements, all within sufficient time to enable JS Global to meet its timetable for the printing, filing and public dissemination of the JS Global Semi-Annual Financial Statements.

 

(c)          Access to Records. SharkNinja will provide JS Global Auditors and JS Global’s other representatives, including JS Global’s internal auditors, with access to the SharkNinja Group’s books and records so that JS Global may conduct audits relating to the financial statements provided by SharkNinja under this Agreement as well as to the internal accounting controls and operations of the SharkNinja Group.

 

(d)          Operating Review Process. SharkNinja shall conduct its strategic and operational review process prior to the Disposition Date on a schedule that is consistent with that of JS Global’s.

 

(e)          Notice of Changes. Prior to the Disposition Date, SharkNinja will give JS Global as much prior notice as reasonably practicable of any proposed determination of, or any significant changes in, SharkNinja’s accounting estimates or accounting principles from those in effect on the Disposition Date. SharkNinja will consult with JS Global and, if requested by JS Global, SharkNinja will consult with the JS Global Auditors with respect thereto. SharkNinja will not make any such determination or changes without JS Global’s prior written consent if such a determination or a change would be sufficiently material to be required to be disclosed in JS Global’s financial statements.

 

(f)          Accounting Changes Requested by JS Global. Notwithstanding clause (e) above, SharkNinja will make any changes in its accounting practices or accounting principles, including any changes in the interpretation or application of IFRS, that are requested by JS Global in order for SharkNinja’s accounting practices and principles to be consistent with those of JS Global until the Disposition Date.

 

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(g)          Special Reports of Deficiencies or Violations. SharkNinja will report in reasonable detail to JS Global the following events or circumstances promptly (and in any event within forty-eight (48) hours) after any executive officer of SharkNinja or any member of the SharkNinja Board becomes aware of such matter: (A) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect SharkNinja’s ability to record, process, summarize and report financial information; (B) any fraud, whether or not material, that involves management or other employees who have a significant role in SharkNinja’s internal controls over financial reporting; (C) any illegal act within the meaning of Section 10A(b) and (f) of the Exchange Act; and (D) any other material violation of Law (including any violation of law that an attorney representing any member of the SharkNinja Group has formally reported to any officers or directors of SharkNinja pursuant to the Commission’s attorney conduct rules (17 C.F.R. Part 205)).

 

Section 6.3            Other Covenants of SharkNinja. In addition to the other covenants contained in this Agreement and the Ancillary Agreements, SharkNinja and SharkNinja TopCo hereby covenant and agree that, until the Disposition Date (except with respect to any obligations of SharkNinja TopCo or its Subsidiaries provided for in Section 6.3(c), which shall survive following the Disposition Date as applicable):

 

(a)          To the extent that JS Global is a party to any Contracts that provide that certain actions or inactions of JS Global Affiliates (which for purposes of such Contract include any member of the SharkNinja Group) may result in JS Global being in breach of or in default under such Contracts and JS Global has advised SharkNinja of the existence, and has furnished SharkNinja with copies, of such Contracts (or the relevant portions thereof), SharkNinja will not take or fail to take, as applicable, and SharkNinja will cause the other members of the SharkNinja Group not to take or fail to take, as applicable, any actions that reasonably could result in JS Global being in breach of or in default under any such Contract. The Parties acknowledge and agree that from time to time JS Global may in good faith enter into additional Contracts or amendments to existing Contracts that provide that certain actions or inactions of JS Global Subsidiaries or Affiliates (including, for purposes of this Section 6.3(a), members of the SharkNinja Group) may result in JS Global being in breach of or in default under such Contracts. In such event, provided JS Global has notified SharkNinja of such additional Contracts or amendments to existing Contracts, SharkNinja will not thereafter take or fail to take, as applicable, and SharkNinja will cause the other members of the SharkNinja Group not to take or fail to take, as applicable, any actions that reasonably could result in JS Global being in breach of or in default under any such additional Contracts or amendments to existing Contracts. JS Global acknowledges and agrees that SharkNinja will not be deemed in breach of this Section 6.3(a) to the extent that, prior to being notified by JS Global of an additional Contract or an amendment to an existing Contract pursuant to this Section 6.3(a), a SharkNinja Group member already has taken or failed to take one or more actions that would otherwise constitute a breach of this Section 6.3(a) had such action(s) or inaction(s) occurred after such notification; provided that SharkNinja does not, after notification by JS Global, take any further action or fail to take any action that contributes further to such breach or default. SharkNinja agrees that any Information provided to it pursuant to this Section 6.3(a) will constitute Information that is subject to SharkNinja’s obligations under Article VIII.

 

(b)          Without the prior written consent of JS Global, no member of the SharkNinja Group shall enter into any Contract that purports to bind or impose any obligations or Liabilities (including, without limitation, any non-competition, exclusivity, non-solicitation or similar obligations) on any member of the JS Global Group (or any director, officer or employee of any member of the JS Global Group).

 

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(c)          For the duration of the Brand License Agreement, SharkNinja TopCo will, and will cause each other member of the SharkNinja Group to, not take any action directly or indirectly to (A) offer or pay, or authorize the offer or payment of, any money or anything of value, or (B) accept any payment referred to in clause (A), in each case, in order to improperly or corruptly seek to influence any Government Official or any other person in order to gain an improper advantage;

 

Section 6.4            Other Covenants of JS Global. In addition to the other covenants contained in this Agreement and the Ancillary Agreements, JS Global hereby covenants and agrees that, until the Disposition Date (except with respect to any obligations of JS Global or its Subsidiaries provided for in Section 6.4(c), which shall survive following the Disposition Date as applicable):

 

(a)          To the extent that SharkNinja is a party to any Contracts that provide that certain actions or inactions of SharkNinja Affiliates (which for purposes of such Contract include any member of the JS Global Group) may result in SharkNinja being in breach of or in default under such Contracts and SharkNinja has advised JS Global of the existence, and has furnished JS Global with copies, of such Contracts (or the relevant portions thereof), JS Global will not take or fail to take, as applicable, and JS Global will cause the other members of the JS Global Group not to take or fail to take, as applicable, any actions that reasonably could result in SharkNinja being in breach of or in default under any such Contract. The Parties acknowledge and agree that from time to time SharkNinja may in good faith enter into additional Contracts or amendments to existing Contracts that provide that certain actions or inactions of Affiliates (including, for purposes of this Section 6.4(a), members of the JS Global Group) may result in SharkNinja being in breach of or in default under such Contracts. In such event, provided SharkNinja has notified JS Global of such additional Contracts or amendments to existing Contracts, JS Global will not thereafter take or fail to take, as applicable, and JS Global will cause the other members of the JS Global Group not to take or fail to take, as applicable, any actions that reasonably could result in SharkNinja being in breach of or in default under any such additional Contracts or amendments to existing Contracts. SharkNinja acknowledges and agrees that JS Global will not be deemed in breach of this Section 6.4(a) to the extent that, prior to being notified by SharkNinja of an additional Contract or an amendment to an existing Contract pursuant to this Section 6.4(a), a JS Global Group member already has taken or failed to take one or more actions that would otherwise constitute a breach of this Section 6.4(a) had such action(s) or inaction(s) occurred after such notification; provided that JS Global does not, after notification by SharkNinja, take any further action or fail to take any action that contributes further to such breach or default. JS Global agrees that any Information provided to it pursuant to this Section 6.4(a) will constitute Information that is subject to JS Global’s obligations under Article VIII.

 

(b)          Without the prior written consent of SharkNinja, no member of the JS Global Group shall enter into any Contract that purports to bind or impose any obligations or Liabilities (including, without limitation, any non-competition, exclusivity, non-solicitation or similar obligations) on any member of the SharkNinja Group (or any director, officer or employee of any member of the SharkNinja Group).

 

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(c)          For the duration of the Brand License Agreement, JS Global will, and will cause each other member of the JS Global Group to, not take any action directly or indirectly to (i) offer or pay, or authorize the offer or payment of, any money or anything of value, or (ii) accept any payment referred to in clause (i), in each case, in order to improperly or corruptly seek to influence any Government Official or any other person in order to gain an improper advantage.

 

ARTICLE VII

 

Mutual release; INDEMNIFICATION

 

Section 7.1            Release of Pre-Disposition Date Claims.

 

(a)          Except (i) as provided in Section 7.1(b), (ii) as may be otherwise expressly provided in this Agreement or in any Ancillary Agreement and (iii) for any matter for which any Party is entitled to indemnification pursuant to this Article VII:

 

(i)          JS Global, for itself and each member of the JS Global Group, its Affiliates as of the Disposition Date and, to the extent permitted by Law, all Persons who at any time prior to the Disposition Date were directors, officers, agents or employees of any member of the JS Global Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, does hereby (x) irrevocably but effective at the time of and conditioned upon the occurrence of the Distribution, and (y) at the time of the Disposition Date, remise, release and forever discharge SharkNinja, SharkNinja TopCo and the other members of the SharkNinja Group, their respective Affiliates and all Persons who at any time prior to the Disposition Date were shareholders, directors, officers, agents or employees of any member of the SharkNinja Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, from any and all JS Global Liabilities, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, in each case, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Disposition Date, including in connection with the Internal Reorganization, the Internal Reorganization Contribution and the Internal Reorganization Distribution and any of the other transactions contemplated hereunder and under the Ancillary Agreements (such liabilities, the “JS Global Released Liabilities”) and in any event shall not, and shall cause its respective Subsidiaries not to, bring any Action against any member of the SharkNinja Group in respect of any JS Global Released Liabilities; provided, however, that nothing in this Section 7.1(a)(i) shall relieve any Person released in this Section 7.1(a)(i) who, after the Disposition Date, is a director, officer or employee of any member of the SharkNinja Group and is no longer a director, officer or employee of any member of the JS Global Group, from Liabilities arising out of, relating to or resulting from his or her service as a director, officer or employee of any member of the SharkNinja Group after the Disposition Date. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to limit JS Global, any member of the JS Global Group, or their respective Affiliates from commencing any Actions against any SharkNinja or SharkNinja TopCo (as applicable) officer, director, agent or employee, or their respective heirs, executors, administrators, successors and assigns with regard to matters arising from, or relating to, (i) theft of Know-How of JS Global or its Affiliates or (ii) Liabilities arising out of, relating to or resulting from such Person’s gross negligence, willful misconduct or intentional criminal acts.

 

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(ii)          SharkNinja TopCo, for itself and each member of the SharkNinja Group, its Affiliates as of the Disposition Date and, to the extent permitted by Law, all Persons who at any time prior to the Disposition Date were directors, officers, agents or employees of any member of the SharkNinja Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, does hereby (x) irrevocably but effective at the time of and conditioned upon the occurrence of the Distribution, and (y) at the time of the Disposition Date, remise, release and forever discharge JS Global and the other members of the JS Global Group, its Affiliates and all Persons who at any time prior to the Disposition Date were shareholders, directors, officers, agents or employees of any member of the JS Global Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, from any and all SharkNinja Liabilities, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, in each case, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Disposition Date, including in connection with the Internal Reorganization, the Internal Reorganization Contribution and the Internal Reorganization Distribution and any of the other transactions contemplated hereunder and under the Ancillary Agreements (such liabilities, the “SharkNinja Released Liabilities”) and in any event shall not, and shall cause its respective Subsidiaries not to, bring any Action against any member of the JS Global Group in respect of any SharkNinja Released Liabilities; provided, however, that nothing in this Section 7.1(a)(ii) shall relieve any Person released in this Section 7.1(a)(ii) who, after the Disposition Date, is a director, officer or employee of any member of the JS Global Group and is no longer a director, officer or employee of any member of the SharkNinja Group, from Liabilities arising out of, relating to or resulting from his or her service as a director, officer or employee of any member of the JS Global Group after the Disposition Date. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to limit SharkNinja, SharkNinja TopCo, any member of the SharkNinja Group, or their respective Affiliates from commencing any Actions against any JS Global officer, director, agent or employee, or their respective heirs, executors, administrators, successors and assigns with regard to matters arising from, or relating to, (i) theft of Know-How of SharkNinja, SharkNinja TopCo or their respective Affiliates or (ii) Liabilities arising out of, relating to or resulting from such Person’s gross negligence, willful misconduct or intentional criminal acts.

 

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(b)          Nothing contained in this Agreement, including Section 7.1(a), Section 2.4(a) or Section 2.5, shall impair or otherwise affect any right of any Party and, as applicable, a member of such Party’s Group, as well as their respective heirs, executors, administrators, successors and assigns, to enforce this Agreement, any Ancillary Agreement, any Continuing Arrangements or any agreements, arrangements, commitments or understandings contemplated in this Agreement or in any Ancillary Agreement to continue in effect after the Disposition Date. In addition, nothing contained in Section 7.1(a) shall release any person from:

 

(i)           any Liability Assumed, Transferred or allocated to a Party or a member of such Party’s Group pursuant to or as contemplated by, or any other Liability of any member of such Group under, this Agreement or any Ancillary Agreement, including (A) with respect to JS Global, any JS Global Liability and (B) with respect to SharkNinja or SharkNinja TopCo (as applicable), any SharkNinja Liability;

 

(ii)          any Liability provided for in or resulting from any other Contract or arrangement that is entered into after the Disposition Date between any Party (and/or a member of such Party’s or Parties’ Group), on the one hand, and any other Party or Parties (and/or a member of such Party’s or Parties’ Group), on the other hand;

 

(iii)         any Liability with respect to any Continuing Arrangements; or

 

(iv)        any Liability that the Parties may have with respect to indemnification pursuant to this Agreement or otherwise for Actions brought against the Parties by third Persons, which Liability shall be governed by the provisions of this Agreement and, in particular, this Article VII and, if applicable, the appropriate provisions of the Ancillary Agreements; and any Liability the release of which would result in a release of any Person other than the Persons released in Section 7.1(a); provided that the Parties agree not to bring any Action or permit any other member of their respective Group, or any of their respective Affiliates to bring any Action against a Person released in Section 7.1(a) with respect to such Liability.

 

In addition, nothing contained in Section 7.1(a) shall release: (i) JS Global from indemnifying any director, officer or employee of the SharkNinja Group who was a director, officer or employee of JS Global or any of its Affiliates prior to the Disposition Date, as the case may be, to the extent such director, officer or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification pursuant to then-existing obligations; it being understood that if the underlying obligation giving rise to such Action is a SharkNinja Liability, SharkNinja TopCo shall indemnify JS Global for such Liability (including JS Global’s costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Article VII; and (ii) SharkNinja TopCo from indemnifying any director, officer or employee of the JS Global Group who was a director, officer or employee of SharkNinja TopCo or any of its Affiliates prior to the Disposition Date, as the case may be, to the extent such director, officer or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification pursuant to then-existing obligations; it being understood that if the underlying obligation giving rise to such Action is a JS Global Liability, JS Global shall indemnify SharkNinja TopCo for such Liability (including SharkNinja TopCo’s costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Article VII.

 

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(c)          Each Party shall not, and shall not permit any member of its Group to, make any (or fail to withdraw any previously existing) claim, demand or offset, or commence any (or fail to withdraw any previously existing) Action, including any claim of contribution or any indemnification, against any other Party or any member of any other Party’s Group, or any other Person released pursuant to Section 7.1(a), with respect to any Liabilities released pursuant to Section 7.1(a).

 

(d)          Each of JS Global and SharkNinja TopCo, on behalf of itself and the members of its Group, hereby waives any claims, rights of termination and any other rights under any Continuing Arrangement related to or arising out of the Internal Reorganization, the Distribution (including with respect to any of “change of control” or similar provision or from any Party no longer being an Affiliate of the other Party, and agrees that any change in rights or obligations that would automatically be effective as a result thereof be deemed amended to no longer apply (and that Section 2.8 shall apply in respect of such amendments)).

 

(e)          If any Person associated with a Party (including any director, officer or employee of a Party) initiates any Action with respect to claims released by this Section 7.1, the Party with which such Person is associated shall be responsible for the fees and expenses of counsel of the other Party (and/or the members of such Party’s Group, as applicable) and such other Party shall be indemnified for all Liabilities incurred in connection with such Action in accordance with the provisions set forth in this Article VII.

 

Section 7.2            Indemnification by JS Global. In addition to any other provisions of this Agreement requiring indemnification and except as otherwise specifically set forth in any provision of this Agreement or of any Ancillary Agreement, following the Disposition Date, JS Global shall indemnify, defend and hold harmless the SharkNinja Indemnitees from and against any and all Indemnifiable Losses of the SharkNinja Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (a) the JS Global Liabilities, including the failure of any member of the JS Global Group or any other Person to pay, perform or otherwise discharge any JS Global Liability in accordance with its respective terms, whether arising prior to, at or after the Disposition Date, (b) any JS Global Asset or JS Global Business, whether arising prior to, at or after the Disposition Date, (c) any breach by JS Global of any provision of this Agreement or any Ancillary Agreement unless such Ancillary Agreement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder or (d) any Liabilities of the SharkNinja Group under any of the agreements listed on Schedule 7.2.

 

Section 7.3            Indemnification by SharkNinja. In addition to any other provisions of this Agreement requiring indemnification and except as otherwise specifically set forth in any provision of this Agreement or of any Ancillary Agreement, following the Disposition Date, SharkNinja TopCo shall and shall cause the other members of the SharkNinja Group to indemnify, defend and hold harmless the JS Global Indemnitees from and against any and all Indemnifiable Losses of the JS Global Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (a) the SharkNinja Liabilities, including the failure of any member of the SharkNinja Group or any other Person to pay, perform or otherwise discharge any SharkNinja Liability in accordance with its respective terms, whether prior to, at or after the Disposition Date, (b) any SharkNinja Asset or SharkNinja Business, whether arising prior to, at or after the Disposition Date, (c) any breach by SharkNinja or SharkNinja TopCo of any provision of this Agreement or any Ancillary Agreement unless such Ancillary Agreement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder or (d) any Liabilities of the JS Global Group under any of the agreements listed on Schedule 7.3.

 

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Section 7.4            Procedures for Indemnification.

 

(a)          Direct Claims. Other than with respect to Third Party Claims, which shall be governed by Section 7.4(b), each JS Global Indemnitee and SharkNinja Indemnitee (each, an “Indemnitee”) shall notify in writing, with respect to any matter that such Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement or any Ancillary Agreement, the Party which is or may be required pursuant to this Article VII or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying Party”), within forty-five (45) days of such determination, stating in such written notice the amount of the Indemnifiable Loss claimed, if known, and, to the extent practicable, method of computation thereof, and referring to the provisions of this Agreement in respect of which such right of indemnification is claimed by such Indemnitee or arises; provided, however, that the failure to provide such written notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure. The Indemnifying Party will have a period of forty-five (45) days after receipt of a notice under this Section 7.4(a) within which to respond thereto. If the Indemnifying Party fails to respond within such period, the Liability specified in such notice from the Indemnitee shall be conclusively determined to be a Liability of the Indemnifying Party hereunder. If such Indemnifying Party responds within such period and rejects such claim in whole or in part, the disputed matter shall be resolved in accordance with Article IX.

 

(b)          Third Party Claims. If a claim or demand is made against an Indemnitee by any Person who is not a party to this Agreement (a “Third Party Claim”) as to which such Indemnitee is or may be entitled to indemnification pursuant to this Agreement or any Ancillary Agreement, such Indemnitee shall notify the Indemnifying Party in writing (which notice obligation may be satisfied by providing copies of all notices and documents received by the Indemnitee relating to the Third Party Claim), and in reasonable detail, of the Third Party Claim as promptly as practicable (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third Party Claim; provided, however, that the failure to provide notice of any such Third Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim. For all purposes of this Section 7.4(b), each Party shall be deemed to have notice of the matters set forth on Schedule 1.1(151)(viii).

 

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(c)          Other than in the case of indemnification by a beneficiary Party of a guarantor Party pursuant to Section 2.10(b) (the defense of which shall be controlled by the beneficiary Party), the Indemnifying Party shall be entitled, if it so chooses, to assume and control the defense thereof, and if it does not assume the defense of such Third Party Claim, to participate in the defense of any Third Party Claim in accordance with the terms of Section 7.5 at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, that is reasonably acceptable to the applicable Indemnitees (after consultation in good faith with the applicable Indemnitees), within thirty (30) days of the receipt of an indemnification notice from such Indemnitee; provided, however, that the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim to the extent such Third Party Claim (w) is an Action by a Governmental Entity, (x) involves an allegation of a criminal violation, (y) seeks injunctive relief against the Indemnitee (except where such relief is merely incidental to a primary claim or claims for monetary damages) or (z) upon petition by the Indemnitee, an appropriate court of competent jurisdiction rules that the Indemnifying Party is failing to defend such Third Party Claim with reasonable vigor. In connection with the Indemnifying Party’s defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that in the event a conflict of interest exists that would make it inappropriate in the reasonable judgment of the Indemnifying Party’s external counsel for the same counsel to represent both the Indemnifying Party and the applicable Indemnitee(s), or in the event that any Third Party Claim seeks equitable relief (except where such relief is merely incidental to a primary claim or claims for monetary damages) which would restrict or limit the future conduct of the Indemnitee’s business or operations, such Indemnitee(s) shall be entitled to retain, at the Indemnifying Party’s expense, separate counsel as required by the applicable rules of professional conduct with respect to such matter. Subject to Section 7.4(e), the Indemnifying Party shall have the right to compromise or settle a Third Party Claim the defense of which it shall have assumed pursuant to this Section 7.4(c) and any such settlement or compromise made or caused to be made of a Third Party Claim in accordance with this Article VII shall be binding on the Indemnitee, in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise.

 

(d)          If an Indemnifying Party fails for any reason to assume responsibility for defending a Third Party Claim within the period specified in this Section 7.4, such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party. If an Indemnifying Party has failed to assume the defense of the Third Party Claim within the time period specified in Section 7.4(c), it shall not be a defense to any obligation to pay any amount in respect of such Third Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability.

 

(e)          In the case of a Third Party Claim, the Indemnifying Party shall not admit any liability with respect to, consent to entry of any judgment of, or settle, compromise or discharge, the Third Party Claim without the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed) unless such settlement or judgment (A) completely and unconditionally releases the Indemnitee in connection with such matter, (B) provides relief consisting solely of money damages borne by the Indemnifying Party and (C) does not involve any admission by the Indemnitee of any wrongdoing or violation of Law.

 

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(f)          Except as otherwise set forth in Section 8.6 and Section 9.3, or to the extent set forth in any Ancillary Agreement, absent fraud by an Indemnifying Party, the indemnification provisions of this Article VII shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or losses resulting from any breach of this Agreement or any Ancillary Agreement and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article VII against any Indemnifying Party. For the avoidance of doubt, all disputes in respect of this Article VII shall be resolved in accordance with Article IX.

 

(g)          Each Party hereby covenants and agrees that none of it, its Subsidiaries or any Person claiming through it shall bring an Action or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (i) the assumption of any SharkNinja Liabilities by the SharkNinja or a member of the SharkNinja Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; (ii) the retention of any JS Global Liabilities by JS Global or any member of the JS Global Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; or (iii) the provisions of this Article VII are void or unenforceable for any reason.

 

(h)          Notwithstanding the foregoing, to the extent any Ancillary Agreement provides procedures for indemnification that differ from the provisions set forth in this Section 7.4, the terms of the Ancillary Agreement will govern.

 

(i)          The provisions of this Article VII shall apply to Third Party Claims that are already pending or asserted as well as Third Party Claims brought or asserted after the date of this Agreement. There shall be no requirement under this Section 7.4 to give a notice with respect to any Third Party Claim that exists as of the Disposition Date. The Parties acknowledge that Liabilities for Actions (regardless of the parties to the Actions) may be partly JS Global Liabilities and partly SharkNinja Liabilities. Notwithstanding anything contained herein to the contrary, the allocation of any such Liabilities for Actions (i) pending or asserted prior to the date of this Agreement shall be allocated in the sole discretion of JS Global, and (ii) brought or asserted after the date of this Agreement shall be resolved pursuant to the procedures set forth in Article IX. Neither Party shall, nor shall either Party permit its Subsidiaries to, file Third Party Claims or cross-claims against the other Party or its Subsidiaries in an Action in which a Third Party Claim is being resolved.

 

Section 7.5            Cooperation in Defense and Settlement.

 

(a)          With respect to any Third Party Claim that implicates both Parties in any material respect due to the allocation of Liabilities, responsibilities for management of defense and related indemnities pursuant to this Agreement or any of the Ancillary Agreements, the Parties agree to use commercially reasonable efforts to cooperate fully and maintain a joint defense (in a manner that, to the extent reasonably practicable, will preserve for all Parties any Privilege with respect thereto). The Party that is not responsible for managing the defense of any such Third Party Claim shall, upon reasonable request, be consulted with respect to significant matters relating thereto and may, if necessary or helpful, retain counsel to assist in the defense of such claims. Notwithstanding the foregoing, nothing in this Section 7.5(a) shall derogate from any Party’s rights to control the defense of any Action in accordance with Section 7.4.

 

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(b)          Notwithstanding anything to the contrary in this Agreement, with respect to any Action (i) by a Governmental Entity against a Party relating to matters involving anti-bribery, anti-corruption, anti-money laundering, export control and similar laws, where the facts and circumstances giving rise to the Action occurred prior to the Disposition Date or (ii) where the resolution of such Action by order, judgment, settlement or otherwise, could include any condition, limitation or other stipulation that could, in the reasonable judgment of a Party, adversely impact the conduct of such Party’s Businesses, such Party shall have, at such Party’s expense, the reasonable opportunity to consult, advise and comment in all preparation, planning and strategy regarding any such Action, including with regard to any drafts of notices and other conferences and communications to be provided or submitted by the other Party to any Third Party involved in such Action (including any Governmental Entity), to the extent that the Party’s participation does not affect any privilege in a material and adverse manner; provided that to the extent that any such action requires the submission by the other Party of any content relating to any current or former officer or director of such Party, such content will only be submitted in a form approved by such Party in its reasonable discretion (such consent not to be unreasonably withheld, conditioned or delayed). (I) With regard to the matters specified in the preceding clauses (i) and (ii), JS Global shall have a right to consent to any compromise or settlement related thereto by any member of the SharkNinja Group to the extent that the effect on any member of the JS Global Group would reasonably be expected to result in a material adverse effect on the financial condition or results of operations of JS Global and its Subsidiaries at such time or the JS Global Business conducted thereby at such time, taken as a whole, and such material adverse effect would reasonably be expected to be greater with respect to the JS Global Group, taken as a whole, than the effect on the SharkNinja Group, taken as a whole and (II) with regard to the matters specified in the preceding clauses (i) and (ii), SharkNinja TopCo shall have a right to consent to any compromise or settlement related thereto by any member of the JS Global Group to the extent that the effect on any member of the JS Global Group would reasonably be expected to result in a material adverse effect on the financial condition or results of operations of the SharkNinja Group, at such time or the SharkNinja Business conducted thereby at such time, taken as a whole, and such material adverse effect would reasonably be expected to be greater with respect to the SharkNinja Group, taken as a whole, than the effect on the JS Global Group, taken as a whole.

 

(c)          Notwithstanding anything to the contrary in this Agreement, with respect to any notices or reports to be submitted to, or reporting, disclosure, filing or other requirements to be made with, any Governmental Entity by either Party or a member of its Group (“Governmental Filing”) where the Governmental Filing requires disclosure of facts, information or data that relate, in whole or in part, to periods prior to the Disposition Date, the other Party shall have, at its own cost and expense, the reasonable opportunity to consult, advise and comment on the preparation and content of any such Governmental Filing in advance of its submission to a Governmental Entity, and such Party shall in good faith consider and take into account any comments so provided by the other Party with respect to such Governmental Filing.

 

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(d)          Each of JS Global and SharkNinja TopCo agrees that at all times from and after the Disposition Date, if an Action is commenced by a Third Party naming two (2) or more Parties (or any member of such Parties’ respective Groups) as defendants and with respect to which one or more named Parties (or any member of such Party’s respective Group) is a nominal defendant and/or such Action is otherwise not a Liability allocated to such named Party under this Agreement or any Ancillary Agreement, then the other Party or Parties shall use commercially reasonable efforts at its own expense to cause such nominal defendant to be removed from such Action, as soon as reasonably practicable (including using commercially reasonable efforts to petition the applicable court to remove such Party (or member of its Group or their respective then-Affiliates) as a defendant to the extent such Action relates solely to Assets or Liabilities that another Party (or Group) has been allocated pursuant to this Agreement). In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, each Party shall, and shall cause the other members of its Group to, use commercially reasonable efforts to substitute the Indemnifying Party for the named defendant, if reasonably practicable and advisable under the circumstances. If such substitution or addition cannot be achieved for any reason or is not requested, management of the Action shall be determined as set forth in this Article VII.

  

Section 7.6            Indemnification Payments. Indemnification required by this Article VII shall be made by periodic payments of the amount of Indemnifiable Losses in a timely fashion during the course of the investigation or defense, as and when bills are received or an Indemnifiable Loss incurred. The applicable Indemnitee shall deliver to the Indemnifying Party, upon request, reasonably satisfactory documentation setting forth the basis for the amount of such payments, including documentation with respect to calculations made and consideration of any Insurance Proceeds or Third Party Proceeds that actually reduce the amount of such Indemnifiable Losses; provided that the delivery of such documentation shall not be a condition to the payments described in the first sentence of this Section 7.6, but the failure to deliver such documentation may be the basis for the Indemnifying Party to contest whether the applicable Indemnifiable Loss or Liability was incurred by the applicable Indemnitee.

 

Section 7.7            Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

 

(a)          Any recovery by any Indemnitee for any Indemnifiable Loss subject to indemnification pursuant to this Article VII shall be calculated net of (i) Insurance Proceeds actually received by such Indemnitee with respect to any Indemnifiable Loss (which such proceeds shall be reduced by the present value, based on that Party’s then cost of short-term borrowing, of future premium increases known at such time); (ii) any proceeds actually received by the Indemnitee from any unaffiliated Third Party with respect to any such Liability corresponding to the Indemnifiable Loss (“Third Party Proceeds”); and (iii) any Tax benefits actually realized by the Indemnitee in the taxable year in which the indemnification payment is made or immediately following such taxable year, in each case to the extent that such Tax benefits arise from the incurrence or payment of such Indemnifiable Loss. Accordingly, the amount which any Indemnifying Party is required to pay pursuant to this Article VII to any Indemnitee pursuant to this Article VII shall be reduced by any Insurance Proceeds or Third Party Proceeds theretofore actually recovered, or any Tax benefits actually realized in the taxable period specified above, by or on behalf of the Indemnitee corresponding to the related Indemnifiable Loss. If an Indemnitee receives a payment required by this Agreement from an Indemnifying Party corresponding to any Indemnifiable Loss (an “Indemnity Payment”) and subsequently receives Insurance Proceeds or Third Party Proceeds, or actually realizes a Tax benefit in the taxable period specified above that would have reduced the Indemnity Payment, then the Indemnitee shall pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds, Third Party Proceeds or Tax benefits had been received, realized or recovered before the Indemnity Payment was made (net of all out-of-pocket expenses (including Taxes)) of such Indemnitee and without interest (other than any interest paid by the relevant Governmental Authority with respect to any such Tax benefits in the form of Tax refunds). Such Indemnifying Party, upon the request of such Indemnitee, shall repay to such Indemnitee the amount paid over pursuant to this Section 7.7(a) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such Indemnitee is required to repay such Tax benefits to such Governmental Authority. Notwithstanding anything to the contrary in this Section 7.7(a), in no event will the Indemnitee be required to pay any amount to an Indemnifying Party pursuant to this Section 7.7(a) the payment of which would place the Indemnitee in a less favorable net after-Tax position than the Indemnitee would have been in if the Indemnity Payment had never been made by the Indemnifying Party.

 

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(b)          Any Indemnity Payment shall be increased as necessary so that after making all payments corresponding to Taxes imposed on or attributable to such Indemnity Payment, the Indemnitee receives an amount equal to the sum it would have received had no such Taxes been imposed.

 

(c)          The Parties hereby agree that an insurer or other Third Party that would otherwise be obligated to pay any amount shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto by virtue of any provision contained in this Agreement or any Ancillary Agreement, and that no insurer or any other Third Party shall be entitled to a “windfall” (e.g., a benefit they would not otherwise be entitled to receive, or the reduction or elimination of an insurance coverage obligation that they would otherwise have, in the absence of the indemnification or release provisions) by virtue of any provision contained in this Agreement or any Ancillary Agreement. Each Party shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to collect or recover, or allow the Indemnifying Party to collect or recover, or cooperate with each other in collecting or recovering, any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification may be available under this Article VII. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Actions to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.

 

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Section 7.8            Contribution. If the indemnification provided for in this Article VII is unavailable for any reason to an Indemnitee (other than failure to provide notice with respect to any Third Party Claims in accordance with Section 7.4(b)) in respect of any Indemnifiable Loss, then the Indemnifying Party shall, in accordance with this Section 7.8, contribute to the Indemnifiable Losses incurred, paid or payable by such Indemnitee as a result of such Indemnifiable Loss in such proportion as is appropriate to reflect the relative fault of SharkNinja TopCo and each other member of the SharkNinja Group, on the one hand, and JS Global and each other member of the JS Global Group, on the other hand, in connection with the circumstances which resulted in such Indemnifiable Loss. With respect to any Indemnifiable Losses arising out of or related to information contained in the Distribution Disclosure Documents or other securities law filing, the relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact relates to information supplied by the SharkNinja Business of a member of the SharkNinja Group, on the one hand, or the JS Global Business or a member of the JS Global Group, on the other hand.

 

Section 7.9            Additional Matters; Survival of Indemnities.

 

(a)          The indemnity agreements contained in this Article VII shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee; and (ii) the knowledge by the Indemnitee of Indemnifiable Losses for which it might be entitled to indemnification hereunder. The indemnity agreements contained in this Article VII shall survive the Internal Reorganization, the Internal Reorganization Contribution and the Internal Reorganization Distribution.

 

(b)          The rights and obligations of any member of the JS Global Group or any member of the SharkNinja Group, in each case, under this Article VII shall survive (i) the sale or other Transfer by any Party or its Affiliates of any Assets or businesses or the assignment by it of any Liabilities (unless the Third Party acquiror assumes such obligations) and (ii) any merger, consolidation, business combination, restructuring, recapitalization, reorganization or similar transaction involving either Party or any of its Subsidiaries, in each case, with respect to any Indemnifiable Loss of any Indemnitee related to such Assets, businesses or Liabilities.

 

(c)          No Party hereto shall have any right to set off any losses (including Indemnifiable Losses) under this Article VII against any payments to be made by such Party pursuant to this Agreement or any other agreement between or among the Parties, including any Ancillary Agreements.

 

ARTICLE VIII

 

PRESERVATION OF RECORDS; ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE

 

Section 8.1            Preservation of Corporate Records.

 

(a)          Except to the extent otherwise contemplated by any Ancillary Agreement, a Party providing (or causing to be provided) Records or access to Information to another Party under this Article VIII shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees of such Party (or its Group or any of its or their respective then-Affiliates) or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service with respect to the foregoing), as are reasonably incurred in providing such Records or access to Information.

 

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(b)          Except as otherwise required or agreed in writing, or as otherwise provided in any Ancillary Agreement, with regard to any Information referenced in Section 8.2, each Party shall, and shall cause the other members of its Group (and any of their successors and assigns) to, use its commercially reasonable efforts, at such Party’s sole cost and expense, to retain, until the latest of, as applicable, (i) the date on which such Information is no longer required to be retained pursuant to the applicable record retention policy of the Party or such other member of such Party’s Group, respectively, as in effect immediately prior to the Disposition Date, including, without limitation, pursuant to any “litigation hold” issued by such Party or any of its Subsidiaries prior to the Disposition Date, (ii) the concluding date of any period as may be required by any applicable Law, (iii) the concluding date of any period during which such Information relates to a pending or threatened Action which is known to the members of the JS Global Group or the SharkNinja Group, as applicable, in possession of such Information at the time any retention obligation with regard to such Information would otherwise expire and (iv) the concluding date of any period during which the destruction of such Information could interfere with a pending or threatened investigation by a Governmental Entity which is known to the members of the JS Global Group or the SharkNinja Group, as applicable, in possession of such Information at the time any retention obligation with regard to such Information would otherwise expire; provided that with respect to any pending or threatened Action arising after the Disposition Date, clause (iii) of this sentence applies only to the extent that whichever member of the JS Global Group or the SharkNinja Group, as applicable, is in possession of such Information has been notified in writing pursuant to a “litigation hold” by the other Party of the relevant pending or threatened Action. The Parties agree that upon written request from the other that certain Information relating to the SharkNinja Business, the JS Global Businesses or the transactions contemplated hereby be retained in connection with an Action, the Parties shall use reasonable efforts to preserve and not to destroy or dispose of such Information without the consent of the requesting Party.

 

(c)          The Parties intend, and acknowledge that each member of its respective Group intends, that any Transfer of Information that would otherwise be within the attorney-client or attorney work product privileges shall not operate as a waiver of any potentially applicable Privilege.

 

Section 8.2            Access to Information. Other than in circumstances in which indemnification is sought pursuant to Article VII (in which event the provisions of such Article VII shall govern) and subject to appropriate restrictions for Privileged Information or Confidential Information:

 

(a)          After the Disposition Date, and subject to compliance with the terms of the Ancillary Agreements, upon the prior written reasonable request by, and at the expense of, SharkNinja TopCo for specific and identified Information:

 

(i)          that (x) relates to SharkNinja, SharkNinja TopCo or the SharkNinja Business, as the case may be, prior to the Disposition Date or (y) is necessary for SharkNinja TopCo to comply with the terms of, or otherwise perform under, any Ancillary Agreement to which JS Global and/or SharkNinja TopCo (or any members of their respective Groups) are parties, JS Global shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if SharkNinja TopCo has a reasonable need for such originals) in the possession or control of JS Global or any of its Affiliates or Subsidiaries, but only to the extent such items so relate and are not already in the possession or control of SharkNinja TopCo;

 

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(ii)          that (x) is required by SharkNinja TopCo with regard to reasonable compliance with reporting, disclosure, filing or other requirements imposed on SharkNinja TopCo (including under applicable securities laws) by a Governmental Entity having jurisdiction over SharkNinja TopCo, or (y) is for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, Action or other similar requirements, as applicable, JS Global shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if SharkNinja TopCo has a reasonable need for such originals) in the possession or control of JS Global or any of its Affiliates or Subsidiaries, but only to the extent such items so relate and are not already in the possession or control of SharkNinja TopCo;

 

provided that, to the extent any originals are delivered to SharkNinja TopCo pursuant to this Agreement or the Ancillary Agreements, SharkNinja TopCo shall, at its own expense, return them to JS Global within a reasonable time after the need to retain such originals has ceased; provided, further, that, such obligation to provide any requested Information shall terminate and be of no further force and effect on the date that is the sixth (6th) anniversary of the date of this Agreement; provided, further, that, in the event that JS Global, in its sole discretion, determines that any such access or the provision of any such Information (including information requested under Article VI) would violate any Law or Contract with a Third Party or waive any Privilege, JS Global shall not be obligated to provide such Information requested by SharkNinja TopCo.

 

(b)          After the Disposition Date, and subject to compliance with the terms of the Ancillary Agreements, upon the prior written reasonable request by, and at the expense of, JS Global for specific and identified Information:

 

(i)          that (x) relates to JS Global or the JS Global Business, as the case may be, prior to the Disposition Date or (y) is necessary for JS Global to comply with the terms of, or otherwise perform under, any Ancillary Agreement to which JS Global and/or SharkNinja TopCo are parties, SharkNinja TopCo (or a member of its Group) shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if JS Global has a reasonable need for such originals) in the possession or control of the SharkNinja Group or any of its Affiliates, but only to the extent such items so relate and are not already in the possession or control of JS Global;

 

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(ii)          that (x) is required by JS Global with regard to reasonable compliance with reporting, disclosure, filing or other requirements imposed on JS Global (including under applicable securities laws) by a Governmental Entity having jurisdiction over JS Global, or (y) is for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, Action or other similar requirements, as applicable, SharkNinja TopCo (or a member of its Group) shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if JS Global has a reasonable need for such originals) in the possession or control of the SharkNinja Group or any of its Affiliates, but only to the extent such items so relate and are not already in the possession or control of JS Global; provided that, to the extent any originals are delivered to JS Global pursuant to this Agreement or the Ancillary Agreements, JS Global shall, at its own expense, return them to SharkNinja TopCo within a reasonable time after the need to retain such originals has ceased.

 

provided that, to the extent any originals are delivered to JS Global pursuant to this Agreement or the Ancillary Agreements, JS Global shall, at its own expense, return them to SharkNinja TopCo within a reasonable time after the need to retain such originals has ceased; provided, further, that, such obligation to provide any requested Information shall terminate and be of no further force and effect on the date that is the sixth (6th) anniversary of the date of this Agreement; provided, further, that, in the event that SharkNinja TopCo, in its sole discretion, determines that any such access or the provision of any such Information (including information requested under Article VI) would violate any Law or Contract with a Third Party or waive any Privilege, SharkNinja TopCo shall not be obligated to provide such Information requested by JS Global.

 

(c)          Each of JS Global and SharkNinja TopCo shall inform their respective officers, employees, agents, consultants, advisors, authorized accountants, counsel and other designated representatives who have or have access to the other Party’s Confidential Information or other information provided pursuant to this Article VIII or Article VI of their obligation to hold such information confidential in accordance with the provisions of this Agreement.

 

Section 8.3            Disposition of Information.

 

(a)          Each Party, on behalf of itself and each other member of its Group, acknowledges that Information in its or in a member of its Group’s possession, custody or control as of the Distribution may include Information owned by another Party or a member of another Party’s Group and not related to (i) it or its Business or (ii) any Ancillary Agreement to which it or any member of its Group is a Party.

 

(b)          Notwithstanding such possession, custody or control, such Information shall remain the property of such other Party or member of such other Party’s Group. Each Party agrees, on behalf of itself and each other member of its Group, subject to legal holds and other legal requirements and obligations, (i) that any such Information is to be treated as Confidential Information of the Party or Parties to which it relates and (ii) subject to Section 8.1, to use commercially reasonable efforts to within a reasonable time (1) purge such Information from its databases, files and other systems and not retain any copy of such Information (including, if applicable, by transferring such Information to the Party to which such Information belongs) or (2) if such purging is not practicable, to encrypt or otherwise make unreadable or inaccessible such Information; provided that, each Party shall, and shall cause each other member of its Group to, provide reasonable advance notice to each other Party prior to taking any action described in this Section 8.3(b) with respect to any Information related to the matters set forth on Schedule 8.3; provided, further, that no Party shall be in breach of limb (ii) of this Section 8.3(b) if such Party does not have knowledge that certain Information is within its possession, custody or control.

 

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Section 8.4            Witness Services. At all times from and after the Disposition Date, each of JS Global and SharkNinja TopCo shall use its commercially reasonable efforts to make available to the other, upon reasonable written request, its and its Subsidiaries’ directors, officers, employees and agents (taking into account the business demands of such individuals) as witnesses (in the presence of counsel for such officer, director, employee or agent, if any, and, if requested by the providing Group, counsel or other representatives designated by the providing Group) to the extent that (i) such Persons may reasonably be required to testify, or the testimony of such Persons would reasonably be expected to be beneficial to the requesting Party (or any member of its Group) in connection with the prosecution or defense of any Action in which the requesting Party may from time to time be involved (except for claims, demands or Actions in which one or more members of one Group is adverse to one or more members of the other Group) and (ii) there is no conflict in the Action between the requesting Party and the other Party. A Party providing a witness to the other Party under this Section 8.4 shall be entitled to receive from the recipient of such witness services, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees who are witnesses or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service as witnesses), as may be reasonably incurred and properly paid under applicable Law.

 

Section 8.5            Reimbursement; Other Matters. Except to the extent otherwise contemplated by this Agreement or any Ancillary Agreement, a Party providing Information or access to Information to the other Party under this Article VIII shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees of such Party or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service with respect to the foregoing), as may be reasonably incurred in providing such Information or access to such Information.

 

Section 8.6            Confidentiality; Non-Use.

 

(a)          Notwithstanding any termination of this Agreement, and except as otherwise provided in the Ancillary Agreements, each of JS Global and SharkNinja TopCo shall hold, and shall cause their respective Affiliates and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence at a standard of care no less than that used for its own Confidential Information (and in any event no less than a reasonable standard of care), (and not to disclose or release or, except as otherwise permitted by this Agreement or any Ancillary Agreement, use, including for any ongoing or future commercial purpose, without the prior written consent of the Party to whom the Confidential Information relates (which may be withheld in such Party’s sole and absolute discretion, except where disclosure is required by applicable Law)), any and all Confidential Information to the extent concerning or belonging to the other Party or its Affiliates; provided that each Party may disclose, or may permit disclosure of, Confidential Information (i) to its respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such Information for auditing and other non-commercial purposes and are informed of the obligation to hold such Information confidential and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any Party or any of its respective Subsidiaries is required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule or is advised by outside counsel in connection with a proceeding brought by a Governmental Entity that it is advisable to do so, (iii) to the extent required in connection with any legal or other proceeding by one Party (or member of its Group) against the other Party (or member of such other Party’s Group) or in respect of claims by one Party against the other Party (or member of such other Party’s Group) brought in a proceeding, (iv) to the extent necessary in order to permit a Party (or member of its Group) to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (v) to the extent necessary for a Party (or member of its Group) to enforce its rights or perform its obligations under this Agreement (including pursuant to Section 2.3) or an Ancillary Agreement, (vi) to Governmental Entities in accordance with applicable procurement regulations and contract requirements or (vii) to other Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic or financing transaction, to the extent reasonably necessary in connection therewith, provided an appropriate and customary confidentiality agreement has been entered into with the Person receiving such Confidential Information. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made by a Third Party pursuant to clause (ii), (iii), or (vi) above, each Party, as applicable, shall promptly notify (to the extent permissible by Law) the Party to whom (or to whose Group) the Confidential Information relates of the existence of such request, demand or disclosure requirement and shall provide such affected Party (and/or any applicable member of its Group) a reasonable opportunity to seek an appropriate protective order or other remedy, which such Party will cooperate in obtaining to the extent reasonably practicable. In the event that such appropriate protective order or other remedy is not obtained, the Party which faces the disclosure requirement shall furnish only that portion of the Confidential Information that is required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Confidential Information.

 

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(b)          Each Party acknowledges that it and the other members of its Group may have in its or their possession confidential or proprietary Information of Third Parties that was received under confidentiality or non-disclosure agreements with such Third Party while such Party and/or members of its Group were part of the JS Global Group. Each Party shall comply, and shall cause the other members of its Group to comply, and shall cause its and their respective directors, officers, employees, agents, consultants and advisors (or potential buyers) to comply, with all terms and conditions of any such Third Party Agreements entered into prior to the Disposition Date, with respect to any confidential and proprietary Information of third parties to which it or any other member of its Group has had access.

 

(c)          Notwithstanding anything to the contrary set forth herein, and except as otherwise provided in the Ancillary Agreement, (i) the Parties shall be deemed to have satisfied their obligations hereunder with respect to Confidential Information if they exercise at least the same degree of care that applies to such Party’s confidential and proprietary information of a similar value and nature and (ii) confidentiality obligations provided for in any Contract between each Party or its Subsidiaries and their respective employees shall remain in full force and effect.

 

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(d)          Notwithstanding anything to the contrary set forth herein, Confidential Information of any Party in the possession of and used by any other Party as of the Disposition Date may continue to be used by such Party in possession of the Confidential Information in and only in the operation of the SharkNinja Business (in the case of the SharkNinja Group) or the JS Global Business (in the case of the JS Global Group); provided that such Confidential Information may only be used by such Party and its officers, employees, agents, consultants and advisors in the specific manner and for the specific purposes for which it is used as of the date of this Agreement, and may only be shared with additional officers, employees, agents, consultants and advisors of such Party on a need-to-know basis exclusively with regard to such specified use; provided, further, that such Confidential Information may be used only so long as the Confidential Information is maintained in confidence and not disclosed in violation of Section 8.6(a).

 

(e)          The Parties agree that irreparable damage may occur in the event that the provisions of this Section 8.6 were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or injunctions to enforce specifically the terms and provisions of this Section 8.6 hereof in any court having jurisdiction, and without posting any bond or other undertaking, this being in addition to any other remedy to which they are entitled at law or in equity.

 

(f)          For the avoidance of doubt and notwithstanding any other provision of this Section 8.6, (i) the disclosure and sharing of Privileged Information shall be governed solely by Section 8.7, and (ii) Information that is subject to any confidentiality provision or other disclosure restriction in any Ancillary Agreement shall be governed by the terms of such Ancillary Agreement.

 

(g)          For the avoidance of doubt and notwithstanding any other provision of this Section 8.6, and except as and to the extent expressly provided in an applicable Ancillary Agreement or other Contract between the Parties or their respective Affiliates, following the Disposition Date, the confidentiality obligations under this Agreement shall continue to apply to any and all Confidential Information concerning or belonging to each Party or its Affiliates that is shared or disclosed with the other Party or its Affiliates, whether or not such Confidential Information is shared pursuant to this Agreement, any Ancillary Agreement or otherwise.

 

Section 8.7            Privilege Matters.

 

(a)          Pre-Disposition Date Services. The Parties recognize that legal and other professional services that have been and will be provided prior to the Disposition Date have been and will be rendered for the collective benefit of each of the members of the JS Global Group and the SharkNinja Group, and that each of the members of the JS Global Group and the SharkNinja Group are or shall jointly be the client with respect to such pre-Disposition Date services for the purposes of asserting all privileges, immunities or other protections from disclosure which may be asserted under applicable Law, including attorney-client privilege, business strategy privilege, joint defense privilege, common interest privilege and protection under the work-product doctrine (each a “Privilege”). The Parties irrevocably acknowledge and agree that any Information of the Parties subject to a Privilege (“Privileged Information”) that relates to such pre-Disposition Date services shall be shared jointly between the Parties. For the avoidance of doubt, Privileged Information within the scope of this Section 8.7 includes, but is not limited to, services rendered by legal counsel retained or employed by any Party (or any member of such Party’s respective Group), including outside counsel and in-house counsel.

 

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(b)          Post-Distribution Services. The Parties recognize that legal and other professional services will be provided following the Disposition Date to each of JS Global and SharkNinja TopCo. The Parties further recognize that certain of such post-Distribution services will be rendered solely for the benefit of JS Global or SharkNinja TopCo, as the case may be, while other such post-Distribution services may be rendered for the joint benefit of both JS Global and SharkNinja TopCo. With respect to such post-Distribution services and related Privileged Information, the Parties irrevocably acknowledge and agree as follows:

 

(i)          All Privileged Information arising out of or relating to any claims, proceedings, litigation, disputes or other matters in which both JS Global and SharkNinja TopCo are adverse to a Third Party shall be subject to a shared Privilege among JS Global and SharkNinja TopCo unless expressly agreed otherwise by the Parties in writing;

 

(ii)          Except as otherwise provided in Section 8.7(b)(i), Privileged Information relating to post-Distribution services provided solely to one of JS Global or SharkNinja TopCo shall not be deemed shared between the Parties;

 

(iii)          Except as otherwise provided in Sections 8.7(a), 8.7(c) and 8.7(b)(i), SharkNinja TopCo shall own the Privileges and be entitled to control, in perpetuity, the assertion or waiver of all Privileges in connection with Privileged Information that relates solely to the SharkNinja Business, whether or not the Privileged Information is in the possession of or under the control of any member of the SharkNinja Group or JS Global Group. Except as otherwise provided in Sections 8.7(a), 8.7(c) and 8.7(b)(i), SharkNinja TopCo shall also own all Privileges and be entitled to control, in perpetuity, the assertion or waiver of all Privileges in connection with Privileged Information that relates solely to the subject matter of any claims constituting SharkNinja Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by any member of the SharkNinja Group, whether or not the Privileged Information is in the possession of or under the control of any member of the SharkNinja Group or JS Global Group; and

 

(iv)          Except as otherwise provided in Sections 8.7(a), 8.7(c) and 8.7(b)(i), JS Global shall own the Privileges and be entitled to control, in perpetuity, the assertion or waiver of all Privileges in connection with Privileged Information which relates solely to the JS Global Business, whether or not the Privileged Information is in the possession of or under the control of any member of the SharkNinja Group or JS Global Group. Except as otherwise provided in Sections 8.7(a), 8.7(c) and 8.7(b)(i), JS Global shall also own all Privileges and be entitled to control, in perpetuity, the assertion or waiver of all Privileges in connection with Privileged Information that relates solely to the subject matter of any claims constituting JS Global Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by any member of the JS Global Group, whether or not the Privileged Information is in the possession of or under the control of any member of the SharkNinja Group or JS Global Group.

 

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(c)          Each Party, on behalf of itself and each other member of its Group, irrevocably acknowledges and agrees that (x) the Parties shall have a shared Privilege for all Privileged Information relating to Collective Benefit Services except to the extent expressly allocated pursuant to the terms of Section 8.7(a) or Section 8.7(b), and (y) all Privileges relating to any claims, proceedings, litigation, disputes or other matters which involve a member of each Group in respect of which members of both the JS Global Group and the SharkNinja Group retains any responsibility or Liability under this Agreement, shall be subject to a shared Privilege among them.

 

(i)           No Party (or any member of its Group) may waive any Privilege that such Party could assert under any applicable Law with respect to Privileged Information in which any other Party (or member of its Group) has a shared Privilege, without the consent of such other Party, which shall not be unreasonably withheld, conditioned or delayed. Consent shall be in writing, or shall be deemed to be granted unless written objection is made within fifteen (15) days after written notice upon the other Party requesting such consent.

 

(ii)          In the event of any Action or Dispute (i) involving a Third Party or (ii) solely between or among the Parties (or any members of their respective Groups), if a Dispute arises between or among the Parties (or members of their respective Groups) regarding whether a Privilege should be waived to protect or advance the interest of any Party or its Group, each Party agrees that it shall, and shall cause each other member of its Group to, negotiate the potential waiver of such Privilege in good faith, and shall not, and shall cause each other member of its Group not to, unreasonably withhold consent to any request for waiver by the other Party. Each Party agrees that it shall not, and shall cause each other member of its Group to not, withhold consent to waiver for any purpose except in good faith and to protect its (or its Group’s) own legitimate business interests and, to the extent the Parties agree to waive such Privilege, the requesting Party shall use commercially reasonable efforts to minimize any prejudice to the rights of the other Party (or members of its Group).

 

(iii)         Upon receipt by any Party or any other member of its Group of any Third Party subpoena, request for discovery or other request which, upon a good faith reading, may reasonably be expected to result in the production or disclosure of Information subject to a shared Privilege or a Privilege owned by the other Party (or a member of its Group), such Party shall promptly notify the other Party of the existence of the subpoena or request and shall provide the other Party (and the relevant members of its Group) a reasonable opportunity to review the Information and to assert any rights it may have under this Section 8.7 or otherwise to prevent, restrict or otherwise limit the production or disclosure of such Privileged Information.

 

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(d)          The transfer of all Information pursuant to this Agreement is made in reliance on the agreement of JS Global or SharkNinja TopCo as set forth in Section 8.6 and this Section 8.7, to maintain the confidentiality of Privileged Information (regardless of whether or not the Privileged Information of one Party or a member of its Group is in the possession of or under the control of the other Party or a member of its Group) and to assert and maintain any applicable Privilege. The access to Information being granted pursuant to Section 7.5, Section 8.1, Section 8.2 and Article VI, the agreement to provide witnesses and individuals pursuant to Section 7.5 and Section 8.4, the furnishing of notices and documents and other cooperative efforts contemplated by Section 7.5, and the transfer of Privileged Information between the Parties and their respective Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any Privilege that has been or may be asserted under this Agreement or otherwise.

 

Section 8.8            Ownership of Information. Any Information owned by one Party or any of its Subsidiaries that is provided to a requesting Party pursuant to this Article VIII shall be deemed to remain the property of the providing Party. Unless expressly set forth herein, nothing contained in this Agreement shall be construed as granting a license or other rights to any Party with respect to any such Information, whether by implication, estoppel or otherwise.

 

Section 8.9            Personal Data.

 

(a)          The Parties acknowledge that (i) JS Global is a Data Controller with respect to the Processing of the JS Global Personal Data prior to and after the Disposition Date, (ii) JS Global and SharkNinja are separate Data Controllers with respect to the Processing of SharkNinja Personal Data prior to the Disposition Date, and (iii) SharkNinja TopCo is a Data Controller with respect to the Processing of the SharkNinja Personal Data from and after the Disposition Date. As such, from and after the Disposition Date, SharkNinja TopCo and JS Global, respectively, shall comply with the requirements of Data Protection Laws applicable to Data Controllers in connection with the SharkNinja Personal Data (with respect to SharkNinja TopCo as Data Controller) and the JS Global Personal Data (with respect to JS Global as Data Controller) and this Agreement.

 

(b)          Both Parties shall cooperate to ensure that their Processing of Personal Data hereunder does and will comply with all applicable Data Protection Laws and take all reasonable precautions to avoid acts that place the other Party in breach of its obligations under any applicable Data Protection Laws. Nothing in this Section 8.9 shall be deemed to prevent any Party from taking the steps it reasonably deems necessary to comply with any applicable Data Protection Laws.

 

Section 8.10         Other Agreements. The rights and obligations granted under this Article VIII are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of Information set forth in any Ancillary Agreement.

 

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ARTICLE IX

 

DISPUTE RESOLUTION

 

Section 9.1            Negotiation. In the event of a controversy, dispute or Action arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity or breach of this Agreement or the Ancillary Agreements or otherwise arising out of, or in any way related to, this Agreement or the Ancillary Agreements or the transactions contemplated hereby, including any Action based on contract, tort, statute or constitution (collectively, “Disputes”), the legal counsels of the Parties (or such other individuals designated by the respective legal counsels) and/or the executive officers designated by the Parties shall negotiate for a reasonable period of time to settle such Dispute; provided that such reasonable period shall not, unless otherwise agreed by the Parties in writing, exceed sixty (60) days (the “Negotiation Period”) from the time of receipt by a Party of written notice of such Dispute (“Dispute Notice”) and settlement of such Dispute pursuant to this Section 9.1 shall be confidential, and no written or oral statements or offers made by the Parties during such settlement negotiations shall be admissible for any purpose in any subsequent proceedings, including any arbitration proceeding pursuant to Section 9.2; provided, further, that in the event of any arbitration in accordance with Section 9.2 hereof, the Parties shall not assert the defenses of statute of limitations and laches arising during the period beginning after the date of receipt of the Dispute Notice, and any contractual time period or deadline under this Agreement or any Ancillary Agreement to which such Dispute relates occurring after the Dispute Notice is received shall not be deemed to have passed until such Dispute has been resolved.

 

Section 9.2            Arbitration. If the Dispute has not been resolved for any reason after the Negotiation Period, such Dispute shall be submitted to final and binding arbitration administered in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect (the “Rules”), except as modified herein.

 

(a)          The arbitration shall be conducted by a three-member arbitral tribunal (the “Arbitral Tribunal”). The claimant shall nominate one arbitrator in accordance with the Rules, and the respondent shall nominate one arbitrator in accordance with the Rules within twenty-one days (21) after the appointment of the first arbitrator. The third arbitrator, who shall serve as chair of the Arbitral Tribunal, shall be jointly nominated by the two party-nominated arbitrators within twenty-one (21) days of the confirmation of the appointment of the second arbitrator. If any arbitrator is not appointed within the time limit provided herein, such arbitrator shall be appointed by the AAA in accordance with the listing, striking and ranking procedure in the Rules.

 

(b)          The arbitration shall be held, and the award shall be rendered, in New York, New York, in the English language.

 

(c)          For the avoidance of doubt, by submitting their dispute to arbitration under the Rules, the Parties expressly agree that all issues of arbitrability, including all issues concerning the propriety and timeliness of the commencement of the arbitration (including any defense based on a statute of limitation, if applicable), the jurisdiction of the Arbitral Tribunal, and the procedural conditions for arbitration, shall be finally and solely determined by the Arbitral Tribunal.

 

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(d)          Without derogating from Section 9.2(e) below, the Arbitral Tribunal shall have the full authority to grant any pre-arbitral injunction, pre-arbitral attachment, interim or conservatory measure or other order in aid of arbitration proceedings (“Interim Relief”). The Parties shall exclusively submit any application for Interim Relief to only: (A) the Arbitral Tribunal; or (B) prior to the constitution of the Arbitral Tribunal, an Emergency Arbitrator appointed in the manner provided for in the Rules. Any Interim Relief so issued shall, to the extent permitted by applicable Law, be deemed a final arbitration award for purposes of enforceability, and, moreover, shall also be deemed a term and condition of this Agreement subject to specific performance in Section 9.3 below. The foregoing procedures shall constitute the exclusive means of seeking Interim Relief; provided, however, that: (i) the Arbitral Tribunal shall have the power to continue, review, vacate or modify any Interim Relief granted by an Emergency Arbitrator; (ii) in the event an Emergency Arbitrator or the Arbitral Tribunal issues an order granting, denying or otherwise addressing Interim Relief (a “Decision on Interim Relief”), any Party may apply to enforce or require specific performance of such Decision on Interim Relief in any court of competent jurisdiction; and (iii) either Party shall retain the right to apply for freezing orders to prevent the improper dissipation of transfer of assets to a court of competent jurisdiction.

 

(e)          The Arbitral Tribunal (and, if applicable, Emergency Arbitrator) shall have the power to grant any remedy or relief that it deems just and equitable and that is in accordance with the terms of this Agreement, including specific performance and temporary or final injunctive relief; provided, however, that the Arbitral Tribunal shall have no authority or power to limit, expand, alter, amend, modify, revoke or suspend any condition or provision of this Agreement or any Ancillary Agreement, nor any right or power to award punitive, exemplary or treble damages.

 

(f)          The Arbitral Tribunal shall have the power to allocate the costs and fees of the arbitration, including reasonable attorneys’ fees and costs as well as those costs and fees addressed in the Rules, between the Parties in the manner it deems fit.

 

(g)          Arbitration under this Article IX shall be the sole and exclusive remedy for any Dispute, and any award rendered thereby shall be final and binding upon the Parties as from the date rendered. Judgment on the award rendered by the Arbitral Tribunal may be entered in any court having jurisdiction thereof, including any court having jurisdiction over the relevant Party or its Assets.

 

(h)          EACH OF JS GLOBAL, SHARKNINJA TOPCO AND SHARKNINJA HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF JS GLOBAL, SHARKNINJA TOPCO AND SHARKNINJA CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY TO THIS AGREEMENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY TO THIS AGREEMENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH OF JS GLOBAL, SHARKNINJA TOPCO AND SHARKNINJA UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH OF JS GLOBAL, SHARKNINJA TOPCO AND SHARKNINJA MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH OF JS GLOBAL, SHARKNINJA TOPCO AND SHARKNINJA HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.2.

 

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Section 9.3            Specific Performance. From and after the Disposition Date, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the Parties agree that the Party or Parties to this Agreement or such Ancillary Agreement who are or are to be thereby aggrieved shall, subject and pursuant to the terms of this Article IX (including for the avoidance of doubt, after compliance with all notice and negotiation provisions herein), have the right to specific performance and injunctive or other equitable relief of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that, from and after the Disposition Date, the remedies at law for any breach or threatened breach of this Agreement or any Ancillary Agreement, including monetary damages, are inadequate compensation for any Indemnifiable Loss, that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.

 

Section 9.4            Treatment of Arbitration. The Parties agree that any arbitration hereunder shall be kept confidential, and that the existence of the proceeding and all of its elements (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall be deemed confidential, and shall not be disclosed beyond the Arbitral Tribunal, the Parties, their counsel and any Person necessary to the conduct of the proceeding, except as and to the extent required by law and to defend or pursue any legal right. In the event any Party makes application to any court in connection with this Section 9.4 (including any proceedings to enforce a final award or any Interim Relief), that party shall take all steps reasonably within its power to cause such application, and any exhibits (including copies of any award or decisions of the Arbitral Tribunal or Emergency Arbitrator) to be filed under seal, shall oppose any challenge by any Third Party to such sealing, and shall give the other Party immediate notice of such challenge.

 

Section 9.5            Continuity of Service and Performance. Unless otherwise agreed in writing, the Parties shall continue to provide service and honor all other commitments under this Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of this Article IX with respect to all matters not subject to such dispute resolution.

 

Section 9.6            Consolidation. The arbitrators may consolidate an arbitration under this Agreement with any arbitration arising under or relating to the Ancillary Agreements or any other agreement between the Parties entered into pursuant hereto, as the case may be, if the subject of the Disputes thereunder arises out of or relates essentially to the same set of facts or transactions. Such consolidated arbitration shall be determined by the arbitrators appointed for the arbitration proceeding that was commenced first in time.

 

ARTICLE X

 

INSURANCE

 

Section 10.1          Insurance Matters.

 

(a)          SharkNinja TopCo acknowledges and agrees that, from and after the Disposition Date, neither SharkNinja TopCo nor any member of the SharkNinja Group (except the Internal Reorganization Distributed SharkNinja Assets) shall have any rights to or under any Policies of JS Global, including the Company Policies, other than (x) any insurance policies acquired prior to the Disposition Date directly by and in the name of SharkNinja TopCo or a member of the SharkNinja Group and that provide coverage solely for one or more members of the SharkNinja Group, or (y) as expressly provided in Section 7.7 or this Article X.

 

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(b)            JS Global acknowledges and agrees that, from and after the Disposition Date, neither JS Global nor any member of the JS Global shall have any rights to or under any Policies of SharkNinja TopCo, other than (x) any insurance policies acquired prior to the Disposition Date directly by and in the name of JS Global or a member of the JS Global Group and that provide coverage solely for one or more members of the JS Global Group, or (y) as expressly provided in Section 7.7 or this Article X.

 

(c)            At the Disposition Date, the SharkNinja Group and the JS Global Group shall both have in effect all insurance programs required to comply with their respective statutory obligations.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1            Entire Agreement; Construction. This Agreement, including the Exhibits and Schedules, and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. In the event and to the extent that there shall be a conflict between the provisions of (a) this Agreement and the provisions of any Ancillary Agreement or Continuing Arrangement, such Ancillary Agreement or Continuing Arrangement shall control (except with respect to any provisions relating to the Transfer of Assets to, or the Assumption of Liabilities by, a Party or a member of its Group, the Internal Reorganization, the Distribution, the covenants and obligations set forth in Article V, [Article VI]2, Article IX and Article X or the application of Article XI to the terms of this Agreement (or, in each case, any indemnification rights pursuant to this Agreement in respect thereof and/or any other remedies pursuant to this Agreement in respect of any breach of any covenant or obligation under this Agreement)) and (b) this Agreement and any agreement which is not an Ancillary Agreement, this Agreement shall control unless specifically stated otherwise in such agreement. For the avoidance of doubt, the Conveyancing and Assumption Instruments are intended to be ministerial in nature and only to effect the transactions contemplated by this Agreement with respect to the applicable local jurisdiction and shall not expand or modify the rights and obligations of the Parties or their Affiliates under this Agreement or any of the Ancillary Agreements that are not Conveyancing and Assumption Instruments.

 

 

2Note to Draft: Article VI and reference to Article VI to be deleted if this Agreement is entered into substantially concurrently with the Distribution.

 

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Section 11.2            Ancillary Agreements. Except as expressly set forth herein, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.

 

Section 11.3            Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

 

Section 11.4            Survival of Agreements. Except as otherwise contemplated by this Agreement or any Ancillary Agreement, all covenants and agreements of the Parties contained in this Agreement and each Ancillary Agreement shall survive the Disposition Date and remain in full force and effect in accordance with their applicable terms.

 

Section 11.5            Expenses.

 

(a)            Except as otherwise expressly provided in this Agreement or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, all out-of-pocket fees and expenses incurred at or prior to the Disposition Date by any member of the JS Global Group or the SharkNinja Group in connection with, or as required by, the preparation, execution, delivery and implementation of this Agreement, any Ancillary Agreement and the Distribution Disclosure Documents and the consummation of the Internal Reorganization, the Internal Reorganization Contribution and the Internal Reorganization Distribution (the “Transaction-related Expenses”) shall be borne and paid by SharkNinja TopCo; provided that notwithstanding anything herein to the contrary, all costs and expenses incurred with respect to the services listed on Schedule 11.5(a) shall not be deemed Transaction-related Expenses and shall be borne and paid by JS Global.

 

(b)            Except as otherwise expressly provided in this Agreement or any Ancillary Agreement, following the Disposition Date, each Party shall be responsible for any out-of-pocket fees and expenses incurred following the Disposition Date by such Party in connection with, or as required by, the preparation, execution, delivery, implementation and performance of this Agreement, any Ancillary Agreement and, solely in respect of the SharkNinja Group, the Distribution Disclosure Documents; provided that notwithstanding anything herein to the contrary, all costs and expenses incurred with respect to the item(s) listed on Schedule 11.5(b).

 

(c)            Except as otherwise expressly provided in this Agreement or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, (i) any costs and expenses incurred at or prior to the Disposition Date in obtaining any Consents or novation from a Third Party in connection with the assignment to or assumption by a Party or its Subsidiary of any Contracts in connection with the Internal Reorganization, the Internal Reorganization Contribution or the Internal Reorganization Distribution shall be borne by SharkNinja TopCo and (ii) any costs and expenses incurred after the Disposition Date in obtaining any Consents or novation from a Third Party in connection with the assignment to or assumption by a Party or its Subsidiary of any Contracts in connection with the Internal Reorganization, the Internal Reorganization Contribution or the Internal Reorganization Distribution shall be borne the Party or its Subsidiary to which such Contract is being assigned.

 

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(d)            Except as set forth in Section 11.5(b), with respect to any expenses incurred pursuant to a request for further assurances granted under Section 2.8, the Parties agree that any and all fees and expenses incurred by either Party shall be borne and paid by the requesting Party; it being understood that no Party shall be obliged to incur any Third Party accounting, consulting, advisor, banking or legal fees, costs or expenses, and the requesting Party shall not be obligated to pay such fees, costs or expenses, unless such fee, cost or expense shall have had the prior written approval of the requesting Party. Notwithstanding the foregoing, each Party shall be responsible for paying its own internal fees, costs and expenses (e.g., salaries of personnel). With respect to any fees, costs and expenses incurred by either Party in satisfying its obligations under Section 6.1 or Section 6.2, the requesting Party shall be responsible for the other Party’s fees, costs and expenses.

 

Section 11.6            Notices. All notices, requests, claims, demands and other communications under this Agreement and, to the extent applicable and unless otherwise provided therein, under each of the Ancillary Agreements shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by email (provided no “error” message or other notification of non-delivery is received by the sender of any such email; followed by delivery of an original via overnight courier service) or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 11.6):

 

To JS Global:

 

JS Global Lifestyle Co. Ltd.
[•]
Attn: [•]
Email: [•]

 

with a copy (which shall not constitute notice) to:

 

Clifford Chance LLP
[•]
[•]
Attn: [•]
Email: [•]

 

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To SharkNinja TopCo or SharkNinja:

 

SharkNinja, Inc.
[•]
[•]
Attn: [•]
Email: [•]

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
[•]
[•]
Attn: [•]
Email: [•]

 

Section 11.7            Waivers; Consents. Any provision of this Agreement may be waived, if and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any consent or approval required or permitted to be given by a Party to any other Party or its Affiliates under this Agreement shall be in the sole and absolute discretion of the Party giving, conditioning or denying such consent or approval (unless a different standard is expressly set forth herein therefor), shall only be effective if given in writing and signed by the Party giving such consent and shall be effective only against such Party (and the members of its Group).

 

Section 11.8            Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any party hereto without the prior written consent of the other Parties, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void. Notwithstanding the foregoing, this Agreement shall be assignable to (a) an Affiliate of any Party or (b) a bona fide Third Party in connection with a merger, reorganization, consolidation or the sale of all or substantially all the assets of a party hereto so long as the resulting, surviving or transferee entity assumes all the obligations of the relevant Party by operation of law or pursuant to an agreement in form and substance reasonably satisfactory to the other Parties; provided, however, that in the case of each of the preceding clauses (a) and (b), no assignment permitted by this Section 11.8 shall release the assigning Party from liability for the full performance of its obligations under this Agreement.

 

Section 11.9            Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

 

Section 11.10          Termination and Amendment. This Agreement may be terminated, modified or amended at any time prior to the Distribution by and in the sole discretion of JS Global without the written consent of SharkNinja or the JS Global Shareholders, and in the event of such termination, no Party shall have any liability of any kind to the other Parties or any other Person under this Agreement. After the Distribution, this Agreement may not be terminated, modified or amended except by an agreement in writing signed by JS Global and SharkNinja TopCo.

 

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Section 11.11        Payment Terms.

 

(a)          Except as set forth in Article VII or as otherwise expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount to be paid or reimbursed by a Party (and/or a member of such Party’s Group), on the one hand, to the other Parties (and/or a member of such Party’s Group), on the other hand, under this Agreement shall be paid or reimbursed hereunder within sixty (60) days after presentation of an invoice or a written demand therefor and setting forth, or accompanied by, reasonable documentation or other reasonable explanation supporting such amount.

 

(b)          Except as set forth in Article VII or as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement (and any amount billed or otherwise invoiced or demanded and properly payable that is not paid within sixty (60) days of such bill, invoice or other demand) shall bear interest at a rate per annum equal to the Prime Rate, from time to time in effect, calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.

 

(c)          Without the consent of the Party or Parties receiving any payment under this Agreement specifying otherwise, all payments to be made by any Party under this Agreement shall be made in U.S. Dollars. Except as expressly provided herein, any amount which is not expressed in U.S. Dollars shall be converted into U.S. Dollars by using the exchange rate published on Bloomberg at 5:00 p.m. Eastern Standard time (EST) on the day before the relevant date or in the Wall Street Journal on such date if not so published on Bloomberg. Except as expressly provided herein, in the event that any indemnification payment required to be made hereunder or under any Ancillary Agreement may be denominated in a currency other than U.S. Dollars, the amount of such payment shall be converted into U.S. Dollars on the date in which notice of the claim is given to the Indemnifying Party.

 

Section 11.12       No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is a breach or, in the case where a Party acts in concert with any Person who takes such action, would be a breach of any of the provisions of this Agreement (including adversely affecting the rights or ability of any Party to successfully pursue indemnification or payment pursuant to Article VII).

 

Section 11.13       Subsidiaries. Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary of such Party or by any entity that becomes a Subsidiary of such Party at and after the Disposition Date, to the extent such Subsidiary remains a Subsidiary of the applicable Party; provided that, for the avoidance of doubt, except as provided in Section 5.3 or Section 5.4, nothing herein shall prevent any member of the Joyoung Group from conducting its business in the ordinary course in compliance with applicable Laws and the rules of the competent Governmental Entities and stock exchange.

 

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Section 11.14       Third Party Beneficiaries. Except (i) as provided in Article VII relating to Indemnitees and for the release under Section 7.1 of any Person provided therein and (ii) as specifically provided in any Ancillary Agreement, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

 

Section 11.15       Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

Section 11.16       Exhibits and Schedules.

 

(a)          The Exhibits and Schedules shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein. Nothing in the Exhibits or Schedules constitutes an admission of any liability or obligation of any member of the JS Global Group or the SharkNinja Group or any of their respective Affiliates to any Third Party, nor, with respect to any Third Party, an admission against the interests of any member of the JS Global Group or the SharkNinja Group or any of their respective Affiliates. The inclusion of any item or liability or category of item or liability on any Exhibit or Schedule is made solely for purposes of allocating potential liabilities among the Parties and shall not be deemed as or construed to be an admission that any such liability exists.

 

(b)          Subject to the prior written consent of the other Party (not to be unreasonably withheld or delayed), each Party shall be entitled to update the Schedules from and after the date hereof until the Disposition Date.

 

Section 11.17       Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

 

Section 11.18       Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 11.19       Public Announcements. From and after the Disposition Date, JS Global and SharkNinja TopCo shall consult with each other before issuing, and give each other the opportunity to review and comment upon, that portion of any press release or other public statements that relates to the transactions contemplated by this Agreement or the Ancillary Agreements, and shall not issue any such press release or make any such public statement prior to such consultation, except (a) as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange; (b) for disclosures made that are substantially consistent with disclosure contained in any Distribution Disclosure Document; or (c) as may pertain to disputes between one Party or any member of its Group, on one hand, and the other Party or any member of its Group, on the other hand.

 

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Section 11.20       No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances (including with respect to the rights, entitlements, obligations and recoveries that may arise out of one or more of the following Sections: Section 7.2; Section 7.3; and Section 7.4).

 

Section 11.21       Tax Treatment of Payments. Unless otherwise required by a Final Determination, this Agreement or otherwise agreed to among the Parties, for U.S. federal Tax purposes, any payment made pursuant to this Agreement by: (i) SharkNinja to JS Global shall be treated for all Tax purposes as a distribution by SharkNinja to JS Global with respect to shares of SharkNinja occurring on or immediately before the SharkNinja TopCo Contribution; or (ii) JS Global to SharkNinja shall be treated for all Tax purposes as a tax-free contribution by JS Global to SharkNinja with respect to its shares occurring on or immediately before the SharkNinja TopCo Contribution; and in each case, no Party shall take any position inconsistent with such treatment. In the event that a Taxing Authority asserts that a Party’s treatment of a payment pursuant to this Agreement should be other than as set forth in the preceding sentence, such Party shall use its commercially reasonable efforts to contest such challenge. Notwithstanding the foregoing, JS Global (or, if applicable, SharkNinja) shall notify SharkNinja (or, if applicable, JS Global) if it determines that any payment made pursuant to this Agreement is to be treated, for any Tax purposes, as a payment made by one Party acting as an agent of one of such Party’s Subsidiaries to the other Party acting as an agent of one of such other Party’s Subsidiaries, and the Parties agree to treat any such payment accordingly. The Parties agree to cooperate with one another and use commercially reasonable efforts to provide to one another promptly upon request all information within its possession or reasonably available to it and all assistance reasonably requested by one another (at the requesting Party’s cost) for the purposes of any tax filing, tax computations or correspondence with any Taxing Authority by the requesting Party, including, without limitation, in connection with any claim for benefits, reduction, relief or an exemption from, or refunds of, Taxes applicable to any payment made pursuant to this Agreement.d

 

Section 11.22       No Admission of Liability. The allocation of Assets and Liabilities herein (including on the Schedules hereto) is solely for the purpose of allocating such Assets and Liabilities between the JS Global Group and the SharkNinja Group and is not intended as an admission of liability or responsibility for any alleged Liabilities vis-à-vis any Third Party, including with respect to the Liabilities of any non-wholly owned subsidiary of JS Global or SharkNinja TopCo.

 

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Section 11.23       Advisors.

 

(a)          It is acknowledged and agreed by each of the Parties that JS Global, on behalf of itself and the other members of the JS Global Group, has retained each of the Persons identified on Schedule 11.23(a) to act as counsel in connection with this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution and the other transactions contemplated hereby and thereby and that the Persons listed on Schedule 11.23(a) have not acted as counsel for SharkNinja, SharkNinja TopCo or a member of the SharkNinja Group in connection with this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution and the other transactions contemplated hereby and thereby and that none of SharkNinja or any member of the SharkNinja Group shall be deemed a client of the Persons listed on Schedule 11.23(a) for any purpose, including conflicts of interest purposes. SharkNinja and SharkNinja TopCo each hereby irrevocably acknowledge and agree, on behalf of itself and each other member of the SharkNinja Group that, in the event that a dispute arises after the Disposition Date in connection with this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution and/or any of the other transactions contemplated hereby and thereby between JS Global and SharkNinja TopCo or any of the members of their respective Groups, each of the Persons listed on Schedule 11.23(a) may represent any or all of the members of the JS Global Group in such dispute even though the interests of the JS Global Group may be directly adverse to those of the SharkNinja Group; provided that each of the Persons listed on Schedule 11.23(a) shall not use information that is confidential or privileged based on its prior representation of, and associated communications with, SharkNinja which may be adverse to SharkNinja in respect of a dispute with JS Global as described in the foregoing. SharkNinja further irrevocably acknowledges and agrees, on behalf of itself and each other member of the SharkNinja Group that, any communications by and between the Persons identified on Schedule 11.23(a), on the one hand, and any or all members of the JS Global Group, on the other hand, arising out of or relating to this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution, and the other transactions contemplated hereby and thereby, shall be deemed privileged and confidential, and the attorney-client privilege and the expectation of client confidence shall belong to JS Global or the applicable member of the JS Global Group and shall be controlled exclusively by JS Global or such member of the JS Global Group and shall not belong to, pass to or be controlled or claimed by SharkNinja or any member of the SharkNinja Group.

 

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(b)          It is acknowledged and agreed by each of the Parties that SharkNinja and SharkNinja TopCo, on behalf of themselves and the other members of the SharkNinja Group, have retained each of the Persons identified on Schedule 11.23(b) to act as counsel in connection with this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution and the other transactions contemplated hereby and thereby and that the Persons listed on Schedule 11.23(b) have not acted as counsel for JS Global or a member of the JS Global Group in connection with this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution and the other transactions contemplated hereby and thereby and that none of JS Global or any member of the JS Global Group shall be deemed a client of the Persons listed on Schedule 11.23(b) for any purpose, including conflicts of interest purposes. JS Global hereby irrevocably acknowledges and agrees, on behalf of itself and each other member of the JS Global Group that, in the event that a dispute arises after the Disposition Date in connection with this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution and/or any of the other transactions contemplated hereby and thereby between JS Global and SharkNinja TopCo or any of the members of their respective Groups, each of the Persons listed on Schedule 11.23(b) may represent any or all of the members of the SharkNinja Group in such dispute even though the interests of the SharkNinja Group may be directly adverse to those of the JS Global Group; provided that each of the Persons listed on Schedule 11.23(b) shall not use information that is confidential or privileged based on its prior representation of, and associated communications with, JS Global which may be adverse to JS Global in respect of a dispute with SharkNinja as described in the foregoing. JS Global further irrevocably acknowledges and agrees, on behalf of itself and each other member of the JS Global Group that, any communications by and between the Persons identified on Schedule 11.23(b), on the one hand, and any or all members of the SharkNinja Group, on the other hand, arising out of or relating to this Agreement, the Ancillary Agreements, the Internal Reorganization, the Internal Reorganization Contribution, the Internal Reorganization Distribution, and the other transactions contemplated hereby and thereby, shall be deemed privileged and confidential, and the attorney-client privilege and the expectation of client confidence shall belong to SharkNinja, SharkNinja TopCo or the applicable member of the SharkNinja Group and shall be controlled exclusively by SharkNinja TopCo, SharkNinja or such member of the SharkNinja Group and shall not belong to, pass to or be controlled or claimed by JS Global or any member of the JS Global Group.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.

 

JS GLOBAL LIFESTYLE COMPANY LIMITED
   
 By: 
  Name:
  Title:

 

SHARKNINJA GLOBAL SPV. LTD.
   
 By: 
  Name:
  Title:

 

SHARKNINJA, INC.
   
 By: 
  Name:
  Title:

 

[Signature Page to Separation and Distribution Agreement]

 

 

 

 

Exhibit 10.5

 

TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

SHARKNINJA, INC.

 

AND

 

JS GLOBAL TRADING HK LIMITED

 

Dated as of [●], 2023

 

i

 

  

TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT (this “Agreement”), dated as of [●], 2023 (the “Effective Date”), between SharkNinja, Inc., an exempted company with limited liability incorporated in the Cayman Islands (“SharkNinja”), and JS Global Trading HK Limited, an exempted company with limited liability incorporated in the Cayman Islands (“JS Global”). “Party” or “Parties” means SharkNinja or JS Global, individually or collectively, as the case may be.

 

RECITALS

 

WHEREAS, the Parties have entered into that certain Separation and Distribution Agreement, dated [●], 2023 (the “SDA”);

 

WHEREAS, pursuant to the SDA, and in connection with the transition of the respective Businesses from one Group to the other, respectively, the Parties contemplate that certain services are to be provided or caused to be provided by SharkNinja to JS Global and by JS Global to SharkNinja for certain periods after the Separation upon the terms and conditions set forth in this Agreement; and

 

WHEREAS, this Agreement constitutes the Transition Services Agreement referred to in the SDA.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

Article I

 

DEFINITIONS

 

Section 1.01      Certain Defined Terms. (a) Unless otherwise defined herein, all capitalized terms used herein shall have the same meanings as in the SDA, and Section 1.2 (References; Interpretation) of the SDA is incorporated herein by reference.

 

(b)         The following capitalized terms used in this Agreement shall have the meanings set forth below:

 

“Arm’s Length Price” refers to the Service Fees or other applicable charges under this Agreement, as determined in accordance with the arm’s length standard under (i) Part 4 of the Taxation (International and Other Provisions) Act 2010, (ii) Treasury Regulations promulgated under Section 482 of the Internal Revenue Code of 1986, as amended, (iii) the Organisation for Economic Cooperation and Development’s transfer pricing guidelines for multinational enterprises and tax administrations, as amended or updated from time to time, or (iv) such other applicable national or multinational standards.

 

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“Data Protection Legislation” means the following legislation and guidance to the extent applicable from time to time: (a) the California Consumer Privacy Act, (b) national laws implementing the Directive on Privacy and Electronic Communications (2002/58/EC); (c) the General Data Protection Regulation (2016/679) (the “GDPR”), any national law supplementing the GDPR; (d) the UK General Data Protection Regulation as defined by the Data Protection Act 2018 as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 (the “UK GDPR”) and (e) any other data protection or privacy laws, regulations, or regulatory requirements applicable to the processing of personal data (as amended and/or replaced from time to time) in each jurisdiction in which the Services are provided.

 

“JS Global Provider” means any member of the JS Global Group that is a Provider.

 

“JS Global Recipient” means any member of the JS Global Group that is a Recipient.

 

“Force Majeure” means, with respect to a Party, an event beyond the reasonable control of such Party, including acts of God, floods, riots, fires or other natural disasters, explosions, sabotage, civil commotion or civil unrest, interference by civil or military authorities, epidemics, pandemics, acts of war (declared or undeclared), armed hostilities or other national or international calamity, acts of terrorism (including by cyberattack or otherwise) and failure or interruption of networks or energy sources, in each case, which such events cause cessation, interruption or hindrance of such Party’s performance under this Agreement.

 

“SharkNinja Provider” means any member of the SharkNinja Group that is a Provider.

 

“SharkNinja Recipient” means any member of the SharkNinja Group that is a Recipient.

 

“Provider” means the applicable Party or member of its Group responsible for providing or causing the provision of a Service under this Agreement.

 

“Recipient” means the applicable Party or member of its Group entitled to receive a Service under this Agreement.

 

“Services” means the JS Global Provided Services and the SharkNinja Provided Services, as applicable.

 

“VAT” means (i) value added tax chargeable within the United Kingdom in accordance with the VATA 1994 and legislation and regulations supplemental thereto, (ii) inside the European Union, value added tax charged pursuant to Council Directive 2006/112/EC on the common system of value added tax and (iii) outside the United Kingdom and European Union, any similar sales or turnover tax or goods and services tax.

 

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“Virus(es)” means any malicious computer code or instructions that adversely affect in any material respect the operation, security or integrity of (i) a computing telecommunications or other electronic operating or processing system or environment, (ii) software programs, data, databases, or other computer files or libraries, or (iii) computer hardware, networking devices or telecommunications equipment, including (x) viruses, Trojan horses, time bombs, back door devices, worms or any other software routine or hardware component designed to permit unauthorized access, disable, erase or otherwise harm software, hardware or data or perform any other such harmful or unauthorized actions and (y) similar malicious code or data.

 

Article II

 

SERVICES AND DURATION

 

Section 2.01      Provision of Services.

 

(a)            Subject to the terms and conditions of this Agreement, SharkNinja shall provide (or cause to be provided) to the JS Global Recipients all of the services listed in Schedule 1 attached hereto (the “SharkNinja Provided Services”).

 

(b)            Subject to the terms and conditions of this Agreement, JS Global shall provide (or cause to be provided) to the SharkNinja Recipients all of the services listed in Schedule 2 attached hereto (the “JS Global Provided Services”).

 

(c)            Notwithstanding the foregoing, the Services shall not include the services set forth in Schedule 3 (the “Excluded Services”).

 

Section 2.02      Duration of Services. Subject to Section 6.01 and Section 6.04 hereof, effective as of the Effective Date, each Provider shall provide or cause to be provided to the respective Recipients each Service until the expiration of the period set forth next to such Service on the applicable Schedules hereto, and any extensions pursuant to Section 6.01(b) (the date of any such Service expiration, the “Service Term”); provided that no such extension shall extend beyond the end of the Term set forth in Section 6.01.

 

Section 2.03      Omitted Services.

 

(a)            If, within twelve (12) months after the Effective Date, SharkNinja or JS Global identifies and requests in writing a service that (i) the other Party or its Group provided to the Business of the requesting Party, respectively, during the twelve (12) month period prior to the Effective Date, (ii) the requesting Party or its Group reasonably requires in order for its Business to continue to operate in substantially the same manner in which the Business operated prior to the Effective Date, (iii) such service was not included in Schedule 1 or Schedule 2 (and is not an Excluded Service or a service provided for under another Ancillary Agreement), and (iv) in the twelve (12) month period prior to the Effective Date was not discontinued as a service provided by Provider to its own Affiliates or in the process of being phased out as a service provided to all of Provider’s own Affiliates (an “Omitted Service”), then, in each case, JS Global and SharkNinja shall negotiate in good faith for the provision thereof hereunder if the applicable Provider is reasonably able to provide such requested service (and the applicable Recipient is not reasonably able to provide or procure from another Person such requested service), and if so, subject to the Parties reaching an agreement, the applicable Provider will provide, or cause to be provided, the relevant Omitted Service. Any such Omitted Services shall constitute Services under this Agreement and be subject in all respects to the provisions of this Agreement as if fully set forth on Schedule 1 or Schedule 2, as applicable. The duration for any Omitted Service shall be the minimum period necessary for Recipient to transition off the relevant Omitted Service (but no longer than the end of the Term), and the Service Fees for any Omitted Service shall be calculated in a manner consistent with other comparable Services hereunder.

 

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(b)            Subject to the foregoing Section 2.03(a), in the event that SharkNinja or JS Global requests that, in addition to the Services, certain other services be made available by the Provider that are not Excluded Services or a Service provided under another Ancillary Agreement (the “Other Services”), Provider shall have no obligation to provide any Other Services. If the Provider, in its sole discretion, agrees to provide any Other Services, the Provider and the Recipient shall negotiate in good faith the terms therefor, including duration for providing such Other Services and fees therefor. The provision, if any, of any Other Services shall be on the terms and conditions agreed upon between the Provider and the Recipient and set forth on a schedule to be attached hereto or as an amendment to this Agreement. Any such Other Services mutually agreed to by the parties hereto and set forth on an exhibit or included in an amendment to this Agreement shall constitute “Services” hereunder.

 

Section 2.04      Exception to Obligation to Provide Services. Notwithstanding anything in this Agreement to the contrary, the relevant Providers shall not be obligated (and neither SharkNinja nor JS Global shall be obligated to cause any Provider) to provide any Services to the extent the provision of such Services would violate any Law or any Contract to which SharkNinja, JS Global, any of SharkNinja’s or JS Global’s Affiliates or any of the Providers are subject; provided, however, that SharkNinja and JS Global shall comply with Section 7.02 in seeking to obtain any Required Consents necessary to provide such Services; provided further that SharkNinja will not, and will cause its Affiliates not to, enter into any Contract during the Term that it knows would materially prevent the relevant SharkNinja Provider from providing the Services hereunder.

 

Section 2.05      Standard of the Provision of Services. The Services shall be provided in good faith and, except where expressly provided otherwise in the applicable Schedule, with the degree of care, skill and diligence, and at a level, volume, scope and timeliness, substantially consistent with that provided to the applicable Business during the twelve (12) month period immediately preceding the Effective Date and shall be provided and accepted in accordance with the terms, limitations and conditions set forth in this Agreement and the applicable Schedule; provided that no Provider shall be required to increase the level, volume or scope of the Services in excess of those described in the foregoing clause; provided, further, that with respect to Services a Recipient may request such an increase from the applicable Provider, which will be considered a request for an Omitted Service hereunder subject to Section 2.03(b), except that in the event and to the extent such Provider has increased the level of the Services with respect to provision of such Services to Provider’s own Affiliates, Provider shall accept such request in accordance with the terms, limitations and conditions set forth in this Agreement and the applicable Schedule.

 

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Section 2.06      Change in Services. The Providers may from time to time supplement, modify, substitute or otherwise alter the Services provided by such Provider, provided that such supplement, modification, substitution or alteration does not adversely affect the quality or availability of Services or increase the cost of using such Services in a material respect. Notwithstanding the foregoing, a Provider will have the right to (a) temporarily interrupt the provision of Services for emergency or routine maintenance purposes and/or (b) temporarily shut down the operation of the systems of the Provider providing the Services if, in each case, it is the commercially reasonable judgment of the Provider that such action is reasonably required or customary for its business, the Provider uses commercially reasonable efforts to arrange for the provision of such Services impacted by such temporary interruption and/or shutdown where reasonably practicable and at no material additional cost and expense to Recipient, and, where reasonably practicable, subject to reasonable written notice (under the circumstances) and reasonable consultation with Recipient with respect thereto. In performing any maintenance or causing any shutdown or interruption contemplated by this Section 2.06, the Provider shall use commercially reasonable efforts to minimize the impact of such maintenance, shutdown or interruption on the Services and the Recipient’s Business. The Provider shall provide notification to Recipient of any such temporary interruption and/or shutdown as soon as practicable.

 

Section 2.07      Subcontractors. A Provider may reasonably subcontract any of the Services or portion thereof that is not subcontracted as of the Effective Date to any other Person, including any Affiliate of the Provider, without the prior written consent of the Recipient; provided that (i) subcontracting such Services to another Person, including any Affiliate of the Provider, is reasonable, (ii) such other Person shall be subject to service standards and confidentiality obligations consistent with those set forth herein, and (iii) such Provider shall in all cases remain primarily responsible for all of its obligations hereunder with respect to the Services provided by such subcontractor. Provider shall not enter into an agreement with a subcontractor during the Term that causes a Service Fee to increase more than thirty thousand U.S. dollars ($30,000) without the consent of Recipient; provided that if Recipient does not so consent, Provider shall have no obligation to provide such Service.

 

Section 2.08      Electronic Access.

 

(a)            To the extent that the performance or receipt of Services hereunder requires access to a Party’s or its Affiliates’ computer systems, software or other information technology systems, including data contained therein (collectively, the “Systems”) by the other Party or its Affiliates (the “Accessing Group”), the Party whose Group’s Systems are being accessed (the “Providing Group”) shall provide access to (and the Accessing Group may access) such Systems solely for the purpose of, as applicable, providing or receiving the Services. Each Party shall cause its applicable Accessing Group to comply with all of the Providing Group’s policies, procedures and limitations (including with respect to physical security, network access, internet security, confidentiality and personal data security and privacy guidelines and other similar policies, collectively, the “Security Regulations”) to be determined by such Providing Group from time to time and provided in writing to such Accessing Group, and shall not tamper with, compromise or circumvent any security or related audit measures employed by the Providing Group. The Accessing Group shall access and use only those Systems of the Providing Group for which it has been granted the right to access and use.

 

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(b)            While Services are being provided hereunder, the Parties shall take commercially reasonable measures to ensure that no Virus or similar items are coded or introduced into the Services or Systems. With respect to Services or Systems provided by third parties, compliance with the applicable agreement with such third party shall be deemed sufficient commercially reasonable measures. If a Virus is found to have been introduced into any Services or Systems, (i) the Party that discovers the Virus shall promptly notify the other Party and (ii) the Parties shall use commercially reasonable efforts to cooperate and to diligently work together to remediate the effects of the Virus.

 

(c)            The Parties shall take commercially reasonable measures in providing, accessing and using the Services and Systems hereunder to prevent unauthorized access, use, destruction, alteration or loss of data, information or software contained in the Systems. If, at any time, the Accessing Group reasonably determines that any of its personnel has attempted to circumvent, or has circumvented, the Security Regulations, that any unauthorized personnel has or has had access to the Systems, or that any such personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of data, information or software of the Providing Group, the Accessing Group shall immediately suspend any such person’s access to the Systems and immediately notify the Providing Group; provided that the Parties shall work together to resolve the grounds for suspension and, unless the suspension was of personnel not authorized for access, any such suspended access will promptly be restored after such violation or security risk has been remediated. The Accessing Group shall reasonably cooperate with the Providing Group in investigating any unauthorized access to the Systems.

 

Section 2.09      Access to Facilities.

 

(a)            To the extent that the performance or receipt of Services hereunder requires access to a Party’s or its Affiliates’ office space or facilities or designated portion thereof as mutually agreed by the Parties and as more particularly set forth on Schedule 4 (collectively, the “Facilities”) by the other Party or its Affiliates (the “Entering Group”), the Party whose Group’s Facilities are being entered (the “Granting Group”) shall grant to Entering Group a limited exclusive license (each, a “Facility License” and collectively, the “Facilities License”) to use and access such Facilities, and to use certain offices, work stations, furniture, fixtures and equipment located at such Facilities (collectively, the “Licensed Area”), solely for the purpose of, as applicable, providing or receiving the Services, together with a non-exclusive right to use in common with the Granting Group the common areas at and serving the Facilities.  Each Party shall cause its applicable Entering Group to comply with all of the Granting Group’s policies, procedures and limitations (including with respect to physical security, restrictions, confidentiality and other similar policies) to be determined by such Granting Group from time to time or as may be imposed by any Lease (hereinafter defined) and provided in writing to such Entering Group.  The Entering Group shall access and enter only those Facilities of the Granting Group for which it has been granted the right to access and enter, and shall do so in a manner intended to minimize disruption or inconvenience to the Granting Group and its personnel and operations. The Parties agree to cooperate in good faith to (i) separate personnel such that the Licensed Area within each Facility shall only include that portion of the applicable Facility that will be used by the Entering Group and (ii) (X) if required, obtain the consent of the landlord(s) under any Lease to permit the applicable Facilities License and (Y) if required by a landlord, enter into a sublease or similar license or use agreement with respect to any Lease on terms consistent with this Agreement. The grant of the Facilities License is subject to the following terms and conditions, which supplement the terms and conditions of this Agreement:

 

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(b)            The Parties acknowledge that the Granting Group leases the Facilities pursuant to the lease agreements described on Schedule 4 (each, a “Lease”). The Facilities License is and shall be subject and subordinate to each Lease, as applicable, and to the matters to which such Lease is or shall be subordinate. Without limitation to the foregoing, each Facilities License shall immediately terminate without any further action on the part of the Parties in the event that the underlying Lease terminates and is not replaced by a similar arrangement in favor of the Granting Group at the previously Licensed Area, provided that the Granting Group shall use commercially reasonable efforts to provide the Entering Group with notice of any such termination as promptly as practicable. In the event of any conflict between this Agreement and the terms and conditions of any underlying Lease, the terms and conditions of the underlying Lease shall control.

 

(c)            The Entering Group shall and shall cause their employees, representatives, contractors, invitees and licensees to use the Licensed Area in substantially the same manner that it used and occupied such space immediately prior to the Effective Date and for no other purpose nor in any other manner and, in any event, in accordance with (i) all terms, conditions, requirements, conditions and provisions of the applicable Lease, (ii) all Laws and other legal requirements applicable to the use or occupation of each Facility, including those relating to environmental, health and workplace safety matters.

 

(d)            The Entering Group shall only permit their employees, authorized representatives, contractors, invitees or licensees to use the Licensed Areas, unless otherwise permitted by the Granting Group in writing.

 

(e)            The Granting Group shall have reasonable access to the Licensed Areas from time to time, as reasonably necessary for the security, repair and maintenance thereof. 

 

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(f)            The Entering Group shall not make, and shall cause their respective employees, representatives, contractors, invites and licensees to refrain from making, any alterations or improvements to the Licensed Areas.

 

(g)            During the term of each Facilities License, all costs relating to the Licensed Area thereunder (including all common areas related thereto), including without limitation, rent, maintenance, water, sewer, telephone, electricity and gas service charges, common area charges, amounts of public liability, damage, fire, and extended coverage insurance, real property taxes and any other operating expenses which, in each case, the Granting Group is required to pay (together, the “License Costs”) shall be borne by the Entering Group. The License Costs for each License Area shall be an amount equal to the Entering Group's proportionate share of all costs for the entire Facility for which the Granting Group is liable, based on the percentage of the Entering Group’s personnel to the total Granting Group personnel in such Facility. The Entering Group's proportionate share for each Facility and the License Costs shall be calculated by the Granting Group each calendar quarter or, if earlier, at the termination of the applicable Facilities License, and shall be paid pursuant to Section 3.03.  The Granting Group’s calculations shall be conclusive and binding on the parties, absent only manifest error.

 

(h)            The rights granted pursuant to this Section 2.09 shall be in the nature of a license and shall not create a leasehold or other estate or possessory right in favor of any Entering Group, or their respective employees, subsidiaries, representatives, contractors, invitees or licensees, with respect to the Facilities and shall not include any right of sub-license or sub-leasehold to any party.

 

(i)            The term of each Facilities License shall commence on the Effective Date (unless landlord consent is required pursuant to an underlying Lease to which it is subject, in which case the subject Facilities License shall commence on the later of the Effective Date and the date such landlord consent is secured) and, subject to Section 2.09(a), continue until the date set forth on Schedule 4, unless otherwise terminated earlier in accordance with this Agreement or agreed in writing by the Parties. The Entering Group shall have the right to terminate its obligations hereunder with respect to any Licensed Area at any time by providing written notice at least thirty (30) days prior to such termination. The Entering Group shall vacate the applicable Licensed Area on or prior to the expiration or earlier termination of the Facilities License. The Entering Group shall be responsible for all moving and similar costs associated with moving into and vacating the Licensed Area and will leave the Licensed Facility in broom clean condition and in the condition delivered to the Entering Group, subject to reasonable wear and tear.

 

Section 2.10      Title to Intellectual Property; Confidentiality. Except as expressly provided in this Section 2.10, and Section 2.11 and Section 2.12, each Recipient acknowledges that it shall acquire no right, title or interest (including any license rights or rights of use) in any Intellectual Property which is owned or licensed by any Provider or any of their respective Affiliates or any Third Party by reason of the provision of the Services or access to the Systems. The Parties hereby reserve all rights, title and interest in and to their respective Intellectual Property not expressly licensed to the other Party under Section 2.11. Each Party acknowledges that any nonpublic information or Data it obtains of the other Party (including through access to its systems) hereunder shall be “Confidential Information” for purposes of the SDA and subject to the terms and conditions therein relating thereto.

 

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Section 2.11      License to Intellectual Property. Each Party hereby grants to the other Party a non-exclusive, fully paid-up, royalty-free, non-transferable (except as set forth in Section 9.02), worldwide license to the Intellectual Property owned or licensable (as permitted under any applicable third-party agreements without further payment or obligation except to the extent assumed and performed by the other Party hereunder) by such granting Party and such Party’s Affiliates, solely for the purpose of, as applicable, providing or receiving the Services, in each case, as set forth in and in accordance with this Agreement; provided, however, that the license granted in this Section 2.11 shall be perpetual and irrevocable with respect to any Intellectual Property incorporated into a deliverable under any Service with respect to such deliverable.

 

Section 2.12      Data. Provider shall, at the reasonable request of Recipient, use commercially reasonable efforts to provide Recipient with all records, data and other information to the extent related to and reasonably required for the use of or transition from the Services provided to Recipient that is contained in the Provider’s data files, including records, data and other information created or processed in connection with the Services (the “Data”). Provider acknowledges that the Data, to the extent exclusively related to Recipient, is the exclusive property of Recipient, is Recipient’s confidential information, and that Provider obtains no ownership, right, title or interest in any such Data other than being authorized to have access to and make use of such Data solely to the extent necessary and appropriate for the performance by Provider of its obligations under this Agreement and for the sole benefit of Recipient.

 

Section 2.13      No Obligation to Hire or Purchase. For avoidance of doubt, a Recipient shall have no right to require Provider to, Provider shall have no obligation to and Provider shall not be permitted to increase any Service Fees after the Effective Date if it does any of the following to provide a Service (unless permitted by Section 3.01):

 

(a)            hire or engage any additional employees or other services providers;

 

(b)            maintain the employment of any specific employee;

 

(c)            purchase, lease or license any additional equipment, software, technology or other resources; or

 

(d)            pay any costs related to the transfer or conversion of Provider’s data to Recipient or a Third Party supplier;

 

provided, that, the foregoing shall not limit any obligation of a Provider to provide Services hereunder.

  

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Section 2.14      Professional Advice or Opinions. It is not the intent of any Provider to render, nor of any Recipient to receive from any Provider, professional advice or opinions, whether with regard to tax, legal, regulatory, compliance, treasury, finance, employment or other professional advice for business and financial matters, technical advice (except to the extent explicitly provided in Schedule 1) or the handling of or addressing environmental matters. No Recipient shall rely on, or construe, any Service provided by or on behalf of any Provider as such professional advice or opinions or technical advice, and Recipients shall seek all third-party professional advice and opinions or technical advice as they may desire or need independently of this Agreement.

 

Section 2.15      Use of Services. Subject to Section 9.02, no Recipient shall resell, license, sublet or transfer any Services to any Person whatsoever or permit the use of the Services it receives under this Agreement by any Person other than in connection with such Recipient’s conduct of the operations of its business to the extent consistent with the manner in which such business was conducted prior to the Effective Date or contemplated to be conducted as reflected in the written records of such Recipient as of the Effective Date.

 

Section 2.16      Compliance with Law. Each Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement. No Party shall knowingly take any action in violation of any such applicable Law that results in Liability being imposed on the other Party.

 

Section 2.17      Migration. Recipient acknowledges that a purpose of this Agreement is to provide Services to Recipient on an interim basis, until Recipient can perform or procure the services for itself, and, accordingly, Recipient agrees to use reasonable efforts to make or obtain any approvals, permits or licenses, implement any information technology systems and take any other actions for it to provide or procure the Services for itself as soon as reasonably practicable and in any event no later than the end of a Service Term (for each Service) and the Term (for all Services). At the reasonable request and expense of Recipient, Provider shall cooperate with Recipient to support and facilitate Recipient’s migration from the Services.

 

Article III

 

COSTS AND DISBURSEMENTS

 

Section 3.01      Services Fees. Each Party (or its designee) shall pay to the other Party providing, or causing to be provided, the applicable Services, the fees as set forth in Schedule 5 (the “Service Fees”). In addition to the Service Fees, and unless otherwise specified or fully covered under the Service Fee, Recipient shall pay (or reimburse the Provider for) any and all documented third-party costs and expenses reasonably incurred by the Provider in connection with the Services hereunder, including any such documented travel expenses (collectively, “Third Party Costs”); provided that (i) Provider shall have provided to Recipient reasonable prior notice and Recipient shall have provided its prior written consent, in each case, to all Third Party Costs in an amount greater than thirty thousand U.S. dollars ($30,000) prior to Provider causing such Third Party Costs to be incurred; provided that if Recipient does not so consent, Provider shall have no obligation to provide such Service, and (ii) Third Party Costs shall not include (x) any overhead costs, profits or other mark-ups otherwise incurred by the Provider and (y) fees paid directly by Recipient to any third party provider.

 

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Section 3.02      Arm’s Length Pricing. The Parties shall periodically review the amounts and other terms of all Service Fees and other payments hereunder to ensure that such payments constitute Arm’s Length Prices. If such review determines that any such payment does not constitute an Arm’s Length Price, then a Party may receive additional compensation from the other Party or may pay additional compensation to the other Party, as necessary, and the Parties may adjust the terms of any Service Fees or other payments thereafter in accordance with Section 9.08.

 

Section 3.03      Payment Terms.

 

(a)            Any Service Fees payable pursuant to Section 3.01 shall be paid by Recipient (the “Payor”) to Provider (the “Payee”) within forty-five (45) days after receipt of a written invoice from the Payee at the end of each quarter of the calendar year. The Payee or its designated Affiliate shall submit such invoice to the Payor or its designated Affiliate within twenty (20) days after the end of each such quarter, which sets forth the details of the calculation of the Service Fees to be paid by such Payor for such quarter. All Service Fees shall be calculated and paid in U.S. dollars (or, if necessary for legal or tax concerns, other reasonable currency mutually agreed upon by the Parties in writing) in immediately available funds to a bank account designated by the Payee in writing to the Payor. For purposes of determining the Service Fees due and payable in U.S. dollars, the exchange rate shall be determined at the date on which such amount is remitted by the Payor, as reported by the Wall Street Journal (or similar or successor publication if the Wall Street Journal is no longer published).

 

(b)            If a Payor fails to make a Service Fee payment when due, such Payor shall be required to pay, in addition to any such unpaid amounts, interest on such amounts at (i) the Prime Rate, plus two hundred (200) basis points, or (ii) if lower, the highest rate of interest permitted by applicable Law at such time, in each case compounded monthly from, and including, the relevant due date through the actual date of payment.

 

(c)            Except as set forth in Section 3.04, the Payor shall make all Service Fee payments to the Payee without set-off, deduction, recoupment or withholding of any kind for Service Fees or other amounts owed or payable by the Payee or its Affiliates to the Payor or its Affiliates, whether under this Agreement or any other Ancillary Agreement, applicable Law or otherwise.

 

(d)            All amounts treated for the purposes of any VAT as consideration for a Service made pursuant to this Agreement shall be exclusive of applicable VAT. Where Payee is required to account for any VAT to a relevant Tax authority, Payor shall, subject to the receipt of a valid VAT invoice, pay to Payee (in addition to, and at the same time as, the consideration) the amount of such VAT.

  

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Section 3.04      Taxes. All payments made to a Payee under this Agreement shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law requires the deduction or withholding of any Tax from any payment to a Payee, then (i) the Payor shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Entity in accordance with applicable Law, and (ii) the sum payable to the Payee shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 3.04), the Payee receives an amount equal to the sum it would have received had no such deduction or withholding been made. If any payment made pursuant to this Agreement is eligible for a reduction in the rate of, or the elimination of, any applicable withholding Tax, the Parties agree to cooperate and use commercially reasonable efforts to reduce the applicable rate of withholding or to relieve the Payor of its obligation to withhold such Tax; provided, that for the avoidance of doubt, such cooperation and the provisions of this Section 3.04 shall not require the Payee to alter the entities receiving payments under this Agreement.

 

Section 3.05      Transfer Pricing. If any Party or its Affiliate (“the first Party”) suffers a transfer pricing adjustment in relation to any amount paid or payable under this Agreement and that adjustment increases the Tax payable by (or decreases the Tax relief available to) the first Party, the other Party (“the second Party”) shall make a payment to the first Party in an amount equal to that increase in Tax (or decrease in relief). The second Party shall make any payment due hereunder no less than ten (10) days before the Tax referred to in that clause (including any Tax that would not have been payable, or which is payable earlier than would have been the case, if any Tax relief had not been decreased) is payable. For purposes of this Section 3.05, a “transfer pricing adjustment” is any adjustment to the profits or losses of a person for Tax purposes asserted by a Tax authority whether by way of assessment or reassessment or otherwise and includes any such adjustment under Part 4 of the Taxation (International and Other Provisions) Act 2010. The Parties agree to pursue all reasonable legal remedies to avoid double taxation that may result from such a transfer pricing adjustment or from any conforming or correlative adjustments that may be necessary on account of such transfer pricing adjustment.

 

Section 3.06      No Right to Set-Off. Each of SharkNinja or JS Global, as applicable, shall pay (or cause to be paid) the full amounts owed by it to the other Party’s Group under this Agreement and shall not set-off, counterclaim or otherwise withhold any amount owed to the other Party’s Group under this Agreement on account of any obligation owed by the other Party to SharkNinja or JS Global (or, in either case, the members of its Group), as applicable, under this Agreement, the SDA or any other Ancillary Agreement.

 

Article IV

 

DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

 

Section 4.01      Disclaimer of Warranties. The Parties acknowledge and agree that neither Party nor its Affiliates is in the business of providing Services of the type contemplated by this Agreement, and that each Party and their respective Affiliates make no representation or warranty with respect thereto. NEITHER PARTY NOR ANY OF ITS AFFILIATES MAKES, NOR IS EITHER PARTY OR ITS AFFILIATES RELYING ON, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, AT LAW OR IN EQUITY, WITH RESPECT TO THE SERVICES PROVIDED HEREUNDER OR THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY IN REGARD TO QUALITY, PERFORMANCE, NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY OR FITNESS OF THE SERVICES FOR A PARTICULAR PURPOSE, AND EACH PARTY AND ITS RESPECTIVE AFFILIATES HEREBY EXPRESSLY DISCLAIM THE SAME.

 

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Article V

 

INDEMNIFICATION; limitations of liability

 

Section 5.01        Indemnification.

 

(a)            JS Global shall indemnify, defend and hold harmless SharkNinja and its Affiliates and their respective directors, officers, employees, representatives and agents (the “SharkNinja Indemnitees”) from and against any and all Indemnifiable Losses of the SharkNinja Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of JS Global or its Affiliates in the performance of this Agreement, (ii) breach by JS Global of this Agreement, and (iii) except to the extent subject to indemnification by SharkNinja pursuant to Section 5.01(b), the provision, receipt and use of the Services for which the JS Global Group is a Recipient hereunder, in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by SharkNinja pursuant to Section 5.01(b).

 

(b)            SharkNinja shall indemnify, defend and hold harmless JS Global and its Affiliates and their respective directors, officers, employees, representatives and agents (the “JS Global Indemnitees”) from and against any and all Indemnifiable Losses of the JS Global Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of SharkNinja or its Affiliates in the performance of this Agreement, (ii) breach by SharkNinja of this Agreement, and (iii) except to the extent subject to indemnification by JS Global pursuant to Section 5.01(a), the provision, receipt and use of the Services for which the SharkNinja Group is a Recipient hereunder, in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by JS Global pursuant to Section 5.01(a).

 

Section 5.02        Indemnification Procedures. The indemnification procedures set forth in Section 7.4 of the SDA shall apply to the matters indemnified hereunder, mutatis mutandis.

 

Section 5.03        Limitation of Liability

 

(a)            Except for fraud, willful misconduct or gross negligence of a Party, and except for Recipients’ obligation to make payment of undisputed fees to Provider for Services performed and delivered in compliance with the terms of this Agreement, the maximum liability in the aggregate of a Party and its Affiliates for matters arising out of this Agreement shall not exceed the amount of fees paid under this Agreement by the Party (or its Affiliates) seeking damages.

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(b)            NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT (INCLUDING THIS ARTICLE V), IN NO EVENT SHALL SHARKNINJA, JS GLOBAL OR THEIR RESPECTIVE AFFILIATES BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, AT LAW OR IN EQUITY, FOR PUNITIVE, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT (EXCEPT FOR (I) ALL SUCH COMPONENTS OF AWARDS PAID TO A THIRD PARTY IN ANY THIRD-PARTY CLAIM INDEMNIFIED HEREUNDER, INCLUDING COMPONENTS OF SUCH THIRD-PARTY CLAIM RELATING TO ANY OF THE FOREGOING AND ATTORNEYS’ FEES, (II) RESULTS FROM A BREACH OF SECTION 8.02).

 

ARTICLE VI

 

TERMINATION

 

Section 6.01      Term.

 

(a)            The term of this Agreement (including any and all Service Terms) shall terminate on the expiration of all Service Terms, provided that the term shall not extend beyond twenty-four (24) months from the Effective Date, unless extended pursuant to Section 6.01(b) or terminated earlier pursuant to the provisions of this Agreement (the “Term”); provided further that the Term of this Agreement, including all applicable extensions, shall not extend beyond twenty-seven (27) months from the Effective Date.

 

(b)            Except as expressly set forth in the Schedules, Recipient may extend the performance of any Service (and the corresponding Service Term) for one (1) additional period of three (3) months for any Service on the same terms by providing notice specifying such additional requested period to Provider no less than thirty (30) days prior to the end of the then-current Service Term.

 

Section 6.02      Termination.

 

(a)            This Agreement may be terminated earlier by a Party with respect to its obligations to provide or to cause the provision of Services hereunder if the other Party is in material breach of a material provision of this Agreement and such breach is not corrected within thirty (30) days of a written notice from such Party of such breach and intent to so terminate its obligation to provide and to cause the provision of Services if not so cured. Without limitation to the foregoing, a Party that successfully enforces a claim against the other Party for breach (whether material or not) of this Agreement shall be entitled to reimbursement by the breaching Party of its reasonable costs and attorneys’ fees incurred in connection with such enforcement.

 

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(b)            Recipient may terminate this Agreement or any Service (in each case, in whole or part) for any reason and without liability on at least thirty (30) days’ written notice to Provider; provided that such termination does not adversely affect the ability to provide any other individual Service to Recipient (and, if it would adversely affect the ability to provide another Service then Provider shall provide to Recipient written notice thereof and an opportunity to withdraw such termination request). In the event that Provider is procuring third party rights or vendor services in order to provide the Services to Recipient, and such early termination of a Service in accordance with this Section 6.02(b) results in the payment of additional out-of-pocket fees to such third party due to such early termination and/or Provider incurs additional out-of-pocket wind-down costs, in each case, directly as a result of such early termination, all such reasonable costs shall be payable by Recipient subject to (x) Provider providing reasonable notice of all such fees and costs to Recipient and (y) Recipient confirming in writing such early termination in view of such fees and costs.

 

(c)            Once all of the Services have expired or been terminated pursuant to this Agreement, this Agreement shall automatically expire.

 

(d)            The Parties may terminate this Agreement upon the mutual consent of both Parties.

 

(e)            Either Party may terminate this Agreement (or the applicable portion) upon written notice to the other Party in the event that the other Party assigns this Agreement (or such applicable portion) to a Third Party in breach of Section 9.02, with such termination to be effective as of the date designated by such terminating Party.

 

Section 6.03      Effect of Termination.

 

(a)            Except as expressly set forth in this Agreement (including the Schedules), upon expiration or earlier termination of any Service pursuant to this Agreement, the Provider of the terminated or expired Service or its Affiliate shall have no further obligation to provide the terminated or expired Service, and the applicable Recipient shall have no obligation to pay any Service Fees relating to any such Service, and the Services Fees in respect of such terminated or expired Services shall cease to accrue; provided that the applicable Recipient shall remain obligated to the Provider for the Service Fees owed and payable in respect of Services provided prior to the effective date of termination or expiration, shall remain liable for any other costs and expenses pursuant to Section 6.02(b), and shall remain liable for any applicable Service Taxes pursuant to Section 3.04. Any such required payments not made within the later of thirty (30) days after the later of the termination date or receipt of an applicable invoice with respect thereto shall be subject to the late charges set forth in Section 3.03. In connection with termination or expiration of any Service, the provisions of this Agreement not relating solely to such terminated or expired Service shall survive any such termination or expiration. Notwithstanding anything to the contrary contained herein, upon any expiration or earlier termination of this Agreement or any Services, the Provider shall (at the sole cost and expense of Recipient) cooperate with all reasonable requests by the Recipient in connection with the transition of the Services, including the transfer of Data to the Recipient or its designee (in a suitable electronic format as may be necessary or appropriate to enable the Recipient to access and use such Data or in the format maintained by Provider), until such time as the transition is completed to the Recipient’s reasonable satisfaction.

 

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(b)            In connection with an expiration or earlier termination of this Agreement, Article I, Section 2.10, Section 3.01, Section 3.04, Section 3.05, Article IV, Article V, this Article VI, Article VII, Article VIII, Article IX and liability for all owed and unpaid Service Fees, Service Taxes and other costs and expenses specified in this Agreement shall continue to survive indefinitely and any liability for other breaches of this Agreement shall survive the end of the Term (whether by expiration or termination).

 

Section 6.04      Force Majeure.

 

(a)            Subject to Section 6.03(b), no Party (or other Person acting on its behalf) shall have any liability for any expense, loss or damage whatsoever arising from, or responsibility for failure to fulfill any obligation under, this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, delayed or otherwise made impracticable as a consequence of circumstances of Force Majeure. In the event of an occurrence of a Force Majeure, the Party whose performance is affected thereby shall give notice of suspension as soon as reasonably practicable to the other stating the date and extent of such suspension and the cause thereof, and such Party shall use commercially reasonable efforts to resume the performance of such obligations as soon as reasonably practicable (provided that a Party shall not be required to settle a labor dispute (or resolve a labor stoppage or slowdown) other than as it may determine in its sole judgment), and if the applicable Provider is the Person so prevented then the Recipient shall not be obligated to pay the Service Fee (or portion thereof) for a Service to the extent and for so long as such Service (or portion thereof) is not made available to the Recipient hereunder as a result of such Force Majeure.

 

(b)            Notwithstanding the foregoing, during the period of a Force Majeure preventing provision of applicable Services to the Recipient pursuant to Section 6.04(a), the Provider shall use its commercially reasonable efforts and reasonably cooperate with the Recipient to arrange for the provision of such Services impacted by the Force Majeure, and the Recipient shall be entitled to seek an alternative service provider with respect to such Services, at the sole cost and expense of the Recipient; provided that Recipient shall have no obligation to pay to Provider the applicable Service Fees for a Service to the extent not provided to the Recipient due to a Force Majeure.

 

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Article VII

 

MANAGEMENT AND CONTROL 

 

Section 7.01      Cooperation.

 

(a)            No Recipient shall take any action which it knows would interfere with or increase (other than in a de minimis manner) the cost of the Provider providing (or causing to be provided) any of the Services. During the Term, each Recipient shall cooperate in good faith with the relevant Provider with respect to such Provider providing the Services and, without limitation of the foregoing, each Recipient shall (a) make available on a timely basis to the Provider all information and materials reasonably requested by such Provider to enable such Provider to provide the applicable Services to such Recipient and (b) provide to the applicable Provider reasonable access to its premises, facilities and personnel to the extent reasonably necessary for such Provider to provide the applicable Services to such Recipient. A Provider shall be entitled to rely upon the genuineness, validity or truthfulness of any document, instrument or other writing presented by an applicable Recipient in connection with this Agreement. A Provider shall not be liable for any impairment of any Service to the extent caused by or relating to its not receiving the information, materials or access required by this Section 7.01(a), either timely or at all, or by its receiving inaccurate or incomplete information from an applicable Recipient that is required or reasonably requested regarding that Service. During the Term, the Provider shall provide commercially reasonable cooperation to the applicable Recipient by responding to the Recipient’s reasonable requests for information related to the functionality or operation of the Services. The Provider shall provide Recipient with reasonable access (during reasonable business hours) to records related to the Services and personnel for consulting and assistance in connection with the Services.

 

(b)            To the extent the Parties or a member of their respective Group have entered into any third-party Contracts in connection with any of the Services, the Recipients shall comply in all material respects with the terms of such agreement applicable to the Recipients’ use of such Services, to the extent the Recipients have been provided reasonable prior notice of such terms.

 

Section 7.02      Required Consents. Each Party shall use commercially reasonable efforts to obtain any and all third-party consents, licenses, approvals or amendments to existing agreements necessary or advisable to allow the relevant Provider to provide the Services (the “Required Consents”); provided that the costs of obtaining, or seeking to obtain, such Required Consents shall be paid by the Recipient in respect of the Services; provided, further, that Provider shall have provided to Recipient reasonable prior notice and Recipient shall have provided its prior written consent, in each case, to any such payments in an amount greater than thirty thousand U.S. dollars ($30,000); provided, however, that if Recipient does not so consent, Provider shall have no obligation to provide such Service. Each Party shall reasonably cooperate with the other in connection with obtaining Required Consents upon such other Party’s request. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Third Party consent, the Provider shall have no obligation to provide such Service; provided that the Provider and the Recipient shall use commercially reasonable efforts and reasonably cooperate with each other to minimize the adverse impact therefrom and to identify and arrange for the provision of substitute or alternative services for such Service to the extent reasonably practicable.

 

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Section 7.03      No Agency. Nothing in this Agreement shall be deemed in any way or for any purpose to constitute any Party or its Affiliates acting as an agent of the other Party or its Affiliates. No partnership, joint venture, alliance, fiduciary or any relationship other than that of independent contractors is created hereby, expressly or by implication. The Parties’ respective rights and obligations hereunder shall be limited to the contractual rights and obligations expressly set forth herein on the terms and conditions set forth herein.

 

Article VIII

 

PERSONAL INFORMATION AND CONFIDENTIAL INFORMATION

 

Section 8.01      Data Protection. The provisions of the Data Processing Addendum attached as Schedule 6 hereto shall govern the Processing of the Agreement Personal Data (as such terms are defined in the Schedule) in connection with the provision of the Services hereunder.

 

Section 8.02      Confidentiality. Section 8.6 (Confidentiality; Non-Use) of the SDA shall apply to this Agreement, mutatis mutandis.

 

Article IX

 

MISCELLANEOUS

 

Section 9.01      Dispute Resolution. The Parties acknowledge and agree that the Article IX of the SDA is hereby incorporated into this Agreement, and shall apply to the transactions contemplated by this Agreement to the extent applicable, mutatis mutandis.

 

Section 9.02      Assignment. Neither this Agreement nor any of the rights, interests or obligations of a Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by such Party without the prior consent of the other Party; provided, that such first Party (i) may assign, in whole or in part, by operation of law or otherwise, this Agreement to one or more of its Affiliates, and (ii) subject to Section 6.02(e), may assign, in whole or in relevant part, by operation of law or otherwise, this Agreement to the successor to all or the relevant portion of the business or assets to which this Agreement relates; provided, further, that (x) the assigning Party shall promptly notify the non-assigning Party in writing of any assignments it makes under the foregoing clause (ii), and (y) in either case of the foregoing clauses (i) or (ii), the party to whom this Agreement is assigned shall agree in writing to be bound by the terms of this Agreement as if named as a “Party” hereto with respect to all or such portion of this Agreement so assigned. Any assignment or other disposition in violation of this Section 9.02 shall be void. No assignment shall relieve the assigning Party of any of its obligations under this Agreement that accrued prior to such assignment unless agreed to by the non-assigning Party.

 

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Section 9.03      Entire Agreement; Construction. This Agreement, including the Schedules hereto, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement or Continuing Arrangement, this Agreement shall control.

 

Section 9.04      Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

 

Section 9.05      Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service by email (provided no “error” message or other notification of non-delivery is received by the sender of any such email; followed by delivery of an original via overnight courier service) or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.05):

 

To JS Global:

 

JS Global Trading HK Limited
[·]
[·]
Attn: [●]
Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Clifford Chance LLP
[·]
[·]
Attn: [·]
Email: [·]

 

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To SharkNinja:

 

SharkNinja, Inc.
[·]
[·]
Attn: [●] 

Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
[·]
[·]
Attn: [·]
Email: [·]

 

Section 9.06      Waivers; Consents. Any provision of this Agreement may be waived, if and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any consent or approval required or permitted to be given by a Party to the other Party or its Affiliates under this Agreement shall be in the sole and absolute discretion of the Party giving, conditioning or denying such consent or approval (unless a different standard is expressly set forth herein therefor), shall only be effective if given in writing and signed by the Party giving such consent and shall be effective only against such Party (and the members of its Group).

 

Section 9.07      Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

 

Section 9.08      Amendment. This Agreement may not be modified or amended except by an agreement in writing signed by both Parties.

 

Section 9.09      No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is a breach or, in the case where a Party acts in concert with any Person who takes such action, would be a breach of any of the provisions of this Agreement.

 

Section 9.10      Third Party Beneficiaries. Except as specifically provided herein, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon Third Parties any remedy, claim, liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

 

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Section 9.11      Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

Section 9.12      Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

 

Section 9.13      Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 9.14      No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.

 

[Signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

 

  SharkNinja, Inc.
   
  By:  
    Name:
    Title:
   
  JS Global Trading HK Limited
   
  By:  
    Name:
    Title:

 

 

 

 

 

Exhibit 10.6

 

EMPLOYEE MATTERS AGREEMENT

 

BETWEEN JS GLOBAL LIFESTYLE CO. LTD. AND

 

SHARKNINJA, INC.

 

 

 

 

EMPLOYEE MATTERS AGREEMENT

 

This EMPLOYEE MATTERS AGREEMENT, dated as of [•], 2023, is between JS Global Lifestyle Co. Ltd., an exempted company with limited liability incorporated in the Cayman Islands (“JS Global”), and SharkNinja, Inc., an exempted company with limited liability incorporated in the Cayman Islands (“SharkNinja,” with each of JS Global and SharkNinja a “Party,” and together, the “Parties”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Separation and Distribution Agreement.

 

WHEREAS, JS Global, directly and indirectly through its wholly owned Subsidiaries, is engaged in the SharkNinja Business;

 

WHEREAS, JS Global has determined that it would be desirable to separate the SharkNinja Business from JS Global;

 

WHEREAS, JS Global and SharkNinja currently contemplate that JS Global will be separated into two separate, publicly traded companies, one for each of (i) the JS Global Retained Business, which shall be owned and conducted, directly or indirectly, by JS Global and its Subsidiaries (other than SharkNinja and its Subsidiaries) and (ii) the SharkNinja Business, which shall be owned and conducted, directly or indirectly, by SharkNinja and its Subsidiaries;

 

WHEREAS, in furtherance of the foregoing, JS Global, SharkNinja Global SPV Ltd., an exempted company with limited liability incorporated in the Cayman Islands, and SharkNinja. have entered into a Separation and Distribution Agreement, dated as of [•], 2023 (the “Separation and Distribution Agreement”), and other agreements that will govern certain matters relating to, among other things, the separation of the JS Global Business and the SharkNinja Business, and their respective Affiliates following the Disposition Date; and

 

WHEREAS, JS Global and SharkNinja have agreed to provide for the allocation between them of assets, liabilities, and responsibilities with respect to certain employees and employee compensation and benefit plans, programs and matters.

 

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, JS Global and SharkNinja mutually covenant and agree as follows:

 

ARTICLE I
definitions

 

For purposes of this Agreement the following terms shall have the meanings set forth in this Section 1:

 

1.1            “Agreement” means this Employee Matters Agreement.

 

1.2            “Employee Records” means all personnel files of the JS Global Automatic Transfer Employees (whether included or retained outside of each such individual’s personnel files).

 

 

 

 

1.3            “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and the regulations promulgated thereunder.

 

1.4            “Former SharkNinja Employee” means any (a) JS Global Automatic Transfer Employee, (b) JS Global Offer Employee or (c) JS Global PEO Employee, in each case, who does not object to the transfer of employment to a JS Global Entity (or the PEO pursuant to an engagement contract with a JS Global Entity, as applicable) in accordance with applicable law.

 

1.5            “JS Global” is defined in the preamble to this Agreement.

 

1.6            “JS Global Automatic Transfer Employee” means any JS Global Business Employee located in Japan whose employment has transferred automatically or will transfer automatically, by operation of law in connection with the transactions contemplated by the Separation and Distribution Agreement, subject to the respective employee’s right to object to the transfer of his or her employment. For the avoidance of doubt, JS Global Automatic Transfer Employees shall not include any such JS Global Business Employee who objected or objects to his or her transfer of employment.

 

1.7            “JS Global Business Employee” means any individual whose name is set forth on Schedule 1.7 hereto, as such list may be amended from time to time by mutual agreement of the Parties.

 

1.8            “JS Global Cash Incentive Plans” is defined in Section 3.2(a).

 

1.9            “JS Global Employee” means any individual who, on or following the Disposition Date, is either actively employed by or on a leave of absence from a JS Global Entity (or the PEO pursuant to an engagement contract with a JS Global Entity, as applicable).

 

1.10         “JS Global Entity” means any entity that is, at the time relevant to the applicable provision of this Agreement, an Affiliate of JS Global, except that the term “JS Global Entity” shall not include SharkNinja or a SharkNinja Entity.

 

1.11         “JS Global Offer Employee” means any JS Global Business Employee who was or is offered employment or an engagement by a JS Global Entity in connection with the transactions contemplated by the Separation and Distribution Agreement who accepted or accepts such offer of employment or engagement and has commenced or commences employment or an engagement with a JS Global Entity.

 

1.12         “JS Global PEO Employee” means any JS Global Business Employee who was or is offered employment by the PEO in connection with the transactions contemplated by the Separation and Distribution Agreement who accepted or accepts such offer of employment and has commenced or commences employment with the PEO pursuant to an engagement contract with a JS Global Entity.

 

1.13         “JS Global Plan” means all employee benefit plans (as defined in Section 3(3) of ERISA, whether or not such plans are subject to ERISA) and all compensation, bonus, stock option, stock purchase, restricted stock, equity, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance, gratuity, termination indemnity or other benefit plans, programs, policies, practices, contracts, agreements or arrangements, whether collective or individually agreed, and all employment, consulting, termination, severance, savings plans, profit sharing or other contracts or agreements with or covering (including eligibility to participate) any JS Global Employee, to which any JS Global Employee and a JS Global Entity are parties or which are maintained, contributed to or sponsored by a JS Global Entity for the benefit of any current or former employees of JS Global or a JS Global Entity (or the dependent or beneficiary thereof), or with respect to which any JS Global Entity has or may have any Liability or obligation with respect to current or former employee of a JS Global Entity.

 

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1.14         “JS Global Start Date” means the date on which a Former SharkNinja Employee became or becomes employed or engaged by a JS Global Entity (or the PEO pursuant to an engagement contract with a JS Global Entity, as applicable).

 

1.15         “JS Global Welfare Plans” means any Welfare Plans maintained by JS Global or any other member of the JS Global Group.

 

1.16         “Other JS Global Employee” means any individual whose name is set forth on Schedule 1.16 hereto, as such list may be amended from time to time by mutual agreement of the Parties.

 

1.17         “Party” is defined in the preamble to this Agreement.

 

1.18          “PEO” means Globalization Partners, a third-party professional employer organization.

 

1.19          “Personal Data” means information that (a) identifies or can be used to identify an individual (including names, signatures, addresses, telephone numbers, e-mail addresses and other unique identifiers) or (b) can be used to authenticate an individual (including employee identification numbers, government-issued identification numbers, passwords or PINs, financial account numbers, credit report information, biometric or health data, answers to security questions and other personal identifiers).

 

1.20          “Processing” means, with respect to Personal Data, acquisition, access, collection, use, handling, storage, maintenance, protection, retention, disclosure, transfer, destruction or disposal.

 

1.21          “Retained Welfare Plans” is defined in Section 3.3(b).

 

1.22          “Requesting Party” is defined in Section 2.8.

 

1.23          “Separation and Distribution Agreement” is defined in the recitals to this Agreement.

 

1.24          “SharkNinja” is defined in the preamble to this Agreement.

 

1.25          “SharkNinja Cash Incentive Payments” means payments made pursuant to the SharkNinja Cash Incentive Plans.

 

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1.26          “SharkNinja Cash Incentive Plans” means any cash incentive plan or arrangement maintained by SharkNinja providing for 13th month year-end bonuses, annual bonuses, retention bonuses, or long-term incentive payments.

 

1.27          “SharkNinja Employee” means any individual who, on or following the Disposition Date, is either actively employed by or on a leave of absence from a SharkNinja Entity, but does not include any Former SharkNinja Employee.

 

1.28          “SharkNinja Entity” means SharkNinja and any subsidiary of SharkNinja (and which for the avoidance of doubt, following the Distribution Date, shall exclude SharkNinja Co., Ltd., a company incorporated under the laws of Japan (“SharkNinja Japan”)).

 

1.29          “SharkNinja Equity Incentive Plans” is defined in Section 3.1.

 

1.30          "SharkNinja Offer Employees" means those individuals whose name is set forth on Schedule 1.30 hereto.

 

1.31          “SharkNinja Plan” means all employee benefit plans (as defined in Section 3(3) of ERISA, whether or not such plans are subject to ERISA) and all compensation, bonus, stock option, stock purchase, restricted stock, equity, incentive, deferred compensation, retiree medical or life insurance, 401(k) plan, supplemental retirement, severance, gratuity, termination indemnity or other benefit plans, programs, policies, practices, contracts, agreements or arrangements, whether collective or individually agreed, and all employment, consulting, termination, severance, savings plans, profit sharing or other contracts or agreements with or covering (including eligibility to participate) any SharkNinja Employee, to which any SharkNinja Employee and a SharkNinja Entity are parties or which are maintained, contributed to or sponsored by a SharkNinja Entity for the benefit of any current or former employees of SharkNinja or a SharkNinja Entity (or the dependent or beneficiary thereof), or with respect to which any SharkNinja Entity has or may have any Liability or obligation with respect to current or former employee of a SharkNinja Entity.

 

1.32          "SharkNinja Start Date" means the date on which a SharkNinja Offer Employee became or becomes employed or engaged by a SharkNinja Entity.

 

1.33          “SharkNinja Welfare Plan” means any Welfare Plan maintained by SharkNinja or any other member of the SharkNinja Group.

 

1.34          “TSA” means the Transition Services Agreement dated as of the date of this Agreement between SharkNinja and JS Global.

 

1.35          “Welfare Plan” means, where applicable, a “welfare plan” (as defined in Section 3(1) of ERISA and in 29 C.F.R. §2510.3-1) or a “cafeteria plan” under Section 125 of the Code, and any benefits offered thereunder, and any other plan offering health benefits (including medical, prescription drug, dental, vision and mental health and substance use disorder), disability benefits, or life, accidental death and disability, pre-tax premium conversion benefits, dependent care assistance programs, employee assistance programs, contribution funding toward a health savings account, flexible spending accounts, tuition reimbursement or adoption assistance programs or cashable credits.

 

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ARTICLE II
GENERAL PRINCIPLES

 

2.1            Conveyance of Employee Records for JS Global Automatic Transfer Employees. On the terms and subject to the conditions set forth in this Agreement, SharkNinja shall assign, transfer, convey and deliver, and shall cause any other SharkNinja Entity to assign, transfer, convey and deliver, all right, title and interest in and to the Employee Records, to the extent permitted by applicable law, to any JS Global Entity designated by JS Global for such transfer; provided, however, that SharkNinja shall be permitted to retain copies (or, where required by applicable law, originals) of all personnel, employee compensation, medical and benefits and labor relations records constituting Employee Records to the extent a SharkNinja Entity is required or allowed by applicable law to retain such information.

 

2.2            Assumption and Retention of Liabilities by SharkNinja. Except as otherwise explicitly provided herein, SharkNinja shall retain or assume and agree to pay, perform, fulfill, and discharge, as the case may be, (a) all Liabilities and obligations under SharkNinja Plans regardless of when arising or accrued and (b) all employment, service and termination-related Liabilities and obligations with respect to (i) all JS Global Automatic Transfer Employees (and their dependents and beneficiaries) and JS Global Offer Employees (and their dependents and beneficiaries) for all periods of employment with SharkNinja or a SharkNinja Entity, (ii) all employees of SharkNinja or a SharkNinja Entity who are not Former SharkNinja Employees (and their dependents and beneficiaries) and all former employees of SharkNinja or a SharkNinja Entity (and their dependents and beneficiaries) for all periods of employment with SharkNinja or a SharkNinja Entity, (iii) any Person who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker or in any other similar direct contractual relationship with SharkNinja or a SharkNinja Entity for all periods of employment or engagement with a SharkNinja Entity and (iv) all SharkNinja Offer Employees (and their dependents and beneficiaries) (A) for all periods of employment or engagement with a JS Global Entity or a SharkNinja Entity in regards to recognizing continuity of service for purposes of statutory severance (to the extent an employee is entitled to such severance payment on a per case basis), provided that such employee shall not receive a duplication of benefits, and (B) for all periods of employment or engagement by a SharkNinja Entity commencing on the applicable SharkNinja Start Date in regards to all other Liabilities or obligations. SharkNinja or a SharkNinja Entity shall offer employment to SharkNinja Offer Employees on substantially the same terms and conditions as they were employed by a JS Global Entity immediately prior to the applicable SharkNinja Start Date. SharkNinja acknowledges and agrees that it has paid or shall pay to each JS Global Automatic Transfer Employee and each JS Global Offer Employee all amounts owed to such employee from SharkNinja as of his or her JS Global Start Date, including pursuant to the employee’s SharkNinja employment contract, if any, and any SharkNinja Plan or applicable law, including amounts, if any, relating to severance (excluding JS Global Offer Employees in China), accrued pension and accrued vacation.

 

5 

 

 

2.3            Assumption and Retention of Liabilities by JS Global. Except as otherwise explicitly provided herein, JS Global shall retain or assume and agree to pay, perform, fulfill and discharge, as the case may be (a) all Liabilities and obligations under the JS Global Plans regardless of when arising or accrued, and (b) all employment, service and termination-related Liabilities and obligations with respect to (i) all Former SharkNinja Employees in jurisdictions other than China and Australia (and their dependents and beneficiaries) for all periods of employment or engagement with a JS Global Entity commencing on the applicable JS Global Start Date, (ii) all JS Global Offer Employees in China (and their dependents and beneficiaries) (A) for all periods of employment or engagement with a JS Global Entity or a SharkNinja Entity in regards to recognizing continuity of service for purposes of statutory severance (to the extent an employee is entitled to such severance payment on a per case basis), provided that such employee shall not receive a duplication of benefits in connection with the applicable JS Global Start Date; provided, however, that if any such employee's employment with a JS Global Entity terminates within 12 months following his JS Global Start Date, JS Global and SharkNinja shall share any applicable severance on a pro rata basis based on the number of days the employee was employed by a SharkNinja Entity and a JS Global Entity and (B) for all periods of employment or engagement with a JS Global Entity commencing on the applicable JS Global Start Date in regards to all other Liabilities or obligations, (iii) any Other JS Global Employee (and their dependents and beneficiaries) for all periods of employment commencing on such individual’s JS Global Start Date (to the extent applicable), (iv) any Person who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker or non-payroll worker or in any other contractual relationship with JS Global or a JS Global Entity for all periods of employment or engagement with a JS Global Entity and (v) all Former SharkNinja Employees in Australia for (A) all prior periods of employment or engagement with a PEO pursuant to an engagement contract with a SharkNinja Entity only for the limited purposes of (1) recognizing continuity of service for any redundancy benefits and other service-related benefits which are or may become payable or otherwise owing to any Former SharkNinja Employee under applicable law after the JS Global Start Date (provided that such employee shall not receive a duplication of benefits in connection with their transfer of employment to a JS Global Entity), and (2) assuming liability for Former SharkNinja Employees’ leave entitlements accrued in respect of such prior periods, including annual leave, personal leave and long service leave (provided that, in respect annual leave and long service leave, such employee shall not receive a duplication of benefits in connection with their transfer of employment to a JS Global Entity) and (B) all periods of employment or engagement with a JS Global Entity commencing on such individual’s JS Global Start Date, excluding all other Liabilities and obligations arising prior to the JS Global Start Date. JS Global or a JS Global Entity shall offer employment to JS Global Offer Employees on substantially the same terms and conditions as they were employed by a SharkNinja Entity immediately prior to the applicable JS Global Start Date.

 

2.4            Assumption and Retention of Liabilities Related to Actions. In the event of any actual or threatened claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity (“Action”), brought by or on behalf of any Former SharkNinja Employee alleging a violation of any applicable law governing employment based on acts or omissions that occurred prior to and after the applicable JS Global Start Date, the portion of Liability in respect of the period prior to the applicable JS Global Start Date will be assumed by SharkNinja, and the portion of Liability in respect of the period on and after the applicable JS Global Start Date will be assumed by JS Global; provided, however, that SharkNinja shall be liable solely for such Liabilities as is allocable to the period prior to the applicable JS Global Start Date, including, without limitation for the purpose of calculating such Liabilities, taking into account the impacted employee’s level of compensation and length of service solely as of the applicable JS Global Start Date and not taking into account any subsequent increases in compensation or length of service. Each Party shall promptly notify the other Party of any actual or threatened Action described herein. The Parties shall mutually agree on whether JS Global or SharkNinja will have the right to control the defense of an Action at such Party’s own cost, risk and expense and with counsel reasonably satisfactory to such Party; provided that, if one Party assumes control of the defense of any Action described herein, (a) upon the other Party's reasonable request, consult with the other Party with respect to significant matters relating thereto and (b) keep the other Party reasonably informed of the progress of the defense, potential compromise or settlement of any such Action. Each Party agrees to cooperate with the other Party and its counsel in the defense of any such Action. The Party handling the defense shall be entitled to compromise or settle any such Action, which compromise or settlement shall be made only with the written consent of the other Party, such consent not to be unreasonably withheld, conditioned or delayed.

 

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2.5            Former SharkNinja Employees.

 

(a)            Other JS Global Employees. No Other JS Global Employee shall become an employee of or engaged by JS Global or a JS Global Entity unless and until such time as the Parties agree upon the terms and conditions of employment or an engagement with JS Global or a JS Global Entity, subject to any rights under applicable law of such Other JS Global Employee, whose terms and conditions of employment with JS Global or a JS Global Entity shall be determined at the sole discretion of JS Global or a JS Global Entity, if and as applicable. Unless and until such time as the terms and conditions of employment or an engagement is mutually agreed upon, JS Global or a JS Global Entity agrees to engage SharkNinja or a SharkNinja Entity to provide the services set forth in Schedule 1.16 and SharkNinja or a SharkNinja Entity agrees to designate the Other JS Global Employees to provide such services to JS Global or a JS Global Entity. For the realization of such purpose, a SharkNinja Entity will continue to employ or engage and compensate (or engage the PEO to employ and compensate) the Other JS Global Employees as reasonably determined by SharkNinja in the ordinary course of business, and JS Global or a JS Global Entity shall compensate SharkNinja for such services pursuant to Section 2.8 below, subject to the existing arrangements in effect with respect to such Other JS Global Employees as such arrangements may be amended from time to time in the ordinary course of business; provided, however, that nothing herein shall in any way limit or restrict any SharkNinja Entity’s right to terminate the employment or engagement of any Other JS Global Employee at any time and for any reason so long as notice of such termination is provided by SharkNinja to JS Global as promptly as practicable.

 

(b)            JS Global Automatic Transfer Employees. The Parties acknowledge and agree that the employment of the JS Global Automatic Transfer Employees did not or will not be terminated, as the case may be, upon the JS Global Start Date, but rather the rights, powers, duties, Liabilities and obligations of the applicable employing entity, under the contracts of employment of such employees (except for any Liabilities (i) which are expressly prohibited from transfer under applicable law or (ii) for which it has been agreed with the employing entity’s works council that they do not transfer and such non-transfer has been accepted by the respective JS Global Automatic Transfer Employee) in force immediately before the JS Global Start Date shall continue in effect with the applicable employing entity, in accordance with applicable laws. Further, the Parties acknowledge and agree that the employment of the JS Global Automatic Transfer Employees transferred to, or will transfer to, a JS Global Entity effective as of the applicable JS Global Start Date in accordance with applicable law. Notwithstanding anything in Article III to the contrary, the Parties acknowledge and agree that SharkNinja Japan shall provide substantially similar incentive cash opportunities and substantially similar employee benefit plans and programs, in each case, that were provided to the JS Global Automatic Transfer Employees as of immediately prior to the Disposition Date.

 

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(c)            JS Global PEO Employees.

 

(i)            For any jurisdiction in which there is a JS Global Business Employee who is employed by the PEO pursuant to an engagement contract with a SharkNinja Entity, but there will not be a JS Global Entity to employ such JS Global Business Employee as of the Disposition Date, JS Global shall, or shall cause one of its subsidiaries to, either (A) prior to the Disposition Date, enter into a new engagement contract with the PEO and cause the PEO to make a written offer of employment to such JS Global Business Employee pursuant to the new engagement contract between the PEO and a JS Global Entity; or (B) following the Disposition Date, reimburse SharkNinja for the cost of any engagement contract between the PEO and a SharkNinja Entity with respect to any JS Global Business Employee until such time as (1) JS Global or a JS Global Entity enters into a new engagement contract with the PEO and causes the PEO to provide a written offer of employment to such JS Global PEO Employee; or (2) JS Global or a JS Global Entity provides a written offer of employment to such JS Global Business Employee with a JS Global Entity, whose terms and conditions of employment shall be determined at the sole discretion of JS Global or a JS Global Entity, if and as applicable; provided, however, that nothing herein shall in any way limit or restrict any SharkNinja Entity’s right to terminate any engagement contract with the PEO at any time and for any reason so long as notice of such termination is provided by SharkNinja to JS Global as promptly as practicable.

 

(ii)            After the commencement of a new engagement contract between the PEO and a JS Global Entity with respect to any JS Global PEO Employee, JS Global shall be responsible for all further Liabilities and obligations that accrue thereafter with respect to such JS Global PEO Employee, and neither SharkNinja nor any SharkNinja Entity shall incur any further or additional Liability or obligation with respect to such JS Global PEO Employee that accrue thereafter.

 

(d)            JS Global Offer Employees in China.

 

(i)            SharkNinja agrees to and shall compensate JS Global for all statutory severance amounts owed to any JS Global Offer Employee in China as of his or her JS Global Start Date pursuant to the employee’s SharkNinja employment contract, any SharkNinja Plan or applicable law, that were not previously paid to such employee; provided, however, SharkNinja shall be liable solely up to the lesser of (a) the existing Liability as would have been payable at the applicable JS Global Start Date, including, without limitation, for the purpose of calculating such Liabilities, taking into account the impacted employees’ level of compensation and length of service solely as of the applicable JS Global Start Date and not taking into account any subsequent increases in compensation or length of service and (b) the amount of Liability actually incurred by JS Global with respect to such employee’s period of employment with a SharkNinja Entity prior to his or her JS Global Start Date.

 

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(ii)            Considering that any JS Global Offer Employee in China has a right to unilaterally terminate his or her employment with any SharkNinja Entity through a prior written notice according to the applicable laws, SharkNinja cannot assure that no such employee will unilaterally terminate his or her employment with any SharkNinja Entity before the Disposition Date. Accordingly, for the avoidance of doubt and notwithstanding anything herein to the contrary, in the event that any JS Global Offer Employee in China elects to unilaterally terminate his or her employment with any SharkNinja Entity, such termination shall not constitute a breach by SharkNinja of any provision of this Agreement.

 

2.6            Notice and Consultation Obligations. The Parties agree to, and to cause their Affiliates to, cooperate and use reasonable efforts to comply with any and all obligations and requirements under applicable law to notify and/or consult with any JS Global Business Employee or other affected employee or any union, labor organization or works council representing any such individual, if any, in connection with the transactions contemplated by this Agreement, the Separation and Distribution Agreement and agreements related thereto.

 

2.7            WARN Act. The Parties agree to, and to cause their Affiliates to, cooperate and use reasonable efforts to comply with preparing and delivering any notices required or potentially required pursuant to the Worker Adjustment and Retraining Notification Act of 1988 and any similar state, local or foreign law in connection with the transactions contemplated by this Agreement.

 

2.8            Reimbursement. From time to time after the Disposition Date, the Parties shall promptly reimburse one another, upon reasonable request of the Party requesting reimbursement (the “Requesting Party”) and the presentation by such Party of such substantiating documentation as the other Party shall reasonably request, for the cost of any obligations or Liabilities satisfied or assumed by the Requesting Party or its Affiliates (including for any such Liabilities that transfer to the JS Global Group by operation of Law) that are, or that have been made pursuant to this Agreement, the responsibility of the other Party or any of its Affiliates. Any such reimbursement shall (i) be equal to the cost actually incurred by the Requesting Party (to the extent such cost is not reimbursable under the TSA), including the employer-portion of any associated employment taxes payable by the Requesting Party in connection therewith, less the present value of any item of loss, deduction or credit which decreases net taxes paid or payable by the Requesting Party as a result of such cost and any related employment taxes (it being understood that such amounts shall be reasonably determined in good faith by the Requesting Party in consultation with the other Party and in making such determination, shall take into account any anticipated income or gain to the Requesting Party in connection with such reimbursement and any advisor costs incurred by the Requesting Party in connection with the calculation of net tax benefits pursuant to this Section 2.8) and (ii) be submitted to the other Party within thirty (30) calendar days of the payment by the Party requesting reimbursement.

 

2.9            Group 4 Employees; No Backfill Obligation; No Further Liability with Respect to Returning Employees. SharkNinja and JS Global acknowledge and agree that (i) any JS Global Offer Employee who is designated as a “Group 4” employee on Schedule 1.7 may receive an offer to resume employment with a SharkNinja Entity no earlier than January 1, 2025, and SharkNinja shall not be required to consider any request by JS Global to postpone such date beyond January 1, 2025; (ii) any position held by a Former SharkNinja Employee or SharkNinja Offer Employee that becomes vacant for any reason is not required to be backfilled by either Party; (iii) SharkNinja shall have no liability or obligation to JS Global with respect to any JS Global Business Employee who resumes employment with a SharkNinja Entity for periods of employment with JS Global; and (iv) JS Global shall have no liability or obligation to SharkNinja with respect to any SharkNinja Offer Employee who resumes employment with a JS Global Entity for periods of employment with a SharkNinja Entity.

 

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ARTICLE III
OTHER COMPENSATION and BENEFIT PLAN MATTERS

 

3.1            SharkNinja Equity Incentive Plans. Effective as of the Disposition Date, SharkNinja shall have adopted, or shall cause another member of the SharkNinja Group to have adopted, an equity incentive plan and employee stock purchase plan (together, the “SharkNinja Equity Incentive Plans”), which shall permit the grant and issuance of equity awards, or options to purchase shares, respectively, denominated in shares of SharkNinja Ordinary Shares. In addition, prior to the Disposition Date, JS Global shall approve the SharkNinja Equity Incentive Plans as the sole shareholder of SharkNinja. No equity awards or options to purchase shares will be granted or outstanding under either of the SharkNinja Equity Incentive Plans prior to the Disposition Date.

 

3.2            SharkNinja Cash Incentive Compensation.

 

(a)            Effective as of the Disposition Date, JS Global shall have adopted, or shall cause another member of the JS Global Group to have adopted, plans or arrangements that will provide cash incentive compensation opportunities for Former SharkNinja Employees that are substantially similar to the opportunities provided to such employees as of immediately prior to the Disposition Date under the SharkNinja Cash Incentive Plans (the “JS Global Cash Incentive Plans”). SharkNinja Cash Incentive Payments that are performance-based and payable in respect of the fiscal year during which the Disposition Date occurs shall be determined on or as soon as practicable following the Disposition Date based on actual performance results and level of performance achieved in respect of the portion of such fiscal year that occurs up to the Disposition Date measured against the applicable targets under the applicable SharkNinja Cash Incentive Plan (as reasonably adjusted) and, if and to the extent earned, shall be prorated to reflect the portion of the performance period that has elapsed through the Disposition Date and paid to the eligible employees by the SharkNinja Group at the time or times it otherwise would have paid such SharkNinja Cash Incentive Payments in the ordinary course of business. SharkNinja Cash Incentive Payments that are time-based and partially earned in respect of the calendar year during which the Disposition Date occurs shall be prorated to reflect the portion of the calendar year in which the eligible employee was employed prior to the Disposition Date and paid to the eligible employees by the SharkNinja Group at the time or times it otherwise would have paid such SharkNinja Cash Incentive Payments in the ordinary course of business.

 

(b)            Following the Disposition Date, (i) SharkNinja shall determine appropriate performance measures to be used for the remainder of the fiscal year(s) applicable to performance-based cash incentive awards for SharkNinja Employees and no Former SharkNinja Employees shall be eligible to participate in any SharkNinja Cash Incentive Plans; (ii) JS Global shall determine appropriate performance measures to be used for the remainder of the fiscal year(s) applicable to performance-based cash incentive awards for the Former SharkNinja Employees; and (iii) each Former SharkNinja Employee shall be eligible to participate in any applicable JS Global Cash Incentive Plan to the extent such Former SharkNinja Employee was eligible to participate in a SharkNinja Cash Incentive Plan prior to the Disposition Date that provided substantially similar cash incentive compensation opportunities as the applicable JS Global Cash Incentive Plan. For the avoidance of doubt, (i) the JS Global Group shall be solely responsible for funding, paying, and discharging all obligations relating to any cash incentive awards that any Former SharkNinja Employee is eligible to receive under any applicable JS Global Cash Incentive Plan, and no member of the SharkNinja Group shall have any obligations with respect thereto, and (ii) the SharkNinja Group shall be solely responsible for funding, paying, and discharging all obligations relating to any cash incentive awards that any SharkNinja Employee is eligible to receive under any SharkNinja Cash Incentive Plan, and no member of the JS Global Group shall have any obligations with respect thereto.

 

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3.3            Health and Welfare Plans.

 

(a)            Subject to any applicable law, effective as of the Disposition Date, the active participation of each Former SharkNinja Employee who is a participant in a SharkNinja Welfare Plan shall automatically cease and no Former SharkNinja Employee shall thereafter accrue any benefits under any such SharkNinja Welfare Plan.

 

(b)            With respect to each SharkNinja Welfare Plan listed on Schedule 3.3(b) hereto (which may be updated no later than thirty (30) calendar days prior to the Disposition Date with the mutual written consent of SharkNinja and JS Global) (collectively, the “Retained Welfare Plans”), JS Global shall, or shall cause another member of the JS Global Group to, establish or maintain one or more JS Global Welfare Plans in which each Former SharkNinja Employee who participated in such Retained Welfare Plan as of immediately prior to the Distribution will be eligible to participate as of the Disposition Date, with terms that are substantially similar to the terms of the applicable Retained Welfare Plan as in effect immediately prior to the Disposition Date.

 

3.4            Vacation and Paid Time-Off Benefits.

 

(a)            To the extent any Former SharkNinja Employee is required, by applicable law, to be paid in connection with the transfer of employment to a JS Global Entity (or the PEO pursuant to an engagement contract with a JS Global Entity, as applicable) for any vacation time, paid time off and other time-off benefits as such Former SharkNinja Employee had with the SharkNinja Group as of immediately prior to the Disposition Date, SharkNinja shall, or shall cause another member of the SharkNinja Group to, (i) pay such Former SharkNinja Employee the amounts owed and any associated employment taxes, and (ii) retain all liabilities with respect to such amounts, including with respect to tax withholding, reporting, remitting or payment obligations or any regulatory filing obligation in connection therewith.

 

(b)            Unless otherwise required by Section 3.4(a), (A) JS Global shall credit each Former SharkNinja Employee as of the Disposition Date with the amount of accrued but unused vacation time, paid time off and other time-off benefits as such Former SharkNinja Employee had with the SharkNinja Group as of immediately prior to the Disposition Date, (B) JS Global shall cause each Former SharkNinja Employee to be eligible to use any accrued but unused vacation time, paid time off and other time-off benefits as such Former SharkNinja Employee had with the SharkNinja Group as of immediately prior to the Disposition Date, (C) to the extent the amount that would have been available to the Former SharkNinja Employee under clause (B) had the Former SharkNinja Employee’s service with SharkNinja been treated as service with JS Global is not available to be utilized while employed by a JS Global Entity, JS Global shall pay any Former SharkNinja Employee for any amount not so available in accordance with the foregoing clause (B), to the extent required by applicable law, and (D) as of the Disposition Date, each Former SharkNinja Employee shall be subject to JS Global’s vacation policy (prorated as of the Disposition Date) for the year in which the Disposition Date occurs, subject to applicable law; provided, however, that JS Global shall provide Former SharkNinja Employees with credit for employment service with SharkNinja for purposes of determining each Former SharkNinja Employee’s eligibility for and future accruals of vacation days under the JS Global vacation policy. Subject to Section 3.4(a), time-off benefits for Former SharkNinja Employees will be fully equivalent to those provided by JS Global to similarly situated employees of JS Global in the applicable jurisdiction.

 

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(c)            (A) SharkNinja shall credit each SharkNinja Offer Employee as of the Disposition Date with the amount of accrued but unused vacation time, paid time off and other time-off benefits as such SharkNinja Offer Employee had with the JS Global Group as of immediately prior to the Disposition Date, (B) SharkNinja shall cause each SharkNinja Offer Employee to be eligible to use any accrued but unused vacation time, paid time off and other time-off benefits as such SharkNinja Offer Employee had with the JS Global Group as of immediately prior to the Disposition Date, (C) to the extent the amount that would have been available to the SharkNinja Offer Employee under clause (B) had the SharkNinja Offer Employee’s service with JS Global been treated as service with SharkNinja is not available to be utilized while employed by a SharkNinja Entity, SharkNinja shall pay any SharkNinja Offer Employee for any amount not so available in accordance with the foregoing clause (B), to the extent required by applicable law, and (D) as of the Disposition Date, each SharkNinja Offer Employee shall be subject to SharkNinja’s vacation policy (prorated as of the Disposition Date) for the year in which the Disposition Date occurs, subject to applicable law; provided, however, that SharkNinja shall provide SharkNinja Offer Employees with credit for employment service with JS Global for purposes of determining each SharkNinja Offer Employee’s eligibility for and future accruals of vacation days under the SharkNinja vacation policy. Time-off benefits for SharkNinja Offer Employees will be fully equivalent to those provided by SharkNinja to similarly situated employees of SharkNinja in the applicable jurisdiction. If a SharkNinja Offer Employee's employment with a SharkNinja Entity terminates within 12 months following his SharkNinja Start Date, and in connection with such termination such employee is entitled to a payment in respect of accrued vacation time, paid-time off or other time-off benefits, SharkNinja and JS Global shall share the cost of such payment pro rata based on the number of days the employee was employed by a SharkNinja Entity and a JS Global Entity.

 

3.5            Cessation of Active Participation in SharkNinja Plans. SharkNinja shall take such actions as are necessary or appropriate to cause each Former SharkNinja Employee to cease to actively participate in the SharkNinja Plans effective as of the applicable JS Global Start Date or if provided for under the terms of the applicable SharkNinja Plan, effective as of the end of the month in which the applicable JS Global Start Date occurs.

 

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3.6            Service Credit. Notwithstanding anything herein to the contrary, but subject to applicable law, the JS Global Plans shall, and JS Global shall cause each member of the JS Global Group to, recognize each Former SharkNinja Employee’s full service credit for purposes of participation, eligibility, vesting and determination of level of benefits under any JS Global Plan as in effect as of the Disposition Date for such Former SharkNinja Employee’s service with any member of the SharkNinja Group on or prior to the applicable JS Global Start Date, to the same extent such service would be credited if it had been performed for a member of the JS Global Group (it being understood that the foregoing shall not apply with respect to vesting credit under any equity incentive opportunity). Notwithstanding anything herein to the contrary, but subject to applicable law, the SharkNinja Plans shall, and SharkNinja shall cause each member of the SharkNinja Group to, recognize each SharkNinja Offer Employee's full service credit for purposes of participation, eligibility, vesting and determination of level of benefits under any SharkNinja Plan in effect as of the Disposition Date for such SharkNinja Offer Employee’s service with any member of the JS Global Group on or prior to the applicable SharkNinja Start Date, to the same extent such service would be credited if it had been performed for a member of the SharkNinja Group (it being understood that the foregoing shall not apply with respect to vesting credit under any equity incentive opportunity).

 

ARTICLE IV
GENERAL AND ADMINISTRATIVE

 

4.1            Sharing of Participant Information. JS Global shall cause each applicable JS Global Entity to share, and SharkNinja shall cause each applicable SharkNinja Entity to share, with each other and their respective agents and vendors (and without obtaining releases unless otherwise required by applicable law) all participant information necessary for the efficient and accurate administration of each of the JS Global Plans and the SharkNinja Plans, provided that the sharing of such information (and the manner in which such information is shared) complies with applicable laws, contractual obligations, self-regulatory standards, or written policies or terms of use of a JS Global Entity or a SharkNinja Entity which are related to privacy, data protection or the Processing of Personal Data. JS Global and SharkNinja and their respective authorized agents shall, subject to applicable laws on confidentiality, be given reasonable and timely access to, and may make copies of, all information relating to the subjects of this Agreement in the custody of the other party, to the extent necessary for such administration.

 

4.2            Confidentiality and Proprietary Information. No provision of the Separation and Distribution Agreement or this Agreement shall be deemed to release any individual for any violation of any agreement or policy pertaining to confidential or proprietary information of JS Global or any of its Affiliates or SharkNinja or any of its Affiliates, respectively, or otherwise relieve any individual of his or her obligations under any such agreements or policies.

 

4.3            Non-Termination of Employment; No Third Party Beneficiaries. No provision of this Agreement or the Separation and Distribution Agreement shall be construed to (a) create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part of any future, present, or former employee of a JS Global Entity or a SharkNinja Entity under any JS Global Plan or SharkNinja Plan or otherwise or (b) to be for the benefit of or otherwise enforceable by any employee, creditor or any other third party. Without limiting the generality of the foregoing: (x) except as expressly provided in this Agreement, the Distribution shall not cause any employee to be deemed to have incurred a termination of employment which entitles such individual to the commencement of benefits under any JS Global Plan or SharkNinja Plan; (y) except as expressly provided in this Agreement, nothing in this Agreement shall preclude any SharkNinja Entity, at any time prior to or after the Distribution, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any SharkNinja Plan, any benefit under any SharkNinja Plan or any trust, insurance policy or funding vehicle related to any SharkNinja Plan; and (z) except as expressly provided in this Agreement, nothing in this Agreement shall preclude any JS Global Entity, at any time prior to or after the Distribution, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any JS Global Plan, any benefit under any JS Global Plan or any trust, insurance policy or funding vehicle related to any JS Global Plan.

 

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4.4            Fiduciary Matters. JS Global and SharkNinja each acknowledge that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable law, and no Party shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination that to do so would violate such a fiduciary duty or standard. Each Party shall be responsible for taking such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities and shall fully release the other Party for any Liabilities imposed on such Party pursuant to the provisions of this Agreement by the failure to satisfy any such responsibility.

 

4.5            Consent of Third Parties. If any provision of this Agreement is dependent on the consent of any third party (such as a vendor) and such consent is withheld, JS Global and SharkNinja shall use commercially reasonable efforts to implement the applicable provisions of this Agreement to the full extent practicable. If any provision of this Agreement cannot be implemented due to the failure of such third party to consent, JS Global and SharkNinja shall negotiate in good faith to implement the provision in a mutually satisfactory manner. The phrase “commercially reasonable efforts” as used herein shall not be construed to require the incurrence of any non-routine or unreasonable expense or liability or the waiver of any right.

 

4.6            Cooperation. The Parties agree to, and to cause their Affiliates to, cooperate and use reasonable efforts to promptly (a) comply with all requirements of this Agreement, ERISA, the Code and other laws which may be applicable to the matters addressed herein, and (b) subject to applicable law, provide each other with such information reasonably requested by the other Party to assist the other Party in administering its plans and programs, pursuing or defending any actual or threatened Action relating to or otherwise involving any Former SharkNinja Employee, and complying with applicable law and regulations and the terms of this Agreement.

 

4.7            U.S. Payroll and Related Taxes. With respect to any Former SharkNinja Employees subject to taxation in the United States, the Parties hereby agree that neither JS Global nor any other member of the JS Global Group will be a “successor employer” and neither SharkNinja nor any other member of the SharkNinja Group will be a “predecessor,” within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the U.S. Internal Revenue Code of 1986, as amended, for purposes of taxes imposed under the United States Federal Insurance Contributions Act, as amended, or the United States Federal Unemployment Tax Act, as amended. With respect to the portion of the tax year commencing on January 1, 2023 and ending on the Disposition Date, SharkNinja (or the applicable member of the SharkNinja Group) shall (x) be responsible for all payroll obligations, tax withholding, and reporting obligations for the Former SharkNinja Employees subject to taxation in the United States and (y) furnish a Form W-2 or similar earnings statement to all such Former SharkNinja Employees for such period, and with respect to the remaining portion of such tax year, JS Global (or the applicable member of the JS Global Group) shall (x) be responsible for all payroll obligations, tax withholding, and reporting obligations with respect to the Former SharkNinja Employees subject to taxation in the United States and (y) furnish a Form W-2 or similar earnings statement to all such Former SharkNinja Employees.

 

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ARTICLE V
MISCELLANEOUS

 

5.1            Limitation of Liability. IN NO EVENT SHALL ANY MEMBER OF THE JS GLOBAL GROUP OR SHARKNINJA GROUP BE LIABLE TO ANY OTHER MEMBER OF THE JS GLOBAL GROUP OR SHARKNINJA GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES AS SET FORTH IN THE SEPARATION AND DISTRIBUTION AGREEMENT OR IN ANY INTER-COMPANY AGREEMENT.

 

5.2            Dispute Resolution. The Parties acknowledge and agree that the Article IX of the Separation and Distribution Agreement is hereby incorporated into this Agreement, and shall apply to the transactions contemplated by this Agreement to the extent applicable, mutatis mutandis.

 

5.3            Entire Agreement. This Agreement, including the Schedules hereto, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of the Separation and Distribution Agreement or any other Ancillary Agreement or Continuing Arrangement, this Agreement shall control.

 

5.4            Governing Law and Jurisdiction. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

 

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5.5            Termination; Amendment. This Agreement may not be terminated, modified or amended except by an agreement in writing signed by the Parties hereto.

 

5.6            Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 5.6):

 

To JS Global:

 

JS Global Lifestyle Co. Ltd.
[•]
Attn: [•]
Email: [•]

 

To SharkNinja:

 

SharkNinja, Inc.
[•]
[•]
Attn: [•]
Email: [•]

 

5.7            Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

 

5.8            Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

 

5.9            Waivers; Consents. Any provision of this Agreement may be waived, if and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any consent or approval required or permitted to be given by a Party to the other Party or its Affiliates under this Agreement shall be in the sole and absolute discretion of the Party giving, conditioning or denying such consent or approval (unless a different standard is expressly set forth herein therefor), shall only be effective if given in writing and signed by the Party giving such consent and shall be effective only against such Party (and the members of its Group).

 

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5.10            No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is to materially undermine the effectiveness of any of the provisions of this Agreement.

 

5.11            Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. All rights and remedies existing under this Agreement or the Schedules attached hereto are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

5.12            Interpretation. The headings contained in this Agreement, in any Schedule hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized term used in any Schedule but not otherwise defined therein, shall have the meaning assigned to such term in this Agreement. For the purposes of this Agreement: (i) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (ii) references to the terms “Article,” “Section,” “Schedule,” “Exhibit” and paragraph are references to the Articles, Sections, Schedules, Exhibits and paragraphs to or of this Agreement unless otherwise specified; (iii) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement; (iv) references to “$” shall mean U.S. dollars; (v) the word “including” and words of similar import when used in this Agreement shall mean “including without limitation,” unless otherwise specified; (vi) the word “or” shall not be exclusive; (vii) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not (unless the context demands otherwise) mean simply “if”; (viii) references to “written” or “in writing” include in electronic form; (ix) provisions shall apply, when appropriate, to successive events and transactions; (x) SharkNinja and JS Global have each participated in the negotiation and drafting of this Agreement, and, if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties hereto and no presumption or burden of proof shall arise favoring or burdening any Party by virtue of the authorship of any of the provisions in this Agreement; (xi) a reference to any Person includes such Person’s successors and permitted assigns; (xii) any reference to “days” means calendar days unless Business Days are expressly specified; (xiii) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded; (xiv) unless otherwise stated in this Agreement, references to any contract are to that contract as amended, modified or supplemented from time to time in accordance with the terms thereof; (xv) the word “shall” shall have the same meaning as the word “will”; (xvi) the word “any” shall mean “any and all”; and (xvii) the term “ordinary course of business” (or any phrase of similar import) shall mean “ordinary course of business, consistent with past practice.”

 

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5.13            Authority. Each of the Parties hereto represents to the other that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to be duly executed as of the day and year first above written.

 

  JS GLOBAL LIFESTYLE CO. LTD.
  An exempted company with limited liability incorporated in the Cayman Islands
   
  Name:
  Title:
   
  SHARKNINJA, INC.
  An exempted company with limited liability incorporated in the Cayman Islands
   
  Name:
  Title:

 

 

 

 

Exhibit 10.7

 

BRAND LICENSE AGREEMENT

 

This BRAND LICENSE AGREEMENT (this “Agreement”), dated as of [●] (the “Effective Date”), is entered into by and between SharkNinja Europe Ltd, a private limited company incorporated under the laws of England and Wales with company number 8492819, having its registered office at 1st/2nd Floor Building 3150, Thorpe Park, Century Way, Leeds, West Yorkshire, LS15 8ZB, United Kingdom (“SharkNinja”) and JS Global Trading HK Limited, a private company limited by shares incorporated in Hong Kong (“JSG”) (each, a “Party,” and collectively, the “Parties”).

 

WHEREAS, SharkNinja and JSG, or their respective Affiliates, are entering into that certain Separation and Distribution Agreement, dated as of the Effective Date (the “SDA”), pursuant to which JSG is being separated into two separate, publicly traded companies, one for each of (i) the JS Global Business, which shall be owned and conducted, directly or indirectly, by JS Global and its Affiliates and (ii) the SharkNinja Business, which shall be owned and conducted, directly or indirectly, by SharkNinja and its Affiliates; and

 

WHEREAS, in connection with the transactions contemplated by the SDA, SharkNinja wishes to grant to JSG, and JSG wishes to grant to SharkNinja, licenses and other rights to certain Intellectual Property, in each case as and to the extent set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I
DEFINITIONS; INTERPRETATION

 

Section 1.1          Definitions. Capitalized terms used but not defined herein shall have the meaning set forth in the SDA. For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)          “Affiliate” means, when used with respect to a specified Person and at a point in, or with respect to a period of, time, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person at such point in or during such period of time. For the purposes of this definition, “control”, when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that, from and after the Effective Date, solely for purposes of this Agreement, (i) no member of the SharkNinja Group shall be deemed an Affiliate of any member of the JS Global Group, and (ii) no member of the JS Global Group shall be deemed an Affiliate of any member of the SharkNinja Group. The Parties agree and acknowledge that the obligations of the Parties and their respective Affiliates pursuant to this Agreement shall not be impacted by way of (i) Wang Xuning’s ownership of SharkNinja or JSG or (ii) Wang Xuning, Timothy Roberts Warner or Hui Chi Kin Max serving as a director, officer or employee of any member of the SharkNinja Group or the JS Global Group, in each case of the foregoing clauses (i)-(ii), except as otherwise expressly set forth in this Agreement.

 

 

 

 

(b)          “Arm’s Length Price” refers to the royalty rate or other applicable charges under this Agreement, as determined in accordance with the arm’s length standard under (i) Part 4 of the Taxation (International and Other Provisions) Act 2010, (ii) Treasury Regulations promulgated under Section 482 of the Internal Revenue Code of 1986, as amended, (iii) the Organisation for Economic Cooperation and Development’s transfer pricing guidelines for multinational enterprises and tax administrations, as amended or updated from time to time, or (iv) such other applicable national or multinational standards.

 

(c)          “Confidential Information” means any and all confidential and proprietary Information disclosed by or on behalf of a Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”) under or in connection with this Agreement, whether in writing or in oral, graphic, electronic or any other form, that is designated, marked or otherwise identified by the Disclosing Party in writing as, or that under the circumstances would reasonably be understood to be, confidential or proprietary. Confidential Information excludes any and all Information that is (i) in the public domain, (ii) lawfully acquired after the Effective Date by the Receiving Party from a Third Party not known to be subject to confidentiality obligations with respect to such Information or (iii) independently developed by the Receiving Party after the Effective Date without reference to any Confidential Information of the Disclosing Party.

 

(d)          “Consistently Profitable” means positive annual pre-tax book income (determined in a manner that is consistent with how pre-tax book income is reported in JSG’s audited financial statements) for three consecutive calendar years.

 

(e)          “Delayed Royalty Jurisdiction” means the People’s Republic of China, including the Hong Kong Special Administrative Region and the Macao Special Administrative Region, and any other country in the JSG Territory where JSG and its Affiliates do not Distribute any Licensed Products as of the Effective Date.

 

(f)          “Distribute” and “Distribution” mean selling, offering for sale, distributing for sale, marketing, promoting and advertising.

 

(g)          “Improvement” means any modification, improvement, enhancement or upgrade to, or derivative work based on, any product or Intellectual Property licensed under this Agreement which is made or developed by or on behalf of either Party, its Affiliates or its Sublicensees.

 

(h)          “Intellectual Property” means any and all rights in or to all intellectual property, including all U.S. and foreign: (i) trademarks, trade dress, service marks, certification marks, logos, slogans, design rights, names, corporate names, trade names, Internet domain names, social media accounts and addresses and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (collectively, “Trademarks”); (ii) patents and patent applications, and any and all related national or international counterparts thereto, including any divisionals, continuations, continuations-in-part, reissues, reexaminations, substitutions and extensions thereof, and any utility models, petty patents and similar rights (collectively, “Patents”); (iii) copyrights, copyright applications and copyrightable subject matter (collectively, “Copyrights”); (iv) trade secrets, and all other confidential or proprietary information, know-how, inventions, processes, formulae, models and methodologies (collectively, “Know-How”); and (v) all applications and registrations for any of the foregoing.

 

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(i)          “Joyoung Royalty Patents” means the Patents set forth on Schedule 1 hereto.

 

(j)          “JSG Territory” means the following: Australia, China (including the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan), India, Indonesia, Japan, Republic of Korea, New Zealand, Singapore, Thailand, Vietnam and other member countries, as of the Effective Date, of the Association of Southeast Asian Nations.

 

(k)          “Licensed JSG IP” means any Intellectual Property owned or (other than the Licensed SN IP) controlled by JSG or its Affiliates in connection with the actual or proposed Use or Distribution of Licensed Products (whether in existence as of, or arising after, the Effective Date), including, for clarity, the Joyoung Royalty Patents.

 

(l)          “Licensed JSG Royalty IP” means, with respect to a particular country in the SharkNinja Territory, Licensed JSG IP created after the Effective Date that (i) is not an Improvement to the Licensed JSG IP existing as of the Effective Date or to the Licensed SN IP, (ii) is issued, valid and enforceable and subject to a registration or application in such country, and (iii) is necessary and material to Use or Distribution of a product of SharkNinja or its Affiliates in such country.

 

(m)          “Licensed Products” means the products (i) sold by or on behalf of SharkNinja or its Affiliates in the JSG Territory as of the Effective Date, (ii) developed by SharkNinja or its Affiliates for JSG or its Affiliates under the Product Development Agreement, or (iii) authorized by SharkNinja pursuant to Section 2.2.

 

(n)          “Licensed SN IP” means the Licensed SN Trademarks and the Licensed SN Technology.

 

(o)          “Licensed SN Technology” means the following (whether in existence as of, or arising after, the Effective Date): (i) all Patents owned or controlled by SharkNinja or its Affiliates in the JSG Territory that are used in connection with the Licensed Products, (ii) all Copyrights owned or controlled by SharkNinja or its Affiliates that are used in connection with the Licensed Products, (iii) all Know-How owned or controlled by SharkNinja or its Affiliates that is used in connection with the Licensed Products, and (iv) all software owned or controlled by SharkNinja or its Affiliates that is used in connection with the Licensed Products (and to be provided as source code, object code, machine code or other format in SharkNinja’s sole discretion).

 

(p)          “Licensed SN Trademarks” means the following (whether in existence as of, or arising after, the Effective Date): (i) all Trademarks owned or controlled by SharkNinja or its Affiliates in the JSG Territory that are used in connection with the Licensed Products, and (ii) all Internet domain names and social media addresses owned or controlled by SharkNinja or its Affiliates that (A) contain an express reference to the JSG Territory in such domain name or social medial address or (B) are used solely in connection with the Licensed Products in the JSG Territory.

 

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(q)          “Licensee” means (i) JSG, with respect to the licenses and rights granted pursuant to Section 2.1, and (ii) SharkNinja, with respect to the licenses and rights granted pursuant to Section 2.2.

 

(r)          “Licensor” means (i) SharkNinja, with respect to the licenses and rights granted pursuant to Section 2.1, and (ii) JSG, with respect to the licenses and rights granted pursuant to Section 2.2.

 

(s)          “Net Sales” means the gross receipts from sales of a particular product by Licensee, its Affiliates and its Sublicensees less customary deductions, as determined in a manner that is consistent with how net sales are reported (i) in JSG’s audited financial statements, with respect to payments to be made by JSG or its Affiliates hereunder, or (ii) in SharkNinja’s audited financial statements, with respect to payments to be made by SharkNinja or its Affiliates hereunder.

 

(t)          “Product Development Agreement” means that certain Product Development Agreement, dated as of the Effective Date, by and between SharkNinja, JSG or their respective Affiliates.

 

(u)          “SharkNinja Territory” means worldwide, except for the JSG Territory.

 

(v)          “Use” means (i) with respect to Trademarks, to use or display, and (ii) with respect to Intellectual Property (other than Trademarks), to make, have made, use, import, export, offer for sale, sell or otherwise transfer or dispose of, distribute, reproduce, modify or prepare derivative works of and otherwise make Improvements to, and to display, perform or otherwise exploit.

 

(w)          “VAT” means (i) value added tax chargeable within the United Kingdom in accordance with the VATA 1994 and legislation and regulations supplemental thereto, (ii) inside the European Union, value added tax charged pursuant to Council Directive 2006/112/EC on the common system of value added tax and (iii) outside the United Kingdom and European Union, any similar sales or turnover tax or goods and services tax.

 

Section 1.2     References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. References to the definitions contained in this Agreement are applicable to the other grammatical forms of such terms. Unless the context otherwise requires, the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. The words “written request” when used in this Agreement shall include email. Reference in this Agreement to any time shall be to New York City, New York time unless otherwise expressly provided herein. Unless the context requires otherwise, references in this Agreement to “JSG” shall also be deemed to refer to the applicable member of the JS Global Group, references to “SharkNinja” shall also be deemed to refer to the applicable member of the SharkNinja Group and, in connection therewith, any references to actions or omissions to be taken, or refrained from being taken, as the case may be, by JSG or SharkNinja shall be deemed to require JSG or SharkNinja, as the case may be, to cause the applicable members of the JS Global Group or the SharkNinja Group, respectively, to take, or refrain from taking, any such action. References herein to “domain names”, “email”, “social media” or the like shall include all similar and successor electronic addresses and media. Unless expressly stated otherwise herein, any consent or approval right of a Party hereunder may be granted, withheld or conditioned by such Party in its sole and absolute discretion.

 

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ARTICLE II
GRANTS OF RIGHTS

 

Section 2.1     Licenses to JSG. Subject to the terms and conditions of this Agreement, SharkNinja, on behalf of itself and its Affiliates, hereby grants to JSG the irrevocable (subject to Article VIII), non-sublicensable (subject to Section 2.4), royalty-bearing (to the extent set forth in Article V) right and license to Use the Licensed SN IP solely in connection with the Licensed Products in the JSG Territory, which license shall be (i) exclusive (even as to SharkNinja) with respect to Distribution of Licensed Products, and (ii) non-exclusive with respect to all other Uses of the Licensed SN IP; provided, that SharkNinja shall only exercise its retained non-exclusive rights in the JSG Territory to develop and manufacture or have developed and manufactured products in the JSG Territory for export to, and Distribution in, the SharkNinja Territory (and any other activities reasonably necessary and incidental to such retained non-exclusive rights). Notwithstanding the foregoing, the licenses and rights granted by SharkNinja herein do not include, and JSG and its Affiliates shall not use or sublicense, the Licensed SN Trademarks (or any name that is derivative of or confusingly similar thereto) as or in a corporate name, fictitious name, trade name or the like (except with respect to such Affiliates of JSG that (x) are solely incorporated in the JSG Territory, (y) Distribute Licensed Products in the JSG Territory under, and in accordance with, this Agreement, and neither such Affiliate nor any of its subsidiaries conduct any business other than the Distribution of Licensed Products, and (z) include an express geographic reference to the name of the country or city in which such Affiliate is incorporated, (including (A) SharkNinja (China) Technology Co., Ltd. and (B) SharkNinja Co., Ltd.), which entities (1) for clarity, shall use such names in compliance with all terms and conditions of this Agreement and (2) JSG shall cause to change their name to remove “SharkNinja” by the end of the Term or at the time such entities cease to be Affiliates of JSG (if sooner)).

 

Section 2.2     Licensed Products. JSG shall not, and shall cause its Affiliates and Sublicensees not to, (i) knowingly use the Licensed SN IP except in connection with the Licensed Products, (ii) Distribute any products under the Licensed SN Trademarks except for the Licensed Products, (iii) Distribute any products that JSG, its Affiliates or Sublicensees knows to include the Licensed SN IP except under the Licensed SN Trademarks, or (iv) knowingly include any Intellectual Property or technology in the Licensed Products other than Licensed SN IP and any other Intellectual Property or technology approved for inclusion therein by SharkNinja; provided, that to the extent that JSG or its Affiliates independently develops or acquires or licenses from any Third Party any Intellectual Property or other technology, JSG and its Affiliates and Sublicensees shall not be in breach of this Section 2.2 to the extent such Intellectual Property or other technology is included in any product Distributed by JSG, its Affiliates or Sublicensees with SharkNinja’s prior written consent. In the event that: (A) a product is developed or sold by or on behalf of SharkNinja or its Affiliates for sale to consumers in the SharkNinja Territory after the Effective Date that is not a Licensed Product or otherwise covered under the Product Development Agreement; or (B) a product (including any Improvement to a Licensed Product) is developed by or on behalf of JSG or its Affiliates for sale to consumers in the JSG Territory after the Effective Date that is not a Licensed Product (or otherwise covered under the Product Development Agreement) (a “New JSG Product”); then JSG may submit a written request to SharkNinja to Distribute such product in the JSG Territory under the Licensed SN Trademarks (a “License Request”), and upon SharkNinja’s consent (not to be unreasonably withheld, conditioned or delayed), such product shall be included as a Licensed Product hereunder. In the event that SharkNinja has not responded to any such License Request within forty (40) days of SharkNinja’s receipt of such License Request, JSG may submit a second written request to SharkNinja that clearly and conspicuously indicates that if SharkNinja fails to respond within twenty (20) days, SharkNinja will be deemed to have consented to such License Request (a “Follow-Up License Request”). If SharkNinja has not responded to any such Follow-Up License Request within twenty (20) days of SharkNinja’s receipt of such Follow-Up License Request, SharkNinja shall be deemed to have consented to the applicable License Request and Follow-Up License Request. Each License Request and Follow-Up License Request provided to SharkNinja under this Section 2.2 shall be provided in accordance with Section 11.5, with a copy to SharkNinja’s then-current Head of Intellectual Property and Head of Engineering. Nothing in this Section 2.2 is intended to restrict or limit the ability of JSG or its Affiliates to Distribute any product (excluding the Licensed Products) anywhere in the world outside this Agreement; provided, that such products (x) do not bear any Licensed SN Trademarks, and (y) are not developed by or on behalf of JSG or its Affiliates using, or otherwise include or are covered by, any Licensed SN IP.

 

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Section 2.3     Licenses to SharkNinja. Subject to the terms and conditions of this Agreement, JSG, on behalf of itself and its Affiliates, hereby grants to SharkNinja the irrevocable (subject to Article VIII), non-transferable (subject to Section 11.2), non-sublicensable (subject to Section 2.4), royalty-free (except as set forth in Article V) right and license to Use the Licensed JSG IP, which license (i) for registrations for Licensed JSG IP in the SharkNinja Territory shall be exclusive with respect to Distribution of products in the SharkNinja Territory, and (ii) for all other Licensed JSG IP shall be non-exclusive with respect to the right to develop and manufacture or have developed and manufactured products in the JSG Territory for export to, and Distribution in, the SharkNinja Territory (and any other activities reasonably necessary and incidental to such non-exclusive rights). In the event that JSG identifies any Licensed JSG Royalty IP that it believes SharkNinja is Using or sublicensing to Third Parties, JSG shall promptly notify SharkNinja in writing thereof.

 

Section 2.4     Sublicensing. Each Licensee may sublicense, through multiple tiers, the license and rights granted to it pursuant to Section 2.1 or Section 2.2 (as applicable) to (i) its Affiliates and (ii) Third Parties in the ordinary course of business, for the benefit of Licensee or its Affiliates (and not, for the avoidance of doubt, for the independent use of such Third Parties) (each such Affiliate or Third Party, a “Sublicensee”); provided, that each Licensee shall not, and shall cause its Affiliates not to, grant any such sublicense to any Person that such Licensee knows, or should reasonably know, intends to Distribute the Licensed Products outside the JSG Territory (with respect to JSG as the Licensee) or the SharkNinja Territory (with respect to SharkNinja as the Licensee). The sublicensing Party shall notify the other Party in writing of any sublicense granted to Third Parties promptly following execution (and amendment) thereof. Each sublicense granted to a Third Party under the Licensed SN IP or the Licensed JSG Royalty IP that is negotiated by a Licensee after the Effective Date (including, for clarity, amendments and renewals negotiated after the Effective Date to agreements that exist as of the Effective Date) shall (A) be granted pursuant to a written agreement which does not conflict with the terms and conditions of this Agreement, (B) expressly include Licensor (or its designated Affiliate) as an intended third-party beneficiary in such sublicense agreement with rights to directly enforce the terms and conditions related to the Licensed SN IP or Licensed JSG Royalty IP (as applicable), and (C) upon the request of Licensor, be provided by the Licensee to the Licensor (which may be redacted solely to the extent reasonably necessary to delete confidential terms not related to the sublicense of the applicable rights granted hereunder or other compliance with this Agreement). For clarity, granting a sublicense shall not relieve each Licensee of any obligations hereunder and each Licensee shall cause each of its Sublicensees to comply, and shall remain responsible for its Sublicensees’ compliance with, the terms of this Agreement applicable to such Licensee. In the event that a Licensee becomes aware of a material breach by any of its Sublicensees of any applicable provisions of this Agreement with respect to Intellectual Property of Licensor, such Licensee shall promptly notify the applicable Licensor of such breach, and the Parties shall cooperate to cause such Sublicensee to remedy such breach as appropriate; provided, that any reasonable costs or expenses incurred by either Party and paid to a Third Party shall be at such Licensee’s sole cost and expense.

 

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Section 2.5     Third Party Rights. Notwithstanding anything to the contrary in this Agreement, the Parties’ rights and obligations set forth in this Agreement (including the licenses and rights granted pursuant to Section 2.1 or Section 2.2) shall be subject to the terms of any Contracts with a Third Party relating to the Licensed SN IP or the Licensed JSG IP to which SharkNinja, JSG or any of their respective Affiliates is a party or otherwise bound. To the extent that, as a result of such rights of or obligations owed to a Third Party, any licenses or other rights granted hereunder: (i) may not be granted without the consent of, or payment of a fee or other consideration to, a Third Party under such Contracts; or (ii) will cause SharkNinja, JSG or any of their respective Affiliates to be in breach of any of its or their obligations to any Third Party, the applicable licenses and other rights granted hereunder shall only be granted to the extent such consent has been obtained or such fee or other consideration has been paid (it being understood that each Party shall have no obligation to agree to or make any payments or other concessions, except to the extent expressly required under this Agreement, the SDA or any other Ancillary Agreements). The Parties shall cooperate and use commercially reasonable efforts (x) to attempt to obtain any such consent or approval required from any such Third Parties (but such obligation shall not require payment or other consideration to such Third Parties without the prior written agreement of the Parties, including as to which Party will bear the cost thereof) and (y) until such consent or approval is obtained, to minimize the adverse impact therefrom. Notwithstanding anything to the contrary in this Section 2.5, each Licensee shall be deemed not to be in breach of this Agreement only if, and for such time that, such Licensee is not notified by the applicable Licensor (or otherwise has actual knowledge) of such rights of or obligations owed to such Third Party. Each Party shall not, and shall cause its Affiliates not to, enter into any Contracts with a Third Party after the Effective Date that such Party or such Party’s Affiliates knows would materially and adversely affect the rights granted by such Party to the other Party under this Agreement.

 

Section 2.6     Ownership; License-Back; Infringement.

 

(a)          As between the Parties and their respective Affiliates, (i) all right, title and interest in and to (A) the Licensed SN IP (and, except as expressly provided under any other Ancillary Agreement, any Improvements thereto), and (B) any translations, transliterations, phonetic equivalents and localizations of any Licensed SN Trademarks shall be the exclusive property of SharkNinja and its Affiliates, and neither JSG nor any of its Affiliates shall acquire any ownership thereof, and (ii) all right, title and interest in and to the Licensed JSG IP (and, except as expressly provided under any other Ancillary Agreement, any Improvements thereto) shall be the exclusive property of JSG and its Affiliates, and neither SharkNinja nor any of its Affiliates shall acquire any ownership thereof. Except as expressly provided under any other Ancillary Agreement, to the extent that a Party, its Affiliates or its Sublicensees is assigned or otherwise obtains ownership of any right, title or interest in or to any Intellectual Property in contravention of this Section 2.6(a), such Party hereby assigns, and shall cause its Affiliates and Sublicensees to assign (to the extent applicable), to the other Party (or to such Affiliate or Third Party designated by such other Party in writing) all such right, title and interest, without requiring any compensation from the other Party. Each Licensee shall ensure that its and its Affiliates’ and Sublicensees’ employees, contractors and agents assigns to such Licensee or its Affiliate any Intellectual Property (including Improvements) belonging to the Licensor under this Section 2.6(a).

 

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(b)          For clarity, any Intellectual Property assigned pursuant to Section 2.6(a) shall be subject to the licenses and rights granted pursuant to Section 2.1 or Section 2.2 to the extent such Intellectual Property constitutes Licensed SN IP or Licensed JSG IP, as applicable.

 

(c)          In the event that either Party determines that the Distribution of the Licensed Products by or on behalf of JSG in the JSG Territory may infringe or otherwise violate any Third Party’s Intellectual Property Rights, such Party may notify the other Party thereof and the Parties shall reasonably cooperate with each other to cease any such infringing or violative conduct.

 

Section 2.7     Anti-Shelving. JSG acknowledges that it has received hereunder an exclusive license to Distribute Licensed Products under the Licensed SN Trademarks in the JSG Territory and that it accordingly shall, subject to the terms and conditions hereof, use commercially reasonable efforts to exploit such rights to the extent commercially practicable in its reasonable business judgment.

 

Section 2.8     Product Safety Certifications. As between the Parties, all product safety certifications and applications therefor related to the Licensed Products in the JSG Territory shall be owned by JSG or its Affiliates; provided, that (i) at JSG’s request, SharkNinja or its Affiliates shall apply for and maintain product safety certifications related to the Licensed Products in the JSG Territory at JSG’s sole cost and expense, and (ii) the Parties shall reasonably cooperate with respect to all product safety certifications and applications therefor related to the Licensed Products.

 

Section 2.9     Reservation of Rights. Except for the licenses and rights explicitly granted by a Party under this Agreement, this Agreement does not grant to any Party or Third Party any right, title or interest in or to any of such Party’s or its Affiliates’ Intellectual Property, by implication, estoppel or otherwise. All rights, titles and interests not explicitly granted by a Party hereunder are hereby reserved by such Party.

 

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ARTICLE III
TRADEMARK USE; QUALITY CONTROL; Coordination

 

Section 3.1     Quality Standards. JSG shall, and shall cause its Affiliates and Sublicensees to, only use the Licensed SN Trademarks (i) in a manner that is consistent with the quality, reputation and goodwill of SharkNinja and the Licensed SN Trademarks, and (ii) in connection with Licensed Products that are (A) developed, produced, manufactured, packaged, labeled, sourced and Distributed in compliance with all applicable Law, and (B) consistent with or exceed all product quality standards set by SharkNinja and provided to JSG in writing from time to time (“Product Quality Standards”). SharkNinja acknowledges and agrees that, to its knowledge as of the Effective Date, all Licensed Products Distributed in the JSG Territory as of the Effective Date, and all uses of the Licensed LN Trademarks in connection therewith as of the Effective Date, by either of the Parties meet with the Product Quality Standards in effect as of the Effective Date in all material respects.

 

Section 3.2     Samples.

 

(a)          Upon SharkNinja’s reasonable request, JSG shall submit to SharkNinja, at JSG’s cost and expense, representative samples of any products, packages, labels, specifications or commercial materials (including advertising, marketing and promotional materials) of JSG, its Affiliates or its Sublicensees that (i) use, reproduce or display the Licensed SN Trademarks and (ii) have not been previously provided in substantially identical form and design by JSG to SharkNinja (“Samples”). Without limiting the generality of the foregoing, prior to Distributing a Licensed Product that is manufactured on behalf of JSG by a Third Party, JSG shall submit a Sample to SharkNinja of such Licensed Product manufactured by such Third Party for review in accordance with Section 3.2(b).

 

(b)          If SharkNinja reasonably determines that any Sample does not comply with the Product Quality Standards, in any material respect, for the Licensed Products, SharkNinja shall promptly provide written notice of such non-compliance to JSG, including a reasonably detailed explanation of SharkNinja’s objections with respect to the relevant Sample and any proposed changes or modifications that SharkNinja would suggest be made for JSG, its Affiliates or its Sublicensees (as applicable) to achieve the requisite compliance (such notice and related information, a “Quality Objection Notice”). Upon receipt of a Quality Objection Notice, JSG shall promptly implement corrective measures to cure the material non-compliance therein, and JSG shall resubmit such corrected Sample.

 

(c)          In the event that, with respect to the development, production, manufacture, packaging, labeling, sourcing or Distribution of a Licensed Product in connection with the Licensed SN Trademarks, JSG, its Affiliates or its Sublicensees are not in material compliance with the Product Quality Standards applicable to such Licensed Product, then in each case, JSG shall, and shall cause its Affiliates and Sublicensees to, as soon as reasonably practicable, cease such conduct until such time as such Licensed Product is in compliance.

 

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Section 3.3     Trademark Standards.

 

(a)          JSG shall, and shall cause its Affiliates and Sublicensees to, use, reproduce and display the Licensed SN Trademarks in material compliance with any and all Trademark use standards set by SharkNinja and provided to JSG in writing (which SharkNinja may update and amend from time to time upon written notice to JSG) (“Trademark Use Standards”). Upon receiving written notice from SharkNinja that any use by JSG, its Affiliates or its Sublicensees of a Licensed SN Trademark is not in material compliance with the Trademark Use Standards and a reasonably detailed explanation of such material non-compliance, JSG shall, and shall cause its Affiliates and Sublicensees to, promptly implement corrective measures to cure such material non-compliance.

 

(b)          JSG shall not, and shall cause its Affiliates and Sublicensees to not, (i) use any other Trademark, symbol or device in combination or conjunction with the Licensed SN Trademarks or on Licensed Products or packaging, marketing, promotion or advertising therefor without the prior consent of SharkNinja (except where necessary under applicable Law to identify JS Global or its applicable Affiliate as the manufacturer or distributor of the applicable Licensed Product, in which case such use shall be in a non-prominent manner as customary in the industry for such purpose), or (ii) use the Licensed SN Trademarks on or in connection with any products or services that are not Licensed Products.

 

Section 3.4     Non-Degradation.

 

(a)          In connection with all uses by JSG, its Affiliates or its Sublicensees of the Licensed SN Trademarks, and all Licensed Products offered in connection therewith, JSG shall, and shall cause its Affiliates and Sublicensees to: (i) not make any statements that are misleading as to the quality or functionality of the Licensed Products, or that cause confusion with the business or identity of a Third Party; (ii) be consistent with the image and reputation for overall high-quality products; (iii) not file applications to register any Trademarks or design Patents that consist in whole or in part of, or are derivative of or confusingly similar to, the Licensed SN Trademarks, or assist any Third Party in doing the same; and (iv) not Distribute any Licensed Products in a manner, or at prices, that may reflect negatively on the prestige and market positioning of the Licensed SN Trademarks (and JSG shall reasonably consult and cooperate with SharkNinja regarding pricing and distribution strategy for the Licensed Products to ensure the same).

 

(b)          Each Party shall, and shall cause its Affiliates and Sublicensees to: (i) not enter into any Contract that conflicts with, results in any breach of, or constitutes a default under, the terms and conditions of this Agreement; (ii) not contest, challenge, or otherwise take any action adverse to the other Party’s ownership of, or rights in and to, as applicable, the such other Party’s Intellectual Property licensed hereunder, or assist any Third Party in doing the same; and (iii) not do, omit to do or permit to be done, any act that such Party, its Affiliates or its Sublicensees knows would, or knows would reasonably be expected to, invalidate any Patents or Trademarks licensed to such Party hereunder or compromise the trade secret status of any Trade Secrets licensed to such Party hereunder.

 

(c)          JSG agrees that any and all goodwill that accrues based on any and all uses of the Licensed SN Trademarks, or by operation of Law or otherwise, shall accrue solely for the benefit of SharkNinja and its Affiliates, and JSG hereby irrevocably assigns such goodwill to SharkNinja without any further action by either Party.

 

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Section 3.5     Coordination.

 

(a)          Coordination Committee. Each Party may nominate appropriate officer(s) or employee(s) of such Party to act as the primary contact(s) for such Party (each such individual, a “Representative,” including those Representatives set forth on Schedule 2), with such designation to remain in force unless and until the earlier of (i) such Party notifies the other Party of a change in such designation, or (ii) such Representative ceases to be an officer or employee of the applicable Party. The Representatives of the Parties, collectively, shall constitute a coordination committee to monitor and facilitate compliance by the Parties with this Agreement, including as set forth in Section 3.5(b) and Section 3.5(c). Each Party’s Representatives shall respond reasonably promptly to any reasonable requests from the other Party (and such other Party’s Representatives) for instructions, information and approvals hereunder.

 

(b)          Branding Coordination. In connection with the use, reproduction or display of the Licensed SN Trademarks by and on behalf of JSG under this Agreement, JSG shall use commercially reasonable efforts and reasonably cooperate with SharkNinja to prevent confusion between the respective Parties and their Affiliates and between the Distribution of Licensed Products by or on behalf of JSG in the JSG Territory and SharkNinja in the SharkNinja Territory. Such efforts may include (i) clear and conspicuous wording in business collateral and marketing materials used in such instances that makes clear that JSG’s and its Affiliates’ and Sublicensees’ business is targeted to the JSG Territory hereunder, (ii) use of different SKUs appearing on packages, and (iii) coordination with respect to trade shows and the like so that one Party may represent the other in the first Party’s territory hereunder or that the Parties share or participate together in a booth or location, as appropriate.

 

(c)          Business Plan Coordination. At the reasonable request of a Party, the Parties shall meet (in person or electronically) to discuss and exchange information on the current and proposed Distribution of Licensed Products in the JSG Territory and the SharkNinja Territory, as applicable to this Agreement. To the extent mutually agreed between the Parties with respect to any particular such meeting, (i) SharkNinja shall provide to JSG a list of currently marketed products in the SharkNinja Territory, and information regarding planned pipeline products under the Licensed SN Trademarks (at a level of detail to be mutually and reasonably agreed between the Parties), and (ii) JSG will prepare, and present to SharkNinja (A) for review and comment, an advertising, marketing and promotion plan setting forth the then-planned major advertising, marketing and promotion strategies, themes and significant proposed copy for the JSG Territory (at a level of detail to be mutually and reasonably agreed between the Parties), and JSG shall in good faith implement any reasonable suggestions and recommendations that SharkNinja may provide on such plan, and (B) information regarding current and anticipated research and development projects by or on behalf of JSG to the extent related to products under the Licensed SN Trademarks.

 

Section 3.6     Extraterritorial Use and Distribution.

 

(a)          JSG shall not, and shall cause its Affiliates and Sublicensees not to, Distribute any Licensed Products, or Distribute any other product or service that JSG, its Affiliates or its Sublicensees knows is covered by or includes Licensed SN IP, in the SharkNinja Territory. JSG shall use commercially reasonable efforts to monitor, detect and prevent any direct or indirect Distribution of any Licensed Product in the SharkNinja Territory, and shall cooperate, as reasonably requested by SharkNinja, with SharkNinja in connection therewith. In the event that JSG, its Affiliates or its Sublicensees discovers any actual or suspected occurrence of any of the activities described in this Section 3.6, JSG shall promptly notify SharkNinja in writing and cooperate with SharkNinja to take all commercially reasonable measures necessary to prevent and address any such occurrence that has, or is suspected to have, taken place.

 

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(b)          SharkNinja shall not, and shall cause its Affiliates and Sublicensees not to, Distribute any Licensed Products, or Distribute any other product or service that SharkNinja, its Affiliates or its Sublicensees knows is covered by or includes Licensed SN IP, in the JSG Territory. SharkNinja shall use commercially reasonable efforts to monitor, detect and prevent any direct or indirect Distribution of any Licensed Product in the JSG Territory, and shall cooperate, as reasonably requested by JSG, with JSG in connection therewith. In the event that SharkNinja, its Affiliates or its Sublicensees discovers any actual or suspected occurrence of any of the activities described in this Section 3.6(b), SharkNinja shall promptly notify JSG in writing and cooperate with JSG to take all commercially reasonable measures necessary to prevent and address any such occurrence that has, or is suspected to have, taken place.

 

(c)          For clarity, the territorial restrictions with respect to use of the Licensed SN Trademarks set forth herein shall not be deemed breached by a Party with respect to uses that are solely directed to such Party’s permitted territory hereunder, including where the use or communication by its very nature is accessible or observed from outside such territory (e.g., website use directed to a Party’s permitted territory or a trade show attended by a Party outside of its permitted territory solely for purposes of making sales in its permitted territory); provided, that such use is usual and customary in the trade, and at the reasonable request of the other Party such Party reasonably cooperates to minimize any potential for confusion or mistake based on such use.

 

ARTICLE IV
PROSECUTION; MAINTENANCE; ENFORCEMENT

 

Section 4.1     Cooperation. JSG shall reasonably cooperate with SharkNinja, at SharkNinja’s cost and expense (subject to Section 4.2(b)), in the preparation and filing of any applications, renewals or other documentation necessary or useful to protect SharkNinja’s ownership of the Licensed SN IP. Each Party shall promptly notify in writing the other Party (including the relevant details known to the notifying Party) of any (i) discovered or suspected infringement, misappropriation or other violation by any Third Party of any of the Licensed SN IP or Licensed JSG IP in the JSG Territory, or (ii) actual or threatened challenge by any Third Party concerning the validity, registration or ownership any of the Licensed SN IP or Licensed JSG IP in the JSG Territory.

 

Section 4.2     Prosecution; Maintenance.

 

(a)          Except as otherwise set forth in Section 4.2, SharkNinja shall have the sole and exclusive right and option to determine whether to file, prosecute or maintain any registrations or applications for registration of any of the Licensed SN IP (the “Registered SN IP”) in the JSG Territory, at SharkNinja’s cost and expense.

 

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(b)          JSG shall have the right to request that SharkNinja file any (i) reasonable applications for registration of unregistered Licensed SN IP with the appropriate Governmental Entity in the JSG Territory, and (ii) reasonable documents to record with the relevant Governmental Entity in the JSG Territory Intellectual Property assignment agreements and other Contracts or documentation necessary for SharkNinja to be recorded as the owner of record with the relevant Governmental Entity in the JSG Territory for each item of Registered SN IP. SharkNinja shall consider such requests in good faith, and not unreasonably refuse to approve such requests. With respect to applications for registration, provided that such rights are determined to be available for registration following such clearance searches as deemed necessary in SharkNinja’s reasonable business judgment, SharkNinja shall promptly make such filings in its own name and shall own all resulting registrations and related rights. In the event that SharkNinja approves such request, SharkNinja shall use commercially reasonable efforts to accomplish such requests, at JSG’s cost and expense.

 

(c)          Each Party shall not, and shall cause its Affiliates and Sublicensees not to, file, prosecute or maintain, (i) in the case of JSG, any Registered SN IP (or any other Intellectual Property that it or they know is owned by SharkNinja or its Affiliates), and (ii), in the case of SharkNinja, any Licensed JSG IP that is the subject of registrations or applications for registration thereof (or any other Intellectual Property that it or they know is owned by JSG or its Affiliates).

 

Section 4.3     Enforcement.

 

(a)          JSG shall have the first right, but not the obligation, to take enforcement action in the JSG Territory against any Third Party in respect of any infringement, misappropriation or other violation of the Licensed SN IP to the extent used in the Licensed Products, at JSG’s cost and expense, to the extent such infringement, misappropriation or other violation is exclusively related to the JSG Territory (with SharkNinja having step-in rights as provided in Section 4.3(b)); provided, that JSG shall not take any such enforcement action without first reasonably consulting with SharkNinja. SharkNinja shall have the first right, but not the obligation, to take enforcement action in the JSG Territory against any Third Party in respect of any infringement, misappropriation or other violation of any Licensed SN IP, at SharkNinja’s cost and expense, to the extent such infringement, misappropriation or other violation is not exclusively related to the JSG Territory.

 

(b)          If, upon receiving notice of infringement, misappropriation or other violation of the Licensed SN IP in the JSG Territory in accordance with Section 4.3(a), the Party with the first right to take enforcement action in the JSG Territory under Section 4.3(a) does not provide notice to the other Party within a reasonable period of time that it intends to exercise its rights to take enforcement action in the JSG Territory, then the other Party may then take enforcement action in the JSG Territory in its own name and at its cost and expense in respect of such infringement, misappropriation or other unlawful use.

 

(c)          The terms and conditions of Section 4.3(a) and Section 4.3(b) shall apply, mutatis mutandis, with respect to enforcement of the Licensed JSG IP in the SharkNinja Territory.

 

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(d)          In connection with each enforcement action taken by a Party pursuant to Section 4.3, the non-enforcing Party shall reasonably cooperate with, and provide reasonable assistance to, the enforcing Party, at the enforcing Party’s cost and expense (including reimbursement for reasonable attorneys’ fees and expenses), including being joined as a necessary or indispensable party to any such enforcement action (to the extent applicable). The enforcing Party shall be solely responsible for the costs of such enforcement action; provided, that the enforcing Party shall not settle any such enforcement action in a manner that would be reasonably likely to adversely affect, in any material respect, the rights of the non-enforcing Party under the Licensed SN IP owned by or licensed to such non-enforcing Party (as applicable) without such non-enforcing Party’s prior consent (such consent not to be unreasonably withheld, conditioned or delayed).

 

(e)          Any amounts recovered by the enforcing Party in connection with any enforcement action taken pursuant to Section 4.3 shall be used first to reimburse the reasonable costs and expenses (including reimbursement for reasonable attorneys’ fees and expenses) incurred in bringing and maintaining the applicable enforcement action, and subject to any obligations to pay Third Parties in connection with any such enforcement action, any remainder shall be allocated between the Parties as follows (on a pari passu basis): (i) JSG shall be entitled to any amounts recovered to the extent constituting damages for infringement, misappropriation or other unlawful use of the Licensed SN IP in the JSG Territory; and (ii) SharkNinja shall be entitled to any amounts recovered to the extent constituting damages for infringement, misappropriation or other unlawful use of the Licensed SN IP in the SN Territory.

 

ARTICLE V
ROYALTIES; PAYMENT TERMS

 

Section 5.1     Royalties to SharkNinja.

 

(a)          In consideration of the rights and licenses granted by SharkNinja to JSG under this Agreement, JSG shall pay to SharkNinja a royalty of three percent (3%) of Net Sales of Licensed Products by or on behalf of JSG, its Affiliates and its Sublicensees during the Term, on a country-by-country and Licensed Product-by-Licensed Product basis.

 

(b)          Notwithstanding Section 5.1(a), with respect to each country that is a Delayed Royalty Jurisdiction, JSG shall not be obligated to pay to SharkNinja the royalty set forth in Section 5.1(a) until the Distribution of Licensed Products by or on behalf of JSG, its Affiliates and its Sublicensees in each such country is Consistently Profitable. For the avoidance of doubt, JSG’s obligation to pay SharkNinja the royalty set forth in Section 5.1(a) with respect to Net Sales of Licensed Products in any such country that is a Delayed Royalty Jurisdiction shall be deemed effective and shall automatically apply as of and following January 1 of the calendar year in which the Distribution of Licensed Products by or on behalf of JSG, its Affiliates and its Sublicensees in each such country is first Consistently Profitable, and shall continue thereafter regardless of whether the Distribution of Licensed Products by or on behalf of JSG, its Affiliates and its Sublicensees in each such country continues to be Consistently Profitable.

 

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Section 5.2     Royalties to JSG.

 

(a)          In consideration of the rights and licenses granted by JSG to SharkNinja under this Agreement, SharkNinja shall pay to JSG a reasonable royalty to be mutually and reasonably agreed to between the Parties from time to time (such royalty not to exceed one and a half percent (1.5%)) of Net Sales in the SharkNinja Territory of New JSG Products, that absent the licenses to SharkNinja hereunder would infringe Licensed JSG Royalty IP, by or on behalf of SharkNinja, its Affiliates and its Sublicensees during the Term, on a country-by-country and New JSG Product-by-New JSG Product basis.

 

(b)          In consideration of the rights and licenses granted by JSG to SharkNinja under this Agreement, SharkNinja shall pay to JSG the royalties set forth in Schedule 1 on Net Sales in the SharkNinja Territory of the products identified in Schedule 1, to the extent covered by the Joyoung Royalty Patents, by or on behalf of SharkNinja, its Affiliates and its Sublicensees during the Term, on a country-by-country and product-by-product basis; provided, that for clarity, SharkNinja shall not be obligated to pay to JSG a royalty under this Section 5.2(b) to the extent that payment of such royalty under this Agreement would be duplicative of a royalty, markup or other consideration paid by SharkNinja, its Affiliates or its Sublicensees to JSG or its Affiliates under another agreement between the Parties or their Affiliates (e.g., in the event that, under another Ancillary Agreement, SharkNinja procures a product covered by the Joyoung Royalty Patents from JSG and the price paid by SharkNinja for such product includes the right to practice the Joyoung Royalty Patents).

 

Section 5.3     Arm’s Length Pricing. The Parties shall periodically review the amounts and other terms of all Royalty Payments and other payments hereunder to ensure that such payments constitute Arm’s Length Prices. If such review determines that any such payment does not constitute an Arm’s Length Price, then a Party may receive additional compensation from the other Party or may pay additional compensation to the other Party, as necessary, and the Parties may adjust the terms of any Royalty Payments or other payments thereafter in accordance with Section 11.8.

 

Section 5.4     Payment Terms.

 

(a)          Any amounts payable pursuant to Section 5.1 or Section 5.2 (collectively, “Royalty Payments”) shall be paid by the applicable Party (the “Payor”) to the other Party (the “Payee”) within forty-five (45) days after the end of each quarter of the calendar year. The Payor shall submit a royalty report to the Payee within twenty (20) days after the end of each such quarter, which sets forth the details of the calculation of the Royalty Payments to be paid by such Payor for such quarter, including identification of the quantities of each Licensed Product sold in each country in the JSG Territory. All Royalty Payments shall be paid in U.S. dollars (or, if necessary for legal or tax concerns, other reasonable currency mutually agreed upon by the Parties in writing) in immediately available funds to a bank account designated by the Payee in writing to the Payor. For purposes of determining the Royalty Payments due and payable in U.S. dollars, the exchange rate shall be determined at the date on which such amount is remitted by the Payor, as reported by the Wall Street Journal (or similar or successor publication if the Wall Street Journal is no longer published).

 

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(b)          If a Payor fails to make a Royalty Payment when due, such Payor shall be required to pay, in addition to any such unpaid amounts, interest on such amounts at (i) the Prime Rate, plus two hundred (200) basis points, or (ii) if lower, the highest rate of interest permitted by applicable Law at such time, in each case compounded monthly from, and including, the relevant due date through the actual date of payment.

 

(c)          Except as set forth in Section 5.5, the Payor shall make all Royalty Payments to the Payee without set-off, deduction, recoupment or withholding of any kind for Royalty Payments or other amounts owed or payable by the Payee or its Affiliates to the Payor or its Affiliates, whether under this Agreement or any other Ancillary Agreement, applicable Law or otherwise.

 

(d)          All amounts treated for the purposes of any VAT as consideration for a supply made pursuant to this Agreement shall be exclusive of applicable VAT. Where Licensor is required to account for any VAT to a relevant Tax authority, Licensee shall, subject to the receipt of a valid VAT invoice, pay to Licensor (in addition to, and at the same time as, the consideration) the amount of such VAT.

 

Section 5.5     Taxes. All payments made to a Payee under this Agreement shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law requires the deduction or withholding of any Tax from any payment to a Payee, then (i) the Payor shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Entity in accordance with applicable Law, and (ii) the sum payable to the Payee shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 5.5), the Payee receives an amount equal to the sum it would have received had no such deduction or withholding been made. If any payment made pursuant to this Agreement is eligible for a reduction in the rate of, or the elimination of, any applicable withholding Tax, the Parties agree to cooperate and use commercially reasonable efforts to reduce the applicable rate of withholding or to relieve the Payor of its obligation to withhold such Tax; provided, that for the avoidance of doubt, such cooperation and the provisions of this Section 5.5 shall not require the Payee to alter the entities receiving payments under this Agreement.

 

Section 5.6     Transfer Pricing. If any Party (“the first Party”) suffers a transfer pricing adjustment in relation to any amount paid or payable under this Agreement and that adjustment increases the Tax payable by (or decreases the Tax relief available to) the first Party, the other Party (“the second Party”) shall make a payment to the first Party in an amount equal to that increase in Tax (or decrease in relief). The second Party shall make any payment due hereunder no less than ten (10) days before the Tax referred to in that clause (including any Tax that would not have been payable, or which is payable earlier than would have been the case, if any Tax relief had not been decreased) is payable. For purposes of this Section 5.6, a “transfer pricing adjustment” is any adjustment to the profits or losses of a person for Tax purposes asserted by a Tax authority whether by way of assessment or reassessment or otherwise and includes any such adjustment under Part 4 of the Taxation (International and Other Provisions) Act 2010. The Parties agree to pursue all reasonable legal remedies to avoid double taxation that may result from such a transfer pricing adjustment or from any conforming or correlative adjustments that may be necessary on account of such transfer pricing adjustment.

 

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Section 5.7     Tooling Depreciation Pass-Through. Within thirty (30) days following the end of each quarter of the calendar year, SharkNinja shall notify JSG of the amount of tooling and equipment depreciation that is recognized by SharkNinja and its Affiliates during the preceding quarter and attributable to JSG (each such amount, a “Depreciation Charge”), based upon a reasonable, good faith determination by SharkNinja of the extent of (i) the use of such tooling and equipment in furtherance of the Distribution of Licensed Products in the JSG Territory by or on behalf of JSG during such preceding quarter, relative to (ii) the use of such tooling and equipment for other purposes during such preceding quarter. Within fifty (50) days following the end of each such quarter, JSG shall pay to SharkNinja the Depreciation Charge for the preceding quarter. All Depreciation Charges shall be paid in U.S. dollars (or, if necessary for legal or Tax concerns, other reasonable currency mutually agreed upon by the Parties in writing) in immediately available funds to a bank account designated by SharkNinja in writing to JSG. For purposes of determining the Depreciation Charges due and payable in U.S. dollars, the exchange rate shall be determined at the date on which such amount is remitted by JSG, as reported by the Wall Street Journal (or similar or successor publication if the Wall Street Journal is no longer published).

 

ARTICLE VI
AUDIT RIGHTS

 

Section 6.1     Royalty Payment Audits.

 

(a)          Payor shall, and shall cause its Affiliates and Sublicensees to, during the Term and for so long thereafter as any Royalty Payments under this Agreement have been incurred but are unpaid, keep and maintain complete and accurate books and records in accordance with its standard accounting procedures and in accordance with GAAP to verify the applicable Royalty Payments owed during the Term (including with respect to all sales by Payor’s Affiliates and Sublicensees) under this Agreement.

 

(b)          Payee shall have the right, during the Term and for so long thereafter as any Royalty Payments under this Agreement have been incurred but are unpaid, on at least ten (10) Business Days advance written notice and not more than twice in any twelve (12) month period, to, itself or through an independent accounting firm (the “Auditor”), examine the books and records of Payor, its Affiliates and its Sublicensees, solely to verify the accuracy of the royalty reports and the amount of Royalty Payments made by Payor hereunder after any period covered by a previous audit (if any). If the Auditor is an independent accounting firm, the Auditor may not be paid on a contingency or other basis related to the outcome of the audit, and shall execute a confidentiality agreement with Payor in a form reasonably acceptable to Payor that is consistent with the applicable confidentiality provisions herein and limits the Auditor’s disclosure to Payee to the amount of the underpayment or overpayment and any information reasonably customary or appropriate to reasonably explain and describe the basis for such underpayment or overpayment. Any such audit shall be conducted during the normal business hours of Payor, its Affiliates or its Sublicensees, as applicable, in such a manner as not to interfere in any material respect with the normal business activities of Payor, its Affiliates and its Sublicensees, as applicable, and shall be at Payee’s expense; provided, that if such audit reveals an underpayment of more than five percent (5%) during the audited period, Payor shall pay all reasonable costs of the audit. The Parties shall cooperate to make any necessary adjustment to correct for any underpayment, or overpayment revealed by any such audit.

 

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Section 6.2     Compliance Audits. In the event that a Party (the “Auditing Party”) reasonably believes that the other Party, its Affiliates or its Sublicensees (collectively, the “Audited Party”) has or may have breached the terms and conditions of Article II, Section 3.1, Section 3.2, Section 3.3, Section 3.4, Section 3.6, Article IV or Article VII, the Auditing Party shall have the right to audit the Audited Party’s Use of, (i) if SharkNinja is the Auditing Party, the Licensed SN IP and Distribution of Licensed Products, and (ii) if JSG is the Auditing Party, the Licensed JSG IP and the Distribution of the products covered by such Licensed JSG IP, to ensure the Audited Party’s Use, to the extent that it is related to the suspected breach or any similar or related breach, is in compliance with such terms and conditions of this Agreement. Such audits shall be scheduled at the request of the Auditing Party in consultation with the Audited Party, but not more than twice in any twelve (12) month period, except in the event that the Auditing Party has actual, reasonable cause that the Audited Party has breached any term or condition of this Agreement. Any such audit shall be conducted during the normal business hours of the Audited Party in such a manner as not to unreasonably interfere with the normal business activities of the Audited Party and shall be at the Auditing Party’s expense; provided, that if such audit reveals a material breach of this Agreement, the Audited Party shall pay all reasonable costs of the audit. Upon the Auditing Party’s reasonable request, the other Party shall, and shall cause its Affiliates and Sublicensees to, cooperate with the Auditing Party to perform such audits of the Audited Party, and enforce the Audited Party’s obligations under this Agreement and any sublicenses granted hereunder.

 

ARTICLE VII
confidentiality

 

Section 7.1     Confidentiality. Each Party acknowledges that, in connection with this Agreement, it or its Affiliates may gain access to Confidential Information of the other Party or its Affiliates. Each Receiving Party shall (i) not use the Confidential Information of the Disclosing Party, other than as necessary to exercise its rights and perform its obligations under this Agreement, and (ii) maintain the Confidential Information of the Disclosing Party in strict confidence and, subject to Section 7.2, not disclose the Confidential Information of the Disclosing Party without the Disclosing Party’s prior consent; provided, that the Receiving Party may disclose the Confidential Information as otherwise permitted in this Article VII.

 

Section 7.2     Disclosure. The Receiving Party may disclose, or may permit disclosure of, Confidential Information of the Disclosing Party (i) to its respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such Information for auditing and other non-commercial purposes and are informed of the obligation to hold such Information confidential and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any Party or any of its respective Affiliates is required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule or is advised by outside counsel in connection with a proceeding brought by a Governmental Entity that it is advisable to do so, (iii) as required in connection with any legal or other proceeding by one Party (or member of its Group) against the other Party (or member of such other Party’s Group) or in respect of claims by one Party against the other Party (or member of such other Party’s Group) brought in a proceeding, (iv) as necessary in order to permit a Party (or member of its Group) to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (v) as necessary for a Party (or member of its Group) to enforce its rights or perform its obligations under this Agreement, (vi) to Governmental Entities in accordance with applicable procurement regulations and contract requirements or (vii) to other Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic or financing transaction, to the extent reasonably necessary in connection therewith; provided, that an appropriate and customary confidentiality agreement has been entered into with the Person receiving such Confidential Information. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made by a Third Party pursuant to clause (ii), (iii), (v) or (vi) above, each Party, as applicable, shall promptly notify (to the extent permissible by Law) the Party to whom (or to whose Group) the Confidential Information relates of the existence of such request, demand or disclosure requirement and shall provide such affected Party (and/or any applicable member of its Group) a reasonable opportunity to seek an appropriate protective order or other remedy, which such Party will cooperate in obtaining to the extent reasonably practicable. In the event that such appropriate protective order or other remedy is not obtained, the Party which faces the disclosure requirement shall furnish only that portion of the Confidential Information that is required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Confidential Information.

 

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ARTICLE VIII
term; termination

 

Section 8.1     Term. This Agreement shall commence as of the Effective Date and, unless and until earlier terminated in accordance with Section 8.2, shall continue in full force and effect until the date that is twenty (20) years from the Effective Date (the “Term”).

 

Section 8.2     Termination.

 

(a)          Mutual Termination. The Parties may terminate this Agreement upon the mutual consent of both Parties.

 

(b)          Termination for Breach. Each Party may terminate this Agreement upon forty five (45) days’ prior written notice to the other Party in the event that the other Party (i) materially breaches this Agreement (including, for clarity, any breach of Section 2.2, Section 3.6, Section 3.4, Article V or Article VIII), and (ii) does not cure such breach within such forty five (45) day period; provided, that such forty five (45) day period shall be extended for up to forty five (45) additional days in the event that the breaching Party is diligently and in good faith pursuing cure of such breach.

 

Section 8.3     Consequences of Termination; Survival.

 

(a)          Upon the end of the Term (whether by expiration or termination), subject to Section 8.3(b), all licenses and rights granted hereunder shall immediately terminate; provided, that for a period of twelve (12) months following the end of the Term, JSG shall have the right to exhaust inventory of Licensed Products created before the end of the Term to the extent such exhaustion is in compliance with the terms and conditions of this Agreement.

 

(b)          Notwithstanding anything to the contrary in this Article VIII, Article I, Section 2.3, Section 2.6(a), Section 3.4(a), Section 3.4(c), Article V (solely with respect to payment obligations that accrued prior to the effective date of expiration or termination), Section 6.1 (solely with respect to payment obligations that accrued prior to the effective date of expiration or termination), Article VII, Section 8.3(a) (for the period set forth therein), this Section 8.3(b), Article X and Article XI shall survive the end of the Term (whether by expiration or termination).

 

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ARTICLE IX
representations & warranties

 

Section 9.1     Representations & Warranties. Each Party hereby represents and warrants to the other Party that (i) such first Party has the requisite authority and power, and has taken all requisite actions, to execute and perform this Agreement, and (ii) this Agreement constitutes a legal, valid and binding obligation of such first Party, enforceable against such Party in accordance with its terms. SharkNinja hereby represents and warrants to JSG that, to its knowledge as of the Effective Date and except as set forth on Schedule 3, the Distribution of the Licensed Products in the JSG Territory and the use of the Licensed SN IP in accordance with this Agreement does not infringe any Third Party’s valid Intellectual Property rights in any material respect.

 

Section 9.2     Disclaimer of Representations & Warranties. EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SDA OR ANY OTHER ANCILLARY AGREEMENTS, THE PARTIES EXPRESSLY DISCLAIM AND WAIVE ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING WITH REGARD TO QUALITY, PERFORMANCE, NON-INFRINGEMENT, NON-DILUTION, VALIDITY, COMMERCIAL UTILITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE), AND EACH ACKNOWLEDGES AND AGREES THAT IT HAS NOT AND WILL NOT RELY ON ANY SUCH REPRESENTATIONS OR WARRANTIES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SHARKNINJA AND JSG MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER REGARDING THE EXISTENCE OR ABSENCE OF FAULTS, IF ANY, IN THE LICENSED SN IP, THE LICENSED JSG IP OR THE LICENSED PRODUCTS, AND EACH PARTY ACKNOWLEDGES AND AGREES THAT IT HAS NOT AND WILL NOT RELY ON ANY SUCH REPRESENTATIONS OR WARRANTIES.

 

ARTICLE X
indemnification; limitations of liability

 

Section 10.1     Indemnification.

 

(a)          JSG shall indemnify, defend (except if SharkNinja elects to control such defense itself with respect to any particular dispute concerning the Licensed SN IP) and hold harmless SharkNinja and its Affiliates and their respective directors, officers, employees, representatives and agents (the “SharkNinja Indemnitees”) from and against any and all Indemnifiable Losses of the SharkNinja Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of JSG, its Affiliates or its Sublicensees in the performance of this Agreement, (ii) breach by JSG of this Agreement, and (iii) the Distribution of the Licensed Products in the JSG Territory or the exercise of the licenses and rights granted under Section 2.1, in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by SharkNinja pursuant to Section 10.1(b).

 

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(b)          SharkNinja shall indemnify, defend and hold harmless JSG and its Affiliates and their respective directors, officers, employees, representatives and agents (the “JSG Indemnitees”) from and against any and all Indemnifiable Losses of the JSG Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of the SharkNinja, its Affiliates or its Sublicensees in the performance of this Agreement, (ii) breach by SharkNinja of this Agreement, and (iii) the Distribution of the Licensed Products in the SharkNinja Territory or the exercise of the licenses and rights granted under Section 2.3, in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by JSG pursuant to Section 10.1(a).

 

Section 10.2     Indemnification Procedures. The indemnification procedures set forth in Section 7.4 of the SDA shall apply to the matters indemnified hereunder, mutatis mutandis.

 

ARTICLE XI
miscellaneous

 

Section 11.1     Dispute Resolution. The Parties acknowledge and agree that the Article IX of the SDA is hereby incorporated into this Agreement, and shall apply to the transactions contemplated by this Agreement to the extent applicable, mutatis mutandis.

 

Section 11.2     Assignment. Neither this Agreement nor any of the rights, interests or obligations of a Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by such Party without the prior consent of the other Party; provided, that (i) each Party may assign, in whole or in part, by operation of law or otherwise, this Agreement to one or more of its Affiliates, and (ii) SharkNinja may assign, in whole or in relevant part, by operation of law or otherwise, any of the foregoing to the successor to all of the business or assets, or the relevant portion of the business or assets, to which this Agreement relates; provided, further, that (x) the assigning Party shall promptly notify the non-assigning Party in writing of any assignments it makes under the foregoing clause (ii), and (y) in either case of the foregoing clauses (i) or (ii), the party to whom this Agreement is assigned shall agree in writing to be bound by the terms of this Agreement as if named as a “Party” hereto with respect to all or such portion of this Agreement so assigned. Any assignment or other disposition in violation of this Section 11.2 shall be void. No assignment shall relieve the assigning Party of any of its obligations under this Agreement that accrued prior to such assignment unless agreed to by the non-assigning Party. If either Party or any of its Affiliates assigns any of the Licensed SN IP or the Licensed JSG IP, such assignment shall be subject to the licenses granted to such Intellectual Property under this Agreement and the assignee of such Licensed SN IP or the Licensed JSG IP, as applicable, shall be deemed to assume the applicable obligations under this Agreement automatically with respect thereto.

 

Section 11.3     Entire Agreement; Construction. This Agreement, including the Schedules hereto, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement or Continuing Arrangement, this Agreement shall control.

 

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Section 11.4     Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

 

Section 11.5     Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by email (provided no “error” message or other notification of non-delivery is received by the sender of any such email; followed by delivery of an original via overnight courier service) or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 11.5):

 

To JSG:

 

JS Global Trading HK Limited
[●]
Attn: [●]
Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Clifford Chance LLP
[●]
Attn: [●]
Email: [●]

 

To SharkNinja:

 

SharkNinja Europe Ltd
[●]
Attn: [●]
Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
[●]
Attn: [●]
Email: [●]

 

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Section 11.6     Waivers; Consents. Any provision of this Agreement may be waived, if and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any consent or approval required or permitted to be given by a Party to the other Party or its Affiliates under this Agreement shall be in the sole and absolute discretion of the Party giving, conditioning or denying such consent or approval (unless a different standard is expressly set forth herein therefor), shall only be effective if given in writing and signed by the Party giving such consent and shall be effective only against such Party (and the members of its Group).

 

Section 11.7     Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

 

Section 11.8     Amendment. This Agreement may not be modified or amended except by an agreement in writing signed by both Parties.

 

Section 11.9     No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is a breach or, in the case where a Party acts in concert with any Person who takes such action, would be a breach of any of the provisions of this Agreement.

 

Section 11.10     Third Party Beneficiaries. Except as specifically provided herein, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon Third Parties any remedy, claim, liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

 

Section 11.11     Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

Section 11.12     Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

 

Section 11.13     Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 11.14     No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.

 

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* * * * *

 

[End of page intentionally left blank]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the authorized representatives of the Parties as of the day and year first above written.

 

  SHARKNINJA EUROPE LTD
   
  By:  
  Name:  
  Title:  
   
  JS GLOBAL TRADING HK LIMITED
   
  By:            
  Name:  
  Title:  

 

[Signature Page to Brand License Agreement]

 

 

 

 

Exhibit 10.8

 

SOURCING SERVICES AGREEMENT – JS GLOBAL

 

This SOURCING SERVICES AGREEMENT – JS GLOBAL (this “Agreement”), dated as of [●] (the “Effective Date”), is entered into by and between SharkNinja (Hong Kong) Company Limited, a private company limited by shares incorporated in Hong Kong (“SharkNinja”) and JS Global Trading HK Limited, a private company limited by shares incorporated in Hong Kong (“JSG”) (each, a “Party,” and collectively, the “Parties”).

 

WHEREAS, SharkNinja and JSG, or their respective Affiliates, are entering into that certain Separation and Distribution Agreement, dated as of the Effective Date (the “SDA”), pursuant to which JSG is being separated into two separate, publicly traded companies, one for each of (i) the JS Global Business, which shall be owned and conducted, directly or indirectly, by JS Global and its Affiliates and (ii) the SharkNinja Business, which shall be owned and conducted, directly or indirectly, by SharkNinja and its Affiliates; and

 

WHEREAS, in connection with the transactions contemplated by the SDA, JSG wishes to provide to SharkNinja, and SharkNinja wishes to receive from JSG, certain supply chain and product sourcing services, in each case as and to the extent set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I
DEFINITIONS; INTERPRETATION

 

Section 1.1       Definitions. Capitalized terms used but not defined herein shall have the meaning set forth in the SDA. For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)      “Affiliate” means, when used with respect to a specified Person and at a point in, or with respect to a period of, time, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person at such point in or during such period of time. For the purposes of this definition, “control”, when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that, from and after the Effective Date, solely for purposes of this Agreement, (i) no member of the SharkNinja Group shall be deemed an Affiliate of any member of the JS Global Group, and (ii) no member of the JS Global Group shall be deemed an Affiliate of any member of the SharkNinja Group. The Parties agree and acknowledge that the obligations of the Parties and their respective Affiliates pursuant to this Agreement shall not be impacted by way of (i) Wang Xuning’s ownership of SharkNinja or JSG or (ii) Wang Xuning, Timothy Roberts Warner or Hui Chi Kin Max serving as a director, officer or employee of any member of the SharkNinja Group or the JS Global Group, in each case of the foregoing clauses (i)-(ii), except as otherwise expressly set forth in this Agreement.

 

 

 

 

(b)      “Approved OEM” means any Third Party original equipment manufacturer, contract manufacturing organization or other similar supplier with respect to the Products that is (i) set forth on Schedule 1, or (ii) proposed by JSG and approved by SharkNinja in writing.

 

(c)      “Arm’s Length Price” refers to the Service Fees or other applicable charges under this Agreement, as determined in accordance with the arm’s length standard under (i) Part 4 of the Taxation (International and Other Provisions) Act 2010, (ii) Treasury Regulations promulgated under Section 482 of the Internal Revenue Code of 1986, as amended, (iii) the Organisation for Economic Cooperation and Development’s transfer pricing guidelines for multinational enterprises and tax administrations, as amended or updated from time to time, or (iv) such other applicable national or multinational standards.

 

(d)      “Confidential Information” means any and all confidential and proprietary Information disclosed by or on behalf of a Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”) under or in connection with this Agreement, whether in writing or in oral, graphic, electronic or any other form, that is designated, marked or otherwise identified by the Disclosing Party in writing as, or that under the circumstances would reasonably be understood to be, confidential or proprietary. Confidential Information excludes any and all information that is (i) in the public domain, (ii) lawfully acquired after the Effective Date by the Receiving Party from a Third Party not known to be subject to confidentiality obligations with respect to such Information or (iii) independently developed by the Receiving Party after the Effective Date without reference to any Confidential Information of the Disclosing Party.

 

(e)      “Procurement Amount” means, with respect to any particular period, the aggregate amount payable by SharkNinja to an Approved OEM for the supply of the Products to SharkNinja during such period under a written agreement with such Approved OEM negotiated by JSG or its Affiliates in connection with the Services under this Agreement.

 

(f)       “Products” means any products (or components of products) to be sold by or on behalf of SharkNinja or its Affiliates, or any raw materials to be used in connection with the foregoing (as applicable).

 

(g)      “VAT” means (i) value added tax chargeable within the United Kingdom in accordance with the VATA 1994 and legislation and regulations supplemental thereto, (ii) inside the European Union, value added tax charged pursuant to Council Directive 2006/112/EC on the common system of value added tax and (iii) outside the United Kingdom and European Union, any similar sales or turnover tax or goods and services tax.

 

Section 1.2       References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. References to the definitions contained in this Agreement are applicable to the other grammatical forms of such terms. Unless the context otherwise requires, the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. The words “written request” when used in this Agreement shall include email. Reference in this Agreement to any time shall be to New York City, New York time unless otherwise expressly provided herein. Unless the context requires otherwise, references in this Agreement to “JSG” shall also be deemed to refer to the applicable member of the JS Global Group, references to “SharkNinja” shall also be deemed to refer to the applicable member of the SharkNinja Group and, in connection therewith, any references to actions or omissions to be taken, or refrained from being taken, as the case may be, by JSG or SharkNinja shall be deemed to require JSG or SharkNinja, as the case may be, to cause the applicable members of the JS Global Group or the SharkNinja Group, respectively, to take, or refrain from taking, any such action.

 

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ARTICLE II
services

 

Section 2.1       Sourcing Services. Subject to the terms and conditions of this Agreement, during the Term, JSG shall, itself or through its designated Affiliates, (i) manage the relationship with each Approved OEM (including as reasonably requested or directed by SharkNinja), (ii) negotiate written agreements with each Approved OEM with respect to the supply of the Products to SharkNinja (subject to the approval of SharkNinja, including with respect to pricing and other key commercial and supply terms), (iii) oversee production planning and inventory/capacity management with respect to the Products to be procured from each Approved OEM (including as set forth in Section 2.2), (iv) facilitate the supply of the Products directly from each Approved OEM to SharkNinja or its designated Affiliates, and (v) develop relationships with prospective new Approved OEMs (the foregoing clauses (i)-(v), collectively, the “Services”). JSG shall reasonably consult with and keep SharkNinja reasonably informed in connection with the provision of the Services.

 

Section 2.2       Product Procurement. JSG shall ensure (except as otherwise mutually and reasonably agreed between the Parties with respect to any particular Approved OEM) that each written agreement with an Approved OEM that is negotiated by JSG or its Affiliates after the Effective Date (including, for clarity, amendments and renewals negotiated after the Effective Date to agreements that exist as of the Effective Date) (i) designates SharkNinja (or its designated Affiliate) as an intended third-party beneficiary of such agreement with respect to the Products (except if SharkNinja or any of its Affiliates is a party to such agreement), and (ii) provides for SharkNinja the rights to (A) submit work orders, purchase orders and other such orders for the Products directly to each Approved OEM under such agreement, (B) coordinate directly with each such OEM with respect to the fulfillment of such orders, and (C) perform quality inspections of each Approved OEM’s facilities under such agreement. The Parties acknowledge and agree that SharkNinja may, but is not obligated to, procure the Products from the Approved OEMs managed by JSG during the Term (and, for clarity, nothing herein shall restrict SharkNinja from procuring the Products from Third Parties that are not Approved OEMs or under agreements or relationships not negotiated or managed by JSG or its Affiliates, which products for clarity shall not be subject to this Agreement).

 

Section 2.3       R&D Services. In the event that SharkNinja determines that it requires research and development, product design or other such services (the “New R&D Services”) from JSG or its Affiliates (including any such Affiliates that operate under the “Joyoung” name), SharkNinja may submit a written request to JSG for such New R&D Services. Upon JSG’s receipt of such request, the Parties shall negotiate in good faith a new agreement for such New R&D Services, including such terms and conditions as are reasonably necessary in connection with the foregoing (including, for clarity, any service fees for such New R&D Services and provisions governing the ownership and treatment of any intellectual property rights arising from such New R&D Services).

 

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Section 2.4       Service Quality. JSG shall, and shall cause its Affiliates to, provide the Services in good faith and to a reasonable commercial standard, consistent with the practice of the Parties prior to the Effective Date (to the extent applicable). JSG shall not, and shall cause its Affiliates not to, enter into any Contract during the Term that it knows would materially prevent JSG from providing the services hereunder.

 

Section 2.5       Required Consents. Except as otherwise set forth in the SDA, Each Party shall use commercially reasonable efforts to obtain any and all Third Party consents, licenses, approvals or amendments to existing agreements necessary or advisable to allow JSG to provide the Services (the “Required Consents”); provided, that the costs of obtaining, or seeking to obtain, such Required Consents shall be paid by SharkNinja in respect of the Services; provided, further, that JSG shall have provided to SharkNinja reasonable prior notice and SharkNinja shall have provided its prior written consent, in each case, to any such payments in an amount greater than thirty thousand U.S. dollars ($30,000). Each Party shall reasonably cooperate with the other Party in connection with obtaining Required Consents upon such other Party’s request. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a Required Consent, JSG shall have no obligation to provide such Service; provided, that the Parties shall use commercially reasonable efforts and reasonably cooperate with each other to minimize the adverse impact therefrom and to identify and arrange for the provision of substitute or alternative services for such Service to the extent reasonably practicable.

 

Section 2.6       Phase-Out of Services. The Parties acknowledge and agree that (i) JSG is not in the business of providing services such as the Services to Third Parties, and (ii) the Services are intended to be non-exclusive and transitional in nature, to enable SharkNinja to establish independent internal sourcing and product procurement capabilities. SharkNinja shall use commercially reasonable efforts to transition from, and phase-out use of, the Services as soon as reasonably practicable and in any event no later than the end of the Term. In furtherance of the foregoing, for the avoidance of doubt, nothing herein shall be deemed to restrict SharkNinja’s right to negotiate or enter into written agreements with any Approved OEMs, independently of JSG, with respect to the supply of the Products to SharkNinja or its Affiliates, whether during or after the Term.

 

ARTICLE III
production management & quality control

 

Section 3.1       Product Specifications. JSG shall use commercially reasonable efforts to ensure that each Approved OEM strictly complies with (or exceeds) all specifications for the Products of which JSG is notified in writing or that have been approved by SharkNinja (as such specifications may be amended or otherwise changed from time to time by SharkNinja upon written notice to JSG); provided, that SharkNinja shall provide to JSG reasonable notice of such specifications and amendments thereto. If either Party or any of its Affiliates becomes aware of any change in applicable Law that would, or would reasonably be expected to, cause the Products, or the specifications for such Products, to not be in compliance with applicable Law, such Party shall promptly notify the other Party in writing of such change in applicable Law, and the Parties shall cooperate in good faith to amend such specifications to the extent necessary to cure such non-compliance.

 

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Section 3.2       Product Standards. JSG shall use commercially reasonable efforts to cause the Approved OEMs to manufacture the Products in accordance with all applicable Laws (including in the country of manufacture and, to the extent of JSG’s knowledge of the intended location of intended sale, the country in which such Products are intended to be sold) and industry standards.

 

Section 3.3       Governmental Inquiries. JSG shall respond promptly and completely, consistent with its general practices, to answer any inquiries from Governmental Entities regarding the Products, and shall provide all necessary information and documents in case of inspection; provided, that JSG shall not, and shall cause its Affiliates not to, make any significant communication to any Governmental Entity regarding the Products or other subject matter of this Agreement before such communication is approved in writing by SharkNinja (such approval not to be unreasonably withheld, conditioned or delayed), except where not permitted by applicable Law or where the circumstances do not reasonably permit. JSG shall reasonably consult with and keep SharkNinja reasonably informed in connection with any such inquiries or inspections and JSG’s communications related thereto.

 

Section 3.4       Manufacturer Warranty Passthrough. JSG shall, and shall cause its Affiliates and the Approved OEMs to, use commercially reasonable efforts to transfer and assign to SharkNinja or its designated Affiliate all express and implied manufacturer warranties pertaining to the Products or any component thereof, in each case subject to the terms of the applicable agreements with such Approved OEMs and applicable Laws. To the extent that JSG, its Affiliate or an Approved OEM is unable to transfer and assign such rights, then JSG shall, and shall cause such Affiliate or Approved OEM to, make available to SharkNinja or its designated Affiliate all rights that JSG and its Affiliates hold pursuant to such manufacturer warranties and shall cooperate with SharkNinja in enforcing such warranties, at SharkNinja’s cost and expense (for reasonable out-of-pocket costs incurred by JSG and its Affiliates in connection therewith) and in each case subject to the terms of the applicable agreements with such Approved OEM.

 

Section 3.5       Inventory. JSG shall use commercially reasonable efforts to ensure that the Approved OEMs maintain a sufficient stock of raw materials and packaging materials (to the extent applicable) to supply the Products to SharkNinja and its designated Affiliates in accordance with this Agreement and the written agreements with such Approved OEMs.

 

Section 3.6       Quality Inspections. SharkNinja and its designated Affiliates shall have the right to perform quality inspections of any Approved OEM’s facilities in conjunction with inspections conducted by JSG or its Affiliates, in each case subject to the terms of the applicable agreements with each such Approved OEM. JSG shall notify SharkNinja at least ten (10) Business Days prior to a scheduled quality inspection of an Approved OEM’s facilities, and SharkNinja shall be entitled to send representatives to participate in such inspection.

 

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ARTICLE IV
service fees; PAYMENT TERMS

 

Section 4.1       Service Fee. In consideration of the Services provided by JSG to SharkNinja under this Agreement, SharkNinja shall pay to JSG the following amounts, subject to the annual caps set forth in Schedule 2 in accordance with applicable Law (collectively, the “Service Fees”):

 

(a)      For the period from the Effective Date until (and including) June 30, 2024, an amount equal to four percent (4%) of the Procurement Amount during such period; and

 

(b)      For the period from July 1, 2024 until (and including) December 31, 2024, an amount equal to two percent (2%) of the Procurement Amount during such period; and

 

(c)      For the period from January 1, 2025 until the end of the Term, an amount equal to one percent (1%) of the Procurement Amount during such period.

 

Section 4.2       Annual Cap. The Parties acknowledge that, with respect to each period set forth in Section 4.1, JSG is not permitted to, and shall not and shall cause its Affiliates not to, continue to provide the Services to SharkNinja if and to the extent that the continued provision of the Services during such period would obligate SharkNinja to pay to JSG Service Fees in excess of the applicable annual cap set forth in Schedule 2 for such period. Accordingly, each Party shall promptly notify the other Party in the event that the Service Fees incurred during such period exceeds eighty percent (80%) of the applicable cap for such period, in which case the Parties shall cooperate in good faith to determine whether to seek to increase the applicable annual cap. In the event that the Parties mutually determine, acting reasonably, to seek to increase the applicable annual cap, JSG shall use commercially reasonable efforts to take any actions necessary and appropriate to increase the applicable annual cap in accordance with the Hong Kong Listing Rules and any other applicable Laws, and SharkNinja shall reasonably cooperate with JSG in connection with the foregoing. Each Party shall bear its own costs and expenses incurred in connection with this Section 4.2.

 

Section 4.3       Arm’s Length Pricing. The Parties shall periodically review the amounts and other terms of all Service Fees and other payments hereunder to ensure that such payments constitute Arm’s Length Prices. If such review determines that any such payment does not constitute an Arm’s Length Price, then a Party may receive additional compensation from the other Party or may pay additional compensation to the other Party, as necessary, and the Parties may adjust the terms of any Service Fees or other payments thereafter in accordance with Section 9.8.

 

Section 4.4       Payment Terms.

 

(a)      Any Service Fees payable pursuant to Section 4.1 shall be paid by SharkNinja or its designated Affiliate (the “Payor”) to JSG (the “Payee”) within forty-five (45) days after receipt of a written invoice from the Payee at the end of each quarter of the calendar year. The Payee shall submit such invoice to the Payor within twenty (20) days after the end of each such quarter, which sets forth the details of the calculation of the Service Fees to be paid by such Payor for such quarter. All Service Fees shall be calculated and paid in U.S. dollars (or, if necessary for legal or tax concerns, other reasonable currency mutually agreed upon by the Parties in writing) in immediately available funds to a bank account designated by the Payee in writing to the Payor. For purposes of determining the Service Fees due and payable in U.S. dollars, the exchange rate shall be determined at the date on which such amount is remitted by the Payor, as reported by the Wall Street Journal (or similar or successor publication if the Wall Street Journal is no longer published).

 

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(b)      If a Payor fails to make a Service Fee payment when due, such Payor shall be required to pay, in addition to any such unpaid amounts, interest on such amounts at (i) the Prime Rate, plus two hundred (200) basis points, or (ii) if lower, the highest rate of interest permitted by applicable Law at such time, in each case compounded monthly from, and including, the relevant due date through the actual date of payment.

 

(c)      Except as set forth in Section 4.5, the Payor shall make all Service Fee payments to the Payee without set-off, deduction, recoupment or withholding of any kind for Service Fees or other amounts owed or payable by the Payee or its Affiliates to the Payor or its Affiliates, whether under this Agreement or any other Ancillary Agreement, applicable Law or otherwise.

 

(d)      All amounts treated for the purposes of any VAT as consideration for a supply made pursuant to this Agreement shall be exclusive of applicable VAT. Where Payee is required to account for any VAT to a relevant Tax authority, Payor shall, subject to the receipt of a valid VAT invoice, pay to Payee (in addition to, and at the same time as, the consideration) the amount of such VAT.

 

Section 4.5       Taxes. All payments made to a Payee under this Agreement shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law requires the deduction or withholding of any Tax from any payment to a Payee, then (i) the Payor shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Entity in accordance with applicable Law, and (ii) the sum payable to the Payee shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 4.5), the Payee receives an amount equal to the sum it would have received had no such deduction or withholding been made. If any payment made pursuant to this Agreement is eligible for a reduction in the rate of, or the elimination of, any applicable withholding Tax, the Parties agree to cooperate and use commercially reasonable efforts to reduce the applicable rate of withholding or to relieve the Payor of its obligation to withhold such Tax; provided, that for the avoidance of doubt, such cooperation and the provisions of this Section 4.5 shall not require the Payee to alter the entities receiving payments under this Agreement.

 

Section 4.6       Transfer Pricing. If any Party (“the first Party”) suffers a transfer pricing adjustment in relation to any amount paid or payable under this Agreement and that adjustment increases the Tax payable by (or decreases the Tax relief available to) the first Party, the other Party (“the second Party”) shall make a payment to the first Party in an amount equal to that increase in Tax (or decrease in relief). The second Party shall make any payment due hereunder no less than ten (10) days before the Tax referred to in that clause (including any Tax that would not have been payable, or which is payable earlier than would have been the case, if any Tax relief had not been decreased) is payable. For purposes of this Section 4.6, a “transfer pricing adjustment” is any adjustment to the profits or losses of a person for Tax purposes asserted by a Tax authority whether by way of assessment or reassessment or otherwise and includes any such adjustment under Part 4 of the Taxation (International and Other Provisions) Act 2010. The Parties agree to pursue all reasonable legal remedies to avoid double taxation that may result from such a transfer pricing adjustment or from any conforming or correlative adjustments that may be necessary on account of such transfer pricing adjustment.

 

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ARTICLE V
confidentiality

 

Section 5.1       Confidentiality. Each Party acknowledges that, in connection with this Agreement, it or its Affiliates may gain access to Confidential Information of the other Party or its Affiliates. Each Receiving Party shall, in perpetuity, (i) not use the Confidential Information of the Disclosing Party, other than as necessary to exercise its rights and perform its obligations under this Agreement, and (ii) maintain the Confidential Information of the Disclosing Party in strict confidence and, subject to Section 5.2, not disclose the Confidential Information of the Disclosing Party without the Disclosing Party’s prior consent; provided, that the Receiving Party may disclose the Confidential Information as otherwise permitted in this Article V.

 

Section 5.2       Disclosure. The Receiving Party may disclose, or may permit disclosure of, Confidential Information of the Disclosing Party (i) to its respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such Information for auditing and other non-commercial purposes and are informed of the obligation to hold such Information confidential and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any Party or any of its respective Affiliates is required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule or is advised by outside counsel in connection with a proceeding brought by a Governmental Entity that it is advisable to do so, (iii) as required in connection with any legal or other proceeding by one Party (or member of its Group) against the other Party (or member of such other Party’s Group) or in respect of claims by one Party against the other Party (or member of such other Party’s Group) brought in a proceeding, (iv) as necessary in order to permit a Party (or member of its Group) to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (v) as necessary for a Party (or member of its Group) to enforce its rights or perform its obligations under this Agreement, (vi) to Governmental Entities in accordance with applicable procurement regulations and contract requirements or (vii) to other Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic or financing transaction, to the extent reasonably necessary in connection therewith; provided, that an appropriate and customary confidentiality agreement has been entered into with the Person receiving such Confidential Information. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made by a Third Party pursuant to clause (ii), (iii), (v) or (vi) above, each Party, as applicable, shall promptly notify (to the extent permissible by Law) the Party to whom (or to whose Group) the Confidential Information relates of the existence of such request, demand or disclosure requirement and shall provide such affected Party (and/or any applicable member of its Group) a reasonable opportunity to seek an appropriate protective order or other remedy, which such Party will cooperate in obtaining to the extent reasonably practicable. In the event that such appropriate protective order or other remedy is not obtained, the Party which faces the disclosure requirement shall furnish only that portion of the Confidential Information that is required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Confidential Information.

 

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ARTICLE VI
term; termination

 

Section 6.1       Term. This Agreement shall commence as of the Effective Date and, unless and until earlier terminated in accordance with Section 6.2, shall continue in full force and effect for twenty-four (24) months thereafter (the “Term”).

 

Section 6.2       Termination.

 

(a)      Mutual Termination. The Parties may terminate this Agreement upon the mutual consent of both Parties.

 

(b)      Termination for Breach. Each Party may terminate this Agreement upon sixty (60) days’ prior written notice to the other Party in the event that the other Party (i) materially breaches this Agreement, and (ii) does not cure such breach within such sixty (60) day period.

 

(c)       Termination for Assignment. Either Party may terminate this Agreement (or the applicable portion) upon written notice to the other Party in the event that the other Party assigns this Agreement (or such applicable portion) to a Third Party, with such termination to be effective as of the date designated by such terminating Party.

 

(d)      Other Termination. SharkNinja may terminate this Agreement at its discretion upon forty five (45) days’ prior written notice to JSG. In the event that such early termination of this Agreement in accordance with this Section 6.2(d) results in the payment of additional out-of-pocket fees under any agreement with any Approved OEM due to such early termination and/or JSG incurs additional out-of-pocket wind-down costs, in each case, directly as a result of such early termination, all such reasonable costs shall be payable by SharkNinja subject to (i) JSG providing reasonable notice of all such fees and costs to SharkNinja and (ii) SharkNinja confirming in writing such early termination in view of such fees and costs.

 

Section 6.3       Consequences of Termination; Survival.

 

(a)      Upon the end of the Term (whether by expiration or termination), subject to Section 6.3(b), all services, licenses and rights granted hereunder shall immediately terminate.

 

(b)      Notwithstanding anything to the contrary in this Article VI, Article I, Section 3.3, Section 3.4 (solely with respect to such manufacturer warranties provided during the Term that remain in effect after the Term), Article IV (solely with respect to payment obligations that accrued prior to the effective date of expiration or termination), Article V, this Section 6.3(b), Article VIII and Article IX shall survive the end of the Term (whether by expiration or termination).

 

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ARTICLE VII
representations & warranties

  

Section 7.1       Representations & Warranties. Each Party hereby represents and warrants to the other Party that (i) such first Party has the requisite authority and power, and has taken all requisite actions, to execute and perform this Agreement, and (ii) this Agreement constitutes a legal, valid and binding obligation of such first Party, enforceable against such Party in accordance with its terms.

 

Section 7.2       Disclaimer of Representations & Warranties. EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SDA OR ANY OTHER ANCILLARY AGREEMENTS, THE PARTIES EXPRESSLY DISCLAIM AND WAIVE ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING WITH REGARD TO QUALITY, PERFORMANCE, NON-INFRINGEMENT, NON-DILUTION, VALIDITY, COMMERCIAL UTILITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE), AND EACH ACKNOWLEDGES AND AGREES THAT IT HAS NOT AND WILL NOT RELY ON ANY SUCH REPRESENTATIONS OR WARRANTIES.

 

ARTICLE VIII
indemnification; limitations of liability

 

Section 8.1       Indemnification.

 

(a)      JSG shall indemnify, defend and hold harmless SharkNinja and its Affiliates and their respective directors, officers, employees, representatives and agents (the “SharkNinja Indemnitees”) from and against any and all Indemnifiable Losses of the SharkNinja Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of JSG or its Affiliates in the performance of this Agreement, and (ii) breach by JSG of this Agreement, in each case (in respect of the foregoing clauses (i)-(ii)), except to the extent that such Indemnifiable Losses are subject to indemnification by SharkNinja pursuant to Section 8.1(b).

 

(b)      SharkNinja shall indemnify, defend and hold harmless JSG and its Affiliates and their respective directors, officers, employees, representatives and agents (the “JSG Indemnitees”) from and against any and all Indemnifiable Losses of the JSG Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of SharkNinja or its Affiliates in the performance of this Agreement, (ii) breach by SharkNinja of this Agreement, and (iii) except to the extent subject to indemnification by JSG pursuant to Section 8.1(a), the provision, receipt and use of the Services for, by or on behalf of the SharkNinja Group hereunder, in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by JSG pursuant to Section 8.1(a).

 

Section 8.2       Indemnification Procedures. The indemnification procedures set forth in Section 7.4 of the SDA shall apply to the matters indemnified hereunder, mutatis mutandis.

 

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Section 8.3       Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT (INCLUDING THIS ARTICLE VIII), IN NO EVENT SHALL SHARKNINJA, JSG OR THEIR RESPECTIVE AFFILIATES BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, AT LAW OR IN EQUITY, FOR PUNITIVE, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT (EXCEPT FOR ALL SUCH COMPONENTS OF AWARDS PAID TO A THIRD PARTY IN ANY THIRD-PARTY CLAIM INDEMNIFIED HEREUNDER, INCLUDING COMPONENTS OF SUCH THIRD-PARTY CLAIM RELATING TO ANY OF THE FOREGOING AND ATTORNEYS’ FEES).

 

ARTICLE IX
miscellaneous

 

Section 9.1       Dispute Resolution. The Parties acknowledge and agree that the Article IX of the SDA is hereby incorporated into this Agreement, and shall apply to the transactions contemplated by this Agreement to the extent applicable, mutatis mutandis.

 

Section 9.2       Assignment. Neither this Agreement nor any of the rights, interests or obligations of a Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by such Party without the prior consent of the other Party; provided, that such first Party (i) may assign, in whole or in part, by operation of law or otherwise, this Agreement to one or more of its Affiliates, and (ii) subject to Section 6.2(c), may assign, in whole or in relevant part, by operation of law or otherwise, this Agreement to the successor to all or the relevant portion of the business or assets to which this Agreement relates; provided, further, that (x) the assigning Party shall promptly notify the non-assigning Party in writing of any assignments it makes under the foregoing clause (ii), and (y) in either case of the foregoing clauses (i) or (ii), the party to whom this Agreement is assigned shall agree in writing to be bound by the terms of this Agreement as if named as a “Party” hereto with respect to all or such portion of this Agreement so assigned. Any assignment or other disposition in violation of this Section 9.2 shall be void. No assignment shall relieve the assigning Party of any of its obligations under this Agreement that accrued prior to such assignment unless agreed to by the non-assigning Party.

 

Section 9.3       Entire Agreement; Construction. This Agreement, including the Schedules hereto, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement or Continuing Arrangement (except for the Brand License Agreement), this Agreement shall control, and in the event and to the extent that there shall be a conflict between this Agreement and the Brand License Agreement then the Brand License Agreement shall control.

 

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Section 9.4       Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

 

Section 9.5       Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by email (provided no “error” message or other notification of non-delivery is received by the sender of any such email; followed by delivery of an original via overnight courier service) or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.5):

 

To JSG:

 

JS Global Trading HK Limited
[●]
Attn: [●]
Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Clifford Chance LLP
[●]
Attn: [●]
Email: [●]

 

To SharkNinja:

 

SharkNinja (Hong Kong) Company Limited
[●]
Attn: [●]
Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
[●]
Attn: [●]
Email: [●]

 

Section 9.6       Waivers; Consents. Any provision of this Agreement may be waived, if and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any consent or approval required or permitted to be given by a Party to the other Party or its Affiliates under this Agreement shall be in the sole and absolute discretion of the Party giving, conditioning or denying such consent or approval (unless a different standard is expressly set forth herein therefor), shall only be effective if given in writing and signed by the Party giving such consent and shall be effective only against such Party (and the members of its Group).

 

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Section 9.7       Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

 

Section 9.8       Amendment. This Agreement may not be modified or amended except by an agreement in writing signed by both Parties.

 

Section 9.9       No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is a breach or, in the case where a Party acts in concert with any Person who takes such action, would be a breach of any of the provisions of this Agreement.

 

Section 9.10     Third Party Beneficiaries. Except as specifically provided herein, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon Third Parties any remedy, claim, liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

 

Section 9.11     Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

Section 9.12     Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

 

Section 9.13     Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 9.14     No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.

 

* * * * *

 

[End of page intentionally left blank]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the authorized representatives of the Parties as of the day and year first above written.

 

  SHARKNINJA (HONG KONG) COMPANY LIMITED
   
  By:           
  Name:
  Title:
   
  JS GLOBAL TRADING HK LIMITED
   
  By:  
  Name:
  Title:

 

[Signature Page to Sourcing Services Agreement – JS Global]

 

 

 

 

Exhibit 10.9

 

SOURCING SERVICES AGREEMENT – JOYOUNG

 

This SOURCING SERVICES AGREEMENT – JOYOUNG (this “Agreement”), dated as of [●] (the “Effective Date”), is entered into by and between Joyoung Holdings (Hong Kong) Limited, a private company limited by shares incorporated in Hong Kong, Hangzhou Jiuchuang Household Electric Appliances Co., Ltd., a limited liability company incorporated in the Peoples’ Republic of China, and Hangzhou Joyoung Household Electric Appliances Co., Ltd. a limited liability company incorporated in the Peoples’ Republic of China (collectively, “Joyoung”) and SharkNinja (Hong Kong) Company Limited, a private company limited by shares incorporated in Hong Kong (“SharkNinja”) (each of Joyoung and SharkNinja, a “Party,” and collectively, the “Parties”).

 

WHEREAS, SharkNinja or one of its Affiliates, and JS Global Lifestyle Company Limited (“JSG”), an Affiliate of Joyoung, are entering into that certain Separation and Distribution Agreement, dated as of the Effective Date (the “SDA”), pursuant to which JSG is being separated into two separate, publicly traded companies, one for each of (i) the JS Global Business, which shall be owned and conducted, directly or indirectly, by JS Global and its Affiliates and (ii) the SharkNinja Business, which shall be owned and conducted, directly or indirectly, by SharkNinja and its Affiliates; and

 

WHEREAS, in connection with the transactions contemplated by the SDA, Joyoung wishes to provide to SharkNinja, and SharkNinja wishes to receive from Joyoung, certain product supply services, in each case as and to the extent set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I
DEFINITIONS; INTERPRETATION

 

Section 1.1         Definitions. Capitalized terms used but not defined herein shall have the meaning set forth in the SDA. For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)             “Affiliate” means, when used with respect to a specified Person and at a point in, or with respect to a period of, time, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person at such point in or during such period of time. For the purposes of this definition, “control”, when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that, from and after the Effective Date, solely for purposes of this Agreement, (i) no member of the SharkNinja Group shall be deemed an Affiliate of any member of the JS Global Group, and (ii) no member of the JS Global Group shall be deemed an Affiliate of any member of the SharkNinja Group. The Parties agree and acknowledge that the obligations of the Parties and their respective Affiliates pursuant to this Agreement shall not be impacted by way of (i) Wang Xuning’s ownership of SharkNinja or JSG or (ii) Wang Xuning, Timothy Roberts Warner or Hui Chi Kin Max serving as a director, officer or employee of any member of the SharkNinja Group or the JS Global Group, in each case of the foregoing clauses (i)-(ii), except as otherwise expressly set forth in this Agreement.

 

 

 

(b)             “Approved OEM” means any Third Party original equipment manufacturer, contract manufacturing organization or other similar supplier with respect to the Products that is (i) set forth on Schedule 1, or (ii) proposed by Joyoung after the Effective Date and approved by SharkNinja in writing.

 

(c)             “Arm’s Length Price” refers to the Service Fees or other applicable charges under this Agreement, as determined in accordance with the arm’s length standard under (i) Part 4 of the Taxation (International and Other Provisions) Act 2010, (ii) Treasury Regulations promulgated under Section 482 of the Internal Revenue Code of 1986, as amended, (iii) the Organisation for Economic Cooperation and Development’s transfer pricing guidelines for multinational enterprises and tax administrations, as amended or updated from time to time, or (iv) such other applicable national or multinational standards.

 

(d)             “Confidential Information” means any and all confidential and proprietary Information disclosed by or on behalf of a Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (or, with respect to Joyoung, Approved OEMs) (the “Receiving Party”) under or in connection with this Agreement, whether in writing or in oral, graphic, electronic or any other form, that is designated, marked or otherwise identified by the Disclosing Party in writing as, or that under the circumstances would reasonably be understood to be, confidential or proprietary. Confidential Information excludes any and all Information that is (i) in the public domain, (ii) lawfully acquired after the Effective Date by the Receiving Party from a Third Party not known to be subject to confidentiality obligations with respect to such Information or (iii) independently developed by the Receiving Party after the Effective Date without reference to any Confidential Information of the Disclosing Party.

 

(e)             “Intellectual Property” means any and all rights in or to all intellectual property, including all U.S. and foreign: (i) trademarks, trade dress, service marks, certification marks, logos, slogans, design rights, names, corporate names, trade names, Internet domain names, social media accounts and addresses and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (collectively, “Trademarks”); (ii) patents and patent applications, and any and all related national or international counterparts thereto, including any divisionals, continuations, continuations-in-part, reissues, reexaminations, substitutions and extensions thereof, and any utility models, petty patents and similar rights (collectively, “Patents”); (iii) copyrights, copyright applications and copyrightable subject matter (collectively, “Copyrights”); (iv) trade secrets, and all other confidential or proprietary information, know-how, inventions, processes, formulae, models and methodologies (collectively, “Know-How”); and (v) all applications and registrations for any of the foregoing.

 

(f)             “Products” means any products (or components of products) to be sold by or on behalf of SharkNinja or its Affiliates, or any raw materials to be used in connection with the foregoing (as applicable).

 

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(g)            “VAT” means (i) value added tax chargeable within the United Kingdom in accordance with the VATA 1994 and legislation and regulations supplemental thereto, (ii) inside the European Union, value added tax charged pursuant to Council Directive 2006/112/EC on the common system of value added tax and (iii) outside the United Kingdom and European Union, any similar sales or turnover tax or goods and services tax.

 

Section 1.2         References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. References to the definitions contained in this Agreement are applicable to the other grammatical forms of such terms. Unless the context otherwise requires, the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. The words “written request” when used in this Agreement shall include email. Reference in this Agreement to any time shall be to New York City, New York time unless otherwise expressly provided herein. Unless the context requires otherwise, references in this Agreement to “Joyoung” shall also be deemed to refer to the applicable member of the JS Global Group, references to “SharkNinja” shall also be deemed to refer to the applicable member of the SharkNinja Group and, in connection therewith, any references to actions or omissions to be taken, or refrained from being taken, as the case may be, by Joyoung or SharkNinja shall be deemed to require Joyoung or SharkNinja, as the case may be, to cause the applicable members of the JS Global Group or the SharkNinja Group, respectively, to take, or refrain from taking, any such action.

 

ARTICLE II
Product Supply

 

Section 2.1         Supply; Ancillary Services. SharkNinja and its Affiliates may purchase from Joyoung, and Joyoung shall sell to SharkNinja and its Affiliates, certain Products pursuant to SharkNinja’s and its Affiliates’ written specifications in such quantities as SharkNinja and its Affiliates may order from Joyoung from time to time under this Agreement. Joyoung shall have the right to manufacture such Products ordered by SharkNinja and its Affiliates, or have such Products manufactured by its Affiliates or an Approved OEM. Upon SharkNinja’s or its Affiliates’ request, Joyoung shall provide to SharkNinja and its Affiliates services related to the supply of such Products to SharkNinja and its Affiliates pursuant to this Agreement (e.g., preparation of witness samples or performing testing services), with such services to be charged to SharkNinja and its Affiliates at a reasonable rate to be mutually and reasonably agreed to between the Parties from time to time and subject to the terms and conditions of this Agreement, unless otherwise mutually agreed by the Parties. As between the Parties, Joyoung shall be responsible for supplying or having supplied all raw materials that are needed for the manufacture, packaging and labeling of the Products under this Agreement.

 

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Section 2.2         Procurement Agreements. Joyoung shall ensure (except as otherwise mutually and reasonably agreed in writing between the Parties with respect to any particular Approved OEM) that each written agreement with an Approved OEM negotiated or entered into by Joyoung or its Affiliates after the Effective Date in connection this this Agreement (including, for clarity, amendments and renewals negotiated after the Effective Date to agreements that exist as of the Effective Date) (i) designates SharkNinja (or its designated Affiliate) as an intended third-party beneficiary of, and with rights of direct enforcement under, such agreement with respect to the Products (except if SharkNinja or any of its Affiliates is a party to such agreement), (ii) provides for SharkNinja the rights to (A) coordinate directly with each such OEM with respect to the fulfillment of such orders, and (B) perform quality inspections of each Approved OEM’s facilities under such agreement, (iii) includes any terms and conditions consistent with this Agreement or otherwise as reasonably requested by SharkNinja, and (iv) is provided to SharkNinja upon request by SharkNinja. The Parties acknowledge and agree that SharkNinja may, but is not obligated to, procure the Products from Joyoung during the Term (and, for clarity, nothing herein shall restrict SharkNinja from procuring the Products from Third Parties that are not Approved OEMs or under agreements or relationships not negotiated or managed by Joyoung or its Affiliates, which products for clarity shall not be subject to this Agreement).

 

Section 2.3         Filings & Approvals. If any filing with or notice to, or any approval by, a Governmental Entity of this Agreement, is necessary for Joyoung to fulfill its obligations pursuant to this Article II, Joyoung will promptly notify SharkNinja in writing and, upon SharkNinja’s request, Joyoung shall promptly, at Joyoung’s sole cost and expense, take all actions necessary to make such filing, give such notice or obtain such approval. Joyoung shall reasonably consult and cooperate with SharkNinja and keep SharkNinja reasonably informed in connection with any such filings, notices or approvals.

 

Section 2.4         Forecasts. Joyoung shall ensure that its and its Affiliates’ facilities and the Approved OEMs (as applicable) maintain sufficient manufacturing capacity, qualified and trained personnel, and inventory of component parts to be able to fulfill its obligation to ensure the manufacturing, packaging, labeling and delivery to SharkNinja and its Affiliates of the Products in a timely fashion in accordance with this Agreement. On a quarterly basis (or other period agreed by the Parties), SharkNinja shall provide to Joyoung a rolling forecast indicating SharkNinja’s and its Affiliates’ anticipated Product requirements during the following quarter (or other agreed-upon period), which forecast SharkNinja may update as needed. Joyoung shall use such forecast to provide to SharkNinja production projections on an ongoing basis. The Parties acknowledge and agree that such production projections are intended solely for planning purposes, and shall not replace or constitute a Purchase Order.

 

Section 2.5         Purchase Orders; Precedence. SharkNinja and its Affiliates may use their standard purchase order form for any Products ordered from Joyoung hereunder (each, a “Purchase Order”). Each Purchase Order shall specify the type and quantity of Products to be supplied, the freight type, the delivery dates and the destinations for the delivery of the Products and any other terms consistent with this Agreement which SharkNinja may reasonably specify. Joyoung shall only manufacture Products, or have Products manufactured by its Affiliates or Approved OEMs, for SharkNinja and its Affiliates (i) after receiving a Purchaser Order from SharkNinja and (ii) in compliance with each such Purchaser Order. In the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of any Purchase Order, acknowledgement form or other similar instrument, the terms and conditions of this Agreement shall prevail.

 

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Section 2.6         Purchase Order Acceptance; Assurances. Purchase Orders shall be deemed accepted by Joyoung; provided, that Joyoung may reject any Purchase Order in the event that any such Purchase Order is not in accordance with this Agreement (including if, and to the extent, mutually agreed pursuant to Section 2.9) by providing notice to SharkNinja within ten (10) Business Days of receipt of such Purchase Order. If Joyoung rejects any Purchase Order, or any portion thereof, Joyoung shall provide, in addition to such rejection, a reasonably detailed explanation for the reason for such rejection. SharkNinja may correct any defect in any Purchase Order and resubmit such Purchase Order before the order is shipped. Upon acceptance of each Purchase Order, Joyoung shall be obligated to manufacture and supply, or have manufactured and supplied, to SharkNinja the amounts of the Products set forth on such Purchase Order in accordance with this Agreement and such Purchase Order. Upon acceptance of each Purchase Order or upon the reasonable request of SharkNinja, Joyoung shall provide written assurances to SharkNinja regarding Joyoung’s ability to fulfill all accepted Purchase Orders.

 

Section 2.7         Cancellation; Rescheduling of Orders. Following the occurrence of an event affecting SharkNinja’s need for Products ordered from Joyoung under this Agreement, SharkNinja may cancel or decrease any Purchase Order accepted by Joyoung, and may reschedule any delivery dates specified in any Purchase Order. Joyoung shall use commercially reasonable efforts to (i) comply with such rescheduling and (ii) avoid or mitigate any costs and expenses related to such cancellation, decrease or rescheduling. In the event of any such cancellation, decrease or rescheduling, SharkNinja’s sole liability to Joyoung (in addition to payment of the applicable Supply Fees for Products delivered to SharkNinja in accordance with this Agreement) shall be to pay Joyoung the documented amount of costs incurred directly and reasonably by Joyoung in connection with such cancellation, decrease or rescheduling despite Joyoung’s commercially reasonable efforts, or such other amount as the Parties may mutually and reasonably agree in writing.

 

Section 2.8         Samples. SharkNinja may request Joyoung to ship sample Products to SharkNinja to show Product conformity to the applicable specifications and criteria. Upon receipt of such request, Joyoung shall ship such sample Products to SharkNinja at Joyoung’s cost.

 

Section 2.9         Additional Terms. Following the Effective Date, the Parties shall discuss in good faith and use commercially reasonable efforts to mutually and reasonably agree in writing on any additional terms and conditions that will apply to the Supply of Products by or on behalf of Joyoung to SharkNinja under this Agreement (e.g., with respect to lead times, forecast and supply collars, time periods for inspection on delivery, etc.), and following such written agreement such agreed-to terms shall apply.

 

ARTICLE III
production management & quality control

 

Section 3.1         Product Specifications. Joyoung shall use commercially reasonable efforts to ensure that each Approved OEM strictly complies with (or exceeds) all specifications for the Products of which Joyoung receives reasonable written notice from SharkNinja or that have been approved by SharkNinja (as such specifications may be amended or otherwise changed from time to time by SharkNinja upon reasonable advance written notice to Joyoung). If either Party or any of their Affiliates becomes aware of any change in applicable Law that would, or would reasonably be expected to, cause the Products, or the specifications for such Products, to not be in compliance with applicable Law, such Party shall promptly notify the other Party in writing of such change in applicable Law, and the Parties shall cooperate in good faith to amend such specifications to the extent necessary to cure such non-compliance.

 

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Section 3.2         Product Standards. Joyoung shall cause the Approved OEMs to manufacture the Products in accordance with all applicable Laws (including in the country of manufacture and, to the extent of Joyoung’s knowledge of the intended location of intended sale, the country in which such Products are intended to be sold) and industry standards.

 

Section 3.3         Testing; Destruction.

 

(a)             Before shipping any Products, Joyoung shall inspect and test the Products in accordance with any and all applicable testing and quality assurance procedures as directed by SharkNinja, which testing and quality assurance procedures SharkNinja may update, modify or supplement from time to time.

 

(b)            SharkNinja shall have the right, but not the obligation, to inspect or otherwise approve any Product before accepting delivery of such Product. No inspection or other action by SharkNinja will in any way obligate SharkNinja to retain any Products which, upon subsequent inspection, prove to be defective or nonconforming. In the event that a Product is determined to be nonconforming or defective in SharkNinja’s sole and reasonable judgment, SharkNinja shall have the right to reject all other Products from the same lot as the nonconforming or defective Product without being required to inspect such other Products and regardless of when such other Products were or are delivered to SharkNinja. Upon SharkNinja’s request, Joyoung shall cooperate to enable SharkNinja to inspect any Product at the facilities of Joyoung, its Affiliates or an Approved OEM, as applicable. If SharkNinja’s inspection reveals that any Product is defective or nonconforming, SharkNinja shall return such Product to Joyoung for correction. Joyoung shall bear all costs and expenses associated with the correction of any such returned Product and payment of Invoices associated with such Products shall be delayed and shall not become due until delivery of corrected Product properly tested and inspected.

 

(c)             Defective or nonconforming Products, to the extent not corrected and accepted by SharkNinja, shall be destroyed promptly (and in any event within five (5) days) by Joyoung at Joyoung’s cost, and Joyoung shall provide to SharkNinja proof of such destruction.

 

Section 3.4         Governmental Inquiries. Joyoung shall respond promptly and completely, consistent with its general practices, to answer any inquiries from Governmental Entities regarding the Products, and shall provide all necessary information and documents in case of inspection; provided, that Joyoung shall not, and shall cause its Affiliates not to, make any significant communication to any Governmental Entity regarding the Products or other subject matter of this Agreement before such communication is approved in writing by SharkNinja, except where not permitted by applicable Law. Joyoung shall reasonably cooperate and consult with and keep SharkNinja reasonably informed in connection with any such inquiries or inspections.

 

Section 3.5         Inventory. Joyoung shall maintain, and shall use commercially reasonable efforts to ensure that the Approved OEMs maintain, a sufficient stock of raw materials and packaging materials (to the extent applicable) to supply the Products to SharkNinja and its designated Affiliates in accordance with this Agreement and the written agreements with such Approved OEMs.

 

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Section 3.6         Quality Inspections. SharkNinja and its designated Affiliates shall have the right to perform quality inspections of (i) any Approved OEM’s facilities in conjunction with inspections conducted by Joyoung or its Affiliates, in each case subject to the terms of the applicable agreements with each such Approved OEM, and (ii) Joyoung and its Affiliates, in each case in connection with the Products. Joyoung shall notify SharkNinja at least ten (10) Business Days prior to a scheduled quality inspection of an Approved OEM’s facilities, and SharkNinja shall be entitled to send representatives to participate in such inspection.

 

Section 3.7         Product Manufacturing Restriction. Joyoung acknowledges and agrees that it cannot, and shall cause its Affiliates and the Approved OEMs not to, manufacture, package, label, sell or give away any of the Products to any Person other than SharkNinja or its Affiliates, without the explicit prior written consent of SharkNinja, except to the extent expressly authorized under the Brand License Agreement. Without limitation to any remedies available to SharkNinja at Law, any violation of this Section 3.7, whether by Joyoung, its Affiliates or an Approved OEM, shall constitute an infringement of SharkNinja’s Intellectual Property rights, an act of counterfeiting, and a material breach of this Agreement.

 

ARTICLE IV
service fees; PAYMENT TERMS

 

Section 4.1         Supply Fee. In consideration of the supply of Products and Joyoung’s other obligations pursuant to Article II, SharkNinja shall pay to Joyoung an amount determined on a cost-plus basis to be mutually and reasonably agreed between the Parties from time to time (based on Joyoung’s cost to manufacture Products ordered by SharkNinja and its Affiliates, or Joyoung’s cost to have such Products manufactured by an Approved OEM, as applicable) and set forth in each Purchase Order (collectively, the “Supply Fees”).

 

Section 4.2         Arm’s Length Pricing. The Parties shall periodically review the amounts and other terms of all Supply Fees and other payments hereunder to ensure that such payments constitute Arm’s Length Prices. If such review determines that any such payment does not constitute an Arm’s Length Price, then a Party may receive additional compensation from the other Party or may pay additional compensation to the other Party, as necessary, and the Parties may adjust the terms of any Supply Fees or other payments thereafter in accordance with Section 10.8.

 

Section 4.3         Payment Terms.

 

(a)             Joyoung shall invoice SharkNinja or its designated Affiliate for the Supply Fees incurred in connection with all Products ordered by SharkNinja and its applicable Affiliates at the time of shipment (each, a “Invoice”), and SharkNinja or its designated Affiliate shall pay all uncontested amounts set forth on each Invoice within sixty (60) days of receipt of such Invoice; provided, that such payment shall not constitute acceptance of non-conforming or defective Products. Joyoung shall issue a separate Invoice for each delivery or receipt and will ensure that each Invoice references the Purchaser Order number to which it is attached. All Invoices, bills of lading and freight bills for the Products shall be delivered to SharkNinja at the address shown on the face of the applicable Purchase Order, or via email or other electronic means mutually agreed to by the Parties. All Supply Fees shall be calculated and paid in U.S. dollars (or, if necessary for legal or tax concerns, other reasonable currency mutually agreed upon by the Parties in writing) in immediately available funds to a bank account designated by Joyoung in writing to SharkNinja. For purposes of determining the Supply Fees due and payable in U.S. dollars, the exchange rate shall be determined at the date on which such amount is remitted by SharkNinja, as reported by the Wall Street Journal (or similar or successor publication if the Wall Street Journal is no longer published).

 

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(b)            If SharkNinja fails to make a Supply Fee payment within ninety (90) days of when due, SharkNinja shall be required to pay, in addition to any such unpaid amounts, interest on such amounts at (i) the Prime Rate, plus two hundred (200) basis points, or (ii) if lower, the highest rate of interest permitted by applicable Law at such time, in each case compounded monthly from, and including, the relevant due date through the actual date of payment.

 

(c)            Except as set forth in Section 4.4, SharkNinja shall make all Supply Fee payments to Joyoung without set-off, deduction, recoupment or withholding of any kind for Supply Fees or other amounts owed or payable by Joyoung or its Affiliates to SharkNinja or its Affiliates, whether under this Agreement or any other Ancillary Agreement, applicable Law or otherwise.

 

(d)            All amounts treated for the purposes of any VAT as consideration for a supply made pursuant to this Agreement shall be exclusive of applicable VAT. Where Joyoung is required to account for any VAT to a relevant Tax authority, SharkNinja shall, subject to the receipt of a valid VAT invoice, pay to Joyoung (in addition to, and at the same time as, the consideration) the amount of such VAT.

 

Section 4.4         Taxes. All payments made to Joyoung under this Agreement shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law requires the deduction or withholding of any Tax from any payment to Joyoung, then (i) SharkNinja shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Entity in accordance with applicable Law, and (ii) the sum payable to Joyoung shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 4.4), Joyoung receives an amount equal to the sum it would have received had no such deduction or withholding been made. If any payment made pursuant to this Agreement is eligible for a reduction in the rate of, or the elimination of, any applicable withholding Tax, the Parties agree to cooperate and use commercially reasonable efforts to reduce the applicable rate of withholding or to relieve SharkNinja of its obligation to withhold such Tax; provided, that for the avoidance of doubt, such cooperation and the provisions of this Section 4.4 shall not require Joyoung to alter the entities receiving payments under this Agreement.

 

Section 4.5         Transfer Pricing. If any Party (“the first Party”) suffers a transfer pricing adjustment in relation to any amount paid or payable under this Agreement and that adjustment increases the Tax payable by (or decreases the Tax relief available to) the first Party, the other Party (“the second Party”) shall make a payment to the first Party in an amount equal to that increase in Tax (or decrease in relief). The second Party shall make any payment due hereunder no less than ten (10) days before the Tax referred to in that clause (including any Tax that would not have been payable, or which is payable earlier than would have been the case, if any Tax relief had not been decreased) is payable. For purposes of this Section 4.5, a “transfer pricing adjustment” is any adjustment to the profits or losses of a person for Tax purposes asserted by a Tax authority whether by way of assessment or reassessment or otherwise and includes any such adjustment under Part 4 of the Taxation (International and Other Provisions) Act 2010. The Parties agree to pursue all reasonable legal remedies to avoid double taxation that may result from such a transfer pricing adjustment or from any conforming or correlative adjustments that may be necessary on account of such transfer pricing adjustment.

 

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ARTICLE V
confidentiality

 

Section 5.1         Confidentiality. Each Party acknowledges that, in connection with this Agreement, it or its Affiliates (and, with respect to Joyoung, Approved OEMs) may gain access to Confidential Information of the other Party or its Affiliates. Each Receiving Party shall, in perpetuity, (i) not use the Confidential Information of the Disclosing Party, other than as necessary to exercise its rights and perform its obligations under this Agreement, and (ii) maintain the Confidential Information of the Disclosing Party in strict confidence and, subject to Section 5.2, not disclose the Confidential Information of the Disclosing Party without the Disclosing Party’s prior written consent; provided, that the Receiving Party may disclose the Confidential Information as otherwise permitted in this Article V.

 

Section 5.2         Disclosure. The Receiving Party may disclose, or may permit disclosure of, Confidential Information of the Disclosing Party (i) to its respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such Information for auditing and other non-commercial purposes and are informed of the obligation to hold such Information confidential and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any Party or any of its respective Affiliates is required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule or is advised by outside counsel in connection with a proceeding brought by a Governmental Entity that it is advisable to do so, (iii) as required in connection with any legal or other proceeding by one Party (or member of its Group) against the other Party (or member of such other Party’s Group) or in respect of claims by one Party against the other Party (or member of such other Party’s Group) brought in a proceeding, (iv) as necessary in order to permit a Party (or member of its Group) to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (v) as necessary for a Party (or member of its Group) to enforce its rights or perform its obligations under this Agreement, (vi) to Governmental Entities in accordance with applicable procurement regulations and contract requirements or (vii) to other Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic or financing transaction, to the extent reasonably necessary in connection therewith; provided, that an appropriate and customary confidentiality agreement has been entered into with the Person receiving such Confidential Information. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made by a Third Party pursuant to clause (ii), (iii), (v) or (vi) above, each Party, as applicable, shall promptly notify (to the extent permissible by Law) the Party to whom (or to whose Group) the Confidential Information relates of the existence of such request, demand or disclosure requirement and shall provide such affected Party (and/or any applicable member of its Group) a reasonable opportunity to seek an appropriate protective order or other remedy, which such Party will cooperate in obtaining to the extent reasonably practicable. In the event that such appropriate protective order or other remedy is not obtained, the Party which faces the disclosure requirement shall furnish only that portion of the Confidential Information that is required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Confidential Information.

 

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ARTICLE VI
INTELLECTUAL PROPERTY

 

Section 6.1         License to Intellectual Property. SharkNinja hereby grants to Joyoung a non-exclusive, royalty-free, non-transferable (except as set forth in Section 10.2), worldwide, sublicensable (solely to Joyoung’s Affiliates and Approved OEMs) license during the Term to the Intellectual Property owned or licensable (as permitted under applicable agreements with Third Parties) by SharkNinja and its Affiliates, solely to the extent necessary for, and solely for the purpose of, the supply of Products by Joyoung to SharkNinja under this Agreement. The Parties shall cooperate in good faith to negotiate a license agreement reflecting the license of Intellectual Property granted herein to the extent required by applicable Law.

 

Section 6.2         SharkNinja Intellectual Property. SharkNinja shall own the entire right, title and interest to any Intellectual Property, and to any applicable portions of the Products and associated documentation that have been developed by Joyoung, its Affiliates or any Approved OEM specifically for SharkNinja pursuant to this Agreement, utilizing SharkNinja’s property and specifications. Any such applicable portions of the Products will be deemed Newly Created Intellectual Property (as defined below).

 

Section 6.3         Joyoung Intellectual Property. To the extent Joyoung, its Affiliates or any Approved OEM develops or otherwise implements any improvements to its manufacturing, packaging and labeling processes that are not related to the Products (such improvements, “Supplier Created Intellectual Property”) as part of performing its obligations under this Agreement, Joyoung shall promptly notify SharkNinja of such improvements. Joyoung hereby grants, and will grant, to SharkNinja a royalty-free, non-exclusive, non-transferable and non-assignable (except as expressly permitted in Section 10.2) perpetual, irrevocable and sublicensable right and license to use such Supplier Created Intellectual Property.

 

Section 6.4         Newly Created Intellectual Property. “Newly Created Intellectual Property” means, other than Supplier Existing Intellectual Property and Supplier Created Intellectual Property, any and all Intellectual Property, tangible embodiments thereof and other materials created, developed or otherwise resulting from the performance of obligations by either or both Parties or their Affiliates (including but not limited to, the agents, partners or representatives of either Party or its Affiliates) under this Agreement, whether or not related to the Products or otherwise. The Newly Created Intellectual Property constitutes “works made for hire” for SharkNinja, and SharkNinja shall be considered the author and shall be the owner of the Newly Created Intellectual Property and all Intellectual Property embodied therein or related thereto. If any Newly Created Intellectual Property does not qualify for treatment as “works made for hire,” or if Joyoung otherwise retains any interest in any Newly Created Intellectual Property for any other reason, Joyoung hereby grants, assigns and transfers, and shall grant, assign and transfer, to SharkNinja all ownership and interest in such Newly Developed Intellectual Property, including without limitation any and all Intellectual Property in and to any Newly Created Intellectual Property or that claim or cover any Newly Created Intellectual Property. Joyoung acknowledges that all Approved OEMs for Joyoung under this Agreement have executed appropriate agreements with Joyoung so that Joyoung may fulfill Joyoung’s obligations under this Section 6.4. Joyoung agrees to execute any documents of assignment or registration requested by SharkNinja relating to any and all Newly Created Intellectual Property. Joyoung agrees to cooperate fully with SharkNinja, both during and after the engagement, with respect to the procurement, maintenance and enforcement of Intellectual Property in or related to Newly Created Intellectual Property. If any Newly Created Intellectual Property is unable to be assigned and transferred to SharkNinja due to any reason, Joyoung shall grant to SharkNinja a royalty-free, perpetual, exclusive, transferable, assignable and sublicensable right and license to use the Newly Created Intellectual Property. Unless expressly stipulated herein or as set forth in another Ancillary Agreement, the Intellectual Property owned by any Party prior to the signing hereof that is obtained, developed or produced by either party independently (not based on this Agreement or the information, materials or licenses provided by the other party pursuant to this Agreement) during the term of this Agreement shall be exclusively owned by that Party and will not be transferred, shared to any other Party or licensed to use by the other Party due to the signing of this Agreement.

 

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ARTICLE VII
term; termination

 

Section 7.1         Term. This Agreement shall commence as of the Effective Date and, unless and until earlier terminated in accordance with Section 7.2, shall continue in full force and effect until the date that is three (3) years from the Effective Date, and shall thereafter automatically renew for successive twelve (12) month periods, subject to applicable Law (such initial three (3) year period, together with any renewal periods, collectively the “Term”).

 

Section 7.2         Termination.

 

(a)        Mutual Termination. The Parties may terminate this Agreement upon the mutual consent of both Parties.

 

(b)       Termination for Breach. Each Party may terminate this Agreement upon thirty (30) days’ prior written notice to the other Party in the event that the other Party (i) materially breaches this Agreement, and (ii) does not cure such breach within such thirty (30) day period.

 

(c)        Termination for Assignment. Either Party may terminate this Agreement (or the applicable portion) upon written notice to the other Party in the event that the other Party assigns this Agreement (or such applicable portion) to a Third Party, with such termination to be effective as of the date designated by such terminating Party.

 

(d)        Other Termination. SharkNinja may terminate this Agreement at its discretion upon forty five (45) days’ prior written notice to Joyoung.

 

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Section 7.3         Consequences of Termination; Survival.

 

(a)            Upon the end of the Term (whether by expiration or termination), subject to Section 7.3(b), (i) all services and, except as expressly set forth herein, licenses and rights granted hereunder shall immediately terminate, (ii) Joyoung shall immediately cease using any and all Intellectual Property of SharkNinja or its Affiliates, except as otherwise permitted pursuant to a written agreement between the Parties or their respective Affiliates, and (iii) Products not completed or delivered to SharkNinja shall be destroyed promptly by Joyoung in reasonable consultation with SharkNinja, at Joyoung’s cost and with proof of destruction provided to SharkNinja, except that such destruction shall be at SharkNinja’s cost (for reasonable out-of-pocket costs and expenses incurred by Joyoung) in the event of termination by (x) Joyoung pursuant to Section 7.2(b) or Section 7.2(c) or (y) SharkNinja pursuant to Section 7.2(d).

 

(b)            Notwithstanding anything to the contrary in this Article VII, Article I, Section 3.4, Section 3.7, Article IV (solely with respect to payment obligations that accrued prior to the effective date of expiration or termination), Article V, Section 6.2, Section 6.3, Section 6.4, Section 7.3, Article VIII, Article IX and Article X shall survive the end of the Term (whether by expiration or termination).

 

ARTICLE VIII
representations & warranties

 

Section 8.1         Representations & Warranties.

 

(a)            Each Party hereby represents and warrants to the other Party that (i) such first Party has the requisite authority and power, and has taken all requisite actions, to execute and perform this Agreement, and (ii) this Agreement constitutes a legal, valid and binding obligation of such first Party, enforceable against such Party in accordance with its terms.

 

(b)            Joyoung represents and warrants to SharkNinja that: (i) each Product has been manufactured, tested, packaged and labeled in accordance with this Agreement and applicable Law, including regulations applicable to the same and distribution of the Products; (ii) the Products will have been manufactured, tested, packaged and labeled in accordance with the applicable specifications and will be free from defects in workmanship for a period ending on the later of twelve (12) months from the date of receipt by SharkNinja or the expiration date (if any) on the Product; (iii) the Products and all components, parts and subassemblies that comprise the Products and that appear on the bill of materials for the Products are in compliance with applicable Law.

 

(c)            Joyoung represents and warrants to SharkNinja that: (i) to Joyoung’s knowledge, no manufacturing, packaging or labeling process or method that will be used by Joyoung or any Approved OEM to manufacture or provide the Products will infringe or violate any Intellectual Property of any Third Party, and (ii) no claim or action is pending or threatened against Joyoung or its Affiliates or, to Joyoung’s knowledge, any licensor or supplier of Joyoung, or any Approved OEM, that would adversely affect the ability of Joyoung to produce or have produced the Products under this Agreement or the right of SharkNinja to use the Products for their intended use.

 

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Section 8.2         Limitations; Remedies.

 

(a)            Joyoung’s representations and warranties set forth in Section 8.1(b) shall not apply to: (i) defects directly resulting from the specifications or design of the Products to the extent expressly set forth in the specifications provided or otherwise explicitly required by SharkNinja; or (ii) defects to the extent directly resulting from Product that has been abused, damaged, altered or misused by any Person after such Product has been delivered to and received by SharkNinja.

 

(b)            Without limitation to any other remedies available under this Agreement or applicable Law, in the event of any breach of Joyoung’s representations and warranties set forth in Section 8.1(b), Joyoung shall, at the option of SharkNinja, promptly repair or replace such Product at no additional cost to SharkNinja or refund the purchase price of such Product, and in each case Joyoung shall reimburse SharkNinja for any additional costs incurred by SharkNinja as a result of such breach of warranty. Shipping costs associated with the return of defective Products to Joyoung and the return of any repaired or replacement Products to SharkNinja shall be borne by Joyoung.

 

Section 8.3         Manufacturer Warranty Passthrough. Joyoung shall, and shall cause its Affiliates and the Approved OEMs to, transfer and assign to SharkNinja or its designated Affiliate all express and implied manufacturer warranties pertaining to the Products or any component thereof, in each case subject to the terms of the applicable agreements with such Approved OEMs.  To the extent that Joyoung, its Affiliate or an Approved OEM is unable to transfer and assign such rights, then Joyoung shall, and shall cause such Affiliate or Approved OEM to, make available to SharkNinja or its designated Affiliate all rights that Joyoung and its Affiliates hold pursuant to such manufacturer warranties and shall cooperate with SharkNinja in enforcing such warranties, at no additional charge (other than reasonable out-of-pocket costs incurred by Joyoung and its Affiliates in connection therewith) and in each case subject to the terms of the applicable agreements with such Approved OEM. Without limiting the generality of the foregoing in this Section 8.3, Joyoung shall obtain and pass through to SharkNinja the following warranties with regard to the Products from any and all Approved OEMs: (i) conformance of the Products with the applicable specifications and with the Purchase Orders; (ii) that the Products will be free from defects in workmanship; and (iii) that the Products will comply with applicable Law.

 

Section 8.4         Limitation of Warranty. The warranty provided by Joyoung to SharkNinja under this Agreement that the production, packaging and labeling of Products comply with applicable laws and regulations, and that Products comply with the specifications and the Purchase Orders shall be limited to the Purchase Orders issued by SharkNinja to Joyoung and the information provided SharkNinja in writing to Joyoung before production. SharkNinja shall specify all specification requirements for Products, SharkNinja’s country destination of shipment and other order information of SharkNinja in the Purchase Orders and/or other written documents (“Other Written Documents”). SharkNinja shall specify SharkNinja’s country destination of sales in such Other Written Documents. Joyoung shall undertake any additional warranty liability to SharkNinja only to the extent agreed in such Purchase Orders and/or Other Written Documents. In the event that SharkNinja fails to specify the above information in Purchase Orders and/or Other Written Documents, Joyoung cannot and is not required to undertake corresponding warranty liability to SharkNinja to the actually extent impacted by the absence of such information.

 

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Section 8.5         Disclaimer of Representations & Warranties. EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT (INCLUDING IN THIS ARTICLE VIII), THE SDA OR ANY OTHER ANCILLARY AGREEMENTS, THE PARTIES EXPRESSLY DISCLAIM AND WAIVE ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING WITH REGARD TO QUALITY, PERFORMANCE, NON-INFRINGEMENT, NON-DILUTION, VALIDITY, COMMERCIAL UTILITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE), AND EACH ACKNOWLEDGES AND AGREES THAT IT HAS NOT AND WILL NOT RELY ON ANY SUCH REPRESENTATIONS OR WARRANTIES.

 

ARTICLE IX
indemnification; limitations of liability

 

Section 9.1         Indemnification.

 

(a)             Joyoung shall indemnify, defend and hold harmless SharkNinja and its Affiliates and their respective directors, officers, employees, representatives and agents (the “SharkNinja Indemnitees”) from and against any and all Indemnifiable Losses of the SharkNinja Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of Joyoung or its Affiliates in the performance of this Agreement, (ii) breach by Joyoung of this Agreement, and (iii) any infringement, misappropriation or other violation of Intellectual Property rights of a Third Party to the extent such infringement, misappropriation or other violation results from a process used by or on behalf of Joyoung, its Affiliates or the Approved OEMs to manufacture the Products or otherwise fulfill Joyoung’s obligations under this Agreement (except to the extent such process is expressly set forth in the specifications provided by SharkNinja or otherwise explicitly required by SharkNinja), in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by SharkNinja pursuant to Section 9.1(b).

 

(b)            SharkNinja shall indemnify, defend and hold harmless Joyoung and its Affiliates and their respective directors, officers, employees, representatives and agents (the “Joyoung Indemnitees”) from and against any and all Indemnifiable Losses of the Joyoung Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of SharkNinja or its Affiliates in the performance of this Agreement, (ii) breach by SharkNinja of this Agreement, and (iii) except to the extent subject to indemnification by Joyoung pursuant to Section 9.1(a), the manufacture of the Products for and sale of such Products by SharkNinja in accordance with this Agreement, in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by Joyoung pursuant to Section 9.1(a).

 

Section 9.2         Indemnification Procedures. The indemnification procedures set forth in Section 7.4 of the SDA shall apply to the matters indemnified hereunder, mutatis mutandis.

 

Section 9.3         Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT (INCLUDING THIS ARTICLE IX), IN NO EVENT SHALL SHARKNINJA, JOYOUNG OR THEIR RESPECTIVE AFFILIATES BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, AT LAW OR IN EQUITY, FOR PUNITIVE, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT (EXCEPT FOR ALL SUCH COMPONENTS OF AWARDS PAID TO A THIRD PARTY IN ANY THIRD-PARTY CLAIM INDEMNIFIED HEREUNDER, INCLUDING COMPONENTS OF SUCH THIRD-PARTY CLAIM RELATING TO ANY OF THE FOREGOING AND ATTORNEYS’ FEES).

 

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ARTICLE X
miscellaneous

 

Section 10.1        Dispute Resolution. The Parties acknowledge and agree that the Article IX of the SDA is hereby incorporated into this Agreement, and shall apply to the transactions contemplated by this Agreement to the extent applicable, mutatis mutandis.

 

Section 10.2        Assignment. Neither this Agreement nor any of the rights, interests or obligations of a Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by such Party without the prior consent of the other Party; provided, that such first Party (i) may assign, in whole or in part, by operation of law or otherwise, this Agreement to one or more of its Affiliates, and (ii) subject to Section 7.2(c), may assign, in whole or in part, by operation of law or otherwise, this Agreement to the successor to all or the relevant portion of the business or assets to which this Agreement relates; provided, further, that (x) the assigning Party shall promptly notify the non-assigning Party in writing of any assignments it makes under the foregoing clause (ii), and (y) in either case of the foregoing clauses (i) or (ii), the party to whom this Agreement is assigned shall agree in writing to be bound by the terms of this Agreement as if named as a “Party” hereto with respect to all or such portion of this Agreement so assigned. Any assignment or other disposition in violation of this Section 10.2 shall be void. No assignment shall relieve the assigning Party of any of its obligations under this Agreement that accrued prior to such assignment unless agreed to by the non-assigning Party.

 

Section 10.3        Entire Agreement; Construction. This Agreement, including the Schedules hereto, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement or Continuing Arrangement (except for the Brand License Agreement), this Agreement shall control, and in the event and to the extent that there shall be a conflict between this Agreement (including, for clarity, the terms and conditions set forth in Article VI) and the Brand License Agreement then the Brand License Agreement shall control.

 

Section 10.4        Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

 

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Section 10.5        Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by email (provided no “error” message or other notification of non-delivery is received by the sender of any such email; followed by delivery of an original via overnight courier service) or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.5):

 

To Joyoung (including any and all entities therein):

 

Joyoung Holdings (Hong Kong) Limited
[●]
Attn: [●]
Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Clifford Chance LLP
[●]
Attn: [●]
Email: [●]

 

To SharkNinja:

 

SharkNinja (Hong Kong) Company Limited
[●]
Attn: [●]
Email: [●]

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
[●]
Attn: [●]
Email: [●]

 

Section 10.6       Waivers; Consents. Any provision of this Agreement may be waived, if and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any consent or approval required or permitted to be given by a Party to the other Party or its Affiliates under this Agreement shall be in the sole and absolute discretion of the Party giving, conditioning or denying such consent or approval (unless a different standard is expressly set forth herein therefor), shall only be effective if given in writing and signed by the Party giving such consent and shall be effective only against such Party (and the members of its Group).

 

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Section 10.7       Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

 

Section 10.8        Amendment. This Agreement may not be modified or amended except by an agreement in writing signed by both Parties.

 

Section 10.9       No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is a breach or, in the case where a Party acts in concert with any Person who takes such action, would be a breach of any of the provisions of this Agreement.

 

Section 10.10     Third Party Beneficiaries. Except as specifically provided herein, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon Third Parties any remedy, claim, liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

 

Section 10.11     Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

Section 10.12      Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

 

Section 10.13     Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 10.14      No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.

 

* * * * *

 

[End of page intentionally left blank]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the authorized representatives of the Parties as of the day and year first above written.

 

  SHARKNINJA (HONG KONG) COMPANY LIMITED
   
  By:             
  Name: 
  Title:
   
  JOYOUNG HOLDINGS (HONG KONG) LIMITED
   
  By:  
  Name:  
  Title:
   
  HANGZHOU JIUCHUANG HOUSEHOLD ELECTRIC APPLIANCES CO., LTD
   
  By:  
  Name: 
  Title:
   
  HANGZHOU JOYOUNG HOUSEHOLD ELECTRIC APPLIANCES CO., LTD.
   
  By:  
  Name: 
  Title:

 

[Signature Page to Sourcing Services Agreement – Joyoung]

 

 

 

Exhibit 10.10

 

PRODUCT DEVELOPMENT AGREEMENT

 

BY AND BETWEEN

 

SHARKNINJA EUROPE LTD.

 

AND

 

JS GLOBAL TRADING HK LIMITED

 

Dated as of [●], 2023

  

 

 

PRODUCT DEVELOPMENT AGREEMENT

 

This PRODUCT DEVELOPMENT AGREEMENT (this “Agreement”), dated as of [●], 2023 (the “Effective Date”), between SharkNinja Europe Ltd., a private limited company incorporated under the laws of England and Wales (“SharkNinja”), and JS Global Trading HK Limited, a private company limited by shares incorporated in Hong Kong (“JS Global”). “Party” or “Parties” means SharkNinja or JS Global, individually or collectively, as the case may be.

 

RECITALS

 

WHEREAS, SharkNinja and JS Global, or their respective Affiliates, are entering into that certain Separation and Distribution Agreement, dated as of the Effective Date (the “SDA”), pursuant to which JS Global is being separated into two separate, publicly traded companies, one for each of (i) the JS Global Business, which shall be owned and conducted, directly or indirectly, by JS Global and its Affiliates and (ii) the SharkNinja Business, which shall be owned and conducted, directly or indirectly, by SharkNinja and its Affiliates;

 

WHEREAS, in connection with the transactions contemplated by the SDA, JS Global wishes to receive from SharkNinja, and SharkNinja is willing to provide, certain (i) general product management and strategic planning services to support JS Global’s product strategy and roadmap in the JSG Territory, (ii) product development/R&D services; and (iii) product procurement and supply chain services, in each case as and to the extent set forth herein; and

 

WHEREAS, this Agreement constitutes the Product Development Agreement referred to in the SDA.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

Article I

 

DEFINITIONS

 

Section 1.01           Certain Defined Terms. Capitalized terms used but not defined herein shall have the meaning set forth in the SDA. For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)            “Affiliate” means, when used with respect to a specified Person and at a point in, or with respect to a period of, time, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person at such point in or during such period of time. For the purposes of this definition, “control”, when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that, from and after the Disposition Date, solely for purposes of this Agreement, (i) no member of the SharkNinja Group shall be deemed an Affiliate of any member of the JS Global Group and (ii) no member of the JS Global Group shall be deemed an Affiliate of any member of the SharkNinja Group. The Parties agree and acknowledge that the obligations of the Parties and their respective Affiliates pursuant to this Agreement shall not be impacted by way of (i) Wang Xuning’s ownership of SharkNinja or JS Global or (ii) Wang Xuning, Timothy Roberts Warner or Hui Chi Kin Max serving as a director, officer or employee of any member of the SharkNinja Group or the JS Global Group, in each case of the foregoing clauses (i)-(ii), except as otherwise expressly set forth in this Agreement.

 

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(b)            “Arm’s Length Price” refers to the Service Fees or other applicable charges under this Agreement, as determined in accordance with the arm’s length standard under (i) Part 4 of the Taxation (International and Other Provisions) Act 2010, (ii) Treasury Regulations promulgated under Section 482 of the Internal Revenue Code of 1986, as amended, (iii) the Organisation for Economic Cooperation and Development’s transfer pricing guidelines for multinational enterprises and tax administrations, as amended or updated from time to time, or (iv) such other applicable national or multinational standards.

 

(c)            “Brand License Agreement” means the Brand License Agreement by and between JS Global and SharkNinja.

 

(d)            “Confidential Information” means any and all confidential and proprietary Information disclosed by or on behalf of a Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”) under or in connection with this Agreement, whether in writing or in oral, graphic, electronic or any other form, that is designated, marked or otherwise identified by the Disclosing Party in writing as, or that under the circumstances would reasonably be understood to be, confidential or proprietary. Confidential Information excludes any and all Information that is (i) in the public domain, (ii) lawfully acquired after the Effective Date by the Receiving Party from a Third Party not known to be subject to confidentiality obligations with respect to such Information or (iii) independently developed by the Receiving Party after the Effective Date without reference to any Confidential Information of the Disclosing Party.

 

(e)            “JSG Territory” means the following: Australia, China (including the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan), India, Indonesia, Japan, Republic of Korea, New Zealand, Singapore, Thailand, Vietnam and other member countries, as of the Effective Date, of the Association of Southeast Asian Nations.

 

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(f)            “VAT” means (i) value added tax chargeable within the United Kingdom in accordance with the VATA 1994 and legislation and regulations supplemental thereto, (ii) inside the European Union, value added tax charged pursuant to Council Directive 2006/112/EC on the common system of value added tax and (iii) outside the United Kingdom and European Union, any similar sales or turnover tax or goods and services tax.

 

Section 1.02           References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. References to the definitions contained in this Agreement are applicable to the other grammatical forms of such terms. Unless the context otherwise requires, the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. The words “written request” when used in this Agreement shall include email. Reference in this Agreement to any time shall be to New York City, New York time unless otherwise expressly provided herein. Unless the context requires otherwise, references in this Agreement to “JS Global” shall also be deemed to refer to the applicable member of the JS Global Group, references to “SharkNinja” shall also be deemed to refer to the applicable member of the SharkNinja Group and, in connection therewith, any references to actions or omissions to be taken, or refrained from being taken, as the case may be, by JS Global or SharkNinja shall be deemed to require JS Global or SharkNinja, as the case may be, to cause the applicable members of the JS Global Group or the SharkNinja Group, respectively, to take, or refrain from taking, any such action. References herein to “domain names”, “email”, “social media” or the like shall include all similar and successor electronic addresses and media. Unless expressly stated otherwise herein, any consent or approval right of a Party hereunder may be granted, withheld or conditioned by such Party in its sole and absolute discretion.

 

Article II

 

SERVICES AND DURATION

 

Section 2.01            Provision of Services. Subject to the terms and conditions of this Agreement, SharkNinja shall provide (or cause to be provided) to JS Global and its Affiliates the services listed in Schedule 1 attached hereto with respect to products to be sold by JS Global and its Affiliates only under and subject to the Brand License Agreement (the “Services”).

 

Section 2.02            Exception to Obligation to Provide Services. Notwithstanding anything in this Agreement to the contrary, SharkNinja shall not be obligated to provide any Services to the extent the provision of such Services would violate any applicable Law or any Contract to which SharkNinja or its Affiliates are subject; provided, however, that SharkNinja and JS Global shall comply with Section 7.02 in seeking to obtain any Required Consents necessary to provide such Services; provided further that SharkNinja will not, and will cause its Affiliates not to, enter into any Contract during the Term that it knows would materially prevent SharkNinja from providing the Services hereunder.

 

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Section 2.03            Standard of the Provision of Services. Except where expressly provided otherwise in the applicable Schedule, SharkNinja shall, and shall cause its Affiliates to, provide the Services in good faith and to a reasonable commercial standard, and with no less than the degree of care, skill and diligence consistent with the practice of SharkNinja in providing such Services to JS Global and its Affiliates during the twelve (12) month period prior to the Effective Date (to the extent applicable).

 

Section 2.04           Subcontractors. SharkNinja may reasonably subcontract any of the Services or portion thereof that is not subcontracted as of the Effective Date to any other Person, including any Affiliate of SharkNinja, without the prior written consent of JS Global; provided that (i) subcontracting such Services to another Person, including any Affiliate of SharkNinja, is reasonable, (ii) such other person shall be subject to service standards and confidentiality obligations consistent with those set forth herein, and (iii) SharkNinja shall in all cases remain primarily responsible for all of its obligations hereunder with respect to the Services provided by such subcontractor. SharkNinja shall not enter into an agreement with a subcontractor during the Term that causes a Service Fee to increase more than thirty thousand U.S. dollars ($30,000) without the consent of JS Global; provided that if JS Global does not so consent, SharkNinja shall have no obligation to provide such Service.

 

Section 2.05            Electronic Access.

 

(a)            To the extent that the performance or receipt of Services hereunder requires access to a Party’s or its Affiliates’ computer systems, software or other information technology systems, including data contained therein (collectively, the “Systems”) by the other Party or its Affiliates (the “Accessing Group”), the Party whose Group’s Systems are being accessed (the “Providing Group”) shall provide access to (and the Accessing Group may access) such Systems solely for the purpose of, as applicable, providing or receiving the Services. Each Party shall cause its applicable Accessing Group to comply with all of the Providing Group’s policies, procedures and limitations (including with respect to physical security, network access, internet security, confidentiality and personal data security and privacy guidelines and other similar policies, collectively, the “Security Regulations”) to be determined by such Providing Group from time to time and provided in writing to such Accessing Group, and shall not tamper with, compromise or circumvent any security or related audit measures employed by the Providing Group. The Accessing Group shall access and use only those Systems of the Providing Group for which it has been granted the right to access and use.

 

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(b)            While Services are being provided hereunder, the Parties shall take commercially reasonable measures to ensure that no Virus or similar items are coded or introduced into the Services or Systems. With respect to Services or Systems provided by third parties, compliance with the applicable agreement with such third party shall be deemed sufficient commercially reasonable measures. If a Virus is found to have been introduced into any Services or Systems, (i) the Party that discovers the Virus shall promptly notify the other Party and (ii) the Parties shall use commercially reasonable efforts to cooperate and to diligently work together to remediate the effects of the Virus.

 

(c)            The Parties shall take commercially reasonable measures in providing, accessing and using the Services and Systems hereunder to prevent unauthorized access, use, destruction, alteration or loss of data, information or software contained in the Systems. If, at any time, the Accessing Group reasonably determines that any of its personnel has attempted to circumvent, or has circumvented, the Security Regulations, that any unauthorized personnel has or has had access to the Systems, or that any such personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of data, information or software of the Providing Group, the Accessing Group shall immediately suspend any such person’s access to the Systems and immediately notify the Providing Group; provided that the Parties shall work together to resolve the grounds for suspension and, unless such suspension is of personnel not authorized for access, any such suspended access will promptly be restored after such violation or security risk has been remediated. The Accessing Group shall reasonably cooperate with the Providing Group in investigating any unauthorized access to the Systems.

 

Section 2.06           Title to Intellectual Property, Confidentiality.

 

(a)            Except as expressly provided in this Section 2.06, Section 2.07 or in the Brand License Agreement, JS Global acknowledges that it shall acquire no right, title or interest (including any license rights or rights of use) in any Intellectual Property which is owned or licensed by SharkNinja or any of its respective Affiliates or any Third Party by reason of the provision of the Services or access to the Systems. The Parties hereby reserve all rights, title and interest in and to their respective Intellectual Property not expressly licensed to the other Party under Section 2.07 or the Brand License Agreement. Each Party acknowledges that any nonpublic information it obtains of the other Party (including through access to its systems) hereunder shall be “Confidential Information” for purposes of the SDA and subject to the terms and conditions therein relating thereto.

 

(b)            In performing the Services, SharkNinja shall not incorporate into a product any Intellectual Property that it knows at the time of such incorporation will result in the infringement of valid Intellectual Property rights of any other Person in any material respect.

 

Section 2.07           No Obligation to Hire or Purchase. For avoidance of doubt, JS Global shall have no right to require SharkNinja to, and SharkNinja shall have no obligation to:

 

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(a)            hire or engage any additional employees or other services providers;

 

(b)            maintain the employment of any specific employee; or

 

(c)            purchase, lease or license any additional equipment, software, technology or other resources;

 

provided, that, the foregoing shall not limit any obligation of SharkNinja to provide Services hereunder.

 

Section 2.08            Use of Services. Subject to Section 9.02, JS Global shall not resell, license, sublet or transfer any Services to any Person whatsoever or permit the use of the Services it receives under this Agreement by any Person other than in connection with JS Global’s conduct of the operations of its business to the extent consistent with the manner in which such business was conducted prior to the Effective Date or contemplated to be conducted as reflected in the written records of JS Global as of the Effective Date.

 

Section 2.09            Compliance with Law. Each Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement. No Party shall knowingly take any action in violation of any such applicable Law that results in Liability being imposed on the other Party.

 

Article III

 

SERVICE FEES AND PAYMENT TERMS

 

Section 3.01            Service Fees. JS Global shall pay to SharkNinja the fees set forth in Schedule 1 for the respective Services, subject to the annual caps for such fees set forth in such Schedule (the “Service Fees”).

 

Section 3.02           Arm’s Length Pricing. The Parties shall periodically review the amounts and other terms of all Service Fees and other payments hereunder to ensure that such payments constitute Arm’s Length Prices. If such review determines that any such payment does not constitute an Arm’s Length Price, then a Party may receive additional compensation from the other Party or may pay additional compensation to the other Party, as necessary, and the Parties may adjust the terms of any Service Fees or other payments thereafter in accordance with Section 9.08.

 

Section 3.03            Payment Terms.

 

(a)            Any Service Fees payable pursuant to Section 3.01 shall be paid by JS Global to SharkNinja within forty-five (45) days after receipt of a written invoice from SharkNinja at the end of each quarter of the calendar year. SharkNinja or its designated Affiliate shall submit such invoice to JS Global or its designated Affiliate within twenty (20) days after the end of each such quarter, which sets forth the details of the calculation of the Service Fees to be paid by JS Global for such quarter. All Service Fees shall be calculated and paid in U.S. dollars (or, if necessary for legal or tax concerns, other reasonable currency mutually agreed upon by the Parties in writing) in immediately available funds to a bank account designated by SharkNinja in writing to JS Global. For purposes of determining the Service Fees due and payable in U.S. dollars, the exchange rate shall be determined at the date on which such amount is remitted by JS Global, as reported by the Wall Street Journal (or similar or successor publication if the Wall Street Journal is no longer published).

 

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(b)            If JS Global fails to make a Service Fee payment when due, JS Global shall be required to pay, in addition to any such unpaid amounts, interest on such amounts at (i) the Prime Rate, plus two hundred (200) basis points, or (ii) if lower, the highest rate of interest permitted by applicable Law at such time, in each case compounded monthly from, and including, the relevant due date through the actual date of payment.

 

(c)            Except as set forth in Section 3.04, JS Global shall make all Service Fee payments to SharkNinja without set-off, deduction, recoupment or withholding of any kind for Service Fees or other amounts owed or payable by SharkNinja or its Affiliates to JS Global or its Affiliates, whether under this Agreement or any other Ancillary Agreement, applicable Law or otherwise.

 

(d)            All amounts treated for the purposes of any VAT as consideration for a supply made pursuant to this Agreement shall be exclusive of applicable VAT. Where SharkNinja is required to account for any VAT to a relevant Tax authority, JS Global shall, subject to the receipt of a valid VAT invoice, pay to SharkNinja (in addition to, and at the same time as, the consideration) the amount of such VAT.

 

Section 3.04            Taxes. All payments made to SharkNinja under this Agreement shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law requires the deduction or withholding of any Tax from any payment to SharkNinja, then (i) JS Global shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Entity in accordance with applicable Law, and (ii) the sum payable to SharkNinja shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 3.04), SharkNinja receives an amount equal to the sum it would have received had no such deduction or withholding been made. If any payment made pursuant to this Agreement is eligible for a reduction in the rate of, or the elimination of, any applicable withholding Tax, the Parties agree to cooperate and use commercially reasonable efforts to reduce the applicable rate of withholding or to relieve JS Global of its obligation to withhold such Tax; provided, that for the avoidance of doubt, such cooperation and the provisions of this Section 3.04 shall not require SharkNinja to alter the entities receiving payments under this Agreement.

 

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Section 3.05            Transfer Pricing. If any Party (“the first Party”) suffers a transfer pricing adjustment in relation to any amount paid or payable under this Agreement and that adjustment increases the Tax payable by (or decreases the Tax relief available to) the first Party, the other Party (“the second Party”) shall make a payment to the first Party in an amount equal to that increase in Tax (or decrease in relief). The second Party shall make any payment due hereunder no less than ten (10) days before the Tax referred to in that clause (including any Tax that would not have been payable, or which is payable earlier than would have been the case, if any Tax relief had not been decreased) is payable. For purposes of this Section 3.05, a “transfer pricing adjustment” is any adjustment to the profits or losses of a person for Tax purposes asserted by a Tax authority whether by way of assessment or reassessment or otherwise. The Parties agree to pursue all reasonable legal remedies to avoid double taxation that may result from such a transfer pricing adjustment or from any conforming or correlative adjustments that may be necessary on account of such transfer pricing adjustment.

 

Article IV

 

DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

 

Section 4.01            Disclaimer of Warranties. The Parties acknowledge and agree that neither Party nor its Affiliates is in the business of providing Services of the type contemplated by this Agreement, and that each Party and their respective Affiliates make no representation or warranty with respect thereto. NEITHER PARTY NOR ANY OF ITS AFFILIATES MAKES, NOR IS EITHER PARTY OR ITS AFFILIATES RELYING ON, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, AT LAW OR IN EQUITY, WITH RESPECT TO THE SERVICES PROVIDED HEREUNDER OR THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY IN REGARD TO QUALITY, PERFORMANCE, NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY OR FITNESS OF THE SERVICES FOR A PARTICULAR PURPOSE, AND EACH PARTY AND ITS RESPECTIVE AFFILIATES HEREBY EXPRESSLY DISCLAIM THE SAME.

 

Article V

 

INDEMNIFICATION; limitations of liability

 

Section 5.01            Indemnification.

 

(a)            SharkNinja shall indemnify, defend and hold harmless JS Global and its Affiliates and their respective directors, officers, employees, representatives and agents (the “JS Global Indemnitees”) from and against any and all Indemnifiable Losses of the JS Global Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of SharkNinja or its Affiliates in the performance of this Agreement, and (ii) breach by SharkNinja of this Agreement, in each case (in respect of the foregoing clauses (i)-(ii)), except to the extent that such Indemnifiable Losses are subject to indemnification by JS Global pursuant to Section 5.01(b).

 

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(b)            JS Global shall indemnify, defend and hold harmless SharkNinja and its Affiliates and their respective directors, officers, employees, representatives and agents (the “SharkNinja Indemnitees”) from and against any and all Indemnifiable Losses of the SharkNinja Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (i) gross negligence or willful misconduct of JS Global or its Affiliates in the performance of this Agreement, (ii) breach by JS Global of this Agreement, and (iii) except to the extent subject to indemnification by SharkNinja pursuant to Section 5.01(a), the provision, receipt and use of the Services for, by or on behalf of the JS Global Group hereunder, in each case (in respect of the foregoing clauses (i)-(iii)), except to the extent that such Indemnifiable Losses are subject to indemnification by SharkNinja pursuant to Section 5.01(a).

 

Section 5.02            Indemnification Procedures. The indemnification procedures set forth in Section 7.4 of the SDA shall apply to the matters indemnified hereunder, mutatis mutandis.

 

Section 5.03            Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT (INCLUDING THIS ARTICLE V), IN NO EVENT SHALL SHARKNINJA, JS GLOBAL OR THEIR RESPECTIVE AFFILIATES BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, AT LAW OR IN EQUITY, FOR PUNITIVE, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT (EXCEPT FOR (I) ALL SUCH COMPONENTS OF AWARDS PAID TO A THIRD PARTY IN ANY THIRD-PARTY CLAIM INDEMNIFIED HEREUNDER, INCLUDING COMPONENTS OF SUCH THIRD-PARTY CLAIM RELATING TO ANY OF THE FOREGOING AND ATTORNEYS’ FEES AND (II) RELATING TO BREACHES OF Article VIII).

 

Article VI

 

TERMINATION

 

Section 6.01           Section 6.01      Term. This Agreement shall commence as of the Effective Date and, unless and until earlier terminated in accordance with Section 6.02, shall continue in full force and effect until the date that is three (3) years from the Effective Date (the “Term”). The Term will automatically renew for successive periods of one (1) year, unless JS Global provides prior written notice ninety (90) days prior to the expiration of the then current Term of its intention to not renew this Agreement.

 

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Section 6.02            Termination.

 

(a)            This Agreement may be terminated earlier by a Party with respect to its obligations to provide or to cause the provision of Services hereunder if the other Party is in material breach of a material provision of this Agreement and such breach is not corrected within thirty (30) days of a written notice from such Party of such breach and intent to so terminate its obligation to provide and to cause the provision of Services if not so cured. Without limitation to the foregoing, a Party that successfully enforces a claim against the other Party for breach (whether material or not) of this Agreement shall be entitled to reimbursement by the breaching Party of its reasonable costs and attorneys’ fees incurred in connection with such enforcement.

 

(b)            The Parties may terminate this Agreement upon the mutual consent of both Parties.

 

(c)            Either Party may terminate this Agreement (or the applicable portion) upon written notice to the other Party in the event that the other Party assigns this Agreement (or such applicable portion) to a Third Party, with such termination to be effective as of the date designated by such terminating Party.

 

(d)            JS Global may terminate this Agreement at its discretion upon forty five (45) days’ prior written notice to SharkNinja.

 

Section 6.03            Effect of Termination.

 

(a)            Except as expressly set forth in this Agreement (including the Schedules), upon expiration or earlier termination of any Service pursuant to this Agreement, SharkNinja shall have no further obligation to provide the terminated or expired Service, and JS Global shall have no obligation to pay any Service Fees relating to any such Service, and the Service Fees in respect of such terminated or expired Services shall cease to accrue; provided that JS Global shall remain obligated to SharkNinja for the Service Fees owed and payable in respect of Services provided prior to the effective date of termination or expiration, shall remain liable for any other costs and expenses pursuant to Section 6.01, and shall remain liable for any applicable Taxes pursuant to Section 3.04. Any such required payments not made within the later of thirty (30) days after the later of the termination date or receipt of an applicable invoice with respect thereto shall be subject to the late charges set forth in Section 3.03. In connection with termination or expiration of any Service, the provisions of this Agreement not relating solely to such terminated or expired Service shall survive any such termination or expiration. Notwithstanding anything to the contrary contained herein, upon any expiration or earlier termination of this Agreement or any Services, SharkNinja shall (at the sole cost and expense of JS Global) cooperate with all reasonable requests by JS Global in connection with the transition of the Services, including the transfer of data to JS Global or its designee (in a suitable electronic format as may be necessary or appropriate to enable JS Global to access and use such data or in the format maintained by SharkNinja), until such time as the transition is completed to JS Global reasonable satisfaction.

 

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(b)            In connection with an expiration or earlier termination of this Agreement, Article I, Section 2.06, Article III (solely with respect to payment obligations that accrued prior to the effective date of expiration or termination), Article IV, Article V, this Article VI, Article VII, Article VIII, Article IX and liability for all owed and unpaid Service Fees, Taxes and other costs and expenses specified in this Agreement shall continue to survive indefinitely and any liability for other breaches of this Agreement shall survive the end of the Term (whether by expiration or termination).

 

Section 6.04            Force Majeure.

 

(a)            Subject to Section 6.03(b), no Party (or other Person acting on its behalf) shall have any liability for any expense, loss or damage whatsoever arising from, or responsibility for failure to fulfill any obligation under, this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, delayed or otherwise made impracticable as a consequence of an event beyond the reasonable control of such Person, including acts of God, floods, riots, fires or other natural disasters, explosions, sabotage, civil commotion or civil unrest, interference by civil or military authorities, epidemics, pandemics, acts of war (declared or undeclared), armed hostilities or other national or international calamity, acts of terrorism (including by cyberattack or otherwise) and failure or interruption of networks or energy sources, in each case, which such events cause cessation, interruption or hindrance of the performance of any obligation under this Agreement (“Force Majeure”). In the event of an occurrence of a Force Majeure, the Party whose performance is affected thereby shall give notice of suspension as soon as reasonably practicable to the other stating the date and extent of such suspension and the cause thereof, and such Party shall use commercially reasonable efforts to resume the performance of such obligations as soon as reasonably practicable (provided that a Party shall not be required to settle a labor dispute (or resolve a labor stoppage or slowdown) other than as it may determine in its sole judgment), and if SharkNinja is the Person so prevented then JS Global shall not be obligated to pay the Service Fee (or portion thereof) for a Service to the extent and for so long as such Service (or portion thereof) is not made available to JS Global hereunder as a result of such Force Majeure.

 

(b)            Notwithstanding the foregoing, during the period of a Force Majeure preventing provision of applicable Services to JS Global pursuant to Section 6.04(a), SharkNinja shall use its commercially reasonable efforts and reasonably cooperate with JS Global to arrange for the provision of such Services impacted by the Force Majeure, and JS Global shall be entitled to seek an alternative service provider with respect to such Services, at the sole cost and expense of JS Global; provided that JS Global shall have no obligation to pay to SharkNinja the applicable Service Fees for a Service to the extent not provided to JS Global due to a Force Majeure.

 

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Article VII

 

MANAGEMENT AND CONTROL

 

Section 7.01           Cooperation.

 

(a)            JS Global shall not, and shall cause its Affiliates to not, take any action which it knows would interfere with or increase (other than in a de minimis manner) the cost of SharkNinja providing (or causing to be provided) any of the Services. During the Term, JS Global shall cooperate in good faith with SharkNinja with respect to SharkNinja providing the Services and, without limitation of the foregoing, JS Global shall (a) make available on a timely basis to SharkNinja all information and materials reasonably requested by SharkNinja to enable SharkNinja to provide the applicable Services and (b) provide to SharkNinja reasonable access to its and its Affiliates’ premises, facilities and personnel to the extent reasonably necessary for SharkNinja to provide the applicable Services. SharkNinja and its Affiliates shall be entitled to rely upon the genuineness, validity or truthfulness of any document, instrument or other writing presented by JS Global and its Affiliates in connection with this Agreement. SharkNinja shall not be liable for any impairment of any Service to the extent caused by or relating to its not receiving the information, materials or access required by this Section 7.01(a), either timely or at all, or by its receiving inaccurate or incomplete information from JS Global that is required or reasonably requested regarding that Service.

 

(b)            To the extent the Parties or a member of their respective Group have entered into any third-party Contracts in connection with any of the Services, JS Global and its Affiliates shall comply in all material respects with the terms of such agreement applicable to JS Global’s (and its Affiliates’) use of such Services, to the extent JS Global has been provided reasonable prior notice of such terms.

 

Section 7.02            Required Consents. Each Party shall use commercially reasonable efforts to obtain any and all third-party consents, licenses, approvals, or amendments to existing agreements necessary or advisable to allow SharkNinja to provide the Services (the “Required Consents”); provided that the costs of obtaining, or seeking to obtain, such Required Consents shall be paid by JS Global in respect of the Services; provided, further, that SharkNinja shall have provided to JS Global reasonable prior notice and JS Global shall have provided its prior written consent, in each case, to any such payments in an amount greater than thirty thousand U.S. dollars ($30,000); provided, however, that if JS Global does not so consent, SharkNinja shall have no obligation to provide such Service. Each Party shall reasonably cooperate with the other in connection with obtaining Required Consents upon such other Party’s request. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Third Party consent, SharkNinja shall have no obligation to provide such Service; provided that the Parties shall use commercially reasonable efforts and reasonably cooperate with each other to minimize the adverse impact therefrom and to identify and arrange for the provision of substitute or alternative services for such Service to the extent reasonably practicable.

 

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Section 7.03            No Agency. Nothing in this Agreement shall be deemed in any way or for any purpose to constitute any Party or its Affiliates acting as an agent of the other Party or its Affiliates. No partnership, joint venture, alliance, fiduciary or any relationship other than that of independent contractors is created hereby, expressly or by implication. The Parties’ respective rights and obligations hereunder shall be limited to the contractual rights and obligations expressly set forth herein on the terms and conditions set forth herein.

 

Article VIII

 

CONFIDENTIALITY

 

Section 8.01            Confidentiality. Each Party acknowledges that, in connection with this Agreement, it or its Affiliates may gain access to Confidential Information of the other Party or its Affiliates. Each Receiving Party shall (i) not use the Confidential Information of the Disclosing Party, other than as necessary to exercise its rights and perform its obligations under this Agreement, and (ii) maintain the Confidential Information of the Disclosing Party in strict confidence and, subject to Section 8.02, not disclose the Confidential Information of the Disclosing Party without the Disclosing Party’s prior consent; provided, that the Receiving Party may disclose the Confidential Information as otherwise permitted in this Article VII.

 

Section 8.02            Disclosure. The Receiving Party may disclose, or may permit disclosure of, Confidential Information of the Disclosing Party (i) to its respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such Information for auditing and other non-commercial purposes and are informed of the obligation to hold such Information confidential and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any Party or any of its respective Affiliates is required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule or is advised by outside counsel in connection with a proceeding brought by a Governmental Entity that it is advisable to do so, (iii) as required in connection with any legal or other proceeding by one Party (or member of its Group) against the other Party (or member of such other Party’s Group) or in respect of claims by one Party against the other Party (or member of such other Party’s Group) brought in a proceeding, (iv) as necessary in order to permit a Party (or member of its Group) to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (v) as necessary for a Party (or member of its Group) to enforce its rights or perform its obligations under this Agreement, (vi) to Governmental Entities in accordance with applicable procurement regulations and contract requirements or (vii) to other Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic or financing transaction, to the extent reasonably necessary in connection therewith; provided, that an appropriate and customary confidentiality agreement has been entered into with the Person receiving such Confidential Information. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made by a Third Party pursuant to clause (ii), (iii), (v) or (vi) above, each Party, as applicable, shall promptly notify (to the extent permissible by Law) the Party to whom (or to whose Group) the Confidential Information relates of the existence of such request, demand or disclosure requirement and shall provide such affected Party (and/or any applicable member of its Group) a reasonable opportunity to seek an appropriate protective order or other remedy, which such Party will cooperate in obtaining to the extent reasonably practicable. In the event that such appropriate protective order or other remedy is not obtained, the Party which faces the disclosure requirement shall furnish only that portion of the Confidential Information that is required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Confidential Information.

 

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Article IX

 

MISCELLANEOUS

 

Section 9.01           Dispute Resolution. The Parties acknowledge and agree that the Article IX of the SDA is hereby incorporated into this Agreement, and shall apply to the transactions contemplated by this Agreement to the extent applicable, mutatis mutandis.

 

Section 9.02           Assignment. Neither this Agreement nor any of the rights, interests or obligations of a Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by such Party without the prior consent of the other Party; provided, that such first Party (i) may assign, in whole or in part, by operation of law or otherwise, this Agreement to one or more of its Affiliates, and (ii) subject to Section 6.02(c), may assign, in whole or in relevant part, by operation of law or otherwise, this Agreement to the successor to all or the relevant portion of the business or assets to which this Agreement relates; provided, further, that (x) the assigning Party shall promptly notify the non-assigning Party in writing of any assignments it makes under the foregoing clause (ii), and (y) in either case of the foregoing clauses (i) or (ii), the party to whom this Agreement is assigned shall agree in writing to be bound by the terms of this Agreement as if named as a “Party” hereto with respect to all or such portion of this Agreement so assigned. Any assignment or other disposition in violation of this Section 9.02 shall be void. No assignment shall relieve the assigning Party of any of its obligations under this Agreement that accrued prior to such assignment unless agreed to by the non-assigning Party.

 

Section 9.03            Entire Agreement; Construction. This Agreement, including the Schedules hereto, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement or Continuing Arrangement (except for the Brand License Agreement), this Agreement shall control, and in the event and to the extent that there shall be a conflict between this Agreement and the Brand License Agreement then the Brand License Agreement shall control.

 

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Section 9.04            Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

 

Section 9.05            Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service by email (provided no “error” message or other notification of non-delivery is received by the sender of any such email; followed by delivery of an original via overnight courier service) or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.05):

 

To JS Global:

 

JS Global Trading HK Limited
[·]
[·]
Attn: [·]
Email: [·]

 

with a copy (which shall not constitute notice) to:

 

Clifford Chance LLP
[·]
[·]
Attn: [·]
Email: [·]

 

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To SharkNinja:

 

SharkNinja, Inc.
[·]
[·]
Attn: [·]

Email: [·]

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
[·]
[·]
Attn: [·]
Email: [·]

 

Section 9.06           Waivers; Consents. Any provision of this Agreement may be waived, if and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any consent or approval required or permitted to be given by a Party to the other Party or its Affiliates under this Agreement shall be in the sole and absolute discretion of the Party giving, conditioning or denying such consent or approval (unless a different standard is expressly set forth herein therefor), shall only be effective if given in writing and signed by the Party giving such consent and shall be effective only against such Party (and the members of its Group).

 

Section 9.07           Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

 

Section 9.08            Amendment. This Agreement may not be modified or amended except by an agreement in writing signed by both Parties.

 

Section 9.09            No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is a breach or, in the case where a Party acts in concert with any Person who takes such action, would be a breach of any of the provisions of this Agreement.

 

Section 9.10            Third Party Beneficiaries. Except as specifically provided herein, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon Third Parties any remedy, claim, liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

 

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Section 9.11            Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

Section 9.12            Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

 

Section 9.13            Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 9.14            No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.

 

[Signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

 

  SharkNinja Europe Ltd.
   
  By:  
    Name:
    Title:
   
  JS Global Trading HK Limited
   
  By:  
    Name:
    Title:

 

 

 

 

Exhibit 21.1

 

Subsidiaries of the Registrant

 

Name of Entity   Jurisdiction
Qfeeltech (Beijing) Co., Ltd.   People's Republic of China
SharkNinja (Hong Kong) Company Limited   Hong Kong
SharkNinja Appliance LLC   Delaware
SharkNinja Appliance UK Holdco Ltd.   United Kingdom
SharkNinja Canada Co.   Canada
SharkNinja Co., Ltd.   Japan
SharkNinja Europe Limited   United Kingdom
SharkNinja France S.A.S.   France
SharkNinja Germany GmbH   Germany
SharkNinja Global SPV, Ltd.   Cayman Islands
SharkNinja Global SPV2 Limited   Cayman Islands
SharkNinja Iberia Socieded Limitada   Spain
SharkNinja International Holding Company   Delaware
SharkNinja Italy S.r.l.   Italy
SharkNinja Management LLC   Delaware
SharkNinja Midco LLC   Delaware
SharkNinja Operating LLC   Delaware
SharkNinja Sales Company   Delaware
SharkNinja UK EP Ltd.   United Kingdom
SharkNinja Venus Technology Company Limited   Hong Kong
SharkNinja Vietnam Company Limited   Vietnam
Shenzhen SharkNinja Technology Co., Ltd.   People's Republic of China
Suzhou SharkNinja Technology Co., Ltd.   People's Republic of China

 

 

 

Exhibit 23.2

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated March 30, 2023, with respect to the consolidated financial statements of SharkNinja Global SPV, Ltd. included in the Registration Statement (Form F-1) and related Prospectus of SharkNinja, Inc. for the registration of its ordinary shares.

 

/s/ Ernst & Young LLP 

 

Boston, Massachusetts

June 28, 2023

 

 

Exhibit 99.1

 

CONSENT TO BE NAMED AS A DIRECTOR

 

In connection with the filing by SharkNinja, Inc. (the “Company”) of its Registration Statement (the “Registration Statement”) on Form F-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments and supplements thereto.

 

Dated: June 28, 2023

 

 

/s/ Peter Feld  
Name: Peter Feld  

 

 

Exhibit 99.2

 

CONSENT TO BE NAMED AS A DIRECTOR

 

In connection with the filing by SharkNinja, Inc. (the “Company”) of its Registration Statement (the “Registration Statement”) on Form F-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments and supplements thereto.

 

Dated: June 28, 2023

 

 

/s/ Wendy Hayes  
Name: Wendy Hayes  

 

 

Exhibit 99.3

 

CONSENT TO BE NAMED AS A DIRECTOR

 

In connection with the filing by SharkNinja, Inc. (the “Company”) of its Registration Statement (the “Registration Statement”) on Form F-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments and supplements thereto.

 

Dated: June 28, 2023

 

 

/s/ Chi Kin Max Hui  
Name: Chi Kin Max Hui  

 

 

Exhibit 99.4

 

CONSENT TO BE NAMED AS A DIRECTOR

 

In connection with the filing by SharkNinja, Inc. (the “Company”) of its Registration Statement (the “Registration Statement”) on Form F-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments and supplements thereto.

 

Dated: June 28, 2023

 

 

/s/ Dennis Paul  
Name: Dennis Paul  

 

 

Exhibit 99.5

 

CONSENT TO BE NAMED AS A DIRECTOR

 

In connection with the filing by SharkNinja, Inc. (the “Company”) of its Registration Statement (the “Registration Statement”) on Form F-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments and supplements thereto.

 

Dated: June 28, 2023

 

 

/s/ Timothy R. Warner  
Name: Timothy R. Warner  

 

 

 

Exhibit 99.6

 

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

 

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

 

If you have sold or transferred all your shares in JS Global Lifestyle Company Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

 

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

 

The Proposed Spin-off and the Proposed Distribution (each as defined herein) are subject to, among other things, the approval of the Company Shareholders, the approvals from the relevant U.S. authorities, the final decision of the Directors and the board of directors of SharkNinja (or its subsidiaries, as applicable), as well as market conditions and other relevant considerations. Accordingly, the Company Shareholders and potential investors should be aware that there is no assurance that the Proposed Spin-off and the Proposed Distribution will take place or when they will take place. The Company Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

 

This circular is for information purposes only and does not constitute an invitation or offer, for securities of the Company.

 

 

 

 

 

(1) THE PROPOSED SPIN-OFF AND THE PROPOSED DISTRIBUTION
AND

(2) NOTICE OF THE EXTRAORDINARY GENERAL MEETING

 

 

 

A letter from the Board is set out on pages 5 to 41 of this circular and a letter of recommendation from the Independent Board Committee to the Company Shareholders is set out on page 42 of this circular.

 

A notice convening the EGM of the Company to be held at Niccolo Room 5-8, Level 25, The Murray, Hong Kong, 22 Cotton Tree Drive, Central, Hong Kong on 26 June 2023 at 9:30 a.m. is set out on pages 60 to 61 of this circular. A form of proxy for use at the EGM is also sent to the Company Shareholders together with this circular. Such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.jsgloballife.com).

 

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM (i.e. 24 June 2023 at 9:30 a.m.) or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting (as the case may be) thereof if you so desire.

 

Hong Kong, 5 June 2023

 

 

 

 

 CONTENTS

 

Page

 

EXPECTED TIMETABLE ii
   
DEFINITIONS 1
   
LETTER FROM THE BOARD 5
   
LETTER FROM THE INDEPENDENT BOARD COMMITTEE 42

 

APPENDIX I – FINANCIAL INFORMATION OF THE GROUP 43
       
APPENDIX II – GENERAL INFORMATION 45
       
APPENDIX III – PRO FORMA FINANCIAL INFORMATION OF THE SHARKNINJA GROUP 53
       
APPENDIX IV – QUESTIONS AND ANSWERS 54

 

NOTICE OF THE EGM 60

 

– i –

 

 

EXPECTED TIMETABLE

 

EVENTS

 

Despatch of circular and notice of the EGM Monday, 5 June 2023
   
Latest time for lodging transfers of Shares in order to be entitled to attend and vote at the EGM 4:30 p.m., Monday, 19 June 2023
   
Latest time for return of proxy forms in respect of the EGM 9:30 a.m., Saturday, 24 June 2023
   
Closure of the register of members of the Company for determining the entitlements to attend and vote at the EGM Tuesday, 20 June 2023 to Monday, 26 June 2023
   
EGM 9:30 a.m., Monday, 26 June 2023
   
Announcement of the results of the EGM Monday, 26 June 2023
   
Register of members of the Company re-opens Tuesday, 27 June 2023
   
Latest day of trading in the Shares on a cum-entitlement basis Tuesday, 27 June 2023
   
First day of dealing in the Shares on an ex-entitlement basis Wednesday, 28 June 2023
   
Latest time for lodging transfers of Shares to qualify for the Proposed Distribution 4:30 p.m., Thursday, 29 June 2023
   
Closure of the register of members of the Company for determining entitlements to the Proposed Distribution Friday, 30 June 2023
   
Record Date for determining the entitlements to the Proposed Distribution Friday, 30 June 2023
   
Register of members of the Company re-opens Monday, 3 July 2023
   
Completion of the Proposed Distribution Monday, 31 July 2023

 

All times refer to Hong Kong time. Please note that the expected timetable above is indicative only and may be extended or varied. If there is any change to the expected timetable above, the Company will publish an announcement as soon as possible.

 

– ii –

 

 

DEFINITIONS

 

In this circular, the following expressions shall have the following meanings unless the context requires otherwise:

 

‘‘Articles’’ the articles of association of the Company
   
‘‘Asia Pacific Region’’ includes but not limited to Australia, India, Indonesia, Japan, Republic of Korea, New Zealand, Singapore, Thailand, Vietnam and other countries of Association of Southeast Asian Nations
   
‘‘Board’’ the board of the Directors
   
‘‘Company’’ JS Global Lifestyle Company Limited, an exempted limited liability company incorporated in the Cayman Islands on July 26, 2018, with its shares listed on the Main Board of the Stock Exchange
   
‘‘Company Shareholder(s)’’ the shareholder(s)of the Company
   
‘‘Controlling Shareholders’’ has the meaning ascribed to it under the Listing Rules
   
‘‘Director(s)’’ the director(s)of the Company
   
‘‘EGM’’ the extraordinary general meeting of the Company to be held at Niccolo Room 5-8, Level 25, The Murray, Hong Kong, 22 Cotton Tree Drive, Central, Hong Kong on 26 June 2023 for the purpose of considering and, if thought fit, approving the Proposed Spin-off and the Proposed Distribution
   
‘‘Greater China’’ includes Mainland China, Hong Kong, the Macau Special Administrative Region and Taiwan
   
‘‘Group’’ the Company and its subsidiaries
   
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China
   
‘‘IFRS’’ International Financial Reporting Standards

 

– 1 –

 

 

DEFINITIONS

 

‘‘Independent Board Committee’’ an independent committee of the Board comprising of all the independent non-executive Directors established by the Company to advise the Company Shareholders in respect of the terms of the Proposed Spin-off and the Proposed Distribution
   
‘‘Joyoung’’ Joyoung Co.,Ltd.(九陽股份有限公司）, a company incorporated in Mainland China on July 8, 2002, whose A shares are listed on the Shenzhen Stock Exchange and a subsidiary of the Company. As of the Latest Practicable Date, the Company holds approximately 67% equity interests in Joyoung
   
‘‘Joyoung Group’’ Joyoung and its subsidiaries
   
‘‘JSG APAC’’ the company to be incorporated to lead the SN APAC Business upon completion of the Proposed Spin-off and the Proposed Distribution
   
‘‘Latest Practicable Date’’ 30 May 2023, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular
   
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time)
   
‘‘Non-Qualifying Company Shareholders’’ the Company Shareholders who, due to practical limitations and restrictions, will not be qualified to receive SharkNinja shares directly under the Proposed Distribution. Please refer to the paragraph headed ‘‘2.12. Arrangement for the Proposed Distribution of this circular’’ for a more detailed definition
   
‘‘PN15’’ Practice Note 15 of the Listing Rules
   
‘‘Proposed Distribution’’ the proposed demerger of SharkNinja from the Company through a distribution in specie of all of the Company’s shares held in SharkNinja to all the Company Shareholders on a pro-rata basis

 

– 2 –

 

 

DEFINITIONS

 

‘‘Proposed Spin-off’’ the proposed listing of the shares of SharkNinja on the U.S. Stock Exchange
   
‘‘Qualifying Company Shareholders’’ the Company Shareholders who are not the Non-Qualifying Shareholders and who will directly receive the SharkNinja shares under the Proposed Distribution
   
‘‘Referenced Equity Value’’ the value of the SharkNinja Group at 30 September 2022, assessed by an independent valuer engaged by the Company
   
‘‘Retained Group’’ the Company and its subsidiaries, excluding the SharkNinja Group
   
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
   
‘‘Share(s)’’ the ordinary share(s)of US$0.00001 each in the share capital of the Company
   
‘‘SharkNinja’’ SharkNinja,Inc, an exempted limited liability company incorporated in the Cayman Islands and will be a wholly- owned subsidiary of the Company and the holding company of SharkNinja SPV prior to the Proposed Spin- off, and the demerger entity in the Proposed Spin-off
   
‘‘SharkNinja Group’’ SharkNinja, SharkNinja SPV and their respective subsidiaries
   
‘‘SharkNinja Listing Date’’ the date on which SharkNinja is listed on the U.S. Stock Exchange
   
‘‘SharkNinja SPV’’ SharkNinja Global SPV,Ltd., an exempted limited liability company incorporated in the Cayman Islands and a wholly- owned subsidiary of the Company as of the date of this circular
   
‘‘Stock Connect’’ Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect

 

– 3 –

 

 

DEFINITIONS

 

‘‘Stock Connect Investors’’ the Mainland China southbound trading investors holding the Company’s Shares through either of the Stock Connect
   
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
   
‘‘subsidiary(ies)’’ has the meaning as ascribed thereto in the Listing Rules
   
‘‘U.S.’’ the United States of America
   
‘‘U.S. SEC’’ the Securities and Exchange Commission of the U.S.
   
‘‘U.S. Stock Exchange’’ the New York Stock Exchange or Nasdaq
   
‘‘US$’’ U.S. dollar(s), the lawful currency of the U.S.
   
‘‘%’’ percent

 

– 4 –

 

 

LETTER FROM THE BOARD

 

 

 

Directors Registered Office
Executive Directors Maples Corporate Services Limited
Mr. Wang Xuning PO Box 309
Ms. Han Run Ugland House
Ms. Huang Shuling Grand Cayman KY1-1104
  Cayman Islands
Non-executive Directors  
Mr. Hui Chi Kin Max Head Office and Principal Place of Business
Mr. Stassi Anastas Anastassov 21/F
Mr. Sun Zhe 238 Des Voeux Road Central
  Sheung Wan
  Hong Kong
Independent Non-executive Directors  
Mr. Yuan Ding Principal Place of Business in Hong Kong
Mr. Timothy Roberts Warner 21/F
Mr. Yang Xianxiang 238 Des Voeux Road Central
  Sheung Wan
  Hong Kong
   
  Hong Kong, 5 June 2023

 

To the Company Shareholders

 

Dear Sir or Madam,

 

(1) THE PROPOSED SPIN-OFF AND THE PROPOSED DISTRIBUTION
AND

(2) NOTICE OF THE EXTRAORDINARY GENERAL MEETING

 

1.INTRODUCTION

 

Reference is made to the announcement of the Company dated 23 February 2023 in relation to the Proposed Spin-off and the Proposed Distribution.

 

– 5 –

 

 

LETTER FROM THE BOARD

 

The purpose of this circular is to provide you with, among others: (i) further details of the Proposed Spin-off and the Proposed Distribution; (ii) the letter of recommendation from the Independent Board Committee to the Company Shareholders in respect of the Proposed Spin-off and the Proposed Distribution; and (iii) a notice of the EGM, to enable you to make an informed decision on whether to vote for or against the proposed resolution at the EGM.

 

An ordinary resolution will be proposed at the EGM to approve the Proposed Spin-off and the Proposed Distribution, which is subject to the approval by the requisite majority (i.e., over 50%) of the Company Shareholders voting at the EGM in person or by proxy.

 

2.THE PROPOSED SPIN-OFF AND SEPARATE LISTING OF SHARKNINJA ON THE U.S. STOCK EXCHANGE

 

2.1.Background

 

The Board proposes to carry out a spin-off and separate listing of SharkNinja on the U.S. Stock Exchange. In this regard, the Company submitted a spin-off proposal to the Stock Exchange pursuant to PN15 and announced on 23 February 2023 that the Stock Exchange has confirmed that the Company may proceed with the Proposed Spin-Off.

 

Subject to obtaining the requisite approval from the Company Shareholders at an EGM, the Proposed Spin-off, if proceeded with, will result in the separate listing of SharkNinja on a U.S. Stock Exchange and the Proposed Distribution, if proceeded with, will result in the full separation of SharkNinja from the Company. It is proposed that the Proposed Distribution, whereby the Company will distribute all of the shares it holds in SharkNinja to the Company Shareholders, will occur substantially concurrently with the listing of SharkNinja. Considering the recent market conditions in the U.S., an initial public offering of SharkNinja’s shares on a U.S. Stock Exchange will not be undertaken together with the Proposed Spin-off and the Proposed Distribution.

 

The Proposed Distribution is aimed at providing the Company Shareholders with an assured entitlement to the shares of SharkNinja upon the Proposed Spin-off by way of a distribution in specie, representing an arrangement determined by the Company having due regard to the interests of the Company Shareholders.

 

The ultimate objective of the Proposed Spin-off and the Proposed Distribution is to create a parallel listing structure of the Company and SharkNinja, under which SharkNinja will be demerged and deconsolidated from the Company and separately listed on a U.S. Stock Exchange, with the Company Shareholders (except for Non-Qualifying Company Shareholders (as defined below)) becoming direct shareholders of SharkNinja.

 

In addition to the approval by the Company Shareholders at the EGM, among other things, SharkNinja has yet to obtain approvals from the U.S. SEC and the U.S. Stock Exchange before it can be listed on the U.S. Stock Exchange.

 

– 6 –

 

 

LETTER FROM THE BOARD

 

2.2.Shareholding percentage of the Company in SharkNinja immediately before and after the Proposed Spin-off and the Proposed Distribution

 

Prior to the completion of the Proposed Spin-off, SharkNinja (as the listing entity) will become a wholly-owned subsidiary of the Company and the holding company of SharkNinja SPV, which is currently the holding company of the SharkNinja Group. Immediately following the completion of the Proposed Spin-off, the SharkNinja Group will be fully demerged and deconsolidated from the Company and separately listed on the U.S. Stock Exchange, whilst the Company will remain listed on the Stock Exchange.

 

Set out below is the shareholding structure of the Group and the SharkNinja Group before and after the completion of the Proposed Spin-off and the Proposed Distribution.

 

Before the completion of the Proposed Spin-off and the Proposed Distribution.

 

 

 

After the Proposed Spin-off and the Proposed Distribution:

 

 

 

– 7 –

 

 

LETTER FROM THE BOARD

 

2.3.Conditions of the Proposed Spin-off and the Proposed Distribution

 

The Proposed Spin-off and the Proposed Distribution will proceed if the proposal is approved by the requisite majority (i.e., over 50%) of the Company Shareholders voting at the EGM in person or by proxy. The Proposed Spin-off and the Proposed Distribution are subject to, among others, (i) the approval by the requisite majority (i.e., over 50%) of the Company Shareholders voting at the EGM in person or by proxy, and (ii) the approvals from the relevant U.S. authorities in respect of the Proposed Spin-off and Proposed Distribution. As of the Latest Practicable Date, the abovementioned conditions have not yet been fulfilled, and such conditions are not waivable.

 

2.4.Financial impact of the Proposed Spin-off and the Proposed Distribution

 

It is expected that SharkNinja (and its subsidiaries) will cease to be subsidiaries of the Company and be fully demerged from the Company immediately upon completion of the Proposed Spin-off and the Proposed Distribution.

 

The following estimates the financial impact of the Proposed Spin-off and the Proposed Distribution on the Group on the basis of the current structure which is subject to finalization and audit and is for illustration purposes only. The analysis below does not purport to represent how the financial position of the Group will be upon completion of the Proposed Spin-off and the Proposed Distribution.

 

Paragraph 25 of IFRS 10 states that:

 

‘‘If a parent loses control of a subsidiary, the parent:

 

derecognises the assets and liabilities of the former subsidiary from the consolidated statement of financial position.

 

recognises any investment retained in the former subsidiary at its fair value when control is lost and subsequently accounts for it and for any amounts owed by or to the former subsidiary in accordance with relevant IFRSs. That fair value shall be regarded as the fair value on initial recognition of a financial asset in accordance with IFRS 9 or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture.

 

recognises the gain or loss associated with the loss of control attributable to the former controlling interest.’’

 

Since SharkNinja will be fully demerged and deconsolidated from the Company and will no longer be accounted for as a subsidiary of the Company, the Group will derecognise the assets and liabilities of the SharkNinja Group from the consolidated statements of financial position. The Group will no longer hold shares in SharkNinja.

 

– 8 –

 

 

LETTER FROM THE BOARD

 

Valuation of the SharkNinja Group

 

For the purpose of the PN15 application to the Stock Exchange, the Company has engaged an independent valuer to assess the value of the SharkNinja Group. Based on the valuation report, the Referenced Equity Value of the SharkNinja Group is estimated to be approximately US$2,500 million as of 30 September 2022.

 

The valuer has adopted the market approach with reference to the fair value of certain selected comparable companies listed on U.S. exchanges as of 30 September 2022 in determining the market value of the SharkNinja Group. The valuer has selected a group of comparable companies listed on U.S. exchanges to provide a reasonable reference in evaluating the industry’s multiples, and adopted the P/E ratio and EV/EBITDA ratio to arrive at the Referenced Equity Value. The comparable companies have been selected based on the following criteria:

 

(a)The comparable companies are primarily engaged in the manufacturing, marketing and sales of household appliances or related businesses;

 

(b)The selected companies have the majority of their revenue primarily derived from the U.S.;

 

(c)The selected companies are listed on a U.S. exchange; and

 

(d)The selected companies have relevant public information for reference and assessment.

 

The assumptions adopted by the valuer included but not limited to the following: (i) the SharkNinja Group is expected to continue to conduct the existing household appliances business; (ii) the historical profitability of the SharkNinja Group is sustainable and representative; (iii) the general household appliances market will not have a material decrease in the foreseeable future; and (iv) future legislative or regulatory changes would not have a material adverse effect on the SharkNinja Group’s business, results of operations or financial condition.

 

As SharkNinja was not listed as of 30 September 2022, in determining the Referenced Equity Value, the valuer has taken into consideration (i) the nature and history of the Group and the SharkNinja Group; (ii) the financial conditions of the SharkNinja Group; (iii) the operation, financial and business risks of the SharkNinja Group, including the continuity of income; (iv) market-derived investment returns of entities engaged in similar lines of business; and (v) the private company status of SharkNinja.

 

– 9 –

 

 

LETTER FROM THE BOARD

 

Having reviewed the qualification and experience of the independent valuer, and conducted reasonable assessment on the valuation method and the principal assumptions adopted by the valuer, the Company is of the view that the above method in determining the Referenced Equity Value is fair and appropriate because of the following:

 

(a)the value of the SharkNinja Group as determined by the independent valuer represents a fair value of 100% interest in the SharkNinja Group as of 30 September 2022 by reference to the then circumstances of the SharkNinja Group, which is based on common and widely accepted valuation methodology; and

 

(b)the valuation methodology (as being appropriate based on the view of the valuer) has taken into account the specific circumstances of the SharkNinja Group and value of companies as of 30 September 2022 that are considered to be comparable to the SharkNinja Group.

 

However, the Company Shareholders and potential investors should note that the above Referenced Equity Value assessed by the valuer is for the Company Shareholders’ and potential Shareholders’ reference only. The value in respect of the Company’s equity interest in the SharkNinja Group as of the date of the completion of the Proposed Spin-off and the Proposed Distribution will be determined by the market share price of SharkNinja on the U.S. Stock Exchange, as SharkNinja will become a listed company in the U.S. in connection with the Proposed Spin-off and the Proposed Distribution subject to, among other things, the approval of the Company Shareholders and the approvals from the relevant U.S. authorities.

 

2.5.Reasons for and anticipated benefits of the Proposed Spin-off and the Proposed Distribution

 

Following the Company’s assessment of the overall market positions of ‘‘Shark’’, ‘‘Ninja’’ and ‘‘Joyoung’’ branded products across different regions around the world, the Company recognized that success in each market requires geography-specific considerations and focus (such as, among others, consumer habits, localized lifestyle differences, cultural differences, and consumer and market preferences). As a result, the Company believes that the best strategy to drive global business growth and expand its presence in localized markets, is to ‘‘break up’’ the Group into its two primary delineated markets: (i) Asia Pacific Region and Greater China; and (ii) North America, Europe and other selected international markets; and have JS Global, which will remain listed on the Stock Exchange (and with Joyoung remaining listed on the Shenzhen Stock Exchange) focus on the Asia Pacific Region, while the SharkNinja Group, of which the Company proposes to attain a separate listing on the U.S. Stock Exchange, focuses on the North American, European and other selected international markets.

 

– 10 –

 

 

LETTER FROM THE BOARD

 

The Board considers that the Proposed Spin-off and the Proposed Distribution are commercially beneficial to the Company and the SharkNinja Group and in the interest of the Company Shareholders as a whole as it expects the following benefits:

 

(a)the Proposed Spin-off would strengthen the operational management ability of both the Retained Group and the SharkNinja Group, and their respective abilities to recruit and retain personnel;

 

(b)the Proposed Spin-off and the Proposed Distribution would create two independent businesses, being the Retained Group and the SharkNinja Group with enhanced geographic focus, each of which the Board believes is well positioned for continued growth and market share capture, driven by innovation and new product offerings in their respective areas;

 

(c)the Proposed Spin-off would be conducive to improving the operation, financial transparency and corporate governance level of the Retained Group and the SharkNinja Group, respectively, through which the investors could form better understanding of, and investment decisions in, businesses with different focuses, thus achieving reasonable valuation of the Group, enhancing the interests of all shareholders of the Retained Group and the SharkNinja Group; and

 

(d)the Proposed Spin-off and the Proposed Distribution would enable shareholders and investors to assess the investment propositions of each business of the Retained Group and the SharkNinja Group individually and freely select whether to continue to participate in both businesses or adjust their investment exposure, so as to unlock and enhance the market value of both the Retained Group and the SharkNinja Group.

 

As such, the Company is of the view that the Proposed Spin-off and the Proposed Distribution is fair and reasonable and in the interests of the Company and the Company Shareholders as a whole.

 

– 11 –

 

 

LETTER FROM THE BOARD

 

2.6.Information on the SharkNinja Group and the Retained Group

 

2.6.1Business Overview

 

As of the Latest Practicable Date, the Group operates through the following two segments of small household appliance businesses:

 

(a)SharkNinja: The SharkNinja Group, taken as a whole, is a global product design and technology company that creates 5-star rated lifestyle solutions through innovative products for consumers around the world. The SharkNinja Group has built two billion-dollar brands, ‘‘Shark’’ and ‘‘Ninja’’ (together, ‘‘SN’’), each of which has a proven track record of establishing leadership positions by disrupting numerous small household appliance product categories including Cleaning, Cooking, Food Preparation, Home Environment and Beauty (the ‘‘SN Business’’). According to NPD Group’s Retail Tracking Service data, Shark was the No.1 selling vacuum brand by market share in the U.S. for the last four years and the No.1 selling floorcare brand in the U.S. in 2022. According to Growth from Knowledge (GfK) and Market Intelligence, Shark vacuum cleaners held 31% market share by value GBP in the United Kingdom in 2022, Ninja held a market value share of 59.6% of electrical cooking pots in Great Britain in 2022 and 42.7% market share in terms of value in the deep fryers market in Great Britain in 2022. According to NPD Group’s, Retail Tracking Service data, Ninja was the No.1 selling small kitchen appliance brand in the U.S. for the last three years.

 

Enabled by its global research and development platform with advanced engineering capabilities, and built on an agile and scalable supply chain, the SharkNinja Group designs, markets and distributes innovative home appliances at compelling value, striving to delight consumers. The SharkNinja Group’s differentiated marketing strategies drive high brand engagement via solutions driven storytelling which fuels demand through its robust omni-channel distribution network. The SharkNinja Group is highly penetrated across key retailers, online and offline, and also distributes through its direct-to-consumer platform. The SharkNinja Group strives to be the most relevant and prominent brand wherever consumers shop.

 

The Board believes the SharkNinja Group is well-positioned for continued growth through increasing share in existing categories, entering new categories, expanding the brand and driving operating margins and efficiencies.

 

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LETTER FROM THE BOARD

 

SN brands of products are primarily sold in North America, Europe, the Asia Pacific Region and Greater China, with emerging markets for its products in the following geographical regions:

 

•Asia Pacific Region and Greater China (the ‘‘SN APAC Business’’): The Group conducts businesses in Asia Pacific Region markets including but not limited to Japan, Korea, New Zealand, Australia, Singapore, Vietnam, Thailand, Indonesia, India and other ASEAN countries, and the Greater China markets including Mainland China, Hong Kong, Macau and Taiwan, which are currently considered emerging markets for the SN Business; and

 

•North America, Europe, and other international markets (the ‘‘SN International Business’’): Compared to the Asia Pacific Region and Greater China markets, SN’s presence in North America, Europe and other international markets is more established, characterized by strong partnerships with retailers, direct-to-consumer offerings, and higher brand recognition. The Board believes the SN International Business is well positioned to continue to take share in current and potentially new international markets.

 

(b)Joyoung: Joyoung is a company incorporated in Mainland China, with its A shares listed on the Shenzhen Stock Exchange (stock code: 002242) since April 2008. As of the Latest Practicable Date, the Company holds approximately 67% equity interests in Joyoung and consolidates Joyoung as a subsidiary of the Group in its financial statements. Joyoung primarily engages in product research, design, marketing, export and distribution of the Joyoung (‘‘九陽’’) brand of products (the ‘‘Joyoung Business’’), including soybean milk makers, juicers, rice cookers, and air fryers. Joyoung branded products are primarily sold in Mainland China, and Joyoung has a leading position in Mainland China for various small household appliance products.

 

Upon completion of the Proposed Spin-off and the Proposed Distribution, SharkNinja will operate the SN International Business, and the Retained Group will operate the Joyoung Business and SN APAC Business (through JSG APAC).

 

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LETTER FROM THE BOARD

 

2.6.2Sourcing Arrangement

 

JS Global Transitional Sourcing Arrangement

 

As part of the supply chain operation, the Group is currently engaged in the sourcing of original equipment manufacturer (‘‘OEM’’) suppliers, mainly those located in Mainland China, for the Joyoung Business and SN Business (the ‘‘Sourcing Business’’). These OEM suppliers manufacture and supply the various individual parts to build the final household appliances sold to consumers for both Joyoung and SN brands of products.

 

Historically, there were two sourcing offices within the Group, which provided sourcing services to the SharkNinja Group for production and manufacturing of SN products (the ‘‘Intra Group Sourcing Arrangement’’). Under the Intra Group Sourcing Arrangement, both the two sourcing offices were responsible for negotiating the price of the sourced products with OEM suppliers, ensuring that the OEM suppliers are able to meet the overall production schedules and having sufficient production capacity to satisfy the sourcing demand. For the year ended 31 December 2022, the two sourcing offices respectively sourced approximately 65% and 25% of total amount of SN products from OEM suppliers for further sales in Asia Pacific Region and Greater China, North America and European markets. Upon completion of the Proposed Spin-off as part of the separation plan, the Retained Group and the SharkNinja Group will each have one sourcing office to support their respective sourcing needs with proposed adjustments as detailed below.

 

Owing to the long-term historical cooperation, the Retained Group has acquired comprehensive understanding of the SharkNinja Group’s business and operational requirements and established a great foundation for mutual trust between the parties. In addition, the Retained Group has maintained long-term and stable relationships with OEM suppliers, who understand well the sophisticated technical standards of SN brands of products based on their cooperative experience with the Retained Group, and secure proper use of intellectual properties of the SharkNinja Group and prevent the leakage of the SharkNinja Group’s technical and trade secrets.

 

Accordingly, with respect to the SN APAC Business, the Retained Group will continue to engage OEM suppliers through its sourcing office to support the SN APAC Business for production and manufacturing of SN products to be sold in the Asia Pacific Region and Greater China.

 

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LETTER FROM THE BOARD

 

Although the SharkNinja Group will establish its sourcing office after completion of the Proposed Spin-off, the sourcing office of the Retained Group, which is comprised of senior and experienced personnel, will continue to provide value-added sourcing services to the SharkNinja Group over a transitional period after the Proposed Spin-off. Such transitional value-added services will primarily include assisting the SharkNinja Group in strategic planning, analysis and direction, such as the maintenance and development of OEM supplier channel and relationships, pricing term negotiation, production development and management, supplier inventory management, and coordination of product production planning (‘‘JS Global Transitional Sourcing Service’’). With such support, the SharkNinja Group will have capability and capacity to carry out its own sourcing function and will enter into procurement contracts with OEM suppliers directly for production and manufacturing of products to support the sales of SN brands of products in North America, European and other international markets.

 

With respect to the SN International Business, as the SharkNinja Group is aiming to establish its own sourcing platform, it would take some time for the SharkNinja Group to connect with local OEM suppliers to source all its products independently and directly. As such, the SharkNinja Group will continue to engage the Retained Group to non-exclusively provide the JS Global Transitional Sourcing Service on a non-exclusive basis with respect to certain SN brands of products to be sold in the North America and European markets, considering the historical cooperation relationship between the SharkNinja Group and the Retained Group. However, the JS Global Transitional Sourcing Service is intended to be a transitional arrangement, and its revenue contribution to the Retained Group is expected to reduce progressively in the future as (i) the SharkNinja Group gears up its own capabilities to carry out the sourcing function independently; and (ii) the sourcing needs of the Retained Group’s sales of SN brands of products in the Asia Pacific Region and Greater China increase alongside the growth of such business. Set out below is the proposed timeline for the SharkNinja Group to develop its own sourcing function (though certain events listed may occur earlier or later than the applicable period set forth in the timeline):

 

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LETTER FROM THE BOARD

 

  Timeline Event

 

  By the first half of 2024•All the sourcing agreements entered into between the sourcing office of the Retained Group and the OEM suppliers with respect to SN brands of products to be sold by the SharkNinja Group in North America, Europe and other international markets will be transferred to the sourcing office of the SharkNinja Group;

 

   •The SharkNinja Group will update its internal control policies and operational management measures to improve its sourcing capabilities after the Proposed Spin-off;

 

   •The SharkNinja Group will conduct OEM supplier education on separation of sourcing activities between the SharkNinja Group and the Retained Group for further sales of SN brands of products in different geographical regions after the Proposed Spin-off;

 

   •The SharkNinja Group will recruit key management and employees with expertise and experience in sourcing to lead the sourcing activities of the SharkNinja Group;

 

   •The SharkNinja Group will conduct a pilot run on sourcing SN brands of products from selected OEM suppliers of the SharkNinja Group; and

 

   •The SharkNinja Group will obtain the JS Global Transitional Sourcing Service from the sourcing office of the Retained Group to assist it in the procurement arrangements with OEM suppliers under the Sourcing Service Agreement – JS Global.

 

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LETTER FROM THE BOARD

 

  Timeline Event

 

  By the second half of 2024•The SharkNinja Group will start to take over the value-added services performed by the sourcing office of the Retained Group for certain new models of SN brands of products for sales in North America, Europe and other International markets, including but not limited to production development and management, supplier inventory management, and coordination of production planning; and

 

   •The SharkNinja Group will start to conduct sourcing for new products from OEM suppliers independently without support or services from the Retained Group.

 

  By the first half of 2025•The sourcing office of the SharkNinja Group is expected to have a full functional sourcing team which is able to conduct sourcing activities with OEM suppliers independently from the Retained Group; and

 

   •The Retained Group will provide ad hoc assistance on the historical sourcing transactions between the SharkNinja Group and OEM suppliers under the Sourcing Service Agreement – JS Global.

 

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LETTER FROM THE BOARD

 

Accordingly, the Company or its subsidiaries will enter into the Sourcing Services Agreement – JS Global with SharkNinja and/or its subsidiaries on or before the SharkNinja Listing Date, pursuant to which the Retained Group would provide the JS Global Transitional Sourcing Service to the SharkNinja Group. Such transactions under the Sourcing Services Agreement – JS Global will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules after SharkNinja is listed on a U.S. Stock Exchange. As it is expected that the highest applicable percentage ratio for the service fee payable under the Sourcing Services Agreement – JS Global will exceed 0.1% but is less than 5%, the transactions contemplated under the Sourcing Services Agreement – JS Global are subject to the reporting and announcement requirements, but exempt from the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company will comply with the announcement, annual review and reporting requirements of the Listing Rules immediately upon completion of the Proposed Spin-off.

 

The Proposed Sourcing Adjustment

 

Historically, the Intra Group Sourcing Arrangement was accounted for as trading arrangements (i.e. buy and sale) with a mark-up rate charged by the two sourcing offices within the Group, pursuant to which the revenue of the two sourcing offices (the Retained Group and the SharkNinja Group will each retain one sourcing office) was made up of the procurement amounts charged by the OEM suppliers and the mark-up fee charged by the two sourcing offices (and which were eliminated upon consolidation). Upon completion of the Proposed Spin-off and Proposed Distribution, sourcing service fees representing the value of the JS Global Transitional Sourcing Service will be charged by the sourcing office of the Retained Group to the SharkNinja Group until completion of the full transition. As a result of the above arrangements, the revenue and cost structures for both groups will change from those historically recorded by these entities within the Group. The Retained Group’s revenue structure generated by the Sourcing Business from the SharkNinja Group will change from ‘‘a trading arrangement with a mark-up’’ to ‘‘charging sourcing service fees’’, whilst the costs structure for the SharkNinja Group will change from ‘‘procurement amounts plus mark-up’’ for the Retained Group to ‘‘procurement amounts payable to OEM suppliers directly and sourcing fees payable to the sourcing office of the Retained Group’’ (the ‘‘Proposed Sourcing Adjustment’’). The effects of the above pro forma adjustments are that:

 

(a)the adjusted historical revenue amounts for the three financial years ended 31 December 2022 of the Retained Group are significantly smaller than the historical revenue amounts prior to the Proposed Sourcing Adjustment;

 

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LETTER FROM THE BOARD

 

(b)the net profit amounts of the Retained Group from the Sourcing Business would remain at a similar level before and after the Proposed Sourcing Adjustment; and

 

(c)the total cost amounts of the SharkNinja Group do not change significantly before and after the Proposed Sourcing Adjustment.

 

In light of the above, the Group includes in this circular the pro forma financials of the Retained Group and the SharkNinja Group for the three financial years ended 31 December 2022 with the Proposed Sourcing Adjustment incorporated, so that the historical pro forma financials can reflect the proposed arrangements going forward, which would also make the historical pro forma financials presented in this circular comparable with the future financials of the Retained Group. The Company is of the view that such pro-forma financials for the Retained Group and the SharkNinja Group represent the substance of the arrangements between the two groups and that the Retained Group provided and will continue to provide value added sourcing service to the SharkNinja Group.

 

Joyoung Sourcing Arrangement

 

In addition, the Joyoung Group (as a separately listed group) has historically manufactured, and procured its OEM suppliers to manufacture, certain SN branded products, including cooking appliances, food preparation appliances and floorcare products. Such cooking appliances and food preparation appliances were sourced by the SharkNinja Group from the Joyoung Group for further sale in North America and European markets.

 

The SharkNinja Group will continue to engage the Joyoung Group to manufacture, or procure its OEM suppliers to manufacture, certain SN branded products, including cooking appliances, food preparation appliances and floorcare products, for a transitional period after the Proposed Spin-off before the SharkNinja Group gears up its own capacities to carry out the sourcing function with OEM suppliers directly for similar SN products. Such transactions were accounted for, and will continue to be accounted for as trading arrangements (i.e. buy and sale) with a mark-up rate charged by the Joyoung Group.

 

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LETTER FROM THE BOARD

 

During the transitional period, the SharkNinja Group will recruit key management employees with expertise and experience in sourcing to lead the sourcing activities of the SharkNinja Group, while identifying alternative OEM suppliers that manufacture cooking appliances, food preparation appliances and floorcare products with comparable capacities and qualities as the Joyoung Group. After the conclusion of the transitional period, the SharkNinja Group and the Joyoung Group will re-assess whether or not to continue the sourcing services provided by the Joyoung Group with respect to the SN branded cooking appliances, food preparation appliances and floorcare products under the Sourcing Services Agreement – Joyoung (as defined below). In addition, such transactions between the SharkNinja Group and the Joyoung Group are anticipated to be beneficial to both the SharkNinja Group and the Joyoung Group. The SharkNinja Group could leverage the Joyoung Group and its suppliers’ expertise and resources with respect to certain cooking appliances, food preparation appliances such that the SharkNinja Group could expand its offerings of kitchen products over time.

 

Accordingly, Joyoung or its subsidiaries will enter into the Sourcing Services Agreement – Joyoung with SharkNinja or its subsidiaries on or before the SharkNinja Listing Date, pursuant to which the SharkNinja Group will engage the Joyoung Group to manufacture, or procure OEM suppliers to manufacture, certain SN branded products, including cooking appliances, food preparation appliances and floorcare products, and source these products from Joyoung Group. Such transactions under the Sourcing Services Agreement – Joyoung will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules after SharkNinja is listed on the U.S. Stock Exchange. As it is expected that the highest applicable percentage ratio for the service fee payable under the Sourcing Services Agreement – JS Global will exceed 0.1% but is less than 5%, the transactions contemplated under the Sourcing Services Agreement – Joyoung are subject to the reporting and announcement requirements, but exempt from the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company will comply with the announcement, annual review and reporting requirements of the Listing Rules immediately upon completion of the Proposed Spin-off.

 

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LETTER FROM THE BOARD

 

2.6.3Financial Information of the SharkNinja Group

 

For the purpose of the application under PN15, with the Stock Exchange the Company has prepared pro-forma financial information of the SharkNinja Group. Set out below is the financial information of the SharkNinja Group prepared according to IFRS with the pro-forma adjustments (as if the SharkNinja Group had not been part of the Group for the relevant financial years and taking into consideration the Proposed Sourcing Adjustment, but without taking into consideration the adjustments in relation to the Brand License Agreement) for the three years ended 31 December 2022:

 

   For the year ended 31 December 
   2020   2021   2022 
             
   (in US$ million, unaudited) 
Revenue   2,690    3,625    3,620 
Profits before tax   381    408    317 
Profits after tax   298    326    247 

 

The total assets (on a pro forma basis as per above) of the SharkNinja Group amounted to US$2,970 million, US$3,383 million and US$3,422 million, as of 31 December 2020, 2021 and 2022, respectively. The net asset value of the SharkNinja Group amounted to US$1,419 million, US$1,716 million and US$1,711 million, as of 31 December 2020, 2021 and 2022, respectively.

 

The Company Shareholders and potential investors should note that the above financial information has been prepared under IFRS with pro forma adjustments, which may differ from the financial information included in any registration statement to be filed by SharkNinja with the relevant U.S. authorities in connection with its proposed listing on the U.S. Stock Exchange, which would be prepared in accordance with U.S. generally accepted accounting principles (GAAP).

 

For details of the financial information (on a pro forma basis as per above) of the SharkNinja Group, please refer to Appendix III-Pro Forma Financial Information of the SharkNinja Group.

 

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LETTER FROM THE BOARD

 

2.6.4Financial Information of the Retained Group

 

For the purpose of the application under PN15 with the Stock Exchange, the Company has prepared pro-forma financial information of the Retained Group. Set out below is the financial information of the Retained Group and SN APAC Business respectively prepared according to IFRS with pro-forma adjustments (as if the SharkNinja Group had not been part of the Group for the relevant financial years and taking into consideration the Proposed Sourcing Adjustment, but without taking into consideration the adjustments in relation to the Brand License Agreement) for the three years ended 31 December 2022:

 

           SN APAC Business 
   Retained Group   (as part of the Retained Group) 
   For the year ended 31 December 
   2020   2021   2022   2020   2021   2022 
                         
   (in US$ million, unaudited) 
Revenue   1,688    1,790    1,663    63    102    97 
Profits before tax   142    161    138    7    9    8 
Profits after tax   107    135    113    5    7    7 

 

The total assets (on a pro forma basis as per the above) of the Retained Group amounted to US$2,754 million, US$2,617 million and US$2,445 million as of 31 December 2020, 2021 and 2022, respectively. The net asset value of the Retained Group amounted to US$1,428 million, US$1,310 million and US$1,283 million as of 31 December 2020, 2021 and 2022, respectively.

 

2.7.Management Independence

 

As of the Latest Practicable Date, the Board comprises Mr. Wang Xuning, Ms. Han Run and Ms. Huang Shuling as executive Directors, Mr. Hui Chi Kin Max, Mr. Stassi Anastas Anastassov and Mr. Sun Zhe as non-executive Directors and Mr. Yuan Ding, Mr. Timothy Roberts Warner and Mr. Yang Xianxiang as independent non-executive Directors.

 

The complete list of directors and director nominees of SharkNinja upon the completion of the Proposed Spin-off is not finally determined at this stage, as SharkNinja is still in the process of identifying the non-executive directors and independent directors to be appointed to its board of directors. However, consistent with U.S. corporate governance standards, the non-executive directors and independent directors of SharkNinja will not participate in the daily operations of the SharkNinja Group and should therefore not affect the management independence between the Retained Group and SharkNinja Group.

 

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LETTER FROM THE BOARD

 

It is proposed that except for Mr. Wang Xuning, the Chairman, the executive Director and the Chief Executive Officer of the Company, who will also serve as the chairman of SharkNinja, there will be no overlapping of executive directors and senior managers between the SharkNinja Group and the Retained Group.

 

On the above basis, the Company believes that the Board will operate the business of the Retained Group and resolve all actual or potential conflicting matters involving the SharkNinja Group’s business independently, and equally SharkNinja will operate the business of the SharkNinja Group independently and make decisions in the interests of SharkNinja and its shareholders as a whole.

 

2.8.Clear delineation between the business of the SN APAC Business of the Retained Group and SN International Business

 

Upon completion of the Proposed Spin-off, the SharkNinja Group will carry on the design, production, marketing and distribution of the SN brands of products in North America, Europe and other selected international markets (excluding the Asia Pacific Region and Greater China), whilst the Retained Group will continue to carry on the design, production, marketing and distribution of SN brands of products across Asia Pacific Region and Greater China, as well as the Joyoung Business.

 

There is a clear delineation between the business of the Retained Group and the SharkNinja Group as they will be serving different geographical locations. In particular, for the SN APAC Business and the SN International Business, whilst the products will be branded as ‘‘Shark’’ or ‘‘Ninja’’, the products will be respectively designed, developed and sold in Asia Pacific Region and Greater China markets under the SN APAC Business, and in North America, Europe and other selected international markets (excluding Asia Pacific Region and Greater China) under the SN International Business, with different product features and characteristics catering to local consumer preferences. For example, the SN products sold in the Asia Pacific Region are generally designed to be smaller in size, more catered to ‘‘apartment-style’’ living (such as with components to fit in tighter spaces, and are typically lighter in weight and quieter) compared with products designed for the U.S. and U.K. markets.

 

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LETTER FROM THE BOARD

 

There is a clear delineation between the businesses of the SharkNinja Group and the Retained Group, specifically in relation to the following aspects:

 

    Joyoung Business SN APAC Business SN International business

 

ProductsThe ‘‘Joyoung’’ brand of products will be sold by the Retained Group in Mainland China and potentially other Asia Pacific Region countries/regions, mainly including kitchen appliances.

Whilst the products will be branded as ‘‘Shark’’ or ‘‘Ninja’’, the products designed for the Asia Pacific Region and Greater China markets will generally be unique and will be sold by the Retained Group only in Asia Pacific Region and Greater China.

 

The SN products sold in Asia Pacific Region are designed to cater to local consumer preferences, including designed to be smaller in size and able to fit in tighter spaces, lighter weight and lower volume compared to the U.S. and U.K. markets products.

Whilst the products will be branded as ‘‘Shark’’ or ‘‘Ninja’’, the products designed for North America, Europe and other selected international markets (excluding Asia Pacific Region and Greater China) will generally be unique and will be sold by SharkNinja only in North America, Europe and other selected international markets (excluding Asia Pacific Region and Greater China).

 

The SN products sold in North America, Europe and other selected international markets (excluding Asia Pacific Region and the Greater China) are typically larger in size with larger capacity and more weight as compared to those sold in Asia Pacific Region and Greater China.

 

Household goods in the market (including those offered by the SharkNinja Group, the Retained Group and competitors in this space) in the same category mostly differentiate and compete by design, functionality, capacity and price. It is natural that there are similarities between the products in the same category (e.g., electronic vacuum cleaners) but offered by different brands or in different parts of the world.

 

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LETTER FROM THE BOARD

 

    Joyoung Business SN APAC Business SN International business
         
  Distribution and marketing channels

Joyoung brand of products are sold in Mainland China through various channels, including offline retail channel such as shopping malls, distributors and online e-commerce platforms.

 

These online and offline retailers only sell products in their respective responsible local markets. The distribution and marketing channels of Joyoung brand of products do not generally overlap with that of the SharkNinja Group.

SN products sold in Japan are mainly through local retailers, with a small portion directly sold to Japanese local consumers.

 

SN products sold in other Asia Pacific Region markets including South Korea, Australia and New Zealand and Greater China are mainly through local distributors, who will further on-sell to local retailers and consumers.

 

These local retailers and distributors would only sell SN products to their respective responsible local markets. The distribution and marketing channels do not generally overlap between the Retained Group and the SharkNinja Group.

SN products sold in North America and Europe are mainly sold through local retailers, with a small portion directly sold to North American and European local consumers.

 

These local retailers only sell products in their respective responsible local markets. The distribution and marketing channels do not generally overlap between the Retained Group and the SharkNinja Group.

         
  Target customers Consumers in Mainland China and potentially other Asia Pacific Region countries/regions. Consumers in Asia Pacific Region. Consumers in North America, Europe and other international markets (excluding Asia Pacific Region and Greater China).
         
  Research and development The Joyoung brand of products will continue to be developed by Joyoung before and after the Proposed Spin-off.

Historically, the SN brands of products sold in the Asia Pacific Region and Greater China were developed by the SN global product development teams, and upon reviewing products of local competitors in Asia Pacific Region and Greater China market and the recommendation of the localized consumer insights team of the Group, the Group would determine whether there are specific product designs and functions that would need to be developed or modified for Asia Pacific Region consumers.

 

Upon completion of the Proposed Spin-off, the Retained Group will formulate and develop the roadmap for products to be sold in the Asia Pacific Region and Greater China markets, and at its sole discretion, engage the SharkNinja Group, Joyoung or other independent third parties for detailed product design.

 The SN brands of products sold in North America, Europe and other selected international markets (excluding Asia Pacific Region and Greater China) were and will continue to be developed by the SN global product development teams before and after the Proposed Spin-off.

 

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    Joyoung Business SN APAC Business SN International business
         
  Production and manufacturing Joyoung historically engaged and will continue to engage OEM suppliers mainly located in Mainland China for production and manufacturing of certain portion of Joyoung brand of products before and after the completion of the Proposed Spin-off. In addition, Joyoung also operates its own independent production and manufacturing capacities.

The Retained Group historically engaged and will continue to engage OEM suppliers mainly located in Mainland China for production and manufacturing of SN products to be sold in Asia Pacific Region and Greater China before and after the completion of the Proposed Spin-off.

 

Historically, there were two sourcing offices within the Group, which provided sourcing services to the SharkNinja Group for production and manufacturing of SN products. Upon completion of the Proposed Spin-off, the Retained Group and the SharkNinja Group will each have one sourcing office to support their respective sourcing needs.

 Upon completion of the Proposed Spin-off, the Retained Group and the SharkNinja Group will each have one sourcing office to support their respective sourcing needs, while the SharkNinja Group will continue to engage the Retained Group, on a non-exclusive basis, to provide value added sourcing services with respect to SN brands of products to be sold by the SharkNinja Group in the North America, European and other selected international markets (excluding Asia Pacific Region and Greater China) with OEMs primarily based in Mainland China. The sourcing services between the SharkNinja Group and the Retained Group will be a transitional arrangement, and the SharkNinja Group will expand and enhance its sourcing capability to enable it to function independently from the Retained Group.

 

2.9.Operational Independence

 

The SharkNinja Group has its own organizational structure with independent function (for example financial, human resources and legal and compliance functions), each with specific areas of responsibility carrying out essential administrative functions without the Retained Group’s support. It has a set of internal control procedures to facilitate the effective operation of its business.

 

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2.9.1Continuing Connected Transactions

 

Historically, the SharkNinja Group maintained a close business relationship with the Retained Group. It is currently expected that after the completion of the Proposed Spin-off, the SharkNinja Group will continue to have various transactions with the Retained Group, which will constitute continuing connected transactions of the Company. Each of these continuing connected transactions will be conducted on an arm’s length basis and on normal commercial terms in the ordinary and usual course of business of each of the SharkNinja Group and the Retained Group pursuant to the applicable laws and regulations.

 

No. Category Nature

 

1.Sourcing Services Agreement – JS Global The Retained Group will provide the JS Global Transitional Sourcing Service to the SharkNinja Group.

 

2.Sourcing Services Agreement – Joyoung The SharkNinja Group will engage the Joyoung Group to manufacture, or procure OEM suppliers to manufacture, certain SN branded products, including cooking appliances, food preparation appliances and floorcare products, and source these products from Joyoung Group.

 

3.Brand License Agreement The SharkNinja Group will grant to the Retained Group the non-exclusive rights to obtain, produce and source, and the exclusive rights to distribute and sell, SN brands of products in the Asia Pacific Region and Greater China.

 

4.Product Development Agreement The Retained Group may engage the SharkNinja Group to develop market tailored products for Asia Pacific Region and Greater China markets, and provide certain related business support services, for which the SharkNinja Group will charge service fees to the Retained Group.

 

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2.9.2Sourcing Arrangement

 

JS Global Transitional Sourcing Service

 

As described in the paragraph headed ‘‘2.6.2 Sourcing Arrangement’’, the Retained Group will continue to provide value-added sourcing services to the SharkNinja Group upon completion of the Proposed Spin-off under a sourcing agreement between the SharkNinja Group and the Retained Group (the ‘‘Sourcing Services Agreement – JS Global’’). Whilst there will be such on- going relationship between the SharkNinja Group and the Retained Group in support of the sourcing function, such arrangement is for transitional purposes only and the SharkNinja Group expects to gradually take over and establish the contractual and business relationships with the OEM suppliers with respect to the procurements for the SharkNinja Group. Considering that the highest applicable percentage ratio under Rule 14.07 of the Listing Rules for the service fees payable by the SharkNinja Group to the Retained Group is expected to be less than 5%, such on-going continuing connected transactions will not materially impact the ability of the SharkNinja Group to source and make procurements from existing OEM suppliers or develop relationships with new OEM suppliers.

 

Historically, from the SharkNinja Group’s perspective, the suppliers for the production and manufacturing of products were the two sourcing offices within the Group. During the transitional period, all the sourcing agreements entered into between the sourcing office of the Retained Group and the OEM suppliers with respect to SN brands of products to be sold by the SharkNinja Group in North5 America, Europe and other international markets (excluding Asia Pacific Region and Greater China) are expected to be transferred to the sourcing office of the SharkNinja Group or be replaced by new sourcing agreements entered into directly between the SharkNinja Group and such OEM suppliers. These OEM suppliers to be directly engaged by the SharkNinja Group may continue to provide production and manufacturing services to the Retained Group, while the Company believes that such overlapping would not affect the operational independence of the SharkNinja Group for the following reasons:

 

(a)each of the SharkNinja Group and the Retained Group will exercise its own discretion in selecting their respective OEM suppliers, and all the terms/agreements with OEM suppliers will be negotiated directly and independently. There would be no bundling arrangements with respect to the sourcing arrangement between each of the SharkNinja Group and the Retained Group on one hand, and the OEM suppliers on the other hand, and such sourcing arrangement with respect to each of the SharkNinja Group and the Retained Group would not be conditional or dependent on each other;

 

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LETTER FROM THE BOARD

 

(b)although the services provided by OEM suppliers are readily available in the market, the Company believes that the OEM suppliers engaged by the Retained Group and/or the SharkNinja Group are able to provide high quality services with competitive pricing terms. Therefore, it is commercially sensible for certain high quality OEM suppliers, who are familiar with the sourcing requirements of the SharkNinja Group and the Retained Group, to provide production and manufacturing services to both parties; and

 

(c)upon completion of the Proposed Spin-off, the SharkNinja Group will have an independent sourcing office overseeing its overall procurement. The selection procedure of major OEM suppliers, as well as the detailed pricing terms, will be subject to internal control measures of the SharkNinja Group and disclosed in the prospectus of the SharkNinja Group.

 

The term of the Sourcing Services Agreement – JS Global will commence on or before the SharkNinja Listing Date and end on 31 December 2024.

 

Listing Rules Implications

 

Considering that the highest applicable percentage ratio under Rule 14.07 of the Listing Rules for the service fees payable by the SharkNinja Group to the Retained Group is expected to exceed 0.1% but be less than 5%, the transactions contemplated under the Sourcing Service Agreement – JS Global are subject to the reporting and announcement requirements, but exempt from the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company will comply with the announcement, annual review and reporting requirements of the Listing Rules immediately upon completion of the Proposed Spin-off.

 

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LETTER FROM THE BOARD

 

Joyoung Sourcing Arrangements

 

In addition to the above sourcing arrangement between the sourcing office of the Retained Group (excluding Joyoung Group) and the SharkNinja Group, upon the completion of the Proposed Spin-off, it is expected that the SharkNinja Group will enter into a sourcing agreement with the Joyoung Group (the ‘‘Sourcing Services Agreement – Joyoung’’), pursuant to which the SharkNinja Group expects to continue to engage the Joyoung Group to manufacture, or procure OEM suppliers to manufacture, certain SN branded products, including cooking appliances, food preparation appliances and floorcare products, and source such products from the Joyoung Group for a transitional period, and the SharkNinja Group will pay sourcing fees (being the purchase amount with a mark-up rate) to the Joyoung Group. Such mark-up rate for the sourcing fees under the Sourcing Services Agreement – Joyoung will be determined by the Joyoung Group and the SharkNinja Group on an arm’s length basis, with reference to (a) the historical sourcing service rates charged by the Joyoung Group to the SharkNinja Group for the manufacture, or procuring OEM suppliers to manufacture, certain SN branded cooking appliances, food preparation appliances and floorcare products; and (b) the cost and expense for the Joyoung Group to conduct sourcing service under the Sourcing Services Agreement – Joyoung.

 

The term of the Sourcing Services Agreement – Joyoung will commence on or before the SharkNinja Listing Date and end on 31 December 2023, subject to automatic renewal in accordance with applicable law until terminated.

 

Listing Rules Implications

 

Considering that the highest applicable percentage ratio under Rule 14.07 of the Listing Rules for the sourcing amount of such SN branded products, including cooking appliances, food preparation appliances and floorcare products during the term of the Sourcing Services Agreement – Joyoung is expected to exceed 0.1% but be less than 5%, the transactions contemplated under the Sourcing Services Agreement – Joyoung are subject to the reporting and announcement requirements, but exempt from the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

 

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LETTER FROM THE BOARD

 

2.9.3Brand License Arrangement

 

Upon completion of the Proposed Spin-off, the Retained Group will enter into a brand license agreement with the SharkNinja Group (the ‘‘Brand License Agreement’’), pursuant to which the SharkNinja Group will grant to the Retained Group the non-exclusive rights to obtain, produce and source, and the exclusive rights to distribute and sell, SN brands of products in the Asia Pacific Region and Greater China, and the SharkNinja Group will charge royalties from the Retained Group.

 

The licensing arrangements will enable the Retained Group to obtain long term exclusive rights to distribute and sell SN brands of products in the Asia Pacific Region and Greater China, and would allow it to enjoy all material benefits from the license and use of the ‘‘Shark’’ and ‘‘Ninja’’ brands, and to develop its business and reputation through distributing SN brands of products in Asia Pacific Region and Greater China. In addition, the licensing arrangement will enable the SharkNinja Group to benefit from the Retained Group’s use of and development of reputation for the brands on its products offered to the Asia Pacific Region and Greater China markets, and therefore enhancing the ‘‘Shark’’ and ‘‘Ninja’’ presence, brand recognition, and market penetration in these regions, which will in turn enable the SharkNinja Group to leverage the local strength of the ‘‘Shark’’ and ‘‘Ninja’’ brands (and brands of products) in the Asia Pacific Region and Greater China and capitalize on a stronger global brand to further entrench and grow its position in North America, Europe and other international markets, creating a reinforcing ‘‘halo effect’’ for all geographical regions in which the ‘‘Shark’’ and ‘‘Ninja’’ brands are present. The SharkNinja Group will also receive more royalties if the SN APAC Business of the Retained Group grows. As such, the SharkNinja Group has a strong and direct incentive to ensure the success of the Retained Group for its sales of SN brands of products in Asia Pacific Region and Greater China markets.

 

The license royalty under the Brand License Agreement will be determined among the respective parties on an arm’s length basis, which is subject to adjustments from time to time upon arm’s length negotiations between the SharkNinja Group and the Retained Group, and having made reference to (a) the positioning of the relevant SN brands of product in the end-market, (b) the duration such products have been present in the relevant market and the product introduction strategy, (c) profit/loss generated from the sales of SN brands of products in the Asia Pacific Region and Greater China regions under the Brand License Agreement, and (d) such other factors as the Retained Group and the SharkNinja Group may deem relevant. The term of the Brand License Agreement will commence on or before the SharkNinja Listing Date with a term of 20 years.

 

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LETTER FROM THE BOARD

 

Listing Rules implications

 

Considering that the highest applicable percentage ratio under Rule 14.07 of the Listing Rules for the royalties payable by the Retained Group to the SharkNinja Group will be less than 0.1%, therefore the relevant transactions under the Brand License Agreement are fully exempt from the reporting and announcement requirements, the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

 

2.9.4Product Development Service

 

It is expected that the SharkNinja Group and the Retained Group will enter into a product development agreement (the ‘‘Product Development Agreement’’), pursuant to which the Retained Group will be responsible to use local insight, market intelligence, local know-how and consumer feedback to define the products that are needed to grow the Asia Pacific Region and Greater China markets (e.g. modified versions of the SharkNinja Group’s products) and be responsible for developing the product roadmap. Once the product roadmap has been established, the Retained Group may, at its own discretion, cooperate with the SharkNinja Group and engage the SharkNinja Group to develop such market tailored products for the Asia Pacific Region and Greater China markets leveraging its extensive experience in the development of similar SN brand of products, and provide certain related business support services, for which SN will charge a service fee to the Retained Group.

 

The service fee to be charged by the SharkNinja Group to the Retained Group under the Product Development Agreement will be determined among the Retained Group and the SharkNinja Group on normal commercial terms after arm’s length negotiations between the relevant parties on a cost-plus or other arm’s-length basis, taking into consideration the number of products to be developed by the SharkNinja Group, the cost to be borne by the development personnel of the SharkNinja Group with a reasonable profit margin and the prevailing market rate for providing similar services. The term of the Product Development Agreement will commence on or before the SharkNinja Listing Date with an initial term of three years, and will renew automatically for successive periods of one year, unless the Retained Group provides prior written notice ninety (90) days prior to the expiration of the current term of the Product Development Agreement of its intention not to renew the agreement.

 

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LETTER FROM THE BOARD

 

Listing Rules Implications

 

Considering that the highest applicable percentage ratio under Rule 14.07 of the Listing Rules for the fees payable by the Retained Group to the SharkNinja Group will be less than 0.1%, the relevant transactions under the Product Development Agreement are fully exempt from the reporting and announcement requirements, the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

 

2.10.Financial Independence

 

The SharkNinja Group has established its own finance department with a team of independent financial staff responsible for financial management, accounting, reporting, funding and internal control functions, which is independent from the Retained Group.

 

The Company and Global Appliance LLC, being the holding company and a subsidiary of SharkNinja SPV respectively, as the joint borrowers (the ‘‘Borrowers’’) entered into a loan agreement with a commercial bank (the ‘‘Loan Agreement’’) in 2020. Pursuant to the Loan Agreement, the bank granted a loan facility with an amount up to US$1.2 billion (the ‘‘Loan’’) to the Borrowers, under which the commitments to the Company (on behalf of the Retained Group) and Global Appliance LLC (on behalf of the SharkNinja Group) shall be no more than US$0.5 billion and US$0.7 billion, respectively. The Loan was secured by securities provided by the Company which comprised its equity interests in major subsidiaries, including the SharkNinja Group and Joyoung.

 

As of 31 December 2022, the outstanding amount of loan under the Loan Agreement was US$857 million, of which the borrowing by the Retained Group and the SharkNinja Group were US$421 million and US$436 million, respectively.

 

The Company is in the process of refinancing the Loan and currently expects to terminate the Loan prior to the completion of the Proposed Spin-off. Upon completion of the Proposed Spin-off, there will be no external loans and borrowings, either obtained by SharkNinja or by JS Global for financing SharkNinja’s operations, that are guaranteed/ secured by the Retained Group.

 

On this basis, it is believed that the SharkNinja Group will be financially independent from the Retained Group after the Proposed Spin-off.

 

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LETTER FROM THE BOARD

 

2.11.Assured Entitlement

 

In accordance with the requirement of paragraph 3(f) of PN15, the Board proposes to give due regard to the interests of the Company Shareholders by providing them with an assured entitlement to the shares of SharkNinja by way of a full distribution in specie of existing shares of SharkNinja held by the Company, with each of the Company Shareholders to be entitled to a pro rata distribution of all of the Company’s shareholding in SharkNinja in proportion to their respective shareholdings in the Company.

 

The Company does not intend to offer a cash alternative through direct cash payments to the Company Shareholders while retaining shares of SharkNinja (the ‘‘Cash Alternative’’) for the following the reasons:

 

(a)The Cash Alternative is not in line with the overall objective of the Proposed Spin-off. The overall objective of the Proposed Spin-off is to create a parallel listing structure of the Company and SharkNinja, following which the Company will no longer hold any interest in SharkNinja, and SharkNinja will be fully demerged from the Company and separately listed on the U.S. Stock Exchange. If the Cash Alternative were to be provided by the Company and for any Company Shareholder who elects the Cash Alternative, SharkNinja shares that would have been distributed to such Company Shareholder will be retained by the Company. In the extreme case where all Company Shareholders take the Cash Alternative, the Company will need to continue to hold up to 100% of SharkNinja shares, which does not achieve the overall objective of the Company to pursue the Proposed Spin-off; and

 

(b)Providing the Cash Alternative would not be in the best interests of the Company and the Company Shareholders as a whole. If the Company were to offer the Cash Alternative in terms of the payment of a large amount of cash to the Company Shareholders, in view of the large number of the distribution shares and hence the significant amount of cash payment by the Company, the Company would either need to utilize a substantial amount of own cash resources and/or take on a substantial financial liability and burden to support such cash payment. This would not be beneficial to Company Shareholders as a whole as this would limit the resources for future business operation and development of the Company.

 

The Company considers that the Proposed Spin-off and the Proposed Distribution will be beneficial to the Company, the Company Shareholders and shareholders of SharkNinja as a whole.

 

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LETTER FROM THE BOARD

 

2.12.Arrangement for the Proposed Distribution

 

Certain Company Shareholders on the Record Date cannot receive the distribution in kind in the form of the shares of SharkNinja, which are referred to herein as the Non- Qualifying Company Shareholders. Non-Qualifying Company Shareholders include, on the Record Date, (i) the Stock Connect Investors. As of the Latest Practicable Date, the Stock Connect Shareholders comprise approximately 5.43% of the total issued shares of JS Global; and (ii) certain overseas Company Shareholders residing in a jurisdiction where it would be illegal for him/her/it to receive SharkNinja shares under the Proposed Distribution due to restrictions under the relevant overseas securities laws and regulations.

 

Stock Connect Investors and Certain Overseas Shareholders

 

Stock Connect Investors

 

Pursuant to article 24 of the Implementation Rules for Registration, Depository and Clearing Services under the Mainland-Hong Kong Stock Markets Connect Programme （《內地與香港股票市場交易互聯互通機制登記、存管、結算業務實施細 則》）, if the Stock Connect Investors receive any securities not listed on the Stock Exchange, they will not be allowed to buy or sell such securities through the Stock Connect. As SharkNinja shares will be listed on the U.S. Stock Exchange and not on the Stock Exchange, there will be practical difficulty for the Stock Connect Investors in realising the benefit of their entitlement to SharkNinja shares under the Proposed Distribution should they receive the SharkNinja shares directly.

 

Therefore, the Stock Connect Investors will not be able to receive SharkNinja shares directly as part of the assured entitlements under PN15 or the Proposed Distribution, and this treatment is in accordance with Question No. 4 of the Frequently Asked Questions Series 29 released by the Stock Exchange on 17 November 2014 (which is last updated on 13 July 2018).

 

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LETTER FROM THE BOARD

 

Overseas Company Shareholders

 

As of the Latest Practicable Date, Company Shareholders shown on the register of members of the Company included 19 Company Shareholders in Hong Kong, and there were no Overseas Company Shareholders. The Company will make further enquiries regarding the legal restrictions under the laws of the relevant overseas jurisdiction(s) and the requirements of the relevant regulatory body(ies) pursuant to Rule 13.36(2)(a) of the Listing Rules to assess if any overseas Company Shareholders as of the Record Date will be subject to legal restrictions to receive SharkNinja shares. If after making such enquiries and based on legal opinions provided to the Company, the Board is of the opinion that it cannot directly distribute the SharkNinja shares to certain overseas Company Shareholders on account either of the legal restrictions under the laws of the relevant jurisdiction(s) or the requirements of the relevant regulatory body(ies), such overseas Company Shareholders will not directly receive SharkNinja shares.

 

A Company Shareholder with an address outside Hong Kong should also consult his/her/its own professional advisers as to whether or not he/she/it is permitted to receive the SharkNinja shares pursuant to the Proposed Distribution or if any governmental or other consent is required or other formalities are required to be observed and whether there are any other restrictions in relation to the future sale of any SharkNinja shares. An overseas Company Shareholder residing in a jurisdiction where it would be illegal for him/her/it to elect for or to receive the SharkNinja shares under the Proposed Distribution due to restrictions under the relevant overseas securities laws and regulations will be included in the Non-Qualifying Company Shareholders.

 

Arrangements for Qualifying Company Shareholders and Non-qualifying Company Shareholders

 

The following arrangements for the Proposed Distribution for the Company Shareholders, in connection with the Proposed Spin-off, have been proposed:

 

(a)Qualifying Company Shareholders will receive SharkNinja shares on the SharkNinja Listing Date; and

 

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LETTER FROM THE BOARD

 

(b)with respect to the Non-Qualifying Company Shareholders, the Company will transfer the number of SharkNinja shares that would otherwise be directly distributed to the Non-Qualifying Company Shareholders under the Proposed Distribution (the ‘‘Non-Qualifying Company Shareholders Shares’’) to a purpose trust (the ‘‘Purpose Trust’’) (in the name of its trustee) to be established specifically for the following key purposes:

 

(i)An independent professional trust company will act as the trustee and protector of the Purpose Trust.

 

(ii)The trustee of the Purpose Trust will, on behalf of the Purpose Trust, enter into a sell down programme with one or more independent securities firms in Hong Kong (the ‘‘Qualified Broker(s)’’) which are licensed corporations under the SFO and who will cooperate with their licensed partners in the U.S. to sell the Non-Qualifying Company Shareholders Shares on the open market of the U.S. Stock Exchange, on best-efforts basis, at or close to the intraday volume-weighted average price (the ‘‘Intraday VWAP’’) for any trading day and within 90 days of the Proposed Listing (the ‘‘Relevant Period’’), subject to the liquidity in the trading of SharkNinja shares on the U.S. Stock Exchange and general market conditions in the U.S. Intraday VWAP is the average price of a stock weighted by the total trading volume during a trading day. To implement the sale with Intraday VWAP, the Qualified Broker(s) would place the order based on historical trading days’ data, calculating the number of shares to be sold on the market at different time during a trading day, and aim to execute these orders at prices that are at or close to the Intraday VWAP for each trading day. It is envisaged that, at any one time, only one Qualified Broker will be conducting the on-market sale down of the Non-Qualifying Company Shareholders Shares. As it is common for a sale programme of this kind, there will be limitations on the proportion of the daily trading volume that could be constituted by the sale of the shares by the Qualified Brokers. The legal parameters for the sell down programme will be specified in the purpose for the establishment of the Purpose Trust, and accordingly the trustee of the Purpose Trust will be implementing the sell down within the stated purpose and within the parameters that were given to them.

 

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LETTER FROM THE BOARD

 

Given that the sale of the Non-Qualifying Company Shareholders Shares will be sold on a best effort basis pursuant to the key arrangements set forth above, the sale price and time period of completing the sale are subject to the liquidity in the trading of SharkNinja shares on the U.S. Stock Exchange and general market conditions in the U.S. and globally.

 

The Qualified Broker(s) shall pay over to the Purpose Trust the settlement price for the Non-Qualifying Company Shareholders Shares in one lot after all the Non-Qualifying Company Shareholders Shares were sold in the market during the Relevant Period after deducting fees charged by the Qualified Broker(s) and their licensed partners and other taxes and reasonable expenses required for the completion of the sale of the Non-Qualifying Company Shareholders Shares.

 

In the event that not all the Non-Qualifying Company Shareholders Shares are sold by the Qualified Broker(s) by the end of the Relevant Period, SharkNinja will repurchase the remaining Non-Qualifying Company Shareholders Shares held by the Purpose Trust at the end of the Relevant Period (the ‘‘Remaining SharkNinja Shares’’) within 10 business days after the Relevant Period (the ‘‘SharkNinja Repurchase’’). The consideration for the SharkNinja Repurchase will be the average price for the sell down of the Non-Qualifying Company Shares during the Relevant Period (before the deduction of relevant fees charged by the Qualified Broker(s) and their licensed partners, fees charged by the trustee and for the set-up of the Purpose Trust) multiplied by the number of Remaining SharkNinja Shares, and will be paid to the Purpose Trust by SharkNinja.

 

(iii)The Purpose Trust will then, or through the branch share registrar of the Company, pass over the net sale proceeds received from the Qualified Broker(s) (net of the fees charged by the trustee and for the set-up of the Purpose Trust) to the Non-Qualifying Company Shareholders.

 

(iv)The Non-Qualifying Company Shareholders shall bear the costs incurred during the above procedures, including the above mentioned fees charged by the Qualified Broker(s) and their licensed partners, fees charged by the trustee and for the set-up of the Purpose Trust, fees related to the SharkNinja Repurchase, other taxes and reasonable expenses required for the completion of the sale of the Non- Qualifying Company Shareholders Shares during the Relevant Period and the SharkNinja Repurchase (if applicable).

 

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LETTER FROM THE BOARD

 

The Company will make further announcement(s) relating to the detailed arrangement for the Proposed Distribution.

 

2.13.Listing Rules Implications

 

As described in the paragraph headed ‘‘2.11. Assured Entitlement’’, the Proposed Spin- off will be conducted through a distribution in specie of all of the Company’s shares held in SharkNinja to the Company Shareholders in the form of the Proposed Distribution. Prior to the Proposed Spin-off and the Proposed Distribution, SharkNinja will be a wholly-owned subsidiary of the Company. Following the completion of the Proposed Spin-off and the Proposed Distribution, SharkNinja will be demerged from the Company, resulting in a parallel listing structure of the Company and SharkNinja, and the Company Shareholders will be entitled to shares in both the Company and SharkNinja.

 

Although the Proposed Spin-off and the Proposed Distribution do not constitute a transaction under Chapter 14 of the Listing Rules, Article 24.19 of the Articles of the Company provides that the Board, with the sanction of the members in general meeting, may direct that any dividend be satisfied wholly or in part by the distribution of specific assets of any kind. In addition, considering the size of the asset which is subject to the Proposed Spin-off and the Proposed Distribution, the Board will present the Proposed Spin- off and the Proposed Distribution to the Company Shareholders at the EGM for consideration and, if thought fit, approval by way of an ordinary resolution.

 

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, no Shareholder has a material interest in the Proposed Spin-off and the Proposed Distribution. As such, no Shareholder is required to abstain from voting on the EGM resolution approving the Proposed Spin-off and the Proposed Distribution.

 

The Proposed Spin-off and the Proposed Distribution are subject to, among other things, the approval of the Company Shareholders, the approvals from the relevant U.S. authorities in respect of the listing of, and permission to deal in, securities of SharkNinja, the final decision of the Directors, the board of directors of SharkNinja or the directors of the board of SharkNinja SPV (as applicable), as well as market conditions and other relevant considerations. Accordingly, the Company Shareholders and potential investors should be aware that there is no assurance that the Proposed Spin-off and the Proposed Distribution will take place or when they will take place. The Company Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

 

3.EGM

 

The EGM will be held at Niccolo Room 5-8, Level 25, The Murray, Hong Kong, 22 Cotton Tree Drive, Central, Hong Kong at on 26 June 2023 at 9:30 a.m. to consider and, if thought fit, approve, among other matters, the Proposed Spin-off and the Proposed Distribution.

 

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LETTER FROM THE BOARD

 

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting (as the case may be) should you so wish.

 

Pursuant to Rule 13.39(4) of the Listing Rules, all votes of the Company Shareholders at the EGM must be taken by poll. The chairman of the EGM will demand a poll for the resolution to be proposed at the EGM in accordance with the Articles. The results of the voting will be announced in accordance with Rule 2.07C of the Listing Rules after conclusion of the EGM.

 

As of the Latest Practicable Date, no Shareholders, to the knowledge and belief of the Directors having made all reasonable enquiries, will be required to abstain from voting at the EGM on relevant resolutions.

 

In addition, none of the Directors have any material interest in the Proposed Spin-off and the Proposed Distribution and none were required to abstain from voting on the relevant Board resolution.

 

4.RECOMMENDATION

 

Your attention is drawn to the letter from the Independent Board Committee set out on page 42 of this circular.

 

The Directors (excluding the independent non-executive Directors) are of the view that the proposal on the Proposed Spin-off and the Proposed Distribution is fair and reasonable so far as the Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

 

An Independent Board Committee has been formed to advise the Company Shareholders in connection with the Proposed Spin-off and the Proposed Distribution.

 

The Independent Board Committee considers that the terms of the Proposed Spin-off and the Proposed Distribution are fair and reasonable and are in the interests of the Company and the Company Shareholders as a whole. Accordingly, the Independent Board Committee recommends that the Company Shareholders vote in favour of the relevant resolution in the EGM held to consider and if thought fit, to approve the Proposed Spin-off and the Proposed Distribution.

 

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LETTER FROM THE BOARD

 

5.ADDITIONAL INFORMATION

 

This circular is being distributed to the Company Shareholders. This circular does not constitute an offer or invitation to subscribe for or purchase any securities nor is it calculated to invite any such offer or invitation. Neither this circular nor anything contained herein shall form the basis of any contract or commitment whatsoever.

 

Your attention is also drawn to the additional information set out in the appendices to this circular.

 

  Yours faithfully,
  By Order of the Board
  JS Global Lifestyle Company Limited
  Wang Xuning
  Chairman

 

– 41 –

 

 

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

 

 

 

Hong Kong, 5 June 2023

 

To the Company Shareholders

 

Dear Sir or Madam,

 

(1) THE PROPOSED SPIN-OFF AND THE PROPOSED DISTRIBUTION AND

 

(2) NOTICE OF THE EXTRAORDINARY GENERAL MEETING

 

We refer to the circular dated 5 June 2023 issued by the Company to the Company Shareholders (the ‘‘Circular’’) of which this letter forms part. Terms defined in the Circular shall have the same meanings when used in this letter, unless the context otherwise requires.

 

We have been appointed by the Board as members of the Independent Board Committee to advise the Company Shareholders on whether the terms of the Proposed Spin-off and the Proposed Distribution are fair and reasonable so far as the Company Shareholders are concerned and are in the interests of the Company and the Company Shareholders as a whole.

 

We are of the view that the terms of the Proposed Spin-off and the Proposed Distribution are fair and reasonable and in the interests of the Company and the Company Shareholders as a whole.

 

Accordingly, we recommend the Company Shareholders to vote in favour of the ordinary resolutions regarding the Proposed Spin-off and the Proposed Distribution as set out in the notice of the EGM.

 

Yours faithfully,
For and on behalf of the Independent Board Committee

Mr. Yuan Ding Mr.Timothy Roberts Warner Mr.Yang Xianxiang

Independent non-executive Directors

 

– 42 –

 

 

APPENDIX IFINANCIAL INFORMATION OF THE GROUP

 

1.FINANCIAL INFORMATION OF THE GROUP

 

The audited consolidated financial statements for each of the years ended 31 December 2020, 2021 and 2022 of the Company together with relevant notes thereto have been disclosed in the documents published on the Stock Exchange’s website (http://www.hkexnews.hk) and the Company’s website (http://www.jsgloballife.com/).

 

2.STATEMENT OF INDEBTEDNESS

 

At the close of business on 31 December 2022, the Group had total borrowings of approximately US$857 million, which were all guaranteed and secured.

 

Except as disclosed above, the Group did not have any outstanding loans or other similar indebtedness as of the close of the business on 31 December 2022. The Directors have confirmed that there have been no material changes in the indebtedness and contingent liabilities of the Group since 31 December 2022.

 

3.WORKING CAPITAL

 

As of the Latest Practicable Date, having made appropriate inquiries and taking into account of the internal resources of the Group and currently available loan facilities, the Directors are of the opinion that the Group will have sufficient working capital for its requirements for at least the next 12 months from the date of this circular.

 

4.MATERIAL ADVERSE CHANGE

 

The Directors are not aware of any material adverse change in the financial and trading position of the Group since 31 December 2022, the date to which the latest published audited consolidated financial statements of the Group were made up.

 

5.FINANCIAL AND OPERATIONAL PROSPECT

 

Business Review and Prospects

 

Despite the downturn in consumer spending over the year of 2022 and the business interruptions caused by the COVID-19 pandemic, the Group was able to continue the good momentum from the previous year and managed to hold market share of the major categories of floor care, food processing and heating products. Meanwhile, the Group also had great success in new product debuts in terms of outdoor cooking and haircare categories. The Group keeps its growth through continued market share gains in existing categories, entering new categories, expanding the brand influence and driving operating margins and efficiencies.

 

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APPENDIX IFINANCIAL INFORMATION OF THE GROUP

 

Future Outlook and Strategies

 

Looking ahead, we are committed to providing a variety of small household appliance products and services to create better user experience for global customers leveraging our local strength and R&D ability.

 

As the Group continues to see future growth of consumer needs and believe it will maintain its leading position in the industry. Looking ahead, the Group is confident in its strategy, the strength of business model and development going forward and expects its business performance to remain robust. The Group will remain committed to creating long- term value for the Company Shareholders through steady growth and sustainable development.

 

Upon the completion of the Proposed Spin-off, the Retained Group will be embracing the vast market of the Asia Pacific Region and Greater China with its three brands well positioned in various categories of small household appliances under the Joyoung Business and the SN APAC Business (through JSG APAC Business), including product research, design, marketing, export and distribution of the Joyoung and SN brands of products in the Asia Pacific Region and Greater China. The Group is looking to achieve fast growth in the Asia Pacific Region and Greater China and make the brands known to more consumers, as well as providing provide innovative lifestyle solutions to consumers in the Asia Pacific Region and Greater China.

 

– 44 –

 

 

APPENDIX IIGENERAL INFORMATION

 

1.RESPONSIBILITY STATEMENT

 

This circular, for which the Directors, collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular substantially misleading.

 

2.DISCLOSURE OF INTERESTS

 

(a)Directors’ and chief executive’s interests and short positions in the securities of the Company and its associated corporations

 

As of the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be recorded in the register required to be kept by the Company; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers, to be notified to the Company and the Stock Exchange were as follows:

 

Interest in the shares and underlying shares of the Company:

 

Name of Director or
chief executive		   Nature of interest   Long position/
short position		   Number of Shares   Approximate
percentage of
shareholding in
the Company(1)		  
Mr. Wang Xuning(2)(3)   Founder of a discretionary trust who can influence how the trustee exercises his discretion, interest in controlled corporations, interest held jointly with other persons   Long position   1,934,882,576   55.37 %
                   
    Beneficial interest     Long position   47,759,890   1.37 %
                   
Ms. Han Run(2)(4)   Founder of a discretionary trust who can influence how the trustee exercises his discretion   Long position   1,603,578,331   45.89 %
                   
    Beneficial interest   Long position   11,429,472   0.33 %
                   
Ms. Huang Shuling(2)   Founder of a discretionary trust who can influence how the trustee exercises his discretion   Long position   1,603,578,331   45.89 %

 

– 45 –

 

 

APPENDIX IIGENERAL INFORMATION

 

Notes:

 

(1)The approximate percentage of shareholding in the Company was calculated based on the total number of issued Shares, which was 3,494,612,277 as of the Latest Practicable Date.

 

(2)JS Holding Limited Partnership (‘‘JS Holding’’) directly held 1,603,578,331 Shares. Hezhou Company Limited (‘‘Hezhou’’) was the general partner exercising operational control over JS Holding. Tong Zhou Company Limited (‘‘Tong Zhou’’) was its limited partner with close to 100% of the limited partnership interest. Hezhou was ultimately wholly owned by Mr. Wang Xuning. Tong Zhou was owned by the holding companies respectively wholly owned by relevant trustee of several discretionary trusts (where their respective founders may respectively influence how the relevant trustee exercises its discretion), including the trusts founded by Mr. Wang Xuning, Ms. Han Run and Ms. Huang Shuling. Therefore, each of Mr. Wang Xuning, Ms. Han Run and Ms. Huang Shuling was deemed to be interested in the Shares held by JS Holding for the purpose of Part XV of the SFO.

 

(3)Sol Target Limited (‘‘STL’’), held 100 management shares (representing 100% voting rights) in Sol Omnibus SPC (‘‘Sol SPC’’). STL was wholly owned by Xuning Holdings Limited (‘‘XHL’’). XHL was ultimately wholly owned by Mr. Wang Xuning. Therefore, Mr. Wang Xuning was deemed to be interested in 331,304,245 Shares held by Sol SPC for the purpose of part XV of the SFO. Together with Mr. Wang Xuning’s interest in the Company held through JS Holding as described in note (1) above, Mr. Wang was deemed to be interested in an aggregate of 1,934,882,576 Shares held by JS Holding and Sol SPC. In addition, Mr. Wang Xuning held 46,570,295 Shares and was interested in 1,189,595 restricted stock units granted to him under the RSU Plan entitling him to receive up to 1,189,595 Shares, subject to vesting.

 

(4)In addition to the interest in the Shares held by JS Holding as described in note (1) above, Ms. Han Run was deemed to be interested in 11,429,472 Shares comprising of 11,132,073 Shares and 297,399 restricted stock units granted to her under the RSU Plan entitling her to receive up to 297,399 Shares, subject to vesting.

 

– 46 –

 

 

APPENDIX IIGENERAL INFORMATION

 

Interest in the shares and underlying shares of an associated corporation of the Company:

 

Name of Director or
chief executive		   Nature of interest   Long position/
short position		   Associated
Corporations		   Number of Shares   Approximate
percentage of
shareholding in
the associated
corporation (1)		  
Ms. Han Run(2)(3)   Beneficial interest   Long position   Joyoung   1,040,000   0.14 %
                 
Ms. Huang Shuling(2)(4)   Beneficial interest   Long position   Joyoung   330,000   0.04 %

 

Notes:

 

(1)The approximate percentage of shareholding in the associated corporation was calculated based on the total number of issued shares of Joyoung, which was 767,017,000 as of the Latest Practicable Date.

 

(2)On 1 June 2021, Ms. Han Run and Ms. Huang Shuling were granted 900,000 and 300,000 options, respectively, which entitled them to subscribe for the equivalent number of shares in Joyoung in accordance with certain conditions under the Subsidiary Option Scheme. On 30 March 2022, Ms. Han Run and Ms. Huang Shuling were cancelled 360,000 and 120,000 options due to triggering the conditions under the Subsidiary Option Scheme.

 

(3)Ms. Han Run held 500,000 shares of Joyoung.

 

(4)Ms. Huang Shuling held 150,000 shares of Joyoung.

 

– 47 –

 

 

APPENDIX IIGENERAL INFORMATION

 

(b)Substantial Company Shareholders’ interests in Shares and underlying Shares

 

As of the Latest Practicable Date, as far as the Directors are aware of, the following persons (other than the Directors and chief executive of the Company), had an interest in the shares or underlying shares in the Company which would fall to be disclosed to the Company under the provision of Divisions 2 and 3 of Part XV of the SFO, or was, directly or indirectly, interested in 5% or more of the issued capital of the Company:

 

Name of substantial
shareholder		   Nature of interest   Long position/
short position		   Number of
Shares		   Approximate
percentage of
shareholding in
the Company(1)		  
JS Holding(2)   Beneficial interest   Long position   1,603,578,331   45.89 %
                   
Hezhou(2)   Interest in controlled corporation   Long position   1,603,578,331   45.89 %
                   
Tong Zhou(2)   Interest in controlled corporation   Long position   1,603,578,331   45.89 %
                   
HONGTAO Holding Company Limited (‘‘HJHCL”)(3)   Interest held jointly with other persons   Long position   1,603,578,331   45.89 %
                 
                   
Mr. Zhu Hongtao(3)   Founder of a discretionary trust who can influence how the trustee exercises his discretion   Long position   1,603,578,331   45.89 %
                   
Happy Seeking Limited (‘‘HSL”)(4)   Interest held jointly with other persons   Long position   1,603,578,331   45.89 %
                 
                   
Mr. Zhu Zechun(4)   Founder of a discretionary trust who can influence how the trustee exercises his discretion   Long position   1,603,578,331   45.89 %
                   
Guo De Er Limited (‘‘GDEL”)(5)   Interest held jointly with other persons   Long position   1,603,578,331   45.89 %
                 
                   
Ms. Yang Ningning(5)(6)(11)   Founder of a discretionary trust who can influence how the trustee exercises his discretion   Long position   1,603,578,331   45.89 %
                   
    Beneficial Interest   Long position   11,329,472   0.32 %
                   
YONG JUN Limited (‘‘YJL”)(7)   Interest held jointly with other persons   Long position   1,603,578,331   45.89 %
                 
                   
Mr. Jiang Guangyong(7)   Founder of a discretionary trust who can influence how the trustee exercises his discretion   Long position   1,603,578,331   45.89 %
                   
XHL(8)   Interest in controlled corporations, interest held jointly with other persons   Long position   1,934,882,576   55.37 %
                   
RHL(9)   Interest held jointly with other persons   Long position   1,603,578,331   45.89 %
                   
YWHL(10)   Interest held jointly with other persons   Long position   1,603,578,331   45.89 %
                   
Sol SPC(11)   Beneficial Interest   Long position   331,304,245   9.48 %
                   
STL(11)   Interest in controlled corporation   Long position   331,304,245   9.48 %

 

– 48 –

 

 

APPENDIX IIGENERAL INFORMATION

 

Name of substantial
shareholder		   Nature of interest   Long position/
short position		   Number of
Shares		   Approximate
percentage of
shareholding in
the Company(1)		  
Easy Home Limited (‘‘Easy Home”)(12)   Beneficial Interest   Long position   175,236,139   5.01 %
                   
CDH Fund V, L.P.(12)   Interest in controlled corporation   Long position   213,292,305   6.10 %
                   
CDH V Holdings Company Limited(12)   Interest in controlled corporation   Long position   213,292,305   6.10 %
                   
China Diamond Holdings V Limited(12)   Interest in controlled corporation   Long position   213,292,305   6.10 %
                   
China Diamond Holdings Company Limited(12)   Interest in controlled corporation   Long position   213,292,305   6.10 %
                 
                   
JPMorgan Chase & Co.(13)   Interest in controlled corporation, investment manager, and person having a security interest in shares, approved lending agent   Long position   172,970,415   4.94 %
                   
    Interest in controlled corporation   Short position   26,570,136   0.76 %
                   
    Approved lending agent   Lending pool   4,941,379   0.14 %

 

Notes:

 

(1)The percentage of shareholding in the Company was calculated based on the total number of issued Shares, which was 3,494,612,277 as of the Latest Practicable Date.

 

(2)JS Holding directly held 1,603,578,331 Shares. Hezhou was the general partner exercising operational control over JS Holding. Tong Zhou was the limited partner of JS Holding with close to 100% of its limited partnership interest. Therefore, each of Hezhou and Tong Zhou was deemed to be interested in 1,603,578,331 Shares held by JS Holding for the purpose of Part XV of the SFO.

 

(3)HJHCL was ultimately owned and controlled by Mr. Zhu Hongtao.

 

(4)HSL was ultimately owned and controlled by Mr. Zhu Zechun.

 

(5)GDEL was ultimately owned and controlled by Ms. Yang Ningning.

 

(6)Ms. Yang Ningning was granted 11,329,472 restricted stock units on 12 October 2019, entitling her to receive up to 11,329,472 ordinary shares subject to vesting, of which 8,497,104 restricted stock units had been vested as of the Latest Practicable Date.

 

(7)YJL was ultimately owned and controlled by Mr. Jiang Guangyong.

 

(8)XHL directly wholly owned Hezhou, the general partner of JS Holding, and STL, which in turn held 100% voting rights of Sol SPC. Therefore, XHL was deemed to be interested in 1,934,882,576 Shares comprising of 1,603,578,331 Shares held by JS Holding and 331,304,245 Shares held by Sol SPC for the purpose of part XV of the SFO.

 

– 49 –

 

 

APPENDIX IIGENERAL INFORMATION

 

(9)RHL was ultimately owned and controlled by Ms. Han Run.

 

(10)YWHL was ultimately owned and controlled by Ms. Huang Shuling.

 

(11)STL had 100% control in Sol SPC. STL was ultimately wholly owned by Mr. Wang Xuning.

 

(12)Easy Home and Comfort Home Limited (‘‘Comfort Home’’) directly held 175,236,139 and 38,056,166 Shares, respectively. Each of Easy Home and Comfort Home was a wholly-owned subsidiary of CDH Fund V, L.P. whose general partner was CDH V Holdings Company Limited. CDH V Holdings Company Limited is held as to 80% by China Diamond Holdings V Limited, which was in turn wholly-owned by China Diamond Holdings Company Limited. Therefore, each of CDH Fund V, L.P., CDH V Holdings Company Limited, China Diamond Holdings V Limited and China Diamond Holdings Company Limited was deemed to be interested in 213,292,305 Shares in aggregate held by Easy Home and Comfort Home for the purpose of Part XV of the SFO.

 

(13)172,970,415 Shares were held by JPMorgan Chase & Co. in long position as to (i) 33,546,279 Shares in the capacity as interest of controlled corporations, (ii) 129,112,493 Shares in the capacity as investment manager, (iii) 5,370,264 Shares in the capacity as person having a security interest in shares, and (iv) 4,941,379 Shares in the capacity as approved lending agent. 26,570,136 Shares are in short position held by JPMorgan Chase & Co. in the capacity as interest of controlled corporations.

 

Save as disclosed herein, as of the Latest Practicable Date, the Company had not been notified by any person (other than the Directors or the chief executive of the Company) who had an interest or short position in the Shares or the underlying Shares which would fall to be disclosed to the Company under the provision of Divisions 2 and 3 of Part XV of the SFO, or was, directly or indirectly, interested in 5% or more of the issued capital of the Company.

 

3.DIRECTORS’ SERVICE CONTRACTS

 

The Company has entered into service contracts or appointment letters with all executive Directors and non-executive Directors for a term of three years, and with all independent non- executive Directors for a term of three years, or which shall be terminated pursuant to relevant terms of respective contracts or letters of appointment.

 

As of the Latest Practicable Date, none of the Directors has entered into any service contract with the Company or any of its subsidiaries which was not determinable by the Company within one year without payment of compensation (other than statutory compensation).

 

– 50 –

 

 

APPENDIX IIGENERAL INFORMATION

 

4.COMPETING INTERESTS

 

To the best knowledge of the Directors, save as disclosed below, none of the Directors had any interest in any business which directly or indirectly competes or is likely to compete with the business of the Group as of the Latest Practicable Date:

 

•Jiuyang Bean: As of the Latest Practicable Date, Hangzhou Jiuyang Bean Industry Limited（杭州九陽豆業有限公司）(‘‘Jiuyang Bean’’), was owned as to 42.5%, 25.5% and 32% by Ningbo Meishan Free Trade Port Area Lihao Investment Limited, Joyoung and other independent third parties, respectively. Ningbo Meishan Free Trade Port Area Lihao Investment Limited was controlled by the Controlling Shareholders through JS Holding. Jiuyang Bean generally provides soymilk powder and commercial soymilk makers.

 

On the basis that the Group’s products have different usage scenarios from the products of Jiuyang Bean, as the Group’s products are generally for home use and targeted at individual customers while Jiuyang Bean generally provides soymilk powder and commercial soymilk makers to factories, schools, stores and restaurants, the Directors are of the view that these businesses would not give rise to any material competition issue under Rule 8.10 of the Listing Rules. In light of the above, the above Director and Controlling Shareholders have no intention to have the businesses as detailed above incorporated into the Group as of the Latest Practicable Date.

 

5.INTERESTS IN CONTRACT OR ARRANGEMENTS

 

As of the Latest Practicable Date, none of the Directors was materially interested in contract or arrangement subsisting which is significant in relation to the business of the Group, nor has any Director had any direct or indirect interest in any assets which have been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2022, the date to which the latest published audited consolidated financial statements of the Group were made up.

 

6.MATERIAL CONTRACTS

 

There was no contract (not being contracts entered into in the ordinary course of business) entered into by any member of the Group within the two years immediately preceding the Latest Practicable Date, which is or may be material.

 

7.MATERIAL LITIGATION

 

The Directors confirm that, as of the Latest Practicable Date, no member of the Group was involved in any material litigation or arbitration and no material litigation or claim is known to the Directors to be pending or threatened by or against any member of the Group.

 

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APPENDIX IIGENERAL INFORMATION

 

8.MATERIAL ADVERSE CHANGE

 

As of the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2022, the date to which the latest published audited consolidated financial statements of the Group were made up.

 

9.MISCELLANEOUS

 

(a)Mr. Shan Minqi is our Company Secretary. Mr. Shan is a professional accountant, and a fellow member of the Hong Kong Institute of Certified Public Accountants, and he received a bachelor’s degree in accounting and finance the University of Hong Kong and a master’s degree in Business Administration the Hong Kong University of Science and Technology;

 

(b)The registered office of the Company is situated PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands; and the head office and principal place of business of the Company is situated at 21/F, 238 Des Voeux Road Central, Sheung Wan, Hong Kong;

 

(c)The branch share registrar of the Company is Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong;

 

(d)The English text of this circular shall prevail over the respective Chinese text in the case of inconsistency.

 

10.DOCUMENTS ON DISPLAY

 

Copies of the following documents will be published on the website of the Stock Exchange (www.hkexnews.hk) and the Company’s website (www.jsgloballife.com) for a period of 14 days from the date of this circular:

 

(a)this circular; and

 

(b)the letter from the Independent Board Committee to the Company Shareholders dated 5 June 2023, the text of which is set out on page 42 of this circular.

 

– 52 –

 

 

APPENDIX IIIPRO FORMA FINANCIAL INFORMATION OF THE SHARKNINJA GROUP

 

Set out below are the key unaudited pro forma financial information of the SharkNinja Group prepared according to IFRS with pro-forma adjustments for the three years ended 31 December 2022 (as if the SharkNinja Group had not been part of the Group for the relevant financial years/period and taking into consideration the Proposed Sourcing Adjustment).

 

The following financial information may differ from the financial information included in any registration statement to be filed with the relevant U.S. authorities, which would be prepared in accordance with U.S. generally accepted accounting principles (GAAP). The financial information of the SharkNinja Group following completion of the Proposed Spin-off and the Proposed Distribution will be provided in U.S. GAAP rather than IFRS.

 

Summary Consolidated Income Statements

 

   For the year ended 31 December 
   2020   2021   2022 
             
   (In US$ thousand, unaudited) 
CONTINUING OPERATIONS               
REVENUE   2,689,708    3,625,296    3,620,435 
Cost of sales   (1,508,082)   (2,249,688)   (2,267,317)
Gross profit   1,181,626    1,375,608    1,353,118 
Other income and gains   4,405    1,410    25,853 
Selling and distribution expenses   (417,562)   (549,113)   (532,355)
Administrative expenses   (324,492)   (377,290)   (459,108)
Impairment losses on financial assets   (9,387)   (7,912)   (8,965)
Other expenses   (7,127)   (13,743)   (31,761)
Finance costs   (42,631)   (16,376)   (29,521)
Share of profits and losses of an associate/joint venture   (3,495)   (4,492)   (373)
PROFIT/(LOSS) BEFORE TAX FROM CONTINUING OPERATIONS   381,337    408,092    316,888 
Income tax credit/(expense)   (82,908)   (82,541)   (70,374)
PROFIT/(LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS   298,429    325,551    246,514 
PROFIT ATTRIBUTABLE TO THE SHAREHOLDER   298,331    326,211    246,890 

 

Summary Consolidated Balance Sheet                        

 

   As of 31 December 
   2020   2021   2022 
             
   (In US$ thousand, unaudited) 
Total non-current assets   1,641,975    1,703,650    1,738,807 
Total current assets   1,328,400    1,679,556    1,683,246 
Total assets   2,970,375    3,383,206    3,422,053 
Total current liabilities   859,025    1,008,825    1,120,934 
Total non-current liabilities   692,599    658,539    589,936 
Total liabilities   1,551,624    1,667,364    1,710,870 
Total equity   1,418,751    1,715,842    1,711,183 

 

– 53 –

 

 

APPENDIX IVQUESTIONS AND ANSWERS

 

The following summary of questions and answers has been prepared to help you understand what the Proposed Spin-off and the Proposed Distribution involve. You should read the whole of this Circular and not rely solely on the summary questions and answers set out below.

 

1.What is the Proposed Spin-off and the Proposed Distribution?

 

The Proposed Spin-off, if proceeded with, will result in the separate listing of SharkNinja on the U.S. Stock Exchange and the Proposed Distribution, if proceeded with, will result in the separation of SharkNinja from the Company. The Proposed Distribution is aimed at providing the Company Shareholders with an assured entitlement to shares in SharkNinja upon completion of the Proposed Spin-off by way of a distribution in specie, representing an arrangement determined by the Company having due regard to the interests of the Company Shareholders. Under the Proposed Distribution, the Company will distribute all of its shares in SharkNinja to the Company Shareholders, which will occur substantially concurrently with the listing of SharkNinja.

 

2.Will there be any ongoing relationship between the SharkNinja Group and the Retained Group?

 

Following the completion of the Proposed Spin-off and the Proposed Distribution, SharkNinja will be demerged and deconsolidated from the Company and separately listed on the U.S. Stock Exchange, with the Company Shareholders (except for Non-Qualifying Company Shareholders) becoming direct shareholders of SharkNinja. The Company will no longer hold shares in SharkNinja.

 

The SharkNinja Group and the Retained Group will each operate as independent and separately listed companies. The Board will operate the business of the Retained Group and resolve all actual or potential conflicting matters involving the SN International Business independently, and vice versa.

 

It is currently expected that after the completion of the Proposed Spin-off, the SharkNinja Group will continue to have various transactions with the Retained Group, which will constitute continuing connected transactions of the Company. Each of these continuing connected transactions will be conducted on an arm’s length basis and on normal commercial terms in the ordinary and usual course of business of each of the SharkNinja Group and the Retained Group pursuant to the applicable laws and regulations. For further details, please refer to the Section headed ‘‘2.9.1 Continuing Connected Transactions’’.

 

– 54 –

 

 

APPENDIX IVQUESTIONS AND ANSWERS

 

3.What are the reasons for the arrangement for the Non-Qualifying Company Shareholders?

 

Pursuant to article 24 of the Implementation Rules for Registration, Depository and Clearing Services under the Mainland-Hong Kong Stock Markets Connect Programme（《內地與香港股票市場交易互聯互通機制登記、存管、結算業務實施細則》）, if the Stock Connect Investors receive any securities not listed on the Stock Exchange, they will not be allowed to buy or sell such securities through the Stock Connect. As SharkNinja shares will not be listed on the Stock Exchange, there will be practical difficulty for the Stock Connect Investors in realising the benefit of their entitlement to SharkNinja shares under the Proposed Distribution.

 

Therefore, the Stock Connect Investors will not receive SharkNinja shares as part of the assured entitlements under PN15 or the Proposed Distribution, and the treatment described in this circular for disposing of the relevant SharkNinja shares for the Stock Connect Investors is in accordance with Question No. 4 of the Frequently Asked Questions Series 29 released by the Stock Exchange on 17 November 2014 (which is last updated on 13 July 2018).

 

In addition, there might be an overseas Company Shareholder residing in a jurisdiction where it would be illegal for him/her/it to receive SharkNinja shares under the Proposed Distribution. These Company Shareholders will also be included as the Non-Qualifying Company Shareholders.

 

– 55 –

 

 

APPENDIX IVQUESTIONS AND ANSWERS

 

4.What if the Non-Qualifying Company Shareholders Sell Down Shares cannot be fully sold in the 90-day period after the Proposed Listing?

 

The trustee of the Purpose Trust will, on behalf of the Purpose Trust, enter into a sell down programme with one or more Qualified Broker(s) who will cooperate with their respective licensed brokers in the U.S. to sell the Non-Qualifying Company Shareholders Sell Down Shares on the open market of the U.S. Stock Exchange within 90 days of the Proposed Spin-off (the ‘‘Relevant Period’’) on a best-efforts basis at or close to the Intraday VWAP. However, the sell down by the Qualified Broker(s) will be subject to the liquidity and market conditions in the U.S and globally. In the event that not all the Non-Qualifying Company Shareholders Shares are sold by the Qualified Broker(s) by the end of the Relevant Period, SharkNinja will repurchase the Remaining SharkNinja Shares within 10 business days after the Relevant Period. The consideration for the SharkNinja Repurchase will be the average price for the sell down of the Non-Qualifying Company Shares during the Relevant Period (before the deduction of relevant fees charged by the Qualified Broker(s) and their licensed partners, fees charged by the trustee and for the set-up of the Purpose Trust) multiplied by the number of Remaining SharkNinja Shares. Upon completion of the sale of the Non-Qualifying Company Shareholders Sell Down Shares, the settlement price shall be paid over to the Purpose Trust after deducting fees charged by the Qualified Broker(s) and their licensed partners, fees charged by the trustee and for the set- up of the Purpose Trust, fees related to the SharkNinja Repurchase, other taxes and reasonable expenses required for the completion of the sale of the Non-Qualifying Company Shareholders Shares during the Relevant Period and the SharkNinja Repurchase (if applicable).

 

5.How will the proceeds from the sell down of the Non-Qualifying Company Shareholders Sell Down Shares be paid to Stock Connect Investors?

 

The Purpose Trust will, or through the branch share registrar of the Company, pass over the net sale proceeds received from the Qualified Broker(s) (net of the fees charged by the trustee and for the set-up of the Purpose Trust) to the Non-Qualifying Company Shareholders. In particular, the Purpose Trust will pass the net proceeds received to CCASS, who will then pass to China Clear to further distribute to the Stock Connect Investors through their brokers in Mainland China. The Stock Connect Investors shall bear the costs incurred during these procedures. While the Purpose Trust will be set up by the Company, the net proceeds from the sale down of the Non-Qualifying Company Shareholders Sell Down Shares will not be transferred to Non- Qualifying Company Shareholders (including Stock Connect Shareholders) through the Company.

 

– 56 –

 

 

APPENDIX IVQUESTIONS AND ANSWERS

 

6.What is the expected timing of the Proposed Spin-off and the Proposed Distribution?

 

It is expected that the Proposed Spin-off and the Proposed Distribution will be completed on or around 31 July 2023 when the shares of SharkNinja will commence trading on the U.S. Stock Exchange, and that the Record Date for determining the entitlement to the Proposed Distribution is set on 30 June 2023.

 

7.Can any Company Shareholders receive cash instead of shares of SharkNinja as a result of the Proposed Spin-off and the Proposed Distribution?

 

The Company does not intend to offer any cash alternative for the following reasons:

 

(a)The Cash Alternative is not in line with the overall objective of the Proposed Spin-off. The overall objective of the Proposed Spin-off is to create a parallel listing structure of the Company and SharkNinja, following which the Company will no longer hold any interest in SharkNinja, and SharkNinja will be fully demerged from the Company and separately listed on the U.S. Stock Exchange. If the Cash Alternative were to be provided by the Company and for any Company Shareholder who elects the Cash Alternative, SharkNinja shares that would have been distributed to such Company Shareholder will be retained by the Company. In the extreme case where all Company Shareholders take the Cash Alternative, the Company will need to continue to hold up to 100% of SharkNinja shares, which does not achieve the overall objective of the Company to pursue the Proposed Spin-off; and

 

(b)Providing the Cash Alternative would not be in the best interests of the Company and the Company Shareholders as a whole. If the Company were to offer the Cash Alternative in terms of the payment of a large amount of cash to the Company Shareholders, in view of the large number of the distribution shares and hence the significant amount of cash payment by the Company, the Company would either need to utilize a substantial amount of own cash resources and/or take on a substantial financial liability and burden to support such cash payment. This would not be beneficial to the Company Shareholders as a whole as this would limit the resources for future business operation and development of the Company.

 

8.What will happen to my JS Global Shares following the Proposed Spin-off and the Proposed Distribution?

 

The number of JS Global Shares you hold will not change as a result of the Proposed Spin- off and the Proposed Distribution. Following the Proposed Spin-off and the Proposed Distribution, the JS Global Shares will remain to be listed on the Stock Exchange. The shares of SharkNinja will be listed on the U.S. Stock Exchange.

 

– 57 –

 

 

APPENDIX IVQUESTIONS AND ANSWERS

 

9.What will be the price of JS Global Shares and shares of SharkNinja following the Proposed Spin-off and the Proposed Distribution?

 

There is no certainty as to the price of the JS Global Shares or the shares of SharkNinja following the Proposed Spin-off and the Proposed Distribution. Such prices may be influenced by a large number of factors including but not limited to market sentiment and conditions, market valuations for peer companies, investor response and financial performance of JS Global and SharkNinja, respectively.

 

10.How can the shares of SharkNinja be traded and settled?

 

The shares of SharkNinja will be traded on the U.S. Stock Exchange. Investors wishing to trade shares that are admitted to trading on the U.S. Stock Exchange usually instruct brokers or place their orders via a broker. The brokers then decide how best to execute the trade.

 

Qualifying Company Shareholders will need to engage a duly licensed broker to assist with trading shares of SharkNinja on the U.S. Stock Exchange and should note that their ability finalize a trade of shares of SharkNinja would depend on their individual circumstances and satisfaction of ‘‘know your client’’ and any other internal procedures of the relevant broker.

 

Qualifying Company Shareholders who wish to engage with a duly licensed broker for opening a U.S. brokerage account for trading of shares of SharkNinja should directly contact their licensed broker.

 

11.How will I receive my SharkNinja shares from the Proposed Distribution if I hold my JS Global Shares through CCASS?

 

If you own JS Global Shares beneficially through a CCASS nominee, arrangements will be made for the SharkNinja shares to be distributed to CCASS and transfer the SharkNinja shares to your broker’s account in the Depository Trust Company (‘‘DTC’’).

 

In case your broker at CCASS does not have a DTC account for trading of shares of SharkNinja, at your request, the Company shall provide assistance to you by referencing a broker with DTC account for trading of shares on the U.S. Stock Exchange.

 

– 58 –

 

 

APPENDIX IVQUESTIONS AND ANSWERS

 

12.What if I do not hold my JS Global Shares through CCASS? Will I receive a share certificate?

 

If your JS Global Shares are directly registered in your own name in the Company’s branch share register (not through CCASS), you are not required to take any action. You will receive the SharkNinja shares to which you are entitled to through Computershare, SharkNinja’s Transfer Agent in the U.S. Computershare will credit the whole SharkNinja shares to a new book-entry account and mail you a book-entry statement that reflects the number of whole SharkNinja shares you own. You will be able to access information regarding your book-entry account at Computershare.

 

If you have an U.S. broker account, arrangements will be made for transferring the SharkNinja shares to your U.S, broker’s account in the DTC.

 

In case you or your broker does not have an US broker account or DTC account for trading of shares of SharkNinja, at your request, the Company shall provide assistance to you by referencing a broker with DTC account for trading of shares on the U.S. Stock Exchange. Should you need any assistance in this regard, please contact the Customer Service Hotline of Tricor Investor Service Limited at (852) 2980 1333 or the investor relations department of the Company at (852) 2310 8035 from 9:00 a.m. to 6:00 p.m., Monday to Friday (excluding Hong Kong public holidays), or send an email to ir@jsgl.com at any time.

 

SharkNinja will not issue share certificates in respect of the SharkNinja shares.

 

– 59 –

 

 

NOTICE OF THE EGM

 

 

 

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

 

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the ‘‘EGM’’) of JS Global Lifestyle Company Limited (the ‘‘Company’’) will be held at Niccolo Room 5-8, Level 25, The Murray, Hong Kong, 22 Cotton Tree Drive, Central, Hong Kong on 26 June 2023 at 9:30 a.m. to consider and, if thought fit, passing the following ordinary resolution of the Company. Unless otherwise indicated, capitalized terms used in this notice shall have the same meanings as those defined in the circular of the Company dated 5 June 2023 (the ‘‘Circular’’):

 

ORDINARY RESOLUTION

 

THAT:

 

(a)the Proposed Spin-off and the Proposed Distribution be and are hereby approved; and

 

(b)the directors of the Company and/or the directors of SharkNinja or the directors of any members of the SharkNinja Group be and are hereby authorised, for and on behalf of the Company and SharkNinja, to take all steps and do all acts and things as they consider to be necessary, appropriate or expedient in connection with and to implement or give effect to the Proposed Spin-off and the Proposed Distribution, and any director of the Company be authorised to execute all such other documents, instruments and agreements (including the affixation of the Company’s common seal) deemed by such director to be incidental to, ancillary to or in connection with the Proposed Spin-off and the Proposed Distribution.

 

  By Order of the Board
  JS Global Lifestyle Company Limited
  Wang Xuning
  Chairman

 

Hong Kong, 5 June 2023

 

– 60 –

 

 

NOTICE OF THE EGM

 

Notes:

 

1.Any shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint a proxy to attend and vote on his/her behalf. A proxy need not be a shareholder of the Company. A shareholder who is the holder of two or more shares of the Company may appoint more than one proxy to represent him/her to attend and vote on his/her behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

 

2.In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority, must be deposited at the branch share registrar of the Company in Hong Kong, Tricor Investor Services Limited (the ‘‘Branch Share Registrar’’) at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong not less than 48 hours before the time appointed for the holding of the EGM (i.e. before 24 June 2023 at 9:30 a.m.) or any adjournment thereof. Completion and return of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the EGM and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

 

3.The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised.

 

4.Where there are joint holders of any share, any one of such joint holders may vote at the EGM, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the EGM personally or by proxy, then the one of such joint holders so present whose name stands first on the register of members of the Company shall, in respect of such share, be entitled alone to vote in respect thereof.

 

5.The resolutions at the EGM will be taken by poll pursuant to the Rules Governing the Listing of Securities (the ‘‘Listing Rules’’) on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) and the results of the poll will be published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.jsgloballife.com) in accordance with the Listing Rules.

 

6.The register of members of the Company will be closed from 20 June 2023 to 26 June 2023 (both days inclusive), during which period no transfer of shares of the Company will be registered. In order to determine the identity of members who are entitled to attend and vote at the EGM, all share transfer documents accompanied by the relevant share certificates must be lodged with the Branch Share Registrar at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration not later than 4:30 p.m. on 19 June 2023.

 

As of the date of this notice, the board of directors of the Company comprises Mr. Wang Xuning, Ms. Han Run and Ms. Huang Shuling as executive directors, Mr. Hui Chi Kin Max, Mr. Stassi Anastas Anastassov and Mr. Sun Zhe as non-executive directors and Mr. Yuan Ding, Mr. Timothy Roberts Warner and Mr. Yang Xianxiang as independent non-executive directors.

 

– 61 –

 

 

 

 

FORM OF PROXY FOR THE EXTRAORDINARY GENERAL MEETING

 

I/We (Note 1)    

of  

being the registered holder(s) of (Note 2)   shares of US$0.00001 each in the share capital of JS Global

Lifestyle Company Limited (the ‘‘Company’’) hereby appoint  
of

or failing him/her, the Chairman of the meeting (Note 3), as my/our proxy to attend, act and vote for me/us and on my/our behalf at the extraordinary general meeting (the ‘‘Extraordinary General Meeting’’) of the Company to be held at Niccolo Room 5-8, Level 25, The Murray, Hong Kong, 22 Cotton Tree Drive, Central, Hong Kong on 26 June 2023 at 9:30 a.m. or immediately after the annual general meeting of the Company, whichever is later (and at any adjournment thereof) in respect of the resolutions set out in the notice of the Extraordinary General Meeting dated 5 June 2023 (the ‘‘Notice’’) (with or without amendments) as hereunder indicated, or if no indication is given, as my/our proxy thinks fit.

 

ORDINARY RESOLUTIONS* FOR (Note 4) AGAINST (Note 4)
1. ‘‘THAT the Proposed Spin-off and the Proposed Distribution be and are hereby approved.’’    
2. ‘‘THAT the directors of the Company and/or the directors of SharkNinja or the directors of any members of the SharkNinja Group be and are hereby authorised, for and on behalf of the Company and SharkNinja, to take all steps and do all acts and things as they consider to be necessary, appropriate or expedient in connection with and to implement or give effect to the Proposed Spin-off and the Proposed Distribution, and any director of the Company be authorised to execute all such other documents, instruments and agreements (including the affixation of the Company’s common seal) deemed by such director to be incidental to, ancillary to or in connection with the Proposed Spin-off and the Proposed Distribution.’’    

 

Date:   , 2023   Signature(s) (Note 5)  

 

Note:

 

1.Full name(s) and address(es) to be inserted in BLOCK CAPITALS. The names of all joint holders should be stated.

2.Please insert the number of shares of US$0.00001 each in the share capital of the Company registered in your name(s). If no number is inserted, this form of proxy will be deemed to relate to all the shares of the Company registered in your name(s).

3.Full name and address of proxy to be inserted in BLOCK CAPITALS. IF NOT COMPLETED, THE CHAIRMAN OF THE EXTRAORDINARY GENERAL MEETING WILL ACT AS YOUR PROXY. Any shareholder of the Company entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint a proxy to attend and vote on his/her behalf, subject to the articles of association of the Company. A shareholder who is the holder of two or more shares of the Company may appoint more than one proxy to represent him/her to attend and vote on his/her behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

4.IMPORTANT: IF YOU WISH TO VOTE FOR ANY RESOLUTION, PLEASE TICK (‘‘✓’’) IN THE BOX MARKED ‘‘FOR’’ BESIDE THE APPROPRIATE RESOLUTION. IF YOU WISH TO VOTE AGAINST ANY RESOLUTION, PLEASE TICK (‘‘✓’’) IN THE BOX MARKED ‘‘AGAINST’’. If no direction is given, your proxy will be entitled to vote or abstain at his discretion. Your proxy will also be entitled to vote or abstain at his discretion on any resolution properly put to the Extraordinary General Meeting other than those referred to in the Notice.

5.This form of proxy must be signed by you or your attorney duly authorized in writing or, if you are a corporation, must either be executed under seal or under the hand of an officer or attorney duly authorized.

6.In order to be valid, this form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority, must be deposited at the branch share registrar of the Company in Hong Kong, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong not less than 48 hours before the time appointed for the holding of the Extraordinary General Meeting (i.e. before 24 June 2023 at 9:30 a.m.) or any adjournment thereof.

7.Where there are joint holders of any share, any one of such joint holders may vote at the Extraordinary General Meeting, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the Extraordinary General Meeting personally or by proxy, then the one of such joint holders so present whose name stands first on the register of members of the Company shall, in respect of such share, be entitled alone to vote in respect thereof.

8.The proxy need not be a shareholder of the Company but must attend the Extraordinary General Meeting in person to represent you.

9.Completion and return of this form of proxy shall not preclude you from attending the Extraordinary General Meeting and voting in person at the Extraordinary General Meeting and, in such event, this form of proxy shall be deemed to be revoked.

10.Any alteration to this form of proxy must be initialled by the person who signs it.

 

PERSONAL INFORMATION COLLECTION STATEMENT

 

‘‘Personal Data’’ in this statement has the same meaning as ‘‘personal data’’ defined in the Personal Data (Privacy) Ordinance, Chapter 486 of the Laws of Hong Kong (‘‘PDPO’’), which include your and your proxy’s name and address. Your supply of the Personal Data is on a voluntary basis and for the purpose of processing your instructions as stated in this Proxy Form (the ‘‘Purposes’’). If you fail to supply sufficient information, the Company may not be able to process your instructions. The Company may disclose or transfer the Personal Data to its subsidiaries, its Share Registrar and/or third party service provider who provides administrative, computer and other services to the Company for use in connection with the Purposes and to such parties who are authorised by law to request the information or are otherwise relevant for the Purposes and need to receive the information. The Personal Data will be retained for such period as may be necessary to fulfil the Purposes (including for verification and record purposes). Request for access to and/or correction of the Personal Data can be made in accordance with the provisions of the PDPO and any such request should be in writing and sent to the Privacy Compliance Officer of Tricor Investor Services Limited at the above address.

 

* The full text of the resolutions is set out in the Notice.

 

 

 

Exhibit 107

Calculation of Filing Fee Table

 

Form F-1

(Form Type)

 

SharkNinja, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered and Carry Forward Securities

 

  Security
Type		 Security
Class
Title		 Fee
Calculation
or Carry
Forward
Rule		 Amount
Registered(1)		 Proposed
Maximum
Offering
Price Per
Unit		 Maximum
Aggregate
Offering Price		 Fee Rate Amount of
Registration
Fee
Fees to be Paid Equity Ordinary shares, par value $0.0001 per share Other (2) — $ 1,402,106,000(2) $110.20 per $1,000,000 $ 154,512
  Total Offering Amounts   $ 1,402,106,000   $ 154,512
  Total Fees Previously Paid        
  Total Fee Offsets        
  Net Fee Due       $ 154,512

 

 

(1)This registration statement relates to ordinary shares, par value $0.0001 per share, of the Registrant that will be distributed pursuant to the separation and distribution of the Registrant from JS Global Lifestyle Company Limited. The amount of ordinary shares of the Registrant to be registered represents the maximum number of ordinary shares that will be distributed to the holders of JS Global Lifestyle Company Limited ordinary shares upon the consummation of the separation and distribution.

 

(2)Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) of the Securities Act of 1933, as amended. Given that there is no proposed maximum offering price per ordinary share, the Registrant calculates the proposed maximum aggregate offering price, by analogy to Rule 457(f)(2), based on the book value of the ordinary shares the registrant registers, which will be calculated from its unaudited pro forma balance sheet as of March 31, 2023. Given that the Registrant’s ordinary shares are not traded on an exchange or over-the-counter, the Registrant did not use the trading prices of its ordinary shares in accordance with Rule 457(c).