(Name, address including
zip code, and telephone number, including area code, of agent for service)
Approximate date of commencement of proposed
sale to the public: From time to time after the effective date of this registration statement as determined by the registrant.
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933.
† The term “new or revised financial accounting standard”
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
We may, from time to time, in one or more offerings,
offer and sell up to $300,000,000 of any combination, together or separately, of our ordinary shares, with a par value of US$0.0002 each,
share purchase contracts, share purchase units, warrants, debt securities, convertible debt securities, rights or units, which we
collectively refer to as the “securities”. The aggregate initial offering price of the securities that we may offer and sell
under this prospectus will not exceed $300,000,000. We may offer and sell any combination of the securities described in this prospectus
in different series, at times, in amounts, at prices and on terms to be determined at, or prior to, the time of each offering. This prospectus
describes the general terms of these securities and the general manner in which these securities will be offered. This prospectus provides
a general description of the securities we may offer. We will provide the specific terms of these securities in supplements to this prospectus.
The prospectus supplements will also describe the specific manner in which these securities will be offered and may also supplement,
update or amend information contained in this prospectus. This prospectus may not be used to consummate a sale of securities unless accompanied
by the applicable prospectus supplement. You should read this prospectus and any applicable prospectus supplement before you invest.
The securities covered by this prospectus may
be offered through one or more underwriters, dealers and agents or directly to purchasers. The names of any underwriters, dealers or agents,
if any, will be included in a supplement to this prospectus. For general information about the distribution of securities offered, please
see “Plan of Distribution”.
Our ordinary shares are traded on the Nasdaq
Capital Market under the symbol “HUDI”. On October 6, 2022 the last reported sale price of our ordinary shares on Nasdaq
Capital Market was $28.20 per ordinary share. Our stock price is volatile. During the 12 months prior to the date of this prospectus,
our ordinary share has traded at a low of $8.95 and a high of $35.70. There has been no change recently in our financial condition or
results of operations that is consistent with the recent change in our stock price.
We are an “emerging growth company,”
as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earlier of (1) the
last day of the fiscal year following the fifth anniversary of the completion of our initial public offering equity securities, (2) the
last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (3) the last day of the fiscal year
in which we are deemed to be a large accelerated filer, which will occur when the market value of our ordinary shares held by non-affiliates
exceeds $700 million as of the end of the second quarter of any fiscal year, or (4) the date on which we have issued more than an aggregate
of $1.0 billion in non-convertible debt during the prior three-year period.
Our equity structure is a direct holding structure.
Within our direct holding structure, the cross-border transfer of funds within our corporate entities is legal and compliant with the
laws and regulations of the PRC. After the foreign investors’ funds enter Huadi International, the funds can be directly transferred
to the PRC operating companies through its subsidiaries. Specifically, Huadi International is permitted under the Cayman Islands laws
to provide funding to our subsidiaries in the PRC, Hong Kong and through loans or capital contributions without restrictions on the amount
of the funds, subject to satisfaction of applicable government registration, approval and filing requirements. Our subsidiary in the
Hong Kong is also permitted under the laws of Hong Kong to provide funding to Huadi International through dividend distribution without
restrictions on the amount of the funds. Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out
of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. As of the date of this
prospectus, there have not been any transfers, dividends or distributions made between the holding company, its subsidiaries, and to
investors. Furthermore, as of the date of this prospectus, no cash generated from one subsidiary is used to fund another subsidiary’s
operations and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries. We have also
not installed any cash management policies that dictate the amount of such funds and how such funds are transferred. For the foreseeable
future, we intend to use the earnings for our business operations and as a result, we do not intend to distribute earnings or pay any
cash dividends. See “Transfers of Cash Between Our Company and Our Subsidiaries” on page 3 of the 2021 Annual Report
and on page 5 of the Prospectus Summary.
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements.
All statements contained in this prospectus other than statements of historical fact, including statements regarding our future results
of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements.
The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,”
“intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based
these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may
affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives,
and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those
described in the “Risk Factors” section. Moreover, we operate in a very competitive and rapidly changing environment. New
risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors
on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and
trends discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied
in the forward-looking statements.
You should not rely upon forward-looking statements
as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance, or achievements. Except as required by applicable law, we undertake no duty to update any of these forward-looking
statements after the date of this prospectus or to conform these statements to actual results or revised expectations.
OUR
COMPANY
This summary highlights information contained
in the documents incorporated herein by reference. Before making an investment decision, you should read the entire prospectus, and our
other filings with the SEC, including those filings incorporated herein by reference, carefully, including the sections entitled “Risk
Factors” and “Special Note Regarding Forward-Looking Statements.”
Overview
Huadi International was incorporated in the
Cayman Islands, with limited liabilities on September 27, 2018. Huadi International does not have operations and it conducts business
through its subsidiaries in China. The operating company, Huadi Steel, was established in 1998 in Zhejiang, China as a Private Limited
Company in Medium and Heavy Industry. Our main business operation focuses on new products development, manufacturing, marketing and sales
of stainless steel seamless pipes, tubes and stainless steel bar.
We are a leading manufacturer of industrial stainless steel seamless
pipes and tubes products with extensive distribution facilities and network for over twenty (20) provinces in China. We have also offered
a broad range of products exported to twenty (20) countries and regions as United States, Mexico, Thailand, Australia, Argentina, Taiwan,
India, the Philippines, UAE and Canada. Our products are widely used in the oil & gas transmission, chemistry engineering, food processing,
medical devices, aeronautics and astronautics, boiler, irrigation works construction, electricity, automobile, naval architecture, paper
mill and mechanical industries. Our facilities have been certified with the ISO9001 and ISO14001 quality management system.
We are a nationally-recognized brand and our company
have a big presence across domestic and international steel pipes industry with enhanced market prospects. Our core product “HuaGang”
stainless steel seamless pipe has been recognized as well- known trademark by the State Administration for Industry and Commerce of China.
We have been rewarded as China Top 500 Private Manufacturing Enterprises, High-Tech Enterprise of Zhejiang, Prestigious Brand of Zhejiang
Province, Technology Innovation Model Company, Distinguished Enterprise for Employment as well as National AAA Grade Enterprise with distinctive
rating of corporate credit status of PRC recorded with the People’s Bank of China.
We are offering a comprehensive range of products
with a specialty in high-end products such as 347H corrosion and acid- resistant stainless steel seamless pipes, S32205 duplex stainless
steel plates and automobile steel plates, bright steel pipes as well as precision tubes. We manufacture products by using innovative technologies
as cold-rolling and perforation with product test and certification. Our leading-edge products are especially valuable for sustainable
development of our company.
Holding Company Structure
Huadi International is a holding company established
in the Cayman Islands with no operations of its own. It conducts operations primarily through
its operating subsidiaries in the Cayman Islands, British Virgin Islands, Hong Kong and
the PRC. The ordinary shares offered in this prospectus are those of Huadi International, the holding company. Shareholders of Huadi
International are not directly investing in and may never hold equity interest in the operating subsidiaries. Our current corporate structure
is as follows:
The COVID-19 Pandemic update
The impacts of COVID-19
on our business, financial condition, and results of operations include, but are not limited to, the following:
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Wenzhou entered into a city-wide lockdown on February 3, 2020. We temporarily closed our offices and production facilities to adhere to the policy beginning in February 2020, as required by relevant PRC regulatory authorities. Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group Limited’ offices reopened on February 18, 2020 and production facilities are now fully operational. |
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Since the inception of the pandemic, our international customers have been negatively impacted by the outbreak, which reduced the demand of our products. However, domestic demand increased and partially offset the decrease of international demand because of the recovery initiative within China. During fiscal year 2021, we observed recovery of market demand and shortage of supply, and therefore our international and domestic sales increased compared to prior year. And as the vaccination continues to be rolled out worldwide, we anticipate the impact of pandemic will decreased in the 2022 fiscal year. |
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While China has slowly recovered from the economic impact of COVID-19, the situation may worsen if the global pandemic continues or resurface within China. Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group Limited will continue to closely monitor our collections throughout 2021. |
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Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group Limited’ workforce remains stable during the fiscal year of 2021. While the local government has provided funding to subsidize our labor cost, the implementation of various safety measures has increased the total cost of our operation. We are required to provide our employees with protective gears and regularly monitor and trace the health condition of our employees. Workers are also required to practice social distancing during mealtime at our own cafeteria. |
It is possible that
the price of our ordinary shares will decline significantly after the consummation of any future offerings, in which case you may
lose your investment. Because of the uncertainty surrounding the COVID-19 outbreak, the business disruption and the related
financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated at this time. See
“Risk Factors- Risks Related to Our Business and Industry-Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group
Limited’ business could be materially harmed by the ongoing coronavirus (COVID-19) pandemic” contained in the
2021Annual Report incorporated by reference in this prospectus.
Summary of Significant
Risk Factors
Investing in our Company involves significant
risks. You should carefully consider all of the information in this prospectus before making an investment in our Company. Below please
find a summary of the risks and challenges we face organized under relevant headings. These risks are discussed more fully in the section
titled “Item 3.D. Risk Factors” in our 2021 Annual Report, as amended, on Form 20-F for the year ended September 30, 2021,
which is incorporated in this prospectus by reference.
Risks Related to Our Business and Industry
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Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group Limited could be impacted by China’s macro-control policy on control of China’s steel and steel products industry See “Risk Factors- Risks Related to Our Business and Industry-Chinese government’s monitoring and macro-control of the market could hurt demand of our products” on page 9 of the 2021 Annual Report. |
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Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group Limited’ business might be adversely affected by the prolonged slowdown in the economic condition, which would negatively affect sales of our products, operations of our company and our financial conditions. See “Risk Factors- Risks Related to Our Business and Industry-The considerable uncertainty in Chinese economic growth could hurt demand of our products” on page 9 of the 2021 Annual Report. |
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Import tariffs, other trade barriers and protectionist policies could negatively affect steel prices and our exports to international markets, particularly the United States. Such import barriers adversely affect our company’s business by limiting our access to or competitiveness in foreign steel markets. See “Risk Factors- Risks Related to Our Business and Industry-Tariffs could materially have a negative impact on demand of our products” on page 9 of the 2021 Annual Report. |
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This evolving policy dispute between China and the United States is likely to have significant impact on the Chinese economy as well as consumer discretional spending, directly and indirectly, and no assurance can be given that we will not be adversely affected by any governmental actions taken by either China or the United States, perhaps materially. See “Risk Factors- Risks Related to Our Business and Industry-Recent trade policy initiatives announced by the United States administration against China may adversely affect our business” on page 10 of the 2021 Annual Report. |
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Because of the uncertainty surrounding the COVID-19 outbreak, the business disruption and the related financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated at this time. See “Risk Factors- Risks Related to Our Business and Industry-Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group Limited’ business could be materially harmed by the ongoing coronavirus (COVID-19) pandemic” on page 14 of the 2021 Annual Report. |
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Huadi Internationalis subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business. See “Risk Factors- Risks Related to Our Business and Industry-Huadi International may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the foreign corrupt practices act could have a material adverse effect on our business” on page 17 of the 2021 Annual Report. |
Risks Related to Doing Business in China
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The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. we could be subject to liabilities, penalties and operational disruption, which may materially and adversely affect our business, operating results, financial condition and the value of our ordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See “Risk Factors-Risks Related to Doing Business in China-The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to issue securities to foreign investors, however, if our subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors” on page 21 of the 2021 Annual Report. |
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Substantially all of our operations are located in China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole. See “Risk Factors-Risks Related to Doing Business in China-Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations” on page 23-24 of the 2021 Annual Report. |
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Because the Overseas Listing Rules are currently in draft form and given the novelty of the Negative List, there remain substantial uncertainties as to whether and what requirements, including filing requirements, will be imposed on a PRC company with respect to its listing and offerings overseas as well as with the interpretation and implementation of existing and future regulations in this regard. See “Risk Factors-Risks Related to Doing Business in China-Substantial uncertainties exist with respect to the enactment timetable and final content of draft China Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations” on page 24-25 of the 2021 Annual Report. |
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Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit Huadi International’s ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. See “Risk Factors-Risks Related to Doing Business in China-Huadi International relies on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business” on page 25-26 of the 2021 Annual Report. |
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Substantially all of Huadi’s revenues and expenditures are denominated in RMB, whereas our reporting currency is the U.S. dollar. As a result, fluctuations in the exchange rate between the U.S. dollar and RMB will affect the relative purchasing power in RMB terms of our U.S. dollar assets and the proceeds from our initial public offering. See “Risk Factors-Risks Related to Doing Business in China-Fluctuations in exchange rates could have a material adverse effect on Huadi’s results of operations and the price of our ordinary shares” on page 26 of the 2021 Annual Report. |
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The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. See “Risk Factors-Risks Related to Doing Business in China-Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment” page 27 of the 2021 Annual Report. |
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The proceeds of any offerings must be sent back to the PRC, and the process for sending such proceeds back to the PRC may take several months. See “Risk Factors-Risks Related to Doing Business in China-Huadi may be unable to use these proceeds to grow our business until we receive such proceeds in the PRC.Huadi must remit the offering proceeds to PRC before they may be used to benefit our business in the PRC, and this process may take a number of months” on page 27 of the 2021 Annual Report. |
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PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, which could adversely affect our business and prospects. See “Risk Factors-Risks Related to Doing Business in China-PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law” on page 29 of the 2021 Annual Report. |
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On December
16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or
investigate completely PCAOB-registered public accounting firms headquartered in mainland
China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions.
On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “SOP”)
with the China Securities Regulatory Commission and the Ministry of Finance of China. The
SOP, together with two protocol agreements governing inspections and investigations (together,
the “SOP Agreement”), establishes a specific, accountable framework to make possible
complete inspections and investigations by the PCAOB of audit firms based in mainland China
and Hong Kong, as required under U.S. law. The SOP Agreement remains unpublished and is subject
to further explanation and implementation. In other words, the SOP Agreement is just the
first step toward opening access for the PCAOB to inspect and investigate registered public
accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet
with respect to the SOP Agreement disclosed by the SEC, the PCAOB shall have sole discretion
to select any audit firms for inspection or investigation and the PCAOB inspectors and investigators
shall have a right to see all audit documentation without redaction. According to the PCAOB,
its December 2021 determinations under the HFCAA remain in effect. The PCAOB is required
to reassess these determinations by the end of 2022. Under the PCAOB’s rules, a reassessment
of a determination under the HFCAA may result in the PCAOB reaffirming, modifying or vacating
the determination. However, if the PCAOB continues to be prohibited from conducting complete
inspections and investigations of PCAOB-registered public accounting firms in mainland China
and Hong Kong, the PCAOB is likely to determine by the end of 2022 that positions taken by
authorities in the PRC obstructed its ability to inspect and investigate registered public
accounting firms in mainland China and Hong Kong completely, then the companies audited by
those registered public accounting firms would be subject to a trading prohibition on U.S.
markets pursuant to the HFCAA. Our auditor, TPS Thayer, is headquartered in Sugar Land, Texas,
and is subject to inspection by the PCAOB on a regular basis. Therefore, we believe our auditor
is not subject to the determinations as to the inability to inspect or investigate registered
firms completely announced by the PCAOB on December 16, 2021. However, recent developments
with respect to audits of China-based companies create uncertainty about the ability of TPS
Thayer to fully cooperate with the PCAOB’s request for audit workpapers without the
approval of the Chinese authorities. We cannot assure you whether Nasdaq or regulatory authorities
would apply additional and more stringent criteria to us after considering the effectiveness
of our auditor’s audit procedures and quality control procedures, adequacy of personnel
and training, or sufficiency of resources, geographic reach or experience as it relates to
the audit of our financial statements. See “Risk Factors-Risks Related to
Doing Business in China-The recent joint statement by the SEC and PCAOB, proposed
rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call
for additional and more stringent criteria to be applied to emerging market companies upon
assessing the qualification of their auditors, especially the non-U.S. auditors who are not
inspected by the PCAOB. These developments could add uncertainties to Huadi International’s
offering” on page 31-32 of the 2021 Annual Report. |
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The PRC government extensively regulates the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations. See “Risk Factors-Risks Related to Doing Business in China-Huadi International may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group Limited’s business may have a material adverse effect on our business and results of operations” on page 32 of the of the 2021 Annual Report. |
Risks Related to Our Ordinary Shares
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Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail our company of this exemption from new or revised accounting standards and, therefore, will be subject to accounting standards that are available to emerging growth companies. See “Risk Factors-Risks Related to Our Ordinary Shares-Huadi International is an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Ordinary Shares less attractive to investors” on page 35 of the 2021 Annual Report. |
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Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. See “Risk Factors-Risks Related to Our Ordinary Share-Huadi International are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects” on page 35 of the 2021 Annual Report. |
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Nasdaq Listing Rule requires listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. See “Risk Factors-Risks Related to Our Ordinary Share-Because Huadi International is a foreign private issuer and is exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer” page 35 of the 2021 Annual Report. |
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The market price of our shares could decline as a result of sales of substantial amounts of Huadi International’s shares in the public market, or the perception that these sales could occur. See “Risk Factors-Risks Related to Our Ordinary Share-Shares eligible for future sale may adversely affect the market price of Huadi International’s ordinary shares, as the future sale of a substantial amount of outstanding ordinary shares in the public marketplace could reduce the price of our ordinary shares” on page 38 of the 2021 Annual Report. |
Corporate Information
Our principal executive office is located
No. 1688 Tianzhong Street, Longwan District, Wenzhou, Zhejiang Province, People’s Republic of China 325025. The telephone number
of our principal executive offices is +86 057786598888. Our registered agent in Cayman Islands is Harneys Fiduciary (Cayman) Limited.
Our registered office and our registered agent’s office in Cayman Islands are both at 4th Floor, Harbour Place, 103 South Church
Street, P.O. Box 10240, Grand Cayman, KY1-1002, Cayman Islands. Our registered agent in the United States is Cogency Global Inc. We maintain
a corporate website at www.huadigroup.com. We do not incorporate the information on our website into this prospectus and you should not
consider any information on, or that can be accessed through, our website as part of this prospectus.
Legal and Operational Risks of Operating in the PRC
Huadi International is
a Cayman Islands incorporated holding company, conducting business through its subsidiaries’ operation in China. Huadi International
does not conduct business through variable interest entity structure. Wenzhou Hongshun Stainless Steel Limited and Huadi Steel Group
Limited are subject to certain legal and operational risks associated with being based in China and having a majority of our operations
in China. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these
risks may result in a material change in our operations, significant depreciation of the value of our ordinary shares, or a complete
hindrance of our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly
decline or be worthless. The PRC government initiated a series of regulatory actions and statements to regulate business operations in
China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend
the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions
are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new
laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact
such modified or new laws and regulations will have on the daily business operation of PRC subsidiaries and our ability to accept foreign
investments and list on an U.S. or other foreign exchange. These risks may cause significant depreciation of the value of our ordinary
shares, or a complete hinderance of our ability to offer or continue to offer our securities to investors. See “Risk Factors
— Risks Related to Doing Business in China” beginning on page 21 of the 2021 Annual Report.
Transfers of Cash Between Our Company and Our Subsidiaries
Huadi International is a holding company and
conduct substantially all of its business through the PRC subsidiary, which is a limited liability company established in China. We may
rely on dividends to be paid by our PRC subsidiary to fund our cash and financing requirements, including the funds necessary to pay
dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If our
PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends
or make other distributions to us.
The PRC has currency and capital transfer regulations that require
us to comply with certain requirements for the movement of capital. The Company is able to transfer cash (US Dollars) to its PRC subsidiaries
through an investment (by increasing the Company’s registered capital in a PRC subsidiary). The Company’s subsidiaries within
China can transfer funds to each other when necessary through the way of current lending. The transfer of funds among companies are subject
to the Provisions on Private Lending Cases, which was implemented on August 20, 2020 to regulate the financing activities between natural
persons, legal persons and unincorporated organizations. As advised by our PRC counsel, Grandall Law, the Provisions on Private Lending
Cases does not prohibit using cash generated from one subsidiary to fund another subsidiary’s operations. We have not been notified
of any other restriction which could limit our PRC subsidiaries’ ability to transfer cash between subsidiaries. The Company’s
subsidiaries in the PRC have not transferred any earnings or cash to the Company to date. As of the date of this prospectus, there has
not been any assets or cash transfer between the holding company and its subsidiaries. As of the date of this prospectus, there has not
been any dividends or distributions made to US investors. The Company’s business is primarily conducted through its subsidiaries.
The Company is a holding company and its material assets consist solely of the ownership interests held in its PRC subsidiaries. The Company
relies on dividends paid by its subsidiaries for its working capital and cash needs, including the funds necessary: (i) to pay dividends
or cash distributions to its shareholders, (ii) to service any debt obligations and (iii) to pay operating expenses. As a result of PRC
laws and regulations (noted below) that require annual appropriations of 10% of after-tax income to be set aside in a general reserve
fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted in that respect, as well as in others respects
noted below, in their ability to transfer a portion of their net assets to the Company as a dividend.
With respect to transferring cash from the Company to its subsidiaries,
increasing the Company’s registered capital in a PRC subsidiary requires the filing of the local commerce department, while a shareholder
loan requires a filing with the State Administration of Foreign Exchange or its local bureau. Aside from the declaration to the State
Administration of Foreign Exchange, there is no restriction or limitations on such cash transfer or earnings distribution.
With respect to the payment of dividends, we note the following:
| 1. | PRC regulations currently permit the payment of dividends only out of accumulated profits, as determined in accordance with accounting
standards and PRC regulations (an in-depth description of the PRC regulations is set forth below); |
| 2. | Our PRC subsidiaries are required to set aside, at a minimum, 10% of their net income after taxes, based on PRC accounting standards,
each year as statutory surplus reserves until the cumulative amount of such reserves reaches 50% of their registered capital; |
| 3. | Such reserves may not be distributed as cash dividends; |
| 4. | Our PRC subsidiaries may also allocate a portion of their after-tax profits to fund their staff welfare and bonus funds; except in
the event of a liquidation, these funds may also not be distributed to shareholders; the Company does not participate in a Common Welfare
Fund; and |
| 5. | The incurrence of debt, specifically the instruments governing such debt, may restrict a subsidiary’s ability to pay stockholder
dividends or make other cash distributions. |
If, for the reasons noted above, our subsidiaries are unable to pay
shareholder dividends and/or make other cash payments to the Company when needed, the Company’s ability to conduct operations, make
investments, engage in acquisitions, or undertake other activities requiring working capital may be materially and adversely affected.
However, our operations and business, including investment and/or acquisitions by our subsidiaries within China, will not be affected
as long as the capital is not transferred in or out of the PRC.
As of the date of this prospectus, no dividends, distributions or transfers
has been made between Huadi International and any of its subsidiaries. As of the date of this prospectus, our Company, our subsidiaries
have not distributed any earnings or settled any amounts. Our Company, our subsidiaries, do not have any plan to distribute earnings or
settle amounts owed in the foreseeable future. For the foreseeable future, the Company intends to use the earnings for research and development,
to develop new products and to expand its production capacity. As a result, we do not expect to pay any cash dividends in the foreseeable
future. Also, as of the date of this prospectus, no cash generated from one subsidiary is used to fund another subsidiary’s operations
and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries. We have not installed any
cash management policies that dictate the amount of such funding.
As of the date of this prospectus, cash transfers and transfers of
other assets between our Company, our subsidiaries were as follows:
| No. | |
Transfer From | |
Transfer To | |
Approximate
Value ($) | |
Note |
| 1 | |
Huadi International Group Co., Ltd. | |
Hong Kong Beach Limited | |
11,000,000 | |
The proceeds from IPO loaned to the HK subsidiary for the purpose of investment and working capital of the PRC subsidiaries |
| 2 | |
Huadi International Group Co., Ltd. | |
Huadi Steel Group Limited. | |
10,000,000 | |
The proceeds from IPO loaned to the operating entity in PRC as working capital to support the routine operations |
The cash transfers and transfers of other assets
that occurred among our Company, our subsidiaries included the following intercompany borrowings: (i) for the year ended September 30,
2021, Hong Kong Beach Limited and Huadi Steel Group Limited. received cash loan with an amount of $11,000,000 and $10,000,000 from Huadi
International Group Co., Ltd, respectively, (ii) during the fiscal year ended September 30, 2020, there was no such intercompany borrowings.
Recent Regulatory Actions by the PRC Government
On December 24, 2021, the CSRC, together with
other relevant government authorities in China issued the Provisions of the State Council on the Administration of Overseas Securities
Offering and Listing by Domestic Companies (Draft for Comments), and the Measures for the Filing of Overseas Securities Offering and Listing
by Domestic Companies (Draft for Comments) (“Draft Overseas Listing Regulations”). The Draft Overseas Listing Regulations
requires that a PRC domestic enterprise seeking to issue and list its shares overseas (“Overseas Issuance and Listing”) shall
complete the filing procedures of and submit the relevant information to CSRC. The Overseas Issuance and Listing includes direct and indirect
issuance and listing. Where an enterprise whose principal business activities are conducted in PRC seeks to issue and list its shares
in the name of an overseas enterprise (“Overseas Issuer”) on the basis of the equity, assets, income or other similar rights
and interests of the relevant PRC domestic enterprise, such activities shall be deemed an indirect overseas issuance and listing (“Indirect
Overseas Issuance and Listing”) under the Draft Overseas Listing Regulations. Therefore, the proposed listing would be deemed an
Indirect Overseas Issuance and Listing under the Draft Overseas Listing Regulations. As such, the Company would be required to complete
the filing procedures of and submit the relevant information to CSRC after the Draft Overseas Listing Regulations become effective.
In addition, on December 28, 2021, the CAC, the
National Development and Reform Commission (“NDRC”), and several other administrations jointly issued the revised Measures
for Cybersecurity Review, or the Revised Review Measures, which became effective and replace the existing Measures for Cybersecurity Review
on February 15, 2022. According to the Revised Review Measures, if an “online platform operator” that is in possession of
personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Based on
a set of Q&A published on the official website of the State Cipher Code Administration in connection with the issuance of the Revised
Review Measures, an official of the said administration indicated that an online platform operator should apply for a cybersecurity review
prior to the submission of its listing application with non-PRC securities regulators. Given the recency of the issuance of the Revised
Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties exist with respect
to their interpretation and implementation. For example, it is unclear whether the requirement of cybersecurity review applies to follow-on
offerings by an “online platform operator” that is in possession of personal data of more than one million users where the
offshore holding company of such operator is already listed overseas. Furthermore, the CAC released the draft of the Regulations on Network
Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor listed overseas
must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security
review report for a given year to the municipal cybersecurity department before January 31 of the following year. If the draft
Regulations on Network Data Security Management are enacted in the current form, we, as an overseas listed company, will be required to
carry out an annual data security review and comply with the relevant reporting obligations. For more information, see “Risk
Factors — Risks Related to Doing Business in China – The Chinese government exerts substantial influence over the manner in
which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to issue
securities to foreign investors, however, if our subsidiaries or the holding company were required to obtain approval in the future and
were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which
would materially affect the interest of the investors” on page 21-22 of the 2021 Annual Report.
Our PRC counsel has advised us that neither the
holding company, our subsidiaries are currently required to obtain approval from Chinese authorities, including the CSRC, or the CAC,
to list on U.S exchanges or issue securities to foreign investors, given that: (i) using our products and services do not require
providing users’ personal information; (ii) we possess minimum amount, if not none of personal information in our business
operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified
as core or important data by the authorities. As of the date of this prospectus, our Company and its subsidiaries have not been involved
in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice
or sanction. We do not believe that our existing business will require such regulatory review. As of the date of this prospectus, our
Company and its subsidiaries have not received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the
China Securities Regulatory Commission or any other PRC governmental authorities.
Our PRC operating subsidiary currently has obtained
all material permissions and approvals required for our operations in compliance with the relevant PRC laws and regulations in the PRC.
Huadi Steel Group Limited has received the business license which is a permit issued by Wenzhou Market Supervision and Administration
that allows the company to conduct specific business within the government’s geographical jurisdiction. Huadi Steel Group Limited
has obtained Manufacture License of Special Equipment (Pressure Pipeline Components) issued by the The State Administration for Market
Supervision of the People’s Republic of China, Domestic Drinking Water Health and Safety Product
Production Administrative Permission issued by Zhejiang Health Commission, and Sewage Discharge Permission issued by Wenzhou Ecology and
Environment Bureau. As of the date of this prospectus, except for the business license and the permissions mentioned here, Huadi
International and its subsidiaries are not required to obtain any other permissions or approvals from any Chinese authorities to operate
the business. However, applicable laws and regulations may be tightened, and new laws or regulations may be introduced to impose additional
government approval, license and permit requirements. If we inadvertently conclude that such approval is not required, fail to obtain
and maintain such approvals, licenses or permits required for our business or respond to changes in the regulatory environment, we could
be subject to liabilities, penalties and operational disruption, which may materially and adversely affect our business, operating results,
financial condition and the value of our ordinary shares, significantly limit or completely hinder our ability to offer or continue to
offer securities to investors, or cause such securities to significantly decline in value or become worthless.
The Holding Foreign Companies
Accountable Act (“HFCAA”)
On March 24, 2021, the SEC adopted interim
final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. An identified issuer will
be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently
established by the SEC. In June 2021, the Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if signed
into law, would reduce the time period for the delisting of foreign companies under the HFCAA to two consecutive years instead of three
years. If our auditor cannot be inspected by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years,
the trading of our securities on any U.S. national securities exchanges, as well as any over-the-counter trading in the U.S., will be
prohibited. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to
use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public
accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December
2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules
apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting
firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken
by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to
inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because
of positions taken by PRC authorities in those jurisdictions. On August 26, 2022, the PCAOB announced that it had signed a Statement
of Protocol (the “SOP”) with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together
with two protocol agreements governing inspections and investigations (together, the “SOP Agreement”), establishes a specific,
accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and
Hong Kong, as required under U.S. law. The SOP Agreement remains unpublished and is subject to further explanation and implementation.
In other words, the SOP Agreement is just the first step toward opening access for the PCAOB to inspect and investigate registered public
accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the SOP Agreement disclosed
by the SEC, the PCAOB shall have sole discretion to select any audit firms for inspection or investigation and the PCAOB inspectors and
investigators shall have a right to see all audit documentation without redaction. According to the PCAOB, its December 2021 determinations
under the HFCAA remain in effect. The PCAOB is required to reassess these determinations by the end of 2022. Under the PCAOB’s
rules, a reassessment of a determination under the HFCAA may result in the PCAOB reaffirming, modifying or vacating the determination.
However, if the PCAOB continues to be prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting
firms in mainland China and Hong Kong, the PCAOB is likely to determine by the end of 2022 that positions taken by authorities in the
PRC obstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely,
then the companies audited by those registered public accounting firms would be subject to a trading prohibition on U.S. markets pursuant
to the HFCAA.
Our auditor, TPS Thayer, is headquartered in Sugar
Land, Texas, and is subject to inspection by the PCAOB on a regular basis. Therefore, we believe our auditor is not subject to the determinations
as to the inability to inspect or investigate registered firms completely announced by the PCAOB on December 16, 2021. However, recent
developments with respect to audits of China-based companies create uncertainty about the ability of TPS Thayer to fully cooperate with
the PCAOB’s request for audit workpapers without the approval of the Chinese authorities. We cannot assure you whether Nasdaq or
regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s
audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or
experience as it relates to the audit of our financial statements. In the event it is later determined that the PCAOB is unable to inspect
or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such
lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA ultimately result in a determination
by a securities exchange to delist the Company’s securities. In addition, under the HFCAA, our securities may be prohibited from
trading on the Nasdaq or other U.S. stock exchanges if our auditor is not inspected by the PCAOB for three consecutive years, which could
be reduced to two consecutive years if the Accelerating Holding Foreign Companies Accountable Act is signed into law, and this ultimately
could result in our ordinary shares being delisted by and exchange. See “Risk Factors — Risks Related to Doing Business
in China – The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies
Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification
of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to
our offering” beginning on page 31-32 of the 2021 Annual Report.
Implications of Being an Emerging Growth Company
We are an “emerging growth company,” as defined in the
Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal
year following the fifth anniversary of the completion of our initial public offering equity securities, (2) the last day of the fiscal
year in which we have total annual gross revenue of at least $1.07 billion, (3) the last day of the fiscal year in which we are deemed
to be a large accelerated filer, which will occur when the market value of our ordinary shares held by non-affiliates exceeds $700 million
as of the end of the second quarter of any fiscal year, or (4) the date on which we have issued more than an aggregate of $1.0 billion
in non-convertible debt during the prior three-year period.
Implications of Being a Foreign Private Issuer
We are a “foreign private issuer,”
as defined in Rule 405 under the Securities Act and Rule 3b-4(c) under the Exchange Act. As a result, we are not subject to the same requirements
as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and
less frequent than those of U.S. domestic reporting companies. For example:
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we are not required to provide as many Exchange Act reports or provide periodic and current reports as frequently, as a domestic public company; |
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for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; |
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we are not required to provide the same level of disclosure on certain issues, such as executive compensation; |
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we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; |
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we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and |
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we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction. |
RISK
FACTORS
Investing in our securities involves risks. Before
investing in any securities offered pursuant to this prospectus, you should carefully consider the risk factors and uncertainties identified
in this prospectus and set forth under the heading “Item 3.D. Risk Factors” in our Annual Report, as amended, on Form 20-F
for the year ended September 30, 2021, which is incorporated in this prospectus by reference, as updated by our subsequent filings under
the Exchange Act and, if applicable, in any accompanying prospectus supplement subsequently filed relating to a specific offering or sale.
CAPITALIZATION
Our capitalization will be set forth in a prospectus
supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated herein by reference.
USE
OF PROCEEDS
We intend to use the net proceeds from the sale of securities for general
working capital
we offer as indicated in the applicable prospectus supplement, information incorporated by reference, or free
writing prospectus.
DIVIDEND
POLICY
Our dividend policy is set forth under the heading
“Item 8.A. Consolidated Statements and Other Financial Information” in our Annual Report, as amended, on Form 20-F for the
year ended September 30, 2021, which is incorporated in this prospectus by reference, as updated by our subsequent filings under the Exchange
Act.
DESCRIPTION
OF ordinary SHARES
Ordinary Shares
Pursuant to our amended and restated memorandum
and articles of association, our company’s authorized share capital consists of 250,000,000 ordinary shares with a par value of
US$0.0002 per share. As of October 7, 2022, there were 13,239,182 ordinary shares issued and outstanding.
The following are summaries of the material provisions
of our memorandum and articles of association under the Cayman Islands Companies Act (2022 Revision), insofar as they relate to the material
terms of our ordinary shares.
Our Memorandum and Articles
Copies of our amended and restated memorandum
and articles of association are filed as exhibits.
Objects of Our Company
Under our amended and restated memorandum and
articles of association, the objects of our company are unrestricted and we have the full power and authority to carry out any object
not prohibited by the law of the Cayman Islands.
Ordinary Shares
Each ordinary share in the Company confers upon
the shareholder:
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the right to one vote at a meeting of the shareholders of the Company or on any resolution of shareholders; |
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the right to an equal share in any dividend paid by the Company; and |
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the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
All of our issued ordinary shares are fully paid
and non-assessable. Certificates representing the ordinary shares are issued in registered form. Our shareholders may freely hold and
vote their ordinary shares.
Listing
Our ordinary shares are listed on the Nasdaq Capital
Market under the symbol “HUDI.”
Transfer Agent and Registrar
The transfer agent and registrar for the ordinary
shares is VStock Transfer LLC
Dividends
The holders of our ordinary shares are entitled
to such dividends as may be declared by our board of directors subject to the Cayman Islands Companies Act, as amended. Our amended and
restated articles of association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any
reserve set aside from profits which our board of directors determine is no longer needed. Dividends may also be declared or paid out
of share premium account or otherwise permitted by the Cayman Islands Companies Act, provided that in no circumstances may we pay a dividend
if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.
Voting rights
Any action required or permitted to be taken by
the shareholders must be taken at a duly called and quorate annual or special meeting of the shareholders entitled to vote on such action
and may be effected by a resolution in writing. At each general meeting, each shareholder who is present in person or by proxy (or, in
the case of a shareholder being a corporation, by its duly authorized representative) will have one vote for each ordinary share which
such shareholder holds. At any shareholders’ meeting the chairman is responsible for deciding in such manner as he considers appropriate
whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting and recorded
in the minutes of the meeting. A poll may be demanded by the chairman of such meeting or one or more shareholders present in person or
by proxy entitled to vote.
Election of directors
Directors may be appointed by an ordinary resolution
of our shareholder or by a resolution of the directors of the Company.
Meetings of shareholders
Any of our directors may convene meetings of shareholders
at such times and in such manner and places within or outside the Cayman Islands as the director considers necessary or desirable. The
director convening a meeting shall give at least seven days’ notice of a meeting of shareholders to those shareholders whose names
on the date the notice is given appear as members in the register of members of the Company and are entitled to vote at the meeting, and
each of the Company’s directors. Our board of directors must convene a general meeting upon the written request of one or more shareholders
holding no less than 10% of our voting share capital.
No business may be transacted at any general meeting
unless a quorum is present at the time the meeting proceeds to business. Two or more members present in person or by proxy and entitled
to vote shall be a quorum. If, within two hours from the time appointed for the meeting, a quorum is not present, the meeting, if convened
upon the requisition of shareholders, shall be dissolved. In any other case, it shall stand adjourned to the next business day in the
jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the board of directors
may determine, and if, at the adjourned meeting, a quorum is not present within half an hour from the time appointed for the meeting,
the shareholders present shall be a quorum and may transact the business for which the meeting was called. If present, the chair of our
board of directors shall be the chair presiding at any meeting of the shareholders.
Meetings of directors
The management of our company is entrusted to
our board of directors, who will make decisions by voting on resolutions of directors. At any meeting of directors, a quorum will be present
if two directors are present, unless otherwise fixed by the directors. If there is a sole director, that director shall be a quorum. A
person who holds office as an alternate director shall be counted in the quorum. A director who also acts as an alternate director shall
count twice towards the quorum. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors
consented to in writing by all of the directors.
Pre-emptive rights
There are no pre-emptive rights applicable to
the issue by us of new shares under either Cayman Islands law or our amended and restated memorandum and articles of association.
Transfer of Ordinary Shares
Subject to the restrictions in our amended and
restated memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his
or her ordinary shares by written instrument of transfer signed by the transferor and containing the name of the transferee. Our board
of directors may resolve by resolution to refuse or delay the registration of the transfer of any ordinary share without giving any reason.
If our directors refuse to register a transfer they shall, within two months after the date on which the instrument of transfer was lodged
with the Company, notify the transferee of such refusal.
Winding Up
On a return of capital on winding up or otherwise
(other than on conversion, redemption or purchase of shares), assets available for distribution among the holders of ordinary shares shall
be distributed among the holders of our shares on a pro rata basis. If our assets available for distribution are insufficient to repay
all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders proportionately.
Calls on Ordinary Shares and forfeiture of Ordinary Shares
Our board of directors may from time to time make
calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at least 14 days prior
to the specified time of payment. The ordinary shares that have been called upon and remain unpaid are subject to forfeiture.
Repurchase of Shares
The Cayman Islands Companies Act and our amended
and restated memorandum and articles of association permits us to purchase our own shares, subject to certain restrictions and requirements.
Our directors may only exercise this power on our behalf, subject to the Cayman Islands Companies Act, our amended and restated memorandum
and articles of association and to any applicable requirements imposed from time to time by the Nasdaq, the Securities and Exchange Commission,
or by any other recognized stock exchange on which our securities are listed.
Provided the necessary shareholders or board approval
have been obtained, we may issue shares on terms that are subject to redemption, at our option or at the option of the holders of these
shares, on such terms and in such manner, provided the requirements under the Cayman Islands Companies Act have been satisfied, including
out of capital, as may be determined by our board of directors. Under the Cayman Islands Companies Act, the repurchase of any share may
be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such repurchase,
or out of capital (including share premium account and capital redemption reserve). If the repurchase proceeds are paid out of our Company’s
capital, our Company must, immediately following such payment, be able to pay its debts as they fall due in the ordinary course of business.
In addition, under the Cayman Islands Companies Act, no such share may be repurchased (1) unless it is fully paid up, (2) if such repurchase
would result in there being no shares outstanding, and (3) unless the manner of purchase (if not so authorized under the amended and restated
memorandum and articles of association) has first been authorized by a resolution of our shareholders. In addition, under the Cayman Islands
Companies Act, our Company may accept the surrender of any fully paid share for no consideration unless, as a result of the surrender,
the surrender would result in there being no shares outstanding (other than shares held as treasury shares).
Variation of Rights of Shares
The rights attached to any class or series of
shares (unless otherwise provided by the terms of issue of the shares of that class or series), whether or not our company is being wound-up,
may be varied with the consent in writing of the holders of two-thirds of the issued shares of that class or series or with the sanction
of a special resolution passed at a separate meeting of the holders of the shares of the class or series. The rights conferred upon the
holders of the shares of any class issued 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 pari passu with such existing class of shares.
Modifications of rights
All or any of the rights attached to any class
of our shares may (unless otherwise provided by the terms of issue of the shares of that class) be varied with the consent in writing
of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed by not less than two-thirds
of such shareholders of that class as may be present in person or by proxy at a separate general meeting of the holders of shares of that
class.
Changes in the number of shares we are authorized to issue and those
in issue
We may from time to time by resolution of shareholders
in the requisite majorities:
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amend our amended and restated memorandum of association to increase or decrease the authorized share capital of our Company; |
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divide our authorized and issued shares into a larger number of shares; and |
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combine our authorized and issued shares into a smaller number of shares. |
Inspection of books and records
Holders of our ordinary shares will have no general
right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide
our shareholders with annual audited financial statements.
Rights of non-resident or foreign shareholders
There are no limitations imposed by our amended
and restated 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 amended and restated memorandum and articles of association governing
the ownership threshold above which shareholder ownership must be disclosed.
Issuance of additional Ordinary Shares
Our amended and restated memorandum and articles
of association authorizes our board of directors to issue additional ordinary shares from time to time as our board of directors shall
determine, to the extent available authorized but unissued shares.
Exempted Company
We are an exempted company with limited liability
under the Cayman Islands Companies Act. The Cayman Islands 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 that does not hold a license to carry on business in the Cayman Islands:
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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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is prohibited from making any invitation to the public in the Cayman Islands to subscribe for any of its securities; |
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may not issue
negotiable or bearer shares, but may issue shares with no par value; |
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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 an exempted limited duration company; and |
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may register as a segregated portfolio company. |
“Limited liability”
means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company.
DESCRIPTION OF WARRANTS
The following description, together with the additional
information we may include in any applicable prospectus supplements, summarizes the material terms and provisions of the warrants that
we may offer under this prospectus and the related warrant agreements and warrant certificates. While the terms summarized below will
apply generally to any warrants that we may offer under this prospectus, we will describe the particular terms of any series of warrants
that we may offer in more detail in the applicable prospectus supplement. If we indicate in the prospectus supplement, the terms of any
warrants offered under that prospectus supplement may differ from the terms described below. However, no prospectus supplement shall fundamentally
change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at
the time of its effectiveness. Specific warrant agreements will contain additional important terms and provisions and will be incorporated
by reference as an exhibit to the registration statement that includes this prospectus or as an exhibit to a report filed under the Exchange
Act.
General
We may issue warrants that entitle the holder
to purchase ordinary shares, debt securities or any combination thereof. We may issue warrants independently or together with ordinary
shares, debt securities or any combination thereof, and the warrants may be attached to or separate from these securities.
We will describe in the applicable prospectus
supplement the terms of the series of warrants, including:
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the offering price and aggregate number of warrants offered; |
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the currency for which the warrants may be purchased, if not United States dollars; |
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security; |
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if applicable, the date on and after which the warrants and the related securities will be separately transferable; |
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in the case of warrants to purchase ordinary shares, the number of ordinary shares purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; |
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in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency, if not United States dollars, in which, this principal amount of debt securities may be purchased upon such exercise; |
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
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the terms of any rights to redeem or call the warrants; |
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
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the dates on which the right to exercise the warrants will commence and expire; |
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the manner in which the warrant agreement and warrants may be modified; |
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federal income tax consequences of holding or exercising the warrants; |
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the terms of the securities issuable upon exercise of the warrants; and |
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any other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before exercising their warrants, holders of warrants
will not have any of the rights of holders of the securities purchasable upon such exercise, including:
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in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or |
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in the case of warrants to
purchase our ordinary shares, the right to receive dividends, if any, or payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if any. |
Exercise of Warrants
Each warrant will entitle the holder to purchase
the securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus
supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at
any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants
by delivering the warrant certificate representing the warrants to be exercised together with specified information, and paying the required
amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on
the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant
will be required to deliver to the warrant agent.
Upon receipt of the required payment and the warrant
certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants
represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of warrants.
If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise
price for warrants.
Enforceability of Rights by Holders of Warrants
Each warrant agent will act solely as our agent
under the applicable warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant.
A single bank or trust company may act as a warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility
in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate any proceedings
at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related warrant agent or the
holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities purchasable upon exercise
of, its warrants.
Warrant Agreement Will Not Be Qualified Under
Trust Indenture Act
No warrant agreement will be qualified as an indenture,
and no warrant agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore, holders of warrants issued under
a warrant agreement will not have the protection of the Trust Indenture Act with respect to their warrants.
Modification of the Warrant Agreement
The warrant agreements may permit us and the warrant
agent, if any, without the consent of the warrant holders, to supplement or amend the agreement in the following circumstances:
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to cure any ambiguity; |
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to correct or supplement any provision which may be defective or inconsistent with any other provisions; or |
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to add new provisions regarding matters or questions that we and the warrant agent may deem necessary or desirable and which do not adversely affect the interests of the warrant holders. |
DESCRIPTION OF DEBT SECURITIES AND CONVERTIBLE
DEBT SECURITIES
As used in this prospectus, debt securities mean
the debentures, notes, bonds and other evidences of indebtedness that we may issue from time to time. The debt securities may be secured
or unsecured, senior debt securities or subordinated debt securities, and/or convertible, and which may be issued in one or more series.
The debt securities will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying prospectus
supplement. Senior debt securities will be issued under a new senior indenture. Subordinated debt securities will be issued under a subordinated
indenture. Together, the senior indentures and the subordinated indentures are sometimes referred to in this prospectus as the indentures.
This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular series of debt securities.
The statements and descriptions in this prospectus
or in any prospectus supplement regarding provisions of the indentures and debt securities are summaries thereof, do not purport to be
complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of the indentures (and any amendments
or supplements we may enter into from time to time which are permitted under each indenture) and the debt securities, including the definitions
therein of certain terms.
General
Unless otherwise specified in a prospectus supplement,
the debt securities will be direct unsecured obligations of the Company. The senior debt securities will rank equally with any of our
other senior and unsubordinated debt. The subordinated debt securities will be subordinate and junior in right of payment to any senior
indebtedness.
Unless otherwise specified in a prospectus supplement,
the indentures do not limit the aggregate principal amount of debt securities that we may issue and provide that we may issue debt securities
from time to time at par or at a discount, and in the case of the new indentures, if any, in one or more series, with the same or various
maturities. Unless indicated in a prospectus supplement, we may issue additional debt securities of a particular series without the consent
of the holders of the debt securities of such series outstanding at the time of the issuance. Any such additional debt securities, together
with all other outstanding debt securities of that series, will constitute a single series of debt securities under the applicable indenture.
Each prospectus supplement will describe the terms
relating to the specific series of debt securities being offered. These terms will include some or all of the following:
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the title of the debt securities and whether they are subordinated debt securities or senior debt securities; |
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any limit on the aggregate principal amount of the debt securities; |
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the ability to issue additional debt securities of the same series; |
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the price or prices at which we will sell the debt securities; |
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the maturity date or dates of the debt securities on which principal will be payable; |
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the rate or rates of interest, if any, which may be fixed or variable, at which the debt securities will bear interest, or the method of determining such rate or rates, if any; |
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the date or dates from which any interest will accrue or the method by which such date or dates will be determined; |
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the right, if any, to extend the interest payment periods and the duration of any such deferral period, including the maximum consecutive period during which interest payment periods may be extended; |
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whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments; |
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the dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date; |
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the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon us pursuant to the indenture; |
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if we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions; |
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our obligation, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation; |
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the denominations in which the debt securities will be issued, if other than denominations of $1,000 and integral multiples of $1,000; |
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the portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration of the maturity of the debt securities in connection with an event of default (as described below), if other than the full principal amount; |
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the currency, currencies or currency unit in which we will pay the principal of (and premium, if any) or interest, if any, on the debt securities, if not United States dollars; |
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provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events; |
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any deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable indenture; |
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any limitation on our ability to incur debt, redeem shares, sell our assets or other restrictions; |
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the application, if any, of the terms of the indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities; |
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whether the subordination provisions summarized below or different subordination provisions will apply to the debt securities; |
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the terms, if any, upon which the holders may convert or exchange the debt securities into or for our ordinary shares or other securities or property; |
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whether any of the debt securities will be issued in global form and, if so, the terms and conditions upon which global debt securities may be exchanged for certificated debt securities; |
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any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default; |
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the depository for global or certificated debt securities; |
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any special tax implications of the debt securities; |
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any foreign tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies; |
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any trustees, authenticating or paying agents, transfer agents or registrars, or other agents with respect to the debt securities; |
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any other terms of the debt securities not inconsistent with the provisions of the indentures, as amended or supplemented; |
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to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable indenture; |
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if the principal of or any premium or interest on any debt securities of the series is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined); |
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the portion of the principal amount of any securities of the series which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable indenture if other than the entire principal amount; and |
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if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined). |
Unless otherwise specified in the applicable prospectus
supplement, the debt securities will not be listed on any securities exchange and will be issued in fully-registered form without coupons.
Debt securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate that at the time of issuance is below market rates. The
applicable prospectus supplement will describe the federal income tax consequences and special considerations applicable to any such debt
securities. The debt securities may also be issued as indexed securities or securities denominated in foreign currencies, currency units
or composite currencies, as described in more detail in the prospectus supplement relating to any of the particular debt securities. The
prospectus supplement relating to specific debt securities will also describe any special considerations and certain additional tax considerations
applicable to such debt securities.
Subordination
The prospectus supplement relating to any offering
of subordinated debt securities will describe the specific subordination provisions. However, unless otherwise noted in the prospectus
supplement, subordinated debt securities will be subordinate and junior in right of payment to any existing senior indebtedness.
Unless otherwise specified in the applicable prospectus
supplement, under the subordinated indenture, “senior indebtedness” means all amounts due on obligations in connection with
any of the following, whether outstanding at the date of execution of the subordinated indenture, or thereafter incurred or created:
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the principal of (and premium, if any) and interest due on our indebtedness for borrowed money and indebtedness evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); |
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all of our capital lease obligations or attributable debt (as defined in the indentures) in respect of sale and leaseback transactions; |
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all obligations representing the balance deferred and unpaid of the purchase price of any property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, except any such balance that constitutes an accrued expense or trade payable or any similar obligation to trade creditors; |
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all of our obligations in respect of interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; other agreements or arrangements designed to manage interest rates or interest rate risk; and other agreements or arrangements designed to protect against fluctuations in currency exchange rates or commodity prices; |
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all obligations of the types referred to above of other persons for the payment of which we are responsible or liable as obligor, guarantor or otherwise; and |
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all obligations of the types referred to above of other persons secured by any lien on any property or asset of ours (whether or not such obligation is assumed by us). |
However, senior indebtedness does not include:
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any indebtedness which expressly provides that such indebtedness shall not be senior in right of payment to the subordinated debt securities, or that such indebtedness shall be subordinated to any other of our indebtedness, unless such indebtedness expressly provides that such indebtedness shall be senior in right of payment to the subordinated debt securities; |
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any of our obligations to our subsidiaries or of a subsidiary guarantor to us or any other of our other subsidiaries; |
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any liability for federal, state, local or other taxes owed or owing by us or any subsidiary guarantor, |
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any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities); |
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any obligations with respect to any capital stock; |
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any indebtedness incurred in violation of the indenture, provided that indebtedness under our credit facilities will not cease to be senior indebtedness under this bullet point if the lenders of such indebtedness obtained an officer’s certificate as of the date of incurrence of such indebtedness to the effect that such indebtedness was permitted to be incurred by the indenture; and |
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any of our indebtedness in respect of the subordinated debt securities. |
Senior indebtedness shall continue to be senior
indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of
any term of such senior indebtedness.
Unless otherwise noted in an accompanying prospectus
supplement, if we default in the payment of any principal of (or premium, if any) or interest on any senior indebtedness when it becomes
due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then, unless and until such default
is cured or waived or ceases to exist, we will make no direct or indirect payment (in cash, property, securities, by set-off or otherwise)
in respect of the principal of or interest on the subordinated debt securities or in respect of any redemption, retirement, purchase or
other requisition of any of the subordinated debt securities.
In the event of the acceleration of the maturity
of any subordinated debt securities, the holders of all senior debt securities outstanding at the time of such acceleration, subject to
any security interest, will first be entitled to receive payment in full of all amounts due on the senior debt securities before the holders
of the subordinated debt securities will be entitled to receive any payment of principal (and premium, if any) or interest on the subordinated
debt securities.
If any of the following events occurs, we will
pay in full all senior indebtedness before we make any payment or distribution under the subordinated debt securities, whether in cash,
securities or other property, to any holder of subordinated debt securities:
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any dissolution or winding-up or liquidation or reorganization of Huadi International, whether voluntary or involuntary or in bankruptcy, |
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insolvency or receivership; |
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any general assignment by us for the benefit of creditors; or |
In such event, any payment or distribution under
the subordinated debt securities, whether in cash, securities or other property, which would otherwise (but for the subordination provisions)
be payable or deliverable in respect of the subordinated debt securities, will be paid or delivered directly to the holders of senior
indebtedness in accordance with the priorities then existing among such holders until all senior indebtedness has been paid in full. If
any payment or distribution under the subordinated debt securities is received by the trustee of any subordinated debt securities in contravention
of any of the terms of the subordinated indenture and before all the senior indebtedness has been paid in full, such payment or distribution
will be received in trust for the benefit of, and paid over or delivered and transferred to, the holders of the senior indebtedness at
the time outstanding in accordance with the priorities then existing among such holders for application to the payment of all senior indebtedness
remaining unpaid to the extent necessary to pay all such senior indebtedness in full.
The subordinated indenture does not limit the
issuance of additional senior indebtedness.
Events of Default, Notice and Waiver
Unless an accompanying prospectus supplement states
otherwise, the following shall constitute “events of default” under the indentures with respect to each series of debt securities:
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we default for 30 consecutive days in the payment when due of interest on the debt securities; |
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we default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the debt securities; |
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our failure to observe or perform any other of our covenants or agreements with respect to such debt securities for 60 days after we receive notice of such failure; |
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certain events of bankruptcy, insolvency or reorganization of the Huadi International; or |
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any other event of default provided with respect to securities of that series. |
Unless an accompanying prospectus supplement states
otherwise, if an event of default with respect to any debt securities of any series outstanding under either of the indentures shall occur
and be continuing, the trustee under such indenture or the holders of at least 25% (or at least 10%, in respect of a remedy (other than
acceleration) for certain events of default relating to the payment of dividends) in aggregate principal amount of the debt securities
of that series outstanding may declare, by notice as provided in the applicable indenture, the principal amount (or such lesser amount
as may be provided for in the debt securities of that series) of all the debt securities of that series outstanding to be due and payable
immediately; provided that, in the case of an event of default involving certain events in bankruptcy, insolvency or reorganization, acceleration
is automatic; and, provided further, that after such acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount of the outstanding debt securities of that series may, under certain circumstances, rescind
and annul such acceleration if all events of default, other than the non-payment of accelerated principal, have been cured or waived.
Upon the acceleration of the maturity of original issue discount securities, an amount less than the principal amount thereof will become
due and payable. Reference is made to the prospectus supplement relating to any original issue discount securities for the particular
provisions relating to acceleration of maturity thereof.
Any past default under either indenture with respect
to debt securities of any series, and any event of default arising therefrom, may be waived by the holders of a majority in principal
amount of all debt securities of such series outstanding under such indenture, except in the case of (1) default in the payment of
the principal of (or premium, if any) or interest on any debt securities of such series or (2) certain events of default relating
to the payment of dividends.
The trustee is required within 90 days after the
occurrence of a default (which is known to the trustee and is continuing), with respect to the debt securities of any series (without
regard to any grace period or notice requirements), to give to the holders of the debt securities of such series notice of such default.
The trustee, subject to its duties during default
to act with the required standard of care, may require indemnification by the holders of the debt securities of any series with respect
to which a default has occurred before proceeding to exercise any right or power under the indentures at the request of the holders of
the debt securities of such series. Subject to such right of indemnification and to certain other limitations, the holders of a majority
in principal amount of the outstanding debt securities of any series under either indenture may direct the time, method and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee with respect to the
debt securities of such series, provided that such direction shall not be in conflict with any rule of law or with the applicable indenture
and the trustee may take any other action deemed proper by the trustee which is not inconsistent with such direction.
No holder of a debt security of any series may
institute any action against us under either of the indentures (except actions for payment of overdue principal of (and premium, if any)
or interest on such debt security or for the conversion or exchange of such debt security in accordance with its terms) unless (1) the
holder has given to the trustee written notice of an event of default and of the continuance thereof with respect to the debt securities
of such series specifying an event of default, as required under the applicable indenture, (2) the holders of at least 25% in aggregate
principal amount of the debt securities of that series then outstanding under such indenture shall have requested the trustee to institute
such action and offered to the trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred
in compliance with such request; (3) the trustee shall not have instituted such action within 60 days of such request and (4) no
direction inconsistent with such written request has been given to the trustee during such 60-day period by the holders of a majority
in principal amount of the debt securities of that series. We are required to furnish annually to the trustee statements as to our compliance
with all conditions and covenants under each indenture.
Discharge, Defeasance and Covenant Defeasance
We may discharge or defease our obligations under
the indenture as set forth below, unless otherwise indicated in the applicable prospectus supplement.
We may discharge certain obligations to holders
of any series of debt securities issued under either the senior indenture or the subordinated indenture which have not already been delivered
to the trustee for cancellation by irrevocably depositing with the trustee money in an amount sufficient to pay and discharge the entire
indebtedness on such debt securities not previously delivered to the trustee for cancellation, for principal and any premium and interest
to the date of such deposit (in the case of debt securities which have become due and payable) or to the stated maturity or redemption
date, as the case may be, and we or, if applicable, any guarantor, have paid all other sums payable under the applicable indenture.
If indicated in the applicable prospectus supplement,
we may elect either (1) to defease and be discharged from any and all obligations with respect to the debt securities of or within
any series (except in all cases as otherwise provided in the relevant indenture) (“legal defeasance”) or (2) to be released
from our obligations with respect to certain covenants applicable to the debt securities of or within any series (“covenant defeasance”),
upon the deposit with the relevant indenture trustee, in trust for such purpose, of money and/or government obligations which through
the payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal of
(and premium, if any) or interest on such debt securities to maturity or redemption, as the case may be, and any mandatory sinking fund
or analogous payments thereon. As a condition to legal defeasance or covenant defeasance, we must deliver to the trustee an opinion of
counsel to the effect that the holders of such debt securities will not recognize income, gain or loss for federal income tax purposes
as a result of such legal defeasance or covenant defeasance and will be subject to federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if such legal defeasance or covenant defeasance had not occurred. Such opinion
of counsel, in the case of legal defeasance under clause (i) above, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable federal income tax law occurring after the date of the relevant indenture. In addition, in the case
of either legal defeasance or covenant defeasance, we shall have delivered to the trustee (1) if applicable, an officer’s certificate
to the effect that the relevant debt securities exchange(s) have informed us that neither such debt securities nor any other debt securities
of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit and (2) an officer’s
certificate and an opinion of counsel, each stating that all conditions precedent with respect to such legal defeasance or covenant defeasance
have been complied with.
We may exercise our defeasance option with respect
to such debt securities notwithstanding our prior exercise of our covenant defeasance option.
Modification and Waiver
Under the indentures, unless an accompanying prospectus
supplement states otherwise, we and the applicable trustee may supplement the indentures for certain purposes which would not materially
adversely affect the interests or rights of the holders of debt securities of a series without the consent of those holders. We and the
applicable trustee may also modify the indentures or any supplemental indenture in a manner that affects the interests or rights of the
holders of debt securities with the consent of the holders of at least a majority in aggregate principal amount of the outstanding debt
securities of each affected series issued under the indenture. However, the indentures require the consent of each holder of debt securities
that would be affected by any modification which would:
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reduce the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver; |
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reduce the principal of or change the fixed maturity of any debt security or, except as provided in any prospectus supplement, alter or waive any of the provisions with respect to the redemption of the debt securities; |
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reduce the rate of or change the time for payment of interest, including default interest, on any debt security; |
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waive a default or event of default in the payment of principal of or interest or premium, if any, on, the debt securities (except a rescission of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities and a waiver of the payment default that resulted from such acceleration); |
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make any debt security payable in money other than that stated in the debt securities; |
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make any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of the debt securities to receive payments of principal of, or interest or premium, if any, on, the debt securities; |
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waive a redemption payment with respect to any debt security (except as otherwise provided in the applicable prospectus supplement); |
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except in connection with an offer by us to purchase all debt securities, (1) waive certain events of default relating to the payment of dividends or (2) amend certain covenants relating to the payment of dividends and the purchase or redemption of certain equity interests; |
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make any change to the subordination or ranking provisions of the indenture or the related definitions that adversely affect the rights of any holder; or |
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make any change in the preceding amendment and waiver provisions. |
The indentures permit the holders of at least
a majority in aggregate principal amount of the outstanding debt securities of any series issued under the indenture which is affected
by the modification or amendment to waive our compliance with certain covenants contained in the indentures.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus
supplement, payment of interest on a debt security on any interest payment date will be made to the person in whose name a debt security
is registered at the close of business on the record date for the interest.
Unless otherwise indicated in the applicable prospectus
supplement, principal, interest and premium on the debt securities of a particular series will be payable at the office of such paying
agent or paying agents as we may designate for such purpose from time to time. Notwithstanding the foregoing, at our option, payment of
any interest may be made by check mailed to the address of the person entitled thereto as such address appears in the security register.
Unless otherwise indicated in the applicable prospectus
supplement, a paying agent designated by us will act as paying agent for payments with respect to debt securities of each series. All
paying agents initially designated by us for the debt securities of a particular series will be named in the applicable prospectus supplement.
We may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office
through which any paying agent acts, except that we will be required to maintain a paying agent in each place of payment for the debt
securities of a particular series.
All moneys paid by us to a paying agent for the
payment of the principal, interest or premium on any debt security which remain unclaimed at the end of two years after such principal,
interest or premium has become due and payable will be repaid to us upon request, and the holder of such debt security thereafter may
look only to us for payment thereof.
Denominations, Registrations and Transfer
Unless an accompanying prospectus supplement states
otherwise, debt securities will be represented by one or more global certificates registered in the name of a nominee for The Depository
Trust Company, or DTC. In such case, each holder’s beneficial interest in the global securities will be shown on the records of
DTC and transfers of beneficial interests will only be effected through DTC’s records.
A holder of debt securities may only exchange
a beneficial interest in a global security for certificated securities registered in the holder’s name if:
| |
● |
we deliver to the trustee notice from DTC that it is unwilling or unable to continue to act as depository or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within 120 days after the date of such notice from DTC; |
| |
|
|
| |
● |
we in our sole discretion determine that the debt securities (in whole but not in part) should be exchanged for definitive debt securities and deliver a written notice to such effect to the trustee; or |
| |
|
|
| |
● |
there has occurred and is continuing a default or event of default with respect to the debt securities. |
If debt securities are issued in certificated
form, they will only be issued in the minimum denomination specified in the accompanying prospectus supplement and integral multiples
of such denomination. Transfers and exchanges of such debt securities will only be permitted in such minimum denomination. Transfers of
debt securities in certificated form may be registered at the trustee’s corporate office or at the offices of any paying agent or
trustee appointed by us under the indentures. Exchanges of debt securities for an equal aggregate principal amount of debt securities
in different denominations may also be made at such locations.
Governing Law
The indentures and debt securities will be governed
by, and construed in accordance with, the laws of the State of New York, without regard to its principles of conflicts of laws, except
to the extent the Trust Indenture Act is applicable or as otherwise agreed to by the parties thereto.
Trustee
The trustee or trustees under the indentures will
be named in any applicable prospectus supplement.
Conversion or Exchange Rights
The prospectus supplement will describe the terms,
if any, on which a series of debt securities may be convertible into or exchangeable for our ordinary shares or other debt securities.
These terms will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. These
provisions may allow or require the number of our ordinary shares or other securities to be received by the holders of such series of
debt securities to be adjusted. Any such conversion or exchange will comply with applicable Cayman Islands law and our amended and restated
memorandum and articles of Association.
DESCRIPTION OF UNITS
We may issue units comprising one or more of the
other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included
security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred
separately, at any time or at any time before a specified date or occurrence.
The applicable prospectus supplement may describe:
| |
● |
the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
| |
|
|
| |
● |
any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and |
| |
|
|
| |
● |
whether the units will be issued in fully registered or global form. |
The applicable prospectus supplement will describe
the terms of any units. The preceding description and any description of units in the applicable prospectus supplement does not purport
to be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral arrangements
and depository arrangements relating to such units.
DESCRIPTION OF SHARE PURCHASE CONTRACTS AND
SHARE PURCHASE UNITS
We may issue share purchase contracts, including
contracts obligating holders to purchase from us, and obligating us to sell to the holders, a specified number of ordinary shares or other
securities registered hereunder at a future date or dates, which we refer to in this prospectus as “share purchase contracts.”
The price per share of the securities and the number of shares of the securities may be fixed at the time the share purchase contracts
are issued or may be determined by reference to a specific formula set forth in the share purchase contracts.
The share purchase contracts may be issued separately
or as part of units consisting of a share purchase contract and debt securities, warrants, other securities registered hereunder or debt
obligations of third parties, including U.S. treasury securities, securing the holders’ obligations to purchase the securities under
the share purchase contracts, which we refer to herein as “share purchase units.” The share purchase contracts may require
holders to secure their obligations under the share purchase contracts in a specified manner. The share purchase contracts also may require
us to make periodic payments to the holders of the share purchase units or vice versa, and those payments may be unsecured or refunded
on some basis.
The share purchase contracts, and, if applicable,
collateral or depositary arrangements, relating to the share purchase contracts or share purchase units, will be filed with the SEC in
connection with the offering of share purchase contracts or share purchase units. The prospectus supplement relating to a particular issue
of share purchase contracts or share purchase units will describe the terms of those share purchase contracts or share purchase units,
including the following:
| |
● |
if applicable, a discussion of material tax considerations; and |
| |
|
|
| |
● |
any other information we think is important about the share purchase contracts or the share purchase units. |
DESCRIPTION OF RIGHTS
We may issue rights to purchase ordinary shares
that we may offer to our securityholders. The rights may or may not be transferable by the persons purchasing or receiving the rights.
In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or
other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after
such rights offering. Each series of rights will be issued under a separate rights agent agreement to be entered into between us and a
bank or trust company, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as
our agent in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders
of rights certificates or beneficial owners of rights.
The prospectus supplement relating to any rights
that we offer will include specific terms relating to the offering, including, among other matters:
| |
● |
the date of determining the securityholders entitled to the rights distribution; |
| |
|
|
| |
● |
the aggregate number of rights issued and the aggregate number of ordinary shares purchasable upon exercise of the rights; |
| |
|
|
| |
● |
the exercise price; |
| |
|
|
| |
● |
the conditions to completion of the rights offering; |
| |
|
|
| |
● |
the date on which the right to exercise the rights will commence and the date on which the rights will expire; and |
| |
|
|
| |
● |
applicable tax considerations. |
Each right would entitle the holder of the rights
to purchase for cash the principal amount of debt securities or ordinary shares at the exercise price set forth in the applicable prospectus
supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable
prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any rights
offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents,
underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable
prospectus supplement.
TAXATION
Information regarding taxation is set forth under
the heading “Item 10.E. Taxation” in our Annual Report, as amended, on Form 20-F for the year ended September 30, 2021, which
is incorporated in this prospectus by reference, as updated by our subsequent filings under the Exchange Act.
PLAN
OF DISTRIBUTION
We may sell the securities described in this prospectus
through underwriters or dealers, through agents, or directly to one or more purchasers or through a combination of these methods. The
applicable prospectus supplement will describe the terms of the offering of the securities, including:
| |
● |
the name or names of any underwriters, if any, and if required, any dealers or agents, and the amount of securities underwritten or purchased by each of them, if any; |
| |
|
|
| |
● |
the public offering price or purchase price of the securities from us and the net proceeds to us from the sale of the securities; |
| |
|
|
| |
● |
any underwriting discounts and other items constituting underwriters’ compensation; |
| |
|
|
| |
● |
any discounts or concessions allowed or re-allowed or paid to dealers; and |
| |
|
|
| |
● |
any securities exchange or market on which the securities may be listed. |
We may distribute the securities from time to
time in one or more transactions at:
| |
● |
a fixed price or prices, which may be changed; |
| |
|
|
| |
● |
market prices prevailing at the time of sale; |
| |
|
|
| |
● |
varying prices determined at the time of sale related to such prevailing market prices; or |
| |
|
|
| |
● |
negotiated prices. |
Only underwriters named in the prospectus supplement
will be underwriters of the securities offered by the prospectus supplement.
If we use underwriters in the sale, the underwriters
will either acquire the securities for their own account and may resell the securities from time to time in one or more transactions at
a fixed public offering price or at varying prices determined at the time of sale, or sell the Shares on a “best efforts, minimum/maximum
basis” when the underwriters agree to do their best to sell the securities to the public. We may offer the securities to the public
through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Any public offering price
and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time.
If we use a dealer in the sale of the securities
being offered pursuant to this prospectus or any prospectus supplement, the securities will be sold directly to the dealer, as principal.
The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
Our ordinary shares are listed on the Nasdaq Capital
Market. Unless otherwise specified in the related prospectus supplement, all securities we offer, other than ordinary shares, will be
new issues of securities with no established trading market. Any underwriter may make a market in these securities, but will not be obligated
to do so and may discontinue any market making at any time without notice. We may apply to list any series of warrants or other securities
that we offer on an exchange, but we are not obligated to do so. Therefore, there may not be liquidity or a trading market for any series
of securities.
We may sell the securities directly or through
agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe any
commissions we may pay the agent in the applicable prospectus supplement.
We may authorize agents or underwriters to solicit
offers by institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant
to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to
these contracts and the commissions we must pay for solicitation of these contracts in the applicable prospectus supplement.
In connection with the sale of the securities,
underwriters, dealers or agents may receive compensation from us or from purchasers of the securities for whom they act as agents in the
form of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they
may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional investors
or others that purchase securities directly and then resell the securities, may be deemed to be underwriters, and any discounts or commissions
received by them from us and any profit on the resale of the securities by them may be deemed to be underwriting discounts and commissions
under the Securities Act.
We may provide agents and underwriters with indemnification
against particular civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the
agents or underwriters may make with respect to such liabilities. Agents and underwriters may engage in transactions with, or perform
services for, us in the ordinary course of business.
In addition, we may enter into derivative transactions
with third parties (including the writing of options), or sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in connection with such a transaction, the third parties may,
pursuant to this prospectus and the applicable prospectus supplement, sell securities covered by this prospectus and the applicable prospectus
supplement. If so, the third party may use securities borrowed from us or others to settle such sales and may use securities received
from us to close out any related short positions. We may also loan or pledge securities covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the
pledged securities pursuant to this prospectus and the applicable prospectus supplement. The third party in such sale transactions will
be an underwriter and will be identified in the applicable prospectus supplement or in a post-effective amendment.
To facilitate an offering of a series of securities,
persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the market price of the
securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the
offering of more securities than have been sold to them by us. In those circumstances, such persons would cover such over-allotments or
short positions by purchasing in the open market or by exercising the over-allotment option granted to those persons. In addition, those
persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing
penalty bids, whereby selling concessions allowed to underwriters or dealers participating in any such offering may be reclaimed if securities
sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain
the market price of the securities at a level above that which might otherwise prevail in the open market. Such transactions, if commenced,
may be discontinued at any time. We make no representation or prediction as to the direction or magnitude of any effect that the transactions
described above, if implemented, may have on the price of our securities.
EXPENSES
The following table sets forth the estimated costs
and expenses, other than underwriting discounts and commissions, payable by us in connection with the offering of the securities being
registered. All the amounts shown are estimates, except for the SEC registration fee.
| SEC registration fee |
|
$ |
28,710 |
|
| FINRA fee |
|
$ |
* |
|
| Legal fees and expenses |
|
$ |
* |
|
| Accounting fees and expenses |
|
$ |
* |
|
| Printing fees and expenses |
|
$ |
* |
|
| Miscellaneous |
|
$ |
* |
|
| Total |
|
$ |
* |
|
| * | Estimated expenses are not presently known. The foregoing sets
forth the general categories of expenses (other than underwriting discounts and commissions) that the Company anticipates it will incur
in connection with the offering of securities under the registration statement. An estimate of the aggregate expenses in connection with
the issuance and distribution of the securities being offered will be included in the applicable prospectus supplement. |
WHERE
YOU CAN GET MORE INFORMATION
We have filed with the SEC a registration statement
on Form F-3 under the Securities Act with respect to the securities described in this prospectus and any accompanying prospectus supplement,
as applicable. This prospectus and any accompanying prospectus supplement, which constitute a part of that registration statement, do
not contain all of the information set forth in that registration statement and its exhibits. For further information with respect to
us and our securities, you should consult the registration statement and its exhibits.
We are subject to the informational requirements
of the Exchange Act, and, in accordance with the Exchange Act, we also must file reports with, and furnish other information to, the SEC.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements,
and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained
in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as U.S. companies. However,
we file with the SEC an annual report on Form 20-F containing financial statements audited by an independent registered public accounting
firm, and we submit to the SEC, on Form 6-K, unaudited quarterly financial information.
You may read and copy any document we file with,
or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. The SEC also maintains an internet site (www.sec.gov) that makes
available reports and other information that we file or furnish electronically with it.
INCORPORATION
BY REFERENCE
The SEC allows us to “incorporate by reference”
into this prospectus the documents we file with, or furnish to, it, which means that we can disclose important information to you by referring
you to these documents. The information that we incorporate by reference into this prospectus forms a part of this prospectus, and information
that we file later with the SEC automatically updates and supersedes any information in this prospectus. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We incorporate by reference into this prospectus
the documents listed below:
| |
● |
our
Reports on Form 6-K, furnished
to the SEC on September 29, 2022; |
| ● | our Annual Report on No. 1 amendment to Form 20-F for the fiscal year ended September 30, 2021 filed on
May 17, 2022; |
| ● | our Reports on Form 6-K, furnished to the SEC on February 2, 2022; |
| ● | our Annual Report on Form 20-F for the fiscal year ended September 30, 2021 filed on February 2, 2022; |
| ● | our Reports on Form 6-K, furnished to the SEC on November 26, 2021; |
| ● | our Reports on Form 6-K, furnished to the SEC on November 10, 2021; |
| ● | our Reports on Form 6-K, furnished to the SEC on November 1, 2021; |
| ● | our Reports on Form 6-K, furnished to the SEC on August 26, 2021; |
| ● | our Reports on Form 6-K, furnished to the SEC on April 9, 2021; |
| ● | our Reports on Form 6-K, furnished to the SEC on March 30, 2021 |
| ● | our Annual Report on Form 20-F for the fiscal year ended September 30, 2020 filed on March 30, 2021; |
| ● | our Reports on Form 6-K, furnished to the SEC on March 17, 2021; |
| ● | our Reports on Form 6-K, furnished to the SEC on February 1, 2021; and |
| ● | our Reports on Form 6-K, furnished to the SEC on January 28, 2021. |
All documents filed by us pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and prior to the termination of the offering of
the securities offered by this prospectus are incorporated by reference into this prospectus and form part of this prospectus from the
date of filing or furnishing of these documents. Any documents that we furnish to the SEC on Form 6-K subsequent to the date of this prospectus
will be incorporated by reference into this prospectus only to the extent specifically set forth in the Form 6-K.
Any statement contained in a document that is
incorporated by reference into this prospectus will be deemed to be modified or superseded for the purposes of this prospectus to the
extent that a statement contained in this prospectus, or in any other subsequently filed document which also is or is deemed to be incorporated
by reference into this prospectus, modifies or supersedes that statement. The modifying or superseding statement does not need to state
that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes.
Upon request, we will provide, without charge,
to each person who receives this prospectus, a copy of any or all of the documents incorporated by reference (other than exhibits to the
documents that are not specifically incorporated by reference in the documents). Please direct written or oral requests for copies to
our Corporate Secretary at No. 1688 Tianzhong Street, Longwan District, Wenzhou, Zhejiang Province, People’s Republic of China 325025.
ENFORCEABILITY
OF CIVIL LIABILITIES
We are incorporated under the laws of the Cayman
Islands with limited liability. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands
corporation, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of exchange control
or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body
of securities laws as compared to the United States and provides less protections to investors. In addition, Cayman Islands companies
may not have standing to sue before the federal courts of the United States.
Substantially all of our assets are located outside
the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United
States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult
for investors to effect service of process within the United States upon us or such persons or to enforce against them or against us,
judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws
of the United States or any state thereof.
We have appointed Cogency Global Inc. as our
agent to receive service of process with respect to any action brought against us in the United States District Court for districts
in the State of New York under the federal securities laws of the United States or of any State of the United States or any action
brought against us in the Supreme Court of the State of New York under the securities laws of the State of New York.
There is uncertainty as to whether the courts
of China would (1) recognize or enforce judgments of United States courts obtained against us or such persons predicated upon the
civil liability provisions of the securities laws of the United States or any state thereof, or (2) be competent to hear original
actions brought in each respective jurisdiction, against us or such persons predicated upon the securities laws of the United States or
any state thereof.
The recognition and enforcement of foreign judgments
are provided for under the Chinese Civil Procedure Law. Chinese courts may recognize and enforce foreign judgments in accordance with
the requirements of the Chinese Civil Procedure Law based either on treaties between China and the country where the judgment is made
or in reciprocity between jurisdictions. China does not have any treaties or other agreements with the Cayman Islands or the United States
that provide for the reciprocal recognition and enforcement of foreign judgments. As a result, it is uncertain whether a Chinese court
would enforce a judgment rendered by a court in either of these two jurisdictions.
We have been advised by Ogier, our counsel as
to Cayman Islands law, that it is uncertain whether the courts of the Cayman Islands will allow shareholders of our company to originate
actions in the Cayman Islands based upon securities laws of the United States. In addition, there is uncertainty with regard to Cayman
Islands law related to whether a judgment obtained from the U.S. courts under civil liability provisions of U.S. securities laws will
be determined by the courts of the Cayman Islands as penal or punitive in nature. If such determination is made, the courts of the Cayman
Islands will not recognize or enforce the judgment against a Cayman Islands company, such as our company. As the courts of the Cayman
Islands have yet to rule on making such a determination in relation to judgments obtained from U.S. courts under civil liability provisions
of U.S. securities laws, it is uncertain whether such judgments would be enforceable in the Cayman Islands. We have been further advised
that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, a judgment obtained
in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re- examination of
the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided
such judgment:
| (a) | is given by a foreign court of competent jurisdiction; |
| | | |
| (b) | imposes on the judgment debtor a liability to pay a liquidated
sum for which the judgment has been given; |
| | | |
| (d) | is not in respect of taxes, a fine or a penalty; and |
| | | |
| (e) | was not obtained in a manner and is not of a kind the enforcement
of which is contrary to natural justice or the public policy of the Cayman Islands. |
The United States and the Cayman Islands do not
have a treaty providing for reciprocal recognition and enforcement of judgments of courts of the United States in civil and commercial
matters and that a final judgment for the payment of money rendered by any general or state court in the United States based on civil
liability, whether or not predicated solely upon the U.S. federal securities laws, may not be enforceable in the Cayman Islands.
LEGAL
MATTERS
Ortoli Rosenstadt LLP is acting as counsel to
our company regarding U.S. securities law matters. The validity of the ordinary shares offered hereby will be opined upon for us by Ogier.
Certain legal matters as to PRC law will be passed upon for us by Grandall Law Firm. Ortoli Rosenstadt LLP may rely upon Ogier with respect
to matters governed by the law of the Cayman Islands and Grandall Law Firm with respect to matters governed by PRC law.
EXPERTS
Our consolidated financial statements as of and
for the year ended September 30, 2021 incorporated by reference in this prospectus and have been so included in reliance on the report
of TPS Thayer, an independent registered public accounting firm, given on the authority of said firm as experts in accounting and auditing.
The current address of TPS Thayer is 1600 Hwy 6 Suite 100, Sugar Land, TX 77478. Our consolidated financial statements as of September
30, 2020 and for the years ended September 30, 2020 and 2019 incorporated by reference in this prospectus and have been so included in
reliance on the report of Briggs & Veselka Co., an independent registered public accounting firm, given on the authority of said firm
as experts in accounting and auditing. The current address of Briggs & Veselka Co. is 9 Greenway Plaza #1700, Houston, TX 77046.
INTERESTS OF EXPERTS AND COUNSEL
No named expert of or counselor to us was employed
on a contingent basis, or owns an amount of our shares (or those of our subsidiaries) which is material to that person, or has a material,
direct or indirect economic interest in us or that depends on the success of the offering.
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the
foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is therefore unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
The Cayman Islands Companies Act 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 indemnification may be held by the Cayman Islands courts to be contrary to public policy, such as to provide
indemnification against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association
permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such
losses or damages arise from dishonesty, willful default or fraud of such directors or officers. This standard of conduct is generally
the same as permitted under the Delaware General Corporation Law for a Delaware corporation.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have
been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.
Item 9. Exhibits
The following exhibits are attached hereto:
Exhibit
Number |
|
Title |
| |
|
|
| 1.1* |
|
Form of Underwriting Agreement |
| 3.1 |
|
Memorandum and Articles
of Association of Huadi International Group Co., Ltd., filed as Exhibit 3.1 to the Form
F-1 submitted on September 18, 2020 and is incorporated herein by reference |
| 4.1 |
|
Specimen Certificate for Ordinary Share, filed as Exhibit 4.1 to the registration statement on Form F-1 filed on September 18, 2020 and incorporate herein by reference |
| 4.2+ |
|
Form of Indenture |
| 4.3* |
|
Form of Debt Securities |
| 4.4* |
|
Form of Warrant Agreement
(including Warrant Certificate) |
| 4.5* |
|
Form of Unit Agreement
(including unit certificate) |
| 4.6* |
|
Form of Rights Agreement
(including rights certificate) |
| 4.7* |
|
Form of Share Purchase
Contract |
| 4.8* |
|
Form of Share Purchase
Unit |
| 5.1+ |
|
Opinion of Ogier, Cayman Island counsel of Huadi International Group Co., Ltd. |
| 23.1+ |
|
Consent of TPS Thayer |
| 23.2+ |
|
Consent of Briggs & Veselka Co. |
| 25.1** |
|
Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, of a trustee acceptable to the registrant, as trustee under any new indenture. |
| 107 |
|
Filing Fee Table, filed as Exhibit 107 to the registration statement on Form F-3 filed on June 28, 2022 and incorporate herein by reference |
| ++ | To be filed by amendment. |
| * | To be filed, if applicable, after effectiveness of this registration
statement by an amendment to the registration statement or incorporated by reference to a report on Form 6-K filed in connection with
an underwritten offering of the shares offered hereunder. |
| ** | If applicable, to be filed pursuant to Section 305(b)(2)
of the Trust Indenture Act of 1939. |
Item 10. Undertakings
The undersigned Registrant hereby undertakes:
| |
(1) |
To file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| |
(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| |
(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| |
(2) |
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| |
(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| |
(4) |
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the Registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as of the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-X if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. |
| |
(5) |
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
| |
(i) |
If the registrant is relying on Rule 430B: |
| |
(a) |
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| |
(b) |
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or |
| |
(ii) |
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
| |
(6) |
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| |
(i) |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| |
(ii) |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| |
(iii) |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| |
(iv) |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| |
(b) |
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| |
(c) |
The undersigned registrant hereby undertakes to supplement the prospectus, after the expiration of the subscription period, to set forth the results of the subscription offer, the transactions by the underwriters during the subscription period, the amount of unsubscribed securities to be purchased by the underwriters, and the terms of any subsequent reoffering thereof. If any public offering by the underwriters is to be made on terms differing from those set forth on the cover page of the prospectus, a post-effective amendment will be filed to set forth the terms of such offering. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wenzhou, Zhejiang Province, People’s Republic of China, on October 7, 2022.
| |
HUADI INTERNATIONAL GROUP CO., LTD. |
| |
|
| |
By: |
/s/ Huisen Wang |
| |
|
Huisen Wang |
| |
|
Chief Executive Officer & Chairman of the Board |
| |
|
(Principal Executive Officer) |
| |
|
| |
By: |
/s/ Qin Li |
| |
|
Qin Li |
| |
|
Chief Financial Officer |
| |
|
(Principal Accounting Officer) |
Pursuant to the requirements
of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and
on the dates indicated.
| Signature |
|
Capacity |
|
Date |
| |
|
|
|
|
| /s/ Huisen Wang |
|
Chief Executive Officer & Chairman of the
Board |
|
October
7, 2022 |
| Huisen Wang |
|
(Principal Executive Officer) |
|
|
| |
|
|
|
|
| /s/ Qin Li |
|
Chief Financial Officer |
|
October 7, 2022 |
| Qin Li |
|
(Principal Accounting Officer) |
|
|
| |
|
|
|
|
| /s/ Jueqin Wang |
|
Director |
|
October 7, 2022 |
| Jueqin Wang |
|
|
|
|
| |
|
|
|
|
| /s/ Henry He Huang |
|
Director |
|
October 7, 2022 |
| Henry He Huang |
|
|
|
|
| |
|
|
|
|
| /s/ Jiancong Huang |
|
Director |
|
October 7, 2022 |
| Jiancong Huang |
|
|
|
|
| |
|
|
|
|
| /s/ Songlin Li |
|
Director |
|
October 7, 2022 |
| Songlin Li |
|
|
|
|
SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE
UNITED STATES
Pursuant
to the Securities Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America, has signed
this registration statement thereto in New York, NY on October 7, 2022.
| |
Cogency Global Inc. |
| |
|
|
| |
|
|
| |
By: |
/s/
Colleen A. De Vries |
| |
|
Colleen A. De Vries |
| |
|
Senior Vice-President on behalf of Cogency Global Inc. |
II-4
Huadi (NASDAQ:HUDI)
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