Specifically, we sold our harmonic reducers (including ancillary products such as lubricants) to five restricted customers.
Business · p. 172
The aggregate transaction amounts for such sales in 2023, 2024 and 2025 were RMB1.3 million, RMB2.0 million and RMB1.0 million, respectively.
Business · p. 172
our Directors, based on the advice of our International Sanctions Legal Advisor, are of the view that, during the Track Record Period and up to the Latest Practicable Date, we had not been involved in any activity that would violate applicable international sanctions laws and regulations
For the years ended December 31, 2023, 2024 and 2025, revenue derived from sales to Russia amounted to approximately RMB0.3 million, RMB2.2 million and RMB0.4 million, respectively, accounting for approximately 0.03%, 0.2%, and 0.02% of total revenue for the respective years.
Business · p. 168
We have ceased all Russia-related business operations since February 2025.
Business · p. 168
According to our International Sanctions Counsel, our historical transactions in Russia are unlikely to trigger U.S. secondary sanctions risks, primarily because: (i) such transactions did not involve any entities designated on the Specially Designated Nationals and Blocked Persons (“SDN”) List and other sanctions lists maintained by the U.S. government
During the Track Record Period, we had one customer on the Entity List, and our aggregate transaction amount with such customer was RMB85,838.
Business · p. 178
Accordingly, our Directors are of the view that we are not subject to any trade restrictions or sanction that would materially affect our business operation.
After consultation with Paul Hastings LLP, our legal advisor as to the Outbound Investment Rule, our Directors are of the view that we are a “covered foreign person” and the activity in which we are engaged may be subject to notification requirement.
Business · p. 179
Our Directors are of the view that the Outbound Investment Rule will not have a material adverse impact on our Group, the Global Offering and post-listing trading.
During the Track Record Period, we engaged in limited sales with two PRC customers (the “Anhui Customer” and the “Shenzhen Customer”) that were “blocked entities” with the same SDN shareholder subject to U.S. sanctions at the time of the relevant transactions.
Summary · p. 7
We also purchased laser diode coupling components from a PRC supplier designated as an SDN (the “PRC Supplier”), paying approximately RMB18.7 million in 2024 and RMB30.1 million in 2025, representing 3.05% and 3.51% of our cost of sales respectively.
Summary · p. 7
As of March 13, 2026, our Group has decided to cease all transactions with the Anhui Customer.
As advised by our International Trade Legal Adviser, we are of the view that the Company is a “covered foreign person,” and U.S. person investments in our equity interests are “prohibited transactions.”
Business · p. 159
In general, as advised by our International Trade Legal Adviser, following Listing, U.S. persons are not prohibited from acquiring the Company’s shares in the Global Offering under the Publicly Traded Securities Exception under the OISP and should therefore not have a material adverse impact on our operations.
Business · p. 159
The OISP has no implications on our Group’s business operations and has limited and manageable implications on our Group’s capital raising activities and investor eligibility.
During the Track Record Period, our Group provided information and AI services in aspects including media data sharing, and network service maintenance to certain customers that have been designated by the BIS to the Entity List, including one customer that has also been designated by OFAC as an SDN.
Business · p. 199
Based on review of all our transaction records since April 24, 2019, the transactions were denominated in RMB, with the transactions involving the aforementioned SDN customer totalling approximately RMB5.3 million, including approximately RMB0.7 million during the Track Record Period.
Business · p. 199
We have undertaken to the Stock Exchange that we will not finance or facilitate, directly or indirectly, activities or business with, or for the benefit of, any Comprehensively Sanctioned Countries or any other government, individual or entity sanctioned by the U.S., the EU, the UN, the U.K., the United Kingdom overseas territories or Australia, including, without limitation, any government, individual or entity that is specifically identified on the SDN List maintained by OFAC or other restricted parties lists maintained by the U.S., the EU, the UN, the U.K., the United Kingdom overseas territories and Australia that would cause us to violate International Sanctions.
During the Track Record Period, our Group procured certain PRC ICs chips that meet the parameters for the control under ECCN 3A090 from an affiliated entity of Supplier B, one of our top five suppliers in 2023 and 2024, respectively. via a third-party distributor, totalling RMB23.6 million in 2023 and RMB6.6 million in 2024 (“Historical Procurements”).
Business · p. 200
We had not made any subsequent procurement of any chips meeting the ECCN 3A090 parameter specified in the Commerce Control List since the issuance of the Guidance (i.e., on or after May 13, 2025).
Business · p. 200
Therefore, as advised by our International Sanctions Legal Advisor, the Historical Procurements of the said chips do not appear to represent a violation of the applicable U.S. export controls.
During the Track Record Period, we sold our smart parking systems to the Relevant Regions, involving non-sanctioned customers, and had also received a U.S. dollar payment processed through a U.S. corresponding bank for a sale of our parking guidance systems comprising LED guidance displays, network controllers and parking sensors to Iran in 2024 totaling US$4,960 (“Iranian Transaction”).
Business · p. 196
The revenue generated from our sales to the Relevant Regions were RMB1.9 million, RMB52.5 million and RMB20.7 million, respectively, in 2023, 2024 and 2025, representing 0.3%, 6.6% and 2.5% of our total revenue for the same years, respectively.
Business · p. 196
As advised by our International Sanctions Legal Advisors after performing the procedures they consider necessary, the Iranian Transaction appears to be a potential violation of the applicable U.S. sanctions due to the U.S. dollar payments processed through a U.S. corresponding bank for a sale.
As advised by our International Sanctions Legal Advisor after performing the procedures they consider necessary, we are likely to be deemed a “Covered Foreign Person” engaged in activities described in the definition of “Notifiable Transaction” — namely the development of an AI system intended to be used for the control of robotic systems but not those described in the definition of “Prohibited Transaction” under the Final Rule such as developing any AI system that is designed to be exclusively used for: (i) military end use; or (ii) government intelligence or mass-surveillance end use.
Business · p. 174
Based on the aforementioned advice of our International Sanctions Legal Advisor, our Directors are of the view that, the Final Rule is not expected to have any material impact on our operations or financial performance because such rule only pose restrictions on U.S. persons’ investments instead of our routine business operation.
We procured certain goods and services from seven suppliers (the "Relevant Suppliers") that are designated on one or more U.S. export control or restrictive lists, including the Entity List, the Non-SDN Chinese Military-Industrial Complex Companies ("NS-CMIC") List and the Chinese Military Companies ("CMC") List.
Business · p. 175
The aggregate procurement amounts from the Relevant Suppliers accounted for approximately 1.4%, 8.2% and 7.7% of our total purchases in 2023, 2024 and 2025, respectively.
Business · p. 175
The aggregate procurement value of such chips during the Track Record Period accounted for less than 1% of our total cost of sales in the corresponding period.
The revenue generated from such customers was approximately RMB0.3 million in 2023, RMB0.1 million in 2024 and RMB0.4 million in 2025, represented approximately 0.07%, 0.02% and 0.06% of our total revenue of each year during the Track Record Period.
Business · p. 152
During the Track Record Period, we made limited sales to customers located in Russia and Belarus.
Business · p. 153
The transaction value was relatively small (accounting for 0.06% of our total procurement in 2025) and occurred only once.
We are aware that on December 18, 2025, leadership of certain committees of the U.S. Congress issued a formal letter to the U.S. Department of Defense recommending that certain companies, including our third-party CDMO service provider, be added to the Section 1260H list.
Business · p. 211
Our Directors are of the view that the BIOSECURE Act and related geopolitical developments did not have any material adverse impact on the Group’s business operations, financial performance or liquidity during the Track Record Period and up to the Latest Practicable Date.
Business · p. 211
Accordingly, we continue to monitor legislative and regulatory developments in relevant jurisdictions and has adopted measures to mitigate potential risks, including (i) maintaining operational flexibility in selecting CRO and CDMO service providers, (ii) diversifying potential suppliers and external service providers where commercially appropriate, (iii) conducting ongoing assessments of supply chain and regulatory risks, and (iv) evaluating alternative arrangements for future manufacturing and research activities as part of our broader operational and commercialization planning.
During the Track Record Period and up to the Latest Practicable Date, we had (i) nine customers, to which we supplied PCBs, and one supplier, from which we procured labor services added to the BIS Entity List; (ii) three additional suppliers added to the NS CMIC List, from which we procured telecommunications services; and (iii) seven additional suppliers and one additional customer added to the 1260H List.
Summary · p. 11
(i) revenue from the nine Relevant BIS Customers accounted for 4.0%, 3.7%, 3.7% and 1.5% of our revenue, while purchase from the Relevant BIS Supplier accounted for nil, 0.003%, nil and nil of our total purchases;
Business · p. 159
our Directors are of the view that during the Track Record Period and up to the Latest Practicable Date, (i) our Group has complied with applicable U.S. export control laws and regulations and applicable sanctions laws in all material respects, that (ii) there has not been, and is not expected to be, any material direct or indirect impact from overseas sanctions, export controls, trade restrictions on our business operations or financial performance; and that
Although our Supplier A is subject to certain U.S. export control and economic sanctions restrictions, namely, that it has been listed on the U.S. BIS Entity List with a Footnote 5 designation and included on the U.S. DoD’s CMC List, our International Sanctions Advisor is of the view that the relevant transactions between us and Supplier A are neither prohibited nor restricted, as the wafers supplied by Supplier A are not subject to the EAR.
Business · p. 165
We consider the impact of the DD IFR on us is immaterial because (i) our products are manufactured using mature process nodes of 40nm and above, which do not meet the advanced process node threshold of 16/14nm or below, nor do they adopt any non-planar transistor architecture, and (ii) in practice, our wafer foundries and packaging and testing service providers have not imposed any more stringent compliance reviews, information disclosure requirements, or transaction restrictions on us as a result of the implementation of the DD IFR.
Business · p. 165
Based on the foregoing facts and the analysis of our International Sanctions Advisor, our Directors and Sponsor hold the view that our business activities do not violate U.S. export control laws and regulations, and that U.S. restrictions on the export of chips to China have not had a material adverse effect on our operations or financial condition.
Our total revenue generated from the Relevant Regions during the Track Record Period, comprising both direct sales to customers located in such regions and indirect sales identified by our Group through verifiable documentation, is RMB24.2 million, RMB19.5 million and RMB10.6 million in 2023, 2024 and 2025, respectively.
Summary · p. 15
In particular, our revenue generated from Russia, representing our sales to Customer A (one of our top five customers in 2023, 2024 and 2025, respectively) was approximately RMB23.1 million, RMB17.3 million and RMB7.7 million for the years ended December 31, 2023, 2024 and 2025, respectively, representing approximately 10.4%, 7.4% and 2.4% of our total revenue for the corresponding years, respectively.
Summary · p. 15
As of September 30, 2025 and up to the date of this document, we have ceased all sales to Russia, including both direct sales and indirect sales. We have also ceased all sales to Ukraine, Turkey and Serbia since January 1, 2026 and up to the date of this document.
On average, the value of a single 3A991 Chip accounts for only 0.65% of the total value of a finished product of us, which is below 25% (the de minimis value threshold), thus, as advised by our International Sanctions Legal Adviser, our product is not subject to the EAR under the de minimis rule under Supplement No. 2 of Part 734.
Business · p. 189
Based on Hogan Lovells' confirmation, four entities which were designated on the Entity List had transactions with us since 1 January 2022 (the "EL Parties"), and none of them of our five largest customers or suppliers for each year during the Track Record Period, respectively.
Summary · p. 16
Accordingly, as advised by Hogan Lovells, (1) the export restrictions associated with the EL Parties' designation on the BIS Entity List are not implicated for us; and (2) no other purchases by our Group from suppliers during the Track Record Period are exposed to restriction as a result of designation on the Entity List.
As advised by our International Sanctions Legal Adviser, Hogan Lovells, the Procured Items that are classified under EAR99 consist of low-technology consumer goods and do not require a license in most situations.
Business · p. 169
As advised by our International Sanctions Legal Adviser, the procurement from Supplier A did not represent a violation of the U.S. Export Controls.