During the Track Record Period, we had transactions with (i) certain countries or territories for which Relevant Jurisdictions maintain various forms of sanctions programs in place, including the Balkans (including Albania, Bosnia and Herzegovina, Northern Macedonia, and Serbia), Egypt, Hong Kong SAR, Turkey, Tunisia, and Ukraine (excluding the Crimea, LPR, DPR, Zaporizhzhia and Kherson regions) (the "Relevant Regions"); and (ii) 11 PRC entities on the SDN List, the BIS List and/or the NS-CMIC List (the "Relevant Entities").
Business · p. 149
The transaction amount with these PRC SDNs in the aggregate contributed less than 1% of our gross revenue during the Track Record Period.
Business · p. 149
As of the Latest Practicable Date, we have ceased signing any new contracts with these PRC SDNs, and for the existing purchase orders with one PRC SDN customer for PRC-origin servo motors, it is expected that these orders will be completed by June 2026 and will not be renewed;
Purchase from Supplier F for 2023, 2024 and 2025 was RMB584.6 million, RMB26.8 million and RMB502.7 million, respectively, representing approximately 11.4%, 0.5% and 3.8% of our total purchase amount for the respective periods.
Business · p. 138
Our revenues attributable to these customers for the years ended December 31, 2023, 2024 and 2025 amounted to RMB1.8 million, RMB1.9 million and RMB10.0 million, respectively, representing approximately 0.05%, 0.03% and 0.09% of our total revenue for the corresponding periods.
Business · p. 138
According to our Sanctions Legal Advisor, our risk exposure regarding U.S. export controls and economic sanctions is immaterial.
We have been advised by our Sanctions Legal Advisor that only three Group entities qualify as "covered foreign persons" under the OIR, each by reason of engaging in "covered activities" involving either integrated circuit design or packaging.
Business · p. 142
Based on the above, investments in our H Shares, including those made in connection with our proposed [REDACTED], would not constitute notifiable or prohibited transactions under the OIR.
In addition, two of our customers which procured autonomous vehicle leasing services were designated on the BIS Entity List.
Business · p. 215
During the Track Record Period, we entered into and performed only three contracts with the two customers, generating revenue of RMB0.5 million, RMB0.1 million and RMB3.0 million in 2023, 2024 and 2025, respectively, representing approximately 0.3%, 0.03% and 0.9% of our total revenue for the corresponding years.
Business · p. 215
Such suppliers are not our sole sources for the relevant commodities.
For illustration purposes, in relation to FY2023, FY2024 and FY2025, (i) our procurement from the Relevant Suppliers amounted to approximately RMB0.07 million, RMB0.65 million and RMB0.04 million, representing approximately 0.03%, 0.20% and 0.01% of our total cost of sales, respectively; and (ii) our total revenue derived from the Relevant Customers was approximately RMB29.55 million, RMB123.65 million and RMB24.87 million, respectively, representing approximately 8.83%, 23.26% and 4.46% of our total revenue, respectively.
Business · p. 193
We were advised by the International Sanctions Legal Advisor that our products are not intended for military usages and no goods involved in the sale of products of our Group includes more than the 25% applicable de minimis amount of U.S.-origin products, parts, commodities, software or technology under the EAR (being less than 6% by value involves U.S.-origin products of the highest level products), therefore, our products sold to EAR Customers during the Track Record Period were not items that are restricted for MEUs as described in Supplement No. 2 to part 744 of the EAR.
Business · p. 194
While we will cease all business dealing with the Relevant Suppliers being on the SDN List or subject to asset freeze under the U.K. Regulation, we do not intend to increase the levels of our business dealings with the EAR Customers, the Relevant Customers or Relevant Suppliers which are subject to export control or listed on other International Sanctions programmes as at the Latest Practicable Date.
However, although our exports to the United States might be subject to the tariffs of the United States, these exports accounted for a very small proportion of our revenue during the Track Record Period, representing approximately 0.2%, 1.2% and 0.1% of our total revenue in 2023, 2024 and 2025, respectively, primarily involving Bat series and Python series.
Business · p. 177
In 2023, 2024 and 2025, the revenue generated from counterparties on the Entity List accounted for 4.2%, 2.9% and 1.5% of our total revenue, respectively, and the purchases from such entities accounted for 1.2%, 0.8% and 0.7% of our total purchase amount, respectively.
Business · p. 177
Therefore, as advised by King & Wood, our legal advisor as to international sanctions matters, we are of the view that the U.S. tariffs and/or export controls did not and were not expected to have any direct material adverse impact on our business operations and financial performance as of the Latest Practicable Date.
In this regard, based on the review of our International Sanctions and Export Control Legal Advisors, of the suppliers and customers with which our Group had dealings during the Track Record Period and up to the Latest Practicable Date: (a) six of our customers, with which we had dealings during the Track Record Period; (b) six of our suppliers, with which we had dealings during the Track Record Period (three of which were also the suppliers of Yangzhou Chiplet during the Track Record Period); and (c) one supplier of Yangzhou Chiplet, with which Yangzhou Chiplet had dealings during the Track Record Period, have been placed on the Entity List maintained by the BIS.
Business · p. 177
Revenue generated from transactions with these six customers accounted for only approximately 0.244% of our Group’s total revenue, during the Track Record Period;
Business · p. 178
Notwithstanding the above, as also advised by our International Sanctions and Export Control Legal Advisors, the risks of our Group potentially violating U.S. export controls (which, if any, would primarily arise from the Company’s activities) were not material during the Track Record Period, which have remained substantially the same up to the Latest Practicable Date, considering that:
During the Track Record Period, our Group has sold our Chinese-origin construction machinery and spare parts to various non-sanctioned customers located in the Relevant Regions.
Business · p. 161
Such wide definition may capture our sales activities.
Business · p. 162
Therefore, as advised by Hogan Lovells International LLP, our legal advisor to International Sanction laws, our activities are unlikely to be viewed as activities targeted by secondary sanctions focused on the Russian manufacturing sector.
We are aware that Customer B was added to the Entity List by the U.S. Department of Commerce.
Business · p. 149
As such, we have implemented rigorous internal control measures to ensure that our cooperation remains in strict compliance with all applicable export control regulations and trade restrictions.
Business · p. 149
While we currently do not anticipate any material adverse impact on our ongoing services involving strictly providing content marketing services, we continue to monitor the evolving regulatory landscape closely.
Effective June 5, 2020, the BIS added “Intellifusion” with aliases “Shenzhen Yuntian Lifei Technology Co., Ltd.” and “Yuntian Lifei”, which are English translations of its official Chinese name, to the Entity List, and the Listed Entity was subsequently designated as a Footnote 4 entity on October 7, 2022, pursuant to Supplement No. 4 to Part 744 of the EAR.
Business · p. 171
Based on the information reviewed and the legal advice received, there is no factual basis to conclude that the Company or its subsidiaries violated the EAR at the time of the relevant procurements or engaged in prohibited circumvention.
Business · p. 172
Our Directors and the Joint Sponsors, after due inquiry and consultation with C&F, are of the view that the Entity List designation does not have a material adverse effect on our business and operations, or [REDACTED] suitability under Chapter 4.4 of the Guide.
Based on this review, we have confirmed that: one of our suppliers was listed on the NS-CMIC list (the “Relevant Transactions”).
Business · p. 174
The Relevant Transactions with the above-mentioned counterparty primarily relate to non-controlled products and services, including smart city software and video analytics infrastructure.
Business · p. 174
Accordingly, our commercial dealings with the NS-CMIC designated entity are not prohibited under applicable U.S. or international sanctions laws and do not present a material compliance risk under the current regime.
If so, our Legal Advisor on international sanctions laws is of the view that, the Listed Entity may be deemed a “covered foreign person”, and the [REDACTED] is a Covered Transaction and that U.S. Investors as defined in the Final Rule, including U.S. underwriters and U.S. Investors procured by the [REDACTED], will be prohibited from purchasing our Shares in this [REDACTED].
Business · p. 175
We have implemented measures to restrict participation by U.S. Investors in the [REDACTED].
Business · p. 175
While purchases of our Shares in this [REDACTED] by U.S. Investors will likely be subject to the prohibition, ordinary secondary trading in our Shares will be able to rely on the Publicly Traded Securities Exception, and the prohibitions will not be applicable to those trades.
In 2023, 2024 and 2025, our purchase from Supplier B amounted to RMB66.1 million, RMB265.6 million and RMB312.5 million, respectively, accounting for 20.4%, 37.2% and 49.0% of our total purchases for the corresponding periods.
Business · p. 196
Therefore, our relevant procurement did not and will not violate the EAR.
Business · p. 197
Therefore, as advised by our International Sanctions Legal Advisor, we believe the export control and sanctions laws and regulations currently do not have material impacts on our business operations and financial performance directly or indirectly, and we are compliant with relevant sanctions laws and there is no material sanctions risk discussed in Chapter 4.4 of the Guide for New Listing Applicants.
The revenue generated from such sales was RMB45.0 million, RMB49.1 million, and RMB29.3 million, representing approximately 0.15%, 0.15% and 0.08% of our total revenue in 2023, 2024 and 2025, respectively.
Summary · p. 20
As advised by our International Sanctions Legal Advisors who have performed procedures they deem necessary, given the nature of our transactions with the Relevant Entity (including that no U.S. nexus was involved and the gradual cessation of sales to the Relevant Entity since January 15, 2025), the risk is relatively limited that our transactions with the Relevant Entity during the Track Record Period and up to the Latest Practicable Date would result in the imposition of sanctions on the Relevant Persons.
During the Track Record Period, certain Russian suppliers and banks we transacted with became subject to U.S. blocking sanctions.
Business · p. 180
In addition, during the Track Record Period, we sold motorcycles and general-purpose machinery to Iranian distributors, accounting for approximately 3.20%, 2.56% and 2.2% of total revenue in 2023, 2024 and 2025.
Business · p. 180
During the Track Record Period, we sourced U.S.-origin chips for AI-driven products.
Based on screening of the supplier and customer lists, we have engaged in procurement transactions from a limited number of entities subject to certain U.S. economic sanctions and we did not engage in any sales transactions to entities subject to certain U.S. economic sanctions.
Business · p. 191
As of the Latest Practicable Date, the impact of U.S. and other jurisdictions’ export controls, sanctions and tariff measures on our business operations and financial performance has been minimal according to our Export Control and Sanctions Counsel.
Summary · p. 17
With respect to products exported to the U.S., the volume exported to the U.S during the peak periods of reciprocal tariffs was minimal.
Our transactions with Sanctioned Targets amounting to approximately RMB34.9 million in aggregate, representing approximately 7.0% of our total revenue during the Track Record Period.
Summary · p. 4
As advised by our International Sanctions Legal Advisor after conducting the relevant due diligence, (i) our activities with customers in the Relevant Regions did not represent Primary Sanctioned Activity in violation of the applicable International Sanctions in the Relevant Jurisdictions that could result in any material sanctions risk to the Relevant Persons.
Summary · p. 5
As of the Latest Practicable Date, we had (i) fully ceased our transactions with the Sanctioned Counterparties and (ii) closed our account in the Sanctioned Russian Clearing Bank.
During the Track Record Period, we have certain sales transactions involving Russia, Zimbabwe, Myanmar and North Korea.
Business · p. 147
Among these sales, a total of RMB2.5 million (approximately USD369,000) in six payments were received by us through an account at the Shanghai Branch of VTB Bank PJSC (“VTB Shanghai”) during the period from December 2024 to June 2025.
Business · p. 148
our Legal Advisor as to U.S. Sanctions and Export Control Laws is of the view that the Russian sales and the associated receipt of payment through VTB Shanghai did not appear to implicate material U.S. primary sanctions risks in the absence of U.S. nexus.
Following the U.S. export control developments announced in Q4 2024, we transitioned subsequent projects to domestic fabrication partners, which now substantially support our ongoing and future production needs without material adverse impact on our operations or technology development.
Summary · p. 15
This fabrication partner agreed to release the remaining wafers to us after we obtained a Commodity Classification Automated Tracking System (CCATS) validation issued by the BIS for PACE 2 on December 12, 2025, and we have received such wafers in late December 2025.
Business · p. 173
the domestic fabrication partners have achieved a performance level comparable to that of Supplier F as a result of our close cooperation and technical oversight
These tools are essential to our product design and development processes, and have long been under consideration for U.S. export licensing requirements when destined for China.
Business · p. 173
We plan to renew multi-year agreements with EDA providers in mid-2026 to ensure continued access beyond the current license terms, and do not foresee any obstacles in obtaining such renewal.
Business · p. 173
To preempt such adverse impact, we actively engage with our current EDA tool suppliers to renew license agreements, and explore alternative suppliers outside the U.S. for potential service procurement and have established a rigorous export compliance system to conduct periodic assessment to ensure ongoing regulatory compliance and minimize the risk of license revocation.