As advised by our Sanctions Legal Advisor, we are likely to be deemed a “Covered Foreign Person” defined under the Final Rule due to the fact that we are incorporated in the PRC and our business activities fall within the semiconductor sector.
Business · 第 188 页
However, as advised by our Sanctions Legal Advisor, while the United States has not issued regulations or rules that expressly clarify the application of the Publicly Traded Securities Exemption under the Final Rule, any H Shares acquired by a U.S. person in the [REDACTED] would qualify for the Publicly Traded Securities Exemption.
Business · 第 188 页
Based on the above, our Directors are of the view that the impact of the Final Rule on our Group is generally limited and manageable.
As advised by our International Sanctions Legal Advisor, we are a “covered foreign person,” and U.S. person investments in our equity interests are “notifiable transactions.”
Business · 第 199 页
On the other hand, as advised by our International Sanctions Legal Advisor, our Directors are of the view that an investment in our Group’s equity interests by a U.S. person should not be subject to other prohibitions under the Outbound Investment Rule.
Business · 第 199 页
In general, our International Trade Legal Advisor has advised that U.S. persons who acquire our Company’s H Shares in the Global Offering or trade in our H Shares after Listing are not subject to notification obligations to Treasury under the Publicly Traded Securities Exception.
During the Track Record Period, our sales to the Relevant BIS Customers amounted to RMB0.1 million, RMB0.1 million, nil, and RMB0.3 million, accounting for 0.6%, 0.2%, nil and 0.1% of our total revenue in the same periods, respectively.
Business · 第 179 页
Our Directors are of the view, based on the legal advice of our legal advisor as to U.S. foreign investment law, that the Final Rule will not have a material adverse impact on our Company’s business operations, financial performance, the Offering or our investment prospects.
Business · 第 180 页
Our Directors are of the view, based on the advice of our legal adviser as to U.S. Tariffs, that our Group’s business is not materially affected by recent U.S.-China tariff measures
While these process nodes are not expected to fall within the categories of prohibited semiconductor transactions under the Final Rule based on currently applicable technical thresholds set forth in 31 C.F.R. §850.224, the design of such integrated circuits falls within the scope of notifiable covered activities under 31 C.F.R. § 850.217(a) of the Final Rule.
Business · 第 176 页
Therefore, as advised by our legal adviser as to U.S. outbound investment rules, sanctions and export control laws, we would likely be deemed a “covered foreign person” for purposes of the Final Rule.
Business · 第 176 页
Based on the above, our Directors are of the view that the impact of the Final Rule on our Group is generally limited and manageable.
As advised by DLA Piper, our Directors believe that we are likely to be deemed a Covered Foreign Person engaged in one of the "covered activities" (including (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence systems) as we design integrated circuits as described in the definition of "notifiable transactions" in 31 C.F.R. §850.217.
Business · 第 179 页
Based on the above, and that, as advised by DLA Piper, it is the responsibility of the U.S. person engaged in a "notifiable transaction" to make a notification to Treasury pursuant to the Final Rule, our Directors do not believe that the Final Rule is expected to have a material adverse impact on our business, results of operations, financial condition or the [REDACTED].
As we engage in activities involving developing certain AI systems for the control of robotic systems (which is an activity described in the definition of "notifiable transaction"), we are likely to be deemed a "covered foreign person" under the Final Rule and certain of our business activities are considered "covered activities" as defined under the Final Rule.
Business · 第 195 页
Based on the above, our Directors are of the view that the impact of the Final Rule on our Group is generally limited and manageable.
As advised by our Export Control and Sanctions Counsel, (i) our activities during the Track Record Period do not implicate restrictions under the EAR, including restrictions imposed on persons named on the Entity List; (ii) our dealings with our customers and suppliers also do not implicate any restrictions related to the Entity List and the NS-CMIC List; and (iii) our exposure to U.S. trade restrictions and the impact of relevant trade restrictions on our operations is not material.
Business · 第 185 页
U.S. persons are prohibited from making, or required to report, certain investments in Covered Foreign Persons, including certain acquisitions of equity interests, certain debt financings, joint ventures and certain investments as a limited partner in a non-U.S. person pooled investment fund.
Business · 第 186 页
While the United States has not issued regulations or rules that expressly clarify the application of the Publicly Traded Securities Exemption, our Export Control and Sanctions Counsel is of the view that were any H Shares to be acquired by U.S. persons in the [REDACTED], such purchase would qualify for the Publicly Traded Securities Exemption.
During the Track Record Period, we sold our products to customers in multiple overseas markets and, accordingly, our business has been subject to various international trade restrictions.
Business · 第 153 页
Although certain of our suppliers during the Track Record Period were included on the BIS Entity List, U.S. export controls generally regulate exports, reexports and in-country transfers of controlled items, rather than procurement activities.
Business · 第 153 页
However, one of our wholly-owned PRC subsidiaries has developed vertical AI models for our multi-agent collaborative solution and would likely constitute a covered foreign person engaged in covered activities relating to the artificial intelligence sector.
our International Sanctions Counsel is of the view that we are a "covered foreign person" under the Final Rule, and investments by U.S. persons, including the acquisition of our non-public shares, would likely be subject to notification requirements.
Business · 第 144 页
Therefore, as advised by our International Sanctions Counsel, U.S. investors are exempt from the notification requirements when acquiring our equity publicly traded on the Stock Exchange, except to the extent that the investment affords rights beyond standard minority shareholder protections.
Business · 第 144 页
Accordingly, our Directors and International Sanctions Counsel are of the view that the Final Rule is not expected to have a material adverse impact on the [REDACTED] of our securities on the Exchange.
Therefore, we are advised by our International Sanctions Legal Advisor that we are a "covered foreign person" under the Outbound Investment Rule and the Global Offering may constitute a notifiable transaction under the relevant rules, and U.S persons participating in the Global Offering may be subject to notification obligations to the U.S. Treasury, while subsequent secondary market transactions are generally exempted.
As advised by our legal advisor as to U.S. outbound investment laws, our Directors are of the view that: (i) we are a Covered Foreign Person since we are organized under the laws of the PRC and, based on our current business operations, we are engaged in the development of AI-enabled autonomous driving systems for mining applications, which may constitute “covered activities” under the AI systems category under the OIP;
Business · 第 180 页
our Directors are of the view that upon the completion of the Global Offering, U.S. persons are allowed to purchase our publicly traded shares regardless of the fact that we will be considered as a Covered Foreign Person
Business · 第 180 页
Based on the above, our Directors are of the view that the Final Rule does not have material impact on our operation, financial and investment conditions.
we are likely to be deemed a Covered Foreign Person engaged in "Covered Activities" referred to in the definition of "Notifiable Transactions" as set out in 31 C.F.R. § 850.217(d)(2)(iv) as such AI systems could be viewed as AI systems developed for the control of robotic systems.
Business · 第 208 页
Hence, the Final Rule may increase the compliance burden of U.S. investors and may cause certain U.S. investors to adopt a more cautious approach in their investments, which may negatively impact our ability to raise capital from U.S. investors.
Business · 第 209 页
Based on and having considered the advice of our International Sanctions Legal Adviser, our Directors are of the view that the U.S. Outbound Investment Security Program may increase the compliance burden of certain U.S. investors and may affect the investment approach of certain U.S. persons, but is not expected to materially and adversely affect our operations, financial performance or the Global Offering.
Our Sanctions Counsels conclude that the Group is considered a covered foreign person, and investments made by the U.S. persons in the Group are subject to notification requirements under the Final Rule, with the exception of acquisitions of the Company's [REDACTED] securities.
Business · 第 208 页
These requirements may affect our ability to raise capital.
Business · 第 209 页
To the best of our knowledge, none of our pre-[REDACTED] investors are U.S. persons.
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 · 第 179 页
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.
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 · 第 159 页
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 · 第 159 页
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.
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 · 第 174 页
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 are likely a "covered foreign person," and our business likely constitutes "covered activities" under the Outbound Investment Rule.
Business · 第 191 页
Therefore, the Outbound Investment Rule is not expected to have a material adverse impact on our business, results of operations, financial condition or the [REDACTED].
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 · 第 175 页
We have implemented measures to restrict participation by U.S. Investors in the [REDACTED].
Business · 第 175 页
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.
Based on its review and analysis, the International Sanctions Legal Adviser has advised us that none of our Company and our subsidiaries are a Sanctioned Target, or are incorporated in a Sanctioned Country.
Business · 第 140 页
As advised by our International Sanction Adviser, (i) we are a "covered foreign person" as we are incorporated in the PRC; (ii) our business activities may fall within the classification of a "covered activity" as our products may incorporate AI algorithms and/or are embedded within robotic devices; and (iii) the Outbound Investment Rules provide exemptions where investments in securities/shares that are publicly-traded on recognized exchanges (including the Stock Exchange) are generally exempt from both the prohibition and notification requirements.
Pursuant to this rule, as advised by our International Sanctions Counsel, we will be deemed to be a “covered foreign person” because we engage in the notifiable “covered activities”.
Summary · 第 12 页
Therefore, the U.S. persons would not be prohibited from participating in the Global Offering.
Summary · 第 12 页
As such, our Directors are of the view that the Outbound Investment Review Regulation has no material adverse impact to our business operations, financial performance and the Global Offering.