向受制裁国家客户销售

During the Track Record Period, we recorded an insignificant portion of revenue from the sales of cobots to Russia (excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) which falls under the Relevant Custom Codes, such as our CR series (industrial robots), MG400 (industrial robots), integrated cobots for printing (machines for additive manufacturing by rubber or plastic deposit), and the accessories (parts of machines and mechanical appliances having individual functions; parts of machines for additive manufacturing), being nil, RMB2.2 million, RMB1.6 million and RMB3.1 million in 2021, 2022, 2023 and the six months ended June 30, 2024, respectively, representing nil, 0.9%, 0.5% and 2.6% of our total revenue in the same periods, respectively.

the Group was advised by our International Sanctions Legal Advisor that the Group did not implicate violations of U.S. sanctions laws, regulations and executive orders.

it is expected that such penalty should not exceed RMB1.8 million.

During the Track Record Period, we sold products, including APIs we produced, to certain customers in the Relevant Regions, contributing an aggregate of RMB123.2 million, RMB47.5 million, RMB38.2 million and RMB26.4 million for the years ended December 31, 2021, 2022, 2023 and the six months ended June 30, 2024, respectively, accounting for 9.4%, 4.2%, 3.0% and 3.8% of our total revenue during the respective period.

Our International Sanctions Legal Adviser has not identified apparent violations of International Sanctions by us after evaluating the sanctions risks of our historical business activities in relation to the Relevant Regions during the Track Record Period.

Based on our current understanding and as advised by our International Sanctions Legal Adviser, our Directors believe that we are not subject to sanctions risk that could have a material adverse effect on our transactions involving the Relevant Regions during the Track Record Period, and our Directors do not foresee any material adverse effect to our business or operations for continuing our business in relation to the Relevant Regions.

(i) the Group provided container shipping services to one customer in Myanmar which was owned by an SDN during the period from March 31, 2021 to April 29, 2021, with a revenue from the transactions with this customer of US$87,990.

We have fully ceased any transaction with the customer in Myanmar which was owned by an SDN since April 29, 2021, and we will not deal with any customer who is an SDN or owned by an SDN in the future.

Therefore, our International Sanctions Legal Advisers have not recommended reporting of our historical business activities relating to the Relevant Regions during the Track Record Period, including voluntary self-disclosure to OFAC, and such reporting is not necessary as of the date of this prospectus.

We understand, after consultations with U.S. export control counsel and taking into account their view, that because the semiconductors incorporated into our solutions are not produced in or exported from the United States, these semiconductor items would not be subject to U.S. export controls under the EAR when being exported, reexported, or transferred entirely outside the United States, except in limited circumstances that could trigger the EAR’s de minimis rule or an FDPR:

Because we do not sell our solutions incorporating our semiconductors to any of these countries or territories or to or for these prohibited end uses or end users, the EAR, including the BIS 2022/23 IFRs, have not negatively impacted our operations or financial performance as of the Latest Practicable Date.

Based on the reasons set forth above and the due diligence conducted by the Joint Sponsors, nothing has come to the attention of the Joint Sponsors that would reasonably cause the Joint Sponsors to disagree with the Directors’ view as set out above in any material respects.

During the Track Record Period, we sold our products including process burners and SRU and VOCs incineration equipment directly and/or indirectly to four customers located in Russia who were operating in the engineering and manufacturing sectors of the Russian economy.

our Indirect Iran Sales and our direct and indirect sales to customers in Russia (a) did not constitute Primary Sanctioned Activity under U.S. law; and (b) did include certain transactions that might potentially qualify as Secondary Sanctioned Activity under U.S. law, and the risks that our Company might become subject to secondary sanctions under U.S. law as a result of our Indirect Iran Sales alone and our direct and indirect sales to customers in Russia alone are determined to be low

As at the Latest Practicable Date, our Group had already ceased to sell equipment to Iran; and except for the current sale orders on hand with Direct Russian Sales as abovementioned, we have already ceased to sell equipment to Russia.

During the Track Record Period, we sold consumer-level robots and other hardware devices to customers located in Belarus, Egypt, Hong Kong, Iraq, Russia, Serbia, Turkey and Ukraine (excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) and purchased certain promotional service from a service provider in Turkey.

To the best knowledge of our Directors, for FY2020, FY2021, FY2022 and 6M2023, our revenue derived from the sales to the Relevant Countries amounted to approximately RMB2.99 million, RMB5.13 million, RMB13.20 million and RMB3.00 million, respectively, representing approximately 0.40%, 0.63%, 1.31% and 1.15% of our total revenue for the same periods, respectively.

Our International Sanctions Legal Advisers have advised us that, based on the due diligence procedures that have been carried out to assess the sanctions risk, as well as the factors set out below, (i) none of our Group nor any of our counterparty customers, suppliers or service providers during the Track Record Period and up to the Latest Practicable Date was a Sanctioned Target listed on the SDN List or other restricted parties lists maintained by OFAC; and (ii) our Group’s business dealings with our counterparty customers and service providers during the Track Record Period and up to the Latest Practicable Date did not constitute Primary Sanctioned Activities or give rise to Secondary Sanctionable Activities:

To the best knowledge of our Directors, in 2020, 2021 and 2022, and for the four months ended April 30, 2023, our revenue generated from transactions related to Relevant Regions was approximately RMB13.9 million, RMB19.0 million, RMB24.0 million and RMB13.8 million, respectively, representing approximately 1.4%, 1.6%, 2.0% and 3.2% of our total revenue for the same periods, respectively.

The Iran USD Sales include 69 distinct transactions to 15 distinct Iran customers with delivery dates between December 2019 and April 2023, in which we received approximately USD1.8 million in payments denominated in USD to our bank accounts in China.

Accordingly, the Iran USD Sales and Syria USD sales likely constituted Primary Sanctioned Activity.

During the Track Record Period, we (i) engaged in transactions of selling containers and providing transportation services for the said containers to an entity which is based in Russia (excluding Crimea), and (ii) maintained operating entities, subsidiaries and affiliates in Hong Kong ("Hong Kong Operating Entities").

We have also entered into a termination agreement with the said Russia-based entity to cease the business relationship.

Therefore, our International Sanctions Legal Advisors have not recommended reporting of our historical business activities relating to the Relevant Regions during the Track Record Period, including voluntary self-disclosure to OFAC, and such reporting is not necessary as of the date of this prospectus.

As advised by our International Sanctions Legal Advisers after performing the procedures they consider necessary, our transactions with customers and suppliers involving the Relevant Regions during the Track Record Period were not sanctionable activities under Guidance Letter HKEX-GL101-19 given that (i) none of our customers/suppliers located in the Relevant Regions were identified on the Specially Designated Nationals and Blocked Persons List maintained by OFAC or the relevant restricted parties lists maintained by the European Union, Australia and the United Nations; and (ii) the services provided to the customers did not have a nexus to the United States or the EU and do not constitute Primary or Secondary Sanctionable Activities.

Our International Sanctions Legal Advisers have not identified apparent violations of the International Sanctions by us after evaluating the sanctions risks of our historical business activities relating to the Relevant Regions during the Track Record Period.

Our Directors confirm that we do not have present intention to undertake any business involving directly or indirectly the Comprehensively Sanctioned Countries.