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Digital Currency X Technology Inc.

Digital Currency X Technology Inc.DCX決算レポート

Nasdaq

Digital Currency Group Inc. (DCG) is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut. The company has the subsidiaries Foundry, Grayscale Investments, and Luno. It also formerly owned CoinDesk and Genesis.

What changed in Digital Currency X Technology Inc.'s 20-F — 2023 vs 2024

Top changes in Digital Currency X Technology Inc.'s 2024 20-F

447 paragraphs added · 451 removed · 300 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

49 edited+42 added−56 removed33 unchanged
If lenders enforce the pledge on certain of our properties, our business operation may be disrupted, and our business, financial condition, results of operations and prospects could be materially and adversely affected. ● An increase in the prices of materials used in our business could adversely affect our business. ● We may be unable to complete or operate its projects on a profitable basis or as we have committed to our customers. ● Our revenue, expenses, and operating results may fluctuate significantly. ● Failure of third parties to manufacture quality products or provide reliable services in a timely manner could cause delays in the delivery of our services and completion of its projects, which could damage our reputation, have a negative impact on our relationships with its customers and adversely affect our growth. ● Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate. ● Our business will depend on experienced and skilled personnel and third-party engineering subcontractor resources, and if we lose key personnel or if we are unable to attract and integrate additional skilled personnel, it will be more difficult for us to manage our business and complete projects. ● We expect to operate in a highly competitive industry, and our current or future competitors may be able to compete more effectively than we do, which could have a material adverse effect on our business, revenues, growth rates, and market share. ● We expect that our business will benefit in part from government support for new energy vehicles and electric vehicles, and a decline in such support could harm our business. ● Our patent applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting solutions similar to ours. ● Certain of our facilities are or may be located in regions that may be affected by extreme weather conditions and natural disasters. ● We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in manufacture and sale of our vehicles. ● Our ability to produce vehicles and our future growth depend upon our ability to maintain relationships with our existing suppliers and strategic partners, to source new suppliers for our critical components, and to complete building out our supply chain while effectively managing the risks due to such relationships. ● We may not be able to accurately estimate the supply and demand for our vehicles, which could result in inefficiencies in our business, hinder our ability to generate revenue, and create delays in the production of our vehicles. ● We may in the future experience significant delays in the design, development, manufacture, launch, and financing of our vehicles, as well as delays in our constructions of factories, which could harm our business and prospects. 5 ● Increases in costs, disruption of supply, or shortage of materials, especially for lithium-ion cells or semiconductors, could harm our business. ● Our limited operating history of NEVs makes evaluating our business and future prospects difficult and may increase the risk of your investment. ● If we are unable to maintain and enhance our brands, capture additional market share, or if our reputation and business are harmed, it could have a material and adverse impact on our business, financial condition, results of operations, and prospects. ● Our sales will depend in part on our ability to establish and maintain confidence in our business prospects among consumers, analysts, and others within our industry. ● The automotive industry has significant barriers to entry that we must overcome in order to manufacture and sell electric vehicles at scale. ● We may be unable to adequately control the substantial costs associated with our operations. ● We depend on revenue generated from a limited number of models and expect this to continue in the foreseeable future. ● If our vehicles fail to perform as expected, our ability to develop, market, and sell our products could be harmed. ● If vehicle owners customize our vehicles or change the infrastructure with aftermarket products, the vehicle may not operate properly, which may create negative publicity and could harm our business.
If lenders enforce the pledge on certain of our properties, our business operation may be disrupted, and our business, financial condition, results of operations and prospects could be materially and adversely affected. ● An increase in the prices of materials used in our business could adversely affect our business. ● We may be unable to complete or operate its projects on a profitable basis or as we have committed to our customers. ● Our revenue, expenses, and operating results may fluctuate significantly. ● Failure of third parties to manufacture quality products or provide reliable services in a timely manner could cause delays in the delivery of our services and completion of its projects, which could damage our reputation, have a negative impact on our relationships with its customers and adversely affect our growth. ● Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate. ● Our business will depend on experienced and skilled personnel and third-party engineering subcontractor resources, and if we lose key personnel or if we are unable to attract and integrate additional skilled personnel, it will be more difficult for us to manage our business and complete projects. ● We expect to operate in a highly competitive industry, and our current or future competitors may be able to compete more effectively than we do, which could have a material adverse effect on our business, revenues, growth rates, and market share. ● We expect that our business will benefit in part from government support for new energy vehicles and electric vehicles, and a decline in such support could harm our business. ● Our patent applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting solutions similar to ours. ● Certain of our facilities are or may be located in regions that may be affected by extreme weather conditions and natural disasters. ● We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in manufacture and sale of our vehicles. 6 ● Our ability to produce vehicles and our future growth depend upon our ability to maintain relationships with our existing suppliers and strategic partners, to source new suppliers for our critical components, and to complete building out our supply chain while effectively managing the risks due to such relationships. ● We may not be able to accurately estimate the supply and demand for our vehicles, which could result in inefficiencies in our business, hinder our ability to generate revenue, and create delays in the production of our vehicles. ● We may in the future experience significant delays in the design, development, manufacture, launch, and financing of our vehicles, as well as delays in our constructions of factories, which could harm our business and prospects. ● Increases in costs, disruption of supply, or shortage of materials, especially for lithium-ion cells or semiconductors, could harm our business. ● Our limited operating history of NEVs makes evaluating our business and future prospects difficult and may increase the risk of your investment. ● If we are unable to maintain and enhance our brands, capture additional market share, or if our reputation and business are harmed, it could have a material and adverse impact on our business, financial condition, results of operations, and prospects. ● Our sales will depend in part on our ability to establish and maintain confidence in our business prospects among consumers, analysts, and others within our industry. ● The automotive industry has significant barriers to entry that we must overcome in order to manufacture and sell electric vehicles at scale. ● We may be unable to adequately control the substantial costs associated with our operations. ● We depend on revenue generated from a limited number of models and expect this to continue in the foreseeable future. ● If our vehicles fail to perform as expected, our ability to develop, market, and sell our products could be harmed. ● If vehicle owners customize our vehicles or change the infrastructure with aftermarket products, the vehicle may not operate properly, which may create negative publicity and could harm our business.
Risks Related to Litigation and Regulations ● We are subject to evolving laws and regulations that could impose substantial costs, legal prohibitions, or unfavorable changes upon our operations or products, and any failure to comply with these laws and regulations, including as they evolve, could result in litigation and substantially harm our business and results of operations. ● We or our subsidiaries may have undertaken, or in the future may choose to or be compelled to undertake, product recalls or to take other actions that could result in litigation and adversely affect our business, prospects, results of operations, reputation, and financial condition. 6 ● We may in the future be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, results of operations, cash flows, and financial condition. ● We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. ● Our suppliers and manufacturing partners may be exposed to delays, limitations, and risks related to the environmental permits and other operating permits required to operate manufacturing facilities for our vehicles. ● If we fail to implement and maintain an effective system of internal controls over financial reporting, we may be unable to accurately report our results of operations, meet reporting obligations, or prevent fraud.
Risks Related to Litigation and Regulations ● We are subject to evolving laws and regulations that could impose substantial costs, legal prohibitions, or unfavorable changes upon our operations or products, and any failure to comply with these laws and regulations, including as they evolve, could result in litigation and substantially harm our business and results of operations. ● We or our subsidiaries may have undertaken, or in the future may choose to or be compelled to undertake, product recalls or to take other actions that could result in litigation and adversely affect our business, prospects, results of operations, reputation, and financial condition. ● We may in the future be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, results of operations, cash flows, and financial condition. ● We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. ● Our suppliers and manufacturing partners may be exposed to delays, limitations, and risks related to the environmental permits and other operating permits required to operate manufacturing facilities for our vehicles. 7 ● If we fail to implement and maintain an effective system of internal controls over financial reporting, we may be unable to accurately report our results of operations, meet reporting obligations, or prevent fraud.
Risk Factors-Risks Related to Doing Business in China .” PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
Risk Factors—Risks Related to Doing Business in mainland China.” The PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
In addition, each of our subsidiaries in China may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
In addition, each of our subsidiaries in China may allocate a portion of its after-tax profits, if any, based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
Risk Factors-Risks Related to Doing Business in China- To the extent cash or assets in our business are in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our company and our subsidiaries by the PRC government to transfer cash or assets, which may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies ” and “ - PRC regulation on loans to, and direct investment in, our PRC subsidiary by offshore holding companies and governmental control in currency conversion may delay or prevent us from using the proceeds of the Business Combination to make loans to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business .” Under PRC law, we may provide funding to our PRC subsidiaries only through capital contributions or loans, subject to satisfaction of applicable government registration and approval requirements.
Risk Factors-Risks Related to Doing Business in China- To the extent cash or assets in our business are in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our company and our subsidiaries by the PRC government to transfer cash or assets, which may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies ” and “ - PRC regulation on loans to, and direct investment in, our PRC subsidiary by offshore holding companies and governmental control in currency conversion may delay or prevent us from using the proceeds of any financing in the U.S. to make loans to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business .” Under PRC law, we may provide funding to our PRC subsidiaries only through capital contributions or loans, subject to satisfaction of applicable government registration and approval requirements.
Liquidity and Capital Resources-Holding Company Structure .” 2 Under PRC laws and regulations, our PRC subsidiaries are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us.
Liquidity and Capital Resources-Holding Company Structure .” 3 Under PRC laws and regulations, our PRC subsidiaries are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us.
The following table provides a summary of the distributions and working capital funds transferred between Shandong Baoya and its subsidiaries: Fiscal Years Ended December 31, In thousands USD $ 2023 2022 2021 Cash transferred to its subsidiaries from Shandong Baoya $ 3,917 $ 7,744 $ 3,484 Cash transferred to Shandong Baoya from its subsidiaries $ 4,406 $ 9,612 $ 312 3 The transfer of funds among companies are subject to the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (2021 Revision, the “Provisions on Private Lending Cases”), which was implemented on January 1, 2021 to regulate the financing activities between natural persons, legal persons and unincorporated organizations.
The following table provides a summary of the distributions and working capital funds transferred between Shandong Baoya and its subsidiaries: Fiscal Years Ended December 31, In thousands USD $ 2024 2023 2022 Cash transferred to its subsidiaries from Shandong Baoya $ 3,202 $ 3,917 $ 7,744 Cash transferred to Shandong Baoya from its subsidiaries $ 1,251 $ 4,406 $ 9,612 4 The transfer of funds among companies are subject to the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (2021 Revision, the “Provisions on Private Lending Cases”), which was implemented on January 1, 2021 to regulate the financing activities between natural persons, legal persons and unincorporated organizations.
See Note 17 of Notes to Consolidated Financial Statements, which are included in this annual report, for more details of the loan agreements. Additionally, in December 2019, Shandong Baoya entered into loan agreements with Yantai Guofeng Investment Holding Group Co., Ltd. The loans bear an annual interest rate of 6.5%.
See Note 17 of Notes to Consolidated Financial Statements, for more details of the loan agreements. Additionally, in December 2019, Shandong Baoya entered into loan agreements with Yantai Guofeng Investment Holding Group Co., Ltd. The loans bear an annual interest rate of 6.5%.
These risks could result in a material adverse change in our operations and the value of our ordinary shares, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline.
These risks could result in a material adverse change in our operations and the value of our Class A ordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause the value of such securities to significantly decline or become of little or no value.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by China’s State Administration of Foreign Exchange (“SAFE.”). Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.
For the fiscal years ended December 31, 2023, 2022, and 2021, we provided funding to our PRC subsidiaries of $7,150 thousand, nil and nil, respectively. In addition, funds are transferred among our PRC subsidiaries for working capital purposes, primarily between Shandong Baoya, our main operating subsidiary and its subsidiaries.
For the fiscal years ended December 31, 2024, 2023, and 2022, we provided funding to our PRC subsidiaries of $2.82 million, $7.15 million and nil, respectively. In addition, funds are transferred among our PRC subsidiaries for working capital purposes, primarily between Shandong Baoya, our main operating subsidiary and its subsidiaries.
Business Overview - Regulation - Regulations Relating to Private Lending.” Our wholly owned subsidiary, Chijet Inc., has maintained cash management policies which dictate the purpose, amount and procedure of cash transfers between Chijet Inc. and its wholly-owned and holding subsidiaries.
See “Item 4. Information on the Company - B. Business Overview - Regulation - Regulations Relating to Private Lending.” Our wholly owned subsidiary, Chijet Inc., has maintained cash management policies which dictate the purpose, amount and procedure of cash transfers between Chijet Inc. and its wholly-owned and holding subsidiaries.
Our business depends in large part on our ability to secure contracts with customers. Contract proposals and negotiations are complex and frequently involve a lengthy negotiation and selection process, which is affected by a number of factors. These factors include market conditions, demonstrating to potential customers that our solutions can work for them, financing arrangements, and any required governmental approvals.
Contract proposals and negotiations are complex and frequently involve a lengthy negotiation and selection process, which is affected by a number of factors. These factors include market conditions, demonstrating to potential customers that our solutions can work for them, financing arrangements, and any required governmental approvals.
Pursuant to the loan agreements, if Shandong Baoya met certain development conditions, part of the loan could be waived and converted to a government subsidy, including interest on such portion. For the year ended December 31, 2023, no principal amount has been converted to government subsidies. As of December 31, 2023, the outstanding principals were US$104,227 thousand.
Pursuant to the loan agreements, if Shandong Baoya met certain development conditions, part of the loan could be waived and converted to a government subsidy, including interest on such portion. For the year ended December 31, 2024, no principal amount was converted to government subsidies. As of December 31, 2024, the outstanding principal were US$101.38 million.
Our potential profitability is particularly dependent upon the penetration and growth of the market for our vehicles, parts, and technology, including solid-state batteries, in-wheel motors, and intelligent driving solutions, which may not occur at the levels we currently anticipate or at all. 9 Although the COVID-19 pandemic has affected our business and operations, those risks may be diminishing.
Our potential profitability is particularly dependent upon the penetration and growth of the market for our vehicles, parts, and technology, including solid-state batteries, in-wheel motors, and intelligent driving solutions, which may not occur at the levels we currently anticipate or at all.
Consequently, the loans were reclassified as current liabilities for the years 2021, 2022, and 2023, and we incurred a penalty of US$737 thousand (RMB5,232 thousand) for defaulting, which is 5% of the land use rights cost. The lender also reserved rights to demand compensation for losses, repurchase the land, and require repayment of any related government subsidies.
Consequently, the loans were reclassified as current liabilities for the years 2023, and 2024, and we incurred a penalty of US$716,781 (RMB5.23 million), which is 5% of the land use rights cost, due to our default. The lender also reserved rights to demand compensation for losses, repurchase the land, and require repayment of any related government subsidies.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not Applicable. ITEM 3. KEY INFORMATION Our Holding Company Structure Neither Chijet Inc. nor Chijet Motor is an operating company but a Cayman Islands holding company with operations primarily conducted by its subsidiaries based in China.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not Applicable. ITEM 3. KEY INFORMATION Our Holding Company Structure and Risks Related to Doing Business in Mainland China Chijet Motor is not an operating company in China, but a Cayman Islands holding company with operations mainly conducted by its subsidiaries in mainland China.
For more details, see “ Item 3. Key Information-D.
For more details, see “Item 3. Key Information—D.
As a result, our security holders could lose confidence in our financial and other public reporting, which would harm our business and trading price of our securities. ● We are subject to various environmental, health, and safety laws and regulations that could impose substantial costs on us and cause delays in expanding our production capabilities. ● The unavailability, reduction, elimination or the conditionality of certain government and economic programs could have a material and adverse effect on our business, prospects, financial condition, and results of operations.
As a result, our security holders could lose confidence in our financial and other public reporting, which would harm our business and trading price of our securities. ● We are subject to various environmental, health, and safety laws and regulations that could impose substantial costs on us and cause delays in expanding our production capabilities. ● The unavailability, reduction, elimination or the conditionality of certain government and economic programs could have a material and adverse effect on our business, prospects, financial condition, and results of operations. ● We may fail to adequately obtain, maintain, enforce, and protect our existing and future intellectual property and licensing rights, and we may not be able to prevent third parties from unauthorized use of our intellectual property and proprietary technology.
On May 20, 2020, the parties have entered into a supplement agreement to the loan agreements, pursuant to which, FAW Jilin agreed to make four installment payments of US$41,732,628 (RMB 287,867,500), each for the remaining principal balance and pledged certain land use rights, buildings, machinery and equipment, mold and tooling and other logistic equipment of FAW Jilin.
On May 20, 2020, the parties entered into a supplemental agreement to the loan agreements, pursuant to which, FAW Jilin agreed to make four annual installment payments of US$39.44 million (RMB 287.87 million), for the remaining principal balance and pledged certain land use rights, buildings, machinery and equipment, molds and tooling and other logistics equipment of FAW Jilin.
Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, in this nature may cause the value of such securities to significantly decline. For more details, see “ Item 3. Key Information-D.
Implementation of industry-wide regulations in this nature may cause the value of such securities to significantly decline or become of little or no value. For more details, see “Item 3. Key Information—D.
Chijet Motor is a holding company with substantial all of its operations in China and is subject to a legal and regulatory environment that in many respects differs from the United States.
Operating and Financial Review and Prospects” before you decide to make an investment in our ordinary shares. Chijet Motor is a holding company with substantial all of its operations in China and is subject to a legal and regulatory environment that in many respects differs from the United States.
The variance primarily resulted from currency exchange rate fluctuations. 11 We are negotiating with the lender to extend the loan terms and are planning to expand production to fulfill the loan conditions. During the period ended December 31, 2023, we were unable to meet the conditions to apply for the government subsidies to repay the loans.
We are negotiating with the lender to extend the loan terms and are planning to expand production to fulfill the loan conditions. During the period ended December 31, 2024, we were unable to meet the conditions to apply for the government subsidies to repay the loans. In June 2023, we signed two pledge agreements with the lender.
FAW Jilin failed to make the payments on November 1, 2022 and November 1, 2023. As of April 30, 2024, the aggregate outstanding principals and interests under such loans were US$185,746 thousand (RMB1,318,779 thousand). See “ Item 7. Major Shareholders and Related Party Transactions ” and “
FAW Jilin failed to make the payments on November 1, 2022, November 1, 2023 and November 1, 2024. As of May 15, 2025, the aggregate outstanding principal and interest under such loans were US$189.26 million. See “ Item 7. Major Shareholders and Related Party Transactions ” and “
As of the date of this annual report, our PRC subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company and our subsidiaries in China.
Our operations in mainland China are governed by PRC laws and regulations. As of the date of this annual report, as advised by King&Wood Mallesons, we have obtained all of the requisite licenses and permits from the PRC government authorities that are material for our business operation.
For a detailed description of risk related to doing business in China, please refer to risks disclosed under “ Item 3. Key Information-D.
For a detailed description of risks related to doing business in mainland China, see “Item 3. Key Information—D.
Risks Related to Doing Business in China ● We are also subject to risks and uncertainties relating to doing business in China in general, including, but are not limited to, the following: ● We face uncertainties for U.S. stock exchange listings due to the HFCAA, SEC, PCAOB statements, Nasdaq rule changes, and PCAOB limitations. ● Changes in the interpretation and application of PRC laws and evolving cybersecurity oversight may hinder our share offerings. ● Changes in PRC policies or China-U.S. relations could adversely affect our expansion strategies. ● Differences between private and state-owned enterprises may pose integration challenges for us. ● Failure to meet vehicle standards or protect customer data could impact our business. ● Labor law enforcement may increase costs and impose limitations on our operations. ● Failure to comply with PRC regulations and tax laws may lead to fines and penalties for us. ● Foreign exchange restrictions and taxation could limit our revenue utilization. ● Challenges in conducting investigations and legal proceedings in China may arise for us. ● PRC government interventions may limit our ability to transfer funds or assets outside the PRC. ● International trade tensions and political risks may adversely impact our business. 7 Risks Related to Ownership of Chijet Motor Ordinary Shares In addition to the risks and uncertainties described above, we are subject to risk related to ordinary shares, including, but not limited to, the following: ● We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002. ● If we are characterized as a passive foreign investment company for U.S. federal income tax purposes, our U.S. shareholders may suffer adverse tax consequences. ● Code Section 7874 may increase our U.S. affiliates’ U.S. taxable income or have other adverse consequences to us and our shareholders. ● We are an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make its shares of common stock less attractive to investors. ● The future exercise of registration rights may adversely affect the market price of Chijet Motor Ordinary Shares. ● Future resales of our Ordinary Shares issued in connection with the Business Combination may cause the market price of our Ordinary Shares to drop significantly, even if Chijet Motor’s business is doing well. ● The market price of our securities may decline. ● Nasdaq may delist our securities from trading on its exchange. ● Concentration of ownership among our existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions. ● We do not expect to declare any dividends in the foreseeable future. ● Our business and stock price may suffer as a result of our lack of public company operating experience and if securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our Ordinary Shares in an adverse manner, the price and trading volume of our Ordinary Shares could decline. ● Our issuance of additional capital stock in connection with financings, acquisitions, investments, stock incentive plans or otherwise will dilute all other shareholders.
Risks Related to Ownership of Our Class A Ordinary Shares In addition to the risks and uncertainties described above, we are subject to risk related to ordinary shares, including, but not limited to, the following: ● We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002. ● If we are characterized as a passive foreign investment company for U.S. federal income tax purposes, our U.S. shareholders may suffer adverse tax consequences. ● Code Section 7874 may increase our U.S. affiliates’ U.S. taxable income or have other adverse consequences to us and our shareholders. ● We are an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make its shares of common stock less attractive to investors. ● The future exercise of registration rights may adversely affect the market price of Class A Ordinary Shares. ● The market price of our securities may decline. ● Nasdaq may delist our securities from trading on its exchange. 8 ● Concentration of ownership among our existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions. ● We do not expect to declare any dividends in the foreseeable future. ● Our business and stock price may suffer as a result of our lack of public company operating experience and if securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our Ordinary Shares in an adverse manner, the price and trading volume of our Ordinary Shares could decline. ● Our issuance of additional capital stock in connection with financings, acquisitions, investments, stock incentive plans or otherwise will dilute all other shareholders. ● We will require additional capital to support business growth, and this capital might not be available on commercially reasonable terms, or at all. ● Our financial results may vary significantly from period to period due to fluctuations in our operating costs, product demand, and other factors.
You should carefully consider the following risks as well as all other information contained in this annual report, including the matters discussed under the headings “Forward-Looking Statements” and “Item 5. Operating and Financial Review and Prospects” before you decide to make an investment in our ordinary shares.
Risk Factors Investing in our ordinary shares is highly speculative and involves a significant degree of risk. You should carefully consider the following risks as well as all other information contained in this annual report, including the matters discussed under the headings “Forward-Looking Statements” and “Item 5.
The aforementioned circumstances do not exist in our PRC subsidiaries’ operations. As advised by our PRC counsel, Han Kun Law Offices, the Provisions on Private Lending Cases does not prohibit using cash generated from one subsidiary to fund another subsidiary’s operations.
The aforementioned circumstances do not exist in our PRC subsidiaries’ operations. As advised by our PRC counsel, King&Wood Mallesons, 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.
Risk Factors-Risks Related to Doing Business in China- The Chinese government may intervene in or influence our operations in China at any time, which could result in a material change in our operations and ability to produce vehicles .” Risks arising from the legal system in China, including risks and changes regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ordinary shares.
Risk Factors—Risks Related to Doing Business in mainland China—The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our Class A ordinary shares.” Risks and uncertainties arising from the legal system in mainland China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, which may also exist in other jurisdictions, could result in a material adverse change in our operations and the value of our ADSs.
Pursuant to the pledge agreements, the Company pledged machinery and equipment, mold and tooling with a carrying amount of approximately US$12,766 thousand (RMB90,638 thousand), buildings with a carrying amount of approximately US$15,815 thousand (RMB11,282 thousand) and land use rights with a carrying amount of US$14,406 thousand (RMB102,280 thousand) to the government to secure the repayment of the principal and related interest on the aforementioned loans.
Pursuant to the pledge agreements, we pledged machinery and equipment, molds and tooling with a carrying value of approximately US$9.69 million, buildings with a carrying value of approximately US$14.37 million and land use rights with a carrying value of US$13.68 million to the government to secure the repayment of the principal and related interest on the aforementioned loans.
Cash and Asset Flows through Our Organization Both Chijet Inc. and Chijet Motor are holding companies with no material operations of their own. We conduct a portion of our operations through our PRC subsidiaries. As a result, our ability to pay dividends depends significantly upon dividends paid by our PRC subsidiaries.
We conduct a portion of our operations through our PRC subsidiaries. As a result, our ability to pay dividends depends significantly upon dividends paid by our PRC subsidiaries.
We expect that we will continue to incur operating and net losses for the medium term. The amount of future losses and when, if ever, we will achieve profitability are uncertain. In addition, even if we achieve profitability, there can be no assurance that we will be able to maintain profitability in the future.
In addition, even if we achieve profitability, there can be no assurance that we will be able to maintain profitability in the future.
Remittance of dividends by a wholly foreign-owned enterprise out of China is also subject to examination by the banks designated by the State Administration of Foreign Exchange, or SAFE.
Remittance of dividends by a wholly foreign-owned enterprise out of China is also subject to examination by the banks designated by the State Administration of Foreign Exchange, or SAFE. The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiaries, totaling US$148.31 million, US$148.30 million as of December 31, 2024 and 2023, respectively.
However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control including positions taken by authorities of the PRC. 1 On December 16, 2021, the PCAOB issued its determination that the PCAOB 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, and the PCAOB included in the report of its determination a list of the accounting firms that are headquartered in the PRC or Hong Kong.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor.
The HFCA Act states that if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC will prohibit our ordinary shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
We cannot predict whether we will be able to complete such filing on a timely manner, or at all.” The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023, signed into law on December 29, 2022, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
As of April 30, 2024, no subsidies had been received. The principal amounts outstanding were approximately US$97,832 thousand (RMB 694,598 thousand) and US$100,697 thousand (RMB 694,598 thousand), respectively, as of December 31, 2023, and December 31, 2022.
As of May 15, 2025, no subsidies had been received. The principal amounts outstanding were approximately US$95.16 million (RMB 694.60 million) and US$97.83 million (RMB 694.60 million), respectively, as of December 31, 2024, and December 31, 2023. The variance primarily resulted from currency exchange rate fluctuations.
FAW Jilin, China FAW Corporation Limited (the minority shareholder of FAW Jilin) and its affiliate, FAW Finance Co., Ltd have entered into a series of working capital loan agreements in the amount of RMB700 million (approximately US$98,593 thousand) on January 29, 2019, in the amount of RMB350 million (approximately US$49,296 thousand) on May 20, 2019, in the amount of RMB150 million (approximately US$21,127 thousand) on August 29, 2019, in the amount of approximately RMB270 million (approximately US$38,029) on October 29, 2019, in the amount of approximately RMB188 million (approximately US$26,479 thousand) on November 27, 2019, in the amount of approximately RMB87.4 million (approximately US$12,310 thousand) on December 13, 2019, each of the loans bears an annual interest rate of 3.915% with a term of one year.
The amount of these loans was RMB700 million (approximately US$95.90 million) on January 29, 2019, in the amount of RMB350 million (approximately US$47.95 million) on May 20, 2019, in the amount of RMB150 million (approximately US$20.55 million) on August 29, 2019, in the amount of approximately RMB270 million (approximately US$36.95 million) on October 29, 2019, in the amount of approximately RMB188 million (approximately US$25.73 million) on November 27, 2019, in the amount of approximately RMB87.4 million (approximately US$11.98 million) on December 13, 2019, each of the loans bears an annual interest rate of 3.915% with a term of one year.
On December 15, 2022, the PCAOB announced that it has secured complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate the previous 2021 determination report to the contrary.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
Our financial performance depends, in part, on our ability to design, develop, manufacture, assemble, test, commercialize, market and support our vehicles on a timely and cost-effective basis. 8 We plan to commercialize electric commercial vehicles for production and sales currently and will commercialize a large number of electric passenger cars in 2024.
Our financial performance depends, in part, on our ability to design, develop, manufacture, assemble, test, commercialize, market and support our vehicles on a timely and cost-effective basis. We have a history of operating losses and expect to incur significant additional operating losses. We are an early-stage company, have a history of operating losses and negative operating cash flows.
Known and unknown risks and uncertainties may significantly impact and impair our business operations through our subsidiaries in China. 4 RISK FACTORS SUMMARY Our business is subject to numerous risks described in the section titled “ Risk Factors ” and elsewhere in this annual report.
Known and unknown risks and uncertainties may significantly impact and impair our business operations through our subsidiaries in China. 5 Summary of Risk Factors The following summary description sets forth an overview of the material risks we are exposed to in the normal course of our business activities.
If current tax incentives are not available in the future, our financial position could be harmed. We may face significant challenges in securing on acceptable terms for a substantial part of the government grants, loans, and other incentives for which we apply.
If we do not realize the anticipated benefits of this transaction, our growth strategy and future profitability would be adversely affected. ● The potential loss of key employees, customers, distributors, vendors and other business partners of the companies we acquire following and continuing after announcement of acquisition plans. 10 We may face significant challenges in securing on acceptable terms for a substantial part of the government grants, loans, and other incentives for which we apply.
The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiaries, totaling $148,301 thousand, $170,956 thousand and $148,202 thousand as of December 31, 2023, 2022 and 2021, respectively. Furthermore, cash transfers from our PRC subsidiaries to entities outside of China are subject to PRC government controls on currency conversion.
Furthermore, cash transfers from our PRC subsidiaries to entities outside of China are subject to PRC government controls on currency conversion.
As of April 30, 2024, the outstanding principals and interests were US$133,794 thousand (RMB949,927 thousand). We are in breach of certain loan agreements and may become in breach of other loan agreements in the future.
The net value of the land use rights was US$25.64 million as of December 31, 2024. 11 We are in breach of certain loan agreements and may become in breach of other loan agreements in the future.
Risk Factors-Risks Related to Doing Business in China- Changes in Chinese policies, regulations, and rules may be quick with little advance notice, and the enforcement of laws of the Chinese government is subject to change and could have a significant impact upon our ability to operate profitably .” Permissions Required from the PRC Authorities for Our Operations Our operations in China are governed by PRC laws and regulations.
Risk Factors—Risks Related to Doing Business in mainland China—There may be changes from time to time in the interpretation and application of the laws of mainland China, and any failure to comply with laws and regulations could have a material adverse effect on our business, results of operations, financial condition and the value of our Class A ordinary shares.” 1 Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our subsidiaries in mainland China.
Given the interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities are subject to change, we may be required to obtain additional licenses, permits, filings or approvals for the operations of our businesses in the future. For more detailed information, see “ Item 3. Key Information-D.
However, we may be required to obtain additional licenses, permits, filings or approvals for our products and services in the future.
We have a history of operating losses and expect to incur significant additional expenses and operating losses. We are an early-stage company, have a history of operating losses and negative operating cash flows. We incurred a net loss of $98,501 thousand, $111,518 thousand, and $62,552 thousand for the years ended December 31, 2023, 2022, and 2021, respectively.
We incurred net losses of $69.01 million, $98.50 million and $111.52 million during the years ended December 31, 2024, 2023, and 2022, respectively. We expect that we will continue to incur operating and net losses for the medium term. The amount of future losses and when, if ever, we will achieve profitability are uncertain.
We and our subsidiaries are subject to complex and evolving PRC laws and regulations and face various legal and operational risks and uncertainties relating to doing business in China.
As used in this annual report, “we,” “us,” “our company,” “the Company” or “our” refers to Chijet Motor Company Inc. and its subsidiaries. We face various legal and operational risks and uncertainties associated with being based in or having our operations primarily in mainland China and the complex and evolving PRC laws and regulations.
For example, we and our subsidiaries in the PRC face risks associated with regulatory approvals on offshore offerings, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy, as well as the lack of inspection on our auditors by the PCAOB, which may impact our ability to conduct certain businesses, accept foreign investments, or list and conduct offerings on a United States or other foreign exchange.
For example, we face risks associated with the fact that the PRC government has significant authority in regulating our operations and may influence or intervene in our operations at any time, regulatory approvals on offerings conducted overseas by, and foreign investment in, China-based issuers, anti-monopoly regulatory actions, and oversight on data security.
Removed
Risk Factors-Risk related to Our Business and Industry- Permissions required for our business from PRC Authorities which have been received to date, but there can be no assurance of future events relating to such permissions .” The PRC governmental authorities have promulgated PRC laws and regulations relating to cybersecurity review and overseas listings.
Added
If (i) we fail to obtain, maintain or renew the relevant licenses, permits, filings or approvals, (ii) we inadvertently conclude that such licenses, permits, filings or approvals are not required, while they actually are required, or (iii) we are required to obtain the relevant approval or complete other filing procedures as a result of changes of applicable laws, regulations or interpretations thereof but fail to do so, as the case may be, the competent PRC government authorities may have the power to, among other things, levy fines, confiscate our income, revoke our licenses, and require us to discontinue our relevant business or impose restrictions on the affected portion of our business.
Removed
Under PRC laws and regulations effective as of the date of this annual report, none of us or our PRC subsidiaries (i) is required to obtain any prior permission from the China Securities Regulatory Commission, or the CSRC, (ii) is required to go through a cybersecurity review conducted by the Cyberspace Administration of China, or the CAC, or (iii) has received any notice from any PRC authority requiring us to obtain any prior permissions, in each case in connection with our previous issuance of securities to foreign investors.
Added
Any of these actions by government authorities may have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A ordinary shares. See “Item 3.
Removed
However, in certain circumstances, the relevant PRC governmental authorities may perform cybersecurity review on us. For more detailed information, see “ Item 3. Key Information-D.
Added
Key Information—Risk Factors—Risks Related to Our Business and Industry—Any lack of requisite approvals, licenses or permits applicable to our business operation may have a material and adverse impact on our business and results of operations.” Permissions Required from the PRC Authorities for Overseas Securities Offerings On December 28, 2021, the Cyberspace Administration of China, or the CAC, together with certain other PRC governmental authorities, jointly released the Revised Cybersecurity Review Measures, which took effect on February 15, 2022.
Removed
Risk Factors-Risks Related to Doing Business in China -There may be changes from time to time in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protections available to you and us. ” Meanwhile, the PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
Added
Pursuant to the Revised Cybersecurity Review Measures, (i) operators of critical information infrastructure that intend to purchase network products and services and online platform operators that conduct data processing activities, in each case that affect or may affect national security, and (ii) operators of network platforms seeking listing abroad that are in possession of more than one million users’ personal information must apply for a cybersecurity review.
Removed
For more detailed information, see “ Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China- The CSRC has recently released the Trial Measures for China-based companies seeking to conduct overseas offering and listing in foreign markets.
Added
The Revised Cybersecurity Review Measures set out certain general factors which would be the focus in assessing the national security risk during a cybersecurity review, including without limitation, risks of influence, control or malicious use of critical information infrastructure, core data, important data or large amounts of personal information by foreign governments in relation to a listing abroad.
Removed
Actions by the PRC government to exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers may significantly limit or completely hinder our ability to offer or continue to offer our Ordinary Shares to investors and could cause the value of our Ordinary Shares to significantly decline or such shares to become worthless. ” The Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020.
Added
If we are required to go through a cybersecurity review, we face uncertainties as to whether we will be able to timely complete the review, or at all, which may subject us to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, and materially and adversely affect our business and results of operations.
Removed
On December 2, 2021, the SEC adopted final amendments to its rules implementing the HFCA Act.
Added
As of the date of this annual report, we are not in possession of more than one million users’ personal information.
Removed
Such final rules establish procedures that the SEC will follow in (i) determining whether a registrant is a “Commission-Identified Issuer” (a registrant identified by the SEC 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 the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction) and (ii) prohibiting the trading of an issuer that is a Commission-Identified Issuer for three consecutive years under the HFCA Act.
Added
However, if we plan to list our securities on other foreign exchanges in the future, and if by that time the amount of users’ personal information we possess exceeds one million, we will be obligated to apply for a cybersecurity review. For detailed information, see “Item 3. Key Information—D.
Removed
The SEC began identifying Commission-Identified Issuers for the fiscal years beginning after December 18, 2020. A Commission-Identified Issuer is required to comply with the submission and disclosure requirements in the annual report for each year in which it was identified.
Added
Risk Factors—Risks Related to Our Business and Industry—Our business generates and processes a large amount of data, and we are required to comply with PRC and other applicable laws relating to privacy and cybersecurity.
Removed
As of the date of this annual report, we have not been, and do not expect to be identified by the SEC under the HFCA Act.
Added
The improper use or disclosure of data or failure to comply with applicable laws and regulations could have a material and adverse effect on our business and prospects.” 2 On February 17, 2023, the CSRC, as approved by the State Council, released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, or the Filing Rules.
Removed
This list does not include our auditor, Assentsure PAC. On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “Statement of Protocol”) with the CSRC and the Ministry of Finance of China (“MOF”).
Added
The Filing Rules took effect on March 31, 2023, when the CSRC started to accept filing applications.
Removed
The terms of the Statement of Protocol would grant the PCAOB complete access to audit work papers and other information so that it may inspect and investigate PCAOB-registered accounting firms headquartered in mainland China and Hong Kong.
Added
Under the Filing Rules, a filing-based regulatory system will apply to “indirect overseas offering and listing” of PRC domestic enterprises, which refers to such securities offering and listing in an overseas market made by an offshore entity based on the underlying equity, assets, earnings or other similar rights of a domestic enterprise which operates its main business domestically in mainland China.
Removed
On December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden.
Added
The Filing Rules apply to all overseas equity financing and listing activities of PRC domestic enterprises, including initial and follow-on offerings of shares, depository receipts, convertible corporate bonds, or other equity instruments and trading of securities in overseas market.
Removed
The Consolidated Appropriations Act contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two.
Added
Any future capital raising activities such as follow-on equity or debt offerings, listing on other stock exchanges and going private transactions, may also be subject to the filing requirement with the CSRC.
Removed
As a result of the Consolidated Appropriations Act, the HFCA Act now also applies if the PCAOB’s inability to inspect or investigate the relevant accounting firm is due to a position taken by an authority in any foreign jurisdiction. The denying jurisdiction does not need to be where the accounting firm is located.
Added
Failure to complete such filing procedures as required under the Filing Rules, or a rescission of any such filings completed by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in mainland China, and other forms of sanctions that may materially and adversely affect our business, financial condition and results of operations.
Removed
Our current auditor, Assentsure PAC, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Trademark Both the Trademark Law of the PRC adopted by the SCNPC on August 23, 1982 and last amended on April 23, 2019, and the Implementation Regulation of the Trademark Law of the PRC adopted by the State Council on August 3, 2002 and revised on April 29, 2014 give protection to the holders of registered trademarks and trade names.
Trademarks Both the Trademark Law of the PRC adopted by the SCNPC on August 23, 1982 and last amended on April 23, 2019, and the Implementation Regulation of the Trademark Law of the PRC adopted by the State Council on August 3, 2002 and revised on April 29, 2014 give protection to the holders of registered trademarks and trade names.
Regulations on Intellectual Property Rights Patent Pursuant to the PRC Patent Law (the “ Patent Law ”) which was promulgated by the SCNPC on March 12, 1984 and amended on September 4, 1992, on August 25, 2000, on December 27, 2008 and on October 17, 2020, and its implementation rules, once a patent for an invention or utility model has been granted, unless otherwise provided by the Patent Law, no entity or individual may use the patent, patented product or patented process for production or business purposes without the authorization of the patent owner.
Regulations on Intellectual Property Rights Patents Pursuant to the PRC Patent Law (the “ Patent Law ”) which was promulgated by the SCNPC on March 12, 1984 and amended on September 4, 1992, on August 25, 2000, on December 27, 2008 and on October 17, 2020, and its implementation rules, once a patent for an invention or utility model has been granted, unless otherwise provided by the Patent Law, no entity or individual may use the patent, patented product or patented process for production or business purposes without the authorization of the patent owner.
Copyright The PRC Copyright Law, which took effect on June 1, 1991 and was subsequently amended on October 27, 2001, on February 26, 2010 and on November 11, 2020, respectively, provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software.
Copyrights The PRC Copyright Law, which took effect on June 1, 1991 and was subsequently amended on October 27, 2001, on February 26, 2010 and on November 11, 2020, respectively, provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software.
On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security and the General Office of the SAMR jointly issued the Measures for Determining the Illegal Collection and Use of Personal Information through Mobile Applications, which aims to provide reference for supervision and administration departments and provide guidance for mobile applications operators’ self-examination and self-correction and social supervision by netizens, and further elaborates the forms of behavior constituting illegal collection and use of the personal information through mobile applications including: (i) failing to publish the rules on the collection and use of personal information; (ii) failing to explicitly explain the purposes, methods and scope of the collection and use of personal information; (iii) collecting and using personal information without the users’ consent; (iv) collecting personal information unrelated to the services they provide and beyond the necessary principle; (v) providing personal information to others without the users’ consent; (vi) failing to provide the function of deleting or correcting the personal information according to the laws or failing to publish information such as ways of filing complaints and reports. 101 On June 10, 2021, the SCNPC promulgated the PRC Data Security Law (the “ Data Security Law ”), which took effect in September 2021.
On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security and the General Office of the SAMR jointly issued the Measures for Determining the Illegal Collection and Use of Personal Information through Mobile Applications, which aims to provide reference for supervision and administration departments and provide guidance for mobile applications operators’ self-examination and self-correction and social supervision by netizens, and further elaborates the forms of behavior constituting illegal collection and use of the personal information through mobile applications including: (i) failing to publish the rules on the collection and use of personal information; (ii) failing to explicitly explain the purposes, methods and scope of the collection and use of personal information; (iii) collecting and using personal information without the users’ consent; (iv) collecting personal information unrelated to the services they provide and beyond the necessary principle; (v) providing personal information to others without the users’ consent; (vi) failing to provide the function of deleting or correcting the personal information according to the laws or failing to publish information such as ways of filing complaints and reports. 81 On June 10, 2021, the SCNPC promulgated the PRC Data Security Law (the “ Data Security Law ”), which took effect in September 2021.
Where any new energy vehicle manufacturer manufactures or sells any model of a new energy vehicle without the prior approval of the competent authorities, including being published in the Manufacturers and Products Announcement by the MIIT, it may be subject to penalties, including fines, forfeiture of any illegally manufactured and sold vehicles and spare parts and revocation of its business licenses. 98 Regulations on Compulsory Product Certification Under the Administrative Regulations on Compulsory Product Certification which was promulgated by the General Administration of Quality Supervision, Inspection and Quarantine (the “ QSIQ ”, which has merged into the State Administration for Market Regulation, or the SAMR) on July 3, 2009, became effective on September 1, 2009 and was amended on September 29, 2022, and the List of the First Batch of Products Subject to Compulsory Product Certification which was promulgated by the QSIQ in association with the State Certification and Accreditation Administration Committee on December 3, 2001 and became effective on May 1, 2002, SAMR, as the successor of QSIQ, is responsible for the regulation and quality certification of automobiles.
Where any new energy vehicle manufacturer manufactures or sells any model of a new energy vehicle without the prior approval of the competent authorities, including being published in the Manufacturers and Products Announcement by the MIIT, it may be subject to penalties, including fines, forfeiture of any illegally manufactured and sold vehicles and spare parts and revocation of its business licenses. 78 Regulations on Compulsory Product Certification Under the Administrative Regulations on Compulsory Product Certification which was promulgated by the General Administration of Quality Supervision, Inspection and Quarantine (the “ QSIQ ”, which has merged into the State Administration for Market Regulation, or the SAMR) on July 3, 2009, became effective on September 1, 2009 and was amended on September 29, 2022, and the List of the First Batch of Products Subject to Compulsory Product Certification which was promulgated by the QSIQ in association with the State Certification and Accreditation Administration Committee on December 3, 2001 and became effective on May 1, 2002, SAMR, as the successor of QSIQ, is responsible for the regulation and quality certification of automobiles.
In addition, these provisions provide certain exemptions from obligations under the circumstances of cross-border data transfer, including, among others, the obligations for declaring data security assessment, concluding a standard contract for provisions of personal information abroad or passing the certification for personal information protection. 103 Regulations on Environmental Protection and Work Safety Environment Protection Pursuant to the Environmental Protection Law of the PRC promulgated by the SCNPC on December 26, 1989, amended on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will discharge pollutants during the course of operations or other activities must implement effective environmental protection safeguards and procedures to control and properly treat waste gas, wastewater, waste residue, dust, malodorous gases, radioactive substances, noise, vibrations, electromagnetic radiation and other hazards produced during such activities.
In addition, these provisions provide certain exemptions from obligations under the circumstances of cross-border data transfer, including, among others, the obligations for declaring data security assessment, concluding a standard contract for provisions of personal information abroad or passing the certification for personal information protection. 83 Regulations on Environmental Protection and Work Safety Environment Protection Pursuant to the Environmental Protection Law of the PRC promulgated by the SCNPC on December 26, 1989, amended on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will discharge pollutants during the course of operations or other activities must implement effective environmental protection safeguards and procedures to control and properly treat waste gas, wastewater, waste residue, dust, malodorous gases, radioactive substances, noise, vibrations, electromagnetic radiation and other hazards produced during such activities.
Social Insurance and Housing Fund As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and amended in 2010, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999 and the Social Insurance Law of the PRC implemented on July 1, 2011 and amended on December 29, 2018, employers are required to provide their employees in the PRC with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, labor injury insurance and medical insurance. 107 In accordance with the Regulations on the Management of Housing Fund which was promulgated by the State Council in 1999 and subsequently amended in 2002 and 2019, employers must register at the designated administrative centers and open bank accounts for depositing employees’ housing funds.
Social Insurance and Housing Fund As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and amended in 2010, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999 and the Social Insurance Law of the PRC implemented on July 1, 2011 and amended on December 29, 2018, employers are required to provide their employees in the PRC with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, labor injury insurance and medical insurance. 87 In accordance with the Regulations on the Management of Housing Fund which was promulgated by the State Council in 1999 and subsequently amended in 2002 and 2019, employers must register at the designated administrative centers and open bank accounts for depositing employees’ housing funds.
In addition, if an automaker uses OTA technology to eliminate defects and recalls its defective products, it must make a recall plan and complete a filing with the SAMR. 100 Regulations on Product Liability Pursuant to the Product Quality Law of the PRC, promulgated on February 22, 1993 and latest amended on December 29, 2018, a manufacturer is prohibited from producing or selling products that do not meet applicable standards and requirements for safeguarding human health and ensuring human and property safety.
In addition, if an automaker uses OTA technology to eliminate defects and recalls its defective products, it must make a recall plan and complete a filing with the SAMR. 80 Regulations on Product Liability Pursuant to the Product Quality Law of the PRC, promulgated on February 22, 1993 and latest amended on December 29, 2018, a manufacturer is prohibited from producing or selling products that do not meet applicable standards and requirements for safeguarding human health and ensuring human and property safety.
If the employees fail to pay or the PRC subsidiaries fail to withhold income tax in accordance with relevant laws and regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC governmental authorities. 110 Regulations on Merger and Acquisition and Overseas Listing On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission, or the CSRC, adopted the Regulations on Mergers of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and was amended on June 22, 2009.
If the employees fail to pay or the PRC subsidiaries fail to withhold income tax in accordance with relevant laws and regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC governmental authorities. 90 Regulations on Merger and Acquisition and Overseas Listing On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission, or the CSRC, adopted the Regulations on Mergers of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and was amended on June 22, 2009.
Block 1 of Yedian Rd., Auto Industrial Park, High-tech District, Xiangyang Xiangyang Yazhi 308,647.7 land-use rights Up to 2066.7.30 Industrial * The land use rights held by FAW Jilin have been pledged to lenders of certain loan agreements. See “ Item 7. Major Shareholders and Related Party Transactions ”, “ Item 13.
Block 1 of Yedian Rd., Auto Industrial Park, High-tech District, Xiangyang Xiangyang Yazhi 308,647.7 land-use rights Up to 2066.7.30 Industrial * The land use rights held by FAW Jilin, Shandong Baoya, Dezhou Yarui and Xiangyang Yazhi have been pledged to lenders of certain loan agreements. See “ Item 7. Major Shareholders and Related Party Transactions ”, “ Item 13.
The Trademark Office of China under the National Intellectual Property Administration handles trademark registrations. Trademarks can be registered for a term of ten years and can be extended for another ten years if requested upon expiration of any ten-year term. Trademark license agreements must be filed with the Trademark Office.
The Trademark Office of China under the National Intellectual Property Administration handles trademark registrations. Trademarks can be registered for a term of ten years and can be extended for another ten years if requested upon expiration of any ten-year term.
In the event of any changes in the PRC laws and/or regulations and/or government policies on environmental protection and more stringent requirements are imposed on the Company, we may have to incur extra costs and expenses to comply with such requirements.
We believe that we are in compliance with all current environmental protection requirements under PRC laws and regulations. In the event of any changes in the PRC laws and/or regulations and/or government policies on environmental protection and more stringent requirements are imposed on the Company, we may have to incur extra costs and expenses to comply with such requirements.
In addition, if a non-listed special purpose vehicle grants any equity incentives to directors, supervisors or employees of domestic companies under its direct or indirect control, the relevant PRC individual residents could register with the local branch of the SAFE before exercising such options.
In addition, if a non-listed special purpose vehicle grants any equity incentives to directors, supervisors or employees of domestic companies under its direct or indirect control, the relevant PRC individual residents could register with the local branch of the SAFE before exercising such options. 89 The SAFE simultaneously issued guidance to its local branches with respect to the implementation of Circular 37.
On September 1, 2023, the SCNPC promulgated the Value-added Tax Law (Draft for Second Review), which, upon its enactment, will replace the Provisional Regulations of the PRC on Value-added Tax. 106 Dividend Withholding Tax The EIT Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors that do not have an establishment or place of business in the PRC, or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
On December 25,2024, the SCNPC promulgated the Value-added Tax Law, which become effective on January 1, 2026, will replace the Provisional Regulations of the PRC on Value-added Tax. 86 Dividend Withholding Tax The EIT Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors that do not have an establishment or place of business in the PRC, or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
According to the Regulations, operators of certain industries or sectors that may endanger national security, people’s livelihood or public interest in case of damage, function loss or data leakage may be identified as critical information infrastructure operators by CAC or the respective industrial regulatory authorities once they meet the identification standards promulgated by the authorities.
According to the Regulations, operators of certain industries or sectors that may endanger national security, people’s livelihood or public interest in case of damage, function loss or data leakage may be identified as critical information infrastructure operators by CAC or the respective industrial regulatory authorities once they meet the identification standards promulgated by the authorities. 82 On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect in November 2021.
Infringers of copyright may also be subject to fines and/or administrative or criminal liabilities in severe situations. 104 Pursuant to the Computer Software Protection Regulations promulgated by the State Council on June 4, 1991 and subsequently amended on December 20, 2001, on January 8, 2011 and on January 30, 2013, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless of whether the software is released publicly.
Pursuant to the Computer Software Protection Regulations promulgated by the State Council on June 4, 1991 and subsequently amended on December 20, 2001, on January 8, 2011 and on January 30, 2013, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless of whether the software is released publicly.
Generally speaking, the Company Law of the PRC or the Partnership Law of the PRC (promulgated by the SCNPC in February 1997 and amended in August 2006) shall apply with respect to the organization of foreign-invested enterprises. 109 Regulations on Dividend Distribution The principal regulations governing distribution of dividends of foreign-invested enterprises include the Company Law of the PRC (the “ Company Law ”).
Generally speaking, the Company Law of the PRC or the Partnership Law of the PRC (promulgated by the SCNPC in February 1997 and amended in August 2006) shall apply with respect to the organization of foreign-invested enterprises.
According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasing infringement activities, apologizing to the copyright owners and compensating the loss of copyright owner.
According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasing infringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also be subject to fines and/or administrative or criminal liabilities in severe situations.
Furthermore, the Provisions on Automobile Data Security also prescribe the implementation of classified protection of cybersecurity, the obligations of automobile data operators to inform, anonymize and obtain individuals’ consents, and the specific requirements for operating sensitive personal information, as well as the risk assessment when operating important data and the security assessment when providing data abroad. 102 On July 7, 2022, the CAC issued the Measures for Security Assessment of Cross-border Data Transfers, which took effect on September 1, 2022.
Furthermore, the Provisions on Automobile Data Security also prescribe the implementation of classified protection of cybersecurity, the obligations of automobile data operators to inform, anonymize and obtain individuals’ consents, and the specific requirements for operating sensitive personal information, as well as the risk assessment when operating important data and the security assessment when providing data abroad.
Located Address Lessee Lessor Duration of Leasehold Use of Leasehold Rent per year USD Workshop No. 2, Yeda Industrial Plant West, Tianshan Rd. 3-6, Kaifa District, Yantai Shandong Baoya Yeda 2024.2.1-2025.1.31 Headquarters of offices, temporary office, the establishment of new energy vehicle research institute, automotive laboratory and exhibition hall 38,206 112
Located Address Lessee Lessor Duration of Leasehold Use of Leasehold Rent per year USD Workshop No. 2, Yeda Industrial Plant West, Tianshan Rd. 3-6, Kaifa District, Yantai Shandong Baoya Yeda 2025.2.1-2026.1.31 Headquarters of offices, temporary office, the establishment of new energy vehicle research institute, automotive laboratory and exhibition hall, 34,094 We believe that our existing facilities are suitable and adequate to meet our current needs. 92
Pursuant to Circular 28, on the basis of allowing investment-oriented foreign-invested enterprise (including foreign-invested investment companies, foreign-invested venture capital enterprises and foreign-invested equity investment enterprises) to use capital funds for domestic equity investment in accordance with laws and regulations, non-investment foreign-invested enterprises shall be allowed to use capital funds for domestic equity investment in accordance with the laws under the premise of not violating the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version) (the “ 2021 Negative List ”) and the authenticity and compliance of their domestic invested projects. 108 According to the Circular of the SAFE on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic payments by using their capital funds, foreign credits and the income under capital accounts of overseas listing, with no need to provide the evidentiary materials concerning authenticity of such capital for banks in advance, provided that their capital use shall be authentic and in line with provisions, and conform to the prevailing administrative regulations on the use of income under capital accounts.
According to the Circular of the SAFE on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic payments by using their capital funds, foreign credits and the income under capital accounts of overseas listing, with no need to provide the evidentiary materials concerning authenticity of such capital for banks in advance, provided that their capital use shall be authentic and in line with provisions, and conform to the prevailing administrative regulations on the use of income under capital accounts.
After obtaining a construction work planning permit, subject to certain exceptions, a construction enterprise must apply for a construction work commencement permit from the construction authority under the local people’s government at the county level or above in accordance with the Administrative Provisions on Construction Permit of Construction Projects promulgated by the Ministry of Housing and Urban-Rural Development (“ MOHURD ”), on June 25, 2014 and implemented on October 25, 2014 and latest amended on March 30, 2021. 105 Pursuant to the Administrative Measures for Reporting Details Regarding Acceptance Examination upon Completion of Buildings and Municipal Infrastructure promulgated by the Ministry of Construction on April 4, 2000 and amended on October 19, 2009 and the Provisions on Acceptance Examination upon Completion of Buildings and Municipal Infrastructure promulgated and implemented by MOHURD on December 2, 2013, upon the completion of a construction project, the construction enterprise must submit an application to the competent department in the people’s government at or above county level where the project is located, for examination upon completion of building and for filing purpose; and to obtain the filing form for acceptance and examination upon completion of construction project.
Pursuant to the Administrative Measures for Reporting Details Regarding Acceptance Examination upon Completion of Buildings and Municipal Infrastructure promulgated by the Ministry of Construction on April 4, 2000 and amended on October 19, 2009 and the Provisions on Acceptance Examination upon Completion of Buildings and Municipal Infrastructure promulgated and implemented by MOHURD on December 2, 2013, upon the completion of a construction project, the construction enterprise must submit an application to the competent department in the people’s government at or above county level where the project is located, for examination upon completion of building and for filing purpose; and to obtain the filing form for acceptance and examination upon completion of construction project.
Plaintiff Defendant Cause of Action Amount in Controversy (USD) Name of the Court/Arbitration Commission Current Status 1 FAW Mould Manufacturing Co., LTD FAW Jilin Contractual Dispute 36,606,447.72 Jilin High-Tech Industrial Development Zone People’s Court Under enforcement 95 2 The Ninth Design and Research Institute of Machinery Industry Co.
Plaintiff Defendant Cause of Action Amount in Controversy (USD) Name of the Court/Arbitration Commission Current Status 1 FAW Mould Manufacturing Co., LTD FAW Jilin Contractual Dispute 38,911,748.37 Jilin High-Tech Industrial Development Zone People’s Court Under enforcement 2 FAW Logistics Co.
Regulations on Taxation Enterprise Income Tax According to the Enterprise Income Tax Law of the PRC, or the EIT Law, which was promulgated on March 16, 2007, and came into effect on January 1, 2008 and was amended by the SCNPC on February 24, 2017 and December 29, 2018, and the Implementation Regulations on the Enterprise Income Tax Law of the PRC, which was promulgated by the State Council on December 6, 2007 and came into effect on January 1, 2008, and was amended by the State Council on April 23, 2019 and came into effect on the same date, a uniform income tax rate of 25% will be applied to domestic enterprises, foreign-invested enterprises.
According to Interim Regulations on Administration of Examination and Acceptance of Fire Control Design of Construction Projects promulgated on April 1, 2020 and last amended on August 21, 2023, an examination system for fire prevention design and acceptance only applies to special construction projects, and for other projects, a record-filing and spot check system would be applied. 85 Regulations on Taxation Enterprise Income Tax According to the Enterprise Income Tax Law of the PRC, or the EIT Law, which was promulgated on March 16, 2007, and came into effect on January 1, 2008 and was amended by the SCNPC on February 24, 2017 and December 29, 2018, and the Implementation Regulations on the Enterprise Income Tax Law of the PRC, which was promulgated by the State Council on December 6, 2007 and came into effect on January 1, 2008, and was amended by the State Council on April 23, 2019 and came into effect on the same date, a uniform income tax rate of 25% will be applied to domestic enterprises, foreign-invested enterprises.
The PRC Company Law shall also apply to foreign-invested companies. Where laws on foreign investment have other stipulations, such stipulations shall prevail.
The PRC Company Law generally governs two types of companies – limited liability companies and joint stock limited companies. The PRC Company Law shall also apply to foreign-invested companies. Where laws on foreign investment have other stipulations, such stipulations shall prevail.
We believe the primary competitive factors in our markets are: ● Pricing; ● Technological innovation; ● Vehicle performance quality and safety; ● Service and charging options; ● User experience; ● Design and styling; and ● Manufacturing efficiency. The China automotive market is generally competitive. We expect it will become more competitive in the future.
We believe the primary competitive factors in our markets are pricing, technological innovation, vehicle performance quality and safety, service and charging options, user experience, design and styling, and manufacturing efficiency. We face competition, both in China and globally, from auto domestic and international auto manufacturers. We expect competition will increase in the future.
Generally, September to December is the peak sales season, and January to February is the off-season. The seasonality of our products is in line with the situation in China’s new energy vehicle market. 94 Competition Competition in the automotive industry is intense and evolving.
The seasonality of our products is in line with the situation in China’s new energy vehicle market. 73 Competition Competition in the automotive industry is intense and evolving.
Such measures stipulate that data processors who provide overseas the important data collected and generated during operations within the PRC and personal information that shall be subject to security assessment shall conduct a security assessment.
On July 7, 2022, the CAC issued the Measures for Security Assessment of Cross-border Data Transfers, which took effect on September 1, 2022. Such measures stipulate that data processors who provide overseas the important data collected and generated during operations within the PRC and personal information that shall be subject to security assessment shall conduct a security assessment.
Huanshan Street, Auto Industrial Park, Jilin FAW Jilin 678,453.46 land-use rights 2011.12.15-2061.4.29* Industrial 4 Huanshan Street, Auto Industrial Park, Jilin FAW Jilin 602,916.49 land-use rights 2014.9.26-2062.11.2* Industrial 5. North of 314 Avenue, East of Jingsi Road, Economic Technology Development District, Dezhou Dezhou Yarui 184,404.4 land-use rights 126,636.4 m² is up to 2064.2.27, 57,768 m² is up to 2062.11.29* Industrial 6.
North of 314 Avenue, East of Jingsi Road, Economic Technology Development District, Dezhou Dezhou Yarui 184,404.4 land-use rights 126,636.4 m² is up to 2064.2.27, 57,768 m² is up to 2062.11.29* Industrial 6.
Shandong Baoya Contractual Disputes 284,511.05 Yantai Economic and Technological Development Zone People’s Court Pending first instance trial 20 Zhejiang Mould Factory Shandong Baoya Contractual Disputes 943,675.26 Yantai Economic and Technological Development Zone People’s Court Mediation prior to trial 97 21 Qingdao Branch of Changzhou Fusen Automobile Parts Co. Ltd.
Shandong Baoya Contractual Disputes 276,738.87 Yantai Economic and Technological Development Zone People’s Court Pending first instance trial 15 Zhejiang Mould Factory Shandong Baoya Contractual Disputes 928,108.04 Yantai Economic and Technological Development Zone People’s Court Mediation prior to trial 76 16 Qingdao Branch of Changzhou Fusen Automobile Parts Co. Ltd.
Domain Name According to the Administrative Measures on Internet Domain Names promulgated by the MIIT on August 24, 2017 and took effect on November 1, 2017.The registration of domain names in PRC is on a “first-apply-first-registration” basis. A domain name applicant will become the domain name holder upon the completion of the application procedure.
Trademark license agreements must be filed with the Trademark Office. 84 Domain Names According to the Administrative Measures on Internet Domain Names promulgated by the MIIT on August 24, 2017 and took effect on November 1, 2017.The registration of domain names in PRC is on a “first-apply-first-registration” basis.
In addition to domestic traditional car companies, it will also face multi-faceted competition from international wholly-owned enterprises, joint ventures and new car manufacturers. Our main competitors include Nio Inc., Li Auto Inc.,Xpeng Inc., among others. Insurance We maintain vehicle insurance, property insurance, machinery breakdown insurance, inventory insurance, and real property insurance.
In addition to domestic traditional car companies, we also face multi-faceted competition from international enterprises, joint ventures and new car manufacturers. Our main competitors include Nio Inc., Li Auto Inc.,Xpeng Inc., among others. Most of our competitors are better capitalized and have greater financial resources.
Under the Company Law, companies shall contribute 10% of the profits into their statutory surplus reserve upon distribution of their post-tax profits of the current year. A company may discontinue the contribution when the aggregate sum of the statutory surplus reserve is more than 50% of its registered capital.
A company may discontinue the contribution when the aggregate sum of the statutory surplus reserve is more than 50% of its registered capital.
The company accrued the expected amount of loss for Case No.7 and No.8. Regulations This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.
Amounts in controversy are converted into US dollar using the exchange rate as of December 31, 2024 (i.e., 1 USD = RMB 7.2993). The Company accrued the expected amount of loss for Case No.1-7, No.9 and No. 24-27. Regulations This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.
Regulations on Automobile Sales Pursuant to the Administrative Measures on Automobile Sales promulgated by the Ministry of Commerce, or the MOFCOM, on April 5, 2017, which became effective on July 1, 2017, automobile suppliers and dealers are required to file with relevant authorities through the information system for the national automobile circulation operated by the competent commerce department within ninety (90) days after the receipt of a business license.
If a passenger vehicle enterprise fails to offset its negative credits, its new products, if the fuel consumption of which does not reach the target fuel consumption value for a certain vehicle models as specified in the Evaluation Methods and Indicators for the Fuel Consumption of Passenger Vehicles, will not be listed in the Announcement of the Vehicle Manufacturers and Products issued by the MIIT, or will not be granted the compulsory product certification, and the vehicle enterprises may be subject to penalties according to the relevant rules and regulations. 79 Regulations on Automobile Sales Pursuant to the Administrative Measures on Automobile Sales promulgated by the Ministry of Commerce, or the MOFCOM, on April 5, 2017, which became effective on July 1, 2017, automobile suppliers and dealers are required to file with relevant authorities through the information system for the national automobile circulation operated by the competent commerce department within ninety (90) days after the receipt of a business license.
Key Information - Our Holding Company Structure .” 4D. Property, Plants and Equipment Under PRC law, land is owned by the state. “Land use rights” are granted to an individual or entity after payment of a land use right fee is made to the applicable state or rural collective economic organization.
“Land use rights” are granted to an individual or entity after payment of a land use right fee is made to the applicable state or rural collective economic organization. Land use rights allow the holder of the right to use the land for a specified long-term period.
Pursuant to the 2022 Encouraging Catalogue, the manufacture and the development of key parts and components of NEVs fall within the encouraged catalogue, and the 2021 Negative List lifts the limit on foreign ownership of automakers for ICE passenger vehicles.
Pursuant to the 2022 Encouraging Catalogue, the manufacture and the development of key parts and components of NEVs fall within the encouraged catalogue, and the 2021 Negative List lifts the limit on foreign ownership of automakers for ICE passenger vehicles. 88 The establishment, operation and management of corporate entities in the PRC is governed by the Company Law, which was latest amended on December 29, 2023 and will come into effect on July 1, 2024, to supersede the existing PRC Company Law.
Located Address Registered Name Area (M²) Nature of Property Duration Use of Property 1. B-42, Kaifa District, Yantai Shandong Baoya 458,971.9 land-use rights 2020.12.18-2070.12.17 Industrial 2. East Hengshan Rd. 2, High-tech District, Jilin FAW Jilin 5,981.30 land-use rights 2010.8.5-2050.7.29 Business and Financial 3.
The following table sets forth the location, registered name, approximate size, use of the property, and the term of the land use rights registered to our subsidiaries. No. Located Address Registered Name Area (M²) Nature of Property Duration Use of Property 1. B-42, Kaifa District, Yantai Shandong Baoya 458,971.9 land-use rights 2020.12.18-2070.12.17 Industrial 2.
Contractual Disputes 436,717.84 Yantai Economic and Technological Development Zone People’s Court Pending first instance trial 18 Shandong Baoya Shanghai Youhang Automotive Electronics Co., Ltd., Shenzhen Youjia Innovation Technology Co., Ltd. Contractual Disputes 278,877.17 Yantai Economic and Technological Development Zone People’s Court Pending first instance trial 19 Jiangsu Zhongqi Boyue Vehicle Technology Co. Ltd.
Contractual Disputes 271,258.89 Yantai Economic and Technological Development Zone People’s Court Pending first instance trial 14 Jiangsu Zhongqi Boyue Vehicle Technology Co. Ltd.
On February 17, 2023, the CSRC announced the Circular on the Administrative Arrangements for Filing of Securities Offering and Listing by Domestic Companies, or the Circular, and released a set of new regulations which consists of the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines.
On February 17, 2023, the CSRC, as approved by the State Council, released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, or the Filing Rules. The Filing Rules took effect on March 31, 2023, when the CSRC started to accept filing applications.
LTD FAW Jilin Contractual Dispute 1,152,057.26 Jilin Province Higher People’s Court Jilin Intermediate People’s Court Under enforcement 3 FAW Logistics Co. LTD FAW Jilin Contractual Dispute 2,764,619.85 Jilin Intermediate People’s Court Under enforcement 4 FAW Logistics (Changchun Lushun) Storage and Transportation Co., LTD FAW Jilin Contractual Dispute 2,807,846.16 Jilin Intermediate People’s Court Under enforcement 5 Changchun FAW International Logistics Co.
LTD FAW Jilin Contractual Dispute 2,731,040.99 Jilin Intermediate People’s Court Under enforcement 3 FAW Logistics (Changchun Lushun) Storage and Transportation Co., LTD FAW Jilin Contractual Dispute 2,752,418.99 Jilin Intermediate People’s Court Under enforcement 4 Changchun FAW International Logistics Co. LTD FAW Jilin Contractual Dispute 982,695.44 Jilin Intermediate People’s Court Under enforcement 5 Thyssenkrupp Presta Fawer(Changchun) Co., Ltd.
FAW Jilin Contractual Disputes 33,201.82 Jilin High-Tech Industrial Development Zone People’s Court Stage of second instance trial 8 Guangxi Materials Group Liuzhou Electromechanical Co. FAW Jilin Contractual Disputes 40,683.32 Jilin High-Tech Industrial Development Zone People’s Court Stage of first instance trial 9 FAW Jilin Changchun FAW Yanfeng Visteon Electronics Co., Ltd.
FAW Jilin Contractual Dispute 2,149,318.41 Jilin High-Tech Industrial Development Zone People’s Court Under enforcement 8 Changchun FAW Yanfeng Visteon Electronics Co., Ltd. FAW Jilin Contractual Dispute 385,363.84 Jilin High-Tech Industrial Development Zone People’s Court Stage of first instance trial 9 Changchun Jinhe Transportation Equipment Co., Ltd.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect in November 2021.
PRC regulators, including the CAC, the MIIT, and the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection. On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect in November 2021.
LTD FAW Jilin Contractual Dispute 1,005,515.83 Jilin High-Tech Industrial Development Zone People’s Court Under enforcement 6 Thyssenkrupp Presta Fawer(Changchun) Co., Ltd. FAW Jilin Contractual Dispute 598,368.93 Jilin Intermediate People’s Court Jilin High-Tech Industrial Development Zone People’s Court Under enforcement 7 Changchun Zhongsheng Technology Co., Ltd.
FAW Jilin Contractual Dispute 724,827.59 Jilin Intermediate People’s Court Jilin High-Tech Industrial Development Zone People’s Court Under enforcement 6 Jilin City Connect Auto Parts Co., Ltd. FAW Jilin Contractual Dispute 178,617.13 Yongji County People’s Court Pending first instance trial 7 Changchun Jiya Warehousing Co., Ltd.
Removed
This poses a material risk to our financial stability and may materially and adversely impact our business, financial results and future prospects.” Business Contract of EP Car Body-in-White Trial Production On April 18, 2022, Shandong Baoya entered into a business contract with Rizhengsheng Auto Technology (Changzhou) Co., Ltd. for the trial production of the body-in-white of an EP Vehicle.
Added
This poses a material risk to our financial stability and may materially and adversely impact our business, financial results and future prospects.” Seasonality There are certain seasonal fluctuations in China’s new energy vehicle sales market. Generally, September to December is the peak sales season, and January to February is the off-season.
Removed
Shandong Baoya committed to milestone-based payments in installments, upon mold opening, pre-delivery inspections, and final payments following post-delivery acceptance. The payment schedule was set from April 18, 2022, through March 31, 2023. Although the contract has not been renewed, it remains in force and both parties have not terminated the contract as of the date of this annual report.
Added
The auto industry is highly competitive and competition may intensify even further, which could negatively affect our market position and financial performance. We may be liable for improper use or appropriation of personal information provided by our customers. Our business involves collecting and retaining certain internal and customer data.
Removed
Development Agreement On May 8, 2021, Shandong Baoya entered into a development agreement with Jiangxi Dekai Carlight Co. Ltd. for exterior lighting in the FB77 project. Shandong Baoya agreed to pay in installments upon its approvals of developed products. Jiangxi Dekai Carlight Co. Ltd. agreed to pay a daily penalty for delays in delivering tooling samples acceptable to Shandong Baoya.
Added
We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customers, employees and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information.
Removed
The contract has not been fully completed due to delays in the construction of the Yantai electric vehicle manufacturing site. Although the contract has not been renewed, it remains in force, and both parties have not terminated the contract as of the date of this annual report.
Added
We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.
Removed
Construction Agreement On February 26, 2021, Shandong Baoya entered into a construction contract with Shandong Sanjian Construction Engineering Management Co. Ltd. for the construction of FAW Jilin new energy vehicle base project at Yantai Economic & Technological Development Area, Shandong Province, China.
Added
The PRC Criminal Law, as amended by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained in performing duties or providing services or obtaining such information through theft or other illegal ways.
Removed
The project is for an aggregated area of 114,580 square meters and an aggregated contract price of approximately RMB248 million (approximately US$34.9 million). This includes the construction of general assembly, stamping, painting, and welding workshops, each designed with robust steel structures to meet the project’s manufacturing requirements. The project was originally expected to be completed on June 30, 2022.
Added
On November 7, 2016, the Standing Committee of the National People’s Congress, or the SCNPC, issued the Cyber Security Law of the PRC, which became effective on June 1, 2017.
Removed
The contract has not been fully completed due to delays in the construction of the Yantai electric vehicle manufacturing site. Although the contract has not been renewed, it remains in force, and both parties have not terminated the contract as of the date of this annual report. Seasonality There are certain seasonal fluctuations in China’s new energy vehicle sales market.
Added
Pursuant to the Cyber Security Law of the PRC, network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services.
Removed
We consider our insurance coverage sufficient for our business operations in China.
Added
Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations.
Removed
We are currently not being fined/penalized for environmental violations. We are in compliance with all current environmental protection requirements under PRC laws and regulations.
Added
The Civil Code of the PRC (issued by the PRC National People’s Congress on May 28, 2020 and effective from January 1, 2021) provides legal basis for privacy and personal information infringement claims under the Chinese civil laws.
Removed
Contractual Dispute 454,737.44 Jilin High-Tech Industrial Development Zone People’s Court Stage of first instance trial 10 FAW Jilin China First Automobile Co., Ltd. Contractual Dispute 830,049.45 China International Economic and Trade Arbitration Commission Stage of first instance trial 11 FAW Jilin China First Automobile Co., Ltd.
Added
The Personal Information Protection Law aims at protecting the personal information rights and interests, regulating the processing of personal information, ensuring the orderly and free flow of personal information in accordance with the law and promoting the reasonable use of personal information.
Removed
Contractual Dispute 2,676,396.71 China International Economic and Trade Arbitration Commission Stage of first instance trial 12 FAW Jilin China First Automobile Co., Ltd. Contractual Dispute 4,438,315.60 China International Economic and Trade Arbitration Commission Stage of first instance trial 96 13 FAW Jilin China First Automobile Co., Ltd.
Added
The Personal Information Protection Law applies to the processing of personal information within China, as well as certain personal information processing activities outside China, including those for the provision of products and services to natural persons within China or for the analysis and assessment of acts of natural persons within China.
Removed
Contractual Dispute 63,155.34 China International Economic and Trade Arbitration Commission Stage of first instance trial 14 FAW Jilin China First Automobile Co., Ltd.
Added
As a result, our overseas subsidiaries could potentially become subject to the Personal Information Protection Law. Processors processing personal information exceeding the threshold to be set by the relevant authorities and CIIOs are required to store, within the territory of the PRC, all personal information collected and produced within the PRC.
Removed
Contractual Dispute 113,403.22 China International Economic and Trade Arbitration Commission Stage of first instance trial 15 FAW Jilin FAW Logistics (Changchun Lushun) Storage and Transportation Co., LTD Contractual Dispute 145,726.28 Jilin High-Tech Industrial Development Zone People’s Court Pending first instance trial 16 Qingjian Group Co., Ltd.
Added
In addition, the Personal Information Protection Law imposes pre-approval and other requirements for any cross-border data transfer by PRC entities. Given the Personal Information Protection Law is still in its infancy, there are uncertainties with respect to its interpretation and application. The PRC regulatory requirements regarding cybersecurity are evolving.
Removed
Bijie Yabei, Shandong Baoya Contractual Dispute 59,738.52 Qixingguan District People’s Court of Stage of first instance trial 17 Shandong Baoya Hunan Taide Automobile Air Conditioning Co., Ltd., Shanxi Taide Automobile Air Conditioning Co., Ltd.
Added
For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the State Administration for Market Regulation (the “ SAMR ”), have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations.
Removed
Shandong Baoya Contractual Disputes 445,640.08 / Application for jurisdictional objection 22 Jiangsu Wosu Automobile Parts Co. Ltd. Shandong Baoya Contractual Disputes 480,570.15 / Application for jurisdictional objection 23 Zhengzhou Dexin Automobile Parts Co.
Added
The Measures for Cybersecurity Review (2021 version) issued by the CAC on November 16, 2021, which became effective on February 15, 2022, includes the following key changes: ● companies who are engaged in data processing are also subject to the regulatory scope; ● the CSRC is included as one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review working mechanism; 74 ● the operators of critical information infrastructure and online platform operators holding more than one million users/users’ (which is to be further specified) individual information and seeking a listing outside China shall file for cybersecurity review with the Cybersecurity Review Office; and ● the risks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or transmitted to overseas parties and the risks of critical information infrastructure, core data, material data or large amounts of personal information being influenced, controlled or used maliciously shall be collectively taken into consideration during the cybersecurity review process.
Removed
Shandong Baoya Contractual Disputes 214,052.31 / Application for jurisdictional objection Despite the listing of status for items above, future events and outcomes may be different than currently reasonably expected by the Company. Amounts in controversy are converted into US dollar using the exchange rate as of December 31, 2023 (i.e., 1 USD = RMB 7.0999).
Added
On July 7, 2022, the CAC published the Measures for Security Assessment of Cross-border Data Transfers, which became effective on September 1, 2022 and specifies the circumstances in which data processors providing data outbound shall apply for outbound data transfer security assessment with the Cyberspace Administration, including, among others, the data processor provide important information outbound.
Removed
Cases No.1 to No. 6 have been settled through judgment effected. The settled amounts have been accrued and reflected in the consolidated financial statements for the year ended December 31, 2023. Cases No.7 to No.19 are in the stage of second instance trial or first instance trial or pending first instance trial.
Added
The assessment results of the data export are valid for three years. In addition, these provisions provide certain exemptions from obligations under the circumstances of cross-border data transfer, including, among others, the obligations for declaring data security assessment, concluding a standard contract for provisions of personal information abroad or passing the certification for personal information protection.
Removed
If a passenger vehicle enterprise fails to offset its negative credits, its new products, if the fuel consumption of which does not reach the target fuel consumption value for a certain vehicle models as specified in the Evaluation Methods and Indicators for the Fuel Consumption of Passenger Vehicles, will not be listed in the Announcement of the Vehicle Manufacturers and Products issued by the MIIT, or will not be granted the compulsory product certification, and the vehicle enterprises may be subject to penalties according to the relevant rules and regulations. 99 Regulations on Electric Vehicle Charging Infrastructure Pursuant to the Guidance Opinions of the General Office of the State Council on Accelerating the Promotion and Application of the New Energy Vehicles, which became effective on July 14, 2014, the Guidance Opinions of the General Office of the State Council on Accelerating the Development of Charging Infrastructures of the Electric Vehicle, which became effective on September 29, 2015, and the Development Plan for the New-energy Vehicle Industry (2021-2035), which became effective on October 20, 2020, the PRC government encourages the construction and development of charging infrastructure for electric vehicles, such as charging stations and battery swap stations, and only centralized charging and battery replacement power stations are required to obtain approvals for construction, permits from the relevant authorities.
Added
On December 16, 2022, the National Information Security Standardization Technical Committee issued the Practical Guidance on Cybersecurity Standard — the Regulations on Safety Verification in Cross-border Personal Information Processing, which stipulates personal information protection obligations of personal information processor and foreign recipient.

… 48 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

58 edited+3 added−2 removed86 unchanged
Holder’s basis in its shares of Chijet Motor (but not below zero), and any excess will be treated as gain from the sale or exchange of such shares as described below under “ Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of our Ordinary Shares .” Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of our Ordinary Shares Subject to the discussion below under “— Passive Foreign Investment Company Rules ,” upon a sale or other taxable disposition of Chijet Motor Ordinary Shares, a U.S.
Holder’s basis in its shares of Chijet Motor (but not below zero), and any excess will be treated as gain from the sale or exchange of such shares as described below under “ Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of our Ordinary Shares .” Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of our Ordinary Shares Subject to the discussion below under “— Passive Foreign Investment Company Rules ,” upon a sale or other taxable disposition of Class A Ordinary Shares, a U.S.
For capital-account transactions involving foreign direct investment, foreign debts and outbound investment in securities and derivatives, approval from SAFE is a pre-condition. Capital investments by foreign-invested enterprises outside China are subject to limitations and requirements in China, such as prior approvals from the PRC Ministry of Commerce or SAFE. 10.E.
For capital-account transactions involving foreign direct investment, foreign debts and outbound investment in securities and derivatives, approval from SAFE is a pre-condition. Capital investments by foreign-invested enterprises outside China are subject to limitations and requirements in China, such as prior approvals from the PRC Ministry of Commerce or SAFE. 126 10.E.
Holder does not make a mark-to-market election (or a QEF election, as discussed above) effective from the first taxable year of a U.S. Holder’s holding period for the Chijet Motor Ordinary Shares in which Chijet Motor is a PFIC, then the U.S. Holder generally will remain subject to the excess distribution rules. A U.S.
Holder does not make a mark-to-market election (or a QEF election, as discussed above) effective from the first taxable year of a U.S. Holder’s holding period for the Class A Ordinary Shares in which Chijet Motor is a PFIC, then the U.S. Holder generally will remain subject to the excess distribution rules. A U.S.
Specifically, Code Section 7874 can apply in this manner if (i) the foreign corporation acquires, directly or indirectly, substantially all of the properties held directly or indirectly by a U.S. corporation, (ii) after the acquisition, the former shareholders of the acquired U.S. corporation hold at least 60% (by either vote or value) but less than 80% (by vote and value) of the shares of the foreign acquiring corporation by reason of holding shares in the acquired U.S. corporation, and (iii) the foreign corporation’s “expanded affiliated group” does not meet the Substantial Business Activities Exception. 153 Based upon the terms of the Business Combination, the rules for determining share ownership under Section 7874 of the Code and the Section 7874 Regulations, and certain factual assumptions, we currently expect that the Section 7874 Percentage of JWAC stockholders in Chijet Motor were less than 60% after the Business Combination.
Specifically, Code Section 7874 can apply in this manner if (i) the foreign corporation acquires, directly or indirectly, substantially all of the properties held directly or indirectly by a U.S. corporation, (ii) after the acquisition, the former shareholders of the acquired U.S. corporation hold at least 60% (by either vote or value) but less than 80% (by vote and value) of the shares of the foreign acquiring corporation by reason of holding shares in the acquired U.S. corporation, and (iii) the foreign corporation’s “expanded affiliated group” does not meet the Substantial Business Activities Exception. 131 Based upon the terms of the Business Combination, the rules for determining share ownership under Section 7874 of the Code and the Section 7874 Regulations, and certain factual assumptions, we currently expect that the Section 7874 Percentage of JWAC stockholders in Chijet Motor were less than 60% after the Business Combination.
Holder will be deemed to have sold its Chijet Motor Ordinary Shares at their fair market value on the last day of the last taxable year in which Chijet Motor is classified as a PFIC, and any gain from such deemed sale would be subject to the consequences described below.
Holder will be deemed to have sold its Class A Ordinary Shares at their fair market value on the last day of the last taxable year in which Chijet Motor is classified as a PFIC, and any gain from such deemed sale would be subject to the consequences described below.
Any net deficits or net capital losses of Chijet Motor for a taxable year, however, would not be passed through and included on the tax return of the U.S. Holder. A U.S. Holder’s basis in the Chijet Motor Ordinary Shares would be increased by the amount of income inclusions under the QEF rules.
Any net deficits or net capital losses of Chijet Motor for a taxable year, however, would not be passed through and included on the tax return of the U.S. Holder. A U.S. Holder’s basis in the Class A Ordinary Shares would be increased by the amount of income inclusions under the QEF rules.
If Chijet Motor is a PFIC, a U.S. Holder of shares in Chijet Motor may avoid taxation under the excess distribution rules described above in respect to the Chijet Motor Ordinary Shares by making a timely and valid “qualified electing fund” (“ QEF ”) election (if eligible to do so). However, a U.S.
If Chijet Motor is a PFIC, a U.S. Holder of shares in Chijet Motor may avoid taxation under the excess distribution rules described above in respect to the Class A Ordinary Shares by making a timely and valid “qualified electing fund” (“ QEF ”) election (if eligible to do so). However, a U.S.
Holder from making a QEF election or result in the invalidation or termination of a U.S. Holder’s prior QEF election. A U.S. Holder that makes a QEF election with respect to its Chijet Motor Ordinary Shares would generally be required to include in income for each year that Chijet Motor is treated as a PFIC the U.S.
Holder from making a QEF election or result in the invalidation or termination of a U.S. Holder’s prior QEF election. A U.S. Holder that makes a QEF election with respect to its Class A Ordinary Shares would generally be required to include in income for each year that Chijet Motor is treated as a PFIC the U.S.
Dividends actually paid on the Chijet Motor Ordinary Shares generally would not be subject to U.S. federal income tax to the extent of prior income inclusions and would reduce the U.S. Holder’s basis in the Chijet Motor Ordinary Shares by a corresponding amount. If Chijet Motor owns any interests in a Lower-Tier PFIC, a U.S.
Dividends actually paid on the Class A Ordinary Shares generally would not be subject to U.S. federal income tax to the extent of prior income inclusions and would reduce the U.S. Holder’s basis in the Class A Ordinary Shares by a corresponding amount. If Chijet Motor owns any interests in a Lower-Tier PFIC, a U.S.
Holder has made a valid “QEF election” (as described below) for the first taxable year in which the holder owned such holder’s Chijet Motor Ordinary Shares in which Chijet Motor was a PFIC, (b) a valid mark-to-market election (as described below) is in effect for the particular year, or (c) the U.S.
Holder has made a valid “QEF election” (as described below) for the first taxable year in which the holder owned such holder’s Class A Ordinary Shares in which Chijet Motor was a PFIC, (b) a valid mark-to-market election (as described below) is in effect for the particular year, or (c) the U.S.
Holder may make a QEF election with respect to its Chijet Motor Ordinary Shares only if Chijet Motor provides U.S. Holders on an annual basis with certain financial information specified under applicable U.S. Treasury regulations, including the information provided in a PFIC Annual Information Statement.
Holder may make a QEF election with respect to its Class A Ordinary Shares only if Chijet Motor provides U.S. Holders on an annual basis with certain financial information specified under applicable U.S. Treasury regulations, including the information provided in a PFIC Annual Information Statement.
Holder generally will include in income for each year that Chijet Motor is treated as a PFIC with respect to such Chijet Motor Ordinary Shares an amount equal to the excess, if any, of the fair market value of the Chijet Motor Ordinary Shares as of the close of the U.S.
Holder generally will include in income for each year that Chijet Motor is treated as a PFIC with respect to such Class A Ordinary Shares an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares as of the close of the U.S.
After the “deemed sale” election, the Chijet Motor Ordinary Shares with respect to which the “deemed sale” election was made will not be treated as shares in a PFIC unless Chijet Motor subsequently becomes a PFIC. For each taxable year that Chijet Motor is treated as a PFIC with respect to a U.S. Holder’s Chijet Motor Ordinary Shares, the U.S.
After the “deemed sale” election, the Class A Ordinary Shares with respect to which the “deemed sale” election was made will not be treated as shares in a PFIC unless Chijet Motor subsequently becomes a PFIC. For each taxable year that Chijet Motor is treated as a PFIC with respect to a U.S. Holder’s Class A Ordinary Shares, the U.S.
However, according to Circular 81, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. Certain Material U.S.
However, according to Circular 81, if the relevant tax authorities consider the transactions or arrangements, we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. 128 Certain Material U.S.
Holders of Chijet Motor Ordinary Shares could be materially different from that described above, if Chijet Motor is treated as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes.
Holders of Class A Ordinary Shares could be materially different from that described above, if Chijet Motor is treated as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes.
Holder’s holding period for the Chijet Motor Ordinary Shares in which Chijet Motor is a PFIC (or a mark-to-market election, as discussed below), then the U.S. Holder generally will remain subject to the excess distribution rules. A U.S.
Holder’s holding period for the Class A Ordinary Shares in which Chijet Motor is a PFIC (or a mark-to-market election, as discussed below), then the U.S. Holder generally will remain subject to the excess distribution rules. A U.S.
Holder owns Chijet Motor Ordinary Shares, Chijet Motor would generally continue to be treated as a PFIC with respect to such holder in a particular year unless (i) Chijet Motor has ceased to be a PFIC and (ii) (a) the U.S.
Holder owns Class A Ordinary Shares, Chijet Motor would generally continue to be treated as a PFIC with respect to such holder in a particular year unless (i) Chijet Motor has ceased to be a PFIC and (ii) (a) the U.S.
Holder means a beneficial owner of Chijet Motor Ordinary Shares that is, for U.S. federal income tax purposes: an individual who is a citizen or resident of the United States; a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States or any state therein or the District of Columbia; an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or a trust (i) that is subject to the primary supervision of a court within the United States and all substantial decisions of which are controlled by one or more U.S. persons or (ii) that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.
Holder means a beneficial owner of Class A Ordinary Shares that is, for U.S. federal income tax purposes: an individual who is a citizen or resident of the United States; a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States or any state therein or the District of Columbia; an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or a trust (i) that is subject to the primary supervision of a court within the United States and all substantial decisions of which are controlled by one or more U.S. persons or (ii) that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.
Holder holds the Chijet Motor Ordinary Shares as capital assets. Certain of the PFIC rules may impact U.S. Holders with respect to equity interests in subsidiaries and other entities which Chijet Motor may hold, directly or indirectly, that are PFICs (collectively, “ Lower-Tier PFICs ”).
Holder holds the Class A Ordinary Shares as capital assets. Certain of the PFIC rules may impact U.S. Holders with respect to equity interests in subsidiaries and other entities which Chijet Motor may hold, directly or indirectly, that are PFICs (collectively, “ Lower-Tier PFICs ”).
Holders are strongly encouraged to consult their tax advisors regarding the application of the PFIC rules to their particular circumstances. 157 Information Reporting Requirements and Backup Withholding Information reporting requirements may apply to dividends received by U.S. Holders of ordinary shares, and the proceeds received on the disposition of ordinary shares effected within the U.S.
Holders are strongly encouraged to consult their tax advisors regarding the application of the PFIC rules to their particular circumstances. 135 Information Reporting Requirements and Backup Withholding Information reporting requirements may apply to dividends received by U.S. Holders of ordinary shares, and the proceeds received on the disposition of ordinary shares effected within the U.S.
Holder will be subject to special tax rules with respect to any “excess distribution” (as defined below) received and any gain realized from a sale or disposition (including a pledge of Chijet Motor Ordinary Shares and under proposed regulations certain transfers of Chijet Motor Ordinary Shares that would otherwise qualify as nonrecognition transactions for U.S. federal income tax purposes) of its Chijet Motor Ordinary Shares (collectively the “ excess distribution rules ”), unless, with respect to the Chijet Motor Ordinary Shares, the U.S.
Holder will be subject to special tax rules with respect to any “excess distribution” (as defined below) received and any gain realized from a sale or disposition (including a pledge of Class A Ordinary Shares and under proposed regulations certain transfers of Class A Ordinary Shares that would otherwise qualify as nonrecognition transactions for U.S. federal income tax purposes) of its Class A Ordinary Shares (collectively the “ excess distribution rules ”), unless, with respect to the Class A Ordinary Shares, the U.S.
The Section 7874 rules are complex and require analysis of all relevant facts, and there is limited guidance and significant uncertainties as to their application. 152 Under Code Section 7874, a corporation created or organized outside the U.S.
The Section 7874 rules are complex and require analysis of all relevant facts, and there is limited guidance and significant uncertainties as to their application. 130 Under Code Section 7874, a corporation created or organized outside the U.S.
In subsequent years for which a valid mark-to-mark election remains in effect, the excess distribution rules generally will not apply. A U.S. Holder that is eligible to make a mark-to-market with respect to such holder’s Chijet Motor Ordinary Shares may do so by providing the appropriate information on IRS Form 8621 and timely filing that form with the U.S.
In subsequent years for which a valid mark-to-mark election remains in effect, the excess distribution rules generally will not apply. A U.S. Holder that is eligible to make a mark-to-market with respect to such holder’s Class A Ordinary Shares may do so by providing the appropriate information on IRS Form 8621 and timely filing that form with the U.S.
Holder will be deemed to have sold the Chijet Motor Ordinary Shares at their fair market value on the first day of the taxable year in which the QEF election becomes effective, and any gain from such deemed sale would be subject to the excess distribution rules described above. As a result of the “deemed sale” election, the U.S.
Holder will be deemed to have sold the Class A Ordinary Shares at their fair market value on the first day of the taxable year in which the QEF election becomes effective, and any gain from such deemed sale would be subject to the excess distribution rules described above. As a result of the “deemed sale” election, the U.S.
Holder will have additional basis (to the extent of any gain recognized on the deemed sale) and, solely for purposes of the PFIC rules, a new holding period in the Chijet Motor Ordinary Shares. The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S.
Holder will have additional basis (to the extent of any gain recognized on the deemed sale) and, solely for purposes of the PFIC rules, a new holding period in the Class A Ordinary Shares. The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S.
Holder that does not make the applicable QEF elections generally will continue to be subject to the excess distribution rules with respect to its indirect interest in any Lower-Tier PFICs as described above, even if a mark-to-market election is made for Chijet Motor Ordinary Shares. If a U.S.
Holder that does not make the applicable QEF elections generally will continue to be subject to the excess distribution rules with respect to its indirect interest in any Lower-Tier PFICs as described above, even if a mark-to-market election is made for Class A Ordinary Shares. If a U.S.
Long-term capital gains recognized by non-corporate U.S. Holders will be eligible to be taxed at reduced rates. The deductibility of capital losses realized by a U.S. Holder on a sale or other taxable disposition of Chijet Motor Ordinary Shares is subject to certain limitations. Generally, the amount of gain or loss recognized by a U.S.
Long-term capital gains recognized by non-corporate U.S. Holders will be eligible to be taxed at reduced rates. The deductibility of capital losses realized by a U.S. Holder on a sale or other taxable disposition of Class A Ordinary Shares is subject to certain limitations. Generally, the amount of gain or loss recognized by a U.S.
Holder may make a mark-to-market election for such holder’s Chijet Motor Ordinary Shares with respect to such shares for the first taxable year in which it holds (or is deemed to hold) Chijet Motor Ordinary Shares and each subsequent taxable year to elect out of the excess distribution rules discussed above. If a U.S.
Holder may make a mark-to-market election for such holder’s Class A Ordinary Shares with respect to such shares for the first taxable year in which it holds (or is deemed to hold) Class A Ordinary Shares and each subsequent taxable year to elect out of the excess distribution rules discussed above. If a U.S.
Holder’s pro rata share of Chijet Motor’s ordinary earnings for the year (which would be subject to tax as ordinary income) and net capital gains for the year (which would be subject to tax at the rates applicable to long-term capital gains), without regard to the amount of any distributions made in respect of the Chijet Motor Ordinary Shares.
Holder’s pro rata share of Chijet Motor’s ordinary earnings for the year (which would be subject to tax as ordinary income) and net capital gains for the year (which would be subject to tax at the rates applicable to long-term capital gains), without regard to the amount of any distributions made in respect of the Class A Ordinary Shares.
Holder that is eligible to make a QEF election with respect to its Chijet Motor Ordinary Shares generally may do so by providing the appropriate information to the IRS in the U.S. Holder’s timely filed tax return for the year in which the election becomes effective.
Holder that is eligible to make a QEF election with respect to its Class A Ordinary Shares generally may do so by providing the appropriate information to the IRS in the U.S. Holder’s timely filed tax return for the year in which the election becomes effective.
Holder that first makes a mark-to-market election with respect to the Chijet Motor Ordinary Shares in a later year will continue to be subject to the excess distribution rules during the taxable year for which the mark-to-market election becomes effective, including with respect to any mark-to-market gain recognized at the end of that year.
Holder that first makes a mark-to-market election with respect to the Class A Ordinary Shares in a later year will continue to be subject to the excess distribution rules during the taxable year for which the mark-to-market election becomes effective, including with respect to any mark-to-market gain recognized at the end of that year.
If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless Chijet Motor Ordinary Shares cease to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consents to the revocation of the election.
If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless Class A Ordinary Shares cease to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consents to the revocation of the election.
Holders should consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances. 156 Alternatively, if Chijet Motor is a PFIC and Chijet Motor Ordinary Shares constitute “marketable stock” (as defined below), a U.S.
Holders should consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances. 134 Alternatively, if Chijet Motor is a PFIC and Class A Ordinary Shares constitute “marketable stock” (as defined below), a U.S.
Holder on a sale or other taxable disposition of the Chijet Motor Ordinary Shares is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such sale or disposition and (ii) the U.S.
Holder on a sale or other taxable disposition of the Class A Ordinary Shares is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such sale or disposition and (ii) the U.S.
Holder’s taxable year over the adjusted basis in the Chijet Motor Ordinary Shares as of the beginning of such taxable year. A U.S. Holder will be allowed a deduction for the excess, if any, of the adjusted basis of the Chijet Motor Ordinary Shares over their fair market value as of the close of the taxable year.
Holder’s taxable year over the adjusted basis in the Class A Ordinary Shares as of the beginning of such taxable year. A U.S. Holder will be allowed a deduction for the excess, if any, of the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year.
Holder that first makes a QEF election in a later year may avoid the continued application of the excess distribution rules to its Chijet Motor Ordinary Shares by making a “deemed sale” election. In that case, the U.S.
Holder that first makes a QEF election in a later year may avoid the continued application of the excess distribution rules to its Class A Ordinary Shares by making a “deemed sale” election. In that case, the U.S.
Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the ordinary shares. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period in the Chijet Motor Ordinary Shares exceeds one year.
Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the ordinary shares. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period in the Class A Ordinary Shares exceeds one year.
Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the Chijet Motor Ordinary Shares, as well as to any loss realized on the actual sale or disposition of the Chijet Motor Ordinary Shares, to the extent the amount of such loss does not exceed the net mark-to-market gains for such Chijet Motor Ordinary Shares previously included in income.
Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the Class A Ordinary Shares, as well as to any loss realized on the actual sale or disposition of the Class A Ordinary Shares, to the extent the amount of such loss does not exceed the net mark-to-market gains for such Class A Ordinary Shares previously included in income.
Amounts included in income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Chijet Motor Ordinary Shares, will be treated as ordinary income.
Amounts included in income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, will be treated as ordinary income.
Holder’s holding period for the Chijet Motor Ordinary Shares that preceded the taxable year of the distribution will be treated as excess distributions. Under these special tax rules: ● the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the Chijet Motor Ordinary Shares; ● the amount allocated to the U.S.
Holder’s holding period for the Class A Ordinary Shares that preceded the taxable year of the distribution will be treated as excess distributions. Under these special tax rules: ● the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the Class A Ordinary Shares; ● the amount allocated to the U.S.
Holder with respect to the resulting tax attributable to each such year. 155 Under the excess distribution rules, the tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses, and gains (but not losses) realized on the sale of the Chijet Motor Ordinary Shares cannot be treated as capital gains, even though the U.S.
Holder with respect to the resulting tax attributable to each such year. 133 Under the excess distribution rules, the tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital gains, even though the U.S.
Partnerships that hold Chijet Motor Ordinary Shares and persons that are treated as partners of such partnerships should consult their own tax advisors as to the particular U.S. federal income tax consequences to them of the ownership and disposition of our ordinary shares. THE U.S.
Partnerships that hold Class A Ordinary Shares and persons that are treated as partners of such partnerships should consult their own tax advisors as to the particular U.S. federal income tax consequences to them of the ownership and disposition of our ordinary shares. THE U.S.
The Chijet Motor Ordinary Shares, which are listed on Nasdaq, are expected to qualify as marketable stock for purposes of the PFIC rules, but there can be no assurance that Chijet Motor Ordinary Shares will be “regularly traded” for purposes of these rules.
The Class A Ordinary Shares, which are listed on Nasdaq, are expected to qualify as marketable stock for purposes of the PFIC rules, but there can be no assurance that Class A Ordinary Shares will be “regularly traded” for purposes of these rules.
However, deductions will be allowed only to the extent of any net mark-to-market gains on the Chijet Motor Ordinary Shares included in the U.S. Holder’s income for prior taxable years.
However, deductions will be allowed only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in the U.S. Holder’s income for prior taxable years.
A U.S. Holder’s basis in the Chijet Motor Ordinary Shares will be adjusted to reflect any mark-to-market gain or loss. If a U.S.
A U.S. Holder’s basis in the Class A Ordinary Shares will be adjusted to reflect any mark-to-market gain or loss. If a U.S.
Holder generally will be required to include in gross income as dividends the amount of any distribution (except certain distributions of ordinary shares or rights to acquire ordinary shares) paid on the Chijet Motor Ordinary Shares.
Holder generally will be required to include in gross income as dividends the amount of any distribution (except certain distributions of ordinary shares or rights to acquire ordinary shares) paid on the Class A Ordinary Shares.
Holder’s adjusted tax basis in the applicable Chijet Motor Ordinary Shares so sold or disposed. A U.S. Holder’s adjusted tax basis in the Chijet Motor Ordinary Shares generally will equal the U.S. Holder’s acquisition cost of such shares. 154 Passive Foreign Investment Company Rules The treatment of U.S.
Holder’s adjusted tax basis in the applicable Class A Ordinary Shares so sold or disposed. A U.S. Holder’s adjusted tax basis in the Class A Ordinary Shares generally will equal the U.S. Holder’s acquisition cost of such shares. 132 Passive Foreign Investment Company Rules The treatment of U.S.
This summary does not discuss all aspects of U.S. federal income taxation that might be relevant to a particular holder of our ordinary shares in light of such holder’s individual circumstances or status, nor does it address tax consequences applicable to holders of our ordinary shares subject to special rules, such as: ● dealers in securities or foreign currency; ● broker-dealers; ● traders in securities that elect to use a mark-to-market method of accounting; ● tax-exempt organizations; ● financial institutions, banks or trusts; ● mutual funds; ● life insurance companies, real estate investment trusts and regulated investment companies; ● holders that actually or constructively own 10% or more of our voting stock; ● holders that hold Chijet Motor Ordinary Shares as part of a hedge, straddle, constructive sale, conversion transaction or other integrated investment; ● holders that have a functional currency other than the U.S. dollar; ● holders that received Chijet Motor Ordinary Shares through the exercise of employee stock options, through a tax-qualified retirement plan or otherwise as compensation; ● U.S. expatriates; ● controlled foreign corporations; ● persons subject to special tax accounting rules as a result of any item of gross income with respect to Chijet Motor Ordinary Shares being taken into account in an applicable financial statement; ● passive foreign investment companies; or ● pass-through entities or investors in pass-through entities. 151 This summary is based on the Code, applicable Treasury regulations thereunder, and judicial and administrative interpretations thereof, all as in effect as of the date of this annual report, and all of which may change, possibly with retroactive effect.
This summary does not discuss all aspects of U.S. federal income taxation that might be relevant to a particular holder of our ordinary shares in light of such holder’s individual circumstances or status, nor does it address tax consequences applicable to holders of our ordinary shares subject to special rules, such as: ● dealers in securities or foreign currency; ● broker-dealers; ● traders in securities that elect to use a mark-to-market method of accounting; ● tax-exempt organizations; ● financial institutions, banks or trusts; ● mutual funds; ● life insurance companies, real estate investment trusts and regulated investment companies; ● holders that actually or constructively own 10% or more of our voting stock; ● holders that hold Class A Ordinary Shares as part of a hedge, straddle, constructive sale, conversion transaction or other integrated investment; ● holders that have a functional currency other than the U.S. dollar; ● holders that received Class A Ordinary Shares through the exercise of employee stock options, through a tax-qualified retirement plan or otherwise as compensation; ● U.S. expatriates; ● controlled foreign corporations; ● persons subject to special tax accounting rules as a result of any item of gross income with respect to Class A Ordinary Shares being taken into account in an applicable financial statement; ● passive foreign investment companies; or ● pass-through entities or investors in pass-through entities.
The discussion set forth below is addressed only to U.S. Holders of our ordinary shares. Chijet Motor has not and does not intend to seek any rulings from the U.S. Internal Revenue Service (the “IRS”) regarding the subjects addressed in this summary.
Holders of our ordinary shares. Chijet Motor has not and does not intend to seek any rulings from the U.S. Internal Revenue Service (the “IRS”) regarding the subjects addressed in this summary.
In particular, holders of Chijet Motor Ordinary Shares would be treated as holders of stock of a U.S. corporation.
In particular, holders of Class A Ordinary Shares would be treated as holders of stock of a U.S. corporation.
Holder makes a mark-to-market election with respect to its Chijet Motor Ordinary Shares, such U.S.
Holder makes a mark-to-market election with respect to its Class A Ordinary Shares, such U.S.
In addition, State Administration of Taxation (SAT) Circular 82 issued in April 2009 specifies that certain offshore-incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if all of the following conditions are met: (a) senior management personnel and core management departments in charge of the daily operations of the enterprises have their presence mainly in the PRC; (b) their financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) major assets, accounting books and company seals of the enterprises, and minutes and files of their board’s and shareholders’ meetings are located or kept in the PRC; and (d) half or more of the enterprises’ directors or senior management personnel with voting rights habitually reside in the PRC.
Under the Implementation Rules, a “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise. 127 In addition, State Administration of Taxation (SAT) Circular 82 issued in April 2009 specifies that certain offshore-incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if all of the following conditions are met: (a) senior management personnel and core management departments in charge of the daily operations of the enterprises have their presence mainly in the PRC; (b) their financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) major assets, accounting books and company seals of the enterprises, and minutes and files of their board’s and shareholders’ meetings are located or kept in the PRC; and (d) half or more of the enterprises’ directors or senior management personnel with voting rights habitually reside in the PRC.
These concessions shall be for a period of 20 years from the date hereof. 149 People’s Republic of China Taxation Under the Enterprise Income Tax Law, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations.
People’s Republic of China Taxation Under the Enterprise Income Tax Law, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations.
Any such change could impact the conclusions discussed below. This summary does not address U.S. federal taxes other than those pertaining to U.S. federal income taxation (such as estate or gift taxes, the alternative minimum tax or the Medicare tax on investment income), nor does it address any aspects of U.S. state or local or non-U.S. taxation.
This summary does not address U.S. federal taxes other than those pertaining to U.S. federal income taxation (such as estate or gift taxes, the alternative minimum tax or the Medicare tax on investment income), nor does it address any aspects of U.S. state or local or non-U.S. taxation. The discussion set forth below is addressed only to U.S.
It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law. 148 Under Existing Cayman Islands Laws Payments of dividends and capital in respect of our Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Ordinary Shares nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax.
Under Existing Cayman Islands Laws Payments of dividends and capital in respect of our Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Ordinary Shares nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax.
Pursuant to the Arrangement between the mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority. 150 Pursuant to the Circular of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements (“Circular 81”), a resident enterprise of the counter-party to such Tax Arrangement should meet all of the following conditions, among others, in order to enjoy the reduced withholding tax under the Tax Arrangement: (i) it must take the form of a company; (ii) it must directly own the required percentage of equity interests and voting rights in such PRC resident enterprise; and (iii) it should directly own such percentage of capital in the PRC resident enterprise anytime in the 12 consecutive months prior to receiving the dividends.
Pursuant to the Circular of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements (“Circular 81”), a resident enterprise of the counter-party to such Tax Arrangement should meet all of the following conditions, among others, in order to enjoy the reduced withholding tax under the Tax Arrangement: (i) it must take the form of a company; (ii) it must directly own the required percentage of equity interests and voting rights in such PRC resident enterprise; and (iii) it should directly own such percentage of capital in the PRC resident enterprise anytime in the 12 consecutive months prior to receiving the dividends.
If a partnership (or any entity or arrangement characterized as a partnership for U.S. federal income tax purposes) holds Chijet Motor Ordinary Shares, the tax treatment of such partnership and any person treated as a partner of such partnership will generally depend on the status of the partner and the activities of the partnership.
There can be no assurance that the IRS will not take positions inconsistent with the consequences discussed below or that any such positions would not be sustained by a court. 129 If a partnership (or any entity or arrangement characterized as a partnership for U.S. federal income tax purposes) holds Class A Ordinary Shares, the tax treatment of such partnership and any person treated as a partner of such partnership will generally depend on the status of the partner and the activities of the partnership.
The discussion is a general summary of present law, which is subject to prospective and retroactive change.
The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Removed
Under the Implementation Rules, a “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise.
Added
These concessions shall be for a period of 20 years from the date hereof.
Removed
There can be no assurance that the IRS will not take positions inconsistent with the consequences discussed below or that any such positions would not be sustained by a court.
Added
Pursuant to the Arrangement between the mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority.
Added
This summary is based on the Code, applicable Treasury regulations thereunder, and judicial and administrative interpretations thereof, all as in effect as of the date of this annual report, and all of which may change, possibly with retroactive effect. Any such change could impact the conclusions discussed below.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

63 edited+17 added−16 removed33 unchanged
Information on the Company—B. Business Overview— Technology Research and Development ” and “ Item 4. Information on the Company—B. Business Overview—Intellectual Property .” D.
Business Overview— Technology Research and Development ” and “ Item 4. Information on the Company—B. Business Overview—Intellectual Property .” D.
Our general and administrative expenses consist primarily of employee compensation for employees involved in general corporate functions and those not specifically dedicated to R&D activities, share-based compensation, depreciation and amortization expenses, legal, and other professional services fees, lease and other general corporate related expenses. 116 Impairment charge The Company periodically reviews assets for impairment.
Our general and administrative expenses consist primarily of employee compensation for employees involved in general corporate functions and those not specifically dedicated to R&D activities, share-based compensation, depreciation and amortization expenses, legal, and other professional services fees, lease and other general corporate related expenses. Impairment charge The Company periodically reviews assets for impairment.
Other income Other income primarily consists of income from non-operating activities and profit or loss of disposition of non-current assets. Interest income Interest income primarily consists of interest earned on our cash, cash equivalents, short-term investments and deposits held in designated bank accounts. Interest expenses Interest expense primarily consists of accrued and paid interest on short and long-term obligations.
Other income Other income primarily consists of income from non-operating activities and profit or loss of disposition of non-current assets. Interest income Interest income primarily consists of interest earned on our cash, cash equivalents, short-term investments and deposits held in designated bank accounts. 96 Interest expenses Interest expense primarily consists of accrued and paid interest on short and long-term obligations.
An impairment loss would be recorded whenever the fair value of an asset is determined to be below its carrying value. The Company considers whether the fair value of our asset has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable.
An impairment loss would be recorded whenever the fair value of an asset is determined to be below its carrying value. The Company considers whether the fair value of our assets has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable.
Trend information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2023 to December 31, 2023 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2024 to December 31, 2024 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Additionally, consumers are looking for vehicles with enhanced technological safety features such as driver assistance systems, including automatic emergency braking, lane departure warning, blind spot monitoring, 360-degree cameras, adaptive cruise control, parking sensors, and semi-autonomous driving systems. 2. Company specific factors The year of 2023 has been critical for our strategic transformation and development.
Additionally, consumers are looking for vehicles with enhanced technological safety features such as driver assistance systems, including automatic emergency braking, lane departure warning, blind spot monitoring, 360-degree cameras, adaptive cruise control, parking sensors, and semi-autonomous driving systems. 2. Company specific factors The year of 2024 has been critical for our strategic transformation and development.
For assets that are deemed to not be recoverable, we write-down the impaired asset to its estimated fair value. 123 Impairment of indefinite-lived intangible assets Intangible assets with indefinite lives are tested for impairment at least annually as of each balance sheet date and more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired in accordance with ASC 350.
For assets that are deemed to not be recoverable, we write down the impaired asset to its estimated fair value. 103 Impairment of indefinite-lived intangible assets Intangible assets with indefinite lives are tested for impairment at least annually as of each balance sheet date and more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired in accordance with ASC 350.
The vehicle size is 4,505×1,835×1,695mm, with a wheelbase of 2700mm, battery capacity of 17.52kWh, internal combustion engine (ICE) of 81/110k and the cruising range of more than 1100 kilometers. ● Chijet FB77 is a new pure electric flagship sedan designed for mid-class consumers. The model has the characteristics of high intelligence, large space, and long battery life.
The vehicle size is 4,505×1,835×1,695mm, with a wheelbase of 2700mm, battery capacity of 17.52kWh, internal combustion engine (ICE) of 81/110k and the cruising range of more than 1100 kilometers. ● The Chijet FB77 is a new pure electric flagship sedan designed for middle-class consumers. The model has the characteristics of high intelligence, large space, and long battery life.
In consideration of the growing electric vehicle industry in China, our improving financial performance, the stable macroeconomic conditions in China, and our future manufacturing plans, we determined that it is not likely that the indefinite-lived intangible assets were impaired as of December 31, 2021, 2022, and 2023. F.
In consideration of the growing electric vehicle industry in China, our improving financial performance, the stable macroeconomic conditions in China, and our future manufacturing plans, we determined that it is not likely that the indefinite-lived intangible assets were impaired as of December 31, 2022, 2023, and 2024. F.
Government grant Our government grant represented government subsidies received by our PRC based subsidies from certain local governments. Government subsidies primarily consists of specific subsidies that the local government has provided for a specific purpose, such as land fulfillment costs and production and capacity subsidies related to the manufacturing plant construction.
Government grant Our government grant represented government subsidies received by our PRC based subsidies from certain local governments. Government subsidies primarily consist of specific subsidies that the local government has provided for a specific purpose, such as land fulfillment costs and production and capacity subsidies related to the manufacturing plant construction.
(Loss) /Gain on equity investment (Loss) /Gain on equity investment primarily consists of the changes in fair value of our investment in unconsolidated subsidiaries. Other expenses Other expenses primarily consist of expense of non-operating activities. Taxation Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction.
(Loss) /Gain on equity investment (Loss) /Gain on equity investment primarily consists of the changes in fair value of our investments in unconsolidated subsidiaries. Other expenses Other expenses primarily consist of expenses of non-operating activities. Taxation Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction.
As of December 31, 2022 and 2023, the Company did not have any significant unrecognized uncertain tax positions. Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.
As of December 31, 2023 and 2024, the Company did not have any significant unrecognized uncertain tax positions. 97 Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the consolidated financial statements and their respective tax basis, and operating loss carryforwards.
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the consolidated financial statements and their respective tax basis, and operating loss carry forwards.
We use continuing operating losses and significant adverse change in the extent in which the individual asset/asset group is being used as our primary indicator of potential impairment for our impairment testing. We firstly determine the unit of account for testing long-lived assets when indicators of impairment present.
We use continuing operating losses and significant adverse changes in the extent in which the individual asset/asset group is being used as our primary indicator of potential impairment for our impairment testing. We firstly determine the unit of account for testing long-lived assets when indicators of impairment are present.
The vehicle size is 4,695×1,870×1,500mm, with a wheelbase of 2,825mm, and the cruising range of 600 kilometers. 113 Key Factors Affecting Our Results of Operations 1. Industry trends 2023 is a year of high-quality growth for China’s new energy passenger vehicles.
The vehicle size is 4,695×1,870×1,500mm, with a wheelbase of 2,825mm, and the cruising range of 600 kilometers. 93 Key Factors Affecting Our Results of Operations 1. Industry trends 2024 is a year of high-quality growth for China’s new energy passenger vehicles.
Research and development expenses Our R&D expenses decreased by 39% from US$13,772 thousand in 2022 to US$8,398 thousand in 2023, primarily attributable to (i) a decrease from our R&D plan actively adjusted to match the financing progress, with corresponding R&D expenses occurring in the future; (2) some R&D projects completed during 2023, with less corresponding R&D expenses occurred compared to which in 2022.
Research and development expenses Our R&D expenses decreased by 39% from US$13.77 million in 2022 to US$8.40 million in 2023, primarily attributable to (i) a decrease from our R&D plan actively adjusted to match the financing progress, with corresponding R&D expenses occurring in the future; (2) some R&D projects completed during 2023, with less corresponding R&D expenses occurred compared to which in 2022.
At the same time, we actively expanded online and overseas channels in the second half of 2023, narrowing the sales decrease during the transformation period. The decrease in revenue was also caused by the fact that sales of vehicle parts, accessories and others decreased by 46% from US$3,331 thousand in 2022 to US$1,803 thousand in 2023.
At the same time, we actively expanded online and overseas channels in the second half of 2023, narrowing the sales decrease during the transformation period. The decrease in revenue was also caused by the fact that sales of vehicle parts, accessories and others decreased by 46% from US$3.33 million in 2022 to US$1.80 million in 2023.
We expect our capital expenditures to continue to be significant in the foreseeable future as we continue to invest in research and development and expand our business to meet our business growth. 122 Holding Company Structure See “ Item 3. Key Information—Our Holding Company Structure .” C. Research and Development, Patents and Licenses, etc. See “ Item 4.
We expect our capital expenditures to continue to be significant in the foreseeable future as we continue to invest in expanding our business to meet our business growth. 102 Holding Company Structure See “ Item 3. Key Information—Our Holding Company Structure .” C. Research and Development, Patents and Licenses, etc. See “ Item 4. Information on the Company—B.
Selling, general and administrative expenses Our selling, general and administrative expenses decreased by 28% from US$65,324 thousand in 2022 to US$47,281 thousand in 2023, which was mainly due to the recognition of approximately US$22,900 thousand of expenses related to warrants to Greentree and professional services fees related to IPO in 2022, while the amounts of such expenses were relatively small in 2023.
Selling, general and administrative expenses Our selling, general and administrative expenses decreased by 28% from US$65.32 million in 2022 to US$47.28 million in 2023, which was mainly due to the recognition of approximately US$22.90 million of expenses related to warrants to Greentree and professional services fees related to IPO in 2022, while the amounts of such expenses were relatively small in 2023.
Impairment charge Our impairment charge decreased by 66% from US$842 thousand in 2022 to US$283 thousand in 2023, which was mainly due to significant provision of impairment of the corresponding assets in 2021 and 2022.
Impairment charge Our impairment charge decreased by 66% from US$841,742 in 2022 to US$283,212 in 2023, which was mainly due to significant provision of impairment of the corresponding assets in 2021 and 2022.
New marketing models such as livestreaming marketing, organized trade fairs, and group buying have been thriving. We made preliminary attempts under the new marketing models in 2023 and achieved better-than-expected results. We will continue to innovate marketing models with the help of short video clips, livestreaming marketing, WeChat mini programs, etc., to diversify our online channels.
New marketing models such as live streaming marketing, organized trade fairs, and group buying have been thriving. We made preliminary attempts to develop the overseas market in 2024 and achieved better-than-expected results. We will continue to innovate marketing models with the help of short video clips, live streaming marketing, WeChat mini programs, etc., to diversify our online channels.
We have a business plan being carried out. Although this business plan may increase our financing to supplement working capital in the future, we acknowledge that our business plan may not result in positive working capital in the near future.
Although this business plan may increase our financing to supplement working capital in the future, we acknowledge that our business plan may not result in positive working capital in the near future.
The batteries used in the current mainstream models include lithium iron phosphate battery and ternary lithium battery. As the battery technology advances with success in experiments of collision, high temperature, and puncture, it has been proved that batteries are now with high safety. (4) Technology/intelligent interaction Consumers are increasingly looking for human-computer interaction features such as voice control and gestures.
As the battery technology advances with success in experiments of collision, high temperature, and puncture, it has been proved that batteries are now with high safety. (4) Technology/intelligent interaction Consumers are increasingly looking for human-computer interaction features such as voice control and gestures.
Year Ended December 31 2021 2022 2023 (US$’000) US$ % US$ % US$ % Revenue： Vehicle sales 12,178 54.6 11,630 77.7 7,680 81.0 Sales of vehicle parts, accessories and others 10,125 45.4 3,331 22.3 1,803 19.0 Total Revenue 22,303 100 14,961 100 9,483 100 The Company generates revenues from (i) vehicle sales, which represent sales of gasoline vehicles, hybrid vehicles and pure electric vehicles; (ii) sales of vehicle parts, accessories and others.
Year Ended December 31 2022 2023 2024 (US$’000) US$ % US$ % US$ % Revenue： Vehicle sales 11,630 77.7 7,680 81.0 6,396 92.5 Sales of vehicle parts, accessories and others 3,331 22.3 1,803 19.0 519 7.5 Total Revenue 14,961 100 9,483 100 6,915 100 The Company generates revenues from (i) vehicle sales, which represent sales of gasoline vehicles, hybrid vehicles and pure electric vehicles; (ii) sales of vehicle parts, accessories and others.
Our main business includes the design and development, production, sales, after-sales service and export of new energy vehicles and vehicle parts. Our passenger vehicles include small cars, sedans, currently at prototype stages and sports utility vehicles, or SUVs, and our commercial vehicles include light trucks and vans.
The main operating entities include Shandong Baoya and FAW Jilin. Our main business includes the design and development, production, sales, after-sales service and export of new energy vehicles and vehicle parts. Our passenger vehicles include small cars, sedans, sports utility vehicles, or SUVs, and our commercial vehicles include light trucks and vans.
Investing Activities In 2023, net cash used in investing activities was US$1,762 thousand, primarily attributable to the use of US$5,340 thousand in purchasing of fixed assets, partially offset by (among other things) the cash obtained by repayment from JWAC on the promissory notes receivable of US$2,060 thousand and the cash received from disposal of fixed assets of US$1,514 thousand.
In 2023, net cash used in investing activities was US$1.76 million, primarily attributable to the use of US$5.34 million in the purchase of fixed assets, partially offset by (among other things) the cash obtained by repayment from JWAC on the promissory notes receivable of US$2.06 million and the cash received from disposal of fixed assets of US$1.51 million.
Loss from operations As a result of the foregoing, we incurred a net loss of US$88,725 thousand in 2023, representing a decrease of 25% as compared to a net loss of US$118,263 thousand in 2022. Interest expense Our interest expense increased slightly from US$14,724 thousand in 2022 to US$14,819 thousand in 2023.
Loss from operations As a result of the foregoing, we incurred a net loss of US$88.73 million in 2023, representing a decrease of 25% as compared to a net loss of US$118.26 million in 2022. Interest expense Our interest expense increased slightly from US$14.72 million in 2022 to US$14.82 million in 2023.
Specifically, we believe our customers will focus on the following characteristics in selecting the electric vehicles: (1) Battery life/range As consumers switch from traditional fuel vehicles to new energy vehicles, the driving range must be comparable, which is why battery life is critical for consumers.
Specifically, we believe our customers will focus on the following characteristics in selecting the electric vehicles: (1) Battery life/range As consumers switch from traditional fuel vehicles to new energy vehicles, the driving range must be comparable, which is why battery life is critical for consumers. The current mainstream models have an average cruising range of about 500 kilometers/310 miles.
Financing Activities In 2023, net cash provided by financing activities was US$5,225 thousand, primarily attributable to (i) cash proceeds of US$4,490 thousand in reverse recapitalization, (ii) short-term borrowings of US$4,840 thousand from related parties, and (iii) proceeds of US$1,100 thousand from exercise of Greentree warrants, partially offset by the repayment of short-term borrowings of US$2,329 thousand and repayment of related party borrowings of US$2,604 thousand.
In 2023, net cash provided by financing activities was US$5.23 million, primarily attributable to (i) cash proceeds of US$4.49 million in reverse recapitalization, (ii) short-term borrowings of US$4.84 million from related parties, and (iii) proceeds of US$1.10 million from exercise of the Greentree warrants, partially offset by the repayment of short-term borrowings of US$2.33 million and repayment of related party borrowings of US$2.60 million.
The consolidated financial statements do not include any adjustments that may result from this significant uncertainty. Cash flows The following table sets forth a summary of our cash flows for the periods indicated.
The consolidated financial statements do not include any adjustments that may result from this significant uncertainty. The Company implemented a 1-for-30 reverse stock split on July 8, 2024. Cash flows The following table sets forth a summary of our cash flows for the periods indicated.
Cost of revenues - idle capacity Cost of revenues - idle capacity decreased by 21% from US$34,001 thousand in 2022 to US$26,951 thousand in 2023, which was mainly due to the decrease of depreciation expenses for machinery and equipment. Some of the assets were fully depreciated by the end of December 31, 2023.
Cost of revenues - idle capacity Cost of revenues - idle capacity decreased by 40% from US$26.95 million in 2023 to US$16.16 million in 2024, which was mainly due to the decrease in depreciation expenses for machinery and equipment as some of our machinery and equipment were fully depreciated as of December 31, 2024.
Our businesses and future actual financial performance may be materially different from what we expect. A. Operating Results Overview We are a high-tech enterprise engaged in the research and development, manufacturing, sales, and service of new energy vehicles and traditional fuel vehicles in China.
Our businesses and future actual financial performance may be materially different from what we expect. A. Operating Results Overview We are engaged in the research and development, manufacturing, sales, and service of new energy vehicles and traditional fuel vehicles in China. Our mission is to produce vehicles with efficient exhaust emissions, improve air quality, and benefit users and the environment.
We developed strong presence in the Yangtze River Delta and Southwest regions of China, adding 46 new dealers. We also broadened our presence in the international market such as Southeast Asia and Africa, adding three new dealers. We have been developing a synchronized approach to foster the domestic and international markets.
We also broadened our presence in the international market such as Southeast Asia and Africa, adding three new dealers. We have been developing a synchronized approach to foster the domestic and international markets. The domestic market is flourishing steadily with continuing high growth in new energy vehicles, and we are expanding into the Yangtze River Delta and southwest regions.
We will continue the cooperation with leading suppliers to integrate advantageous resources, to ensure the completion of new product development as planned and timely delivery of mass-produced products.
We continue strengthening cooperation with well-known domestic and foreign suppliers, adding 32 new first-tier suppliers and 172 new second-tier suppliers in 2024 We will continue the cooperation with leading suppliers to integrate advantageous resources, to ensure the completion of new product development as planned and timely delivery of mass-produced products.
In 2022, net cash provided by operating activities was US$22,383 thousand, primarily attributable to our net loss of US$111,518 thousand adjusted for (i) non-cash items of US$53,594 thousand, which primarily consisted of depreciation and amortization expenses of US$44,653 thousand and warrant expense of US$22,900 thousand and (ii) a net increase in operating assets and liabilities of US$83,307 thousand, including a decrease in other assets of US$52,007 thousand, an increase in other liabilities of US$20,992 thousand and a decrease in amounts due from related parties of US$10,594 thousand.
In 2022, net cash provided by operating activities was US$22.38 million, primarily attributable to our net loss of US$111.52 million adjusted for (i) non-cash items of US$68.32 million, which primarily consisted of depreciation and amortization expenses of US$44.65 million and warrant expense of US$22.90 million and (ii) a net increase in operating assets and liabilities of US$65.58 million, including a decrease in other assets of US$52.01 million, an increase in accrual and other liabilities of US$14.09 million and a decrease in amounts due from related parties of US$10.59 million.
In 2022, net cash used in investing activities was US$13,245 thousand, primarily attributable to the use of US$11,838 thousand in the purchase of fixed assets. In 2021, net cash used in investing activities was US$1,071 thousand, primarily attributable to the use of US$951 thousand in the purchase of fixed assets.
In 2022, net cash used in investing activities was US$13.25 million, primarily attributable to the use of US$11.84 million in the purchase of fixed assets.
In 2022, net cash provided by financing activities was US$1,380 thousand, primarily attributable to the issuance of promissory notes payable to JWAC on December 5, 2022 of US$1,380 thousand. In 2021, net cash used in financing activities was US$44,611 thousand, primarily attributable to US$44,611 thousand used to repay long-term payables.
In 2022, net cash provided by financing activities was US$1.38 million, primarily attributable to the issuance of promissory notes payable to JWAC on December 5, 2022 of US$1.38 million.
Year Ended December 31 (US$’000） 2021 2022 2023 Summary of Consolidated Cash Flow Data: Net cash (used in) / provided by operating activities (22,374 ) 22,383 (40,017 ) Net cash (used in) investing activities (1,071 ) (13,245 ) (1,762 ) Net cash (used in) / provided by financing activities (44,611 ) 1,380 5,225 Effects of currency translation on cash, cash equivalents, and restricted cash 2,003 (3,635 ) (1,360 ) Net (decrease) / increase in cash, cash equivalents and restricted cash (68,056 ) 10,518 (36,554 ) Cash, cash equivalents and restricted cash at beginning of the year 109,193 43,140 50,023 Cash, cash equivalents and restricted cash at end of the year 43,140 50,023 12,109 121 Operating activities In 2023, net cash used in operating activities was US$40,017 thousand, primarily attributable to our net loss of US$98,501 thousand adjusted for (i) non-cash items of US$39,327 thousand, which primarily consisted of depreciation and amortization expenses amounted to US$34,620 thousand and (ii) a net increase in operating assets and liabilities of US$19,157 thousand, including an increase in accrual and other current liabilities of US$14,399 thousand and a decrease in amounts due from related parties of US$11,271 thousand, which was partially offset by (among other things) a decrease in accounts and notes payable of US $13,137 thousand.
Year Ended December 31 (US$’000) 2022 2023 2024 Summary of Consolidated Cash Flow Data: Net cash (used in) / provided by operating activities 22,383 (40,017 ) (25,464 ) Net cash (used in) investing activities (13,245 ) (1,762 ) (1,058 ) Net cash provided by financing activities 1,380 5,225 13,638 Effects of currency translation on cash, cash equivalents, and restricted cash (3,635 ) (1,360 ) 4,546 Net (decrease) / increase in cash, cash equivalents and restricted cash 10,518 (36,554 ) (12,884 ) Cash, cash equivalents and restricted cash at beginning of the year 43,140 50,023 12,109 Cash, cash equivalents and restricted cash at end of the year 50,023 12,109 3,771 101 Operating activities In 2024, net cash used in operating activities was US$25.46 million, primarily attributable to our net loss of US$69.01 million adjusted for (i) non-cash items of US$41.14 million, which primarily consisted of depreciation and amortization expenses that amounted to US$23.13 million and interest expense that amounted to US$16.57 million and (ii) a net increase in operating assets and liabilities of US$2.4 million, including a decrease in amounts due from related parties of US$10.08 million, which was partially offset by (among other things) a decrease in accounts and notes payable of US$1.28 million and a decrease in accruals and other current liabilities of US$6.28 million.
Revenue from sales of vehicles, sales of vehicle parts, accessories and others are recognized when controls are transferred to customers. Cost of revenues Our cost of revenue includes direct parts, material, labor cost and manufacturing overhead (including depreciation of assets associated with the production) and reserves for estimated warranty cost.
Cost of revenues Our cost of revenue includes direct parts, material, labor cost and manufacturing overhead (including depreciation of assets associated with the production) and reserves for estimated warranty cost.
Selling, general and administrative expenses Our sales and marketing expenses consist primarily of employee compensation, transportation cost, and packaging fee. Selling costs are expenses as incurred.
Selling, general and administrative expenses Our selling expenses consist primarily of employee compensation, transportation cost, and packaging fees.
Government grant Our government grant decreased by 81% from US$19,467 thousand in 2022 to US$3,748 thousand in 2023, which was mainly due to the readjustment of the research and development and construction process of the Yantai production base, resulting in a corresponding delay in the amount of government grant to future years. 119 Net loss As a result of the foregoing, we incurred a net loss of US$98,501 thousand in 2023, representing a decrease of 12% as compared to a net loss of US$111,518 thousand in 2022.
Government grant Our government grant decreased by 81% from US$19.47 million in 2022 to US$3.75 million in 2023, which was mainly due to the readjustment of the research and development and construction process of the Yantai production base, resulting in a corresponding delay in the amount of government grant to future years.
Material Cash Requirements As of December 31, 2023, and in any subsequent interim periods, our significant cash requirements mainly include capital commitments to purchase mold tools, equipment and constructing production bases, cash needs in our business operations, and repayment of the short-term and long-term borrowings.
Material Cash Requirements Our significant cash requirements mainly include capital commitments to purchase mold tools, equipment and constructing production bases, cash needs in our business operations, and repayment of the short-term and long-term borrowings. In 2022, 2023, and 2024, our capital expenditures were US$11.59 million, US$972,365 and US$453,858, respectively.
Export sales are expected to account for 40-50% of our overall sales in the future. 3) Dynamic marketing strategy. We will adopt a combination of innovative marketing models and traditional marketing models.
The international market has become a new growth driver with vast increase in sales. We plan to focus on Southeast Asia, Africa, and other overseas regions. Export sales are expected to account for 40-50% of our overall sales in the future. 3) Dynamic marketing strategy. We will adopt a combination of innovative marketing models and traditional marketing models.
Year Ended December 31, (US$’000) 2021 2022 2023 Revenues: -Vehicle Sales 12,178 11,630 7,680 -Sales of vehicle parts, accessories and others 10,125 3,331 1,803 Total revenues 22,303 14,961 9,483 Cost of revenues： -Vehicle Sales (16,419 ) (11,280 ) (7,384 ) -Sales of vehicle parts, accessories and others (39,791 ) (8,005 ) (7,911 ) Cost of revenues-total (56,210 ) (19,285 ) (15,295 ) Cost of idle capacity (23,342 ) (34,001 ) (26,951 ) Gross loss (57,249 ) (38,325 ) (32,763 ) Operating expenses： Research and development 15,420 13,772 8,398 Selling, general and administrative 50,441 65,324 47,281 Impairment charge 6,054 842 283 Total operating expenses 71,915 79,938 55,962 Loss from operations (129,164 ) (118,263 ) (88,725 ) Other income 1,540 1,243 1,360 Interest income 1,884 840 681 Interest expense (16,096 ) (14,724 ) (14,819 ) Government grant 80,995 19,467 3,748 (Loss)/gain on equity investment 131 6 (519 ) Other expenses (1,842 ) (87 ) (227 ) Provision for income tax - - - Net loss (62,552 ) (111,518 ) (98,501 ) Year ended December 31, 2023 c ompared to year ended December 31, 2022 Revenues Our revenues decreased by 37% from US$14,961 thousand in 2022 to US$9,483 thousand in 2023, primarily attributable to the fact that vehicle sales decreased by 34% from US$11,630 thousand in 2022 to US$7,680 thousand in 2023, mainly due to our proactive strategic transformation as well as the implementation of the National VI emission standards, which led to a decrease in domestic sales of fuel vehicles.
Year Ended December 31, (US$’000) 2022 2023 2024 Revenues: -Vehicle Sales 11,630 7,680 6,396 -Sales of vehicle parts, accessories and others 3,331 1,803 519 Total revenues 14,961 9,483 6,915 Cost of revenues： -Vehicle Sales (11,280 ) (7,384 ) (13,824 ) -Sales of vehicle parts, accessories and others (8,005 ) (7,911 ) (1,754 ) Cost of revenues-total (19,285 ) (15,295 ) (15,578 ) Cost of idle capacity (34,001 ) (26,951 ) (16,163 ) Gross loss (38,325 ) (32,763 ) (24,826 ) Operating expenses： Research and development 13,772 8,398 1,478 Selling, general and administrative 65,324 47,281 30,864 Impairment charge 842 283 112 Total operating expenses 79,938 55,962 32,454 Loss from operations (118,263 ) (88,725 ) (57,280 ) Other income 1,243 1,360 2,439 Interest income 840 681 51 Interest expense (14,724 ) (14,819 ) (16,574 ) Government grant 19,467 3,748 2,990 (Loss)/gain on equity investment 6 (519 ) (355 ) Other expenses (87 ) (227 ) (276 ) Provision for income tax - - - Net loss (111,518 ) (98,501 ) (69,005 ) Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues Our revenues decreased by 27% from US$9.48 million in 2023 to US$6.92 million in 2024, primarily attributable to (i) a decrease of vehicle sales by 17% from US$7.68 million in 2023 to US$6.40 million in 2024, mainly due to the Company’s promotional activities and the adjustment of different types of vehicles sold in the year ended December 31, 2024.
Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized. 117 Uncertain tax positions An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.
Uncertain tax positions An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.
To promote product sales, we have adopted the following strategic measures in 2023: 1) Strengthened brand publicity. While maintaining our brand advantages, in response to the national “Car Sale to the Countryside” campaign to boost the brand influence, we organized trade fairs in towns and conducted on-site product demonstrations, functional presentations, and test drives. 2) Extended marketing channels.
While maintaining our brand advantages, in response to the national “Car Sale to the Countryside” campaign to boost the brand influence, we organized trade fairs in towns and conducted on-site product demonstrations, functional presentations, and test drives. 2) Extended marketing channels. We developed strong presence in the Yangtze River Delta and Southwest regions of China, adding 46 new dealers.
The decrease in revenues was greater than the decrease in cost of revenues, mainly due to the Company’s series of promotional activities in 2023, which resulted in a decrease in the selling price of the vehicles. 118 Cost of revenues Our total cost of revenues decreased by 21% from US$19,285 thousand in 2022 to US$15,295 thousand in 2023, which was mainly due to the decrease of vehicle sales of our traditional fuel vehicles.
The decrease in revenues was greater than the decrease in cost of revenues, mainly due to the Company’s series of promotional activities in 2023, which resulted in a decrease in the selling price of the vehicles.
Interest and penalties related to uncertain tax positions, if any, are recorded under accrued expenses and other current liabilities on its consolidated balance sheets and under other expenses in its consolidated statements of operations. The Company did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2021, 2022 and 2023.
Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. Interest and penalties related to uncertain tax positions, if any, are recorded under accrued expenses and other current liabilities on its consolidated balance sheets and under other expenses in its consolidated statements of operations.
In 2021, 2022, and 2023, our capital expenditures were US$13,756 thousand, US$11,586 thousand, and US$972 thousand, respectively. During these periods, our capital expenditures were primarily used to the purchase of property, plant, and equipment, the purchase of intangible assets, the construction of production bases, the purchase of mold tools, and the spending of research and development activities.
During these years, our capital expenditures were primarily used to purchase property, plant, and equipment, the purchase of intangible assets, the construction of production facilities, the purchase of molds and tools, and research and development activities.
Our automobile industry group provides products and services to the entire value chain for our vehicles include R&D, manufacturing, sales and product services. We manufacture using intelligent manufacturing ecosystems, which focus on efficiency in planning, R&D, supply chain management, manufacturing, quality, and logistics. Our current products include: R7, V80, T80. ● R7 is an A0-class SUV.
We manufacture vehicles using intelligent manufacturing ecosystems, which focus on efficiency in planning, R&D, supply chain management, manufacturing, quality, and logistics. Our current products include: R7, V80, T80. We are planning to develop deliver trucks and pure electric cars.
In 2021, net cash used in operating activities was US$22,374 thousand, primarily attributable to our net loss of US$62,552 thousand adjusted for (i) non-cash items of US$348 thousand, which primarily consisted of government subsidies of US$80,995 thousand, partially offset by (among other things) depreciation and amortization expenses of US$54,313 thousand and inventory impairment of US$20,328 thousand and (ii) a net increase in operating assets and liabilities of US$40,526 thousand, including a decrease in amounts due from related parties of US$66,867 thousand, an increase in accrual and other current liabilities of US$37,174 thousand and an increase in other liabilities of US$23,622 thousand, partially offset by (among other things), an increase in inventory of US$25,080 thousand and a decrease in accounts and notes payable of US$39,912 thousand.
In 2023, net cash used in operating activities was US$40.02 million, primarily attributable to our net loss of US$98.50 million adjusted for (i) non-cash items of US$54.15 million, which primarily consisted of depreciation and amortization expenses that amounted to US$34.62 million and (ii) a net increase in operating assets and liabilities of US$4.34 million, including an increase in accrual and other current liabilities of US$14.40 million and a decrease in amounts due from related parties of US$11.27 million, which was partially offset by a decrease in accounts and notes payable of US $13.14 million.
E. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations relates to our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures.
GAAP.”) The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures.
Loss from operations As a result of the foregoing, we incurred a net loss of US$118,263 thousand in 2022, representing a decrease of 8% as compared to a net loss of US$129,164 thousand in 2021.
Loss from operations As a result of the foregoing, we incurred a net loss of US$57.28 million in 2024, representing a decrease of 35% as compared to a net loss of US$88.73 million in 2023.
Our vehicle sales are mainly from sales of R7, V80 and T80, including SUV, compact van and truck. In 2023 we sold 1,424 vehicles. Our sales of vehicle parts, accessories and others include sales of self-made vehicle parts, semi-finished product piece and point income of new energy vehicles, etc.
Our vehicle sales are mainly from sales of the R7, V80 and T80 models. In 2024 we sold 1,108 vehicles. Our sales of vehicle parts, accessories and others include sales of self-made vehicle parts, semi-finished product etc. Majority part of sales is from vehicles, sales of vehicle parts, accessories and others are recognized when controls are transferred to customers.
We see a large potential market for the model with its high efficiency, low fuel consumption, and long battery life.
The current models that are about to be mass-produced by the end of 2025 include: ● Senya R9PHEV is a compact SUV designed for customers. We see a large potential market for the model with its high efficiency, low fuel consumption, and long battery life.
Drivers want reliable electric vehicles with improved acceleration, regenerative braking, and strong batteries/horsepower. (3) Safety Vehicle safety is another essential attribute consumers evaluate when purchasing new energy vehicles. As electric vehicle technology becomes more integrated, software and vehicle components are inevitably intertwined, and the safety of these components is critical to customers.
(2) Vehicle performance/design Vehicle performance and design are another key consideration for consumers. Consumers prefer stylish, modern, and minimalistic features that prove practicality. Vehicle performance is closely affected by design. Drivers want reliable electric vehicles with improved acceleration, regenerative braking, and strong batteries/horsepower. (3) Safety Vehicle safety is another essential attribute consumers evaluate when purchasing new energy vehicles.
Gross loss Our gross loss decreased by 15% from US$38,325 thousand in 2022 to US$32,763 thousand in 2023.
Some of the assets were fully depreciated by the end of December 31, 2023. Gross loss Our gross loss decreased by 15% from US$38.33 million in 2022 to US$32.76 million in 2023.
Our single-vehicle cost is expected to be reduced by 7% - 10% in the next three years. We will also continue to execute lean production management, reduce process waste, strengthen the 6S management of production bases, and train production employees to continuously improve production efficiency and product quality.
We will also continue to execute lean production management, reduce process waste, strengthen the 6S management of production bases, and train production employees to continuously improve production efficiency and product quality. 95 Key Components of Results of Operations Revenues The following table presents our revenue components by amount and as a percentage of the total revenues for the periods indicated.
Selling, general and administrative expenses Our selling, general and administrative expenses increased by 30% from US$50,441 thousand in 2021 to US$65,324 thousand in 2022, which was mainly due to the professional services fees of US$22,900 thousand related to IPO in 2022.
Selling, general and administrative expenses Our selling, general and administrative expenses decreased by 35% from US$47.28 million in 2023 to US$30.86 million in 2024, which was mainly due to the recognition of professional services fees related to IPO for the year ended December 31, 2023, while there were no such expenses during the year ended December 31, 2024.
Our ability to maintain and enlarge supplier base We have further expanded the supplier base. We continue strengthening cooperation with well-known domestic and foreign suppliers, adding 34 new first-tier suppliers and 176 new second-tier suppliers in 2023.
Our ability to maintain and enlarge supplier base We have further expanded the supplier base.
(ii) a decrease of sales of vehicle parts, accessories and others decreased by 67% from US$10,125 thousand in 2021 to US$3,331 thousand in 2022, mainly due to the sales decrease from original equipment manufacturer (“OEM”).
The sales revenue of V80/V80EV and R8 decreased from US$928,501 in 2023 to nil in 2024. (ii) a decrease of sales of vehicle parts, accessories and others decreased by 71% from US$1.80 million in 2023 to US$518,498 in 2024.
B. Liquidity and Capital Resources We have been funded primarily through financing from shareholders, payments from customers, and capital from government funding all along. We had cash and cash equivalents and restricted cash of US$10,731 thousand and US$1,378 thousand respectively as of December 31, 2023. As of December 31, 2023, our working capital deficit was US$434,226 thousand.
Net loss As a result of the foregoing, we incurred a net loss of US$98.50 million in 2023, representing a decrease of 12% as compared to a net loss of US$111.52 million in 2022. B. Liquidity and Capital Resources We have been funded primarily through financing from shareholders, payments from customers, and capital from government funding.
Cost of revenues Our total cost of revenues decreased by 66% from US$56,210 thousand in 2021 to US$19,285 thousand in 2022, which was mainly due to the inventory impairment incurred in 2021.
Cost of revenues Our total cost of revenues decreased by 21% from US$19.29 million in 2022 to US$15.30 million in 2023, which was mainly due to the decrease of vehicle sales of our traditional fuel vehicles. 99 Cost of revenues - idle capacity Cost of revenues - idle capacity decreased by 21% from US$34 million in 2022 to US$26.95 million in 2023, which was mainly due to the decrease of depreciation expenses for machinery and equipment.
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Our mission is to produce vehicles with efficient exhaust emissions, improve air quality, and benefit users and the environment. The main operating entities include Shandong Baoya New Energy Vehicle Co., Ltd. (“Shandong Baoya”) and its holding subsidiary FAW Jilin Automobile Co., Ltd. (“FAW Jilin”).
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As electric vehicle technology becomes more integrated, software and vehicle components are inevitably intertwined, and the safety of these components is critical to customers. The batteries used in the current mainstream models include lithium iron phosphate battery and ternary lithium battery.
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It has a 1.5L engine and meets the National VI emission standards. ● V80 is a compact van. It has a stylish appearance. The power system has an electronic throttle, which can control the transmission in a more accurate and fuel-efficient way. ● T80 is a mini-series truck positioned for overseas markets.
Added
Our new product research and development has entered the final stage. In the meantime, CJET started to have a new strategy, that is searching for acquisition opportunity, which can associate with the company to improve the business performance. On February 2025, Company started to acquire a new business which is named Too Express. Too Express is working on delivering business.
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It is equipped with a 1.5L National V emission engine and matched with a 5-speed manual transmission. Furthermore, we have been planning to develop hybrid SUVs and pure electric cars. The current models that are about to be mass-produced by the end of 2024 include: ● Senya R9PHEV is a compact SUV designed for mass consumers.
Added
Too Express will expand CJET’s business scope. In the meantime, CJET will start entering deliver truck business to cooperate with Too Express. 94 Our ability to implement effective marketing and sales strategy To promote product sales, we have adopted the following strategic measures in 2024: 1) Strengthened brand publicity.
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The current mainstream models can cycle more than 2,000 charges and discharges, and the average cruising range is about 500 kilometers/310 miles. (2) Vehicle performance/design Vehicle performance and design are another key consideration for consumers. Consumers prefer stylish, modern, and minimalistic features that prove practicality. Vehicle performance is closely affected by design.
Added
Our single-vehicle cost is expected to be reduced by 7% - 10% in the next three years.
Removed
Our new product research and development has entered the final stage. Several models will be available on the market in 2024.
Added
Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized.
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Our business and results of operations are also affected by company specific factors, including the following major factors: 114 Our ability to implement effective marketing and sales strategy Our customer base directly affects the sales volume of our existing models, key component of our operating results.
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The Company did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2022, 2023 and 2024.
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The domestic market is flourishing steadily with continuing high growth in new energy vehicles, and we are expanding into the Yangtze River Delta and southwest regions. The international market has become a new growth driver with vast increase in sales. We plan to focus on Southeast Asia, Africa, and other overseas regions.
Added
Cost of revenues Our total cost of revenues increased by 2% from US$15.29 million in 2023 to US$15.58 million in 2024, which was mainly due to the fact that the vehicles sold in 2023 were fully provided for impairment in prior years and the vehicles sold in 2024 were primarily new production for which no impairment had been provided, resulting in higher costs in 2024.
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Impact of COVID-19 on Our Operations There were outbreaks of COVID-19 pandemic during 2021 and 2022 which adversely and materially affected our business. The impact gradually decreased since January 2023. However, any future resurge of severe public health emergencies, may still disrupt our business and operations and adversely affect our financial results. See “ Item 3. Key Information—D.
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Gross loss Our gross loss decreased by 24% from US$32.76 million in 2023 to US$24.83 million in 2024. 98 Research and development expenses Our R&D expenses decreased by 82% from US$8.40 million in 2023 to US$1.48 million in 2024, primarily attributable to a decrease in our R&D which was adjusted to match our financing progress and some R&D projects were completed in 2023.
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Risk Factors—Risks Related to Our Business and Industry — Although the COVID-19 pandemic has affected our business and operations, those risks may be diminishing .” 115 Key Components of Results of Operations Revenues The following table presents our revenue components by amount and as a percentage of the total revenues for the periods indicated.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

66 edited+13 added−44 removed53 unchanged
Unless determined otherwise by the plan administrator, in the event that the successor corporation refuses to assume or substitute for the award, a participant shall fully vest in and have the right to exercise the award as to all of the ordinary shares, including those as to which it would not otherwise be vested or exercisable, all applicable restrictions will lapse, and all performance objectives and other vesting criteria will be deemed achieved at targeted levels.
Unless determined otherwise by the plan administrator, in the event that the successor corporation refuses to assume or substitute for the award, a participant shall fully vest in and have the right to exercise the award as to all of the Class A ordinary shares, including those as to which it would not otherwise be vested or exercisable, all applicable restrictions will lapse, and all performance objectives and other vesting criteria will be deemed achieved at targeted levels.
Equitable Adjustments In the event of a merger, consolidation, recapitalization, share split, reverse share split, reorganization, split-up, spin-off, combination, repurchase or other change in corporate structure affecting the ordinary shares, the maximum number and kind of shares reserved for issuance or with respect to which awards may be granted under the Incentive Plan will be adjusted to reflect such event, and the plan administrator will make such adjustments as it deems appropriate and equitable in the number, kind, and exercise price of the ordinary shares covered by outstanding awards made under the Incentive Plan. 131 Change in Control In the event of any proposed change in control (as defined in the Incentive Plan), the plan administrator will take any action as it deems appropriate, which action may include, without limitation, the following: (i) the continuation of any award, if the Company is the surviving corporation; (ii) the assumption of any award by the surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of equivalent awards; (iv) accelerated vesting of the award, with all performance objectives and other vesting criteria deemed achieved at targeted levels, and a limited period during which to exercise the award prior to closing of the change in control, or (v) settlement of any award for the change in control price (less, to the extent applicable, the per share exercise price).
Equitable Adjustments In the event of a merger, consolidation, recapitalization, share split, reverse share split, reorganization, split-up, spin-off, combination, repurchase or other change in corporate structure affecting the ordinary shares, the maximum number and kind of shares reserved for issuance or with respect to which awards may be granted under the Incentive Plan will be adjusted to reflect such event, and the plan administrator will make such adjustments as it deems appropriate and equitable in the number, kind, and exercise price of the ordinary shares covered by outstanding awards made under the Incentive Plan. 110 Change in Control In the event of any proposed change in control (as defined in the Incentive Plan), the plan administrator will take any action as it deems appropriate, which action may include, without limitation, the following: (i) the continuation of any award, if the Company is the surviving corporation; (ii) the assumption of any award by the surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of equivalent awards; (iv) accelerated vesting of the award, with all performance objectives and other vesting criteria deemed achieved at targeted levels, and a limited period during which to exercise the award prior to closing of the change in control, or (v) settlement of any award for the change in control price (less, to the extent applicable, the per share exercise price).
The value of the restricted share units may be paid in ordinary shares, cash, other securities, other property, or a combination of the foregoing, as determined by the plan administrator. The holders of restricted share units will have no voting rights.
The value of the restricted share units may be paid in Class A ordinary shares, cash, other securities, other property, or a combination of the foregoing, as determined by the plan administrator. The holders of restricted share units will have no voting rights.
A copy of the Clawback Policy has been filed herewith as Exhibit 97.1. 2023 Share Incentive Plan In May 2023, we adopted the 2023 Share Inventive plan (the “Incentive Plan”). The following is a summary of the material features of the Incentive Plan.
A copy of the Clawback Policy has been filed herewith as Exhibit 97.1. 2024 Share Incentive Plan In May 2023, we adopted the 2023 Share Inventive plan (the “Incentive Plan”). The following is a summary of the material features of the Incentive Plan.
Restricted share units are the right to receive the ordinary shares at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the plan administrator.
Restricted share units are the right to receive the Class A ordinary shares at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the plan administrator.
A restricted share award is an award of the ordinary shares that vests in accordance with the terms and conditions established by the plan administrator.
A restricted share award is an award of the Class A ordinary shares that vests in accordance with the terms and conditions established by the plan administrator.
Our Audit Committee performs several functions, including: ● evaluating the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor; ● approving the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor; ● monitoring the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law; ● reviewing the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements; ● overseeing all aspects of our systems of internal accounting control and corporate governance functions on behalf of the board; ● advising the Board and any other Board Committee if the clawback provisions of the Clawback Policy are triggered based upon a financial statement restatement or other financial statement change; ● reviewing and approving in advance any proposed related-party transactions and report to the full board on any approved transactions; and ● providing oversight assistance in connection with legal, ethical and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation, and makes recommendations to our board of directors regarding corporate governance issues and policy decisions. 134 Compensation Committee Zhang Jiannong, Wu Lichun, and John Chiang serve as members of our Compensation Committee.
Our Audit Committee performs several functions, including: ● evaluating the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor; ● approving the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor; ● monitoring the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law; ● reviewing the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements; ● overseeing all aspects of our systems of internal accounting control and corporate governance functions on behalf of the board; ● advising the Board and any other Board Committee if the clawback provisions of the Clawback Policy are triggered based upon a financial statement restatement or other financial statement change; ● reviewing and approving in advance any proposed related-party transactions and report to the full board on any approved transactions; and ● providing oversight assistance in connection with legal, ethical and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation, and makes recommendations to our board of directors regarding corporate governance issues and policy decisions. 111 Compensation Committee Zhang Jiannong, Wu Lichun, and Wenbo Wang serve as members of our Compensation Committee.
Upon exercise of share options, the exercise price must be paid in full either in cash, check, or, with approval of the plan administrator, by delivery (or attestation to the ownership) of the ordinary shares that are beneficially owned by the optionee free of restrictions or were purchased in the open market.
Upon exercise of share options, the exercise price must be paid in full either in cash, check, or, with approval of the plan administrator, by delivery (or attestation to the ownership) of the Class A ordinary shares that are beneficially owned by the optionee free of restrictions or were purchased in the open market.
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors. 128 Employment Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors. 107 Employment Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
The plan administrator may delegate to one or more officers of the Company, the authority to grant awards to eligible individuals. Share Reserve The number of ordinary shares that may be issued under the Incentive Plan is equal to 5% of the aggregate number of ordinary shares issued and outstanding immediately after the Closing.
The plan administrator may delegate to one or more officers of the Company, the authority to grant awards to eligible individuals. Share Reserve The number of Class A ordinary shares that may be issued under the Incentive Plan is equal to 5% of the aggregate number of ordinary shares issued and outstanding immediately after the Closing.
Unless otherwise provided in the applicable award agreement, a participant generally will not have the rights and privileges of a stockholder as to such restricted shares, including without limitation the right to vote such restricted shares and the right to receive dividends, if applicable. 130 Restricted Share Units .
Unless otherwise provided in the applicable award agreement, a participant generally will not have the rights and privileges of a stockholder as to such restricted shares, including without limitation the right to vote such restricted shares and the right to receive dividends, if applicable. 109 Restricted Share Units .
The plan administrator may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to the ordinary shares, or cash, equal to the value of the appreciation in the Company’s share price over the exercise price, as set by the plan administrator.
The plan administrator may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to the Class A ordinary shares, or cash, equal to the value of the appreciation in the Company’s share price over the exercise price, as set by the plan administrator.
The ordinary shares issuable under the Incentive Plan may be authorized, but unissued, or reacquired shares. 129 The ordinary shares underlying any awards under the Incentive Plan that are forfeited, cancelled, held back upon exercise of a share option or settlement of an award to cover the exercise price or tax withholding, satisfied without the issuance of the ordinary shares or otherwise terminated (other than by exercise) will be added back to the ordinary shares available for issuance under the Incentive Plan.
The ordinary shares issuable under the Incentive Plan may be authorized, but unissued, or reacquired shares. 108 The Class A ordinary shares underlying any awards under the Incentive Plan that are forfeited, cancelled, held back upon exercise of a share option or settlement of an award to cover the exercise price or tax withholding, satisfied without the issuance of the ordinary shares or otherwise terminated (other than by exercise) will be added back to the Class A ordinary shares available for issuance under the Incentive Plan.
Li received his Ph.D. in Environmental Chemistry and Engineering from Tokyo Institute of Technology and his M.S. and B.S. degree in Chemical Engineering from Tianjin University. Mr. Li has 67 granted patents and 23 journal papers. We believe Mr.
Li received his Ph.D. degree in Environmental Chemistry and Engineering from Tokyo Institute of Technology and his M.S. and B.S. degrees in Chemical Engineering from Tianjin University. Mr. Li has 67 granted patents and has authored 23 journal papers. We believe Mr.
He used to be the representative of Australia Situ Company in China, the director of Shandong Aosuo Management Consulting Co., Ltd and the chairman of Shanghai Aosuo Investment Co., Ltd. Mr. Mu has rich experience, nearly 30 years, in capital operation, management, sales and international business development in new energy vehicles, biotechnology and enterprise management consulting. Mr.
He WAS be the representative of Australia Situ Company in China, the director of Shandong Aosuo Management Consulting Co., Ltd and the chairman of Shanghai Aosuo Investment Co., Ltd. Mr. Mu has rich experience, nearly 30 years, in capital operation, management, sales and international business development in new energy vehicles, biotechnology and enterprise management consulting. Mr.
The Incentive Plan permits the granting of both share options to purchase the ordinary shares intended to qualify as incentive stock options under Section 422 of the Code and share options that do not so qualify.
The Incentive Plan permits the granting of both share options to purchase the Class A ordinary shares intended to qualify as incentive stock options under Section 422 of the Code and share options that do not so qualify.
Our directors are not subject to a set term of office and hold office until the next general meeting called for the appointment of directors and until their successor is duly appointed or such time as they die, resign or are removed from office by a shareholders’ ordinary resolution.
Our directors are not subject to a set term of office and hold office until the next general meeting of shareholders called for the election of directors and until their successor is duly appointed or such time as they die, resign or are removed from office by a shareholders’ ordinary resolution.
Li has served as a member of our Board since March 2023. Mr. Li is currently the President of AAIT, a company providing technical insights to customers. He has extensive program and project development experiences in the alternative energy industry. From November 2014 until October 2020, he served as the Chief Scientist of Tianneng Power International.
Wen Li has served as a member of our Board since March 2023. Mr. Li has been the President of AAIT, a company providing technical insights to customers. He has extensive program and project development experiences in the alternative energy industry. From November 2014 until October 2020, he served as the Chief Scientist of Tianneng Power International.
Li is well qualified to serve as a director due to his extensive laboratory experience and technical knowledge related to batteries and fuel cells. John Chiang Mr. John Chiang has served as a member of our Board since March 2023. Mr. Chiang serves as a member of the Board of Directors of Astrana Health (Nasdaq: ASTH).
Li is well qualified to serve as a director due to his extensive laboratory experience and technical knowledge related to batteries and fuel cells. Mr. John Chiang has served as a member of our Board since March 2023. Mr. Chiang has served as a member of the Board of Directors of Astrana Health (Nasdaq: ASTH) From 2015 to 2018, Mr.
Eligibility Persons eligible to participate in the Incentive Plan will be officers, employees, non-employee directors, and consultants of the Company and its subsidiaries as selected from time to time by the plan administrator in its discretion, including prospective officers, employees, non-employee directors, and consultants.
Eligibility Persons eligible to participate in the Incentive Plan are officers, employees, non-employee directors, and consultants of the Company and its subsidiaries as selected from time to time by the plan administrator in its discretion, including prospective officers, employees, non-employee directors, and consultants.
He has a deep understanding and operational experience of enterprise “innovation” and is good at grafting and integration of technological innovation and market convergence. He is currently a member of the Board of Directors of Shandong University of Technology and an inventor of several Chinese patented technologies. Li Na, SVP Ms.
He has a deep understanding and operational experience of enterprise “innovation” and is good at grafting and integration of technological innovation and market convergence. He is currently a member of the Board of Directors of Shandong University of Technology and an inventor of several Chinese patented technologies. Li Na, Senior Vice President Ms.
From May 2010 to November 2014, he served as the project manager and CTO assistant of Jinan Qingqi Motorcycle Co.,Ltd., a Motorcycle company, where he was responsible for research and development. He has rich experience in product research and development and project management. Directors Mu Hongwei Mr.
From May 2010 to November 2014, he served as the project manager and CTO assistant at Jinan Qingqi Motorcycle Co.,Ltd., a motorcycle company, where he was responsible for research and development. He has rich experience in product research and development and project management. Directors Mr.
All of the ordinary shares initially available under the Incentive Plan may be issued upon the exercise of incentive stock options.
All of the Class A ordinary shares initially available under the Incentive Plan may be issued upon the exercise of incentive stock options.
Memorandum and Articles of Association - Comparison of Cayman Islands Corporate Law and U.S. Corporate Law ” for additional information on our standard of corporate governance under Cayman Islands law. Terms of Directors and Officers Our officers are appointed by and serve at the discretion of our board of directors and the shareholders voting by ordinary resolution.
Memorandum and Articles of Association - Comparison of Cayman Islands Corporate Law and U.S. Corporate Law ” for additional information on our standard of corporate governance under Cayman Islands law. Terms of Directors and Officers Our officers are appointed by and serve at the discretion of our board of directors.
Nominating and Corporate Governance Committee Wu Lichun, Zhang Jiannong and Wen Li serve as members of our Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee is responsible for identifying and proposing new potential director nominees to the board of directors for consideration and reviewing our corporate governance policies.
Nominating and Corporate Governance Committee Wu Lichun, Zhang Jiannong and Wenbo Wang serve as members of our Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee is responsible for identifying and proposing new potential director nominees to the board of directors for consideration and reviewing our corporate governance policies.
The registered address of EKT, a Hong Kong company, is 12/F, Asia Trade Centre, 79 Lei Muk Road, Kwai Chung, NT, Hong Kong. (4) Represents shares held by Chijet Holdings Limited. Hongwei Mu is the director of CHL and as such, may be deemed to be the beneficial owner of the securities held by Chijet Holdings Limited.
Lichun Wu, our director, is the director of EKT and as such, may be deemed to be the beneficial owner of the securities held by EKT. The registered address of EKT, a Hong Kong company, is 12/F, Asia Trade Centre, 79 Lei Muk Road, Kwai Chung, NT, Hong Kong. (4) Represents shares held by Chijet Holdings Limited.
Li Na has been working in Shangdong Baoya since October 2010. As a founding senior employee of the company, she has successively held the posts of Vice President, General Manager of Human Resources Center and General Manager of Sales of Shandong Baoya, and Senior Vice President of the Group. 125 Ms.
Li Na has been been employed by Shangdong Baoya since October 2010. As a founding senior employee of the company, she has successively held the posts of Vice President, General Manager of Human Resources Center and General Manager of Sales of Shandong Baoya, and Senior Vice President of the Group. Ms.
Fan holds certifications including Certified Public Accountant (CPA) of China, Certificate of Intermediate Accountant and National Certificate of Legal Profession. Wang Qingjun, Member of the Advisory Board Mr. Wang Qingjun is the founder and director of Shandong Baoya New Energy Vehicle Co., Ltd. He once served as one of the main founders of many science and technology companies.
Fan holds certifications including Certified Public Accountant (CPA) in China, Certificate of Intermediate Accountant and National Certificate of Legal Profession. Wang Qingjun, Member of the Advisory Board Mr. Wang Qingjun is the founder and director of Shandong Baoya. He once served as one of the main founders of many science and technology companies.
We believe that maintaining good working relationships with our employees is essential, and we have not experienced any material labor disputes. 6.E. Share Ownership The following table sets forth information regarding the beneficial ownership of our ordinary shares as of April 26, 2024 by our officers, directors and 5% or greater beneficial owners of ordinary shares.
We believe that maintaining good working relationships with our employees is essential, and we have not experienced any material labor disputes. 113 6.E. Share Ownership The following table sets forth information regarding the beneficial ownership of our ordinary shares as of April 22, 2025 by our officers, directors and 10% or greater beneficial owners of ordinary shares.
The office of a director will be vacated automatically if, among other things, the directors resign in writing, becomes bankrupt or makes any arrangement or composition with his/her creditors generally or is found to be or becomes of unsound mind. 135 6.D.
The office of a director will be vacated automatically if, among other things, the directors resigns in writing, becomes bankrupt or makes any arrangement or composition with hi or/her creditors generally or is found to be or becomes of unsound mind. 112 6.D.
Liu sits on the board of directors of Expensify, an expense management software company. Ms. Liu holds an M.B.A from the University of Washington and a B.A. from the Shanghai University of Finance and Economics. She is a chartered financial analyst and a certified public accountant. 127 Huimin Li Ms.
Liu currently sits on the board of directors of Expensify, an expense management software company. Ms. Liu holds an M.B.A degree from the University of Washington and a B.A. degree from the Shanghai University of Finance and Economics. She is a chartered financial analyst and a certified public accountant. 106 Ms.
Mu is an engineering and technical expert of Shandong Science and Technology Commission, a leader of new energy vehicles in Shandong Province, an electrochemical expert and an economist . Zhang Jiannong Mr. Zhang Jiannong has served as a member of our Board since May 2023. Mr.
Mu is an engineering and technical expert of Shandong Science and Technology Commission, a leader of new energy vehicles in Shandong Province, an electrochemical expert and an economist . Mr. Zhang Jiannong has served as a director of our company since May 2010. Mr.
He is of Canadian nationality, and currently serves as the chairman of Euroamer Kaiwan Technology Company Limited since March 2018, Chairman of Shandong University of Engineering and Vocational Technology since April 2006, Vice President of China Overseas Chinese Businessmen Federation since August 2010, with rich experience in enterprise operation and management and a sense of social responsibility. 126 Non-Employee Directors Wen Li Mr.
He is of Canadian nationality, and currently serves as the chairman of Euroamer Kaiwan Technology Company Limited since March 2018, Chairman of Shandong University of Engineering and Vocational Technology since April 2006, Vice President of China Overseas Chinese Businessmen Federation since August 2010, with significant experience in enterprise operation and management. Non-Employee Directors Mr.
From May 2018 to October 2019, he held the position of CFO at Shenyang Zhongtai Equipment Manufacturing Co., Ltd., focusing on financial controls, investment management, and budget administration. Mr. Fan has also held leadership roles at entities including Jiangsu Muyang Group Co.
Fan enhanced financial operations, managed capital initiatives, and directed strategic financing. From May 2018 to October 2019, he held the position of CFO at Shenyang Zhongtai Equipment Manufacturing Co., Ltd., focusing on financial controls, investment management, and budget administration. Mr. Fan has also held leadership roles at entities including Jiangsu Muyang Group Co.
Li Na has been in the industry for nearly 20 years. She is familiar with the operation and management of automobile OEMs. She has a wide range of connections in the industry, superb professional brand marketing and marketing capabilities, and rich experience in the automobile sales industry. She was awarded the title of “Jinan Municipal Model Worker”.
Li Na has been in the industry for nearly 20 years. She is familiar with the operation and management of automobile OEMs. She has a wide range of connections in the industry, superb professional brand marketing and marketing capabilities, and rich experience in the automobile sales industry.
Liu served as CFO and SVP at the printing and imaging solution company, Lexmark International, from July 2017 to April 2020 and had previously been VP of Finance, Enterprise BG at the global information and technology company, Huawei Technology Inc. Prior to Huawei, Ms.
Prior to joining Shutterfly, Ms. Liu served as CFO and SVP Lexmark International, a printing and imaging solution company, from July 2017 to April 2020. She previously served as VP of Finance, Enterprise BG at Huawei Technology Inc., a global information and technology company. Prior to Huawei, Ms.
Zhang graduated from Jinan University with a bachelor’s degree in physics, taught at Jinan No. 34 Middle School (Yanshan Middle School) from September 1983 to July 1993, and served as executive vice president of Shandong Sanzhu Pharmaceutical Group Co. Ltd. from October 1993 to July 1999. Mr.
Zhang graduated from Jinan University with a bachelor’s degree in physics, taught at Jinan No. 34 Middle School (Yanshan Middle School) from September 1983 to July 1993, and served as executive vice president of Shandong Sanzhu Pharmaceutical Group Co. Ltd. from October 1993 to July 1999. Mr. Zhang has significant experience in comprehensive operation and management of new energy s.
Liu possesses accounting or related financial management experience that qualifies her as an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Our board of directors has determined that Mr Wang possesses accounting or related financial management experience that qualifies her as an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Employees As of December 31, 2023, 2022 and 2021, we had 1,439, 1,630, and 1,645 full-time employees, respectively, of which 11, 11, and 17 were outsourced workers, respectively, accounting for 0.76%, 0.67%, and 1.03% of our total workforce. The following table provides a breakdown of our employees by function as of December 31, 2023.
Employees As of December 31, 2024, 2023 and 2022, we had 1,389, 1,439 and1,630 full-time employees, respectively, of which 11, 11, and 11 were outsourced workers, respectively, accounting for 0.79%, 0.76% and0.67%, of our total workforce. The following table provides a breakdown of our employees by function as of December 31, 2024.
Zhang served as the director of Shandong Baoya New Energy Vehicle Co., Ltd from October 2010 to March 2024 and as the legal representative from December 2013 to March 2024. Mr.
Zhang served as the director of Shandong Baoya from October 2010 to March 2024 and as the legal representative from December 2013 to March 2024. Mr.
Each of our Audit Committee members satisfies the “independence” requirements of the Nasdaq listing rules and meets the independence standards under Rule 10A-3 under the Exchange Act. Our board of directors has determined that Ms.
Each of our Audit Committee members satisfies the “independence” requirements of the Nasdaq listing rules and meets the independence standards under Rule 10A-3 under the Exchange Act.
Name Age Position Executive Officers Mu Hongwei 53 Chief Executive Officer, Founder and Director Zhang Jiannong (2)(3) 60 Founder and Director Wu Lichun (2)(3) 61 Founder and Director Wang Qingjun 59 Founder and Advisory Board Member Dongchun Fan 54 Chief Financial Officer Wang Xiangyin. 61 Chief Operating Officer Li Na 43 Senior Vice President Wang Xinjian 40 Secretary of the Board Non-Employee Directors Simon Pang 68 Independent Director (4) Wen Li (3) 58 Independent Director John Chiang (1)(3) 62 Independent Director Ying Liu (2)(3) 49 Independent Director Huimin Li (1)(5) 44 Independent Director (1) Member of the audit committee.
Name Age Position Executive Officers Mu Hongwei 54 Chief Executive Officer, Founder and Director Zhang Jiannong (2)(3) 61 Founder and Director Wu Lichun (2)(3) 62 Founder and Director Wang Qingjun 60 Founder and Advisory Board Member Dongchun Fan 55 Chief Financial Officer Wang Xiangyin (9) 62 Chief Operating Officer Li Na 44 Senior Vice President Wang Xinjian 41 Secretary of the Board Non-Employee Directors Simon Pang (6) 69 Independent Director (4) Wen Li (3) (5) 59 Independent Director John Chiang (4) 63 Independent Director Ying Liu (2)(7) 50 Independent Director Huimin Li (1)(7) 45 Independent Director Wanli Wang (2)(8) 55 Independent Director Wenbo Wang (1) 44 Independent Director Na Wang (8) 42 Independent Director Jing Zhang (8) 39 Independent Director (1) Member of the audit committee.
Li has served as a member of our Board since April 2024, has over 20 years of experience in financial planning and analysis, operations finance, accounting, mergers and acquisitions, and equity investments and financing. Since March 2021, Ms.
Huimin Li has served as a member of our Board since April 2024. She has over 20 years of experience in financial planning and analysis, operations finance, accounting, mergers and acquisitions, and equity investments and financing. Since March 2021, Ms. Li has served as Vice President and Head of Finance at PingCAP, a Series D Cloud Infrastructure Software entity.
Mu Hongwei is the founder and director of Shandong Baoya New Energy Vehicle Co., Ltd. Mr. Mu graduated from Shandong University with a bachelor’s degree in Chemistry, and worked in Shandong Academy of Sciences from 1993 to 1998 with five years’ experience in electrochemical research and management.
Mu Hongwei is a founder and director of Shandong Baoya has served as a director of our company since 2023. Mr. Mu graduated from Shandong University with a bachelor’s degree in Chemistry, and worked in Shandong Academy of Sciences from 1993 to 1998 with five years’ experience in electrochemical research and management.
Functions Number Percentage Research and Development 142 9.87 % Production 986 68.52 % Sales and Marketing 48 3.34 % General and Administrative Support 263 18.28 % Total 1,439 (including 11 outsourced workers) 100 % To attract talented engineering students from leading universities in China, we collaborate with universities such as YanTai University, Ludong University, and Shandong Technology and Business University to establish school enterprise cooperation.
Functions Number Percentage Research and Development 85 6.12 % Production 1,028 74.01 % Sales and Marketing 42 3.02 % General and Administrative Support 234 16.85 % Total 1,389 (including 11 outsourced workers) 100 % To attract talented engineering students from leading universities in China, we collaborate with universities such as YanTai University, Ludong University, and Shandong Technology and Business University to establish school enterprise cooperation.
From September 2017 to February 2020, she served as the Assistant General Manager at Tencent, a multinational technology conglomerate and holding company, where she developed a global team responsible for the international gaming and cloud business. From September 2014 to August 2017, Ms. Li served as Finance Manager III/Controller at Cisco Systems, Inc.
From March 2020 to February 2021, Ms. Li managed her family’s investments. From September 2017 to February 2020, she served as the Assistant General Manager at Tencent, a multinational technology conglomerate and holding company. From September 2014 to August 2017, Ms. Li served as Finance Manager III/Controller at Cisco Systems, Inc. (Nasdaq: CSCO). Ms.
If the plan administrator makes an award transferable, such award will contain such additional terms and conditions as the plan administrator deems appropriate. Term The Incentive Plan will become effective when adopted by the Board and, unless terminated earlier, the Incentive Plan will continue in effect for a term of ten (10) years.
If the plan administrator makes an award transferable, such award will contain such additional terms and conditions as the plan administrator deems appropriate. Term The Incentive Plan will continue in effect for a term of ten (10) years. Amendment and Termination The Board may amend or terminate the Incentive Plan at any time.
Amendment and Termination The Board may amend or terminate the Incentive Plan at any time. Any such termination will not affect outstanding awards. No amendment, alteration, suspension, or termination of the Incentive Plan will materially impair the rights of any participant, unless mutually agreed otherwise between the participant and the Company.
Any such termination will not affect outstanding awards. No amendment, alteration, suspension, or termination of the Incentive Plan will materially impair the rights of any participant, unless mutually agreed otherwise between the participant and the Company. Approval of the shareholders shall be required for any amendment, where required by applicable law.
Wang Xinjian, Secretary of the Board Mr. Wang Xinjian joined Shangdong Baoya in December 2014 and has been serving as the assistant to the Chairman of the Board Office. Mr. Wang Xinjian is a bachelor’s degree in mechanical engineering and automation of Jinan University, and an intermediate engineer.
She was awarded the title of “Jinan Municipal Model Worker”. 105 Wang Xinjian, Secretary of the Board Mr. Wang Xinjian joined Shangdong Baoya in December 2014 and has been serving as the assistant to the Chairman of the Board since 2016. Mr. Wang Xinjian holds a bachelor’s degree in mechanical engineering and automation from Jinan University.
Prior to this, as the Group Director/Vice President and Finance Director of Liaoning Shuguang Automotive Group Co., Ltd., a China A-share listed company from August 2020 to August 2021, Mr. Fan enhanced financial operations, managed capital initiatives, and directed strategic financing.
From November 2021 to December 2022, he served as the CFO of Chiso Automotive (Chongqing) Co., Ltd., overseeing financial strategy, system establishment, and capital operations. Prior to this, as the Group Director/Vice President and Finance Director of Liaoning Shuguang Automotive Group Co., Ltd., a China A-share listed company from August 2020 to August 2021, Mr.
Chiang served as an Aspen Institute Rodel Fellow, Co-Chair of California Forward, Treasurer of California State Guard Foundation, Hunt-Kean Leadership Fellow and University of Southern California Center for the Political Future Fellow.
Chiang served as an Aspen Institute Rodel Fellow, Co-Chair of California Forward, Treasurer of California State Guard Foundation, Hunt-Kean Leadership Fellow and University of Southern California Center for the Political Future Fellow. Mr. Chiang graduated with honors from the University of South Florida with a B.S. degree in finance and received a J.D. degree from the Georgetown University Law Center.
Board Practices Our board of directors consists of seven directors, including three executive directors and four independent directors. We have also established an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee. We have adopted a charter for each of the three committees.
No awards have been granted under the Incentive Plan as of December 31, 2024. 6.C. Board Practices Our board of directors consists of seven directors, including three executive directors and four independent directors. We have also established an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee.
From 2015-2018, John Chiang served as California’s 33rd State Treasurer. As the state’s treasurer, he oversaw trillions of dollars in annual transactions, managed a $75 billion investment portfolio and was the nation’s largest issuer of municipal bonds. He spearheaded efforts to increase financing of housing, stand up the CalSavers program and further advance green bonds.
Chiang served as California’s 33rd State Treasurer. As the state’s treasurer, he oversaw trillions of dollars in annual transactions, managed a $75 billion investment portfolio and was the nation’s largest issuer of municipal bonds. Prior to being elected Treasurer, Mr. Chiang served as State Controller of California from 2007-2014. He served as a CalPERS and CalSTRS Trustee from to.
The number of individual holders of record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company. 136 Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership Percentage of Outstanding Shares (2) 5% or Greater Shareholders Euroamer Kaiwan Technology Company Limited (3) 64,161,450 39.92 % Chijet Holdings Limited (4) 50,541,864 31.45 % Hong Kong Yeda International Holdings Co., Limited (5) 15,401,367 9.58 % Hong Kong Guotai International Holdings Co., Limited (6) 15,335,198 9.54 % Executive Officers and Directors Mu Hongwei (4) 50,541,864 31.45 % Wu Lichun (3) 64,161,450 39.92 % Zhang Jiannong 0 0 % John Chiang (7) 5,000 * Wen Li (8) 5,000 * Ying Liu (9) 5,000 * Huimin Li 0 0 % Wang Qingjun 0 0 % Dongchun Fan 0 0 % Wang Xiangyin 0 0 % Li Na 0 0 % All directors and executive officers as a group (eleven individuals) 114,718,314 71.38 % * Less than one percent (1) Except as otherwise indicated below, the business address of our directors and officers is No. 8, Beijing South Road Economic & Technological Development Zone Yantai, Shandong, CN-37 264006 People’s Republic of China.
Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership Voting Right of Outstanding Shares (2) 10% or Greater Shareholders Euroamer Kaiwan Technology Company Limited (3) 2,320,112 3 4.43 % Chijet Holdings Limited (4) 1,520,241 22.56 % Executive Officers and Directors Mu Hongwei (4) 1,520,241 22.56 % Wu Lichun (3) 2,320,112 34.43 % Zhang Jiannong* 0 0 % Huimin Li* 0 0 % Wang Qingjun* 0 0 % Dongchun Fan* 0 0 % Wang Xiangyin* 0 0 % Li Na* 0 0 % All directors and executive officers as a group (eleven individuals) 3,840,353 56.99 % % % * Less than one percent (1) Except as otherwise indicated below, the business address of our directors and officers is No. 8, Beijing South Road Economic & Technological Development Zone Yantai, Shandong, CN-37 264006 People’s Republic of China.
Compensation During the fiscal year ended December 31, 2023, we paid an aggregate of RMB10,531 thousand ($1,483 thousand) to our executive officers and directors. Additionally, for our executive officers, we paid RMB737,993.62 ($103,944.23) for the fiscal year ended December 31, 2023 in social insurance, provident fund and other social benefits.
Additionally, for our executive officers, we paid $41,100 for the fiscal year ended December 31, 2024 in social insurance, provident fund and other social benefits.
(9) Based on 5,000 shares issued as stock compensation for independent director. 137 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation. Not applicable.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation. Not applicable.
Li received a Bachelor of Arts in Finance from Renmin University of China and an MBA focusing on Finance and Strategy from UCLA Anderson School of Management, where she graduated with honors. Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Li received a B.A, degree in Finance from Renmin University of China and an M.B.A. degree focusing on Finance and Strategy from UCLA Anderson School of Management, where she graduated with honors. Mr Wenbo Wang has served as a member of our Board since May 2024. He has over 20 years of experience in financial analysis, operations finance and.
The registered address of Chijet Holdings Limited, a British Virgin Islands company, is Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands. (5) Based on a Schedule 13G filed on February 16, 2024. Represents shares held by Hong Kong YeDa International Holdings Co., Limited (“HK YeDa”).
Hongwei Mu is the director of CHL and as such, may be deemed to be the beneficial owner of the securities held by Chijet Holdings Limited. The registered address of Chijet Holdings Limited, a British Virgin Islands company, is Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands. 114 6.F.
(2) Applicable percentage of ownership is based on 160,707,171 ordinary shares outstanding as of April 30, 2024. (3) Represents shares held by Euroamer Kaiwan Technology Company Limited (“EKT”). Lichun Wu, our director, is the director of EKT and as such, may be deemed to be the beneficial owner of the securities held by EKT.
(2) Applicable percentage of ownership is based on 30,887,525 Class A ordinary shares voting right and 1,600,000 B share at 20 times voting right outstanding as of May 15, 2025. (3) Represents shares held by Euroamer Kaiwan Technology Company Limited (“EKT”).
Each of the committees of our board of directors shall have the composition and responsibilities described below. Audit Committee John Chiang, Huimin Li, Ying Liu serve as members of our Audit Committee with Ms. Liu serving as the chairman of the Audit Committee.
We have adopted a charter for each of the three committees. A description of the composition and responsibilities of each committee follows below. Audit Committee Na Wang, Jing zhang and Wenbo Wang, serve as members of our Audit Committee with Mr Wang serving as the chairman of the Audit Committee.
(2) Member of the compensation committee. (3) (4) Member of the nominating and corporate governance committee. Resigned on March 15, 2024, due to personal reasons. (5) Appointed as director on April 8, 2024. 124 Executive Officers Wang Xiangyin, COO Dr. Wang Xiangyin has been the president of Shandong Baoya New Energy Vehicle Co., Ltd since September 2020.
(2) Member of the compensation committee. (3) (4) (5) (6) Member of the nominating and corporate governance committee. Resigned on June 3, 2024, due to personal reason Resigned on May 2, 2024, due to personal reason. Resigned on March 15, 2024, due to personal reasons. (7) (8) Resigned on January 14, 2025, due to personal reasons.
Liu has served as Chief Operating Officer since August 2022 and Chief Financial Officer since November 2021 at Wish, a Nasdaq traded public company based in San Francisco, US.
Ms. Ying Liu has served as a member of our Board since March 2023. Ms. Liu has served as Chief Operating Officer since August 2022 and Chief Financial Officer since November 2021 of Wish, a Nasdaq company engaged in 2020. She previously served as Chief Financial Officer and Senior Vice President of Shutterfly, Inc., from April 2020 to November 2021.
Dongchun Fan is the CFO and Vice President of Shandong Baoya New Energy Vehicle Co., Ltd. He is an accomplished financial leader with a distinguished career spanning multiple industries throughout his career. From November 2021 to December 2022, he served as the CFO of Chiso Automotive (Chongqing) Co., Ltd., overseeing financial strategy, system establishment, and capital operations.
Appointed on January 27, 2025 (9) Resigned on May 12,2024, due to personal reason 104 Executive Officers Dongchun Fan, CFO Mr. Dongchun Fan has served as the CFO and Vice President of Shandong Baoya since 2023. He is an accomplished financial leader with a distinguished career spanning multiple industries.
From November 2016 to March 2020, he served as the president of Huatai Automobile Group, an automobile manufacturing company. From November 2017 to March 2019, he served as the co-founder and CEO of Reech Automotive Technology Group Co., Ltd., an automobile manufacturing and sale company. Dr.
From 2019 to 2022 he served as the CEO of Centurygalaxy Group Co., Ltd...
Wu is the founder and director of Shandong Baoya New Energy Vehicle Co., Ltd., with dual master’s degrees from Huazhong University of Science and Technology and Tsinghua University respectively.
As an expert in management and Confucianism, he authored “Soul and Wealth”, “Three Primary Colors of Confucius.”. Wu Lichun Mr. Wu Lichun is a founder and director of Shandong Baoya and has served as a director of our company since 2023 . He received dual master’s degrees from Huazhong University of Science and Technology and Tsinghua University respectively.
Board Diversity Matrix Country of Principal Executive Offices: China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 5 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Family Relationships There are no family relationships, or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such person was selected to serve as a director or officer. 6.B.
Family Relationships There are no family relationships, or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such person was selected to serve as a director or officer. 6.B. Compensation During the fiscal year ended December 31, 2024, we paid an aggregate of $480,853 to our executive officers and directors.
Removed
He is also the executive director of China Market Society (Automobile Marketing Expert Committee) since January 2010, and a special tutor (part-time professor) of Hunan University and Yantai University from March 2021 to December 2023.
Added
From 2013 to 2018 he served as General Manager of Internal Control Center for Bybo Group Co., Ltd., Prior thereto he served as the Deputy General Manager of the Group Finance Department of Tsinghua Unigroup LTD., Director of Internal Audit at Synutra International,Inc, a Nasdaq traded company engaged in in the production, distribution and sale of dairy based nutritional products.
Removed
From July 1985 to June 1999, he served as the general manager/general engineer of China Aerospace Automobile Sanjiang Vehicle Company, an aerospace and automobile company, where he was responsible for project management of engineering projects.
Added
Ms. Jing Zhang has served as a Director of our board since January 2025. Ms. Zhang has been engaged in freelance professional activities since January 2023, demonstrating adaptability and strategic expertise across diverse projects. She holds a diploma in Property Management (2005-2008) from Shandong Youth Management Cadre College, where she acquired foundational skills in operational coordination and resource management.
Removed
From July 1999 to November 2016, he served as the executive deputy general manager and general manager of overseas division of Beiqi Foton Motor Co., Ltd. (“Foton”), an automobile manufacturing company, where he was responsible for comprehensive management of Foton’s international trading and marketing activities.
Added
Her professional background reflects a commitment to organizational efficiency and innovative problem-solving, qualities that align with the company’s governance priorities. Ms. Zhang brings a balanced perspective to the board, informed by her academic training and hands-on experience in dynamic work environments. Mr. Wang Wanli has served as a Director of our board since January 2025.
Removed
Wang holds a master’s degree in mechanical and electronic engineering from Hunan University and a doctor’s degree in vehicle engineering from Hunan University, has more than 30 years’ practice experience in the automobile industry, and is an expert in strategy, management and marketing in the field of commercial vehicles and passenger cars.
Added
A seasoned legal professional with over 25 years of experience, Mr. Wang has been a Lawyer at Beijing Gaotong Law Firm since 2002, specializing in corporate restructuring, mergers & acquisitions (M&A), and cross-sector investment financing.
Removed
He has profound experience in automobile R&D, supply chain, intelligent manufacturing and global marketing, and has led the top-level design, strategic planning and overall operation management of many well-known automobile enterprises in China. He has led Beiqi Foton marketing team to win the top sales of commercial vehicles in China for six years. Dongchun Fan, CFO Mr.
Added
He holds a Master Degree of Law (2003-2005) from China University of Political Science and Law and a Bachelor of Engineering (1989-1993) from Nanjing University of Finance and Economics, blending technical acumen with legal rigor. Mr.
Removed
Zhang has rich experience in comprehensive operation and management of new energy vehicles and has vision and keen insight into the development trend of new energy vehicles. As an expert in management and Confucianism, he authored “Soul and Wealth”, “Three Primary Colors of Confucius” with in-depth research and unique insight. Wu Lichun Mr.
Added
Wang’s career began in public service at the Beijing Fengtai District Grain Bureau (1993-1999), where he developed operational oversight skills as Deputy Chief of the Operations Section. Transitioning to private practice in 1999, he has since led high-stakes M&A and restructuring matters across industries including aviation, energy, securities, and finance.
Removed
Prior to being elected Treasurer, Mr. Chiang served as State Controller for California from 2007-2014. As a CalPERS and CalSTRS Trustee in 2008, Mr. Chiang led the movement to have the nation’s two largest public defined benefit plans advocate for greater diversity of corporate boards.
Added
Notable engagements include serving as Lead Counsel for: - The restructuring of Huaxia Securities into China Securities (now CITIC Construction Securities); - Corporate reorganizations under China National Aviation Holding Corporation; - Liaoning Securities’ restructuring into a state-controlled entity.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

20 edited+17 added−4 removed8 unchanged
Registration Right Agreement On June 2, 2023, we entered into a registration right agreement with our shareholders, under which we have granted certain registration rights to holders of our registrable securities. Set forth below is a description of the registration rights under this agreement.
Registration Right Agreement On June 2, 2023, we entered into a registration right agreement with, under which we granted certain registration rights to holders of our registrable securities. Set forth below is a description of the registration rights under this agreement.
Set forth below are the related party transactions of our company that occurred during the past three fiscal years up to the date of this annual report.
Set forth below are the related party transactions of our company that occurred during the past three fiscal years.
For the years ended December 31, 2023, 2022 and 2021, we purchased raw materials, molds, logistics services, and other components from our subsidiaries, non-controlling shareholders, and their subsidiaries (including Jilin FAW Baosteel Auto Steel Parts Co., Ltd., Jilin Jiqi Longshan Automotive Chassis Co., Ltd., FAW Logistics Co., Ltd., China FAW Group Co., Ltd., and China FAW Group Import and Export Co., Ltd. etc.), resulting in a total purchase amount of $2,795 thousand, $5,881 thousand, and $25,954 thousand, respectively.
(2) For the years ended December 31, 2024, 2023 and 2022, we purchased raw materials, molds, logistics services, and other components from our subsidiaries, non-controlling shareholders, and their subsidiaries (including Jilin FAW Baosteel Auto Steel Parts Co., Ltd., Jilin Jiqi Longshan Automotive Chassis Co., Ltd., FAW Logistics Co., Ltd., China FAW Group Co., Ltd., and China FAW Group Import and Export Co., Ltd. etc.), resulting in purchases of US$17.68 million, US$2.80 million and US$5.88 million, respectively.
Piggyback Registration Rights (i) If a Piggy-Back Registration had been available to the Demanding Holder(s) within the one hundred twenty (120) days preceding the date of request for the Demand Registration, (ii) within sixty (60) days after the effective date of a previous registration effected with respect to the Registrable Securities pursuant this Section 2.1, or (iii) during any period (not to exceed one hundred eighty (180) days) following the closing of the completion of an offering of securities by us if such Demand Registration would cause us to breach a “lock-up” or similar provision contained in the underwriting agreement for such offering。 Share Incentive Plan See “ Item 6.
Piggyback Registration Rights (i) If a Piggy-Back Registration had been available to the Demanding Holder(s) within the one hundred twenty (120) days preceding the date of request for the Demand Registration, (ii) within sixty (60) days after the effective date of a previous registration effected with respect to the Registrable Securities pursuant this Section 2.1, or (iii) during any period (not to exceed one hundred eighty (180) days) following the closing of the completion of an offering of securities by us if such Demand Registration would cause us to breach a “lock-up” or similar provision contained in the underwriting agreement for such offering. 115 Transactions with Certain Related Parties We have adopted an audit committee charter, which requires the committee to review all related party transactions on an ongoing basis and all such transactions be approved by the audit committee.
As of the date of this annual report, the related party transactions of the company in the three accounting years are as follows: For the years ended December 31, 2023, 2022 and 2021, we provided sales of goods to our subsidiaries, non-controlling shareholders, and their subsidiaries (including Jilin Jiqi Longshan Automotive Chassis Co., Ltd., China FAW Co., Ltd., China FAW Group Co., Ltd., China FAW Technology Center, China FAW Group Import & Export Co., Ltd., FAW Jiefang Automobile Co., Ltd.
(1) For the years ended December 31, 2024, 2023 and 2022, we provided sales of goods to our subsidiaries, non-controlling shareholders, and their subsidiaries (including Jilin Jiqi Longshan Automotive Chassis Co., Ltd., China FAW Co., Ltd., China FAW Group Co., Ltd., China FAW Technology Center, China FAW Group Import & Export Co., Ltd., FAW Jiefang Automobile Co., Ltd.
Changchun Smart Bus Branch, FAW Besturn Car Co., Ltd., FAW-Volkswagen Co., Ltd. etc.), and the total sales of goods we received were, $2,403 thousand, $6,908 thousand, and $15,283 thousand, respectively.
Changchun Smart Bus Branch, FAW Besturn Car Co., Ltd., FAW-Volkswagen Co., Ltd. etc.), and the total sales of goods we received were US$533,994, US$2.40 million and US$6.91 million, respectively.
As of December 31, 2023 and 2022, the payable, prepaid, and other payables arising from the related party transactions were $128,281 thousand and $119,571 thousand, respectively.
As of December 31, 2024,2023 and 2022, the payable, prepaid, and other payables arising from the related party transactions were US$140.05 million, US$128.28 million, and US$ million, respectively.
Compensation - Employment Agreements ”. 7.C. Interests of Experts and Counsel Not applicable. 140
Directors, Senior Management and Employees - B. Compensation - Employment Agreements ”. 7.C. Interests of Experts and Counsel Not applicable. 117
The loan was originally due on October 31, 2026. While in March 2022, pursuant to the loan agreement, this related party filed in court to request the Company to repay the loan in advance. As a result, in April 2022, the Company reached a settlement agreement with this related party.
In March 2022, pursuant to the loan agreement, filed a request in court for the Company to repay the loan in advance. As a result, in April 2022, the Company reached a settlement agreement with.
As of December 31, 2023 and 2022, the accounts receivable and other receivables arising from the related party transactions were $48,956 thousand and $60,889 thousand respectively; The contract liabilities are $2,483 thousand and $912 thousand, respectively.
As of December 31, 2024 and 2023, the accounts receivable and other receivables arising from the related party transactions were US$38.78 million and US$48.96 million respectively; The contract liabilities are US$961,398 and US$2.48 million, respectively.
For the years ended December 31, 2023, 2022 and 2021, we received information technology support services from a non-controlling shareholder subsidiary (Qiming Information Technology Co., Ltd.) and incurred information technology support service expenses of $213 thousand, $248 thousand, and $354 thousand, respectively. 139 In December 2019, Baoya entered loans with Yantai Guofeng Investment Holding Group Co., Ltd., an affiliate of the Company.
(3) For the years ended December 31, 2024, 2023 and 2022, we received information technology support services from a non-controlling shareholder subsidiary (Qiming Information Technology Co., Ltd.) and incurred information technology support service expenses of US$126,825, US$213,372, and US$248,000, respectively.
As of December 31, 2023 and 2022, the remaining unpaid principal of this loan was $162,181 thousand and $166,930 thousand, respectively. For the years ended December 31, 2023, 2022 and 2021, the interest expenses generated by this loan were, $$7,510 thousand, $7,240 thousand, and $7,295 thousand, respectively.
As of December 31, 2024 and 2023, the remaining unpaid principal of the loans was US$157.75 million and US$162.18 million, respectively. For the years ended December 31, 2024, 2023 and 2022, the interest expenses generated by the loans were US$8.83 million, US$7.51 million, and US$7.24 million, respectively.
In May 2023, Shandong Baoya New Energy Vehicle Co., Ltd. entered pledged loans with Nanjing Shengnuo Biotechnology Industry Company Ltd. The principal of $1,127 thousand (RMB 8,000,000) and a loan interest rate of 10%. The loans were originally mature in three months.
(7) In May 2023, Shandong Baoya. entered pledged loans with Nanjing Shengnuo Biotechnology Industry Company Ltd. The $1.10 million principal of) the loans were to mature in three months and was subject to interest of 10%. The due dates were further extended twice in July 2023 and January 2024 with the loans coming due in July 2024.
Pursuant to the settlement agreement, the outstanding balance of US$4,889,894 (RMB 33,730 thousand) will bear an annual interest rate of 4.9% and will be repaid through four installments with each payment amount of US$1,187,693 (RMB 8,432,498) on and before August 1, 2024.
Pursuant to the settlement agreement, the outstanding balance of US$4.62 million bears an annual interest rate of 4.9% and was to be repaid in four annual installments of US$1.16 million on and before August 1, 2024. At present, we are negotiating with\y to extend the maturity date to repay the remaining amount.
As a result, pursuant to the agreement with the lender, there will be penalties for unpaid interest, and the remained unpaid principal was not due immediately, and the annual interest rate increased to 5.0895% from 3.915%.The carrying amount of buildings, machinery and equipment, mold and tooling, other logistic equipment and land use right, pledged by the Company to secure the borrowings as of December 31, 2023 and 2022 were $90,664 thousand and $110,420 thousand respectively.
FAW Jilin defaulted on one of these pledged loans on November 1, 2022 and November 1, 2023. As a result, pursuant to the agreement with the lender, penalties are due for unpaid interest, the remaining unpaid principal was not due immediately, and the annual interest rate increased to 5.0895% from 3.915%.
As of December 31, 2023 and 2022, the principal amounts of this loan that have not yet been converted into government subsidies were $104,227 thousand and $107,279 thousand (RMB 740 thousand thousand), respectively. For the years ended December 31, 2023, 2022 and 2021, the interest expenses generated by this loan were $6,894 thousand, $7,239 thousand, and $8,545 thousand, respectively.
For the years ended December 31, 2024, 2023 and 2022, the interest expenses generated by this loan were US$6.80 million, US$6.89 million, and US$7.24 million, respectively. For the years ended December 31, 2024, 2023 and 2022, we recognized government subsidies as government grant income of nil, US$55.78 million and nil, respectively.
The loans are bearing an annual interest rate of 6.5%. Pursuant to the loan agreements, if Baoya met certain development conditions, part of the loan could be transferred to a government subsidy, and the relevant interest will be waived.
Pursuant to the loan agreements, if Shandong Baoya met certain development conditions, part of the loan could be transferred to a government subsidy, and the relevant interest would be waived. As of December 31, 2024 and 2023, the principal amounts of this loan that have not yet been converted into government subsidies were US$101.38 million and US$104.23 million, respectively.
The carrying amount of machine and equipment pledged by to secure the borrowings as of December 31,2023 and 2022 were $586 thousand(RMB 4,159 thousand),and $844 thousand(RMB 5,821 thousand), respectively. The carrying amount of buildings and land use right pledged to secure the borrowings as of December 31, 2023 and 2022 were US$1,780 (RMB 12,640) and nil respectively.
The carrying amount of buildings, machinery and equipment, molds and tooling, other logistics equipment and land use rights pledged by the Company to secure the loans as of December 31, 2024 and 2023 were US$107.53 million and US$90.66 million, respectively.
For the years ended December 31, 2023, 2022 and 2021, the recognized government subsidies as government grant income were $55,789 thousand, nil and nil, respectively. In 2016, the Company entered into a related party pledged loan with the Company’s one non-controlling interest shareholder.
The net value of such land use rights was US$25.64 million as of December 31, 2024. 116 (5) In 2016, the Company entered into a related party pledged loan with the Company’s one non-controlling interest shareholder. The carrying amount of machine and equipment pledged to secure the loan as of December 31,2024 and 2023 were US$689,814and US$585,773, respectively.
For the years ended December 31, 2023, 2022 and 2021, the interest expenses generated by this loan were $203 thousand, USD 245 thousand, and $256 thousand, respectively. During May 2020, FAW Jilin entered pledged loans with FAW Finance Co., Ltd, an affiliate of FAW Jilin’s non-controlling interest shareholders. The loans are bearing an annual interest rate of 3.915%.
(6) During May 2020, FAW Jilin entered into pledged loans with FAW Finance Co., Ltd, an affiliate of FAW Jilin’s non-controlling interest shareholders. The loans bear annual interest at a rate of 3.915%. The loans mature gradually from 2022 to 2025. Pursuant to the agreements, FAW Jilin was to make four installment payments of US$39.44 million .
Removed
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan .” 138 Transactions with Certain Related Parties We have adopted an audit committee charter, which requires the committee to review all related party transactions on an ongoing basis and all such transactions be approved by the audit committee.
Added
(4) In December 2019, Shandong Baoya entered loans with Yantai Guofeng Investment Holding Group Co., Ltd., an affiliate of the Company. The loans bear annual interest at a rate of 6.5%.
Removed
At present, we are negotiating with the related party to extend the maturity date to repay the remaining amount. As of December 31, 2023 and 2022, the remaining unpaid principal of this loan was $3,906 thousand and $4,890 thousand, respectively.
Added
As of December 31, 2024, Shandong Baoya was notified that Yantai Guofeng has transferred its creditor’s rights with respect to the loans to Yantai Public Transportation Co., Ltd (“Yantai Trans”). On February 10, 2025, Yantai Trans filed an application for property preservation with the Yantai Intermediate Court, which resulted in the freeze of Shandong Baoya’s land use rights.
Removed
The loans will mature gradually from 2022 to 2025. Pursuant to the agreements, FAW Jilin will make four installment payments of US$40,545,289 (RMB 287,867,500), each for the remaining principal balance. FAW Jilin defaulted on one of these pledged loans on November 1, 2022 and November 1, 2023, respectively.
Added
The carrying number of buildings and land use rights pledged to secure the loan as of December 31, 2024 and 2023 were US$1.22 million (RMB 8.93 million) and US$1.78 million (RMB 12.64 million) respectively. The loan was originally due on October 31, 2026.
Removed
The due dates were further extended twice in July 2023 and January 2024 for repayment and the loans will be due in July 2024 according to the latest agreement. In 2023, the interest expense generated by this loan was $70 thousand. Employment Agreement and Compensation Agreement Please refer to “ Item 6. Directors, Senior Management and Employees - B.
Added
As of December 31, 2024 and 2023, the remaining unpaid principal of this loan was US$3.80 million and US$3.91 million, respectively. For the years ended December 31, 2024, 2023 and 2022, the interest expenses generated by this loan were US$189,348, US$203,081, and US$245,000, respectively.
Added
On May 16 and June 4, 2024, Shandong Baoya repaid the principal of the loans. For the years ended December 31, 2024 and 2023, the interest expenses generated by this loan were US$46,034, and US$69,73, respectively. (8) In August and October 2023, Shandong Baoya entered two loans totaling US$547,998 with Shandong Jiankangdadi Enterprise Management Consulting Co., Ltd.(“Jiankangdadi”).
Added
The loans bear interest of 10% and the original due dates were December 31, 2023 and April 23, 2024. As of April 20, 2025, the US$410,998 loan had its maturity extended to June 30, 2025 and the interest rate decreased to 6.5%.
Added
The due date of the US$136,999 loan was extended to April 23, 2025 and the interest rate decreased to 6.5%. On January 16, 2024, January 19, 2024, and March 25, 2024, Shandong Baoya entered three additional loans for a total of US$1.23 million with Jiankangdadi. The loans bear interest of 6.5%.
Added
The original due dates were January 15, 2025, January 28, 2025 and March 24, 2025. As of December 31, 2024 and 2023, the remaining unpaid principal of these five loans was US$1.78 million and US$563,388, respectively. For the years ended December 31, 2024 and 2023, the interest expenses generated by these loans were US$100,586 and US$20,733, respectively.
Added
As of April 20, 2025, the due dates for the loans entered into in 2024 were further extended to July 15, 2025, July 28, 2025 and September 24, 2025 with the interest rate increased to 6.5%.
Added
On November 25, 2024, Jiankangdadi filed an application with the Lixia People’s Court of Jinan City to freeze Shandong Baoya’s 4.5% equity interest in Xiangyang Yazhi equivalent to the then outstanding principal of US$616,497. The freeze order is effective until November 28, 2027.
Added
(9) In August and September 2023, Shandong Baoya entered two loans amounting to US$1.37 million with Jinan Haiyun Investment Consulting Co., Ltd. what is the affiliation, The loans bear interest of 10%. The due dates were February 22, 2024 and March 24, 2024, respectively.
Added
As of December 31, 2024 and 2023, the remaining unpaid principal of these loans was US$1.37million and US$1.41 million, respectively. For the years ended December 31, 2024 and 2023, the interest expenses generated by these loans were US$119,901 and US$34,358, respectively.
Added
As of April 20, 2025, the due dates were extended to August 22, 2025 and September 24, 2025, respectively, and the interest rate was decreased to 6%.
Added
On December 3, 2024, Jinan Haiyun filed an application with the Lixia People’s Court of Jinan City to freeze Shandong Baoya’s 2% equity interest in FAW Jilin equivalent to the outstanding principal of US$1.51 million. The freeze order is effective until December 3, 2027.
Added
(10) On March 24, 2025, we issued an aggregate of 1,600,000 Class B ordinary shares to two of our existing shareholders , Chijet Holdings Limited and Euroamer Kaiwan Technology Company Limited, pursuant to a share exchange agreement among the company and the two shareholders.
Added
In exchange for the Class B Shares, the two shareholders returned an aggregate of 1,624,910 of our Class A ordinary shares, which were subsequently canceled, retired and reverted to our authorized but unissued Class A ordinary shares.
Added
(11) On January 7, 2025, we issued an aggregate of 2,282,669 Class A ordinary shares including warrants to our existing shareholders, Chijet Holdings Limited and Euroamer Kaiwan Technology Company Limited, at $1.68 per share, and at $1.72 per warrant. Company raised 1.7 million dollars from this trade. Employment Agreement and Compensation Agreement Please refer to “ Item 6.