Company: CAAS
Filing Date: 2025-07-01
Form Type: F-4
Source: 0001104659-25-064447
Chunk: 44

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-01
Form: F-4
Chunk 44
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 in the approval of transactions that might not
maximize overall stockholders’ value. Additionally, these stockholders control the election of members of the Company’s Board
of Directors, have the ability to appoint new members to the Company’s management team and control the outcome of matters submitted
to a vote of the holders of the Company’s common stock (and after the redomicile merger, CAAS Cayman’s ordinary shares). The
interests of these majority stockholders may at times conflict with the interests of the Company’s other stockholders. The Company
regularly engages in transactions with entities controlled by one or more of its officers and directors, including those controlled by
Mr. Hanlin Chen, the chairman of the Board of Directors of the Company and its controlling stockholder.

There is a limited public float of the Company’s common stock, which can result in the Company’s stock price being volatile and prevent the realization of a profit on resale of the Company’s common stock or derivative securities.

There is a limited public float of the Company’s
common stock. As of March 31, 2025, approximately 35.24% of the Company’s outstanding common stock is considered part of the
public float. The term “public float” refers to shares freely and actively tradable on the NASDAQ Capital Market and not owned
by officers, directors or affiliates, as such term is defined under the Securities Act. As a result of the limited public float and the
limited trading volume on some days, the market price of the Company’s common stock can be volatile, and relatively small changes
in the demand for or supply of the Company’s common stock can have a disproportionate effect on the market price for its common
stock. This stock price volatility could prevent a security holder seeking to sell the Company’s common stock or derivative securities
from being able to sell them at or above the price at which the stock or derivative securities were bought, or at a price which a fully
liquid market would report.

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In connection with the Redomicile Merger, each
share of the Company’s common stock will be converted into the right to receive one ordinary share of CAAS Cayman, and CAAS Cayman
will issue to each holder of such right that number of ordinary shares in CAAS Cayman. Therefore, we expect the situation will remain
unchanged for CAAS Cayman’s ordinary shares after the Redomicile Merger.

Failure to maintain effective internal control over financial reporting