Company: CAAS
Filing Date: 2025-08-04
Form Type: 424B3
Source: 0001104659-25-073486
Chunk: 44

Company: China Automotive Systems, Inc.
Filing Date: 2025-08-04
Form: 424B3
Chunk 44
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 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 could have a material adverse effect on the Company’s business, results of operations and the trading price of its shares.

The Company is subject to reporting obligations
under the U.S. securities laws. The Securities and Exchange Commission, the “SEC,” as required by Section 404 of the
Sarbanes-Oxley Act of 2002, has adopted rules requiring public companies to include a report of management in its annual report
that contains an assessment by management of the effectiveness of such company’s internal control over financial reporting.

If the Company fails to maintain the adequacy
of its internal controls in the future, it will not be able to ensure that it can conclude on an ongoing basis that it has effective
internal control over financial reporting in accordance with the Sarbanes-Oxley Act. Moreover,