Company: NCL
Filing Date: 2025-10-24
Form Type: S-1/A
Source: 0001575872-25-000638
Chunk: 39

Company: Northann Corp.
Filing Date: 2025-10-24
Form: S-1/A
Chunk 39
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 to transfer any foreign currency we hold, including the net proceeds from
our offshore offerings, to the PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business
in China. On October 23, 2019, SAFE issued the Notice of the State Administration of Foreign Exchange on Further Facilitating Cross-border Trade
and Investment, or “SAFE Circular 28,” which, among other things, expanded the use of foreign exchange capital to domestic
equity investment area. Non-investment foreign-funded enterprises are allowed to lawfully make domestic equity investments by
using their capital on the premise without violation to prevailing Special Administrative Measures for Access of Foreign Investments (Edition
2021), or the “Negative List,” and the authenticity and compliance with the regulations of domestic investment projects. However,
since SAFE Circular 28 is newly promulgated, it is unclear how SAFE and competent banks will carry it out in practice.

In light of the various requirements imposed by
PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, including SAFE Circular 19, SAFE
Circular 16, and other relevant rules and regulations, we cannot assure you that we will be able to complete the necessary registrations
or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans or capital contributions to the
PRC subsidiaries. As a result, uncertainties exist as to our ability to provide prompt financial support to the PRC subsidiaries when
needed. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we received or expect to receive
from our offshore offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially
and adversely affect the PRC subsidiaries’ business, including their liquidity and their ability to fund and expand their business.

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You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our PRC subsidiaries based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.

Our subsidiaries conduct
a substantial amount of operations (including the manufacturing of most of our products) in China and most of our assets and equipment
are located in China. As a result, it may be difficult for you to effect service of process upon us or our PRC subsidiaries inside China.
In addition, there is uncertainty as to whether the PRC would recognize or enforce judgments of U.S.