Company: NCL
Filing Date: 2025-11-14
Form Type: 424B3
Source: 0001575872-25-000688
Chunk: 52

Company: Northann Corp.
Filing Date: 2025-11-14
Form: 424B3
Chunk 52
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 adverse effect
on our financial condition and results of operations.

The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the “M&A Rules,” and recently adopted regulations and rules concerning
mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign
investors more time consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control
transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such
transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a
change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. MOFCOM must also be notified in advance
of mergers or acquisitions that allow one market player to take control of or to exert a decisive impact on another market player when
the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the “Prior Notification
Rules,” issued by the State Council in August 2008 are triggered. In addition, the security review rules issued by MOFCOM that became
effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security”
concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise
“national security” concerns are subject to strict review by MOFCOM. The rules further prohibit any activities attempting
to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the future,
we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and
other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval
from MOFCOM or its local counterparts may delay or inhibit our ability to complete such transactions. It is clear that our business would
not be deemed to be in an industry that raises “national defense and security” or “national security” concerns.
MOFCOM or other government agencies, however, may publish explanations in the future determining that our business is in