Company: NCL
Filing Date: 2025-11-14
Form Type: 424B3
Source: 0001575872-25-000688
Chunk: 37

Company: Northann Corp.
Filing Date: 2025-11-14
Form: 424B3
Chunk 37
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 at its will. Although SAFE Circular 19 allows for the use of RMB converted from the foreign
currency-denominated capital for equity investments in the PRC, the restrictions continue to apply as to foreign-invested enterprises’
use of the converted RMB for purposes beyond their business scope, for entrusted loans or for inter-company RMB loans. On June 9,
2016, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange
Settlement Management Policy of Capital Account, or “SAFE Circular 16,” effective on June 9, 2016, which reiterates some
rules set forth in SAFE Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered
capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to
non-affiliated enterprises. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability 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