Company: VSA
Filing Date: 2025-01-15
Form Type: F-3
Source: 0001104659-25-003808
Chunk: 4

Company: VisionSys AI Inc
Filing Date: 2025-01-15
Form: F-3
Chunk 4
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 shareholders to control the business operations of the VIEs. Such structure enables investors to share economic interests in China-based companies in sectors where foreign direct investment is prohibited or restricted under laws and regulations in mainland China. Investors in our securities are not purchasing securities of our operating subsidiaries or the VIEs but instead are purchasing securities of a Cayman Islands holding company, and may never directly hold equity interests in the VIEs. As most of our operations are conducted through either the VIE structure or our operating subsidiaries in mainland China, we are subject to certain legal and operational risks associated therewith. For example, we face risks associated with regulatory approvals on offshore offerings, antimonopoly regulatory actions, and oversight on cybersecurity and data privacy. These risks could result in a material adverse change in our operations and the value of our ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or may cause the value of such securities to significantly decline or become worthless. Though the PRC Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment, the definition of “foreign investment” thereunder is relatively wide and contains a catch-all provision which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, there is no assurance that foreign investment via contractual arrangement would not be interpreted as a type of indirect foreign investment activities in the future. If the variable interest entities were deemed as a foreign-invested enterprise under any such future laws, administrative regulations or provisions and any of our business would be included in any negative list or other form of restrictions on foreign investment, we may need to take further actions to comply with such future laws, administrative regulations or provisions. Such actions may have a material and adverse impact on our business, financial condition, result of operations and prospects. In addition, if the PRC regulatory authorities were to find our legal structure and contractual arrangements to be in violation of any laws, administrative regulations or provisions of mainland China, we are uncertain what impact of above PRC regulatory authorities’ actions would have on us and our ability to consolidate the variable interest entities in the consolidated financial statements. For more details, see “Risk Factors” beginning on page 6of this prospectus and the section entitled “Item 3. Key Information — D. Risk Factors — Risks Related to Doing Business in China” in our Annual Report incorporated by reference herein.

Furthermore, as more stringent criteria have been imposed by the SEC and the Public Company Accounting Oversight Board