Company: CAAS
Filing Date: 2025-07-01
Form Type: F-4
Source: 0001104659-25-064447
Chunk: 53

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-01
Form: F-4
Chunk 53
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 its registered capital. Accordingly, this reserve will not be available to be distributed as dividends
to the Company’s stockholders. The Company presently does not intend to pay dividends for the foreseeable future. The Company’s
Board of Directors intends to follow a policy of retaining all of the Company’s earnings to finance the development and execution
of its strategy and the expansion of the Company’s business.

The recent government regulations into business activities of U.S.-listed Chinese companies may negatively impact our operations.

China intends to improve regulation of cross-border
data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation
and insider trading. China will also check sources of funding for securities investment and control leverage ratios. The Cyberspace Administration
of China, or the CAC, has also opened a cybersecurity probe into several U.S.-listed tech companies focusing on anti-monopoly, financial
technology regulation and more recently, with the passage of the Data Security Law, how companies collect, store, process and transfer
data. If the Chinese government’s regulation expands, our operations may be negatively impacted in a significant way, although,
presently, there is no discernible immediate impact.

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The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the future may deprived our investors with the benefits of such inspections.

Our auditor, the independent registered public
accounting firm that issues the audit report included elsewhere in this proxy statement/prospectus, as an auditor of companies that are
traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the
PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The auditor is located in mainland
China, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. As a result,
we and investors in our shares of common stock were deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to
conduct inspections of auditors in China in the past has made it more difficult to evaluate the effectiveness of our independent registered
public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that are subject
to the PCAOB inspections. On December 16, 2021, the PCAOB issued the HFCAA Determination