Company: CAAS
Filing Date: 2025-07-25
Form Type: F-4/A
Source: 0001104659-25-070492
Chunk: 47

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-25
Form: F-4/A
Chunk 47
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 the Company’s stock could be greatly reduced or rendered worthless.

The Company’s secured credit facilities contain certain financial covenants that it may not satisfy, which, if not satisfied, could result in the acceleration of the amounts due under the Company’s secured credit facilities and the limitation of the Company’s ability to borrow additional funds in the future.

The agreements governing the Company’s secured
credit facilities subject it to various financial and other restrictive covenants with which the Company must comply on an ongoing or
periodic basis. These covenants include, but are not limited to, restrictions on the utilization of the funds and the maintenance of certain
financial ratios. If the Company violates any of these covenants, the Company’s outstanding debt under the Company’s secured
credit facilities could become immediately due and payable, the Company’s lenders could proceed against any collateral securing
such indebtedness and the Company’s ability to borrow additional funds in the future may be limited. Alternatively, the Company
could be forced to refinance or renegotiate the terms and conditions of the Company’s secured credit facilities, including the interest
rates, financial and restrictive covenants and security requirements of the secured credit facilities, on terms that may be significantly
less favorable to the Company.

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Risks Related to Doing Business in China and Other Countries besides the United States

The Company may face a severe operating environment during times of economic recession.

The sales volume of the Company’s core products
is largely influenced by the demand for its customers’ end products which are mostly sold in the Chinese markets. Future economic
crises, either within China or without, may lead to a drastic drop in demand for the Company’s products.

The Chinese government’s macroeconomic policies could have a negative effect on the Company’s business and results of operations.

The Chinese government has implemented various
measures from time to time to adjust the rate of economic growth in the PRC. Some of these measures may have a negative effect on the
Company over the short or long term. For example, in past years, to cope with high inflation and economic imbalances, the Chinese government
has tightened monetary policy and implemented floating exchange rate policy. In addition, in order to alleviate some of the effects of
unbalanced growth and social discontent, the Chinese government has enacted a series of social programs and anti-inflationary measures.
These, in turn, have increased the costs on the financial and manufacturing sectors, without having alleviated the effects of high inflation
and