Filed Pursuant to Rule 424(b)(3)
Registration 333-257228
Prospectus
Borqs
Technologies, Inc.
4,000,000 ORDINARY SHARES
This prospectus relates
to the sale or other disposition from time to time by the selling shareholder identified in this prospectus of up to 4,000,000
ordinary shares. All of the ordinary shares, when sold, will be sold by the selling shareholder. We are not selling any
ordinary shares under this prospectus and will not receive any of the proceeds from the sale or other disposition of the ordinary
shares by the selling shareholder. The ordinary shares offered by this prospectus were originally issued in December 2020 and issued
to the selling shareholder in reliance on exemptions from registration under the Securities Act.
The selling shareholder may
sell or otherwise dispose of some or all the ordinary shares covered by this prospectus in a number of different ways and at varying prices.
We provide more information about how the selling shareholder may sell or otherwise dispose of its ordinary shares in the section
entitled “Plan of Distribution” on page 11. Discounts, concessions, commissions and similar selling expenses attributable
to the sale of ordinary shares covered by this prospectus will be borne by the selling shareholder. We will pay the expenses incurred
in registering the ordinary shares covered by this prospectus, including legal and accounting fees. We will not be paying any underwriting
discounts or commissions in this offering.
Our ordinary shares are listed
on the Nasdaq Capital Market under the symbol BRQS. On June 17, 2021, the closing price for an ordinary share on the Nasdaq Capital
Market was $0.87.
Investing
in our securities involves a high degree of risk. Before making an investment decision, please read “Risk Factors”
beginning on page 3 of this prospectus and any other risk factor included in any accompanying prospectus supplement and in the documents
incorporated by reference into this prospectus or any prospectus supplement.
Neither
the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is June 25, 2021.
TABLE
OF CONTENTS
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some
of the statements in this prospectus may constitute “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended (“Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended
(“Exchange Act”). These statements relate to future events concerning our business and to our future revenues, operating
results and financial condition. In some cases, you can identify forward-looking statements by terminology such as “may,”
“will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “believe,” “estimate,” “forecast,” “predict,” “propose,”
“potential” or “continue,” or the negative of those terms or other comparable terminology.
Any forward looking statements
contained in this prospectus are only estimates or predictions of future events based on information currently available to our management
and management’s current beliefs about the potential outcome of future events. Whether these future events will occur as management
anticipates, whether we will achieve our business objectives, and whether our revenues, operating results or financial condition will
improve in future periods are subject to numerous risks. There are a number of important factors that could cause actual results to differ
materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss under
the heading “Risk Factors” and in other sections of our Annual Report on Form 20-F for the year ended December 31, 2020, including
all amendments thereto, as filed with the Securities and Exchange Commission (SEC), as well as in our other reports filed from time to
time with the SEC that are incorporated by reference into this prospectus. You should read these factors and the other cautionary statements
made in this prospectus and in the documents we incorporate by reference into this prospectus as being applicable to all related forward-looking
statements wherever they appear in this prospectus or the documents we incorporate by reference into this prospectus. If one or more of
these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary
materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We undertake
no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except
as required by law.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form F-1 that we filed with the SEC using a continuous offering process.
You
should read this prospectus, exhibits filed as part of the registration statement and the information and documents incorporated by reference
carefully. Such documents contain important information you should consider when making your investment decision. See “Where You
Can Find Additional Information” and “Incorporation of Information by Reference” in this prospectus.
You
should rely only on the information provided in this prospectus, exhibits filed as part of the registration statement or documents incorporated
by reference into this prospectus. We have not authorized anyone to provide you with different information. This prospectus covers offers
and sales of our ordinary shares only in jurisdictions in which such offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of
our ordinary shares. You should not assume that the information contained in this prospectus is accurate as of any date other than the
date on the front cover of this prospectus, or that the information contained in any document incorporated by reference is accurate as
of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any
sale of a security.
In
this prospectus, we refer to Borqs Technologies, Inc. as “we,” “us,” “our,” the “Company”
or “Borqs.” You should rely only on the information we have provided or incorporated by reference in this prospectus, exhibits
filed as part of the registration statement, any applicable prospectus supplement and any related free writing prospectus. We have not
authorized anyone to provide you with different information. No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus.
BORQS
TECHNOLOGIES, INC.
Borqs
Technologies, Inc. (formerly known as “Pacific Special Acquisition Corp.”, and hereinafter referred to as the “Company”
“Borqs Technologies”, “Borqs” or “we”) was incorporated in the British Virgin Islands on July 1,
2015. The Company was formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing
all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combination
with one or more businesses or entities.
On
August 18, 2017, the Company acquired 100% of the equity interest of BORQS International Holding Corp. (“Borqs International”)
and its subsidiaries, variable interest entities (the “VIE”) and the VIE’s subsidiaries (collectively referred to as
“Borqs Group” hereinafter) (the Company and Borqs Group collectively referred to as the “Group”) in an all-stock
merger transaction. Concurrent with the completion of the acquisition of Borqs International, the Company changed its name from Pacific
Special Acquisition Corp., to Borqs Technologies, Inc.
Our
principal place of business is located at Suite 309, 3/F, Dongfeng KASO, Dongfengbeiqiao, Chaoyang District, Beijing 100016, People’s
Republic of China. Our telephone number is +86 10 6437 8678. Our agent in the BVI is Kingston Chambers and their address is P.O. Box
173, Road Town, Tortola, British Virgin Islands.
We
are a global leader in software, development services and products providing customizable, differentiated and scalable Android-based
smart connected devices and cloud service solutions. We are a leading provider of commercial grade Android platform software for mobile
chipset manufacturers, mobile device OEMs and mobile operators, as well as complete product solutions of mobile connected devices for
enterprise and consumer applications.
Our
Connected Solutions business unit (the “Connected Solutions BU”) works closely with chipset partners to develop new connected
devices. Borqs developed the reference Android software platform and hardware platform for Intel and Qualcomm phones and tablets. We
provide Connected Solutions customers with customized, integrated, commercial grade Android platform software and service solutions to
address vertical market segment needs through the targeted BorqsWare software platform solutions. The BorqsWare software platform consists
of BorqsWare Client Software and BorqsWare Server Software. The BorqsWare Client Software platform has been used in Android phones, tablets,
watches and various Internet-of-things (“IoT”) devices. The BorqsWare Server Software platform consists of back-end server
software that allows customers to develop their own mobile end-to-end services for their devices.
Our
MVNO business unit provides a full range 2G/3G/4G voice and data services for general consumer usage and IoT devices, as well as traditional
telecom services such as voice conferencing. We decided to sell the MVNO BU in order to focus on the growing IoT industry via our Connected
Solutions BU, especially with the coming of 5G.
In November 2018, the Company’s
board of directors approved the plan to dispose all of its tangible and intangibles assets related to Yuantel, our MVNO BU, the Consolidated
VIEs through a series of agreements, signed in November 2018 and February 2019, with Jinan Yuantel Communication Technology LLP (“Jinan
Yuantel”) and Jinggangshan Leiyi Venture Capital LLP (“JGS Venture”). According to the agreements, all of the Company’s
75% equity interest in Yuantel would be disposed at a consideration of RMB108.7 million. The Company received only $5.98 million from
the buyers within the year ended December 31, 2019, the Company, then amended the agreement with the another third-party buyers (the “New
Buyers”) of Yuantel as of September 1, 2020 to sell the remaining percentage of Yuantel owned by the Company for $4.54 million,
of which approximately $0.4 million were received and the balance of $4.14 million was to be received by September 30, 2020, which was
later postponed to October 2020 by both parties. The Company received the last payment of $1.2 million on October 27, 2020, and completed
the disposition of Yuantel on October 29, 2020. The New Buyers also purchased the ownership of Yuantel that was first sold to other purchasers
in 2019. The disposal of the Consolidated VIEs represents a strategic shift for the Company and has a major effect on the Company’s
results of operations. Accordingly, assets and liabilities related to the Consolidated VIEs were reclassified as held for sale as the
carrying amounts would be recovered principally through the sale and revenues, and expenses related to the Consolidated VIEs were reclassified
in the accompanying consolidated financial statements as discontinued operations for all periods presented. The consolidated balance sheets
as of December 31, 2019 and 2020 and consolidated statements of operations for the years ended December 31, 2018, 2019 and 2020 were adjusted
to reflect this change. There was no gain or loss recognized on the reclassification of the discontinued operations as held for sale.
The sale of the MVNO business unit was finally completed as of October 29, 2020.
In the years ended December
31, 2018, 2019 and 2020, Borqs generated 96.7%, 98.3% and 98.4% of its Connected Solutions BU revenues from customers headquartered outside
of China and 3.3%, 1.7% and 1.6% from customers headquartered in China. As of December 31, 2020, Borqs had collaborated with
six mobile chipset manufacturers and 29 mobile device OEMs to commercially launch Android based connected devices in 11 countries, and
sales of connected devices with the BorqsWare software platform solutions are embedded in more than 17 million units worldwide. The discontinued
MVNO BU generated all of its revenue from China.
We have dedicated significant
resources to research and development, and have research and development centers in Beijing, China and Bangalore, India. As of December
31, 2020, 234 out of the 286 persons under our employ were technical professionals dedicated to platform research and development and
product specific customization.
The
following customers accounted for near 10% or more of our total revenues, not including discontinued operations, for the years indicated:
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2020
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GreatCall, Inc.
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41.9%
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ECOM Instruments
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23.1%
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Qualcomm India Ltd.
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14.4%
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2019
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Reliance Retail Limited
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63.9%
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GreatCall, Inc.
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7.8%
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2018
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Reliance Retail Limited
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59.6%
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E La Carte, Inc.
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8.0%
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RISK
FACTORS
An investment in our ordinary
shares involves risks. Prior to making a decision about investing in our ordinary shares, you should consider carefully all of the information
contained or incorporated by reference in this prospectus, including any risks in the section entitled “Risk Factors” contained
in any supplements to this prospectus and in our Annual Report on Form 20-F for the fiscal year ended December 30, 2020, as amended to
date, and in our subsequent filings with the SEC. Each of the referenced risks and uncertainties could adversely affect our business,
operating results and financial condition, as well as adversely affect the value of an investment in our securities. Additional risks
not known to us or that we believe are immaterial may also adversely affect our business, operating results and financial condition and
the value of an investment in our securities.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The
SEC allows us to incorporate by reference the information we file with them. This means that we can disclose important information to
you by referring you to those documents. Each document incorporated by reference is current only as of the date of such document, and
the incorporation by reference of such documents should not create any implication that there has been no change in our affairs since
such date. The information incorporated by reference is considered to be a part of this prospectus and should be read with the same care.
When we update the information contained in documents that have been incorporated by reference by making future filings with the SEC,
the information incorporated by reference in this prospectus is considered to be automatically updated and superseded. In other words,
in the case of a conflict or inconsistency between information contained in this prospectus and information incorporated by reference
into this prospectus, you should rely on the information contained in the document that was filed later.
We
incorporate by reference the documents listed below:
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Our annual report on Form 20-F for the fiscal year ended December 31,
2020 filed with the SEC on April 26, 2021;
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Amendment No. 1 to our annual report on Form 20-F/A for the fiscal year ended December 31, 2020 filed with the SEC on June 14, 2021;
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Form 6-K filed with the SEC on February
22, 2021;
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Form 6-K filed with the SEC on February 25, 2021;
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Form 6-K filed with the SEC on May 5, 2021;
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Form 6-K filed with the SEC on May 7, 2021
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Form 6-K filed with the SEC on June 7, 2021;
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Form 6-K filed with the SEC on June 15, 2021;
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The description of our ordinary
shares contained in our registration statement on Form 8-A filed on October 13, 2015 pursuant to Section 12 of the Exchange
Act, together with all amendments and reports filed for the purpose of updating that description.
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Unless
expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to,
but not filed with, the SEC. We post our SEC filings on our website, www.borqs.com. We will also provide to you, upon your
written or oral request, without charge, a copy of any or all of the documents we refer to above which we have incorporated in this prospectus
by reference, other than exhibits to those documents unless such exhibits are specifically incorporated by reference in the documents.
You should direct your requests to Anthony Chan, our Chief Financial Officer, at Suite 309, 3/F, Dongfeng KASO, Dongfengbeiqiao, Chaoyang
District, Beijing 100016, China. Our telephone number at this address is +86 10 6437 8678.
SELLING
SHAREHOLDER
This prospectus relates to
the resale by the selling shareholder identified below of up to 4,000,000 ordinary shares. The ordinary shares offered by this prospectus,
originally issued in December 2020, were issued to the selling shareholder as settlement for outstanding debt and compensation for consulting
services in reliance on exemptions from registration under the Securities Act.
Selling shareholder Table
The table below sets forth:
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the name and address of the selling shareholder;
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the number of ordinary shares beneficially owned by the selling shareholder as of June 16, 2021;
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the maximum number of ordinary shares that may be sold or disposed of by the selling shareholder under this prospectus;
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the number of ordinary shares that would be owned by the selling shareholder after completion of the offering, assuming the sale of all of the ordinary shares covered by this prospectus; and
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the percentage of ordinary shares beneficially owned by the selling
shareholder based on 115,163,203 shares of ordinary shares outstanding on June 16, 2021.
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The selling shareholder is
not a broker-dealer regulated by the Financial Industry Regulatory Authority. On January 31, 2020, the Company issued 833,333 shares
to the selling shareholder for consulting services. On December 30, 2020, the selling shareholder provided a $1 million loan to the Company.
On February 16, 2021, the Company issued 1,290,000 shares to the selling shareholder for consulting services regarding the establishment
of a R&D center in California for the Company. As of May 4, 2021, the selling shareholder participated in the Company’s fundraising
and purchased $2 million of convertible notes and warrants to purchase 1,739,130 shares of common stock. Other than as described herein,
the selling shareholder has not had any position, office or other material relationship with the Company in the past three years. All
information with respect to share ownership has been furnished by the selling shareholder. The shares being offered are being registered
to permit public secondary trading of such shares and the selling shareholder may offer all or part of the shares it owns for resale from
time to time pursuant to this prospectus.
The term “selling shareholder”
also includes any pledgees, donees, transferees or other successors in interest to the selling shareholder named in the table below. Unless
otherwise indicated, to our knowledge, each person named in the table below has voting power and investment power (subject to applicable
community property laws) with respect to the shares of common stock set forth opposite such person’s name. We will file a
supplement to this prospectus (or a post-effective amendment hereto, if necessary) to name successors to any named selling shareholder
who is able to use this prospectus to resell the securities registered hereby.
Beneficial ownership is determined
under the rules of the SEC. The number of shares beneficially owned by a person includes shares of common stock underlying warrants,
stock options and other derivative securities to acquire our common stock held by that person that are currently exercisable or convertible
within 60 days after June 16, 2021. The shares issuable under these securities are treated as outstanding for computing the percentage
ownership of the person holding these securities, but are not treated as outstanding for the purposes of computing the percentage ownership
of any other person.
As explained below under “Plan
of Distribution,” we have agreed with the selling shareholder to bear certain expenses (other than broker discounts and commissions,
if any) in connection with the registration statement, which includes this prospectus.
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Ordinary Shares Beneficially Owned
Prior to the Offering
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Shares Being
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Ordinary Shares
Beneficially
Owned After the
Offering
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Selling shareholder
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Shares
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Percentage
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Offered
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Shares
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Percentage
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American West Pacific International Investment Corporation (1)
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5,290,000
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4.59
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%
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4,000,000
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1,290,000
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1.12
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%
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(1)
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Sherry H. Jiang is the president of American West Pacific
International Investment Corporation and in such position has voting and dispositive control over securities of the Company held by American
West Pacific International Investment Corporation.
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DESCRIPTION
OF OUR CAPITAL STOCK
We
are a company incorporated in the British Virgin Islands as a BVI business company (company number 1880410) and our affairs are governed
by our memorandum and articles of association, the BVI Business Companies Act (as amended) and the common law of the British Virgin Islands.
We are authorized to issue an unlimited number of both ordinary shares of no par value and preferred shares of no par value. The following
description summarizes certain terms of our shares as set out more particularly in our memorandum and articles of association. Because
it is only a summary, it may not contain all the information that is important to you.
Ordinary
Shares
As of June 16, 2021, there
are 115,163,203 ordinary shares outstanding. Under the BVI Business Companies Act (as amended), the ordinary shares are deemed to be issued
when the name of the shareholder is entered in our register of members. Our register of members is maintained by our transfer agent, Continental
Stock Transfer & Trust Company. Our transfer agent has entered the name of Cede & Co. in our register of members as nominee for
each of the respective public shareholders. If (a) information that is required to be entered in the register of members is omitted from
the register or is inaccurately entered in the register, or (b) there is unreasonable delay in entering information in the register, a
shareholder of the company, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the British Virgin Islands
Courts for an order that the register be rectified, and the court may either refuse the application or order the rectification of the
register, and may direct the company to pay all costs of the application and any damages the applicant may have sustained.
Any
action required or permitted to be taken by our shareholders must be effected by a meeting of shareholders of our company, duly convened
and held in accordance with our memorandum and articles of association. A resolution of our members may not be taken by a resolution
consented to in writing.
At
any general meeting of our shareholders, the chairman of the meeting is responsible for deciding in such manner as he or she considers
appropriate whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting
and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, the
chairman shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any member
present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such
announcement demand that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken at any meeting, the result
shall be announced to the meeting and recorded in the minutes of the meeting.
A
resolution of our shareholders shall be duly and validly passed if it is approved at a duly convened and constituted meeting of our shareholders
by the affirmative vote of a majority of the votes of the shares entitled to vote thereon which were present at the meeting and were
voted. Each ordinary share in our company confers upon the shareholder the right to one vote at any meeting of our shareholders or on
any resolution of shareholders.
The
rights and obligations attaching to our ordinary shares may only be varied by a resolution passed at a meeting by the holders of more
than fifty percent (50%) of the ordinary shares present at a duly convened and constituted meeting of our shareholders holding ordinary
shares which were present at the meeting. The other provisions of our memorandum and articles of association may be amended if approved
by a resolution of our shareholders or by a resolution of our directors (save that no amendment may be made by a resolution of our directors
(a) to restrict the rights or powers of our shareholders to amend the memorandum or articles, (b) to change the percentage of shareholders
required to pass a resolution of shareholders to amend the memorandum or articles, (c) in circumstances where the memorandum or articles
cannot be amended by our shareholders, or (d) to change clauses 7, 8 or 11 of our memorandum (or any of the defined terms used in any
such clause or regulation).
In
accordance with our memorandum and articles of association, our Board is divided into three classes, with the number of directors in
each class to be as nearly equal as possible. Our existing Class I directors will serve until our 2018 annual general meeting, our existing
Class II directors will serve until our 2019 annual general meeting, and our existing Class III directors will serve until our 2020 annual
general meeting. Commencing at our 2018 annual general meeting, and at each following annual general meeting, directors elected to succeed
those directors whose terms expire shall be elected for a term of office to expire at the third annual general meeting following their
election. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50%
of the votes of the shares entitled to vote at any general meeting of our members at which the election of directors is voted upon can
elect all of the directors (and the holders of more than 50% of the votes of the shares entitled to vote at any general meeting of our
members at which the removal of our directors is voted upon can remove a director with or without cause).
Our
shareholders are entitled to receive ratable dividends when, as and if declared by the Board. Under the laws of the British Virgin
Islands, and as provided in our memorandum and articles of association, our directors may authorize a distribution (including any interim
dividend that the directors consider to be justified by the profits of our company) only if, immediately after the distribution, the
value of our assets will exceed our liabilities, and we will be able to pay our debts as and when they fall due. In the event of a liquidation
or winding up of the company, our shareholders are entitled to share ratably in all assets remaining available for distribution to them
after payment of liabilities and after provision is made for each class of shares, if any, having preference over the ordinary shares.
Our shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares,
except that we will provide our shareholders with the redemption rights set forth above.
Preferred
Shares
Our
memorandum and articles of association authorizes the creation and issuance without shareholder approval of an unlimited number of preferred
shares divided into five classes, Class A through Class E each with such further designation, rights and preferences as may be determined
by a resolution of our Board to amend the memorandum and articles of association to create such designations, rights and preferences.
We have five classes of preferred shares to give us flexibility as to the terms on which each Class is issued. Unlike Delaware law, all
shares of a single class must be issued with the same rights and obligations. Accordingly, starting with five classes of preferred shares
will allow us to issue shares at different times on different terms. Accordingly, our Board is empowered, without shareholder approval,
to issue preferred shares with dividend, liquidation, redemption, voting or other rights, which could adversely affect the voting power
or other rights of the holders of ordinary shares. These preferred shares could be utilized as a method of discouraging, delaying or
preventing a change in control of us.
No
preferred shares are currently issued or outstanding. Although we do not currently intend to issue any preferred shares, we may do so
in the future.
The
rights attached to any class of preferred shares in issue, may only be amended by a resolution passed at a meeting by the holders of
more than fifty percent (50%) of the preferred shares of that same class present at a duly convened and constituted meeting of our members
holding preferred shares in such class which were present at the meeting and voted, unless otherwise provided by the terms of issue of
such class. If our preferred shareholders want us to hold a meeting of preferred shareholders (or of a class of preferred shareholders),
they may requisition the directors to hold one upon the written request of preferred shareholders entitled to exercise at least 30 percent
of the voting rights in respect of the matter for which the meeting is requested. Under British Virgin Islands law, we may not increase
the required percentage to call a meeting above 30 percent.
Under
the BVI Business Companies Act (as amended) there are no provisions which specifically prevent the issuance of preferred shares or any
such other “poison pill” measures. Our memorandum and articles of association also do not contain any express prohibitions
on the issuance of any preferred shares. Therefore, the directors, without the approval of the holders of ordinary shares, may issue
preferred shares that have characteristics that may be deemed anti-takeover. Additionally, such a designation of shares may be used in
connection with plans that are poison pill plans. However, under the BVI Business Companies Act (as amended), a director in the exercise
of his powers and performance of his duties is required to act honestly and in good faith in what the director believes to be the best
interests of the company, and a director is also required to exercise his powers as a director for a proper purpose.
2017
Warrants
As of June 16, 2021, we had
outstanding 6,281,875 warrants issued by the predecessor special purpose acquisition company to purchase ordinary shares (excluding
the Warrants), which warrants were registered in connection with our initial public offering. Each public warrant entitles the registered
holder to purchase one half of one ordinary share at a price of $12.00 per full share, subject to adjustment as discussed below. Pursuant
to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares. This means that only an even number
of warrants may be exercised at any given time by a warrant holder. However, no public warrants will be exercisable for cash unless we
have an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current
prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable
upon exercise of the public warrants is not effective within 90 days from August 18, 2017, warrant holders may, until such time as there
is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement,
exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from
registration is not available, holders will not be able to exercise their warrants on a cashless basis. The warrants will expire on the
fifth anniversary of the consummation of the acquisition of Borqs International by way of merger at 5:00 p.m., New York City time.
As of June 16, 2021, we had
outstanding (i) 417,166 assumed warrants with an exercise price of $5.36 per share, (ii) 3,250,000 warrants with an exercise price of
$1.25 per share, and (iii) 100,000 warrants with an exercise price $0.01 per share, to purchase ordinary shares that are not yet registered.
These private warrants are identical to the public warrants except that such private warrants are not registered and will be exercisable
for cash (even if a registration statement covering the ordinary shares issuable upon exercise of such warrants is not effective) or on
a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by the initial
purchasers or their affiliates.
We
may call the public warrants for redemption, in whole and not in part, at a price of $0.01 per warrant:
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at any time while the warrants
are exercisable,
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upon not less than 30 days’
prior written notice of redemption to each warrant holder,
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if, and only if, the reported
last sale price of the ordinary shares equals or exceeds $18.00 per share, for any 20 trading days within a 30 trading day period
ending on the third business day prior to the notice of redemption to warrant holders, and
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if, and only if, there
is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption
and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
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The
right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and
after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s
warrant upon surrender of such warrant.
The
redemption criteria for our warrants have been established at a price which is intended to provide warrant holders a reasonable premium
to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise
price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below
the exercise price of the warrants.
If
we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise
warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants
for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined
below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the ordinary
shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders
of warrants. Whether we will exercise our option to require all holders to exercise their warrants on a “cashless basis”
will depend on a variety of factors including the price of our ordinary shares at the time the warrants are called for redemption, our
cash needs at such time and concerns regarding dilutive share issuances.
The
warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure
any ambiguity or correct any defective provision, but requires the approval, by written consent or vote, of the holders of a majority
of the then outstanding warrants in order to make any change that adversely affects the interests of the registered holders.
The
exercise price and number of ordinary shares issuable on exercise of the warrants may be adjusted in certain circumstances including
in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the
warrants will not be adjusted for issuances of ordinary shares at a price below their respective exercise prices.
The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full
payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised. The warrant
holders do not have the rights or privileges of holders of ordinary shares and any voting rights until they exercise their warrants and
receive ordinary shares. After the issuance of ordinary shares upon exercise of the warrants, each holder will be entitled to one vote
for each share held of record on all matters to be voted on by shareholders.
Except
as described above, no public warrants will be exercisable and we will not be obligated to issue ordinary shares unless at the time a
holder seeks to exercise such warrant, a prospectus relating to the ordinary shares issuable upon exercise of the warrants is current
and the ordinary shares have been registered or qualified or deemed to be exempt under the securities laws of the state of residence
of the holder of the warrants. Under the terms of the warrant agreement, we have agreed to use our best efforts to meet these conditions
and to maintain a current prospectus relating to the ordinary shares issuable upon exercise of the warrants until the expiration of the
warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the
ordinary shares issuable upon exercise of the warrants, holders will be unable to exercise their warrants and we will not be required
to settle any such warrant exercise. If the prospectus relating to the ordinary shares issuable upon the exercise of the warrants is
not current or if the ordinary shares is not qualified or exempt from qualification in the jurisdictions in which the holders of the
warrants reside, we will not be required to net cash settle or cash settle the warrant exercise, the warrants may have no value, the
market for the warrants may be limited and the warrants may expire worthless.
Warrant
holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would not be
able to exercise their warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess
of 9.9% of the ordinary shares outstanding.
No
fractional shares will be issued upon exercise of warrants. If, upon exercise of the warrants, a holder would be entitled to receive
a fractional interest in a share, we will, upon exercise, round up or down to the nearest whole number the number of ordinary shares
to be issued to the warrant holder.
In
connection with our acquisition of Borqs International by way of merger, holders of issued and outstanding warrants to purchase shares
of Borqs International received replacement warrants to purchase an aggregate of 344,559 of our ordinary shares, the terms and conditions
of which are as described above.
2021
Private Placement Notes and Warrants
On February 25, 2021 and April
14, 2021 we entered into securities purchase agreements with institutional and individual investors, pursuant to which we sold approximately
$6.67 million of notes (the “February 25 Notes”) and 11,695,906 warrants at an exercise price of $2.222 per share (the “February
25 Warrants), $1 million of notes (the “April 14 Notes”) and 2,521,008 warrants at an exercise price of $1.540 per share (the
“April 14 Warrants” and, together with the February 25 Warrants, the “Warrants”) and $15.3 million of notes (the
“May 5 Notes” and, together with the February 25 Notes and the April 14 Notes, the “Notes.”) The Notes have a
two year term a conversion price of $0.972 per share. The Notes have certain anti-dilution protections in the event of a lower priced
issuance. Interest shall accrue on the notes at 8% annually, payable on a quarterly basis, in either cash or, in the event the registration
statement of which this prospectus forms a part has been declared effective, ordinary shares. The Notes held by a particular holder will
not be convertible to the extent such conversion would result in such holder owning more than 9.9% of the number of ordinary shares outstanding
after giving effect to the issuance of ordinary shares issuable upon conversion of such note calculated in accordance with Section 13(d)
of the Exchange Act.
The
Warrants are exercisable immediately for a period of five years for cash, at an exercise price of $2.222 per ordinary share for the February
25 Warrants and $1.540 per ordinary share for the April 14 Warrants, subject to adjustment in the event of stock dividends and splits,
or sales or grants of ordinary shares or ordinary share equivalents in certain transactions at less than the then current exercise price,
or where the exercise price is higher than the then-current market price of the ordinary shares, on a cashless exercise basis, using
the Black Scholes Value. The Warrants held by a particular holder will not be exercisable to the extent such conversion would result
in such holder owning more than 9.9% of the number of ordinary shares outstanding after giving effect to the issuance of ordinary shares
issuable upon exercise of such warrants calculated in accordance with Section 13(d) of the Exchange Act.
Dividends
We
have not paid any cash dividends on our ordinary shares to date.
Stock
Exchange Listing
Our
ordinary shares are listed on The Nasdaq Capital Market under the symbol “BRQS.”
Transfer
Agent and Registrar and Warrant Agent
The
transfer agent and registrar for our ordinary shares and the warrant agent for the Warrants is Continental Stock Transfer& Trust
Company. The transfer and warrant agent’s address is One State Street, 30th Floor, New York, NY 10004, and its telephone number
is (212) 509-4000.
USE
OF PROCEEDS
We will not receive any of
the proceeds from the sale or other disposition of ordinary shares by the selling shareholder pursuant to this prospectus.
The selling shareholder will
pay any underwriting discounts and commissions and any expenses incurred by the selling shareholder for brokerage, accounting, tax or
legal services or any other expenses incurred by such selling shareholder in disposing of ordinary shares covered by this prospectus.
PLAN
OF DISTRIBUTION
The selling shareholder of
the securities and any of its pledgees, assignees and successors-in-interest may, from time to time, sell any or all of its securities
covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded
or quoted or in private transactions. These sales may be at fixed or negotiated prices. The selling shareholder may use any one or more
of the following methods when selling securities:
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ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block
trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
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purchases
by a broker-dealer as principal and resales by the broker-dealer for its account;
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an
exchange distribution in accordance with the rules of the applicable exchange;
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privately
negotiated transactions;
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settlement
of short sales;
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in transactions through broker-dealers that agree with the selling shareholder
to sell a specified number of such securities at a stipulated price per security;
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through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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a
combination of any such methods of sale; or
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any
other method permitted pursuant to applicable law.
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The selling shareholder may
also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) or any other
exemption from registration, if available, rather than under this prospectus.
Broker-dealers engaged by
the selling shareholder may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts
from the selling shareholder (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to
be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary
brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction, a markup or markdown in compliance
with FINRA Rule 2121.
In connection with the sale
of the securities or interests therein, the selling shareholder may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The selling
shareholder may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The selling shareholder may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling shareholder and
any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each selling shareholder has informed the Company that it does not have any written or oral agreement or understanding, directly
or indirectly, with any person to distribute the securities.
The Company is required to
pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify
the selling shareholder against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because the selling shareholder
may be deemed to be an “underwriter” within the meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act including Rule 172 thereunder. We will make copies of this prospectus available to the selling shareholder
and have informed it of the need to deliver a copy of this prospectus to the buyer at or prior to the time of the sale (including by compliance
with Rule 172 under the Securities Act). In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The selling shareholder have advised us that
there is no shareholder or coordinating broker acting in connection with the proposed sale of the resale securities by the selling shareholder.
We agreed to keep this prospectus
effective until the earlier of (i) the date on which the securities may be resold by the selling shareholder without registration
and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in
compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all
of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect.
The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities
laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and
regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market
making activities with respect to the Company’s ordinary shares for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the selling shareholder will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Company’s
ordinary shares by the selling shareholder or any other person.
MATERIAL
CHANGES
Except as otherwise described
in our Annual Report on Form 20-F for the fiscal year ended December 31, 2020, as amended to date, in our Reports on Form 6-K filed or
submitted under the Exchange Act and incorporated by reference herein and as disclosed in this prospectus, no reportable material changes
have occurred since December 31, 2020.
LEGAL
MATTERS
Certain
legal matters related to the ordinary shares offered by this prospectus will be passed upon on the Company’s behalf by Maples and
Calder (Hong Kong) LLP, with respect to matters of British Virgin Islands law.
EXPERTS
Our
financial statements as of December 31, 2020, 2019 and 2018, and for the years then ended, have been audited by Yu Certified Public
Accountant, P.C., an independent registered public accounting firm, as stated in their report, which is incorporated by reference in this
prospectus. Such financial statements have been incorporated by reference in this prospectus in reliance upon the report of such firm
(which report includes an explanatory paragraph relating to
substantial doubt on the Company’s ability to continue as a going concern, the adoption of Accounting Standards Codification Topic
326, Financial Instruments-Credit Losses, and the adoption of Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement
(Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, and also critical audit matters,
including going concern assessment, Allowance for current expected credit losses (“CECL”) on accounts receivables and other
receivables, and Accrual of contingent liability on the potential dispute of ownership upon the Group’s discontinued operation)
given upon their authority as experts in accounting and auditing.
ENFORCEABILITY
OF CIVIL LIABILITIES
We
are incorporated in the British Virgin Islands to take advantage of certain benefits associated with being a British Virgin Islands business
company, such as:
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political and economic
stability;
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an effective judicial system;
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a favorable tax system;
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the absence of exchange
controls or currency restrictions; and
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the availability of professional
and support services.
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However,
certain disadvantages accompany incorporation in the British Virgin Islands. These disadvantages include, but are not limited to:
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the British Virgin Islands
has a less developed body of securities laws as compared to the United States and these securities laws provide significantly less
protection to investors as compared to the United States; and
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British Virgin Islands
companies may not have standing to sue before the federal courts of the United States.
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Our
memorandum and articles of association do not contain provisions requiring that disputes, including those arising under the securities
laws of the United States, between us, our officers, directors and shareholders, be arbitrated.
Substantially
all of our assets are located outside of the United States. In addition, the majority of our directors and officers are nationals or
residents of China and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult
for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments
obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United
States or any state in the United States.
There
is uncertainty as to whether the courts of the BVI or China would (i) recognize or enforce judgments of United States courts obtained
against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or
any state in the United States or (ii) entertain original actions brought in the BVI or China against us or our directors or officers
predicated upon the securities laws of the United States or any state in the United States.
There
is uncertainty with regard to British Virgin Islands law as to whether a judgment obtained from the United States courts under civil
liability provisions of the securities laws will be determined by the courts of the British Virgin Islands as penal or punitive in nature.
If such a determination is made, the courts of the British Virgin Islands are also unlikely to recognize or enforce the judgment against
a British Virgin Islands company. Because the courts of the British Virgin Islands have yet to rule on whether such judgments are penal
or punitive in nature, it is uncertain whether they would be enforceable in the British Virgin Islands. Although there is no statutory
enforcement in the British Virgin Islands of judgments obtained in the federal or state courts of the United States, in certain circumstances
a judgment obtained in such jurisdiction may be recognized and enforced in the courts of the British Virgin Islands at common law, without
any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Commercial Division
of the Eastern Caribbean Supreme Court in the British Virgin Islands, provided such judgment:
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is given by a foreign court
of competent jurisdiction;
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imposes on the judgment
debtor a liability to pay a liquidated sum for which the judgment has been given;
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is final;
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is not in respect of taxes,
a fine, a penalty or similar fiscal or revenue obligations of the company; and
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was not obtained in a fraudulent
manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the British Virgin Islands.
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In
appropriate circumstances, a British Virgin Islands court may give effect in the British Virgin Islands to other kinds of final foreign
judgments such as declaratory orders, orders for performance of contracts and injunctions.
Recognition
and enforcement of foreign judgments are provided for under China’s Civil Procedure Law. China’s courts may recognize and
enforce foreign judgments in accordance with the requirements of the Civil Procedure Law based either on treaties between China and the
country where the judgment is made or on reciprocity between jurisdictions. There are no treaties between China and the United States
for the mutual recognition and enforcement of court judgments, thus making the recognition and enforcement of a U.S. court judgment in
China difficult.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
have filed with the SEC a registration statement on Form F-1 relating to the ordinary shares covered by this prospectus. This prospectus
is part of the registration statement and does not contain all the information in the registration statement. Any statement made in this
prospectus concerning a contract or other document of ours is not necessarily complete, and you should read the documents that are filed
as exhibits to the registration statement or otherwise filed with the SEC for a more complete understanding of the document or matter.
Each such statement is qualified in all respects by reference to the document to which it refers. You may inspect a copy of the registration
statement at the SEC’s Public Reference Room in Washington, D.C., as well as through the SEC’s website.
We
are currently subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private
issuers. Accordingly, we are required to file with or furnish to the SEC reports, including annual report on Form 20-F, report of foreign
private issuer on Form 6-K and other information. All information filed with or furnished to the SEC can be inspected and copied at the
public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents
upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. Additional information may also be obtained over the Internet at the SEC’s website at www.sec.gov.
As
a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content
of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit
recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file
periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered
under the Exchange Act.
We
also maintain a website at www.borqs.com, but information contained on our website is not incorporated by reference in this prospectus
or any prospectus supplement. You should not regard any information on our website as a part of this prospectus or any prospectus supplement.
15
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