As
filed with the Securities and Exchange Commission on September 15, 2022
Registration
No.
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
F-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
FREIGHT
TECHNOLOGIES, INC.
(Exact
name of registrant as specified in its charter)
(Translation
of Registrant’s name into English)
British
Virgin Islands |
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N/A |
(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer
Identification Number) |
2001
Timberloch Place, Suite 500
The
Woodlands, TX 77380
Telephone:
(773) 905-5076
(Address
and telephone number of Registrant’s principal executive offices)
Mr.
Javier Selgas, Chief Executive Officer
2001
Timberloch Place, Suite 500
The
Woodlands, TX 77380
Telephone:
(773) 905-5076
(Name,
address, and telephone number of agent for service)
Copies
to:
Benjamin
Tan, Esq.
Sichenzia
Ross Ference, LLP
1185
Avenue of the Americas, 31st Floor,
New
York, NY 10036
+1-212-930-9700
– telephone
+1-212-930-9725
- facsimile
Approximate
date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement as determined
by the registrant.
If
only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the
following box. ☐
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective
upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging
growth company ☒
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided
pursuant to Section 7(a)(2)(B) of the Securities Act ☐
†
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
The
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
Subject
to completion, dated September 15, 2022
FREIGHT
TECHNOLOGIES, INC.
$15,000,000
Ordinary
Shares
Share
Purchase Contracts
Share
Purchase Units
Warrants
Debt
Securities
Rights
Units
We
may offer, from time to time, in one or more offerings, ordinary shares, share purchase contracts, share purchase units, warrants, debt
securities, rights or units, which we collectively refer to as the “securities”. The aggregate initial offering price of
the securities that we may offer and sell under this prospectus will not exceed $15,000,000. We may offer and sell any combination of
the securities described in this prospectus in different series, at times, in amounts, at prices and on terms to be determined at, or
prior to, the time of each offering. This prospectus describes the general terms of these securities and the general manner in which
these securities will be offered. We will provide the specific terms of these securities in supplements to this prospectus. The prospectus
supplements will also describe the specific manner in which these securities will be offered and may also supplement, update or amend
information contained in this prospectus. This prospectus may not be used to consummate a sale of securities unless accompanied by the
applicable prospectus supplement. You should read this prospectus and any applicable prospectus supplement before you invest.
The
securities covered by this prospectus may be offered through one or more underwriters, dealers and agents or directly to purchasers.
The names of any underwriters, dealers or agents, if any, will be included in a supplement to this prospectus. For general information
about the distribution of securities offered, please see “Plan of Distribution”.
Our
ordinary shares issued pursuant to a registration statement on Form F-1 (No. 333-217326) are traded on the Nasdaq Capital Market under
the symbol “FRGT”. On September 14, 2022, the closing price of our ordinary shares as reported by the Nasdaq Capital
Market was $1.00 per ordinary share. As of September 14, 2022, the aggregate market value of our outstanding ordinary shares
held by non-affiliates using the closing price on the Nasdaq Capital Market of $1.00 was approximately $7,987,553 based
on 9,357,919 outstanding ordinary shares, of which approximately 7,987,553 ordinary shares were held by non-affiliates.
We have not offered any securities pursuant to General Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends
on, and includes, the date of this prospectus.
Holding
Foreign Companies Accountable Act
The
Holding Foreign Companies Accountable Act (the “HFCA Act”) was enacted on December 18, 2020. The HFCA Act states if the SEC
determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection
by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a
national securities exchange or in the over the counter trading market in the U.S.
On
March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements
of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection”
year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA
Act, including the listing and trading prohibition requirements described above.
On
June 22, 2021, the U.S. Senate passed a bill which, if passed by the U.S. House of Representatives and signed into law, would reduce
the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two years.
On
December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public
accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a
position taken by an authority in foreign jurisdictions.
On
December 16, 2021, PCAOB announced the PCAOB HFCA Act determinations (the “PCAOB determinations”) relating to the PCAOB’s
inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong
Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or
Hong Kong.
Our
previous auditor, Centurion ZD CPA & Co., the independent registered public accounting firm that issued the audit report included
in this 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 Centurion ZD CPA & Co.’s
compliance with applicable professional standards. Centurion ZD CPA & Co. is headquartered in Hong Kong with no branches or offices
in the United States. As such, Centurion ZD CPA & Co., was identified as a firm subject to the PCAOB’s determinations.
On
June 13, 2022, we dismissed Centurion ZD CPA & Co. and appointed UHY LLP as our new independent public accounting firm. UHY LLP,
which is headquartered in Michigan, has been inspected by the PCAOB on a regular basis, with the last inspection completed in 2019, and
it is not subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited
under the HFCA Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future
time, Nasdaq may determine to delist our Ordinary Shares. If our Ordinary Shares are unable to be listed on another securities exchange
by then, such a delisting would substantially impair your ability to sell or purchase our Ordinary Shares when you wish to do so, and
the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Ordinary Shares.
See
“Risk Factors — Risks Related to our Ordinary Shares - Our shares may be delisted under the Holding Foreign Companies Accountable
Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021. If the bill passed by the U.S. Senate
on June 22, 2021 is passed by the U.S. House of Representatives and signed into law, this would reduce the number of consecutive non-inspection
years required for triggering the prohibitions under the Holding Foreign Companies Accountable from three years to two. The delisting
of our shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.”
The
recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable
Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of
their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our
securities. Such risks include but not limited to that trading in our securities may be prohibited under the HFCA Act and as a result
an exchange may determine to delist our securities.
We
cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering
the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency
of resources, geographic reach or experience as it relates to the audit of our financial statements. It remains unclear what the SEC’s
implementation process related to the March 2021 interim final amendments will entail or what further actions the SEC, the PCAOB or Nasdaq
will take to address these issues and what impact those actions will have on U.S. companies that have significant operations in the PRC
and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market). In addition,
the March 2021 interim final amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase
U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our Ordinary Shares could
be adversely affected, trading in our securities may be prohibited and we could be delisted if we and our auditor are unable to meet
the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management
time.
See
“Risk Factors — NASDAQ may apply additional and more stringent criteria for our continued listing.”
Neither
the Securities and Exchange Commission nor any state securities commission nor any other regulatory body 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.
This
prospectus does not constitute, and there will not be, an offering of securities to the public in the British Virgin Islands.
This
prospectus may not be used to offer or sell our securities unless accompanied by a prospectus supplement. The information contained or
incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus, or such prospectus
supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of our securities.
Investing
in our securities being offered pursuant to this prospectus involves a high degree of risk. You should carefully read and consider the
‘‘Risk Factors’’ section of this prospectus and in the applicable prospectus supplement before you make your
investment decision.
Neither
the Securities and Exchange Commission, the Government of the British Virgin Islands (and any of its regulatory authorities), 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 _______________, 2022
COMMONLY
USED DEFINED TERMS
Unless
otherwise indicated or the context requires otherwise, references in this prospectus to:
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“Amended Memorandum and Articles” refers
to the amended and restated memorandum and articles of association in force on the date of this Registration Statement. |
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“BVI
Act” refers to the BVI Business Companies Act (As Revised). |
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“we,”
“us,” “our Company,” “our,” or “FRGT” refers to Freight Technologies, Inc., (formerly
known as Hudson Capital, Inc. or “HUSN”), its subsidiaries, and, in the context of describing our operations and consolidated
financial information, our consolidated affiliated entities in China, including but not limited to, prior to the Merger, Hongkong
Internet Financial Services Limited, Hongkong Shengqi Technology Limited, Beijing Yingxin Yijia Network Technology Co., Ltd, Sheng
Ying Xin (Beijing) Management Consulting Co., Ltd, Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd., Fu Hui (Shenzhen) Commercial
Factoring Co., Ltd., Ltd., CIFS (Xiamen) Financial Leasing Co., Ltd., Fuhui (Xiamen) Commercial Factoring Co., Ltd., Zhizhen Investment
& Research (Beijing) Information Consulting Co., Ltd., Hangzhou Yuchuang Investment Partnership and our U.S. subsidiaries, Hudson
Capital USA Inc., Hudson Capital Merger Sub I Inc. and Hudson Capital Merger Sub II Inc and after the Merger, Freight App, Inc. and
Freight App de México S.A De C.V. |
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“China”
or “PRC” refers to the People’s Republic of China, and solely for the purpose of this annual report, excluding
Taiwan, Hong Kong and Macau; |
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“Fr8App”
refers to Freight App, Inc., our primary operating subsidiary. |
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“Merger”
refers to the consummation of that certain merger agreement, dated December 13, 2021, and as amended on December 29, 2021 (the “Merger
Agreement”) by and among Hudson Capital, Inc,. Hudson Capital Merger Sub I, Inc., a Delaware corporation and wholly-owned subsidiary
of Hudson Capital (“Merger Sub”), Freight App, Inc., a Delaware corporation (“Fr8App”) and ATW Master Fund
II, L.P., as the representative of the stockholders of Fr8App (the “Stockholders’ Representative”) whereby Merger
Sub I merged with and into Fr8App, with Fr8App surviving the Merger and continuing as a direct wholly-owned subsidiary of the Company.
The Merger closed on February 14, 2022 and the separate corporate existence of Merger Sub I and its Certificate of Incorporation
and by-laws then in effect ceased, and the organizational documents of Fr8App after the Merger is in the form as agreed by the Company
and Fr8App. |
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“shares”
or “Ordinary Shares” refers to our ordinary shares, par value $0.011 per share and prior to the reverse split, par value
$0.005. |
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“U.S.”
means the United States of America; |
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“U.S.
GAAP” refers to generally accepted accounting principles in the United States; |
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“RMB”
or “Renminbi” refers to the legal currency of China; |
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“$,”
“dollars,” “US$” or “U.S. dollars” refers to the legal currency of the United States; and |
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all
discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding. |
MARKET
AND INDUSTRY DATA
Unless
otherwise indicated, information contained in this prospectus concerning our industry, our market share and the markets that we serve
is based on information from independent industry and research organizations, other third-party sources (including industry publications,
surveys and forecasts) and management estimates. Management estimates are derived from publicly available information released by independent
industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing
such data and our knowledge of such industry and markets that we believe to be reasonable. Although we believe the data from these third-party
sources is reliable, we have not independently verified any such information. In addition, projections, assumptions and estimates of
the future performance of the industry in which we operate and our future performance are necessarily subject to uncertainty and risk
due to a variety of factors, including those described in “Risk Factors” and “Cautionary Statement Regarding Forward-Looking
Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by third-parties
and by us.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve risks and uncertainties, such as statements related to future events, business
strategy, future performance, future operations, backlog, financial position, estimated revenues and losses, projected costs, prospects,
plans and objectives of management. All statements other than statements of historical fact may be forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of words such as “seek,” “anticipate,” “plan,”
“continue,” “estimate,” “expect,” “may,” “will,” “project,” “predict,”
“potential,” “targeting,” “intend,” “could,” “might,” “should,”
“believe” and similar expressions or their negative. Forward-looking statements should not be read as a guarantee of future
performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will
be achieved. Forward-looking statements are based on management’s belief, based on currently available information, as to the outcome
and timing of future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from those expressed in such forward-looking statements. When evaluating
forward-looking statements, you should consider the risk factors and other cautionary statements described in “Risk Factors.”
We believe the expectations reflected in the forward-looking statements contained in this prospectus are reasonable, but no assurance
can be given that these expectations will prove to be correct. Forward-looking statements should not be unduly relied upon.
Important
factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but
are not limited to:
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the
effect of economic and political conditions in the industries and markets in which our businesses operate in the United States, Mexico
and Canada and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign
currency exchange rates, inflation, levels of end market demand in construction, the impact of weather conditions, concerns over
border issues, pandemic health issues (including the coronavirus disease (“COVID-19”) and its effects, among other things,
on production and on global supply, demand, and distribution disruptions as the outbreak continues and results in an increasingly
prolonged period of travel, commercial and/or other similar restrictions and limitations), natural disasters and the financial condition
of our customers and suppliers; |
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challenges
in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies
and new products and services, the ongoing availability and dependability of cloud-based systems; |
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rates
of adoption of new technology, from products that could be potential competitors to Our products to those that might affect the primary
target market of carriers and commercial truck freight in general; |
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rates
of adoption of self-driving units commercial trucks or other transportation methods that are competitive with trucking and truck
freight; |
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future
levels of indebtedness, capital spending and research and development spending; |
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future
availability of capital and credit and factors that may affect such availability, including credit market conditions and our capital
structure and credit ratings; |
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delays
and disruption in the delivery of materials and services from suppliers; continuity and/or development of new inventory, merchandising
and distribution strategies; |
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cost
reduction efforts and restructuring costs and savings and other consequences thereof; |
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new
business and investment opportunities; |
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risks
resulting from a less diversified business model and balance of operations across product lines, regions and industries due to the
separation; |
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the
outcome of legal proceedings, investigations and other contingencies; |
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the
effect of changes in political conditions in the U.S. and other countries, in which our businesses operate, including the effect
of changes in U.S. trade policies, on general market conditions, global trade policies and currency exchange rates in the near term
and beyond; |
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the
effect of changes in tax, environmental, regulatory (including among other things import/export) and other laws and regulations in
Mexico, U.S. and Canada and any other countries in which our businesses may operate; |
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our
ability to retain and hire key personnel; |
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the
scope, nature, impact or timing of acquisition and divestiture activity, including among other things integration of acquired businesses
into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs. |
These
factors are not necessarily all of the important factors that could cause actual results or events to differ materially from those expressed
in forward-looking statements. Other unknown or unpredictable factors could also cause actual results or events to differ materially
from those expressed in the forward-looking statements. Our future results will depend upon various other risks and uncertainties, including
those described in “Risk Factors.” All forward-looking statements attributable to us are qualified in their entirety by this
cautionary statement. Forward-looking statements speak only as of the date hereof. We undertake no obligation to update or revise any
forward-looking statements after the date on which any such statement is made, whether as a result of new information, future events
or otherwise.
Cautionary
Statement Regarding Holding Foreign Companies Accountable Act
Holding
Foreign Companies Accountable Act (the “HFCA Act”)
The
Holding Foreign Companies Accountable Act (the “HFCA Act”) was enacted on December 18, 2020. The HFCA Act states if the SEC
determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection
by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a
national securities exchange or in the over the counter trading market in the U.S.
On
March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements
of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection”
year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA
Act, including the listing and trading prohibition requirements described above.
On
June 22, 2021, the U.S. Senate passed a bill which, if passed by the U.S. House of Representatives and signed into law, would reduce
the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two years.
On
December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public
accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a
position taken by an authority in foreign jurisdictions.
On
December 16, 2021, PCAOB announced the PCAOB HFCA Act determinations (the “PCAOB determinations”) relating to the PCAOB’s
inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong
Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or
Hong Kong.
Our
previous auditor, Centurion ZD CPA & Co., the independent registered public accounting firm that issued the audit report included
in this 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 Centurion ZD CPA & Co.’s
compliance with applicable professional standards. Centurion ZD CPA & Co. is headquartered in Hong Kong with no branches or offices
in the United States. As such, Centurion ZD CPA & Co., was identified as a firm subject to the PCAOB’s determinations.
On
June 13, 2022, we dismissed Centurion ZD CPA & Co. and appointed UHY LLP as our new independent public accounting firm. UHY LLP,
which is headquartered in Michigan, has been inspected by the PCAOB on a regular basis, with the last inspection completed in 2019, and
it is not subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited
under the HFCA Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future
time, Nasdaq may determine to delist our Ordinary Shares. If our Ordinary Shares are unable to be listed on another securities exchange
by then, such a delisting would substantially impair your ability to sell or purchase our Ordinary Shares when you wish to do so, and
the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Ordinary Shares.
See
“Risk Factors — Risks Related to our Ordinary Shares - Our shares may be delisted under the Holding Foreign Companies Accountable
Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021. If the bill passed by the U.S. Senate
on June 22, 2021 is passed by the U.S. House of Representatives and signed into law, this would reduce the number of consecutive non-inspection
years required for triggering the prohibitions under the Holding Foreign Companies Accountable from three years to two. The delisting
of our shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.”
The
recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable
Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of
their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our
securities. Such risks include but not limited to that trading in our securities may be prohibited under the HFCA Act and as a result
an exchange may determine to delist our securities.
We
cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering
the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency
of resources, geographic reach or experience as it relates to the audit of our financial statements. It remains unclear what the SEC’s
implementation process related to the March 2021 interim final amendments will entail or what further actions the SEC, the PCAOB or Nasdaq
will take to address these issues and what impact those actions will have on U.S. companies that have significant operations in the PRC
and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market). In addition,
the March 2021 interim final amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase
U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our Ordinary Shares could
be adversely affected, trading in our securities may be prohibited and we could be delisted if we and our auditor are unable to meet
the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management
time.
See
“Risk Factors — NASDAQ may apply additional and more stringent criteria for our continued listing.”
Cautionary
Statement About Being a Foreign Private Issuer
We
are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:
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we
are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; |
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for
interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that
apply to domestic public companies; |
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we
are not required to provide the same level of disclosure on certain issues, such as executive compensation; |
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we
are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; |
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we
are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations
in respect of a security registered under the Exchange Act; and |
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we
are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership
and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction. |
We
are a British Virgin Islands company and substantially all of our assets are located outside of the U.S. A substantial majority of our
current operations are conducted in Mexico. In addition, some of our directors and officers reside outside the U.S. As a result, it may
be difficult for you to effect service of process within the U.S. or elsewhere upon these persons. It may also be difficult for you to
enforce in Mexico or British Virgin Islands courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S.
federal securities laws against us and our officers and directors, some of whom are not residents in the U.S. and the substantial majority
of whose assets are located outside of the U.S. It may be difficult or impossible for you to bring an action against us in the British
Virgin Islands if you believe your rights under the U.S. securities laws have been infringed. In addition, there is uncertainty as to
whether the courts of the British Virgin Islands or Mexico would recognize or enforce judgments of U.S. courts against us or such persons
predicated upon the civil liability provisions of the securities laws of the U.S. or any state and it is uncertain whether such British
Virgin Islands or Mexico courts would hear original actions brought in the British Virgin Islands or Mexico against us or such persons
predicated upon the securities laws of the U.S. or any state.
Our
corporate affairs will be governed by our Amended Memorandum and Articles, the BVI Act and the common law of the British Virgin Islands.
The rights of shareholders to take legal action against our directors, actions by minority shareholders and the fiduciary responsibilities
of our directors under British Virgin Islands law are to a large extent governed by the common law of the British Virgin Islands. The
common law of the BVI is derived in part from comparatively limited judicial precedent in the BVI as well as that from English common
law, which has persuasive, but not binding, authority on a court in the BVI. The rights of our shareholders and the fiduciary responsibilities
of our directors under British Virgin Islands law are not as clearly established as they would be under statutes or judicial precedents
in some jurisdictions in the United States. In particular, the British Virgin Islands have a less developed body of securities laws as
compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate
law. There is no statutory recognition in the BVI of judgments obtained in the U.S., although the courts of the BVI will in certain circumstances
recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. As a result of
all of the above, public members may have more difficulty in protecting their interests in the face of actions taken by management, members
of the board of directors or controlling members than they would as members of a U.S. public company.
Certain
corporate governance practices in the British Virgin Islands, which is our home country, differ significantly from the NASDAQ Capital
Market corporate governance listing standards. To the extent we choose to follow home country practice with respect to corporate governance
matters, our shareholders may be afforded less protection than they otherwise would under NASDAQ Capital Market corporate governance
listing standards applicable to U.S. domestic issuers. For a discussion of significant differences between the provisions the BVI Act
and the laws applicable to companies incorporated in the United States and their shareholders, see “DESCRIPTION OF ORDINARY SHARES
- Material Differences in British Virgin Islands Law and our Memorandum and Articles of Association and Delaware Law”.
ABOUT
THIS PROSPECTUS
This
prospectus is a part of a registration statement that we have filed with the SEC utilizing a “shelf” registration process.
Under this shelf registration process, we may sell any combination of the securities described in this prospectus in one or more offerings
up to an aggregate offering price of $15,000,000.
Each
time we sell securities, we will provide a supplement to this prospectus that contains specific information about the securities being
offered and the specific terms of that offering. The supplement may also add, update or change information contained in this prospectus.
If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the prospectus
supplement.
We
may offer and sell securities to, or through, underwriting syndicates or dealers, through agents or directly to purchasers. The prospectus
supplement for each offering of securities will describe in detail the plan of distribution for that offering.
In
connection with any offering of securities (unless otherwise specified in a prospectus supplement), the underwriters or agents may over-allot
or effect transactions which stabilize or maintain the market price of the securities offered at a higher level than that which might
exist in the open market. Such transactions, if commenced, may be interrupted or discontinued at any time. See “Plan of Distribution.”
Please
carefully read both this prospectus and any prospectus supplement together with the documents incorporated herein by reference under
“Incorporation by Reference” and the additional information described below under “Where You Can Get More Information.”
Prospective
investors should be aware that the acquisition of the securities described herein may have tax consequences. You should read the tax
discussion contained in the applicable prospectus supplement and consult your tax advisor with respect to your own particular circumstances.
You
should rely only on the information contained or incorporated by reference in this prospectus and any prospectus supplement. We have
not authorized anyone to provide you with different information. The distribution or possession of this prospectus in or from certain
jurisdictions may be restricted by law. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified
to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is accurate
only as of the date of this prospectus and any information incorporated by reference is accurate as of the date of the applicable document
incorporated by reference, regardless of the time of delivery of this prospectus or of any sale of the securities. Our business, financial
condition, results of operations and prospects may have changed since those dates.
We
have relied on statistics provided by a variety of publicly-available sources. We did not, directly or indirectly, sponsor or participate
in the publication of such materials, and these materials are not incorporated in this prospectus other than to the extent specifically
cited in this prospectus. We have sought to provide current information in this prospectus and believe that the statistics provided in
this prospectus remain up-to-date and reliable, and these materials are not incorporated in this prospectus other than to the extent
specifically cited in this prospectus.
ABOUT
THE COMPANY
Overview
We
were originally established as “China Internet Nationwide Financial Services Inc.”, a holding company incorporated under
the laws of British Virgin Islands on September 28, 2015. Our corporate name was changed to “Hudson Capital Inc.” on April
23, 2020 and we began to trade under our new symbol, “HUSN” on May 8, 2020. Our securities were also transferred to the Nasdaq
Capital Market at the opening of business on July 16, 2020.
We
were previously involved in providing financial advisory services in the People’s Republic of China. Since February 14, 2022, when
we consummated the Merger and March 30, 2022, when we sold our wholly-owned Hong Kong subsidiary, Hongkong Internet Financial Services
Limited (“HKIFS”), which held and operated our financial advisory business, in its entirety to a private investor, we are
no longer in the financial advisory business and no longer have any presence or holdings outside of North America.
Instead,
we are now, through our wholly-owned subsidiary, Freight App, Inc. (formerly known as “Freight Hub, Inc.” and hereinafter
referred to as “Fr8App”) and Fr8App’s wholly-owned Mexico subsidiary, Freight App de México, S.A De C.V. (“Freight
App Mexico”) involved in the freight management business. On May 26, 2022, we changed our name and ticker symbol from Hudson Capital,
Inc. and HUSN, respectively, to Freight Technologies, Inc., and FRGT, respectively.
Our
Products
Fr8App’s
technology product offerings includes (i) a computerized platform (the “Platform”) that holds an online portal (the “Portal”)
and a mobile App solution (the “App”) to provide third-party logistics (“3PL”) services to companies actively
involved in the freight transportation market, (ii) a Transport Management Solution (“TMS “) for customers to manage their
own fleet, and (iii) freight brokerage support and customer service based on the Platform.
The
freight transportation supply chain begins with parties having transportation needs (“Shippers”) and addressed by those offering
freight transportation services (“Carriers”). Shippers seeking suitable means of transportation for their supplies represent
demand and Carriers with freight transportation capability represent supply. The digital freight matching technology on Fr8App’s
Platform streamlines and simplifies cross-border shipping logistics by facilitating the matching of demand with supply. Shippers that
use Fr8App’s Platform can connect with a wide network of reliable Carriers who can fulfill their logistics needs across North America.
Use of Fr8App’s Platform brings the additional benefit of providing transparency on all shipment characteristics to allow for the
identification of available and qualified freight capacity.
Fr8App
believes it is the first digital commercial freight-matching broker to offer 3PL while targeting the domestic Mexican and the cross-border
Mexico-U.S.-Canada markets (“Target Markets”). Fr8App serves cross-border traffic across the Mexico-U.S. border, the U.S.-Canada
border, and domestic shipments within each of these three countries, with a primary focus on full truck-load freight. Its cutting-edge
cloud-based Platform was designed to connect in real-time parties with commercial transportation needs.
Our
principal executive office is located at 2001 Timberloch Place, Suite 500 The Woodlands, TX 77380 and our phone number is (773) 905-5076.
We maintain a corporate website at https://www.fr8.app/. The information contained in, or accessible from, our website or any other website
does not constitute a part of this prospectus.
Our
Corporate Structure
We
are a British Virgin Islands business company that wholly owns our Delaware subsidiary, our wholly-owned subsidiary, Freight App, Inc.
(formerly known as “Freight Hub, Inc.” and hereinafter referred to as “Fr8App”) and Fr8App’s wholly-owned
Mexico subsidiary, Freight App de México, S.A De C.V. (“Freight App Mexico”).
The
following diagram illustrates our corporate structure as of the date of this prospectus. For more detail on our corporate history please
refer to “Our Corporate History and Structure” appearing on page 11 of this prospectus.
RISK
FACTORS
Investing
in our securities involves risks. Before investing in any securities offered pursuant to this prospectus, you should carefully consider
the risk factors and uncertainties set forth under the heading “Item 3.D. Risk Factors” in our Annual Report, as amended,
on Form 20-F for the year ended December 31, 2021, which is incorporated in this prospectus by reference, as updated by our subsequent
filings under the Exchange Act and, if applicable, in any accompanying prospectus supplement subsequently filed relating to a specific
offering or sale.
CAPITALIZATION
AND INDEBTNESS
Our
capitalization and indebtedness will be set forth in a prospectus supplement or in a report on Form 6-K subsequently furnished to the
SEC and specifically incorporated herein by reference.
USE
OF PROCEEDS
Unless
we otherwise indicate in a prospectus supplement, we currently intend to use the net proceeds from the sale of our securities for general
working capital.
More
detailed information regarding the use of proceeds from the sale of securities, including any determinable milestones at the applicable
time, will be described in any applicable prospectus supplement. We may also, from time to time, issue securities otherwise than pursuant
to a prospectus supplement to this prospectus.
DIVIDEND
POLICY
Our
dividend policy is set forth under the heading “Item 8.A. Consolidated Statements and Other Financial Information” in our
Annual Report, as amended, on Form 20-F for the year ended December 31, 2021, which is incorporated in this prospectus by reference,
as updated by our subsequent filings under the Exchange Act.
OFFER
AND LISTING DETAILS
We
may offer and issue from time to time ordinary shares, share purchase contracts, share purchase units, warrants, debt securities, rights
or units, or any combination thereof, up to an aggregate initial offering price of up to $15,000,000 in one or more transactions under
this shelf prospectus. The price of securities offered will depend on a number of factors that may be relevant at the time of offer.
See “Plan of Distribution.”
The
ordinary shares were first listed on the Nasdaq Global Market under the symbol “CIFS” on August 8, 2017. Our corporate name
was changed to “Hudson Capital Inc.” on April 23, 2020 and we began to trade under our new symbol, “HUSN” on
May 8, 2020. Our ordinary shares were transferred to the Nasdaq Capital Market at the opening of business on July 16, 2020. On May 26,
2022, we changed our name from Hudson Capital, Inc. to Freight Technologies, Inc. and began trading under our new stock symbol, “FRGT”,
on May 27, 2022.
The
following tables sets forth, for the periods indicated, the high and low trading prices of the ordinary shares as reported on the Nasdaq
Capital Market prior to the filing of this prospectus.
The
following table sets forth the annual high and low last trade prices of our ordinary shares as reported by The NASDAQ Stock Market during
the fiscal years 2021, 2020 and 2019 . The prices are inter-dealer prices, without retail markup, markdown or commission.
Period | |
High | | |
Low | |
| |
| | |
| |
Fiscal Year ended December 31, 2019 | |
$ | 4.96 | | |
$ | 0.81 | |
Fiscal Year ended December 31, 2020 | |
$ | 3.72 | | |
$ | 0.352 | |
Fiscal Year ended December 31, 2021 | |
$ | 10.6608 | | |
$ | 4.9119 | |
The
following table sets forth the high and low last trade prices of our ordinary shares as reported by The NASDAQ Stock Market for each
fiscal quarter of 2019, 2020 and 2021 . The prices are inter-dealer prices, without retail markup, markdown or commission.
Period | |
High | | |
Low | |
| |
| | |
| |
Fiscal Year 2019, quarter ended | |
| | | |
| | |
March 31, 2019 | |
$ | 4.96 | | |
$ | 0.853 | |
June 30, 2019 | |
$ | 3.87 | | |
$ | 1.28 | |
September 30, 2019 | |
$ | 2.20 | | |
$ | 1.44 | |
December 31, 2019 | |
$ | 1.60 | | |
$ | 0.81 | |
| |
| | | |
| | |
Fiscal Year 2020, quarter ended | |
| | | |
| | |
March 31, 2020 | |
$ | 1.20 | | |
$ | 0.384 | |
June 30, 2020 | |
$ | 1.18 | | |
$ | 0.39 | |
September 30, 2020 | |
$ | 0.839 | | |
$ | 0.352 | |
December 31, 2020 | |
$ | 3.72 | | |
$ | 0.415 | |
| |
| | | |
| | |
Fiscal Year 2021, quarter ended | |
| | | |
| | |
March 31, 2021 | |
$ | 10.6608 | | |
$ | 6.4317 | |
June 30, 2021 | |
$ | 8.5683 | | |
$ | 4.9119 | |
September 30, 2021 | |
$ | 8.4581 | | |
$ | 5.1322 | |
December 31, 2021 | |
$ | 7.3789 | | |
$ | 5.3084 | |
The
following table sets forth the monthly high and low last trade prices of our ordinary shares as reported by The NASDAQ Stock Market for
each month in 2022 preceding this date of prospectus. The prices are inter-dealer prices, without retail markup, markdown or commission,
and do not necessarily reflect actual transactions.
Period | |
High | | |
Low | |
Month Ended: | |
| | | |
| | |
August 31, 2022 | |
$ | 2.1700 | | |
$ | 1.5400 | |
July 31, 2022 | |
$ | 2.4800 | | |
$ | 1.3600 | |
June 30, 2022 | |
$ | 1.6800 | | |
$ | 1.3300 | |
May 31, 2022 | |
$ | 2.0800 | | |
$ | 1.5200 | |
April 30, 2022 | |
$ | 2.6300 | | |
$ | 1.9300 | |
March 31, 2022 | |
$ | 2.6700 | | |
$ | 1.7000 | |
February 28, 2022* | |
$ | 6.5529 | * | |
$ | 2.2050 | * |
January 31, 2022 | |
$ | 5.9692 | | |
$ | 4.1850 | |
*The
Company effected a 2.2:1 reverse split of its ordinary shares on February 14, 2022.
DESCRIPTION
OF SHARE CAPITAL AND GOVERNING DOCUMENTS
Freight
Technologies, Inc. is a BVI business company incorporated on September 28, 2015 and our affairs are governed by the provisions of our
memorandum and articles of association, as amended and restated from time to time, the BVI Act, and the applicable laws of the British
Virgin Islands, or the BVI (including applicable common law).
As
provided in our Amended Memorandum and Articles, subject to the BVI Act, we have full capacity to carry on or undertake any business
or activity, do any act or enter into any transaction, and, for such purposes, full rights, powers and privileges. Our registered office
is c/o Maples Corporate Services Limited, P.O. Box 173, Road Town, Tortola, British Virgin Islands.
As
of the date of this prospectus, the Company is authorized to issue an unlimited number of shares divided into (a) an unlimited number
of shares divided into an unlimited number of ordinary shares with a par value of US$0.011 each, (b) a maximum of 30,525,000 series A
preferred shares (together, the “Series A Preferred Shares”) designated as follows: (i) a maximum of 25,000 series
seed preferred shares with a par value of US$0.0001 each (the “Series Seed Preferred Shares”), (ii) a maximum of 10,000,000
series A1-A preferred shares with a par value of US$0.0001 each (the “Series A1-A Preferred Shares”), (iii) a maximum
of 3,000,000 series A2 preferred shares with a par value of US$0.0001 each (the “Series A2 Preferred Shares”); and
(iv) a maximum of 17,500,000 series A4 preferred shares with a par value of US$0.0001 each (the “Series A4 Preferred Shares”),
(c) a maximum of 21,000,000 series B preferred shares with a par value of US$0.0001 each (the “Series B Preferred Shares”)
and (d) an unlimited number of blank check preferred shares with no par value (the “Blank Check Preferred Shares”).
As of the date of this prospectus, 7,689,462 Ordinary Shares, 5,316 Series Seed Preferred Shares, 4,451,929 series A1-A Preferred Shares,
1,264,366 Series A2 Preferred Shares, 1,378,456 .81 Series A4 Preferred Shares and 17,318,280 Series By Preferred Shares were issued,
fully paid and outstanding. No Blank Check Preferred Shares have been issued. All of our issued and outstanding shares have been validly
issued, fully paid and non-assessable. Our Ordinary Shares are not redeemable and are not subject to any preemptive right.
Ordinary
Shares
In
the last three years, we have issued an aggregate of 3,113,060 Ordinary Shares in several private placements and public offerings for
aggregate net proceeds of approximately $6,779,190, which amount includes the issuance of Ordinary Shares upon the conversion of options,
warrants and performance rights.
Pre-Funded
Warrants and Options
In
addition to Ordinary Shares, in the last three years, we have issued pre-funded warrants to purchase an aggregate of 650,000 Ordinary
Shares to advisors, consultants and investors, with exercise prices ranging from $0.001 per share, of which 499,751 warrants have been
exercised, and no options have been granted.
Preferred
Shares
In
the three years prior to December 31, 2021, we issued an aggregate of zero Preferred Shares. At the closing of the Merger on February
14, 2022, we issued $3.5 million, in Preferred Series
B Shares which are convertible into 1,060,606 Ordinary Shares in addition to 1,939,394 in Series A Warrants with an exercise price of
$3.300, 395,652 in Series B Warrants with an exercise price of $2.640, 2,573,470 in Series C Warrants with an exercise price of $1.650,
and 3,541,941 in Series D Warrants with an exercise price of $2.475. Series A, B, C and D warrants all had termination dates of February
14, 2029. On February 14, 2022, we also issued Series Seed Preferred Shares, Series A1-A Preferred Shares, Series A2 Preferred Shares,
Series A4 Preferred Shares and Series B Preferred Shares, which were convertible into 7,020 Ordinary Shares, 4,473,547 Ordinary Shares,
1,264,360 Ordinary Shares, 2,195,930 Ordinary Shares, and 8,450,457 Ordinary Shares, respectively. On July 11, 2022, the Company amended
all Series A, B, C and D Warrants to permit a cashless exercise at fixed exchange ratios into Ordinary Shares of 0.779, 0.816, 0.888
and 0.826, respectively, for an aggregate amount upon exchange of all Warrants of 7,044,524 Ordinary Shares. On July 11, 2022, we agreed
to issue 1,928,571 Series A4 Preferred Shares for an aggregate amount of $2.7 million. On July 11, 2022, we also adjusted the conversion
prices all Series A Preferred Shares and Series B Preferred Shares that contain features requiring adjustment of conversion prices in
cases where offerings for equity are made at a lower price that that particular share’s conversion price. The additional Ordinary
shares to be registered arising from the adjustment of conversion prices as a result of the July 11, 2022 financing was 37,347,648 shares.
The
following are summaries of material provisions of our Amended Memorandum and Articles and the BVI Act insofar as they relate to the material
terms of our Ordinary Shares, Series A Preferred Shares and Series B Preferred Shares.
Ordinary
Shares
General.
The Amended Memorandum and Articles authorize the issuance of an unlimited number of Ordinary Shares with a par value of US$0.11 each.
Holders of Ordinary Shares will have the same rights. All of our outstanding Ordinary Shares are fully paid and non-assessable. To the
extent they are issued, certificates representing the Ordinary Shares are issued in registered form.
Dividends.
Subject to the rights of the Series A Preferred Shares, the holders of our Ordinary Shares are entitled to dividends out of funds
legally available when and as declared by our board of directors subject to the BVI Act. Our Amended Memorandum and Articles provide
that dividends may be declared and paid at such time, and in such an amount, as the directors determine subject to their being satisfied
that the Company will meet the statutory solvency test immediately after the dividend.
Voting
Rights. In respect of all matters subject to a members’ vote, each Ordinary Share is entitled to one vote for each Ordinary
Share registered in his or her name on our register of members. Holders of Ordinary Shares shall at all times vote together on all resolutions
submitted to a vote of the members. Voting at any meeting of members is by show of hands unless a poll is demanded. A poll may be demanded
by the chairman of such meeting or any one member.
Liquidation.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the assets of the Company available
for distribution to its shareholders shall be distributed to the holders of Series A4 Preferred Shares, the holders of Series A2 Preferred
Shares, the holders of Series A1 Preferred Shares, the holders of the Series Seed Preferred Shares and the holders of Ordinary Shares,
pro rata based on the number of shares held by each shareholder, treating for this purpose all such securities as if they had been converted
to Ordinary Shares pursuant to the terms of the Amended Memorandum and Articles immediately prior to such liquidation, dissolution or
winding up of the Company.
Series
A Preferred Shares
General.
The Amended Memorandum and Articles authorise the issuance of a maximum of 30,525,000 Series A Preferred Shares designated as follows:
(i) a maximum of 25,000 Series Seed Preferred Shares with a par value of US$0.0001 each, (ii) a maximum of 10,000,000 Series A1-A Preferred
Shares with a par value of US$0.0001 each, (iii) a maximum of 3,000,000 Series A2 preferred shares with a par value of US$0.0001 each;
and (iv) a maximum of 17,500,000 Series A4 preferred shares with a par value of US$0.0001 each. All of our outstanding Series A Preferred
Shares are fully paid and non-assessable. To the extent they are issued, certificates representing the Series A Preferred Shares are
issued in registered form.
Dividends.
The holders of our Series A Preferred Shares are entitled to receive, simultaneously with the holders of Ordinary Shares, a dividend
on each outstanding Series A Preferred Share in an amount as calculated in accordance with the Amended Memorandum and Articles.
Voting
Rights. The holders of Series A Preferred Shares shall not be entitled to vote on any resolution of shareholders, except in relation
to a variation of the rights of the Series A Preferred Shares.
Liquidation.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the assets of the Company available
for distribution to its shareholders shall be distributed to the holders of Series A4 Preferred Shares, the holders of Series A2 Preferred
Shares, the holders of Series A1 Preferred Shares, the holders of the Series Seed Preferred Shares and the holders of Ordinary Shares,
pro rata based on the number of shares held by each shareholder, treating for this purpose all such securities as if they had been converted
to Ordinary Shares pursuant to the terms of the Amended Memorandum and Articles immediately prior to such liquidation, dissolution or
winding up of the Company.
Conversion
Rights. The Series A Preferred Shares are convertible, at the option of the holder thereof, at any time and from time to time,
into such number of fully paid and non-assessable Ordinary Shares at the applicable Conversion Price as detailed in the Amended Memorandum
and Articles and subject to adjustment in the event (i) of a division or combination of shares, (ii) that the Company makes or issues
or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividends or other distribution payable
on the Ordinary Shares in additional Ordinary Shares, (iii) that the Company makes or issues or fixes a record date for the determination
of holders of Ordinary Shares entitled to receive a dividends or other distribution payable in shares of the Company (other than a distribution
of Ordinary Shares in respect of the outstanding Ordinary Shares), and (iv) of any reorganization, recapitalization, reclassification,
consolidation or merger involving the Company in which the Ordinary Shares (but not the Series A Preferred Shares) is converted into
or exchanged for securities, cash or other property.
Protective
Provisions. At any time when Series A Preferred Shares are outstanding, the Company shall not do any of the following without
the written consent or affirmative approval of the holders of at least a majority of the Series A Preferred Shares voting together as
a single class, which must include ATW Master Fund II, L.P.: (a) amend, alter or repeal any provision of the Amended Memorandum and Articles
in any manner that is adverse to, derogates from, or negatively affects the rights of any class of Series A1-A Preferred Shares or the
Series A2 Preferred Shares, (b) create, or the authorise the creation of, or issue or oblige itself to issue shares of, any additional
class or series of shares that ranks senior to the Series A1 Preferred Shares or the Series A1-A Preferred Shares with respect to the
distribution of assets on the liquidation, dissolution or winding up of the Company, the payment of dividends and rights of redemption,
or increase the authorised number of any such class of Series A Preferred Shares or increase the authorised number of any additional
class or series of shares of the Company, (c) reclassify, alter or amend any existing security of the Company that is pari passu with
the Series A2 Preferred Shares or the Series A1-A Preferred Shares if such reclassification, alteration or amendment would render such
other security senior to any such class of Series A Preferred Shares; (d) reclassify, alter or amend any existing security of the Company
that is junior to the Series A Preferred Shares if such reclassification, alteration or amendment would render such other security senior
to or pari passu with any such class of Series A Preferred Shares, (e) purchase or redeem (or permit any subsidiary to purchase or redeem)
or pay or declare any dividend or distribution on any shares of the Company other than (i) redemptions of or dividends or distributions
on the Series A2 Preferred Shares and Series A1-A Preferred Shares as expressly authorised in the Amended Memorandum and Articles, (ii)
dividends or other distributions payable on the Ordinary Shares solely in the form of additional shares of Ordinary Shares by way of
bonus share issue or otherwise and (iii) any repurchase, redemption, surrender or other acquisition of shares from former employees,
officers, directors, consultants or other persons who performed services for the Company or any subsidiary in connection with the cessation
of such employment or service at the lower of the original purchase price or the then-current fair market value thereof, or (f) create,
or hold shares or capital stock in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries)
by the Company, or permit any subsidiary to create or authorize the creation of, or issue or obligate itself to issue, any shares of
any class or series of shares or capital stock, or sell, transfer, or otherwise dispose of any shares or capital stock of any direct
or indirect subsidiary of the Company, or permit any direct or indirect subsidiary to sell, lease, transfer, exclusively license or otherwise
dispose (in a single transaction or series of related transactions) of all or substantially all of the assets of such subsidiary.
Any
rights, powers, preferences and other terms of the Series A Preferred Shares in the Amended Memorandum and Articles, may be waived on
behalf of all holders of Series A Preferred Shares by the written consent or affirmative vote of the holders of a majority of the then
outstanding Series A Preferred Shares.
Series
B Preferred Shares
General.
The Amended Memorandum and Articles authorise the issuance of a maximum of 21,000,000 Series B Preferred Shares with a par value of US$0.0001
each. All of our outstanding Series B Preferred Shares are fully paid and non-assessable. To the extent they are issued, certificates
representing the Series B Preferred Shares are issued in registered form.
Dividends.
The holders of Series B Preferred Shares shall be entitled to receive dividends on Series B Preferred Shares equal (on an as-if-converted-to-Ordinary
Shares basis) to and in the same form as dividends actually paid on Ordinary Shares when, as and if such dividends are paid on Ordinary
Shares. No other dividends or other distributions shall be paid on Series B Preferred Shares.
Voting
Rights. The holders of Series B Preferred Shares shall not be entitled to vote on any resolution of shareholders, except in relation
to a variation of the rights of the Series B Preferred Shares.
Liquidation.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Series B Preferred
Shares shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a shareholder
of Ordinary Shares would receive if the Series B Preferred Shares were fully converted (disregarding for such purposes any conversion
limitations hereunder) to Ordinary Shares which amounts shall be paid pari passu with all shareholders of Ordinary Shares.
Conversion
Rights. The Series B Preferred Shares are convertible, at the option of the holder thereof, at any time and from time to time
and after the Series B Original Issue Date, into such number of fully paid and non-assessable Ordinary Shares at the applicable Conversion
Price as detailed in the Amended Memorandum and Articles and subject to adjustment if the Company (i) pays a share dividend or issues
bonus shares or otherwise makes a distribution or distributions payable in Ordinary Shares on Ordinary Shares or any other Ordinary Share
Equivalents (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon conversion of, or payment
of a dividend on, the Series B Preferred Shares), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines
(including by way of reverse share split or combination) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues,
in the event of a reclassification of the Ordinary Shares, any shares of the Company.
Protective
Provisions. As long as any Series B Preferred Shares are outstanding, the Company shall not do any of the following without the
written consent or affirmative approval of the holders of a majority of the then outstanding Series B Preferred Shares: (a) alter or
change adversely the powers, preferences or rights given to the Series B Preferred Shares or alter or amend the Amended Memorandum and
Articles, in any manner that adversely affects the rights of the holders of the Series B Preferred Shares, (b) increase the number of
authorised Series B Preferred Shares; or (c) enter into any agreement with respect to any of the foregoing.
Any
rights, powers, preferences and other terms of the Series B Preferred Shares in the Amended Memorandum and Articles, may be waived on
behalf of all holders of Series B Preferred Shares by the written consent or affirmative vote of the holders of a majority of the then
outstanding Series B Preferred Shares.
Blank
Check Preferred Shares
Our
Amended Memorandum and Articles provide that Blank Check Preferred Shares may be issued from time to time in one or more series. Our
board of directors are authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional
or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board
of directors are able to, without shareholder approval, issue Blank Check Preferred Shares with voting and other rights that could adversely
affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. The ability of our
board of directors to issue Blank Check Preferred Shares without shareholder approval could have the effect of delaying, deferring or
preventing a change of control of us or the removal of existing management. We have no Blank Check Preferred Shares issued and outstanding
at the date hereof. Although we do not currently intend to issue any Blank Check Preferred Shares, we cannot assure you that we will
not do so in the future. No Blank Check Preferred Shares are being issued or registered in this offering.
General
Objects
and Purposes, Register, and Shareholders. Subject to the BVI Act and BVI law, our objects and purposes are unlimited. Our register
of members will be maintained by our transfer agent, Transhare Corporation. Under the BVI Act, a BVI company may treat the registered
holder of a share as the only person entitled to (a) exercise any voting rights attaching to the share, (b) receive notices, (c) receive
a distribution in respect of the share and (d) exercise other rights and powers attaching to the share. Consequently, as a matter of
BVI law, where a shareholder’s shares are registered in the name of a nominee (such as Cede & Co), the nominee is entitled
to receive notices, receive distributions and exercise rights in respect of any such shares registered in its name. The beneficial owners
of the shares registered in a nominee’s name will therefore be reliant on their contractual arrangements with the nominee in order
to receive notices and dividends and ensure the nominee exercises voting and other rights in respect of the shares in accordance with
their directions.
Directors’
Powers. Under the BVI Act, subject to any modifications or limitations in a company’s memorandum and articles of association,
a company’s business and affairs are managed by, or under the direction or supervision of, its directors; and directors generally
have all powers necessary to manage a company. A director must disclose any interest he has on any proposal, arrangement or contract
not entered into in the ordinary course of business and on usual terms and conditions. An interested director may (subject to the memorandum
and articles) vote on a transaction in which he has an interest. In accordance with, and subject to, our Amended Memorandum and Articles,
the directors may by resolution of directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations
and to secure indebtedness, liabilities or obligations whether of the Company or of any third party.
Appointment
and Removal of Directors. In accordance with our Amended Memorandum and Articles, any director may be appointed by resolution
of shareholders or resolution of directors. A director shall be removed from office (a) with or without cause, by resolution of shareholders
passed at a meeting called for the purpose of removing the director or by written resolution passed by at least 75% of the votes of the
shares of the company entitled to vote or (b) with cause, by resolution of directors passed at a meeting of directors called for the
purpose of removing the director.
Shareholder
Meetings. In accordance with, and subject to, our Amended Memorandum and Articles, (a) any director of the Company may convene
meetings of the shareholders at such times as the director considers necessary or desirable (and the director convening a meeting of
shareholders may fix as the record date for determining those shareholders that are entitled to vote at the meeting the date notice is
given of the meeting, or such other date as may be specified in the notice, being a date not earlier than the date of the notice); and
(b) upon the written request of shareholders entitled to exercise 30% or more of the voting rights in respect of the matter for which
the meeting is requested, the directors shall convene a meeting of shareholders. Under BVI law, the memorandum and articles of association
may be amended to decrease but not increase the required percentage to call a meeting above 30%. In accordance with, and subject to,
our Amended Memorandum and Articles, (a) the director convening a meeting shall give not less than 7 days’ notice of a meeting
of shareholders to those shareholders whose names on the date the notice is given appear as shareholders in the register of members of
the Company and are entitled to vote at the meeting; and the other directors; (b) a meeting of shareholders held in contravention of
the requirement to give notice is valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered
at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute
waiver in relation to all of the ordinary shares that that shareholder holds; (c) a quorum required for a meeting of members consists
of not less than 50% of the votes of the Share entitled to vote present in person or by proxy at the meeting or, if a corporation or
other non-natural person, by its duly authorized representative; and (d) if within two hours from the time appointed for the meeting
a quorum is not present, the meeting, if convened upon the request of the shareholders, shall be dissolved; in any other case it shall
stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or
to such other time and place as the directors may determine, and if at the adjourned meeting there are present within one hour from the
time appointed for the meeting in person or by proxy not less than one third of the votes of the ordinary shares entitled to vote on
the matters to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved.
Disclosure
of the Securities and Exchange Commission’s Position on Indemnification for Securities Act Liabilities. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is therefore unenforceable.
Transfer
of Shares. Under the BVI Act shares that are listed on a recognized exchange may be transferred without the need for a written
instrument of transfer if the transfer is carried out in accordance with the laws, rules, procedures and other requirements applicable
to shares listed on the recognized exchange and subject to the Company’s memorandum and articles of association.
Calls
on Shares and Forfeiture of Shares. Our board of directors may from time to time make calls upon members for any amounts unpaid
on their shares in a notice served to such members at least 14 clear days prior to the specified time of payment. The shares that have
been called upon and remain unpaid are subject to forfeiture.
Redemption
of Shares. Subject to the written consent or affirmative approval of the holders of Series A Preferred Shares where applicable,
the BVI Act and our Amended Memorandum and Articles permit us to purchase our own shares with the prior written consent of the relevant
members, on such terms and in such manner as may be determined by our board of directors and by a resolution of directors and in accordance
with the BVI Act.
Issuance
of Additional Shares. Subject to the written consent or affirmative approval of the holders of Series A Preferred Shares, our
Amended Memorandum and Articles authorize our board of directors to issue additional shares from time to time as our board of directors
shall determine. Our Amended Memorandum and Articles do not provide for pre-emptive rights.
However,
under British Virgin Islands law, our directors may only exercise the rights and powers granted to them under our Amended Memorandum
and Articles for a proper purpose and for what they believe in good faith to be in the best interests of our Company.
Anti-Takeover
Provisions. Some provisions of our Amended Memorandum and Articles may discourage, delay or prevent a change of control of our
company or management that members may consider favorable, including provisions that:
|
● |
authorize
our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges
and restrictions of such preference shares without any further vote or action by our members; and |
|
● |
limit
the ability of members to requisition and convene general meetings of members. |
However,
under British Virgin Islands law, our directors may only exercise the rights and powers granted to them under our Amended Memorandum
and Articles for a proper purpose and for what they believe in good faith to be in the best interests of our Company.
Summary
of Certain Significant Provisions of BVI Law
The
BVI Act differs from laws applicable to US corporations and their shareholders. Set forth below is a summary of certain significant provisions
of the BVI Act applicable to us (save to the extent that such provisions have been, to the extent permitted under the BVI Act, negated
or modified in our Amended Memorandum and Articles in accordance with the BVI Act).
Mergers,
Consolidations and Similar Arrangements. The BVI Act provides for mergers as that expression is understood under US corporate
law. Common law mergers are also permitted outside of the scope of the BVI Act. Under the BVI Act two or more BVI companies or a BVI
company and non-BVI company, each a “constituent company”, may merge or consolidate. The BVI Act provides for slightly different
procedures depending on the nature of the parties to the merger.
A
merger involves the merging of two or more companies into one of the constituent companies (to the merger) with one constituent company
continuing in existence to become the surviving company post-merger. A consolidation involves two or more companies consolidating into
a new company.
A
merger is effective on the date that the articles of merger (as described below) are registered by the Registrar of Corporate Affairs
in the BVI, or on such later date, not exceeding 30 days from the date of registration as is stated in the articles of merger.
As
soon as a merger becomes effective:
|
a) |
the
surviving company (so far as is consistent with its memorandum and articles, as amended by the articles of merger) has all rights,
privileges, immunities, powers, objects and purposes of each of the constituent companies; |
|
b) |
the
memorandum and articles of the surviving company are automatically amended to the extent, if any, that changes to its memorandum
and articles are contained in the articles of merger; |
|
c) |
assets
of every description, including choses in action and the business of each of the constituent companies, immediately vest in the surviving
company; |
|
d) |
the
surviving company is liable for all claims, debts, liabilities and obligations of each of the constituent companies; |
|
e) |
no
conviction, judgment, ruling, order, claim, debt, liability or obligation due or to become due, and no cause existing, against a
constituent company or against any shareholder, director, officer or agent thereof, is released or impaired by the merger; and |
|
f) |
no
proceedings, whether civil or criminal, pending at the time of a merger by or against a constituent company, or against any shareholder,
director or officer, or agent thereof, are abated or discontinued by the merger; but |
|
a. |
the
proceedings may be enforced, prosecuted, settled or compromised by or against the surviving company or against the shareholder, director,
officer or agent thereof, as the case may be; or |
|
b. |
the
surviving company may be substituted in the proceedings for a constituent company. |
The
registrar shall strike off the Register of Companies a constituent company that is not the surviving company in the merger.
The
BVI Act provides that any shareholder of the Company is entitled to payment of the fair value of his shares upon dissenting from a merger,
unless the Company is the surviving company of the merger and the shareholder continues to hold the same or similar shares. The following
is a summary of the position in respect of dissenters rights in the event of a merger under the BVI Act.
A
dissenter is in most circumstances required to give to the Company written objection to the merger, which must include a statement that
the dissenter proposes to demand payment for his shares if the merger takes place. This written objection must be given before the meeting
of shareholders at which the merger is submitted to a vote, or at the meeting but before the vote. However, no objection is required
from a shareholder to whom the Company did not give notice of the meeting of shareholders or where the proposed merger is authorized
by written consent of the shareholders without a meeting.
Within
20 days immediately following the written consent, or the meeting at which the merger was approved, the Company shall give written notice
of the consent or resolution to each shareholder who gave written objection or from whom written objection was not required, except those
shareholders who voted for, or consented in writing to, the proposed merger.
A
shareholder to whom the Company was required to give notice who elects to dissent shall, within 20 days immediately following the date
on which the copy of the plan of merger or an outline of the merger is given to him, give to the Company a written notice of his decision
to elect to dissent, stating:
|
a) |
his
name and address; |
|
b) |
the
number and classes of shares in respect of which he dissents (which must be all shares that he holds in the Company); and |
|
c) |
a
demand for payment of the fair value of his shares. |
Upon
the giving of a notice of election to dissent, the dissenter ceases to have any of the rights of a shareholder except the right to be
paid the fair value of his shares, and the right to institute proceedings to obtain relief on the ground that the action is illegal.
The
Company shall make a written offer to each dissenter to purchase his shares at a specified price that the Company determines to be their
fair value. Such offer must be given within 7 days immediately following the date of the expiration of the period within which shareholders
may give their notices of election to dissent, or within 7 days immediately following the date on which the merger is put into effect,
whichever is later.
If
the Company and the dissenter fail, within 30 days immediately following the date on which the offer is made, to agree on the price to
be paid for the shares owned by the dissenter, then within 20 days:
|
a) |
the
Company and the dissenter shall each designate an appraiser; |
|
b) |
the
two designated appraisers together shall designate an appraiser; |
|
c) |
the
three appraisers shall fix the fair value of the shares owned by the dissenter as of the close of business on the day prior to the
date of the meeting or the date on which the resolution was passed, excluding any appreciation or depreciation directly or indirectly
induced by the action or its proposal, and that value is binding on the Company and the dissenter for all purposes; and |
|
d) |
the
Company shall pay to the dissenter the amount in money upon the surrender by him of the certificates representing his shares, and
such shares shall be cancelled. |
Continuation
into a Jurisdiction Outside the BVI. In accordance with, and subject to, our memorandum and articles, the Company may by resolution
of shareholders or by a resolution passed unanimously by all directors of the Company continue as a company incorporated under the laws
of a jurisdiction outside the BVI in the manner provided under those laws. The Company does not cease to be a BVI company unless the
foreign law permits continuation and the BVI company has complied with the requirements of that foreign law. Where a company that wishes
to continue as a company incorporated under the laws of a jurisdiction outside the BVI has a charge registered in respect of the property
of the company undersection 163 of the BVI Act which has not been released or satisfied, it shall, before continuing and provided that
the charge does not contain a covenant prohibiting continuation of the company outside the BVI, provide a written declaration addressed
to the Registrar specifying that: (a) a notice of satisfaction or release in respect of the charge has been filed and registered under
section 165 of the BVI Act; (b) where paragraph (a) has not been complied with, the chargee to whom the registered charge relates has
been notified in writing of the intention to continue the company as a company incorporated under the laws of a jurisdiction outside
the BVI and the chargee has given his or her consent or has not objected to the continuation; or (c) where paragraph (a) has not been
satisfied and the chargee, after notification under paragraph (b), has not given his or her consent or objected to the continuation,
the chargee’s interest secured by the registered charge shall not be diminished or in any way compromised by the continuation and
the charge shall operate as a liability of the continued company incorporated under the laws of a jurisdiction outside of the BVI. Where
a company is continued under the laws of a jurisdiction outside the BVI, (a) the company continues to be liable for all of its claims,
debts, liabilities and obligations that existed prior to its continuation, (b) no conviction, judgment, ruling, order, claim, debt, liability
or obligation due or to become due, and no cause existing, against the company or against any shareholder, director, officer or agent
thereof, is released or impaired by its continuation as a company under the laws of the jurisdiction outside the BVI, (c) no proceedings,
whether civil or criminal, pending by or against the company, or against any shareholder, director, officer or agent thereof, are abated
or discontinued by its continuation as a company under the laws of the jurisdiction outside the BVI, but the proceedings may be enforced,
prosecuted, settled or compromised by or against the Company or against the shareholder, director, officer or agent thereof, as the case
may be; and (d) service of process may continue to be effected on the registered agent of the company in the BVI in respect of any claim,
debt, liability or obligation of the Company during its existence as a company under the BVI Act.
Directors.
In accordance with, and subject to, our memorandum and articles (including, for the avoidance of any doubt, any rights or restrictions
attaching to any ordinary shares), (a) the directors are elected by resolution of shareholders or by resolution of directors for such
term as the shareholders or directors determine; (b) each director holds office for the term, if any, fixed by the resolution of shareholders
or resolution of directors appointing him, or until his earlier death, resignation or removal. If no term is fixed on the appointment
of a director, the director serves indefinitely until his earlier death, resignation or removal: (c) a director may be removed from office
(i) with or without cause, by a resolution of shareholders passed at a meeting of shareholders called for the purposes of removing the
director or for purposes including the removal of the director or by a written resolution passed by a least 75% of the shareholders of
the Company entitled to vote or (ii) with cause, by a resolution of directors passed at a meeting of directors called for the purpose
of removing the director or for purposes including the removal of the director; (d) a director may resign his office by giving written
notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company at the office
of its registered agent or from such later date as may be specified in the notice and a director shall resign forthwith as a director
if he is, or becomes, disqualified from acting as a director under the BVI Act (e) the directors may at any time appoint any person to
be a director either to fill a vacancy or as an addition to the existing directors and where the directors appoint a person as director
to fill a vacancy, the term shall not exceed the term that remained when the person who has ceased to be a director ceased to hold office;
(f) a vacancy in relation to directors occurs if a director dies or otherwise ceases to hold office prior to the expiration of his term
of office; and (g) a director is not required to hold ordinary shares as a qualification to office.
In
accordance with, and subject to, our memorandum and articles, (a) any one director of the Company may call a meeting of the directors
by sending a written notice to each other director; (b) the directors of the Company or any committee thereof may meet at such times
and in such manner as the directors may determine to be necessary or desirable; (c) a director shall be given not less than 3 days’
notice of meetings of directors, but a meeting of directors held without 3 days’ notice having been given to all directors shall
be valid if all the directors entitled to vote at the meeting who do not attend waive notice of the meeting, and for this purpose the
presence of a director at a meeting shall constitute waiver by that director and the inadvertent failure to give notice of a meeting
to a director, or the fact that a director has not received the notice, does not invalidate the meeting; (d) a meeting of directors is
duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less than one-half
of the total number of directors, unless there are only 2 directors in which case the quorum is present; (e) a director may by a written
instrument appoint an alternate who need not be a director and the alternate shall be entitled to attend meetings in the absence of the
director who appointed him and to vote or consent in place of the director until the appointment lapses or is terminated; (f) a resolution
of directors is passed if either (i) the resolution is approved at a duly convened and constituted meeting of directors of the Company
or of a committee of directors of the Company by the affirmative vote of a majority of the directors present at the meeting who voted
except that where a director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing
a majority; or (ii) the resolution is consented to in writing by a majority of directors or by a majority of members of a committee of
directors of the Company, as the case may be, unless (in either case) the BVI Act or our memorandum and articles require a different
majority.
Indemnification
of Directors. BVI law does not limit the extent to which a company’s memorandum and articles of association may provide
for indemnification of officers and directors, except to the extent any such provision may be held by the BVI High Court to be contrary
to public policy (e.g. for purporting to provide indemnification against the consequences of committing a crime). An indemnity will be
void and of no effect and will not apply to a person unless the person acted honestly and in good faith and in what he believed to be
in the best interests of the company and, in the case of criminal proceedings, the person had no reasonable cause to believe that his
conduct was unlawful. Our post-offering amended and restated memorandum and articles of association permit indemnification of officers
and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from dishonesty
or fraud of such directors or officers. This standard of conduct is generally the same as permitted under the Delaware General Corporation
Law for a Delaware corporation. In addition, we have entered into indemnification agreements with our directors and executive officers
that provide such persons with additional indemnification beyond that provided in our post-offering amended and restated memorandum and
articles of association.
Directors
and Conflicts of Interest. As noted above, pursuant to the BVI Act and the Amended Memorandum and Articles, a director of a company
who has an interest in a transaction and who has declared such interest to the other directors, may:
|
(a) |
vote
on a matter relating to the transaction; |
|
|
|
|
(b) |
attend
a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting
for the purposes of a quorum; and |
|
|
|
|
(c) |
sign
a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction, |
and,
subject to compliance with the BVI Act shall not, by reason of his office be accountable to the Company for any benefit which he derives
from such transaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.
In
accordance with, and subject to, our Amended Memorandum and Articles, (a) a director of the Company shall, forthwith after becoming aware
of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to all other
directors of the Company; and (b) for the purposes noted foregoing, a disclosure to all other directors to the effect that a director
is a member, director or officer of another named entity or has a fiduciary relationship with respect to the entity or a named individual
and is to be regarded as interested in any transaction which may, after the date of the entry or disclosure, be entered into with that
entity or individual, is a sufficient disclosure of interest in relation to that transaction.
Shareholders’
Suits. Under the provisions of the BVI Act, the memorandum and articles of association of a company are binding as between the
company and its shareholders and between the shareholders.
If
the majority shareholders have infringed a minority shareholder’s rights, the minority may seek to enforce its rights either by
derivative action or by personal action. A derivative action concerns the infringement of the company’s rights where the wrongdoers
are in control of the company and are preventing it from taking action, whereas a personal action concerns the infringement of a right
that is personal to the particular shareholder concerned.
The
BVI Act provides for a series of remedies available to shareholders. Where a company incorporated under the BVI Act conducts some activity
which breaches the BVI Act or the company’s memorandum and articles of association, the BVI High Court can issue a restraining
or compliance order. Shareholders can now also bring derivative, personal and Representative Actions under certain circumstances.
Generally
any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the BVI or
their individual rights as shareholders as established by the company’s memorandum and articles of association.
In
certain circumstances, a shareholder has the right to seek various remedies against the company in the event the directors are in breach
of their duties under the BVI Act. Pursuant to Section 184B of the BVI Act, if a company or director of a company engages in, proposes
to engage in or has engaged in, conduct that contravenes the provisions of the BVI Act or the memorandum or articles of association of
the company, the courts of the British Virgin Islands may, on application of a shareholder or director of the company, make an order
directing the company or director to comply with, or restraining the company or director from engaging in conduct that contravenes the
BVI Act or the memorandum or articles. Furthermore, pursuant to Section 184I(1) of the BVI Act, a shareholder of a company who considers
that the affairs of the company have been, are being or likely to be, conducted in a manner that is, or any acts of the company have
been, or are likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the courts
of the British Virgin Islands for an order which, inter alia, can require the company or any other person to pay compensation to the
shareholders.
Squeeze-out
Provisions. Shareholders of a company holding 90% of the votes of the outstanding shares entitled to vote and shareholders of
a company holding 90% of the votes of the outstanding shares of each class of shares entitled to vote as a class, may give a written
instruction to the company directing it to redeem the shares held by the remaining shareholders.
Dissent
Rights. The BVI Act provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting
from any of the following: (a) a merger if the company is a constituent company, unless the company is the surviving company and the
shareholder continues to hold the same or similar shares; (b) a consolidation, if the company is a constituent company; (c) any sale,
transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the company if not made in the
usual or regular course of the business carried on by the company but not including: (i) a disposition pursuant to an order of the court
having jurisdiction in the matter, (ii) a disposition for money on terms requiring all or substantially all net proceeds to be distributed
to the shareholders in accordance with their respective interests within one year after the date of disposition, or (iii) a transfer
pursuant to the power of the directors to transfer assets for the protection thereof; (d) a compulsory redemption of 10% or fewer of
the issued shares of the company required by the holders of 90% or more of the votes of the outstanding shares of the company pursuant
to the terms of Section 176 of the BVI Act; and (e) an arrangement, if permitted by the BVI court.
Generally
any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the BVI or
their individual rights as shareholders as established by the company’s memorandum and articles of association. There are common
law rights for the protection of shareholders that may be invoked, largely derived from English common law. For example, under the rule
established in the English case known as Foss v. Harbottle, a court will generally refuse to interfere with the management of a company
at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the
majority or the board of directors. However, every shareholder is entitled to seek to have the affairs of the company conducted properly
according to law and the constituent documents of the Company. As such, if those who control the Company have persistently disregarded
the requirements of company law or the provisions of the company’s memorandum and articles of association, then the courts may
grant relief. Generally, the areas in which the courts will intervene are the following:
|
● |
a
company is acting or proposing to act illegally or beyond the scope of its authority; |
|
|
|
|
● |
the
act complained of, although not beyond the scope of the authority, could only be effected if duly authorized by more than the number
of votes which have actually been obtained; |
|
|
|
|
● |
the
individual rights of the plaintiff shareholder have been infringed or are about to be infringed; or |
|
|
|
|
● |
those
who control the Company are perpetrating a “fraud on the minority.” |
Share
Repurchases and Redemptions. As permitted by the BVI Act and subject to our Amended Memorandum and Articles (in particular to
the written consent or affirmative approval of the holders of Series A Preferred Shares where applicable), shares may be repurchased,
redeemed or otherwise acquired by us by resolution of directors and with the consent of the shareholder whose shares are being purchased.
Depending on the circumstances of the redemption or repurchase, our directors may need to determine that, immediately following the redemption
or repurchase, we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities. Our directors
may only exercise this power on our behalf, subject to the BVI Act, our memorandum and articles of association and to any applicable
requirements imposed from time to time by the SEC, the or any other stock exchange on which our securities are listed.
Inspection
of Books and Records. A member of the Company is entitled, on giving written notice to the Company, to inspect
(a)
the memorandum and articles of association of the Company; (b) the register of members; (c) the register of directors; and (d) the minutes
of meetings and resolutions of members and of those classes of members of which he is a member; and to make copies of or take extracts
from the documents and records. Subject to the post offering amended and restated memorandum and articles of association, the directors
may, if they are satisfied that it would be contrary to the Company’s interests to allow a member to inspect any document, or part
of a document, specified in (b), (c) and (d) above, refuse to permit the member to inspect the document or limit the inspection of the
document, including limiting the making of copies or the taking of extracts from the records.
Where
a company fails or refuses to permit a member to inspect a document or permits a member to inspect a document subject to limitations,
that member may apply to the BVI High Court for an order that he should be permitted to inspect the document or to inspect the document
without limitation.
A
company is required to keep at the office of its registered agent: its memorandum and articles of association of the company; the register
of members or a copy of the register of members; the register of directors or a copy of the register of directors; and copies of all
notices and other documents filed by the company in the previous ten years.
Where
the place at which the original register of members or the original register of directors of the Company is changed, the Company must
provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.
A
company is also required to keep at the office of its registered agent or at such other place or places, within or outside the BVI, as
the directors may determine the minutes of meetings and resolutions of shareholders and of classes of shareholders; and the minutes of
meetings and resolutions of directors and committees of directors. If such records are kept at a place other than at the office of the
Company’s registered agent, the Company is required to provide the registered agent with a written record of the physical address
of the place or places at which the records are kept and to notify the registered agent, within 14 days, of the physical address of any
new location where such records may be kept.
Dissolution;
Winding Up. Under BVI law, the liquidation of a company may be a voluntary solvent liquidation or an insolvent liquidation under
the Insolvency Act. Where a company has been struck off the Register of Companies under the BVI Act continuously for a period of 7 years
it is dissolved with effect from the last day of that period.
Anti-Money
Laundering Laws. In order comply with legislation or regulations aimed at the prevention of money laundering the Company is required
to adopt and maintain anti-money laundering procedures, and may require members to provide evidence to verify their identity. Where permitted,
and subject to certain conditions, the Company also may delegate the maintenance of our anti-money laundering procedures (including the
acquisition of due diligence information) to a suitable person.
If
any person resident in the British Virgin Islands knows or suspects that another person is engaged in money laundering or terrorist financing
and the information for that knowledge or suspicion came to their attention in the course of their business the person will be required
to report his belief or suspicion to the Financial Investigation of the British Virgin Islands, pursuant to the Proceeds of Criminal
Conduct Act (As Revised). Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure
of information imposed by any enactment or otherwise.
Exchange
Controls. We know of no BVI laws, decrees, regulations or other legislation that limit the import or export of capital or the
payment of dividends to shareholders who do no reside in the BVI.
General
All
of our issued ordinary shares and preferred shares are fully paid and non-assessable. Each holder of ordinary shares and preferred shares
is entitled to a certificate specifying the number of ordinary shares and preferred shares held by him, her or it. Our shareholders may
freely hold and vote their ordinary shares.1
Transfer
Agent
Our
transfer agent for our ordinary shares is Transhare Corporation, 17755 US Hwy 19 N, Clearwater, FL 33764.
1
Maples: Note that as described above, holders of Preferred Shares have no right to vote other than with regard to a variation of
the rights attached to those shares.
DESCRIPTION
OF WARRANTS
The
following description, together with the additional information we may include in any applicable prospectus supplements, summarizes the
material terms and provisions of the warrants that we may offer under this prospectus and the related warrant agreements and warrant
certificates. While the terms summarized below will apply generally to any warrants that we may offer under this prospectus, we will
describe the particular terms of any series of warrants that we may offer in more detail in the applicable prospectus supplement. If
we indicate in the prospectus supplement, the terms of any warrants offered under that prospectus supplement may differ from the terms
described below. However, no prospectus supplement shall fundamentally change the terms that are set forth in this prospectus or offer
a security that is not registered and described in this prospectus at the time of its effectiveness. Specific warrant agreements will
contain additional important terms and provisions and will be incorporated by reference as an exhibit to the registration statement that
includes this prospectus or as an exhibit to a report filed under the Exchange Act.
General
We
may issue warrants that entitle the holder to purchase ordinary shares, debt securities or any combination thereof. We may issue warrants
independently or together with ordinary shares, debt securities or any combination thereof, and the warrants may be attached to or separate
from these securities.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
|
● |
the
offering price and aggregate number of warrants offered; |
|
● |
the
currency for which the warrants may be purchased, if not United States dollars; |
|
● |
if
applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with
each such security or each principal amount of such security; |
|
● |
if
applicable, the date on and after which the warrants and the related securities will be separately transferable; |
|
● |
in
the case of warrants to purchase ordinary shares, the number of ordinary shares purchasable upon the exercise of one warrant and
the price at which these shares may be purchased upon such exercise; |
|
● |
in
the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant
and the price at, and currency, if not United States dollars, in which, this principal amount of debt securities may be purchased
upon such exercise; |
|
● |
the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
|
● |
the
terms of any rights to redeem or call the warrants; |
|
● |
any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
|
● |
the
dates on which the right to exercise the warrants will commence and expire; |
|
● |
the
manner in which the warrant agreement and warrants may be modified; |
|
● |
federal
income tax consequences of holding or exercising the warrants; |
|
● |
the
terms of the securities issuable upon exercise of the warrants; and |
|
● |
any
other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before
exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise,
including:
|
● |
in
the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest
on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or |
|
● |
in
the case of warrants to purchase our ordinary shares, the right to receive dividends, if any, or, payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if any. |
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price
that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders
of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable
prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with
specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable
prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the applicable prospectus supplement the
information that the holder of the warrant will be required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office of the
warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable
upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new
warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants
may surrender securities as all or part of the exercise price for warrants.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship
of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of
warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or
warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder
of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action
its right to exercise, and receive the securities purchasable upon exercise of, its warrants.
Warrant
Agreements Will Not Be Qualified Under Trust Indenture Act
No
warrant agreement will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture
Act. Therefore, holders of warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect
to their warrants.
Modification
of the Warrant Agreement
The
warrant agreements may permit us and the warrant agent, if any, without the consent of the warrant holders, to supplement or amend the
agreement in the following circumstances:
|
● |
to
cure any ambiguity; |
|
● |
to
correct or supplement any provision which may be defective or inconsistent with any other provisions; or |
|
● |
to add new provisions regarding matters or questions
that we and the warrant agent may deem necessary or desirable and which do not adversely affect the interests of the warrant holders. |
DESCRIPTION
OF DEBT SECURITIES
As
used in this prospectus, debt securities mean the debentures, notes, bonds and other evidences of indebtedness that we may issue from
time to time. The debt securities may be either secured or unsecured and will either be senior debt securities or subordinated debt securities.
The debt securities will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying
prospectus supplement. Senior debt securities will be issued under a new senior indenture. Subordinated debt securities will be issued
under a subordinated indenture. Together, the senior indentures and the subordinated indentures are sometimes referred to in this prospectus
as the indentures. This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular series
of debt securities.
The
statements and descriptions in this prospectus or in any prospectus supplement regarding provisions of the indentures and debt securities
are summaries thereof, do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of
the provisions of the indentures (and any amendments or supplements we may enter into from time to time which are permitted under each
indenture) and the debt securities, including the definitions therein of certain terms.
General
Unless
otherwise specified in a prospectus supplement, the debt securities will be direct unsecured obligations of the Company. The senior debt
securities will rank equally with any of our other senior and unsubordinated debt. The subordinated debt securities will be subordinate
and junior in right of payment to any senior indebtedness.
Unless
otherwise specified in a prospectus supplement, the indentures do not limit the aggregate principal amount of debt securities that we
may issue and provide that we may issue debt securities from time to time at par or at a discount, and in the case of the new indentures,
if any, in one or more series, with the same or various maturities. Unless indicated in a prospectus supplement, we may issue additional
debt securities of a particular series without the consent of the holders of the debt securities of such series outstanding at the time
of the issuance. Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute
a single series of debt securities under the applicable indenture.
Each
prospectus supplement will describe the terms relating to the specific series of debt securities being offered. These terms will include
some or all of the following:
|
● |
the
title of the debt securities and whether they are subordinated debt securities or senior debt securities; |
|
● |
any
limit on the aggregate principal amount of the debt securities; |
|
● |
the
ability to issue additional debt securities of the same series; |
|
● |
the
price or prices at which we will sell the debt securities; |
|
● |
the
maturity date or dates of the debt securities on which principal will be payable; |
|
● |
the
rate or rates of interest, if any, which may be fixed or variable, at which the debt securities will bear interest, or the method
of determining such rate or rates, if any; |
|
● |
the
date or dates from which any interest will accrue or the method by which such date or dates will be determined; |
|
● |
the
right, if any, to extend the interest payment periods and the duration of any such deferral period, including the maximum consecutive
period during which interest payment periods may be extended; |
|
● |
whether
the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference
to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner
of determining the amount of such payments; |
|
● |
the
dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest
payable on any interest payment date; |
|
● |
the
place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities
may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered
to or upon us pursuant to the indenture; |
|
● |
if
we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in
part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions; |
|
● |
our
obligation, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous
provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which
we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and
conditions of such obligation; |
|
● |
the
denominations in which the debt securities will be issued, if other than denominations of $1,000 and integral multiples of $1,000; |
|
● |
the
portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration
of the maturity of the debt securities in connection with an event of default (as described below), if other than the full principal
amount; |
|
● |
the
currency, currencies or currency unit in which we will pay the principal of (and premium, if any) or interest, if any, on the debt
securities, if not United States dollars; |
|
● |
provisions,
if any, granting special rights to holders of the debt securities upon the occurrence of specified events; |
|
● |
any
deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of
debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable indenture; |
|
● |
any
limitation on our ability to incur debt, redeem shares, sell our assets or other restrictions; |
|
● |
the
application, if any, of the terms of the indenture relating to defeasance and covenant defeasance (which terms are described below)
to the debt securities; |
|
● |
whether
the subordination provisions summarized below or different subordination provisions will apply to the debt securities; |
|
● |
the
terms, if any, upon which the holders may convert or exchange the debt securities into or for our ordinary shares or other securities
or property; |
|
● |
whether
any of the debt securities will be issued in global form and, if so, the terms and conditions upon which global debt securities may
be exchanged for certificated debt securities; |
|
● |
any
change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable
because of an event of default; |
|
● |
the
depository for global or certificated debt securities; |
|
● |
any
special tax implications of the debt securities; |
|
● |
any
foreign tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described
in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies; |
|
● |
any
trustees, authenticating or paying agents, transfer agents or registrars, or other agents with respect to the debt securities; |
|
● |
any
other terms of the debt securities not inconsistent with the provisions of the indentures, as amended or supplemented; |
|
● |
to
whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the
record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security
will be paid if other than in the manner provided in the applicable indenture; |
|
● |
if
the principal of or any premium or interest on any debt securities of the series is to be payable in one or more currencies or currency
units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms
and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined); |
|
● |
the
portion of the principal amount of any securities of the series which shall be payable upon declaration of acceleration of the maturity
of the debt securities pursuant to the applicable indenture if other than the entire principal amount; and |
|
● |
if
the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or
more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such securities as of any
such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the
stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be determined). |
Unless
otherwise specified in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange and will
be issued in fully-registered form without coupons.
Debt
securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. The applicable prospectus supplement will describe the federal income tax consequences
and special considerations applicable to any such debt securities. The debt securities may also be issued as indexed securities or securities
denominated in foreign currencies, currency units or composite currencies, as described in more detail in the prospectus supplement relating
to any of the particular debt securities. The prospectus supplement relating to specific debt securities will also describe any special
considerations and certain additional tax considerations applicable to such debt securities.
Subordination
The
prospectus supplement relating to any offering of subordinated debt securities will describe the specific subordination provisions. However,
unless otherwise noted in the prospectus supplement, subordinated debt securities will be subordinate and junior in right of payment
to any existing senior indebtedness.
Unless
otherwise specified in the applicable prospectus supplement, under the subordinated indenture, “senior indebtedness” means
all amounts due on obligations in connection with any of the following, whether outstanding at the date of execution of the subordinated
indenture, or thereafter incurred or created:
|
● |
the
principal of (and premium, if any) and interest due on our indebtedness for borrowed money and indebtedness evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); |
|
● |
all
of our capital lease obligations or attributable debt (as defined in the indentures) in respect of sale and leaseback transactions; |
|
● |
all
obligations representing the balance deferred and unpaid of the purchase price of any property or services, which purchase price
is due more than six months after the date of placing such property in service or taking delivery and title thereto, except any such
balance that constitutes an accrued expense or trade payable or any similar obligation to trade creditors; |
|
● |
all
of our obligations in respect of interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest
rate cap agreements and interest rate collar agreements; other agreements or arrangements designed to manage interest rates or interest
rate risk; and other agreements or arrangements designed to protect against fluctuations in currency exchange rates or commodity
prices; |
|
● |
all
obligations of the types referred to above of other persons for the payment of which we are responsible or liable as obligor, guarantor
or otherwise; and |
|
● |
all
obligations of the types referred to above of other persons secured by any lien on any property or asset of ours (whether or not
such obligation is assumed by us). |
However,
senior indebtedness does not include:
|
● |
any
indebtedness which expressly provides that such indebtedness shall not be senior in right of payment to the subordinated debt securities,
or that such indebtedness shall be subordinated to any other of our indebtedness, unless such indebtedness expressly provides that
such indebtedness shall be senior in right of payment to the subordinated debt securities; |
|
● |
any
of our obligations to our subsidiaries or of a subsidiary guarantor to us or any other of our other subsidiaries; |
|
● |
any
liability for federal, state, local or other taxes owed or owing by us or any subsidiary guarantor, |
|
● |
any
accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities); |
|
● |
any
obligations with respect to any shares; |
|
● |
any
indebtedness incurred in violation of the indenture, provided that indebtedness under our credit facilities will not cease to be
senior indebtedness under this bullet point if the lenders of such indebtedness obtained an officer’s certificate as of the
date of incurrence of such indebtedness to the effect that such indebtedness was permitted to be incurred by the indenture; and |
|
● |
any
of our indebtedness in respect of the subordinated debt securities. |
Senior
indebtedness shall continue to be senior indebtedness and be entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such senior indebtedness.
Unless
otherwise noted in an accompanying prospectus supplement, if we default in the payment of any principal of (or premium, if any) or interest
on any senior indebtedness when it becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or
otherwise, then, unless and until such default is cured or waived or ceases to exist, we will make no direct or indirect payment (in
cash, property, securities, by set-off or otherwise) in respect of the principal of or interest on the subordinated debt securities or
in respect of any redemption, retirement, purchase or other requisition of any of the subordinated debt securities.
In
the event of the acceleration of the maturity of any subordinated debt securities, the holders of all senior debt securities outstanding
at the time of such acceleration, subject to any security interest, will first be entitled to receive payment in full of all amounts
due on the senior debt securities before the holders of the subordinated debt securities will be entitled to receive any payment of principal
(and premium, if any) or interest on the subordinated debt securities.
If
any of the following events occurs, we will pay in full all senior indebtedness before we make any payment or distribution under the
subordinated debt securities, whether in cash, securities or other property, to any holder of subordinated debt securities:
|
● |
any dissolution or winding-up or liquidation or reorganization
of Freight Technologies, Inc. whether voluntary or involuntary or in bankruptcy, |
|
● |
insolvency
or receivership; |
|
● |
any
general assignment by us for the benefit of creditors; or |
|
● |
any
other marshaling of our assets or liabilities. |
In
such event, any payment or distribution under the subordinated debt securities, whether in cash, securities or other property, which
would otherwise (but for the subordination provisions) be payable or deliverable in respect of the subordinated debt securities, will
be paid or delivered directly to the holders of senior indebtedness in accordance with the priorities then existing among such holders
until all senior indebtedness has been paid in full. If any payment or distribution under the subordinated debt securities is received
by the trustee of any subordinated debt securities in contravention of any of the terms of the subordinated indenture and before all
the senior indebtedness has been paid in full, such payment or distribution will be received in trust for the benefit of, and paid over
or delivered and transferred to, the holders of the senior indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all senior indebtedness remaining unpaid to the extent necessary to pay
all such senior indebtedness in full.
The
subordinated indenture does not limit the issuance of additional senior indebtedness.
Events
of Default, Notice and Waiver
Unless
an accompanying prospectus supplement states otherwise, the following shall constitute “events of default” under the indentures
with respect to each series of debt securities:
|
● |
we
default for 30 consecutive days in the payment when due of interest on the debt securities; |
|
● |
we
default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the debt
securities; |
|
● |
our
failure to observe or perform any other of our covenants or agreements with respect to such debt securities for 60 days after we
receive notice of such failure; |
|
● |
certain events of bankruptcy, insolvency or reorganization
of the Freight Technologies, Inc.; or |
|
● |
any
other event of default provided with respect to securities of that series. |
Unless
an accompanying prospectus supplement states otherwise, if an event of default with respect to any debt securities of any series outstanding
under either of the indentures shall occur and be continuing, the trustee under such indenture or the holders of at least 25% (or at
least 10%, in respect of a remedy (other than acceleration) for certain events of default relating to the payment of dividends) in aggregate
principal amount of the debt securities of that series outstanding may declare, by notice as provided in the applicable indenture, the
principal amount (or such lesser amount as may be provided for in the debt securities of that series) of all the debt securities of that
series outstanding to be due and payable immediately; provided that, in the case of an event of default involving certain events in bankruptcy,
insolvency or reorganization, acceleration is automatic; and, provided further, that after such acceleration, but before a judgment or
decree based on acceleration, the holders of a majority in aggregate principal amount of the outstanding debt securities of that series
may, under certain circumstances, rescind and annul such acceleration if all events of default, other than the nonpayment of accelerated
principal, have been cured or waived. Upon the acceleration of the maturity of original issue discount securities, an amount less than
the principal amount thereof will become due and payable. Reference is made to the prospectus supplement relating to any original issue
discount securities for the particular provisions relating to acceleration of maturity thereof.
Any
past default under either indenture with respect to debt securities of any series, and any event of default arising therefrom, may be
waived by the holders of a majority in principal amount of all debt securities of such series outstanding under such indenture, except
in the case of (1) default in the payment of the principal of (or premium, if any) or interest on any debt securities of such series
or (2) certain events of default relating to the payment of dividends.
The
trustee is required within 90 days after the occurrence of a default (which is known to the trustee and is continuing), with respect
to the debt securities of any series (without regard to any grace period or notice requirements), to give to the holders of the debt
securities of such series notice of such default.
The
trustee, subject to its duties during default to act with the required standard of care, may require indemnification by the holders of
the debt securities of any series with respect to which a default has occurred before proceeding to exercise any right or power under
the indentures at the request of the holders of the debt securities of such series. Subject to such right of indemnification and to certain
other limitations, the holders of a majority in principal amount of the outstanding debt securities of any series under either indenture
may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or
power conferred on the trustee with respect to the debt securities of such series, provided that such direction shall not be in conflict
with any rule of law or with the applicable indenture and the trustee may take any other action deemed proper by the trustee which is
not inconsistent with such direction.
No
holder of a debt security of any series may institute any action against us under either of the indentures (except actions for payment
of overdue principal of (and premium, if any) or interest on such debt security or for the conversion or exchange of such debt security
in accordance with its terms) unless (1) the holder has given to the trustee written notice of an event of default and of the continuance
thereof with respect to the debt securities of such series specifying an event of default, as required under the applicable indenture,
(2) the holders of at least 25% in aggregate principal amount of the debt securities of that series then outstanding under such indenture
shall have requested the trustee to institute such action and offered to the trustee indemnity reasonably satisfactory to it against
the costs, expenses and liabilities to be incurred in compliance with such request; (3) the trustee shall not have instituted such action
within 60 days of such request and (4) no direction inconsistent with such written request has been given to the trustee during such
60-day period by the holders of a majority in principal amount of the debt securities of that series. We are required to furnish annually
to the trustee statements as to our compliance with all conditions and covenants under each indenture.
Discharge,
Defeasance and Covenant Defeasance
We
may discharge or defease our obligations under the indenture as set forth below, unless otherwise indicated in the applicable prospectus
supplement.
We
may discharge certain obligations to holders of any series of debt securities issued under either the senior indenture or the subordinated
indenture which have not already been delivered to the trustee for cancellation by irrevocably depositing with the trustee money in an
amount sufficient to pay and discharge the entire indebtedness on such debt securities not previously delivered to the trustee for cancellation,
for principal and any premium and interest to the date of such deposit (in the case of debt securities which have become due and payable)
or to the stated maturity or redemption date, as the case may be, and we or, if applicable, any guarantor, have paid all other sums payable
under the applicable indenture.
If
indicated in the applicable prospectus supplement, we may elect either (1) to defease and be discharged from any and all obligations
with respect to the debt securities of or within any series (except in all cases as otherwise provided in the relevant indenture) (“legal
defeasance”) or (2) to be released from our obligations with respect to certain covenants applicable to the debt securities of
or within any series (“covenant defeasance”), upon the deposit with the relevant indenture trustee, in trust for such purpose,
of money and/or government obligations which through the payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium, if any) or interest on such debt securities to maturity or redemption,
as the case may be, and any mandatory sinking fund or analogous payments thereon. As a condition to legal defeasance or covenant defeasance,
we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income,
gain or loss for federal income tax purposes as a result of such legal defeasance or covenant defeasance and will be subject to federal
income tax on the same amounts and in the same manner and at the same times as would have been the case if such legal defeasance or covenant
defeasance had not occurred. Such opinion of counsel, in the case of legal defeasance under clause (i) above, must refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable federal income tax law occurring after the date of the relevant
indenture. In addition, in the case of either legal defeasance or covenant defeasance, we shall have delivered to the trustee (1) if
applicable, an officer’s certificate to the effect that the relevant debt securities exchange(s) have informed us that neither
such debt securities nor any other debt securities of the same series, if then listed on any securities exchange, will be delisted as
a result of such deposit and (2) an officer’s certificate and an opinion of counsel, each stating that all conditions precedent
with respect to such legal defeasance or covenant defeasance have been complied with.
We
may exercise our defeasance option with respect to such debt securities notwithstanding our prior exercise of our covenant defeasance
option.
Modification
and Waiver
Under
the indentures, unless an accompanying prospectus supplement states otherwise, we and the applicable trustee may supplement the indentures
for certain purposes which would not materially adversely affect the interests or rights of the holders of debt securities of a series
without the consent of those holders. We and the applicable trustee may also modify the indentures or any supplemental indenture in a
manner that affects the interests or rights of the holders of debt securities with the consent of the holders of at least a majority
in aggregate principal amount of the outstanding debt securities of each affected series issued under the indenture. However, the indentures
require the consent of each holder of debt securities that would be affected by any modification which would:
|
● |
reduce
the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver; |
|
● |
reduce
the principal of or change the fixed maturity of any debt security or, except as provided in any prospectus supplement, alter or
waive any of the provisions with respect to the redemption of the debt securities; |
|
● |
reduce
the rate of or change the time for payment of interest, including default interest, on any debt security; |
|
● |
waive
a default or event of default in the payment of principal of or interest or premium, if any, on, the debt securities (except a rescission
of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of the then outstanding
debt securities and a waiver of the payment default that resulted from such acceleration); |
|
● |
make
any debt security payable in money other than that stated in the debt securities; |
|
● |
make
any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of the debt
securities to receive payments of principal of, or interest or premium, if any, on, the debt securities; |
|
● |
waive
a redemption payment with respect to any debt security (except as otherwise provided in the applicable prospectus supplement); |
|
● |
except
in connection with an offer by us to purchase all debt securities, (1) waive certain events of default relating to the payment of
dividends or (2) amend certain covenants relating to the payment of dividends and the purchase or redemption of certain equity interests; |
|
● |
make
any change to the subordination or ranking provisions of the indenture or the related definitions that adversely affect the rights
of any holder; or |
|
● |
make
any change in the preceding amendment and waiver provisions. |
The
indentures permit the holders of at least a majority in aggregate principal amount of the outstanding debt securities of any series issued
under the indenture which is affected by the modification or amendment to waive our compliance with certain covenants contained in the
indentures.
Payment
and Paying Agents
Unless
otherwise indicated in the applicable prospectus supplement, payment of interest on a debt security on any interest payment date will
be made to the person in whose name a debt security is registered at the close of business on the record date for the interest.
Unless
otherwise indicated in the applicable prospectus supplement, principal, interest and premium on the debt securities of a particular series
will be payable at the office of such paying agent or paying agents as we may designate for such purpose from time to time. Notwithstanding
the foregoing, at our option, payment of any interest may be made by check mailed to the address of the person entitled thereto as such
address appears in the security register.
Unless
otherwise indicated in the applicable prospectus supplement, a paying agent designated by us will act as paying agent for payments with
respect to debt securities of each series. All paying agents initially designated by us for the debt securities of a particular series
will be named in the applicable prospectus supplement. We may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying agent acts, except that we will be required to maintain
a paying agent in each place of payment for the debt securities of a particular series.
All
moneys paid by us to a paying agent for the payment of the principal, interest or premium on any debt security which remain unclaimed
at the end of two years after such principal, interest or premium has become due and payable will be repaid to us upon request, and the
holder of such debt security thereafter may look only to us for payment thereof.
Denominations,
Registrations and Transfer
Unless
an accompanying prospectus supplement states otherwise, debt securities will be represented by one or more global certificates registered
in the name of a nominee for The Depository Trust Company, or DTC. In such case, each holder’s beneficial interest in the global
securities will be shown on the records of DTC and transfers of beneficial interests will only be effected through DTC’s records.
A
holder of debt securities may only exchange a beneficial interest in a global security for certificated securities registered in the
holder’s name if:
|
● |
we
deliver to the trustee notice from DTC that it is unwilling or unable to continue to act as depository or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within 120 days
after the date of such notice from DTC; |
|
● |
we
in our sole discretion determine that the debt securities (in whole but not in part) should be exchanged for definitive debt securities
and deliver a written notice to such effect to the trustee; or |
|
● |
there
has occurred and is continuing a default or event of default with respect to the debt securities. |
If
debt securities are issued in certificated form, they will only be issued in the minimum denomination specified in the accompanying prospectus
supplement and integral multiples of such denomination. Transfers and exchanges of such debt securities will only be permitted in such
minimum denomination. Transfers of debt securities in certificated form may be registered at the trustee’s corporate office or
at the offices of any paying agent or trustee appointed by us under the indentures. Exchanges of debt securities for an equal aggregate
principal amount of debt securities in different denominations may also be made at such locations.
Governing
Law
The
indentures and debt securities will be governed by, and construed in accordance with, the laws of the State of New York, without regard
to its principles of conflicts of laws, except to the extent the Trust Indenture Act is applicable or as otherwise agreed to by the parties
thereto.
Trustee
The
trustee or trustees under the indentures will be named in any applicable prospectus supplement.
Conversion
or Exchange Rights
The
prospectus supplement will describe the terms, if any, on which a series of debt securities may be convertible into or exchangeable for
our ordinary shares or other debt securities. These terms will include provisions as to whether conversion or exchange is mandatory,
at the option of the holder or at our option. These provisions may allow or require the number of ordinary shares or other
securities to be received by the holders of such series of debt securities to be adjusted. Any such conversion or exchange will comply
with applicable BVI Law and our memorandum and articles of association.
DESCRIPTION
OF UNITS
We
may issue units comprising one or more of the other securities described in this prospectus in any combination. Each unit will be issued
so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights
and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at any time or at any time before a specified date or occurrence.
The
applicable prospectus supplement may describe:
|
● |
the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those
securities may be held or transferred separately; |
|
● |
any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and |
|
● |
whether
the units will be issued in fully registered or global form. |
The
applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units in the
applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the
unit agreement and, if applicable, collateral arrangements and depository arrangements relating to such units.
DESCRIPTION
OF SHARE PURCHASE CONTRACTS AND SHARE PURCHASE UNITS
We
may issue share purchase contracts, including contracts obligating holders to purchase from us, and obligating us to sell to the holders,
a specified number of ordinary shares or other securities registered hereunder at a future date or dates, which we refer to in this prospectus
as “share purchase contracts.” The price per share of the securities and the number of shares of the securities may be fixed
at the time the share purchase contracts are issued or may be determined by reference to a specific formula set forth in the share purchase
contracts.
The
share purchase contracts may be issued separately or as part of units consisting of a share purchase contract and debt securities, warrants,
other securities registered hereunder or debt obligations of third parties, including U.S. treasury securities, securing the holders’
obligations to purchase the securities under the share purchase contracts, which we refer to herein as “share purchase units.”
The share purchase contracts may require holders to secure their obligations under the share purchase contracts in a specified manner.
The share purchase contracts also may require us to make periodic payments to the holders of the share purchase units or vice versa,
and those payments may be unsecured or refunded on some basis.
The
share purchase contracts, and, if applicable, collateral or depositary arrangements, relating to the share purchase contracts or share
purchase units, will be filed with the SEC in connection with the offering of share purchase contracts or share purchase units. The prospectus
supplement relating to a particular issue of share purchase contracts or share purchase units will describe the terms of those share
purchase contracts or share purchase units, including the following:
|
● |
if
applicable, a discussion of material tax considerations; and |
|
● |
any
other information we think is important about the share purchase contracts or the share purchase units. |
DESCRIPTION
OF RIGHTS
We
may issue rights to purchase ordinary shares that we may offer to our securityholders. The rights may or may not be transferable by the
persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other
arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered
securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agent
agreement to be entered into between us and a bank or trust company, as rights agent, that we will name in the applicable prospectus
supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship
of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other
matters:
|
● |
the
date of determining the securityholders entitled to the rights distribution; |
|
● |
the
aggregate number of rights issued and the aggregate number of ordinary shares purchasable upon exercise of the rights; |
|
● |
the
exercise price; |
|
● |
the
conditions to completion of the rights offering; |
|
● |
the
date on which the right to exercise the rights will commence and the date on which the rights will expire; and |
|
● |
applicable
tax considerations. |
Each
right would entitle the holder of the rights to purchase for cash the principal amount of debt securities or ordinary shares at the exercise
price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration
date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised
rights will become void.
If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons
other than our security holders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant
to standby arrangements, as described in the applicable prospectus supplement.
TAXATION
Information
regarding taxation is set forth under the heading “Item 10.E. Taxation” in our Annual Report, as amended, on Form 20-F for
the year ended December 31, 2021, which is incorporated in this prospectus by reference, as updated by our subsequent filings under the
Exchange Act.
PLAN
OF DISTRIBUTION
We
may sell the securities described in this prospectus through underwriters or dealers, through agents, or directly to one or more purchasers
or through a combination of these methods. The applicable prospectus supplement will describe the terms of the offering of the securities,
including:
|
● |
the
name or names of any underwriters, if any, and if required, any dealers or agents, and the amount of securities underwritten or purchased
by each of them, if any; |
|
● |
the
public offering price or purchase price of the securities from us and the net proceeds to us from the sale of the securities; |
|
● |
any
underwriting discounts and other items constituting underwriters’ compensation; |
|
● |
any
discounts or concessions allowed or re-allowed or paid to dealers; and |
|
● |
any
securities exchange or market on which the securities may be listed. |
We
may distribute the securities from time to time in one or more transactions at:
|
● |
a
fixed price or prices, which may be changed; |
|
● |
market
prices prevailing at the time of sale; |
|
● |
varying
prices determined at the time of sale related to such prevailing market prices; or |
|
● |
negotiated
prices. |
Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
If
we use underwriters in the sale, the underwriters will either acquire the securities for their own account and may resell the securities
from time to time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale, or
sell the shares on a “best efforts, minimum/maximum basis” when the underwriters agree to do their best to sell the securities
to the public. We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters
without a syndicate. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from
time to time.
If
we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, the securities
will be sold directly to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined
by the dealer at the time of resale.
Our
ordinary shares are listed on the Nasdaq Capital Market. Unless otherwise specified in the related prospectus supplement, all securities
we offer, other than ordinary shares, will be new issues of securities with no established trading market. Any underwriter may make a
market in these securities, but will not be obligated to do so and may discontinue any market making at any time without notice. We may
apply to list any series of warrants or other securities that we offer on an exchange, but we are not obligated to do so. Therefore,
there may not be liquidity or a trading market for any series of securities.
We
may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering and
sale of securities and we will describe any commissions we may pay the agent in the applicable prospectus supplement.
We
may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified
date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts
in the applicable prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the
securities for whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to
or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters
or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution
of the securities, and any institutional investors or others that purchase securities directly and then resell the securities, may be
deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the securities by
them may be deemed to be underwriting discounts and commissions under the Securities Act.
We
may provide agents and underwriters with indemnification against particular civil liabilities, including liabilities under the Securities
Act, or contribution with respect to payments that the agents or underwriters may make with respect to such liabilities. Agents and underwriters
may engage in transactions with, or perform services for, us in the ordinary course of business.
In
addition, we may enter into derivative transactions with third parties (including the writing of options), or sell securities not covered
by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection
with such a transaction, the third parties may, pursuant to this prospectus and the applicable prospectus supplement, sell securities
covered by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from us or others
to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities
covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event
of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement.
The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement or in
a post-effective amendment.
To
facilitate an offering of a series of securities, persons participating in the offering may engage in transactions that stabilize, maintain,
or otherwise affect the market price of the securities. This may include over-allotments or short sales of the securities, which involves
the sale by persons participating in the offering of more securities than have been sold to them by us. In those circumstances, such
persons would cover such over-allotments or short positions by purchasing in the open market or by exercising the over-allotment option
granted to those persons. In addition, those persons may stabilize or maintain the price of the securities by bidding for or purchasing
securities in the open market or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating
in any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect
of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise
prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make no representation or prediction
as to the direction or magnitude of any effect that the transactions described above, if implemented, may have on the price of our securities.
EXPENSES
The
following table sets forth the estimated costs and expenses, other than underwriting discounts and commissions, payable by us in connection
with the offering of the securities being registered. All the amounts shown are estimates, except for the SEC registration fee.
SEC registration fee | |
$ |
1,390.50 | |
FINRA fee | |
$ |
* | |
Legal fees and expenses | |
$ |
* | |
Accounting fees and expenses | |
$ |
* | |
Printing fees and expenses | |
$ |
* | |
Miscellaneous | |
$ |
* | |
Total | |
$ |
1,390.50 | |
*
Estimated expenses are not presently known. The foregoing sets forth the general categories of expenses (other than underwriting discounts
and commissions) that the Company anticipates it will incur in connection with the offering of securities under the registration statement.
An estimate of the aggregate expenses in connection with the issuance and distribution of the securities being offered will be included
in the applicable prospectus supplement.
WHERE
YOU CAN GET MORE INFORMATION
We
have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities described in this
prospectus and any accompanying prospectus supplement, as applicable. This prospectus and any accompanying prospectus supplement, which
constitute a part of that registration statement, do not contain all of the information set forth in that registration statement and
its exhibits. For further information with respect to us and our securities, you should consult the registration statement and its exhibits.
We
are subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, we also must file reports
with, and furnish other information to, the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing
the furnishing and content of proxy statements, and our 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 are not required to publish financial
statements as promptly as U.S. companies. However, we file with the SEC an annual report on Form 20-F containing financial statements
audited by an independent registered public accounting firm, and we submit to the SEC, on Form 6-K, unaudited interim financial information.
You
may read and copy any document we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains an internet
site (www.sec.gov) that makes available reports and other information that we file or furnish electronically with it.
INCORPORATION
BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus the documents we file with, or furnish to, it, which means
that we can disclose important information to you by referring you to these documents. The information that we incorporate by reference
into this prospectus forms a part of this prospectus, and information that we file later with the SEC automatically updates and supersedes
any information in this prospectus. We incorporate by reference into this prospectus the documents listed below:
|
● |
our
Annual Report on Form 20-F for the fiscal year ended December 31, 2021 filed with the SEC on April 29, 2022 as amended by Amendment
No. 1 to the Annual Report on Form 20-F filed with the SEC on July 20, 2022; |
|
● |
our
registration statement on Form F-1 filed with the SEC on August 15, 2022, as amended by Amendment No. 1 to the registration statement
on Form F-1 filed with the SEC on August 24, 2022; |
|
● |
our
current reports on Form 6-K filed with the SEC on September 13, 2022; September 9, 2022; August 5, 2022; June 14, 2022; June 9, 2022;
May 26, 2022; April 1, 2022; February 23, 202; February 15, 2022; February 14, 2022; February 11, 2022; and January 20, 2022. |
All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of the offering of the securities offered by this prospectus are incorporated by reference into this prospectus
and form part of this prospectus from the date of filing or furnishing of these documents. Any documents that we furnish to the SEC on
Form 6-K subsequent to the date of this prospectus will be incorporated by reference into this prospectus only to the extent specifically
set forth in the Form 6-K.
Any
statement contained in a document that is incorporated by reference into this prospectus will be deemed to be modified or superseded
for the purposes of this prospectus to the extent that a statement contained in this prospectus, or in any other subsequently filed document
which also is or is deemed to be incorporated by reference into this prospectus, modifies or supersedes that statement. The modifying
or superseding statement does not need to state that it has modified or superseded a prior statement or include any other information
set forth in the document that it modifies or supersedes.
Upon
request, we will provide, without charge, to each person who receives this prospectus, a copy of any or all of the documents incorporated
by reference (other than exhibits to the documents that are not specifically incorporated by reference in the documents). Please direct
written or oral requests for copies to our Chief Financial; Officer at 2001 Timberloch Place, Suite 500, The Woodlands, TX 77380.
ENFORCEABILITY
OF CIVIL LIABILITIES
We
are incorporated under the laws of the British Virgin Islands with limited liability. We are incorporated in the British Virgin Islands
because of certain benefits associated with being a British Virgin Islands company, such as political and economic stability, an effective
judicial system, a favorable tax system, the absence of exchange control or currency restrictions and the availability of professional
and support services. However, the British Virgin Islands has a less developed body of securities laws as compared to the United States
and provides protections for investors to a lesser extent. In addition, British Virgin Islands companies may not have standing to sue
before the federal courts of the United States.
Substantially
all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals and/or residents
of countries other than the United States, and all or a substantial portion of such persons’ 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 such persons
or to enforce against them or against us, 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 thereof.
We
have appointed Transhare Corporation, as our agent to receive service of process with respect to any action brought against us in the
United States District Court for districts in the State of New York under the federal securities laws of the United States or of any
State of the United States or any action brought against us in the Supreme Court of the State of New York under the securities laws of
the State of New York.
There is no statutory enforcement in the British Virgin Islands of judgments obtained in the U.S., however, the courts
of the British Virgin Islands will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself
which may be sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that:
|
● |
the
U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident
or carrying on business within such jurisdiction and was duly served with process; |
|
|
|
|
● |
the
judgment is final and for a liquidated sum; |
|
|
|
|
● |
the
judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; |
|
|
|
|
● |
in
obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court; |
|
● |
recognition
or enforcement of the judgment in the British Virgin Islands would not be contrary to public policy; and |
|
|
|
|
● |
the
proceedings pursuant to which judgment was obtained were not contrary to natural justice. |
The
British Virgin Islands courts are unlikely:
|
● |
to
recognize or enforce against the Company, judgments of courts of the U.S. predicated upon the civil liability provisions of the securities
laws of the U.S.; and |
|
|
|
|
● |
to
impose liabilities against the Company, predicated upon the certain civil liability provisions of the securities laws of the U.S.
so far as the liabilities imposed by those provisions are penal in nature. |
MATERIAL
CHANGES
Except
as otherwise described in our Annual Report on Form 20-F for the fiscal year ended December 31, 2021, in our Current 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, 2021.
LEGAL
MATTERS
Sichenzia
Ross Ference LLP is acting as counsel to our company regarding U.S. securities law matters. The current address of Sichenzia Ross Ference
LLP is 1185 Avenue of the Americas, 31st Floor, New York, NY 10036. Maples & Calder is acting as our British Virgin Islands
counsel. The current address of Maples & Calder is Ritter House, PO Box 173, Road Town, Tortola VG1110, British Virgin Islands. Any
underwriters or placement agents will be represented by their own counsel.
EXPERTS
The
financial statements as of December 31, 2021, 2020 and 2019 and for the years then ended included in this prospectus have been so included
in reliance upon the report of Centurion ZD CPA & Co., an independent registered public accounting firm, appearing elsewhere herein
and in the registration statement, given on the authority of said firm as experts in auditing and accounting. The financial statements
as of December 31, 2021 and 2020 and for the years then ended included in this prospectus for Fr8App have been so included in reliance
upon the report of UHY LLP, an independent registered public accounting firm, appearing elsewhere herein and in the registration statement,
given on the authority of said firm as experts in auditing and accounting. The report on the financial statements contains an explanatory
paragraph regarding the Company’s ability to continue as a going concern.
INTERESTS
OF NAMED EXPERTS AND COUNSEL
No
expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon
the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the ordinary
shares was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant. Nor was any such person connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
COMMISSION
POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
8. Indemnification of Directors and Officers
Our
Amended Memorandum and Articles provides that we shall indemnify any of our directors, officers or anyone serving at our request as a
director of another entity against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement
and reasonably incurred in connection with legal, administrative or investigative proceedings or suits. If such person provides an undertaking
to repay expense advances under certain circumstances, we shall pay any expenses, including legal fees, incurred by any such person in
defending any legal, administrative or investigative proceedings in advance of the final disposition of the proceedings. If a person
to be indemnified has been successful in defense of any proceedings referred to above, such person is entitled to be indemnified against
all expenses, including legal fees, and against all judgments and fines reasonably incurred by such person in connection with the proceedings.
We are required to indemnify a director or officer only if he or she acted honestly and in good faith with a view to our best interests
and, in the case of criminal proceedings, the director or officer had no reasonable cause to believe that his or her conduct was unlawful.
The decision of our board of directors as to whether the director or officer acted honestly and in good faith with a view to our best
interests and as to whether the director or officer had no reasonable cause to believe that his or her conduct was unlawful, is in the
absence of fraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings
by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a director or officer
did not act honestly and in good faith and with a view to our best interests or that the director or officer had reasonable cause to
believe that his or her conduct was unlawful.
We
may enter into Letters of Appointment with our directors pursuant to which we agreed to indemnify them against a number of liabilities
and expenses incurred by such persons in connection with claims made by reason of their being a director.
We
may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors
or officers and incurred by the directors or officers in that capacity.
Item
9. Exhibits and Financial Statement Schedules
(a)
Exhibits
The
exhibits filed as part of this registration statement are listed in the exhibit index immediately preceding such exhibits, which index
to exhibits is incorporated herein by reference.
EXHIBIT
INDEX
*
Previously filed with the Draft Registration Statement on Form F-1, filed with the SEC on November 4, 2016 and incorporated herein by
reference.
**
Previously filed with the Current Report on Form 6-K, filed with the SEC on October 28, 2020 and incorporated herein by reference.
***
Previously filed with the Current Report on Form 6-K, filed with the SEC on December 14, 2021 and incorporated herein by reference.
****
Previously filed with the Current Report on Form 6-K, filed with the SEC on February 14, 2022 and incorporated herein by reference.
*****
Previously filed with the Current Report on Form 6-K, filed with the SEC on July 14, 2022 and incorporated herein by reference.
+
To be filed, if necessary, after effectiveness of this registration statement by an amendment to the registration statement or incorporated
by reference to a Current Report on Form 6-K filed in connection with an underwritten offering of the shares offered hereunder.
(b)
Financial Statements
The
financial statements filed as part of this registration statement are listed in the index to the financial statements immediately preceding
such financial statements, which index to the financial statements is incorporated herein by reference.
Item
10. Undertakings
The
undersigned registrant hereby undertakes:
(a)
Under Rule 415 of the Securities Act,
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement unless
the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished
to the SEC by the registrant pursuant to section 13 or section 15(d) of the Exchange Act of 1934 that are incorporated by reference in
the registration statement, or is contained in a form of a prospectus filed pursuant to Rule 424(b) that is part of the registration
statement;
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement.
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form
S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule
424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4)
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F
at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by
Section 10(a)(3) of the Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information
in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section
10(a)(3) of the Securities Act of 1933 Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports
filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in
(5)
That, for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser;
(i)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this Registration Statement as of the
date the filed prospectus was deemed part of and included in this Registration Statement; and
(ii)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required
by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier
of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date.
(6)
That, for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing
of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)
– (f) Reserved
(g)
Not applicable.
(h)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(i)
Not applicable.
(j)
The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to
act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC
under Section 305(b)(2) of the Trust Indenture Act.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form F-3 or any amendment thereto and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Spainand the United States, on September 15, 2022.
|
FREIGHT
TECHNOLOGIES, INC. |
|
|
|
By: |
/s/
Javier Selgas |
|
|
Javier
Selgas |
|
|
Chief
Executive Officer |
|
|
(Principal
Executive Officer) |
|
|
|
|
|
/s/
Paul Freudenthaler |
|
|
Paul
Freudenthaler |
|
|
Chief
Financial Officer |
|
|
Principal
Accounting and Financial Officer |
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement or any amendment thereto has been signed by
the following persons in the capacities and on the dates indicated.
Signature |
|
Capacity |
|
Date |
|
|
|
|
|
/s/
Javier Selgas |
|
Chief
Executive Officer |
|
September
15, 2022 |
|
|
(Principal
Executive Officer) |
|
|
|
|
|
|
|
/s/
Paul Freudenthaler |
|
Chief
Financial Officer |
|
September
15, 2022 |
|
|
(Principal
Accounting and Financial Officer) |
|
|
|
|
|
|
|
/s/
Nicholas Adler |
|
Chairman
and Director |
|
September
15, 2022 |
|
|
|
|
|
/s/
Javier Selgas |
|
Director |
|
September
15, 2022 |
|
|
|
|
|
/s/
Marc Urbach |
|
Director |
|
September
15, 2022 |
|
|
|
|
|
/s/
William Samuels |
|
Director |
|
September
15, 2022 |
SIGNATURE
OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant
to the Securities Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America, has signed
this registration statement thereto in New York, NY on September 15, 2022.
|
Sichenzia
Ross Ference LLP |
|
|
|
By: |
/s/
Benjamin Tan |
|
Name: |
Benjamin
Tan |
|
Title: |
Partner |
Hudson Capital (NASDAQ:HUSN)
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