UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

___________________

SCHEDULE 14A

___________________

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Check the appropriate box:

MOUNTAIN CREST ACQUISITION CORP. IV
(Name of Registrant as Specified in its Charter)

_________________________________________________________________

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PROXY STATEMENT PROSPECTUS

PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS OF
MOUNTAIN CREST ACQUISITION CORP. IV
AND PROSPECTUS FOR UP TO 94,113,375 CLASS A ORDINARY SHARES (INCLUDING
30,421,217 CLASS A ORDINARY SHARES UNDERLYING CLASS B ORDINARY SHARES)

To the Stockholders of Mountain Crest Acquisition Corp. IV:

You are cordially invited to attend the special meeting of the Stockholders of Mountain Crest Acquisition Corp. IV (“MCAF”), which will be held at 10:30 a.m., Eastern time, on October 30, 2023 (the “Special Meeting”). The board of directors of MCAF (the “MCAF Board”) has determined to convene and conduct the Special Meeting in a virtual meeting format at http://www.cstproxy.com/mcacquisitioniv/sm2023. Stockholders will NOT be able to attend the Special Meeting in person. This proxy statement includes instructions on how to access the virtual Special Meeting and how to listen and vote from home or any remote location with Internet connectivity. Stockholders may also listen to the Special Meeting using the following numbers:

Within the U.S. and Canada: 1-800-450-7155 (toll free)
Outside of the U.S. and Canada: +1 857-999-9155 (standard rates apply)
Conference ID: 5389093#

MCAF is a Delaware company incorporated as a blank check company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. The business combination will be completed through the consummation of the Merger, which is conditioned upon the Reorganization (each as defined below). The Merger and the Reorganization are collectively referred to as the “Business Combination.”

On April 30, 2022, MCAF entered into that certain Agreement and Plan of Merger (as amended and restated on December 23, 2022 and further amended on March 1, 2023, respectively, and as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among MCAF, CH AUTO Inc., a Cayman Islands exempted company (“CH AUTO” or “Pubco”), Ch-Auto Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of Pubco (“Merger Sub”) and CH-AUTO TECHNOLOGY CORPORATION LTD., a company organized under the laws of the People’s Republic of China (the “Company”), pursuant to which, among other things, MCAF, Pubco, Merger Sub and the Company intend to effect a merger of Merger Sub with and into MCAF whereby MCAF will be the surviving corporation (the “Surviving Corporation”) and a wholly owned subsidiary of Pubco (the “Merger”) in accordance with the Merger Agreement and the General Corporation Law of the State of Delaware (the “DGCL”). In connection with the Merger, the name of the Surviving Corporation shall be changed to CH Autotech USA, Inc. All capitalized terms used herein and not defined shall have the meanings ascribed to them in the Merger Agreement.

No later than five (5) Business Days prior to the Effective Time (as defined herein), the Company shall deliver to Pubco and MCAF a schedule setting forth the names of each stockholder and such stockholder’s respective percentage interest in the Company Merger Consideration (the “Equityholder Allocation Schedule”). Immediately after the delivery of the Equityholder Allocation Schedule, Pubco shall conduct a reverse stock split (the “Pubco Reverse Stock Split”) of its then issued and outstanding Pubco Class A Ordinary Shares. At the time the Pubco Reverse Stock Split is completed, each Pubco Shareholder who holds Pubco Class A Ordinary Shares immediately before the Pubco Reverse Stock Split (the “Pubco Reorganization Shareholder”) shall automatically receive the corresponding Company Merger Consideration as set forth in the Equityholder Allocation Schedule, without any change in the par value of $0.00001 per share, in exchange for all the Pubco Class A Ordinary Shares held by such Pubco Reorganization Shareholder immediately prior to the Pubco Reverse Stock Split. The corresponding Company Merger Consideration

The Pubco Reverse Stock Split, the HK Share Purchase, the HK Voting Right Entrustment, the issuance of the Company Merger Consideration to the Reorganization Shareholders as described above are collectively referred to herein as the “Reorganization.”

In consideration of the Merger, Pubco will (1) issue 1,506,991 Pubco Class A Ordinary Shares and 575,000 Pubco Class A Ordinary Shares issuable upon the conversion of MCAF Rights to the MCAF public stockholders; (2) issue 1,688,500 Pubco Class A Ordinary Shares to the Sponsor including shares issuable upon conversion of MCAF Rights; (3) issue 188,750 Pubco Class A Ordinary Shares issuable to the representative in MCAF’s IPO and (4) pursuant to the Reorganization, issue 89,096,171 Pubco Ordinary Shares, consisting of (a) 58,913,241 Pubco Class A Ordinary Shares to the Reorganization Shareholders (other than the Founders), which includes 1,515,424 Pubco Class A Ordinary Shares to be issued to CBC and its affiliate pursuant to the NextG Tech Convertible Debts, and (b) 30,182,930 Pubco Class B Ordinary Shares to be issued to Qun Lu, Kejian Wang, Yanmin Wu, Xiangchao Shen, Hua Yao and Baihui Sun (each of whom is referred to as a “Founder” and collectively the “Founders”), in accordance with the Equityholder Allocation Schedule, assuming no adjustment to the Company Equity Valuation as set forth in the Merger Agreement. Each Pubco Class A Ordinary Share and Pubco Class B Ordinary Share shall have a deemed price per share of US$10.00 (“Aggregate Stock Consideration”). The Aggregate Stock Consideration consists of 62,872,482 Pubco Class A Ordinary Shares and 30,182,930 Pubco Class B Ordinary Shares, assuming (1) no shares of MCAF Common Stock are redeemed after actual redemptions of (i) 2,432,520 MCAF’s shares in the amount of $24.5 million in connection with the special meeting of MCAF’s stockholders held on December 15, 2022, which redemption occurred on December 21, 2022 and (ii) 1,810,489 MCAF’s shares in the amount of $18.6 million in connection with the special meeting of MCAF’s stockholders held on June 22, 2023 (the “Minimum Redemption”) and (2) no exercise of any outstanding options of the Company.

At the Special Meeting, MCAF stockholders will be asked to consider and vote upon the following proposals:

1.      approval of the Merger, the Merger Agreement and the Business Combination, which we refer to as the “Business Combination Proposal” or “Proposal No. 1;”

2.      approval, on a non-binding advisory basis, of certain differences between MCAF and Pubco including the governance provisions set forth in the Pubco’s Second Amended Articles, as compared to MCAF’s current Certificate of Incorporation, which we refer to as the “Governance Proposals” or “Proposal No. 2;”

3.      approval of the CH AUTO Inc. 2023 Equity Incentive Plan, which we refer to as the “2023 Plan Proposal” or “Proposal No. 3;”

4.      approval of an amendment (the “NTA Requirement Amendment”) the MCAF Amended and Restated Certificate of Incorporation to expand the methods that MCAF may employ to not become subject to the “penny stock” rules of the Securities and Exchange Commission, which we refer to as the “NTA Requirement Amendment Proposal” or “Proposal No. 4”; and

5.      approval to adjourn the Special Meeting under certain circumstances, which is more fully described in the accompanying proxy statement/prospectus, which we refer to as the “Adjournment Proposal” or “Proposal No. 5” and, together with the Business Combination Proposal, the Governance Proposals, the 2023 Plan Proposal or the NTA Requirement Amendment Proposal, the “Proposals.”

MCAF’s units, common stock and rights are each quoted on the Nasdaq Stock Market (“Nasdaq”), under the symbols “MCAFU,” “MCAF,” and “MCAFR,” respectively. Each unit consists of one share of MCAF’s common stock, par value $0.0001 per share (“MCAF Common Stock”) and one right (“MCAF Right”). The MCAF Common Stock and MCAF Rights commenced trading on Nasdaq on July 28, 2021.

At the time the Merger closes (the “Effective Time” or the “Closing”), by virtue of the Merger and conditioned on the consummation of the Merger, all outstanding units of MCAF will separate into their individual components of MCAF Common Stock and MCAF Rights and will cease separate existence and trading.

As of the Effective Time, the current equity holdings of the MCAF stockholders shall be exchanged as follows:

1.      Each share of MCAF Common Stock issued and outstanding immediately prior to the effective time of the Merger (other than any redeemed shares), will automatically be cancelled and cease to exist and for each share of such MCAF Common Stock, Pubco shall issue to each MCAF stockholder (other than MCAF stockholders who exercise their redemption rights in connection with the Business Combination) one validly issued Pubco Class A Ordinary Share, which shall be fully paid.

2.      The holders of MCAF Rights (convertible into one-tenth (1/10) of one share of MCAF Common Stock) issued and outstanding immediately prior to the effective time of the Merger will obtain one Pubco Class A Ordinary Share in exchange for the cancellation of each ten (10) MCAF Rights; provided, however, that no fractional shares of Pubco Class A Ordinary Shares will be issued and all fractional Pubco Class A Ordinary Shares will be rounded down to the nearest whole share.

It is anticipated that, upon consummation of the Business Combination, (1) MCAF’s existing stockholders, including the Sponsor (as defined below) and the representative, will own approximately 4.1% of the then issued Pubco Ordinary Shares and 0.8% of the voting power; (2) the Reorganization Shareholders (other than the Founders) will own at least approximately 60.9% of the then issued Pubco Ordinary Shares and 11.3% of the voting power; and (3) the Founders will own approximately 31.2% of the then issued Pubco Ordinary Shares and 87.2% of the voting power. The percentage ownership of issued Pubco Ordinary Shares is based on 96,805,412 Pubco Ordinary Shares to be issued and outstanding upon consummation of the Business Combination. Such amount includes (i) the issuance of the 89,096,171 Pubco Ordinary Shares in the Reorganization (assuming no adjustment to the Company Equity Valuation as set forth in the Merger Agreement), consisting of 58,913,241 Pubco Class A Ordinary Shares and 30,182,930 Pubco Class B Ordinary Shares to be issued to the Reorganization Shareholders and the Founders, respectively; (ii) the issuance of up to 2,081,991 Pubco Class A Ordinary Shares to MCAF’s existing public stockholders other than the Sponsor in connection with the Merger; (iii) the issuance of up to 1,688,500 Pubco Class A Ordinary Shares to the Sponsor in connection with the Merger; (iv) the issuance of an aggregate of 188,750 Class A Ordinary Shares to the representative; (v) the issuance of an aggregate of 1,875,000 Pubco Class A Ordinary Shares to China Bridge Capital Limited (the “CBC”) and 625,000 Pubco Class A Ordinary Shares to Revere Securities, LLC as financial advisors and M&A consultants to the Business Combination; and (vi) the issuance of 1,250,000 Pubco Class A Ordinary Shares to Beijing Haohan Tianyu Investment Consulting Co. Ltd. (“BHTIC”) as a due diligence consultant. These relative percentages assume (1) Minimum Redemption scenario and (2) no exercise of any outstanding options of the Company. If any of MCAF’s existing public stockholders exercise their redemption rights, the anticipated percentage ownership of MCAF’s existing stockholders will be reduced. You should read “Summary of the Proxy Statement/Prospectus — The Business Combination and the Merger Agreement” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

The MCAF Units, MCAF Common Stock and MCAF Rights are currently listed on the Nasdaq Stock Market under the symbols “MCAFU,” “MCAF” and “MCAFR,” respectively.

As of June 30, 2023, there was approximately $16,180,210 in MCAF’s Trust Account (as defined below). On June 30, 2023, the last sale price of MCAF Common Stock on Nasdaq was $10.51.

Following the completion of the Business Combination, the issued and outstanding share capital of Pubco will consist of Pubco Class A Ordinary Shares and Pubco Class B Ordinary Shares. Holders of Pubco Class A Ordinary Shares and Pubco Class B Ordinary Shares have the same rights except for voting and conversion rights. Each Pubco Class A Ordinary Share is entitled to one vote, and each Pubco Class B Ordinary Share is entitled to fifteen votes. Upon any sale, transfer, assignment or disposition of Pubco Class B Ordinary Shares by a holder to any person or entity which is not an affiliate of such holder, or upon a change of ultimate beneficial ownership of Pubco Class B Ordinary Shares to any person or entity which is not an affiliate of the holder, such Pubco Class B Ordinary Shares shall be automatically and immediately converted into the same number of Pubco Class A Ordinary Shares. Each Pubco Class B Ordinary Share is convertible to one Pubco Class A Ordinary Share at any time by the holder thereof. Pubco Class A Ordinary Shares are not convertible into Pubco Class B Ordinary Shares under any circumstances. The Founders will beneficially own in the aggregate all of the issued Pubco Class B Ordinary Shares and will be able to exercise 87.2% of the total voting power of the issued and outstanding share capital of Pubco immediately following the completion of the Business Combination, assuming the Minimum Redemption scenario and no adjustment to the Company Equity Valuation as set forth in the Merger Agreement.

Although Pubco is not currently a public reporting company, following the effectiveness of the registration statement of which this proxy statement/prospectus is a part and the closing of the Business Combination (the “Closing”), Pubco will become subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pubco intends to apply for listing of the Pubco Class A Ordinary Shares on the Nasdaq Global Market under the proposed symbol “QTM” to be effective at the consummation of the Business Combination. It is a condition of the consummation of the Business Combination that the Pubco Class A Ordinary Shares are approved for listing on Nasdaq (subject only to official notice of issuance thereof). While trading on the Nasdaq Global Market is expected to begin on the first business day following the date of completion of the Business Combination, there can be no assurance that Pubco’s securities will be listed on Nasdaq or that a viable and active

trading market will develop. See “Risk Factors — Risks Relating to MCAF and the Business Combination — A market for Pubco’s securities may not develop after the Business Combination, which would adversely affect the liquidity and price of its securities” and “— There can be no assurance that Pubco will be able to be approved for listing or comply with the continued listing standards of Nasdaq.”

Pubco is not and will not be a Chinese operating company but will be, upon consummation of the Business Combination and completion of the Reorganization, a Cayman Islands holding company with operations conducted by its subsidiaries in China. The securities registered herein are securities of Pubco, which is a Cayman Islands holding company, not those of the Company and other operating subsidiaries of Pubco in China after the completion of the Business Combination and the Reorganization. Therefore, investors in Pubco are not purchasing equity securities of its operating subsidiaries in China, but are purchasing equity securities of a Cayman Islands holding company. This holding company structure involves unique risks to investors. For example, PRC regulatory authorities could disallow this operating structure and limit or hinder Pubco’s ability to conduct its business through, receive dividends from or transfer funds to the operating companies or list on a U.S. or other foreign exchange, which could cause the value of Pubco’s securities to significantly decline or become worthless. Neither Pubco nor the Company maintains, nor will it maintain variable interest entities in the PRC (including Hong Kong and Macau) after the Closing of the Business Combination.

In addition, Pubco, the Company and its PRC Subsidiaries face various legal and operational risks and uncertainties associated with being based in and having significant operations in China after the completion of the Business Combination. The PRC government has significant authority to exert influence on the ability of a China-based company to conduct its business, accept foreign investments or list on U.S. or other foreign exchanges. For example, Pubco and the Company face risks associated with regulatory approvals of offshore offerings, oversight on cybersecurity and data privacy, as well as the lack of inspection by the Public Company Accounting Oversight Board (the “PCAOB”) on its auditors. Such risks could result in a material change in Pubco’s operations and/or the value of the ordinary shares, or could significantly limit or completely hinder Pubco’s ability to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See “Risk Factors — Risks Relating to the Company — Risks Relating to Doing Business in China” for a detailed description of risks related to having operations in the PRC.

Furthermore, on December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under the Holding Foreign Companies Accountable Act (the “HFCA Act”), pursuant to which the SEC will identify a “Commission-Identified Issuer” if an issuer has filed an annual report containing an audit report issued by a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely, and will then impose a trading prohibition on an issuer after it is identified as a Commission-Identified Issuer for three consecutive years. Additionally, in December 2022, the Accelerating Holding Foreign Companies Accountable Act was signed into law, and reduces the time period for the delisting of foreign companies under the HFCA Act to two consecutive years instead of three years. On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong. The independent auditor of Pubco and the Company, Marcum Asia CPAs LLP (Formerly Marcum Bernstein & Pinchuk LLP), is not included in the list of PCAOB Identified Firms as having been unable to be inspected or investigated completely by the PCAOB. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022, and the PCAOB board vacated its previous determinations issued on December 16, 2021. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control. The PCAOB is continuing to demand complete access in mainland China and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed. Notwithstanding the foregoing, if, in the future, the PCAOB determines that it is unable to inspect or investigate completely the Pubco’s registered accounting firm, the SEC may prohibit the securities of the Pubco from being traded on a national securities exchange or in the over-the-counter trading market in the United States and Pubco’s securities may be delisted by such exchange.

Prior to the Reorganization, within the organization, investor cash inflows have all been received by the Company and its PRC Subsidiaries. Following the Reorganization, within the organization, investor cash inflows will all be received by Pubco, the Cayman parent entity; and cash to fund Pubco and PRC Subsidiaries’ operations will be transferred from: (1) the Cayman parent to its directly owned subsidiaries through capital contributions; and (2) such directly owned subsidiaries to other operating companies through capital contributions. Pubco’s subsidiaries also transfer cash to each other through daily operations, including working capital and loans between companies. The cross-border transfer of funds within Pubco’s corporate group is subject to the currency exchange control imposed by PRC government.

Following the Reorganization, as a holding company, Pubco may rely on dividends and other distributions on equity paid by PRC Subsidiaries for its cash and financing requirements. If any of Pubco’s subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to Pubco. The ability of Pubco’s PRC subsidiaries to distribute dividends is subject to currency exchange controls imposed by the PRC government and based upon their distributable earnings. Current PRC regulations permit Pubco’s PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, such PRC subsidiaries are required to set aside at least 10% of their after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable as cash dividends. See “Risk Factors — Risks Relating to the Company — Risks Relating to Doing Business in China” for more information. As of the date of this proxy statement/prospectus, neither Pubco nor any of its subsidiaries has ever paid dividends or made distributions.

Pursuant to MCAF’s Charter, MCAF is providing its public stockholders with the opportunity to redeem all or a portion of their shares of MCAF Common Stock at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the Special Meeting, including interest, less taxes payable, divided by the number of then outstanding shares of MCAF Common Stock that were sold as part of the MCAF Units in MCAF’s initial public offering (“IPO”), subject to the limitations described herein. MCAF estimates that the per-share price at which Public Shares may be redeemed from cash held in the trust account will be approximately $10.00 at the time of the Special Meeting. MCAF’s public stockholders may elect to redeem their shares even if they vote for the Merger or do not vote at all. MCAF has no specified maximum redemption threshold under MCAF’s amended and restated certificate of incorporation. Holders of outstanding MCAF Rights do not have redemption rights in connection with the Business Combination.

MCAF is providing this proxy statement/prospectus and accompanying proxy card to its stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. The Sponsor, which owns approximately 32% of MCAF Common Stock as of the record date, has agreed to vote its MCAF Common Stock in favor of the Business Combination Proposal, which transaction comprises the Business Combination, and intends to vote for the Adjournment Proposal, although there is no agreement in place with respect to voting on such proposal.

Each stockholder’s vote is very important. Whether or not you plan to attend the Special Meeting in person, please submit your proxy card without delay. MCAF’s stockholders may revoke proxies at any time before they are voted at the meeting. Voting by proxy will not prevent a stockholder from voting in person if such stockholder subsequently chooses to attend the Special Meeting. If you are a holder of record and you attend the Special Meeting and wish to vote in person, you may withdraw your proxy and vote in person. Assuming that a quorum is present, attending the Special Meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the Proposals. And broker non-votes will have no effect on any of the Proposals.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the Proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting of stockholders and, if a quorum is present, will have the effect of a vote against the Business Combination Proposal and no effect on the Adjournment Proposal. If you are a stockholder of record and you attend the Special Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Following the Business Combination, Pubco will be an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, and is therefore eligible to take advantage of certain reduced reporting requirements otherwise applicable to other public companies.

Following the Business Combination, Pubco will also be a “foreign private issuer” as defined in the Exchange Act, and will be exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, Pubco’s officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions under Section 16 of the Exchange Act. Moreover, Pubco will not be required to file periodic reports and financial statements with the U.S. Securities and Exchange Commission as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

Mr. Qun Lu, Mr. Kejian Wang, Ms. Hua Yao and Mr. Baihui Sun intend to enter into certain acting-in-concert agreement, pursuant to which each of Mr. Kejian Wang, Ms. Hua Yao and Mr. Baihui Sun agrees to exercise its voting power as a shareholder of Pubco at the direction of Mr. Qun Lu, and as a result, immediately upon the completion of the Business Combination, Mr. Qun Lu will beneficially own 14,405,985 Pubco Class B Ordinary Shares, representing approximately 14.9% of the then total issued and outstanding share capital and 73.9% of the aggregate voting power of Pubco, assuming the Minimum Redemption scenario and no adjustment to the Company Equity Valuation as set forth in the Merger Agreement. Therefore, Pubco is, and expects to continue to be a “controlled company” under the Nasdaq Stock Market Listing Rules, and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of its directors be independent, as defined in the Nasdaq Stock Market Listing Rules, and the requirement that the compensation committee and nominating and corporate governance committee consist entirely of independent directors.

The accompanying proxy statement/prospectus provides MCAF stockholders with detailed information about the Business Combination and other matters to be considered at the special meeting of MCAF stockholders. We encourage you to read the entire accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 57 of the accompanying proxy statement/prospectus.

The MCAF Board has unanimously approved the Merger Agreement, and unanimously recommends that MCAF stockholders vote “FOR” approval of each of the Proposals. When you consider MCAF Board’s recommendation of these Proposals, you should keep in mind that MCAF’s directors and officers have interests in the Business Combination that may conflict with or differ from your interests as a stockholder. See the section titled “Summary of the Proxy Statement/Prospectus — Interests of MCAF’s Directors and Officers in the Business Combination.”

On behalf of the MCAF Board, I thank you for your support and we look forward to the successful consummation of the Business Combination.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the Business Combination or otherwise, or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated September 28, 2023, and is first being mailed to MCAF stockholders on or about October 5, 2023.

HOW TO OBTAIN ADDITIONAL INFORMATION

MCAF files annual, quarterly and current reports, proxy statement and other information with the SEC required by the Exchange Act. MCAF’s public filings are available to the public from the SEC’s website at www.sec.gov. If you would like to receive additional information or if you want additional copies of this document, agreements contained in the appendices or any other documents filed by MCAF with the SEC, such information is available without charge upon written or oral request. Please contact our proxy solicitor, at:

Advantage Proxy
P.O. Box 10904
Yakima, WA 98909
Toll Free: 877-870-8565
Collect: 206-870-8565
Email: KSmith@advantageproxy.com

If you would like to request documents, please do so no later than one week prior to the meeting date to receive them before the Special Meeting. If you request any documents from MCAF, such documents will be mailed to you by first class mail, or another equally prompt means. Please be sure to include your complete name and address in your request.

If your MCAF Units or MCAF Common Stock are held in a stock brokerage account or by a bank or other nominee, you should contact your broker, bank or other nominee for additional information.

Please see the section titled “Where You Can Find More Information” to find out where you can find more information about MCAF, Pubco and the Company. You should rely only on the information contained in this proxy statement/prospectus in deciding how to vote on the Business Combination. None of MCAF, Pubco and the Company has authorized anyone to give any information or to make any representations other than those contained in this proxy statement/prospectus. Do not rely upon any information or representations made outside of this proxy statement/prospectus. The information contained in this proxy statement/prospectus may change after the date of this proxy statement/prospectus. Do not assume after the date of this proxy statement/prospectus that the information contained in this proxy statement/prospectus is still correct.

Mountain Crest Acquisition Corp. IV
311 West 43rd Street, 12th Floor
New York, NY 10036
(646) 493-6558

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 30, 2023

TO THE STOCKHOLDERS OF MOUNTAIN CREST ACQUISITION CORP. IV:

NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Mountain Crest Acquisition Corp. IV, a Delaware corporation (“MCAF”), will be held on October 30, 2023 at 10:30 AM Eastern Time. Due to the public health concerns relating to the coronavirus pandemic, and our concerns about protecting the health and well-being of our stockholders, the board of directors of MCAF (the “MCAF Board”) has determined to convene and conduct the Special Meeting in a virtual meeting format at http://www.cstproxy.com/mcacquisitioniv/sm2023. Stockholders will NOT be able to attend the Special Meeting in person. This proxy statement includes instructions on how to access the virtual Special Meeting and how to listen and vote from home or any remote location with Internet connectivity. Stockholders may also listen to the Special Meeting using the following numbers:

Within the U.S. and Canada: 1-800-450-7155 (toll free)
Outside of the U.S. and Canada: +1 857-999-9155 (standard rates apply)
Conference ID: 5389093#

The Special Meeting will be held for the following purposes:

1.      to approve the merger (the “Merger”) of Ch-Auto Merger Sub Corp., a Delaware corporation and subsidiary of CH AUTO Inc., a Cayman Islands exempted company, with and into MCAF whereby MCAF will be the surviving corporation. The completion of the Reorganization, among other things, is a condition precedent to the Merger. This proposal is referred to as the “Business Combination Proposal” or “Proposal No. 1.” Holders of MCAF Common Stock as of record date are entitled to vote on this proposal;

2.      to approve, on a non-binding advisory basis, certain differences between MCAF and Pubco including the governance provisions set forth in the Pubco’s Second Amended Articles, as compared to MCAF’s current Certificate of Incorporation, which we refer to as the “Governance Proposals” or “Proposal No. 2;”

3.      to approve the CH AUTO Inc. 2023 Equity Incentive Plan, which we refer to as the “2023 Plan Proposal” or “Proposal No. 3;”

4.      to approve an amendment (the “NTA Requirement Amendment”) to the MCAF Amended and Restated Certificate of Incorporation to expand the methods that MCAF may employ to not become subject to the “penny stock” rules of the Securities and Exchange Commission, which we refer to as the “NTA Requirement Amendment Proposal” or “Proposal No. 4”; and

5.      to approve the adjournment of the Special Meeting in the event MCAF does not receive the requisite stockholder vote to approve any of the above Proposals. This proposal is called the “Adjournment Proposal” or “Proposal No. 5.”

All of the proposals set forth above are sometimes collectively referred to herein as the “Proposals.” It is important for you to note that if the Business Combination Proposal is not approved, then MCAF will not consummate the Business Combination. If MCAF does not consummate the Business Combination and fails to complete an initial business combination by January 2, 2024 (unless such date has been extended), MCAF will be required to dissolve and liquidate.

As of September 29, 2023 the record date of the Special Meeting of Stockholders, there were 3,314,491 shares of MCAF Common Stock issued and outstanding and entitled to vote. Only MCAF stockholders who hold shares of record as of the close of business on September 29, 2023 are entitled to vote at the Special Meeting or any adjournment of the Special Meeting. This proxy statement/prospectus is first being mailed to MCAF stockholders on or about October 5, 2023. Approval of each of the Proposals will require the affirmative vote of the holders of a majority of the issued and outstanding MCAF Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof.

Assuming that a quorum is present, attending the Special Meeting either in person or by proxy and abstaining from voting will have the same effect as voting against the Proposals and failing to instruct your bank, brokerage firm or nominee to attend and vote your shares will have no effect on any of the Proposals. Whether or not you plan to attend the Special Meeting in person, please submit your proxy card without delay to Advantage Proxy, P.O. Box 10904, Yakima, WA 98909 not later than the time appointed for the Special Meeting or adjourned meeting. Voting by proxy will not prevent you from voting your shares in person if you subsequently choose to attend the Special Meeting. If you fail to return your proxy card and do not attend the Special Meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. You may revoke a proxy at any time before it is voted at the Special Meeting by executing and returning a proxy card dated later than the previous one, by attending the Special Meeting in person and casting your vote by ballot or by submitting a written revocation to Advantage Proxy, that is received by the proxy solicitor before we take the vote at the Special Meeting. If you hold your shares through a bank or brokerage firm, you should follow the instructions of your bank or brokerage firm regarding revocation of proxies.

The MCAF Board unanimously recommends that you vote “FOR” approval of each of the Proposals.

TABLE OF CONTENTS

SELECTED DEFINITIONS

Unless otherwise stated, all translations of Renminbi into U.S. dollars were made at RMB6.3726 to US$1.00, the noon buying rate on December 30, 2021, or at RMB6.8972 to US$1.00, the noon buying rate on December 30, 2022, as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. None of MCAF, Pubco and the Company makes representation that the Renminbi or U.S. dollar amounts referred to in this proxy statement/prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. On September 15, 2023, the noon buying rate for Renminbi was RMB7.2744 to US$1.00.

Unless otherwise stated, the calculation of beneficial ownership and share issuance of Pubco following the completion of the Business Combination assumes no adjustment to the Company Equity Valuation as set forth in the Merger Agreement and no issuance of (1) Pubco Ordinary Shares pursuant to the PIPE Financing or (2) Pubco Ordinary Shares upon the exercise of the assumed options of the Company, if any.

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed by Pubco (File No. 333-270267) with the SEC, constitutes a prospectus of Pubco under Section 5 of the Securities Act, with respect to the issuance of (1) the Class A Ordinary Shares to MCAF’s stockholders, (2) Class A Ordinary Shares in exchange for MCAF Rights, if the Business Combination is consummated, (3) Class A Ordinary Shares to the Pubco Reorganization Shareholders and (4) Class A Ordinary Shares to the Company Reorganization Stockholders (including the Class A Ordinary Shares issuable upon conversion of Class B Ordinary Shares issued to the Founders). This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act, with respect to the Special Meeting at which MCAF’s stockholders will be asked to consider and vote upon the Proposal to approve the Business Combination and the other Proposals being considered at the Special Meeting.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is not lawful to make any such offer or solicitation in such jurisdiction.

WHERE YOU CAN FIND MORE INFORMATION

After the consummation of the Business Combination, Pubco will be a foreign private issuer and be required to file its Annual Report on Form 20-F with the SEC no later than four months following its fiscal year end. MCAF files reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read MCAF’s SEC filings, including this proxy statement/prospectus, over the Internet at the SEC’s website at http://www.sec.gov.

Information and statements contained in this proxy statement/prospectus, or any annex to this proxy statement/prospectus, are qualified in all respects by reference to the copy of the relevant contract or other annex filed with this proxy statement/prospectus.

If you would like additional copies of this proxy statement/prospectus, or if you have questions about the Business Combination, you should contact MCAF’s proxy solicitor, Advantage Proxy at 877-870-8565 (toll free).

All information contained in this proxy statement/prospectus relating to MCAF has been supplied by MCAF, and all such information relating to Pubco, Merger Sub and the Company has been supplied by Pubco. Information provided by either of MCAF or Pubco does not constitute any representation, estimate or projection of the other party.

None of MCAF, Pubco, Merger Sub nor the Company has authorized anyone to give any information or make any representation about the Business Combination or their companies that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materials that have been incorporated into this proxy statement/prospectus by reference. Therefore, if anyone does give you any such information, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you. The information contained in this proxy statement/prospectus speaks only as of the date of this proxy statement/prospectus unless the information specifically indicates that another date applies.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements, including statements about the parties’ ability to close the Business Combination, the anticipated benefits of the Business Combination, the financial conditions, results of operations, earnings outlook and prospects of Pubco, MCAF and/or the Company and may include statements for the period following the consummation of the Business Combination. Forward-looking statements appear in a number of places in this proxy statement/prospectus including, without limitation, in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company,” and “CH-AUTO TECH’s Business.” In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of MCAF, Pubco and the Company, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including: risks related to the ability to complete the proposed Business Combination due to the failure to obtain approval from MCAF stockholders or satisfy other closing conditions in the Merger Agreement; the amount of any redemptions by existing holders of MCAF Common Stock; the ability to recognize the anticipated benefits of the business combination, and other risks and uncertainties included under the header “Risk Factors” herein, in the final prospectus of MCAF for its initial public offering dated June 29, 2021 and its annual report on Form 10-K for the year ended December 31, 2021, and in MCAF’s other filings with the SEC.

The forward-looking statements are based on information available as of the date of such statement, and the current expectations of the management of MCAF and Pubco, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. Accordingly, forward-looking statements should not be relied upon as representing the view of MCAF or Pubco as of any subsequent date.

In addition, statements that MCAF or Pubco “believes” and similar statements reflect such party’s beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of such statement, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that either MCAF or Pubco has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement/prospectus. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in “Risk Factors,” those discussed and identified in public filings made with the SEC by MCAF and the following:

•        the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination;

•        the outcome of any legal proceedings that may be instituted against MCAF, the Company or others following announcement of the Business Combination and the transactions contemplated therein;

•        the inability to complete the transactions contemplated by the Business Combination due to the failure to obtain approval of the shareholders of MCAF or the Company or other conditions to closing in the Business Combination;

•        the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the Business Combination;

•        the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the ability of Pubco and its subsidiaries to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees;

•        expectations regarding Pubco’s strategies and future financial performance, including Pubco’s future business plans or objectives, prospective performance and opportunities and competitors, revenues, customer acquisition and retention, products and services, pricing, marketing plans, operating expenses, market trends and acceptance, liquidity, cash flows and uses of cash, capital expenditures, and Pubco’s ability to invest in growth initiatives and pursue acquisition opportunities;

•        anticipated trends, growth rates, and challenges in the EV industry in general and the markets in which Pubco operates;

•        Pubco’s ability to stay in compliance with laws and regulations that currently apply or become applicable to its business in PRC, the United States and other international markets;

•        costs related to the proposed Business Combination;

•        the possibility that MCAF or Pubco may be adversely impacted by other economic, business, and/or competitive factors;

•        future exchange and interest rates; and

•        other risks and uncertainties indicated in this proxy statement/prospectus, including those under “Risk Factors” herein, and other filings that have been made or will be made with the SEC.

Should one or more of these risks or uncertainties materialize, or should any of the assumptions made by the management of MCAF, the Company and Pubco prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the Business Combination or other matters addressed in this proxy statement/prospectus and attributable to the Company, MCAF, Pubco or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this proxy statement/prospectus. Except to the extent required by applicable law or regulation, Pubco, the Company and MCAF undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION
AND THE SPECIAL MEETING

Q:     What is the purpose of this document?

A:     MCAF is proposing to consummate the Business Combination. The Business Combination consists of the Merger and the Reorganization, each of which are described in this proxy statement/prospectus. In addition, the Merger Agreement is attached to this proxy statement/prospectus as Annex A, and is incorporated into this proxy statement/prospectus by reference. This proxy statement/prospectus contains important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. You are encouraged to carefully read this proxy statement/prospectus, including “Risk Factors” and all the annexes hereto.

Approval of the Business Combination will require the affirmative vote of the holders of a majority of the issued and outstanding MCAF Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof.

Q:     What is being voted on at the Special Meeting?

A:     Below are the Proposals that the MCAF’s stockholders are being asked to vote on:

1.      The Business Combination Proposal to approve the Merger;

2.      The Governance Proposals to approve, on a non-binding advisory basis, certain differences between MCAF and Pubco including the governance provisions set forth in the Pubco’s Second Amended Articles, as compared to MCAF’s current Certificate of Incorporation, which are being presented in accordance with the requirements of the U.S. Securities and Exchange Commission (the “SEC”) as separate sub-proposals;

3.      The 2023 Plan Proposal to approve and adopt the CH AUTO Inc. 2023 Equity Incentive Plan;

4.      The NTA Requirement Amendment Proposal to amend the MCAF Amended and Restated Certificate of Incorporation to expand the methods that MCAF may employ to not become subject to the “penny stock” rules of the Securities and Exchange Commission, which we refer to as the “NTA Requirement Amendment Proposal” or “Proposal No. 4”; and

5.      The Adjournment Proposal to approve the adjournment of the Special Meeting in the event MCAF does not receive the requisite stockholder vote to approve the above Proposals.

Approval of each of the Proposals requires the affirmative vote of the holders of a majority of the issued and outstanding MCAF Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof. As of the record date, 1,807,500 shares held by the Initial Stockholders, or approximately 54.5% of the outstanding MCAF Common Stock, would be voted in favor of each of the Proposals.

Q:     What will happen to my shares of MCAF Common Stock and MCAF Rights as a result of the Merger?

A.     As of the Effective Time, the current equity holdings of the MCAF stockholders shall be exchanged as follows:

1.      Each share of MCAF Common Stock issued and outstanding immediately prior to the effective time of the Merger (other than any redeemed shares), will automatically be cancelled and cease to exist and for each share of such MCAF Common Stock, Pubco shall issue to each MCAF stockholder (other than MCAF stockholders who exercise their redemption rights in connection with the Business Combination) one validly issued Pubco Class A Ordinary Share, which shall be fully paid.

2.      The holders of MCAF Rights (convertible into one-tenth (1/10) of one share of MCAF Common Stock) issued and outstanding immediately prior to the effective time of the Merger will obtain one Pubco Class A Ordinary Share in exchange for the cancellation of each ten (10) MCAF Rights; provided, however, that no fractional shares of Pubco Class A Ordinary Shares will be issued and all fractional Pubco Class A Ordinary Shares will be rounded down to the nearest whole share.

Q:     Are there any material differences in my rights as a security holder of MCAF, as compared with as a security holder of Pubco?

A:     Pubco’s authorized and issued share capital are divided into Class A Ordinary Shares and Class B Ordinary Shares. As a security holder of MCAF, you will receive Class A Ordinary Shares upon the completion of the Business Combination while Class B Ordinary Shares will be issued only to the Founders of the Company. Holders of Class A Ordinary Shares will be entitled to one vote per share, while holders of Class B Ordinary Shares will be entitled to fifteen votes per share. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof, while Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Immediately upon the completion of the Business Combination, the Founders will beneficially own all of our Class B Ordinary Shares, representing approximately 30.8% of Pubco’s total issued and outstanding share capital and 87.0% of Pubco’s aggregate voting power, assuming Minimum Redemption scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” As a result of the dual-class voting structure and the concentration of ownership, the Founders will have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. This concentration of ownership may discourage, delay or prevent a change in control of Pubco, which could have the effect of depriving other shareholders of the opportunity to receive a premium for their shares and may reduce the price of Pubco Class A Ordinary Shares after the completion of the Business Combination. For details, see “Risk Factors — Risks Relating to the Company — Risks Relating to Our Corporate Governance — Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial.”

Q:     Are any of the proposals conditioned on one another?

A:     Yes, it is important for you to note that if the Business Combination Proposal is not approved, MCAF will not consummate the Business Combination. If MCAF does not consummate the Business Combination and fails to complete an initial business combination by January 2, 2024 (unless such date has been extended), MCAF will be required to dissolve and liquidate. The Governance Proposals, the 2023 Plan Proposal and the NTA Requirement Amendment Proposal are conditioned upon the approval of the Business Combination Proposal. Adoption of the Adjournment Proposal is not conditioned upon the adoption of any of the other Proposals.

Q:     Why did MCAF add the NTA Requirement Amendment Proposal?

A:     The NTA Requirement Amendment Proposal seeks to amend the MCAF Amended and Restated Certificate of Incorporation to expand the methods that MCAF may employ to not become subject to the “penny stock” rules of the Securities and Exchange Commission. As disclosed in MCAF’s IPO prospectus, because the net proceeds of the IPO were to be used to complete an initial business combination with a target business that had not been selected at the time of the IPO, MCAF may be deemed to be a “blank check company.” Under Rule 419 of the Securities Act the term “blank check company” means a company that (i) is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and (ii) is issuing “penny stock,” as defined in Rule 3a51-1 under the Exchange Act. Rule 3a51-1 sets forth that that term “penny stock” shall mean any equity security, unless it fits within certain enumerated exclusions including (1) the company has net tangible assets of at least $5,000,001 (the “NTA Rule”) or (2) the company is listed on the Nasdaq Stock Market (Rule 3a51-1(a)(2)) (the “Exchange Rule”). Historically, SPACs have relied upon the NTA Rule to avoid being deemed a penny stock issuer. MCAF is proposing to amend its Charter to modify the NTA Requirement to expand its options to be excluded from the “penny stock” rules by amending its Charter to rely upon either the NTA Rule or the Exchange Rule. MCAF is asking its stockholders to vote on the NTA Requirement Amendment Proposal now, because based on the pro forma financial statements of the Combined Entity, the Combined Entity may not be able to satisfy the NTA Rule. Therefore, MCAF intends to rely on the Exchange Rule to not be deemed a penny stock issuer.

Q:     Do any of MCAF’s directors or officers have interests that may conflict with my interests with respect to the Business Combination?

A:     MCAF’s directors and officers may have interests in the Business Combination that are different from your interests as a stockholder. On March 2, 2021, our Sponsor, purchased an aggregate of 1,437,500 shares of MCAF Common Stock for an aggregate purchase price of $25,000 or approximately $0.017 per share. Simultaneously with the closing of the IPO, MCAF consummated a private placement of 195,000 units (the “Private Units”) at a price of $10.00 per Private Unit. Simultaneously with the sale of the over-allotment units in the IPO, MCAF consummated a private sale of an additional 15,000 Private Units to the Sponsor. If MCAF does not consummate the Business Combination by January 2, 2024 (unless such date has been extended), MCAF will be required to dissolve and liquidate and the securities held by our Initial Stockholders, including the Sponsor, will be worthless because the Initial Stockholders have agreed to waive their rights to any liquidation distributions.

The exercise of MCAF’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes or waivers are appropriate and in MCAF stockholders’ best interests.

Q:     When and where is the Special Meeting?

A:     The Special Meeting will take place on October 30, 2023 at 10:30 a.m., Eastern Time. Due to the public health concerns relating to the coronavirus pandemic, and our concerns about protecting the health and well-being of our stockholders, the MCAF Board has determined to convene and conduct the Special Meeting in a virtual meeting format at http://www.cstproxy.com/mcacquisitioniv/sm2023. Stockholders will NOT be able to attend the Special Meeting in person. This proxy statement includes instructions on how to access the virtual Special Meeting and how to listen and vote from home or any remote location with Internet connectivity. Stockholders may also listen to the Special Meeting using the following numbers:

Within the U.S. and Canada: 1-800-450-7155 (toll free)

Outside of the U.S. and Canada: +1 857-999-9155 (standard rates apply)

Conference ID: 5389093#

Q:     Who may vote at the Special Meeting?

A:     Only holders of record of MCAF Common Stock as of the close of business on September 29, 2023, the record date of the Special Meeting, may vote at the Special Meeting. As of September 29, 2023, there were 3,314,491 MCAF Common Stock outstanding and entitled to vote. Please see the section titled “Special Meeting of MCAF Stockholders — Record Date; Who is Entitled to Vote” for further information.

Q:     What is the quorum requirement for the Special Meeting?

A:     Shareholders representing a majority of the shares of capital stock issued and outstanding as of the record date and entitled to vote at the Special Meeting must be present in person or represented by proxy in order to hold the Special Meeting and conduct business. This is called a quorum. MCAF Common Stock will be counted for purposes of determining if there is a quorum if the stockholder (1) is present and entitled to vote at the meeting, or (2) has properly submitted a proxy card or voting instructions through a broker, bank or custodian. In the absence of a quorum, the Special Meeting will be adjourned to the next business day at the same time and place or to such other time and place as the directors may determine.

Q:     What vote is required to approve the Proposals?

A:     Approval of each of the Proposals will require the affirmative vote of the holders of a majority of the issued and outstanding MCAF Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof. Since each of the Proposals requires the affirmative vote of a majority of the MCAF Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof, attending the Special Meeting either in person or by proxy and abstaining from voting will have the same effect as voting “AGAINST” the Proposals and failing to instruct your bank, brokerage firm or nominee to attend and vote your shares will have no effect on any of the Proposals.

Q:     How will the Initial Stockholders vote?

A:     MCAF’s Initial Stockholders, who as of the record date, owned 1,807,500 shares of MCAF Common Stock, or approximately 54.51% of the issued and outstanding MCAF Common Stock, have agreed to vote their respective shares acquired by them prior to the IPO in favor of the Business Combination Proposal and other related proposals.

The Initial Stockholders have also agreed that they will vote any shares they purchase in the open market in or after the IPO in favor of each of the Proposals. While the Initial Stockholders have agreed to vote their shares in favor of the Proposals, stockholders should consider that our Initial Stockholders may have interests that are different from, or in addition to, those of other stockholders, and may be incentivized to complete the Business Combination even if it is with a less favorable target company or on less favorable terms, rather than liquidate.

Q:     What do I need to do now?

A:     We urge you to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and consider how the Business Combination will affect you as a MCAF stockholder. You should vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

Q:     Do I need to attend the Special Meeting to vote my shares?

A:     No. You are invited to attend the Special Meeting to vote on the Proposals described in this proxy statement/prospectus. However, you do not need to attend the Special Meeting to vote your MCAF Common Stock. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card in the pre-addressed postage paid envelope. Your vote is important. MCAF encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.

Q:     Am I required to vote against the Business Combination Proposal in order to have my MCAF Common Stock redeemed?

A:     No. You are not required to vote against the Business Combination Proposal in order to have the right to demand that MCAF redeem your MCAF Common Stock for cash equal to your pro rata share of the aggregate amount then on deposit in the Trust Account (including interest earned on your pro rata portion of the trust account, net of taxes payable) before payment of deferred underwriting commissions. These redemption rights in respect of the MCAF Common Stock are sometimes referred to herein as “redemption rights.” If the Business Combination is not completed, holders of MCAF Common Stock electing to exercise their redemption rights will not be entitled to receive such payments and their MCAF Common Stock will be returned to them.

Q:     How do I exercise my redemption rights?

A:     If you are a public stockholder and you seek to have your shares redeemed, you must (1) demand, no later than 5:00 p.m., Eastern time on October 26, 2023 (two business days before the Special Meeting), that MCAF redeem your shares for cash, and (2) submit your request in writing to MCAF’s transfer agent, at the address listed at the end of this section and deliver your shares to MCAF’s transfer agent (physically, or electronically using the DWAC (Deposit/Withdrawal At Custodian) system) at least two business days prior to the vote at the Special Meeting.

Any corrected or changed written demand of redemption rights must be received by MCAF’s transfer agent two business days prior to the Special Meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the transfer agent at least two business days prior to the vote at the Special Meeting.

Public stockholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of MCAF Common Stock as of the record date. Any public stockholder who holds MCAF Common Stock on or before October 26, 2023 (two (2) business days before the Special Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, at the consummation of the Business Combination. If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company

1 State Street, 30 floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com

Q:     How can I vote?

A:     If you were a holder of record of MCAF Common Stock on September 29, 2023, the record date for the Special Meeting, you may vote with respect to the Proposals in person at the Special Meeting, or by submitting a proxy by mail so that it is received prior to 10:30 a.m. Eastern Time on October 30, 2023, in accordance with the instructions provided to you under the section titled “Special Meeting of MCAF Stockholders.” If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, your broker or bank or other nominee may provide voting instructions (including any telephone or Internet voting instructions). You should contact your broker, bank or nominee in advance to ensure that votes related to the shares you beneficially own will be properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the Special Meeting and vote in person, obtain a proxy from your broker, bank or nominee.

Q:     If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

A:     No. Under Nasdaq rules, your broker, bank or nominee cannot vote your MCAF Common Stock with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. MCAF believes the Proposals are non-discretionary and, therefore, your broker, bank or nominee cannot vote your MCAF Common Stock without your instruction. Broker non-votes will not be considered present for the purposes of establishing a quorum and will have no effect on the Proposals. If you do not provide instructions with your proxy, your bank, broker or other nominee may submit a proxy card expressly indicating that it is NOT voting your MCAF Common Stock; this indication that a bank, broker or nominee is not voting your MCAF Common Stock is referred to as a “broker non-vote”. Your bank, broker or other nominee can vote your MCAF Common Stock only if you provide instructions on how to vote. You should instruct your broker to vote your MCAF Common Stock in accordance with directions you provide.

Q:     What if I abstain from voting or fail to instruct my bank, brokerage firm or nominee?

A:      MCAF will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for the purposes of determining whether a quorum is present at the Special Meeting of MCAF stockholders. For purposes of approval, an abstention will have the same effect as a vote “AGAINST” such Proposal with respect to the Business Combination Proposal and the Governance Proposals but will have no effect with respect to the 2023 Plan Proposal, the NTA Requirement Amendment Proposal or the Adjournment Proposal. You may redeem your shares of MCAF Common Stock if you abstain from voting. However, in the event you intend to redeem your shares we request that you vote for all of the Proposals.

Q:     What happens if I sell my MCAF Common Stock before the Special Meeting?

A:     The record date for the Special Meeting is earlier than the date that the Business Combination is expected to be consummated. If you transfer your MCAF Common Stock after the record date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you would not be entitled to receive any Pubco Class A Ordinary Shares following the consummation of the Business Combination because only MCAF’s stockholders at the time of the consummation of the Business Combination will be entitled to receive Pubco Class A Ordinary Shares in connection with the Business Combination.

Q:     Will I experience dilution as a result of the Business Combination?

A:      Prior to the Business Combination, the MCAF public stockholders who hold shares issued in the IPO own approximately 47.0% of the outstanding shares of MCAF Common Stock. After giving effect to the Business Combination and to (1) the issuance of up to 1,506,991 Pubco Class A Ordinary Shares to the MCAF public stockholders in connection with the Merger and 575,000 Pubco Class A Ordinary Shares in connection with the Rights; (2) the issuance of 1,437,500 Pubco Class A Ordinary Shares to the Sponsor in exchange for the Insider Shares; (3) the issuance of 210,000 Pubco Class A Ordinary Shares to the Sponsor in exchange for the MCAF Common Stock included in the Private Placement Units and 21,000 Pubco Class A Ordinary Shares for the rights included in the Private Placement Units; (4) the issuance of 20,000 Pubco Class A Ordinary Shares to the MCAF founders converted from certain promissory notes; (5) the issuance of 89,096,171 Pubco Ordinary Shares in the Reorganization (assuming no adjustment to the Company Equity Valuation as set forth in the Merger Agreement), including 58,913,241 Pubco Class A Ordinary Shares issued to the Reorganization Shareholders (other than the Founders), which include 1,515,424 Pubco Class A Ordinary Shares to be issued to CBC and its affiliate pursuant to the NextG Tech Convertible Debts, and 30,182,930 Pubco Class B Ordinary

RISK FACTORS

If the Business Combination is completed, the combined company will operate in a market environment that is difficult to predict and that involves significant risks, many of which will be beyond its control. You should carefully consider the risks described below before voting your shares. Additional risks and uncertainties that are not presently known to CH-Auto Technology and MCAF or that they do not currently believe are important to an investor, if they materialize, also may adversely affect the Business Combination. If any of the events, contingencies, circumstances or conditions described in the following risks actually occur, the combined company’s business, financial condition or results of operations could be seriously harmed. If that happens, the trading price of our securities or, if the Business Combination is not consummated, shares of MCAF of MCAF Common Stock could decline in value, and you may lose part or all of the value of any Class A Ordinary Shares of Pubco or, if the Business Combination is not consummated, all or any part of the value of any shares of MCAF Common Stock that you hold.

Risks Relating to the Company

References in this subsection to “we,” “our,” “us” or “our Company,” unless the context otherwise requires, refer to CH-Auto Technology Corporation Ltd. and its PRC Subsidiaries before the Business Combination, and CH AUTO Inc., after the completion of Business Combination, unless otherwise specified.

Our business operations involve certain risks and uncertainties, many of which are beyond our control. These risks can be broadly categorized into (1) risks relating to our financial position and need for additional capital, (2) risks relating to our business operations, (3) risks relating to our intellectual properties and data privacy, (4) risks relating to the EV industry and the related regulations, (5) risks relating to doing business in China, and (6) risks relating to our corporate governance.

Risks Relating to our Financial Position and Need for Additional Capital

We have incurred significant losses and negative cash flows from operating activities, both of which may continue in the future.

The design, manufacture, sale and servicing of EVs is a capital-intensive business. Historically, we have been incurring losses from operations and had negative cash flows from operating activities. We incurred net losses of US$67.6 million and US$130.1 million for 2021 and 2022, respectively. Net cash used in operating activities was US$20.1 million and US$7.3 million for 2021 and 2022, respectively. We have made significant up-front investments in research and development, our manufacturing plant in Suzhou, Jiangsu, our sales and service network, as well as marketing and advertising, to rapidly develop and expand our business. We expect to continue to invest significantly in these areas to further expand our business, and there can be no assurance that we will successfully execute our business strategies.

We may not generate sufficient revenues for a number of reasons, including insufficient demand for our vehicles and services, increased market competition, challenging macro-economic environment due to the COVID-19 pandemic, as well as other risks discussed herein, and we may incur unforeseen expenses, or encounter difficulties, complications and delays in generating revenue or achieving profitability. If we are unable to achieve profitability, we may have to reduce the scale of our operations, which may impact the business growth of us and adversely affect the financial condition and results of operations of us. In addition, we may need additional capital resources in the future if we experience changes in business condition or other unanticipated developments, or if we wish to pursue opportunities for investments, acquisitions, capital expenditures or similar actions. As we have not generated net income or positive cash flows from operating activities, we may continue to rely on equity or debt financing to meet our working capital and capital expenditure requirements. If we were unable to obtain such financing in a timely manner or on terms that are acceptable, or at all, we may fail to implement our business plans or experience disruptions in our operating activities, and our business, financial condition and results of operations would be materially and adversely affected.

Our financial statements have been prepared on a going concern basis and the financial status of us creates a doubt whether we will continue as a going concern.

Our financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. However, we have historically been incurring losses from our operations. We incurred a net loss of US$67.6 million and US$130.1 million in 2021

and 2022, respectively. In addition, the net cash used by us in operating activities was approximately US$20.1 million and US$7.3 million for 2021 and 2022, respectively, and these adverse conditions create doubt over our ability to continue as a going concern. As of December 31, 2021 and 2022, we had current liabilities of US$424.0 million and US$355.8 million, respectively, and non-current liabilities of US$0.3 million and US$13.1 million, respectively. We were involved in lawsuits relating to its loans and other liabilities, and as of December 31, 2021 and 2022, the balance of loans and borrowings associated with these lawsuits were US$56.5 million and US$49.7 million, respectively; and the balance of accounts payable associated with lawsuits filed by our vendors were US$65.5 million and US$73.1 million, respectively; and the balance of accrued expenses and other current liabilities associated with lawsuits filed by third parties were US$21.3 million and US$21.3 million, respectively; and the balance of payroll that were associated with lawsuits filed by our employees were US$17.9 million and US$13.3 million, respectively. In light of the foregoing circumstances, our independent registered public accounting firm has included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our consolidated financial statements for the years ended December 31, 2021 and 2022, and we have concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that consolidated financial statements for the years ended December 31, 2021 and 2022 were issued. We have historically depended on financing from third-party investors to support our operations. Our future operations are dependent upon equity or debt financing and our ability to generate profits through operations at an indeterminate time in the future. We cannot assure you that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability in the near term. Our financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern. We historically repaid a portion of our liabilities by assigning account receivables and issuing equity interests to our creditors. We do not expect to settle any of our debt obligations prior to the consummation of the Business Combination. After the consummation of the Business Combination, Pubco expects to receive approximately nil and US$33.0 million, respectively, from the Business Combination, which is estimated to be the amount then in the trust account under the maximum and minimum redemption scenarios. Pubco plans to use proceeds from the Business Combination to support its ongoing operations, and does not expect to settle the Company’s lawsuits and satisfy judgments or repay its liabilities with such proceeds from the Business Combination. Further, after the consummation of the Business Combination and Pubco’s securities become publicly traded, Pubco intends to raise capital through public offering and private placement of its securities, and the proceeds from such follow-on offering will be used to fund the operations of the Company and settle the Company’s lawsuits and satisfy judgments, and the Company intends to repay its debt obligations with income generated from future operations. We cannot assure you that our repayment plans will be executed as planned.

Our business plans require a significant amount of capital. In addition, our future capital needs may require us to issue additional equity or debt securities that may dilute our shareholders or introduce covenants that may restrict our operations or our ability to pay dividends.

We will need significant capital to, among other things, conduct research and development and expand our production capacity as well as roll out our service network. We intend to fund the operations of the Company, mainly the volume manufacturing and delivery of K50 and K20, through raising US$55 million to US$205 million proceeds from public offering or private placement of its securities. Capital investment required of resuming K50 volume manufacturing is less than that required of commencing K20 volume manufacturing, as the Company already possesses the molds and equipment needed for K50 volume manufacturing and only needs to resume K50 volume manufacturing by repaying its liabilities owed to suppliers and hiring more workers working on manufacturing lines, while the Company still needs to procure necessary facilities required of K20 manufacturing. Moreover, as K50 is a luxury all-electric super sports car, for each K50 order the Company receives, the Company typically collects deposit equal to 50% of the total vehicle sales price, which provides further financial support to commence the manufacturing of such order. The Company plans to, on the other hand, only collect RMB5000 or around US$750 for each K20 pre-order, which is immaterial compared to the expenditures involved in K20 manufacturing. Consequently, the Company expects to first resume its normal operations by resuming the volume delivery of K50 within three to six months after receiving an estimated proceed of US$55 million (or less if the Company receives the equivalent capital through K50’s order deposits). After the Company resumes the K50 volume manufacturing, and based on our rough estimate, we need to raise at least another US$100 million in order to launch our K20 product lines. However, if the Company is able to raise more than US$55 million but less than US$155 million in total, we can start the procurement of materials and equipment for our K20 product lines (which takes about two months to complete) and if we have more capital, we can start to build the vehicle body assembly and welding production lines for K20 (which takes about six months to complete the construction)

and conduct the internal testing (which takes about another two months) before K20 production lines can be officially put into use. We expect to commence the volume delivery and fulfill the non-binding pre-sale orders for K20 within six months after the official launch of K20 product lines. Although the deposit of K20 is nominal, the volume delivery of K20 does not require further financing through public offering or private placement of our securities, instead, we plan to manufacture our K20 orders through the supply chain financing. Therefore, as long as the K20 production lines can officially launch, the Company will be able to deliver K20 in volume and fulfill any order we receive provided that the orders we receive do not exceed our annual production capacity. After the Company starts to deliver K20 in volume, and if the Company will be able to raise another US$50 million through financing activities, the Company expects to release its next EV model, K25, in six months after receiving such financing.

The Company currently continues its efforts to raise capital for its business on reasonable terms through additional equity offerings or debt financing or additional bank facilities. However, there can be no assurance that the Company or Pubco can obtain the capital resources to fund its operation, in particular the delivery of K20 and other future models, as anticipated or at all. In addition, following the Business Combination, Pubco’s ability to raise capital is subject to a variety of risks and uncertainty. Consequently, any delay or failure in accomplishing the financing plan will significantly delay resuming the volume manufacturing and delivery of K50, delay or even discontinue the roll-out plan of K20, and further materially and adversely affect Pubco’s business, financial condition and results of operations.

Furthermore, as we ramp up our production capacity and operations we may also require significant capital to maintain our property, plant and equipment and such costs may be greater than anticipated. We expect our capital expenditures to be significant in the foreseeable future as we expand our business, and that our level of capital expenditures will be significantly affected by customers’ demand for our products and services. The fact that we have a limited history in offering EVs means we have limited historical data on the demand for our products and services, in particular our EVs. Specifically, we expect our capital expenditure requirement for the three years from 2023 to 2025 to be US$150 million, which we currently plan to fund with our operating income generated from our vehicle sales. However, our future capital requirements may be uncertain and actual capital requirements may be different from those we currently anticipate. If we are unable to generate sufficient operating income to satisfy our capital expenditure requirement, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially change our corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

We plan to seek equity or debt financing to finance a portion of our capital expenditures in the event that our operating income is insufficient to satisfy the Company’s capital expenditure requirement. Such financing might not be available to us in a timely manner or on terms that are acceptable, or at all. Our substantial amount of currently outstanding indebtedness may also affect our ability to obtain financing in a timely manner and on reasonable terms. Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business plan. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us.

In addition, our future capital needs and other business reasons could require us to issue additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could dilute our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations or our ability to pay dividends to our shareholders.

We have historically relied on debt financing to support our operations and working capital.

As of December 31, 2021 and 2022, we had a total of US$153.8 million and US$94.6 million, respectively, in short-term or long-term borrowings from commercial banks and other third parties. These borrowings have a term of one to ten years and weighted average interest rates of 7.31% and 8.49% per annum as of December 31, 2021 and 2022, respectively. As of December 31, 2022, an aggregate amount of US$20.4 million was under default. As of December 31, 2021 and 2022, we had current liabilities of US$424.0 million and US$355.8 million, respectively, and non-current liabilities of US$0.3 million and US$13.1 million, respectively. We were involved in lawsuits relating to its loans and other liabilities, and as of December 31, 2021 and 2022, the balance of loans and borrowings associated with these lawsuits were US$56.5 million and US$49.7 million, respectively; and the balance of accounts payable associated with lawsuits filed by our vendors were US$65.5 million and US$73.1 million, respectively; and the balance of accrued expenses and other current liabilities associated with lawsuits filed by third parties were US$21.3 million and US$21.3 million, respectively; and the balance of payroll that were associated with lawsuits filed by our employees were US$17.9 million and US$13.3 million, respectively. We have not been exposed to material risks due to changes in interest rates, as our interest-bearing loans carry fixed interest

rates. However, we may be subject to risks from rising interest rates if and when we refinance our loans. In connection with our long-term and short-term borrowings, we and certain of our shareholders pledged to the lenders the equity interests in us and our PRC Subsidiaries, as the case may be, and such equity pledges restricted our or our shareholders’ ability to transfer or pledge the relevant equity interests to other third parties and receive dividends. Such equity pledges currently do not, however, restrict our or our shareholders’ ability to vote to approve the Business Combination or issue additional securities, because unless the equity pledges are realized, the existing equity pledges will not restrict our or our shareholders’ rights (including the voting rights) except for the ability to dispose of (including transferring or pledging) the relevant equity interests to other third parties. The equity pledges have not materially affected our normal business operations. In addition, we pledged our interests in equipment, land and fixtures of our Suzhou Plant in connection with certain of our liabilities. We defaulted under certain loan agreement, for which some of our manufacturing equipment were pledged in connection with the transaction, and as of the date of this proxy statement/prospectus, our manufacturing activities and business operations have not been adversely affected by such default. Except as disclosed above, we currently are not and do not expect to default on such liabilities. In light of the foregoing circumstances, our independent registered public accounting firm has included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our consolidated financial statements for the years ended December 31, 2021 and 2022, and we have concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that the consolidated financial statements for the years ended December 31, 2021 and 2022 were issued. We cannot assure you that we will not be required to make early repayment either by triggering the acceleration clauses under these loan agreements or for reasons other than contractual obligations upon their request. We also cannot assure you that we will continue to secure new debt financing or extend the maturity dates of current borrowings from our lenders upon their maturity. We cannot assure you that we will be able to find other lenders in time on commercially reasonable terms, or at all. If we fail to repay our liabilities or to satisfy court ordered payments, the creditors may apply to the competent court for an enforcement order against us. After receipt of such application for the enforcement of such liabilities and court ordered payments, the applicable court will inspect our assets and may attach, seize, freeze or auction our assets in order to enforce the liabilities and court ordered payments. In addition, we may be listed as a “dishonest person subject to enforcement” if we fail to repay our liabilities or to satisfy court ordered payments as required by the enforcement order, which may subject us to the punishment imposed by relevant PRC authorities, including but not limited to the restrictions on government procurement, tendering and bidding, government support, financing and extending of credit, market admission, awarding of qualifications, and etc. If any of these were to happen, our working capital and cash flow may be significantly stretched, which may have a material and adverse effect on our financial condition. If our assets are auctioned off to enforce court rulings with respect to the relevant pledges, our manufacturing activities and other operations may be materially disrupted, which may materially and adversely affect our business, results of operations and financial performance.

We depend on revenue generated from only one model and in the foreseeable future will be significantly dependent on a limited number of models.

Our business depends substantially on the sales and success of K50, which is currently our only mass-produced vehicle in the market. We have begun to receive non-binding pre-sale orders for our next model K20, a small-size, two-seater hatchback specially designed for urban middle-class consumers. We also expect to release our K25 model, subject to successful future financings. Historically, automobile customers have come to expect a variety of vehicle models offered in a manufacturer’s product portfolio and new and improved vehicle models to be introduced frequently. In order to meet these expectations, we expect to release another two new vehicle models in addition to the upcoming K25 catering to different consumer groups in the next three years to enrich our product portfolio. To the extent our product variety and cycles do not meet consumer expectations, or our vehicles cannot be produced on our projected timelines and cost and volume targets, our future sales may be adversely affected. Given that our business will depend on a limited number of models for the foreseeable future, to the extent a particular model is not well-received by the market, our sales volume could be materially and adversely affected. This could have a material adverse effect on our business, financial condition and results of operations.

We may be unable to adequately control the costs associated with our operations.

We have devoted significant capital to developing and growing our business, including developing and manufacturing our vehicle models, purchasing property and equipment, constructing our manufacturing plant, procuring required raw materials, and building our sales and servicing infrastructure. We expect to further incur significant costs that will impact our profitability, including research and development expenses as we roll out new models and improve existing models, expenditures in the expansion of our manufacturing capacities, additional operating costs and expenses for production ramp-up, raw material procurement costs, and selling and distribution expenses as we build our brand and market our

vehicles. In particular, the COVID-19 pandemic, rising inflation and geopolitical tensions, including the recent war in Ukraine, have had, and could continue to have, an adverse impact on the global supply chain, including the availability and costs of certain raw materials, such as aluminum and steel. For instance, the resurgence of COVID-19 pandemic in various regions of China since early 2022, such as that in Shanghai since March 2022, had caused a shortage in raw materials and components and suspension of K50 manufacturing and had adversely impacted our business, results of operations and financial condition. Substantial increases in the prices for the raw materials, such as aluminum and steel, and vehicle components would increase our cost of revenue and our operating expenses, and could reduce our margins. Furthermore, currency fluctuations, tariffs or shortages in petroleum and other economic or political conditions may result in significant increases in freight charges and raw material costs. As of the date of this proxy statement/prospectus, our operations have not been materially affected by inflationary pressures and the global supply chain disruption; however, our businesses have suffered from certain negative effects caused by the COVID-19 pandemic. See “— Risks Relating to Our Business Operations — The COVID-19 outbreak has adversely affected our results of operations” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company — Specific Factors Affecting Our Results of Operations — Impact of COVID-19 pandemic.” In addition, we may lose control over the increase of costs in connection with our services including after-sales services. Our ability to become profitable in the future will not only depend on our ability to successfully market our vehicles and other products and services but also to control our costs. If we are unable to design, develop, manufacture, market, sell, and service our vehicles and provide services in a cost-efficient manner, our margins, profitability and growth prospects would be materially and adversely affected.

The global shortage in the supply of semiconductor chips may disrupt our operations and adversely affect our business, results of operations, and financial condition.

Since October 2020, there has been a global shortage in the supply of semiconductors for automotive production resulting from the COVID-19 pandemic, increased demand for consumer electronics, and disruption in semiconductor production due to labor shortage and severe weather. We may be adversely impacted by this global semiconductor shortage and price increases. There is no assurance that we will be able to obtain sufficient quantities of semiconductors and components containing semiconductors for our operations at a reasonable cost, or at all. In addition, similar to other components, many of the processor chips and components used in our vehicles are currently purchased by us from single-source suppliers, although we retain the flexibility to obtain processor chips and components from multiple sources of suppliers. If suppliers of semiconductor chips and components are unable to meet our needs on acceptable terms, or at all, we may be required to switch to alternative suppliers, which could be time-consuming and costly. Accordingly, our production and delivery could be materially disrupted, which could have a material adverse effect on our business, results of operations and financial condition.

Our financial results may vary significantly from period to period due to the seasonality of our business and fluctuations in our operating costs.

Our results of operations may vary significantly from period to period due to many factors, including seasonal factors that may have an effect on the demand for our vehicles. Demand for new cars typically declines over the winter season and during the Chinese New Year holiday. Our limited history in offering EVs makes it difficult for us to judge the exact nature or extent of the seasonality of our business. We may record significant increase in revenues when we commence mass delivery of a new product to fulfill customer orders accumulated in prior periods, but we may not be able to maintain our revenue at similar levels in subsequent periods. Also, any health pandemic or epidemics such as the COVID-19 outbreak and natural disasters such as unusually severe weather conditions in some markets may affect demand for, and our ability to manufacture and deliver, our vehicles. Our results of operations could also suffer if we do not achieve revenue consistent with our expectations for this seasonal demand because many of our expenses are based on anticipated levels of annual revenue.

We also expect our period-to-period results of operations to vary based on our operating costs, which we anticipate will increase significantly in future periods as we, among other things, design and develop new models, develop new technological capabilities, ramp up our manufacturing facilities, expand our physical sales and service network, and expand our general and administrative functions to support our growing operations. We may incur substantial research and development and/or selling expenses when we develop and/or promote a new product in a given period without generating any revenue from such product until we start delivery of such products to customers in future periods. As a result of these factors, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and that these comparisons may not be indicative of future performance. Moreover, our results of operations may not meet expectations of equity research analysts or investors. If this occurs, the trading price of the securities of Pubco could fall substantially either suddenly or over time.

We make prepayments to certain suppliers to secure their production capacity, which may stretch our cash flow and have a material and adverse effect on our financial condition.

Certain suppliers, some of whom have been our single source suppliers for critical components, have experienced strained manufacturing capacity due to various causes such as high demand of their products and shortage in raw materials. Therefore, we make prepayments to these suppliers in order to secure their production capacity in advance for critical components such as battery modules and chips. As we continue to ramp up manufacturing and take in more orders, we may have to significantly increase the amount of prepayments to secure sufficient battery modules to manufacture the battery packs on our vehicles, and therefore stretch our working capital and cash flow, which may have a material and adverse effect on our financial condition and results of operations.

Risks Relating to Our Business Operations

Our ability to develop, manufacture, and deliver EVs of high quality and appeal to customers, on schedule, and on a large scale is unproven and still evolving.

Our future business depends in large part on our ability to execute on the plans to develop, manufacture, market and sell our EVs. We plan to steadily increase the manufacturing and delivery volume of our vehicles. However, due to the suspension of our production in 2020 and 2021, we cannot assure you that we will be able to step up our manufacturing capabilities to potentially match future increasing demand from customers. Our continued development, manufacturing and delivery of our vehicles are and will be subject to risks, including with respect to:

•        our ability to secure necessary funding;

•        the equipment we use being able to accurately manufacture the vehicle within specified design tolerances;

•        compliance with environmental, workplace safety and similar regulations;

•        our ability to secure necessary components on acceptable terms and in a timely manner;

•        delays in delivery of final component designs to our suppliers or delays in the development and delivery of our core technologies and new vehicle models;

•        our ability to attract, recruit, hire and train skilled employees;

•        quality controls;

•        delays or disruptions in our supply chain;

•        our ability to maintain solid partnerships with strategic partners and other suppliers;

•        market acceptance of EV technologies;

•        marketability of our EV vehicle models; and

•        other delays, backlog in manufacturing and research and development of new models, and cost overruns.

Historically, customers have expected EV makers to periodically introduce new and improved vehicle models. We plan to introduce new and/or enhanced vehicle models to meet market demand. However, we have limited experience designing, testing, manufacturing, marketing and selling EVs, and therefore cannot assure you that we will be able to meet customer expectations.

We have a limited history in offering EVs and face significant challenges as a new entrant into our industry.

Although we can trace back our experiences in the automobile industry to 2003 when our core management started the automotive design service through Beijing Changcheng Huaguan Automotive Technology Development Co., Ltd, we have a limited history in designing and manufacturing EVs. We began to develop our first vehicle model in 2015. We also temporarily halted our production in 2020 and 2021 due to the impact of shortage of funds and the COVID-19 pandemic. As a result, we have a limited history in offering EVs, including designing, testing, manufacturing, marketing and selling our vehicles, as well as offering our services. We commenced delivery of our first vehicle model K50, a luxury all-electric super sports car, in September 2018, and we have begun to receive non-binding pre-sale orders for our second model K20, in June 2022. There is no historical basis for making judgments on the demand for our vehicles or our ability to develop, manufacture, and deliver vehicles, or our profitability in the future. It is difficult to predict our

future revenues and appropriately budget for our expenses, and we may have limited insight into trends that may emerge and affect our business. You should consider our business and prospects considering the risks and challenges we face as a new entrant into the EV industry, including, among other things, with respect to our ability to:

•        design and produce safe, reliable and quality vehicles on an ongoing basis;

•        navigate a complex and evolving regulatory environment;

•        build a well-recognized and respected brand;

•        break into overseas markets;

•        expand our customer base;

•        properly price our products and services;

•        advance our technological capabilities in key areas, such as battery systems and powertrain, vehicle body construction, in-car interactive systems and autonomous driving;

•        improve operating efficiency and economies of scale;

•        operate our manufacturing plant in a safe and cost-efficient manner;

•        attract, retain and motivate our employees; and

•        anticipate and adapt to changing market conditions, including changes in consumer preferences and competitive landscape.

If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected. We are in the process of ramping up manufacturing volume, and we have limited experience, in high volume manufacturing of our vehicles. We cannot assure you that we will be able to develop efficient, automated, cost-efficient manufacturing capability and processes, and reliable sources of component supply that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required to successfully mass market the K20, K25, K50 and future vehicles.

Furthermore, our vehicles are highly technical products that require ongoing maintenance and support. As a result, consumers will be less likely to purchase our vehicles now if they are not convinced that our business will succeed or that our operations will continue for many years. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed.

We may not be able to effectively manage our growth, which could negatively impact our brand and financial performance.

We have experienced significant growth in the past years. We plan to further grow our business by, among other things, investing in technology, expanding our product and service offerings, strengthening our brand recognition, expanding our sales and marketing network, and building up our global presence. Our future results of operations will depend to a large extent on our ability to manage our expansion and growth successfully.

Risks that we face in undertaking this expansion include, among others:

•        managing a larger organization with a greater number of employees in different divisions;

•        controlling expenses and investments in anticipation of expanded operations;

•        establishing or expanding design, manufacturing, sales and service facilities;

•        implementing and enhancing administrative infrastructure, systems and processes;

•        increasing our market visibility in China and breaking into overseas markets; and

•        executing our strategies and business initiatives successfully.

Any failure to manage our growth effectively could materially and adversely affect our business, results of operations and financial condition.

Our business and prospects depend significantly on our ability to build our Qiantu brand. We may not succeed in continuing to maintain and strengthen our brand, and our brand and reputation could be harmed by negative publicity regarding our company, products or services.

Our business and prospects are heavily dependent on our ability to develop, maintain and strengthen the Qiantu brand. If we do not continue to develop, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Promoting and positioning our brand will likely depend significantly on our ability to provide high quality vehicles and services, and we have limited experience in these areas. In addition, we expect that our ability to develop, maintain and strengthen the Qiantu brand will depend heavily on the success of our sales and marketing efforts. For example, we seek to enhance our brand recognition by collaborating with sales partners primarily in tier-one and tier-two cities. We also advertise our vehicles through various online channels, including several social media platforms and e-commerce platforms. While we seek to optimize resource allocation through careful selection of online sales and marketing channels, such efforts may not achieve desired results. To promote our brand, we may be required to change our branding practices, which could result in substantially increased expenses, including the need to utilize traditional media and offline advertising. If we do not develop and maintain a strong brand, our business, prospects, financial condition and results of operations will be materially and adversely impacted.

If incidents occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject to adverse publicity. In particular, given the popularity of social media in China, any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in our brand. In addition, from time to time, our vehicles are evaluated and reviewed by third parties. Any negative reviews or reviews which compare us unfavorably to competitors could adversely affect consumer perception about our vehicles.

The COVID-19 outbreak has adversely affected our results of operations.

Since the beginning of 2020, the COVID-19 pandemic has resulted in the temporary closure of many corporate offices, retail stores, manufacturing facilities and factories across China and the world. In early 2020, in response to intensifying efforts to contain the spread of COVID-19, the Chinese government took a number of actions, which included, among others, extending the Chinese New Year holiday, quarantining and treating individuals in China who had contracted COVID-19, and recommending residents remain at home and avoid gathering in public. Although COVID-19 has been largely controlled in China as of the date of this proxy statement/prospectus, there have been occasional outbreaks in several cities. The outbreak and spread of COVID-19 have significantly disrupted the marketing and sales activities of our K50. In addition, our suppliers of certain parts and raw materials such as chips, especially those located in countries where the pandemic has not been successfully contained, have experienced manufacturing bottlenecks due to a shortage of labor. Although we had closely monitored our customer accounts and had not experienced significant bad debt of accounts receivable as of December 31, 2022, all of these events have materially and adversely affected our business, financial condition and results of operations. In addition, our operations have experienced and may continue to experience disruptions, such as temporary closure of our offices and/or those of our customers or suppliers and suspension of services, resulting in the halt of vehicle production, and in turn fewer vehicles delivered, which have materially and adversely affected our business, financial condition, results of operations and cash flow. For example, in 2021 and 2022, we defaulted on payments to our suppliers, terminated employment with many employees, and postponed the payment of salary on several occasions. As a result, we were subject to a number of legal disputes in relation to breach of contracts and wage arrears. In addition, we experienced temporary disruption to business operations where many employees were infected with COVID-19 in December 2022. Furthermore, to the extent the COVID-19 pandemic adversely affects our business and financial condition, it has and may continue to have the effect of heightening many of the other risks, such as those, relating to our level of indebtedness, our need to generate sufficient cash flows to service our indebtedness and our ability to comply with the covenants contained in the agreements that govern our indebtedness.

As a result of COVID-19, normal economic life worldwide was significantly curtailed, and disruptions to normal operation of businesses occurred in various areas, including the manufacturing and sales of vehicles in China. In addition, the global pandemic adversely affected the supply chains, including the supply and delivery of raw material and manufacturing parts, as well as the transportation of vehicles, which in turn have materially and adversely affected our business and results of operations. In addition, the quarantine measures imposed in Shanghai in March 2022 had caused a shortage in raw materials and components and suspension of K50 manufacturing and had adversely impacted our business, results of operations and financial condition. Even if the worldwide economic impact of COVID-19 gradually recedes, the pandemic will have a lingering, long-term effect on business activities and consumption behavior. We cannot assure you that we will be able to adjust our business operations to adapt to these changes and the increasingly complex environment in which we operate.

Our annual vehicle production volume in 2020 and 2021 was less than the minimum vehicle production volume prescribed by relevant PRC laws and regulations, and as a result, we may be deemed as being unable to maintain normal business operations, which may materially and adversely affect our business, results of operations and financial performance.

We experienced vehicle production suspension and manufactured a limited number of vehicles in 2020 and 2021. We manufactured 17 and 14 vehicles in 2020 and 2021, respectively, which was less than the minimum annual production volume for passenger vehicle manufacturers prescribed under the Administrative Rules on the Admission of Motor Vehicle Manufacturers and Products (the “Admission Rules”). According to the Admission Rules, if a motor vehicle manufacturer is unable to maintain normal operations, i.e., having an annual production volume for passenger vehicles of less than 2,000 units for two consecutive years, such enterprise may be identified by the MIIT as an “MIIT-Identified Manufacturer.” An MIIT-Identified Manufacturer is prohibited from making alterations to its market entry qualification as a motor vehicle manufacturer or to its products that have obtained market entry approval until the termination of its MIIT-identified status, which would require a determination from the MIIT that the motor vehicle manufacturer satisfies the Admission Review Standards for New Energy Vehicle Manufacturers (the “Admission Review Standards”). In 2021, the Equipment Industry Development Center of the MIIT (the “Center”) conducted on-site inspection of our manufacturing facilities and concluded that we had been unable to produce at least 2,000 passenger vehicles in both years of 2020 and 2021. On March 30, 2022, Jiangsu Provincial Department of Industry and Information Technology proposed the postpone of public identification of us by the MIIT to the Center, considering that we had continuously engaged in vehicle design and development activities, settled arrears with suppliers and employees and attempted to resume production, despite the negative impact of the COVID-19 pandemic.

As of the date of this proxy statement/prospectus, we have not been identified by MIIT. However, we cannot assure you that we would not be identified by MIIT in the future. If we were identified by MIIT as an MIIT-Identified Manufacturer, we would be unable to make alterations to our market entry qualifications or to our product currently approved for market entry, which would render us unable to, among others, change the product parameters of K50 to be manufactured by us or apply for market entry for our K20, K25 or future vehicle models.

In addition, according to the Admission Rules, a motor vehicle manufacturer may manufacture and sell the corresponding motor vehicle products only upon obtaining the admission approval. Such enterprise shall continue to satisfy the relevant admission criteria. If a motor vehicle manufacturer no longer satisfies admission criteria, the MIIT shall order the enterprise to stop manufacturing and sale of the relevant products and to make corrections immediately. According to the Administrative Regulations on the Admission of Passenger Vehicle Manufacturers and Products (the “Admission Regulations”) (《乘用车生产企业及产品准入管理规则》), passenger vehicle manufacturers that have obtained the admission shall apply to MIIT for the expansion or changes in its product category. MIIT shall assess such applications in accordance with the specific admission conditions provided in Admission Conditions and Review Standards for Passenger Vehicle Manufacturers (the “Admission Conditions and Review Standards”) (《乘用车生产企业准入条件及审查要求》). If a passenger vehicle manufacturer fails to meet the specific admission conditions provided in the Admission Conditions and Review Standards, its applications for new products or its production qualifications shall be suspended. According to the Measures for Supervision and Administration of Conformity of Production of Vehicle Manufacturers and Products (《车辆生产企业及产品生产一致性监督管理办法》), as the subject of responsibility for the management of conformity of production, any vehicle manufacturer shall establish a sound conformity of production management system to ensure the conformity of vehicle products, i.e. to ensure that the relevant technical parameters, configuration and performance indicators of the vehicle products actually produced and sold are consistent with those of the vehicle products approved by the vehicle manufacturer and product announcements, vehicle samples used for tests, the certificates for products and the uploaded information of ex-factory vehicles. According to the Admission Rules, the motor vehicle manufacturers shall establish a system to manage ex-factory certificates for motor vehicle products, standardize the production, issuance, conveyance, tracing, record filing of such certificates, fill in and convey electronic information of such certificates on a real-time basis, and issue each certificate along with the motor vehicle after such motor vehicle product has passed ex-factory inspection. The information stated on a certificate shall match the technical parameters of the admitted motor vehicle product, as well as the actual technical parameters of the motor vehicle product. Where a motor vehicle manufacturing enterprise violates the administrative provisions on product certificates, the MIIT shall order such enterprise to make corrections within a stipulated period, and depending on the circumstances, suspend the conveyance of the electronic information of the motor vehicle’s certificate.

On August 14, the Center issued a Notification Letter to inform us that we shall cease production or sales activities and make corrections immediately because our assembly line for chassis cannot properly operate and thus fail to satisfy the relevant admission criteria. During the period of making corrections, the applications for new products from us and the conveyance of the electronic information of our motor vehicle’s certificate shall be suspended. We have

made an application for a reconsideration on such decision on August 18, 2023. As of the date of this proxy statement/prospectus, we have not received any reply from the Center. However, we cannot assure you that our application for reconsideration will be approved. If our application of reconsideration is not approved, we shall make corrections to the assembly line for chassis immediately as required by the Center. We anticipate that the corrections may take about three months with an expense of approximately RMB2,000,000. As soon as the corrections are made, we will apply for the lift of the restrictions on production and sale activities with the Center. If we were ordered to cease our production or sales activities, we will not be able to satisfy customers’ customization demands for K50 and to apply for, release, manufacture or sell our K20, K25 and future vehicle models before the Center lift the restrictions on production and sales activities after our completion of corrections, and consequently our business, results of operations and financial performance may be materially and adversely affected.

We are subject to the Administrative Measures for the Entry of New Energy Vehicle Manufacturers and Products, and failure to satisfy standards and requirements specified therein may materially and adversely affect our business, results of operations and financial condition.

We are subject to the Administrative Measures for the Entry of New Energy Vehicle Manufacturers and Products, which requires that new energy vehicle manufacturers shall continuously satisfy the production consistency requirement and meet the requirements prescribed under the Admission Review Standards for New Energy Vehicle Manufacturers (the “Admission Review Standards”). A new energy vehicle manufacturer that fails to consistently comply with the Admission Review Standards may be required to suspend its manufacturing and sales activities until rectification of such failures by relevant PRC authorities. A new energy vehicle manufacturer that continues to engage in vehicle manufacturing and sales upon notification by relevant authorities of failure to comply with Admission Review Standards may be subject to fines, confiscation of income and revocation of business license, and under severe circumstances, criminal liabilities. We cannot assure you that we will be able to continuously comply with the Admission Review Standards. In October 2021, we were orally informed by the Center that we failed to meet the requirements of the Admission Review Standards. As of the date of this proxy statement/prospectus, we have not been required to suspend our manufacturing and sales activities by the relevant competent government authorities. However, we cannot assure you that relevant regulatory authorities will not impose such penalties in the future due to our non-compliance with the Admission Review Standards. The suspension of our manufacturing and sales activities materially and adversely affect our business, results of operations and financial performance.

Our business depends substantially on the continuing efforts of our executive officers, key employees and qualified personnel, and our operations may be severely disrupted if we lose their services.

Our success depends substantially on the continued efforts of our executive officers and key employees. If one or more of such executive officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them easily, in a timely manner, or at all. As we build our brand and become more well-known, the risk that competitors or other companies may seek to hire our talent increases, and we may lose some of the employees as a result of our competitors’ aggressive hiring strategies. Our industry is characterized by high demand and intense competition for talent and therefore we cannot assure you that we will be able to attract or retain qualified staff or other highly skilled employees. In addition, because our vehicles are based on a different technology platform than traditional ICE vehicles, individuals with the appropriate training may not be available to hire, and we will need to expend significant time and expense training those employees we hire. We also require sufficient talent in areas such as software development. Furthermore, as our Company is relatively young, our ability to train and integrate new employees into our operations may not meet the growing demands of our business, which may materially and adversely affect our ability to grow our business and results of operations.

If any of our executive officers and key employees terminates his or her services with us, our business may be severely disrupted, our financial condition and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. We have not obtained any “key person” insurance on the key personnel. If any of such executive officers or key employees joins a competitor or forms a competing company, we may lose customers, know-how and key professionals and staff members. Each of our executive officers and key employees has entered into an employment agreement and a non-compete agreement with us. However, if any dispute arises between our executive officers or key employees and us, the non-competition provisions contained in their non-compete agreements may not be enforceable, especially in China, where these executive officers reside, on the ground that we have not provided adequate compensation to them for their non-competition obligations, which is required under relevant PRC laws.

We may depend on our suppliers, some of whom are our single source suppliers for key components of our vehicles.

Our current marketed models, K50 and K20, use many purchased parts which we source from over 100 suppliers, many of whom are currently our single source suppliers for these components, and we expect that this will be similar for any future vehicle we may produce. The supply chain exposes us to multiple potential sources of delivery failure or component shortages. While we obtain components from multiple sources whenever possible, similar to other automobile manufacturers, many of the components used in our vehicles are purchased by us from a single source. To date, we have not qualified alternative sources for some of the single sourced components used in our vehicles, and we generally do not maintain long-term agreements with our single source suppliers.

Furthermore, qualifying alternative suppliers or developing our own replacements for certain highly customized components of K20, K50 and our future vehicles may be time-consuming and costly. Any disruption in the supply of components, whether or not from a single source supplier, could temporarily disrupt the production of our vehicles until an alternative supplier is fully qualified by us or is otherwise able to supply to us the required material. We cannot assure you that we would be able to successfully retain alternative suppliers or supplies on a timely basis, on acceptable terms or at all. Changes in business conditions, force majeure, governmental changes and other factors beyond our control or anticipation could also affect our suppliers’ ability to deliver components to us on a timely basis. Any of the foregoing could materially and adversely affect our results of operations and financial condition.

Any delays in the manufacturing and commencement of volume production of vehicles in our pipeline could have a material adverse effect on our business.

We started the volume production of our first mass-produced EV, K50, in 2018 and began to deliver K50 in September 2018. We have begun to receive non-binding pre-sale orders for our next model, K20. We also expect to release our K25 model, subject to successful future financings. In addition to the upcoming K25, we plan to release another two vehicle models in the next three years, K55 and K70. However, we cannot assure you the manufacturing and release of new models will be as smooth as we anticipate. To the extent we need to delay the release of our vehicles, our growth prospects could be adversely affected as we may fail to grow our market share. Also, we rely on third-party suppliers for the provision and development of many of the key components used in our vehicles. To the extent the suppliers experience any delays in providing us with or developing necessary components or experience quality issues, we could experience delays in delivering on our timelines. Any delay in the manufacture and release of our K20, K25 or future models could lead to customer dissatisfaction and materially and adversely affect our reputation, demand for our vehicles, results of operations and growth prospects.

We manufacture our vehicles in our plant located in Suzhou, Jiangsu Province (the “Suzhou Plant”). Our Suzhou Plant currently has an annual production capacity for vehicle body assembly of 50,000 units and for welding of 15,000 units for our K50 model, and we are in the progress of constructing production lines for our K20 model, which has an estimated annual production for vehicle body assembly of 64,000 to 96,000 units and for welding of 48,000 to 72,000 units. We anticipate delivering 200 units of K50 in 2023 if we can obtain at least US$55 million either through public offering or private placement of our securities or through K50 orders’ deposits, and we do not expect to commence delivery of K20 in 2023. We cannot assure you that such production plan can be achieved in a timely manner or at all, or if our future production capacity for K20 vehicles will satisfy customer demands for our vehicles, failing which may lead to customer order cancellation and negatively affect our reputation, results of operations and financial performance. Any disruption in the operation of the Suzhou Plant may have materially and adversely affect our manufacturing activities, which may cause delay and backlog in our vehicle delivery, result in customer order cancellation and negatively affect our reputation and customer perception.

Moreover, although we have not encountered insufficient capacity in the Suzhou Plant, we cannot assure you that we will not need to expand the manufacturing capacity of the Suzhou Plant in the future, and we may not have sufficient capital resources to execute such expansion as it may require us to incur substantial capital expenditures.

We may not be able to expand our sales and service network cost-efficiently.

As of the date of this proxy statement/prospectus, we operate one brand store and 27 service centers. Although we intend to primarily rely on online marketing and sales networks to expand our customer base, we may further expand our offline service network in China to deliver vehicles and perform after-sales services. Our marketing initiatives may not have the desired effect of increasing sales and enhancing our brand recognition in a cost-efficient manner. We may need to invest significant capital and management resources to operate existing brand store and invest in online marketing activities, and there can be no assurance that we will be able to improve the operational efficiency of our brand store or online marketing activities.

Our research and development efforts may not yield expected results.

Technological innovation is critical to our success, and we strategically develop most of key technologies in-house, such as battery systems, electric drive systems, vehicle body construction, and in-car interactive systems. We have been investing heavily on our research and development efforts. As of December 31, 2022, we had assembled a strong team of 96 in-house research and development personnel with many years of industry experience in their respective fields. In 2021 and 2022, we incurred research and development expenses of US$4.0 million and US$1.5 million, which accounted for 6.9% and 1.3% of our total operating expenses in 2021 and 2022, respectively. Given the rapid technological changes in the industry, we need to invest significant resources in research and development to lead technological advances in order to remain competitive in the market. Therefore, we expect that our research and development expenses will continue to be significant. Furthermore, research and development activities are inherently uncertain, and we cannot assure you that we will continue to achieve technological breakthroughs and successfully commercialize such breakthroughs. As a result, our significant expenditures on research and development may not generate corresponding benefits. If our research and development efforts fail to keep up with the latest technological developments, we would suffer a decline in our competitive position.

In addition to our in-house expertise, we also rely on certain technologies of our suppliers to enhance the performance of our vehicles. We plan to upgrade our existing models and introduce new models in order to equip our vehicles with the latest technologies, which could involve substantial costs and lower our return on investment for existing models. We cannot assure you that we will be able to equip our vehicles with the latest technologies. Even if we are able to keep pace with technology advancement and develop new models, our prior models could become obsolete more quickly than expected, potentially reducing our return on investment.

We plan to primarily sell our vehicles to customers directly rather than through dealerships.

As of the date of this proxy statement/prospectus, we have one brand store in China. We plan to focus on expanding online network and engage and sell directly to our customers primarily through our website, mobile apps, offline brand store and sales partners in an integrated online and offline sales model. In addition, almost all of the vehicles are made to order. This model of vehicle distribution is relatively new and unproven, and subjects us to substantial risk as it provides for slower expansion of our distribution and sales systems than may be possible by utilizing the traditional dealer franchise system. For example, we will not be able to utilize established sales channels developed through a franchise system to increase our sales volume. Moreover, we will be competing with companies with well established distribution channels. Our success will depend in large part on our ability to effectively develop our own sales channels and marketing strategies. Implementing such distribution model is subject to numerous significant challenges, including obtaining permits and approvals from government authorities, and we may not be successful in addressing these challenges.

Prolonged lead time in fulfilling orders could lead to cancellation of orders. If there is substantial delay between order placement by customers and vehicle delivery to customers, our customer satisfaction could be adversely affected, harming our business and reputation.

Orders for our EVs may be cancelled by customers despite their deposit payment and online confirmation.

Our customers may cancel their orders for many reasons within or outside of our control. If we encounter delays in the deliveries of K20, K25, K50 or future vehicle models, a significant number of orders may be cancelled. The potential long wait from reservation to delivery could also impact customer decisions on whether to ultimately make a purchase, due to potential changes in preferences, competitive developments, and other factors. As a result, we cannot assure you that orders will not be cancelled and will ultimately result in the final purchase, delivery, and sales of the vehicles. Such cancellations could harm our business, brand image, financial condition and results of operations.

Misconduct by our employees during and before their employment with us could expose us to potentially significant legal liabilities, reputational harm and/or other damages to our business.

Many of our employees play critical roles in ensuring the safety and reliability of our products and services and/or our compliance with relevant laws and regulations. Certain of our employees have access to sensitive information and/or proprietary technologies and know-how. While we have adopted codes of conduct for all of our employees and implemented detailed policies and procedures relating to intellectual property, proprietary information and trade secrets and anti-bribery, we cannot assure you that our employees will always abide by these codes, policies and procedures, nor that the precautions we take to detect and prevent employee misconduct will always be effective. If any of our employees engage in any misconduct, illegal or suspicious activities, including but not limited to, bribery or misappropriation or leakage of sensitive client information or proprietary information, we and such employees could be subject to legal claims and liabilities and our reputation and business could be adversely affected as a result.

In addition, while we have screening procedures during the recruitment process, we cannot assure you that we will be able to uncover misconduct of job applicants that occurred before we offered them employment, or that we will not be affected by legal proceedings against our existing or former employees as a result of their actual or alleged misconduct, which may divert significant amount of time and attention of our management to handle these matters. Any negative publicity surrounding these cases, especially in the event that any of these employees is found to have committed any wrongdoing, could negatively affect our reputation and may have an adverse impact on our business.

Our insurance coverage strategy may not be adequate to protect us from all business risks.

We have limited liability insurance coverage for our products and business operations. A successful liability claim against us due to injuries suffered by our customers could materially and adversely affect our financial condition, results of operations and reputation. In addition, we do not have any business disruption insurance. Any business disruption event could result in substantial cost to us and diversion of our resources.

From time to time we may evaluate and potentially consummate strategic investments or acquisitions, which could require significant management attention, disrupt our business and adversely affect our financial results.

We may evaluate and consider strategic investments, combinations, acquisitions or alliances to enhance our competitive position. These transactions could be material to our financial condition and results of operations if consummated. If we are able to identify an appropriate business opportunity, we may not be able to successfully consummate the transaction and, even if we do consummate such a transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such transaction, which may result in investment losses.

Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including:

•        difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business;

•        inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits including the failure to successfully further develop the acquired technology;

•        difficulties in retaining, training, motivating and integrating key personnel;

•        diversion of management’s time and resources from our normal daily operations and potential disruptions to our ongoing businesses;

•        strain on our liquidity and capital resources;

•        difficulties in executing intended business plans and achieving synergies from such strategic investments or acquisitions;

•        difficulties in maintaining uniform standards, controls, procedures and policies within the overall organization;

•        difficulties in retaining relationships with existing suppliers and other partners of the acquired business;

•        risks of entering markets in which we have limited or no prior experience;

•        regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business;

•        assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;

•        liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and

•        unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.

Any future investments or acquisitions may not be successful, may not benefit our business strategy, may not generate sufficient revenues to offset the associated acquisition costs or may not otherwise result in the intended benefits.

We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.

We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which we conduct activities, including the U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act 2010, and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act 2010 prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of these laws or regulations could adversely affect our business, results of operations, financial condition and reputation.

We have direct or indirect interactions with officials and employees of government agencies and state-owned affiliated entities in the ordinary course of business. These interactions subject us to an increased level of compliance-related concerns. We have implemented policies and procedures designed to ensure compliance by us and our directors, officers, employees, representatives, consultants, agents and business partners with applicable anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations. However, our policies and procedures may not be sufficient, and our directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible.

Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistle-blower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation. In addition, changes in economic sanctions laws in the future could adversely impact our business and investments in our shares.

We are and may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings.

We are, and may in the future become subject to legal proceedings and claims that arise in the ordinary course of business, including intellectual property, data privacy, product liability, employment, class action, whistle-blower and other litigation claims, and governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability, or require us to change our business practices. In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change, and could adversely affect our financial condition and results of operations. We were affected by the adverse effect of COVID-19 starting in December 2019, and suffered from deteriorated financial position. We began to default on payments due to suppliers and terminated employment relationship with many employees. As of December 31, 2022, we were responsible for approximately US$180.8 million in legal claims and associated penalties and interest for lawsuits filed against us.

We are subject to various environmental, safety and other laws and regulations relevant to our business that could impose substantial costs upon us and cause delays in selling and manufacturing our products, and operating manufacturing facilities.

We are subject to multiple environmental, safety and other laws and regulations related to our business, especially the sale and manufacture of our vehicles. Such as laws and regulations related to the use of hazardous materials in the manufacturing process and the operation of our manufacturing plant. Such laws and regulations govern the use, storage, discharge and disposal of hazardous materials during the manufacturing process. We are responsible for obtaining and/or periodically renewing the sale, construction, environmental protection, waste disposal permits and other relevant permits for selling and manufacturing our products and our manufacturing plants. There is no assurance that we will be able to obtain or renew such permits in a timely manner.

In addition, from time to time, the government of the PRC issues new regulations, which may require additional actions on our part to comply for continuing our normal operations. For example, if the Suzhou Plant or any of our other existing or future constructions fails to comply with applicable regulations or maintain the relevant permits, we could be subject to substantial liability for clean-up efforts, personal injury or fines or be forced to close or temporarily cease the operations of the Suzhou Plant or other relevant constructions, any of which could have a material adverse effect on our business, financial condition and results of operations.

If our vehicles, including software systems, fail to offer a good mobility experience and meet customer expectations, our business, results of operations and reputation would be materially and adversely affected.

Our vehicles offer certain technology functions, such as autonomous driving functions, to make the mobility experience more convenient. There can be no assurance that we will be able to continue to enhance such technology functions and make them more valuable to our customers. In the design process, we pay close attention to the preferences of our target customers. However, there can be no assurance that we are able to accurately identify consumer preferences and effectively address such preferences in our vehicle design. Furthermore, the driving experience of an EV is different from that of an ICEV, and our customers may experience difficulties in adapting to the driving experience of our vehicles. As consumer preferences are constantly evolving, we may fail to introduce desirable product features in a timely manner.

Our vehicles may contain defects in design or manufacturing that cause them not to perform as expected or that require repair, and certain features of our vehicles may take longer than expected to become enabled. These software systems may contain latent defects and errors or be subject to external attacks. Although we attempt to remedy any issues we observe in our vehicles as effectively and rapidly as possible, such efforts may not be timely or may not be to the satisfaction of our customers. Furthermore, while we have performed extensive internal testing on the vehicles we manufacture, we currently have a limited frame of reference by which to evaluate detailed long-term quality, reliability, durability and performance characteristics of our vehicles. We cannot assure you that our vehicles are free of defects, which may manifest over time. Product defects, delays or other failures of our products to perform as expected could damage our reputation and result in product recalls, product liability claims and/or significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, and results of operations.

We may be subject to risks associated with autonomous driving technologies.

We intend to utilize autonomous driving technologies to provide driver assistance-functions and upgrade autonomous driving capabilities in our vehicles. To capitalize on our in-house research and development capabilities, we may upgrade autonomous driving technologies, and plan to roll out driver-assistance functions, such as navigation assistance and valet parking assistance. Such system will be based on a high-performance domain controller and high-level redundancy across sensors, computing, actuators, power supplies, and data communication.

Autonomous driving technologies are subject to risks and, from time to time, there have been accidents associated with such technologies. Although we attempt to remedy any issues we observe in our vehicles as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not be to the satisfaction of our customers. Moreover, autonomous driving technology is still evolving and is yet to achieve wide market acceptance. The safety of autonomous driving technologies depends in part on driver interaction, and drivers may not be accustomed to using such technologies. To the extent accidents associated with autonomous driving systems developed by us occur in the future, we could be subject to liability, government scrutiny and further regulation. Furthermore, accidents or defects caused by third parties’ autonomous driving technology may negatively affect public perception, or result in regulatory restrictions, with respect to autonomous driving technology.

Autonomous driving technologies may be affected by regulatory restrictions. For example, our research and development activities on autonomous driving will be subject to regulatory restrictions on surveying and mapping, as well as driverless road testing. Any tightening of regulatory restrictions could have a material adverse impact on our development of autonomous driving technology.

Our vehicles may not perform in line with customer expectations.

Our vehicles, including K20, K25, K50 and any future vehicle models, may not perform in line with customers’ expectations. For example, our vehicles may not be as durable as other vehicles in the market and may not be as easy and convenient to repair as other vehicles in the market. Any product defects or any other failure of our vehicles to

perform as expected could harm our reputation and result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims, harm to our brand and reputation, and significant warranty and other expenses, and could have a material adverse impact on our business, financial condition and results of operations.

In addition, the range of our vehicles on a single charge may decline as a function of usage, time and charging patterns as well as other factors, although we have adopted measures to reduce the possibility of battery decay of our vehicles. For example, a customer’s use of his or her EV as well as the frequency with which he or she charges the battery can result in additional deterioration of the battery’s ability to hold a charge. Battery deterioration and decrease in range as a result may negatively influence potential customers’ decision to purchase our EVs, which may adversely affect our ability to market and sell our EVs. There can be no assurance that we will be able to continue to improve cycle performance of our battery packs in the future.

Furthermore, our vehicles may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. We cannot assure you that the software system installed on our vehicles will ultimately perform in line with expectations. Our vehicles use a substantial amount of software code to operate and software products are inherently complex and often contain defects and errors when first introduced. While we have performed extensive internal testing on our vehicles’ software and hardware systems, we have a limited frame of reference by which to evaluate the long-term performance of our systems and our vehicles. There can be no assurance that we will be able to detect and fix any defects in the vehicles prior to their sale to consumers. If any of our vehicles fail to perform as expected, we may need to delay deliveries, initiate product recalls and provide servicing or updates under warranty at our expense, which could adversely affect our brand in our target markets and could adversely affect our business, financial condition and results of operations.

Our vehicles are subject to motor vehicle standards in each country where we sell our vehicles, and the failure to satisfy such mandated safety standards would have a material adverse effect on our business and results of operations.

All vehicles sold must comply with various standards of the market where the vehicles were sold. In China, vehicles must meet or exceed all mandated safety standards. Rigorous testing and the use of approved materials and equipment are among the requirements for achieving such standards. Vehicles must pass various tests and undergo a certification process and be affixed with the China Compulsory Certificate (the “CCC certification”), before receiving delivery from the factory, being sold, or being used in any commercial activity, and such certification is also subject to periodic renewal. Our K50 first received the CCC certification in June 2018. Furthermore, the government carries out the supervision and scheduled and unscheduled inspection of certified vehicles on a regular basis. In the event that our certifications fail to be renewed upon expiry, a certified vehicle has a defect resulting in quality or safety accidents, or consistent failure of certified vehicles to comply with certification requirements is discovered during follow-up inspections, the CCC may be suspended or even revoked. With effect from the date of revocation or during suspension of the CCC, any vehicle that fails to satisfy the requirements for certification may not continue to be delivered, sold, imported or used in any commercial activity. Failure by us to have K20, K25, K50 or any future model EV satisfy motor vehicle standards would have a material adverse effect on our business and results of operations.

If we are unable to provide quality services, our business and reputation may be materially and adversely affected.

We aim to provide consumers with a good customer service experience, including providing our customers with access to a comprehensive suite of charging solutions, after-sales services and other ancillary services. Our services may fail to meet our customers’ expectations, which could adversely affect our business, reputation and results of operations. Currently, offline after-sale services are primarily carried out by service centers, which may have limited experience in servicing our vehicles. Servicing EVs is different from servicing ICE vehicles and requires specialized skills, including high voltage training and servicing techniques. There can be no assurance that our after-sale service arrangements will adequately address the service requirements of our customers to their satisfaction, or that we or our service centers will have sufficient resources to meet these service requirements in a timely manner as the volume of vehicles we deliver increases. Moreover, we provide ancillary services to facilitate auto finance and purchase of auto insurance for our customers and we may expand our service offering in the future. However, we cannot assure you that we will be able to successfully monetize these ancillary services. In addition, we seek to engage with our customers on an ongoing basis using online channels. If we are unable to roll out and establish a broad online service network, consumer experience could be adversely affected, which in turn could materially and adversely affect our sales, results of operations and prospects.

Our warranty reserves may be insufficient to cover future warranty claims which could adversely affect our financial performance.

We offer competitive warranty terms. For customers of K50, we offer (1) a five-year or 100,000-km warranty, and (2) an eight-year or 160,000-km warranty for critical components, such as battery pack, motors and electric control system. Customer may also elect to purchase our upgraded services, such as lifelong roadside assistance services and lifelong warranty services. We accrue a warranty reserve for the vehicles sold by us, which includes our best estimate of the projected costs to repair or replace items under warranties and recalls when identified. We have limited experience with warranty claims regarding our vehicles or with estimating warranty reserves. We cannot assure you that such reserves will be sufficient to cover future claims. We could, in the future, become subject to a significant and unexpected warranty claims, resulting in significant expenses, which would in turn materially and adversely affect our business, financial condition and results of operations.

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend against such claims.

If we become liable for product liability claims, our business, results of operations and financial condition may be harmed. The EV industry experiences significant product liability claims and we face inherent risk of exposure to claims in the event our vehicles do not meet applicable standards or requirements, resulting in property damage, personal injury or death. Our risks in this area are particularly pronounced given we have limited experience of offering our EVs. Although we implement full-cycle quality control, covering design, procurement, production, sales and after-sales services, we cannot assure you that our quality control measures will be as effective as we expect. Any failure in any of our quality control steps would cause a defect in our vehicles, and in turn, could harm our customers. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about our vehicles and business and inhibit or prevent commercialization of our future vehicle models, which would have material adverse effect on our brand, business, financial condition and results of operations.

We may choose to or be compelled to undertake product recalls or take other similar actions, which could adversely affect our brand image, business and results of operations.

If our vehicles are subject to recalls in the future, we may be subject to adverse publicity, damage to our brand and liability for costs. In the future, we may at various times, voluntarily or involuntarily, initiate a recall if any of our vehicles, including any systems or parts sourced from our suppliers, prove to be defective or noncompliant with applicable laws and regulations. Such recalls, whether voluntary or involuntary or caused by systems or components engineered or manufactured by us or our suppliers, could involve significant expense and could adversely affect our brand image, business and results of operations.

The battery packs on our vehicles may catch fire or vent smoke and flame on rare occasions.

Our EVs’ battery packs make use of lithium cells. On rare occasions, lithium cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium cells. While our batteries are built with robust safety features and strong thermal management capabilities, there can be no assurance that our batteries will always function safely. If any safety accident occurs to any of our vehicles’ battery pack, we could be subject to lawsuits, product recalls or redesign efforts, all of which would be time consuming and expensive. Also, negative public perceptions regarding the suitability of lithium cells for automotive applications or any future incident involving lithium cells, such as a vehicle fire, even if such incident does not involve our vehicles, could seriously harm customers’ confidence in our vehicles.

Furthermore, we may store high volumes of lithium cells and battery modules and packs at our facilities. Any mishandling of battery cells may cause disruption to the operation of such facilities. While we have implemented safety procedures related to the handling of the cells, there can be no assurance that a safety issue or fire related to the cells would not disrupt our operations. Any such disruptions or issues may harm our brand and business.

If our vehicle owners customize our vehicles or change the charging infrastructure with after-market products, the vehicle may not operate properly.

Automobile enthusiasts may seek to “hack” our vehicles to modify their performance which could compromise vehicle safety systems. Also, customers may customize their vehicles with after-market parts that can compromise driver safety. We do not test, nor endorse, such changes or products. In addition, the use of improper external cabling or unsafe charging outlets can expose our customers to injury from high voltage electricity. Such unauthorized modifications could reduce the safety of our vehicles and any injuries resulting from such modifications could result in adverse publicity which would negatively affect our brand and harm the business, financial condition and results of operations.

If we upgrade our manufacturing equipment more quickly than expected, we may have to shorten the useful lives of any equipment to be retired as a result of any such update, and the resulting acceleration in our depreciation could negatively affect our financial results.

We have invested and expect to continue to invest significantly in tooling, machinery and other manufacturing equipment in its manufacturing facilities, and we depreciate the cost of such equipment over their expected useful lives. However, manufacturing technology may evolve rapidly, and we may decide to update our manufacturing process with cutting-edge equipment more quickly than expected. Moreover, as our engineering and manufacturing expertise and efficiency increase, we may be able to manufacture our vehicles using less of our installed equipment. The useful life of any equipment that would be retired early as a result would be shortened, causing the depreciation on such equipment to be accelerated, and to the extent we own such equipment, our results of operations could be negatively impacted.

If we fail to maintain an effective system of internal control over financial reporting after the completion of the Business Combination, we may be unable to accurately report our financial results or prevent fraud, and investor confidence in us and the market price of Pubco Class A Ordinary Shares may be adversely affected.

Prior to the completion of the Business Combination, we have been a private company with limited accounting personnel and other resources with which to address our internal control and procedures over financial reporting. In the course of auditing our consolidated financial statements for 2021 and 2022, we identified two material weaknesses in our internal control over financial reporting as of December 31, 2022. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified relate to (1) lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements; (2) lack of independent directors and an audit committee. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control under the Sarbanes-Oxley Act for purposes of identifying and reporting any weakness in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.

We have implemented and are continuing to implement a number of measures to address the material weaknesses that have been identified. For details, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company — Internal Control Over Financial Reporting.” However, we cannot assure you that we will be able to continue implementing these measures in the future, or that we will not identify additional material weaknesses or significant deficiencies in the future.

Upon the completion of the Business Combination, Pubco will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with its second annual report on Form 20-F after becoming a public company. In addition, once we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our post-Business Combination management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or

if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation. While documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting.

In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our Class A Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from Nasdaq, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

Any financial or economic crisis, or perceived threat of such a crisis, including a significant decrease in consumer confidence, may materially and adversely affect our business, financial condition and results of operations.

The global macroeconomic environment is facing challenges. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and the European Union. There have been concerns over the downturn in economic output caused by the COVID-19 outbreak. It is unclear whether these challenges will be contained and what effects they each may have. Economic conditions in China are sensitive to global economic conditions. As a result of the COVID-19 outbreak, the Chinese economy is subject to the risk of a general slowdown in 2022 Any prolonged slowdown in China’s economic development might lead to tighter credit markets, increased market volatility, sudden drops in business and consumer confidence and dramatic changes in business and consumer behaviors.

Sales of our vehicles depend in part on discretionary consumer spending and are even more exposed to adverse changes in general economic conditions. In response to their perceived uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of our vehicles and our results of operations may be materially and adversely affected.

We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.

Our business could be adversely affected by the effects of epidemics. In recent years, there have been outbreaks of epidemics in China and globally. If any of our employees are identified as a possible source of spreading COVID-19, H1N1 flu, avian flu or another epidemic, we may be required to quarantine employees that are suspected of being infected, as well as others that have come into contact with those employees. We may also be required to disinfect our affected premises, which could cause a temporary suspension of certain business operations. A recurrence of an outbreak of COVID-19, H1N1 flu, avian flu or another epidemic could restrict the level of economic activities generally and/or slow down or disrupt our business activities, which could in turn adversely affect our results of operations.

We are also vulnerable to natural disasters and other calamities. Although we have servers that are hosted in an offsite location, our backup system does not capture data on a real-time basis, and we may be unable to recover certain data in the event of a server failure. We cannot assure you that any backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide services to our customers.

Risks Relating to Our Technology and Intellectual Property and Data Privacy

Our business may be adversely affected if we are unable to protect our technology and intellectual property from unauthorized use by third parties.

Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we rely on, and plan to continue relying on, a combination of trade secrets (including know-how), employee and third-party nondisclosure agreements, copyright, trademarks, intellectual property licenses and other

contractual rights to retain ownership of, and protect, our technology. Failure to adequately protect our technology and intellectual property could result in competitors offering similar products, potentially resulting in the loss of some of our competitive advantage and a decrease in revenue which would adversely affect our business, prospects, financial condition and results of operations.

The measures we take to protect our technology intellectual property from unauthorized use by others may not be effective for various reasons, including the following:

•        the patent application we have submitted may not result in the issuance of any patents;

•        the scope of any issued patents that may result from the pending patent application may not be broad enough to protect proprietary rights;

•        the costs associated with enforcing patents, trademarks, confidentiality and invention agreements or other intellectual property rights may make enforcement impracticable;

•        current and future competitors may circumvent patents or independently develop similar inventions, trade secrets or works of authorship, such as software;

•        know-how and other proprietary information we purport to hold as a trade secret may not qualify as a trade secret under applicable laws; and

•        proprietary designs and technology embodied in our products may be discoverable by third parties through means that do not constitute violations of applicable laws.

Intellectual property and trade secret laws vary significantly throughout the world. Further, policing the unauthorized use of our intellectual property in foreign jurisdictions may be costly, difficult or even impossible.

Any issued patent which may result from the pending patent application may come to be considered “standards essential.” If this is the case, we may be required to license certain technology on “fair, reasonable and non-discriminatory” terms, decreasing revenue. Further, competitors, vendors, or customers may, in certain instances, be free to create variations or derivative works of our technology and intellectual property, and those derivative works may become directly competitive with our products and services. Finally, we may not be able to leverage, or obtain ownership of, all technology and intellectual property developed by our vendors in connection with design and manufacture of its products, thereby jeopardizing our ability to obtain a competitive advantage over its competitors.

Our patents may expire and may not be extended, and our currently pending or future patent applications may not be granted.

As of December 31, 2022, we had 1,319 registered patents and 42 pending patent applications in China and overseas jurisdictions. We cannot assure you that all of our pending patent applications will be granted. Even if our patent applications are granted, it is still uncertain whether these patents will be contested, circumvented, or invalidated in the future. In addition, the rights granted under any registered patents may not provide us with meaningful protection or competitive advantages. The claims under any patents may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. It is also possible that the intellectual property rights of others could bar us from licensing and exploiting its patents. Numerous patents and pending patent applications owned by others exist in the fields where we have developed and are developing our technology. These patents and patent applications might have priority over our patent applications and could subject our patent applications to invalidation. Finally, in addition to those who may claim priority, any of our existing patents or pending patent applications may also be challenged by others on the basis that they are otherwise invalid or unenforceable.

We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs.

Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our vehicles or components, which could make it more difficult for us to operate our business. From time to time, we may receive communications from holders of patents or trademarks regarding their proprietary rights. Companies holding

patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and urge us to take licenses. Our applications and use of trademarks relating to our design, software or other technologies could be found to infringe upon existing trademark ownership and rights. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

•        cease selling, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the challenged intellectual property;

•        pay substantial damages;

•        seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all;

•        redesign our vehicles or other goods or services; or

•        establish and maintain alternative branding for our products and services.

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business, results of operations and financial condition could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.

We regard our trademarks, service marks, patents, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to our success. We rely on trademark and patent law, trade secret protection and confidentiality and license agreements with our employees and others to protect proprietary rights. We have invested significant resources to develop intellectual property. Failure to maintain or protect these rights could harm our business. In addition, any unauthorized use of our intellectual property by third parties may adversely affect our current and future revenues and our reputation.

Implementation and enforcement of PRC intellectual property-related laws have historically been deficient and ineffective. Accordingly, protection of intellectual property rights in China may not be as effective as in the United States or other countries with more developed intellectual property laws. Furthermore, policing unauthorized use of proprietary technology is difficult and expensive. We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot assure you that the steps we have taken or will take will prevent misappropriation of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.

As our patents may expire and may not be extended, our patent applications may not be granted and our patent rights may be contested, circumvented, invalidated or limited in scope, our patent rights may not protect us effectively. In particular, we may not be able to prevent others from developing or exploiting competing technologies, which could have a material and adverse effect on our business operations, financial condition and results of operations.

Computer malware, viruses, ransomware, hacking, phishing attacks and similar disruptions could result in security and privacy breaches and interruption in service, or unauthorized access or control of our vehicles’ systems, which could harm our business.

We face, and will face, various cybersecurity risks to our systems, products, and operations. Computer malware, viruses, physical or electronic break-ins and similar disruptions could lead to interruption and delays in our services and operations and loss, misuse, corruption, unavailability, or theft of data. Our operations, products, and intellectual property also inherently are at risk of loss, inappropriate access or use, or tampering by both insider threats and external bad actors. Computer malware, viruses, ransomware, hacking and phishing attacks against online networks have become more prevalent and we have been subject to and may experience these types of incidents on our systems in the future. We continue to enhance our network security measures by improving network segmentation and deploying more extensive backup solutions. Our board of directors is generally responsible for overseeing the formulation and

implementation of our network security measures. However, we cannot guarantee that future attacks will not occur or that future attacks will not cause more severe disruption or material costs in the future. In addition, our customers, suppliers and service providers face similar threats and growing cybersecurity requirements. Our third-party service providers and service providers may be targeted or impacted by such attacks. We currently do not maintain policies and procedures to oversee cybersecurity risks with respect to our customers, supply chain, suppliers and service providers, and we cannot guarantee that they or their third-party service providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our services.

Any security breach or incident, including those resulting from a cybersecurity attack, phishing attack, or any unauthorized access, unauthorized usage, virus, malware, ransomware or similar breach or disruption to our networks and systems, or those of third parties upon which we rely, or the perception or report that any of these have occurred, could result in the loss, corruption, misuse, or unauthorized disclosure of confidential information, damage to our reputation, litigation, regulatory investigations and proceedings, fines, penalties, or other liabilities. No assurance can be made that any limitations of liability provisions in our agreements with our customers, third-party service providers, or in other contracts, would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or other security-related matter. Further, insurance may not be sufficient to cover significant expenses and losses related to cyber-attacks and other security breaches and incidents. We may incur significant costs in an effort to detect and prevent security breaches and other security-related incidents, and its costs may increase as we make improvements to our systems and processes to prevent future breaches and incidents. Efforts to prevent cyber attackers from entering computer systems are expensive to implement, and we may not be able to cause the implementation or enforcement of such preventions with respect to our service providers or other third parties.

In addition, our vehicles contain complex information technology systems to support connectivity functions such as 4G and Bluetooth. We have designed, implemented and tested security measures intended to prevent unauthorized access to our information technology networks and our vehicles’ technology systems. However, hackers may attempt to gain unauthorized access to modify, alter and use such networks and systems. We encourage reporting of potential vulnerabilities in the security of our vehicles, and we aim to remedy any reported and verified vulnerability. However, we cannot assure you that vulnerabilities will not be exploited in the future before they can be identified, or that our remediation efforts are or will be successful. Any cyber-attacks, unauthorized access, disruption, damage or control of our information technology networks or our vehicles’ systems or any loss or leakage of data or information stored in our systems could result in legal claims or proceedings. In addition, regardless of their veracity, reports of cyber-attacks to our information technology networks or our vehicles’ systems or data, as well as other factors that may result in the perception that our information technology networks or our vehicles’ systems or data are vulnerable to “hacking,” could negatively affect our brand and harm our business, financial condition and results of operations.

We have procedures in place designed to enable us to quickly recover our data storage and network capability from a disaster or catastrophe. However, there are several factors ranging from human error to data corruption that could materially impact the efficacy of such procedures, including by lengthening the time services are partially or fully unavailable to customers. It may be difficult or impossible of us to perform some or all recovery steps and continue normal business operations due to the nature of a particular disaster or catastrophe, especially during peak periods, which could cause additional reputational damages, or loss of revenue, any of which could adversely affect our business, financial condition and results of operations.

We retain certain information about our customers and may be subject to various privacy and consumer protection laws.

We use our vehicles’ electronic systems to log information about each vehicle’s use, such as charge time, battery usage, mileage and driving behavior, in order to aid us in vehicle diagnostics, repair and maintenance, as well as to help us customize and optimize the driving and riding experience. Our customers may object to the use of these data, and possession and use of our customers’ driving behavior and data in conducting our business may subject us to legislative and regulatory burdens in China and other jurisdictions, which could require security review or assessment of critical data, require us to report any data breach, restrict our use of such information and hinder our ability to acquire new customers or market to existing customers. If customers allege that we have improperly collected, used, released or disclosed their personal information, we could face civil or criminal penalty, legal claims and reputational damage. We may incur significant expenses to comply with privacy, consumer protection and security standards and protocols imposed by laws, regulations, industry standards or contractual obligations. If third parties improperly obtain and use the personal information of our customers, we may be required to expend significant resources to resolve these problems which could materially and adversely affect our business, financial condition and results of operations.

Actual or alleged failure to comply with data privacy and protection laws and regulations could damage our reputation and discourage consumers from purchasing our vehicles.

We are subject to various data privacy and protection laws and regulations in China, including, without limitation, the PRC Cyber Security Law and the PRC Personal Information Protection Law. Pursuant to these laws and regulations, a service provider is required to obtain a user’s consent to collect the user’s personal information. We are required by the PRC laws to ensure the confidentiality, integrity, availability and authenticity of the information of our users and customers, which is also essential to maintaining their confidence in our EVs and services. See “CH-AUTO TECH’s Business — Regulation — Regulations on Internet Information Security and Privacy Protection.” We have adopted and plan to further adopt strict information security policies to protect the data with which we are entrusted. We may collect customer information during the ordinary course of business, and we will obtain prior consent from our customers in accordance with applicable laws and regulations. For further information, see “CH-AUTO TECH’s Business — Data Privacy and Security.”

However, advances in technology, an increased level of sophistication and diversity of our products and services, an increased level of expertise of hackers, new discoveries in the field of cryptography or others can still result in a compromise or breach of the measures that we use. The collection, use and transmission of customer data may subject us to legislative and regulatory burdens in China and other jurisdictions, which could, among other things, require security review or assessment of critical data, require us to report data breach, restrict our use of such information and hinder our ability to acquire new customers or serve existing customers. If we are unable to protect our systems and the information contained therein from unauthorized access, modification or destruction, such security breaches could give rise to our liabilities to the owners of confidential information, or subject us to fines and penalties. In addition, complying with various laws and regulations could cause us to incur substantial costs or require us to change our business practices, including our data practices, in a manner adverse to our business.

On August 16, 2021, the CAC, together with the NDRC, the MIIT, the Ministry of Public Security, and the Ministry of Transport, jointly issued the Provisions on Management of Automotive Data Security (Trial) (“Management Provisions”), which took effect on October 1, 2021, showing the clear intent that data security of the automotive industry will be strictly regulated. According to the Management Provisions, carmakers and other data processors shall not collect data on trips unless they have the drivers’ and passengers’ consent. Data collected within vehicles should be desensitized and should not be used outside vehicles unless necessary. Sensitive private data should be deleted within 10 days of drivers’ and passengers’ requests. Critical data shall be stored within China that involves such things as China’s military, government, traffic, and logistics information as well as EVs’ charging networks, and must not be exported before it passes security assessment by the CAC and relevant departments of the State Council of the PRC. Carmakers, auto suppliers, and other data processors are also required to submit annual reports about their data-related operations.

We generally comply with industry standards and are subject to the terms of our own privacy policies. Compliance with any additional laws could be expensive, and may place restrictions on the conduct of our business and the manner in which we interact with our customers. Significant capital and other resources may be required to protect against information security breaches, alleviate problems caused by such breaches, or to comply with our privacy policies or privacy-related legal obligations.

If we were found to be in violation of customers’ rights to data privacy, we could face administrative investigation, disciplinary actions, civil claims and reputational damage. We may incur significant expenses to comply with laws and regulations relating to data privacy, data security and consumer protection, as well as relevant industry standards and contractual obligations. If third parties improperly obtain and use the personal information of our customers, we may be required to expend significant resources to resolve such problems.

Furthermore, the interpretation and application of cybersecurity, data privacy and personal information protection laws and regulations and standards are still uncertain and evolving. For a detailed discussion of the regulatory development, see “— Risks Relating to Doing Business in China — Substantial uncertainties exist with respect to the interpretation and implementation of cybersecurity related regulations and cybersecurity review as well as any impact these may have on our business operations.”

We cannot assure you that relevant governmental authorities will not interpret or implement the laws or regulations in ways that negatively affect us. We may also become subject to additional or new laws and regulations regarding the protection of personal information or privacy-related matters in connection with our methods for data collection and storage. In addition to the regulatory requirements, consumer attitudes towards data privacy are also

evolving, and consumer concerns about the extent to which their data is collected by us may adversely affect our ability to gain access to data and improve our technologies, products and services. Furthermore, the integrity of our data protection measures could be compromised by system failures, security breaches or cyber-attacks. If we are unable to comply with the applicable laws and regulations or effectively address data privacy and protection concerns, such actual or alleged failure could damage our reputation, discourage consumers from purchasing our EVs and subject us to significant legal liabilities.

Interruption or failure of our information technology and communications systems could impact our ability to effectively provide our services.

We enable our customers to access a variety of features and services through our mobile apps. In addition, certain of vehicles’ features depend to a certain extent on connectivity to our information technology systems. As such, the availability and effectiveness of our services depend on the continued operation of our information technology and communications systems. Our systems are vulnerable to damage or interruption from, among others, fire, terrorist attacks, natural disasters, power loss, telecommunications failures, computer viruses or other attempts to harm our systems. Our data centers are also subject to break-ins, sabotage, and intentional acts of vandalism, and to potential disruptions. Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities. Any problems at our data centers could result in lengthy interruptions in our service. In addition, our products and services are highly technical and complex and may contain errors or vulnerabilities, which could result in interruptions in our services or the failure of our systems.

Risks Relating to the EV Market and Related Regulations

The EV industry in China is highly competitive, and we may not be successful in competing in this industry.

The EV industry in China is highly competitive. We expect this industry will become more competitive in the future as additional players enter into this industry. We compete directly with other pure-play EV companies such as Tesla as well as traditional vehicle manufacturers who are entering the EV market. To a lesser extent, our vehicles compete with other premium ICEVs. Many of our current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. We expect competition in our industry to intensify in the future in light of increased demand and regulatory push for alternative fuel vehicles, continuing globalization and consolidation in the worldwide automotive industry. Factors affecting competition include, among others, product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service and financing terms. Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in downward price pressure and adversely affect our business, financial condition and results of operations. Our ability to successfully compete in our industry will be fundamental to our future success in existing and new markets and our market share. There can be no assurance that we will be able to compete successfully in our markets. If our competitors introduce new cars or services that successfully compete with or surpass the quality or performance of our cars or services at more competitive prices, we may be unable to satisfy existing customers or attract new customers at the prices and levels that would allow us to generate attractive rates of return on our investment.

We may also be affected by the growth of the overall automotive market in China. If demand for automobiles in China continues to decrease, our business, financial condition and results of operations could be materially adversely affected.

The unavailability, reduction or elimination of government and economic incentives or government policies that are favorable for new energy vehicles and domestically produced vehicles could materially and adversely affect our business, financial condition and results of operations.

Our business has benefited from government subsidies, economic incentives and government policies that support the growth of new energy vehicles. Favorable government incentives and subsidies in China include one-time government subsidies, exemption from vehicle purchase tax, exemption from license plate restrictions in certain cities, preferential utility rates for charging facilities and more. For example, each qualified purchaser of our vehicles enjoys subsidies from China’s central government and certain local governments. Furthermore, in certain cities, quotas that limit the purchase of ICEVs do not apply to EVs, thereby incentivizing customers to purchase EVs. Changes in government subsidies, economic incentives and government policies to support NEVs could adversely affect the results of our operations.

In April 2020, the Ministry of Finance of the PRC, together with several other PRC government departments, issued the Announcement on Policies concerning the Exemption of New Energy Vehicles from Vehicle Purchase Tax, and in April 2020, December 2020 and September 2022, the said PRC government departments issued the Circular on Improving the Fiscal Subsidy Policies for the Promotion and Application of New Energy Vehicles, the Circular on Further Improving the Fiscal Subsidy Policies for the Promotion and Application of New Energy Vehicles (collectively, the “2020 Subsidy Circular”) and the Announcement on Continuation of Policies for Exemption of Vehicle Purchase Tax for New Energy Vehicles, which extended certain subsidies and tax exemptions on EV purchases to the end of 2023. China’s central government also provides certain local governments with funds and subsidies to support the roll out of a charging infrastructure. These policies are subject to certain limits as well as changes that are beyond our control, and we cannot assure you that future changes, if any, would be favorable to our business. For instance, according to the 2020 Subsidy Circular, in principle, the subsidies for new energy vehicle purchases from 2020 to 2022 will generally be lowered by 10%, 20% and 30%, respectively, based on the level of the previous year, with limited exceptions in the area of public transport, and the total number of new energy vehicles in China that will be entitled to such subsidies should be no more than two million each year. Furthermore, certain of our subsidiaries have received subsidies or grants from local governments. Any reduction or elimination of government subsidies and economic incentives because of policy changes, fiscal tightening or other factors may result in the diminished competitiveness of the EV industry generally or our vehicles in particular. In addition, as we seek to increase our revenues from vehicle sales, we may also experience an increase in accounts receivable relating to government subsidies. Any uncertainty or delay in collection of the government subsidies may also have an adverse impact on our financial condition. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

We may also face increased competition from foreign OEMs due to changes in government policies. For example, the tariff on imported passenger vehicles (other than those originating in the United States of America) was reduced to 15% starting on July 1, 2018. As a result, the pricing advantage of domestically-manufactured vehicles could be diminished.

The restriction on foreign ownership of new energy vehicle manufacturers was lifted in 2018. In addition, pursuant to the Special Administrative Measures for Market Access of Foreign Investment (2021) (the “Negative List (2021 Version)”), which was jointly promulgated by the NDRC and the MOFCOM on December 27, 2021 and effective on January 1, 2022, there is no restriction on foreign ownership of automakers for ICE passenger vehicles. As a result, foreign EV competitors and foreign ICE automakers could build wholly-owned facilities in China without the need for a domestic joint venture partner. For example, Tesla has constructed the Tesla Giga Shanghai factory in Shanghai without a joint venture partner. These changes could increase our competition and reduce our pricing advantage, which may adversely affect our business, results of operations and financial condition.

Our industry is rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies or improvements in the ICE may materially and adversely affect the demand for our vehicles.

We primarily operate in the EV markets in China. EV markets in China and Europe are rapidly evolving and may not develop as we anticipate. The regulatory framework governing the industry currently involves many uncertainties and may remain uncertain for the foreseeable future. As our industry and our business develop, we may need to modify our business model or change our products and services. These changes may not achieve expected results, which could have a material adverse effect on our business, financial condition and results of operations.

Developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. In addition, a sustained depression of petroleum price could make the ownership of ICEVs more attractive to consumers. Any failure by us to successfully react to changes in alternative technologies and market conditions could materially harm our competitive position and growth prospects.

Our future growth is dependent upon consumers’ willingness to adopt EVs.

The demand for our vehicles and services will highly depend upon the adoption by consumers of new energy vehicles in general and EVs in particular. The market for new energy vehicles is still rapidly evolving, characterized by rapidly changing technologies, prices and the competitive landscape, evolving government regulation and industry standards and changing consumer demands and behaviors. Other factors that may influence the adoption of new energy vehicles, and specifically EVs, include:

•        perceptions about EV quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of EVs, whether or not such vehicles are produced by us or other OEMs;

•        perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technologies, such as autonomous driving and lithium battery cells;

•        the limited range over which EVs may be driven on a single battery charge and the speed at which batteries can be charged;

•        the decline of an EV’s range resulting from deterioration over time in the battery’s ability to hold a charge;

•        the availability of other types of new energy vehicles, including plug-in hybrid EVs;

•        improvements in the fuel economy of the internal combustion engine;

•        the availability of after-sales service for EVs;

•        the environmental consciousness of consumers;

•        access to charging stations, standardization of EV charging systems and consumers’ perceptions about convenience and cost for charging an EV;

•        the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of non-polluting vehicles;

•        perceptions about and the actual cost of alternative fuel; and

•        macroeconomic factors.

Any of the factors described above may cause current or potential customers not to purchase our vehicles and use our services. If the market for EVs does not develop as we expect or develops more slowly than we expect, our business, financial condition and results of operations will be materially and adversely affected.

Risks Relating to Doing Business in China

The PRC government may intervene or influence our operations at any time, which could result in a material change in your operations and/or the value of the securities we are registering. If the PRC government significantly regulates our business operations in the future and we are not able to substantially comply with such regulations, our business operations may be materially adversely affected and the value of our securities after the completion of the Business Combination may significantly decrease.

We believe that the PRC government may intervene or influence our operations at any time, which could result in a material change in your operations and/or the value of the securities we are registering. The ability of our PRC subsidiaries to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, we believe that government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then holds in Chinese properties.

As such, the business operations of our PRC subsidiaries and the EV industry may be subject to various government and regulatory interference in the provinces in which our entities operate. We could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In the event that we are not able to substantially comply with any existing or newly adopted laws and regulations, our business operations may be materially adversely affected and the value of our securities may significantly decrease.

The PRC government may exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

The PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. For example, on July 6, 2021, the relevant PRC government authorities made public the Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance

with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. On December 28, 2021, the NDRC, the MIIT, and several other administrations jointly published the Measures for Cybersecurity Review, effective on February 15, 2022, which required that, among others, operators of “critical information infrastructure” purchasing network products and services or network platform operators carrying out data processing activities, that affect or may affect national security, shall apply with the Cybersecurity Review Office for a cybersecurity review. In addition, a network platform operator holding over one million users’ personal information shall apply with the Cybersecurity Review Office for a cybersecurity review before any public offering at a foreign stock exchange. On November 14, 2021, the CAC released the draft Administrative Regulations for Internet Data Security (Draft for Comments) (the “Draft Regulations for Internet Data Security”), which requires, among others, that a prior cybersecurity review should be required for listing abroad of data processors which process over one million users’ personal information, and the listing of data processors in Hong Kong which affects or may affect national security.

On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, a PRC domestic enterprise seeking to issue and list its shares overseas shall comply with the filing procedures and report relevant information to the CSRC. Such overseas securities issuance and listing include direct and indirect issuance and listing. An offering and listing shall be deemed as a PRC company’s indirect overseas offering and listing if the issuer meets the following conditions: (1) any of the operating income, gross profit, total assets, or net assets of the PRC enterprise in the most recent fiscal year was more than fifty percent (50%) of the relevant line item in the issuer’s audited consolidated financial statement for that year; and (2) senior management personnel responsible for business operations and management are mostly PRC citizens or are ordinarily resident in the PRC, or the principal place of business is in the PRC or the main part of the business operations are carried out in the PRC. A domestic enterprise achieving direct or indirect overseas listing through one or more acquisitions, share swap, share transfer or other trading arrangement shall also comply with the filing procedures. If a domestic company fails to comply with the filing procedure pursuant to the Trial Measures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to rectify, warning, and fines, and certain personnel of such domestic companies, such as their controlling shareholders, actual controllers, the person directly in charge and other directly liable persons, may also be subject to administrative penalties, such as warnings and fines. However, since the Trial Measures was newly promulgated, the interpretation, application and enforcement of the Trial Measures remain unclear. Based on the opinion of the Company’s PRC counsel and its interpretation of the Trial Measures and other currently effective PRC laws and regulations, the Company is required to comply with the filing procedures with the CSRC in connection with the Business Combination for purposes of the listing of Pubco Ordinary Shares on Nasdaq. The Company may be deemed not comply with the filing procedures because the filing materials are incomplete or not meet the requirements of the CSRC or fail to answer CSRC’s follow-up questions based on the Company’s filing materials or provide supplementary materials as required by the CSRC. Any failure to comply with the filing procedure pursuant to the Trial Measures or concealment of any material fact or falsification of any major content in the filing documents could result in administrative penalties such as order to rectify, warnings, and fines, and certain personnel of the Company, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons, may also be subject to administrative penalties, such as warnings and fines, which could materially and adversely affect our business, financial condition, results of operations, and prospects.

In addition, since the Draft Regulations for Internet Data Security are in the process of being formulated and the Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law remain unclear on how it will be interpreted, amended and implemented by the relevant PRC governmental authorities, it remains uncertain whether PRC governmental authorities will further promulgate new rules to regulate overseas listing and whether we are required to obtain any specific regulatory approvals from the CSRC, CAC or any other PRC governmental authorities for the issuance of our securities overseas. If the CSRC, CAC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for listing our securities on Nasdaq or for our offerings of securities overseas, we may be unable to obtain such approvals in a timely manner, or at all, and such approvals may be rescinded even if obtained. Any such circumstance could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. In addition, implementation of industry-wide regulations directly targeting our operations could cause the value of our securities to significantly decline or be worthless.

Uncertainties with respect to the PRC legal system, regulations and enforcement policies could adversely affect the Pubco, the Company and its PRC subsidiaries. The enforcement of laws and rules and regulations in China may change quickly with little advance notice, which could hinder the Pubco’s ability to offer or continue to offer the securities, result in a material adverse change to the business operations of the Pubco’s subsidiaries, and damage the Pubco’s reputation. In such event, the Pubco’s financial condition and results of operations may be materially and adversely affected, and the Pubco’s securities may significantly decline in value or become worthless.

The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, we believe that China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings, and the level of legal protection available to you and us.

Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business, financial condition and results of operations.

New laws and regulations may be enacted from time to time and substantial uncertainties exist regarding the interpretation and implementation of current and any future PRC laws and regulations applicable to our businesses. In particular, the PRC government authorities may continue to promulgate new laws, regulations, rules and guidelines governing new economy companies with respect to a wide range of issues, such as intellectual property, unfair competition and antitrust, privacy and data protection, and other matters. Compliance with these laws, regulations, rules, guidelines, and implementations may be costly, and any incompliance or associated inquiries, investigations, and other governmental actions may divert significant management time and attention and our financial resources, bring negative publicity, subject us to liabilities or administrative penalties, or materially and adversely affect our business, financial condition, results of operations, and the value of our Class A Ordinary Shares. The enforcement of laws and rules and regulations in China may change quickly with little advance notice, which could hinder our ability to offer or continue to offer the securities, result in a material adverse change to our business operations, and damage our reputation. In such event, our financial condition and results of operations may be materially and adversely affected, and our Class A Ordinary Shares may significantly decline in value or become worthless.

The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with the issuance of our securities overseas, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.

Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. The interpretation and application of the regulations remain unclear, and the listing of our securities after the completion of the Business Combination and our offshore offerings may ultimately require approval of the CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if we obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such obtained approval, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.

On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to

take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. As a follow-up, on February 17, 2023, the CSRC issued the Trial Measures. The Trial Measures propose to establish a new filing-based regime to regulate overseas offerings and listings by domestic companies. The examination and determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing shall be deemed as a PRC company’s indirect overseas offering and listing if the issuer meets the following conditions: (1) any of the operating income, gross profit, total assets, or net assets of the PRC enterprise in the most recent fiscal year was more than fifty percent (50%) of the relevant line item in the issuer’s audited consolidated financial statement for that year; and (2) senior management personnel responsible for business operations and management are mostly PRC citizens or are ordinarily resident in the PRC, or the principal place of business is in the PRC or the main business operations are carried out in the PRC. Furthermore, a domestic enterprise achieving direct or indirect overseas listing of its assets through one or more acquisitions, share swap, share transfer or other trading arrangement shall also fulfil the filing procedures.

On February 17, 2023, the CSRC held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies (the “Filing Notice”), according to which the domestic companies that have submitted valid overseas offering and listing applications but had not obtained approval from overseas regulatory authorities or overseas stock exchanges on or before March 31, 2023, could arrange the timing for submitting filing applications to the CSRC with a reasonable time, and shall complete such filing prior to their overseas offering and listing. Based on the opinion of the Company’s PRC counsel, according to its interpretation of the Trial Measures and other currently effective PRC laws and regulations, the Company is required to complete the filing procedures with the CSRC in connection with the Business Combination for purposes of the listing of Pubco Ordinary Shares on Nasdaq. Given the substantial uncertainties surrounding the latest CSRC filing requirements at this stage, there can be no assurance that the Company would be able to complete the filings and fully comply with the relevant new rules on a timely basis, if at all. In accordance with the requirements under the Trial Measures, the Company has been in the process of preparing filing materials with the CSRC as of the date of this proxy statement/prospectus. However, since the Company and several of its PRC subsidiaries have been listed as “dishonest person subject to enforcement,” the Company shall first manage to remove such black-listings before submitting the filing materials with the CSRC. The black-listings can be removed by reaching the settlement agreements with the suppliers and other related creditors who applied for the black-listings of the Company and several of its PRC subsidiaries and completing the performance of such settlement agreements, such as converting certain debt obligations into equity and/or repaying the rest debt obligations owed to the suppliers and other related creditors, or by requesting the suppliers and other related creditors to apply in writing for removing such black-listings and being approved by the related courts. The Company is working towards removing all the black-listings, but it cannot assure that this can be completed in the near term. For repaying liabilities owed to the suppliers, see “Risks Relating to the Company — Risks Relating to our Financial Position and Need for Additional Capital — Our business plans require a significant amount of capital. Any delay or failure in accomplishing our financing plan will materially and adversely affect our business, financial condition and results of operations. In addition, our future capital needs may require us to issue additional equity or debt securities that may dilute our shareholders or introduce covenants that may restrict our operations or our ability to pay dividends.” For repaying liabilities owed to other creditors, see “Liquidity and Capital Resources — With respect to the Company’s debt obligation, including its loans, debt, accounts payable, liabilities in default, and liabilities arising from lawsuits or judgement, the Company plans to continue to negotiate with its creditors for extensions, instalment repayment arrangement and other debt repayment method, such as debt-to-equity conversion, and the Company plans to allocate 20% of its income generated from operations after receiving proceeds from the public offerings and private financings conducted after the consummation of the Business Combination to repay its liabilities.” In addition, even after the initial submission of the filing materials, the Company’s filing materials might be incomplete or not meet the requirements of the CSRC, and the CSRC may have follow-up questions, and the Company might be required by the CSRC to provide supplementary materials. Furthermore, the completion of the CSRC filing procedures is legally required under the PRC laws, and is a closing condition to the Business Combination pursuant to the Merger Agreement. Failure to comply with the CSRC filing procedure pursuant to the Trial Measures, or concealment or falsification of any material fact in the filing documents could result in administrative penalties such as order to rectify, warnings, and fines ranging from RMB1,000,000 to RMB10,000,000 against the company. Directly liable persons-in-charge and other directly liable persons shall be warned and each imposed a fine of between RMB500,000 and RMB5,000,000. And the company’s controlling shareholders and actual controllers of the domestic company that organize or instruct the aforementioned violations shall be imposed a fine of between RMB1,000,000 and RMB10,000,000. As of the date of this proxy statement/prospectus, the Company has not received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with respect to this Business Combination.

In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for Cybersecurity Review (the “Cybersecurity Review Measures”) and the Draft Regulations for Internet Data Security, are required for the issuance of our securities overseas or for offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected. For the requirement of cybersecurity review, see “— Substantial uncertainties exist with respect to the interpretation and implementation of cybersecurity related regulations and cybersecurity review as well as any impact these may have on our business operations.” Any failure to obtain or delay in obtaining such approval or completing such filing procedures for our offshore offerings, or a rescission of any such approval or filing if obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities for failure to seek CSRC approval or filing or other government authorization for our offshore offerings. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities.

Adverse changes in China’s or global economic and political policies could have a material and adverse effect on overall economic growth in China, which could materially and adversely affect our business.

Substantially all of our operations are conducted in China and substantially all of our revenues are sourced from China. Accordingly, our results of operations, financial condition and prospects are influenced by economic, political and legal developments in China. Economic reforms begun in the late 1970s have resulted in significant economic growth.

However, any economic reform policies or measures in China may from time to time be modified or revised. China’s economy differs from the economies of most developed countries in many respects, including the extent of the government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. The PRC government exercises significant control over China’s economic growth through strategically allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business. Therefore, investors of our company and our business face potential uncertainties from the PRC government.

While the PRC economy has experienced significant growth in the past decades, growth has been uneven across different regions and between economic sectors, and the growth rate of the Chinese economy has gradually slowed since 2010, which trend may continue. Furthermore, China’s GDP growth turned negative in the first quarter of 2020. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and operating results, lead to reduction in demand for our products and services and adversely affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. COVID-19 had a severe and negative impact on the Chinese and the global economy in the first quarter of 2020. Whether this will lead to a prolonged downturn in the economy is still unknown. Even before the outbreak of COVID-19, the global macroeconomic environment was facing numerous challenges. The growth rate of the Chinese economy has gradually slowed in recent years and the trend may continue. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies which had been adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China, even before 2020. Unrest, terrorist threats and the potential for war in the Middle East, Europe and elsewhere may increase market volatility across the globe. There have also been concerns about the relationship between China and other countries, including the surrounding

Asian countries, which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. The COVID-19 pandemic has impacted the global and Chinese economy severely in 2020. Our results of operations and financial condition have been affected negatively by the spread of COVID-19 during the years ended December 31, 2021 and 2022. Any severe or prolonged slowdown in the global or Chinese economy may further materially and adversely affect our business, results of operations and financial condition.

Substantial uncertainties exist with respect to the interpretation and implementation of cybersecurity related regulations and cybersecurity review as well as any impact these may have on our business operations.

The cybersecurity legal regime in China is relatively new and evolving rapidly, and their interpretation and enforcement involve significant uncertainties. As a result, it may be difficult to determine what actions or omissions may be deemed to be in violations of applicable laws and regulations in certain circumstances.

On June 10, 2021, the Standing Committee of the National People’s Congress of China promulgated the Data Security Law (the “Data Security Law”), which took effect in September 2021. The Data Security Law sets forth data security and privacy related compliance obligations of entities and individuals carrying out data related activities. The Data Security Law also introduces a data classification and layered protection system based on the importance of data and the degree of impact on national security, public interests or legitimate rights and interests of individuals or organizations if such data is tampered with, destroyed, leaked or illegally acquired or used. In addition, the Data Security Law provides for a national security review procedure for data activities that may affect national security, and imposes export restrictions on certain data and information. According to the PRC National Security Law (the “PRC National Security Law”), the government shall establish institutions and mechanisms for national security review and regulation, and conduct national security review on certain matters that affect or may affect PRC national security, such as key technologies and IT products and services.

On December 28, 2021, the CAC and 12 other PRC regulatory authorities jointly issued the revised Cybersecurity Review Measures, which became effective on February 15, 2022 and replaced the cybersecurity review measures issued in April 2020. The Cybersecurity Review Measures provide, among others, (1) the purchase of cyber products and services by critical information infrastructure operators (the “CIIOs”), and network platform operators, which engage in data processing activities that affect or may affect national security, shall be subject to the cybersecurity review by the Cybersecurity Review Office, which is the department responsible for the implementation of cybersecurity review under the CAC; and (2) network platform operators with personal information of over one million users that seek for listing on a foreign stock exchange shall apply for a cybersecurity review by the Cybersecurity Review Office. In addition, the Cybersecurity Review Measures provide that the relevant regulatory authorities may initiate a cybersecurity review against CIIOs and network platform operators if they are deemed to engage in activities that affect or may affect national security by relevant regulatory authorities. However, the Cybersecurity Review Measures have not offered any explanation or interpretation for what constitute “affect or may affect national security,” and PRC authorities may have broad discretion in interpreting and enforcing these laws and regulations.

As of the date of this proxy statement/prospectus, we have not been informed that we are a critical information infrastructure operator by any government authorities. Furthermore, the exact definition, scope or criteria of “critical information infrastructure operators,” “network platform operators” and “users’ personal information” under the current regulatory regime remains unclear, and the PRC government authorities may have wide discretion in the interpretation and enforcement of the applicable laws. Therefore, it is uncertain whether we would be deemed to be a critical information infrastructure operator or network platform operator under PRC law. If we are deemed to be a critical information infrastructure operator or network platform operator under the PRC cybersecurity laws and regulations, we may be subject to obligations in addition to what we have fulfilled under the PRC cybersecurity laws and regulations.

On November 14, 2021, the CAC published the Draft Regulations for Internet Data Security, which provides that data processors conducting the following activities shall apply for cybersecurity review: (1) merger, reorganization or division of Internet platform operators that have acquired a large number of data resources related to national security, economic development or public interests affects or may affect national security; (2) listing abroad of data processors processing over one million users’ personal information; (3) listing in Hong Kong which affects or may affect national security; or (4) other data processing activities that affect or may affect national security. There have been no clarifications from the authorities as of the date of this proxy statement/prospectus as to the standards for determining such activities

that “affects or may affect national security.” The public comment period for the Draft Regulations for Internet Data Security ended on December 13, 2021, and it has not come into effect as of the date of this proxy statement/prospectus. On December 28, 2021, the PRC government promulgated the 2022 Cybersecurity Review Measures, which came into effect on February 15, 2022. According to the 2022 Cybersecurity Review Measures, (i) critical information infrastructure operators that purchase network products and services and internet platform operators that conduct data processing activities shall be subject to cybersecurity review in accordance with the 2022 Cybersecurity Review Measures if such activities affect or may affect national security; and (ii) internet platform operators holding personal information of more than one million users and seeking to have their securities list on a stock exchange in a foreign country shall file for cybersecurity review with the Cybersecurity Review Office. As of the date of this proxy statement/prospectus, neither we nor any of our PRC Subsidiaries has been required by any PRC governmental authority to apply for cybersecurity review, nor have we or any of our PRC Subsidiaries received any inquiry, notice, warning, sanction in such respect or been denied permission from any PRC regulatory authority to list on U.S. exchanges. Based on the opinion of our PRC counsel, according to its interpretation of the currently in-effect PRC laws and regulations, we believe that neither we nor any of our PRC Subsidiaries is subject to the cybersecurity review, reporting or other permission requirements by the CAC under the applicable PRC cybersecurity laws and regulations with respect to the offering of our securities or the business operations of our PRC Subsidiaries, because neither we nor any of our PRC Subsidiaries qualifies as a critical information infrastructure operator or has conducted any data processing activities that affect or may affect national security or holds personal information of more than one million users. However, as PRC governmental authorities have significant discretion in interpreting and implementing statutory provisions and there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, if the PRC regulatory authorities take a position contrary to ours, we cannot assure you that we or any of our PRC Subsidiaries will not be deemed to be subject to PRC cybersecurity review requirements under the 2022 Cybersecurity Review Measures or the Draft Administrative Regulations (if enacted) as a critical information infrastructure operator or an internet platform operator that is engaged in data processing activities that affect or may affect national security or holds personal information of more than one million users, nor can we assure you that we or our PRC Subsidiaries would be able to pass such review. If we or any of our PRC Subsidiaries fails to receive any requisite permission or approval from the CAC for the Business Combination or the business operations of our PRC Subsidiaries, or the waiver for such permission or approval, in a timely manner, or at all, or inadvertently conclude that such permission or approval is not required, or if applicable laws, regulations or interpretations change and obligate us to obtain such permission or approvals in the future, we or our PRC Subsidiaries may be subject to fines, suspension of business, website closure, revocation of business licenses or other penalties, as well as reputational damage or legal proceedings or actions against us, which may have a material adverse effect on our business, financial condition or results of operations. In addition, we could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future pursuant to new laws, regulations or policies. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with applicable laws and regulations may result in fines, suspension of business, website closure, revocation of business licenses or other penalties, as well as reputational damage or legal proceedings or actions against us, which may have a material adverse effect on our business, financial condition or results of operations.

Pubco’s securities will be delisted and will be prohibited from trading in the over-the-counter market under the HFCA Act, if the PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years. The delisting of Pubco’s securities, or the threat of their being delisted, may materially and adversely affect the value of your investment.

Pursuant to the HFCA Act, if the SEC determines that Pubco has filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit Pubco’s securities from being traded on a national securities exchange or in the over-the-counter trading market in the United States. The independent registered public accounting firm of Pubco and the Company issued an audit opinion on the financial statements included in this proxy statement/prospectus. As an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, the auditor of Pubco and the Company is required by the laws of the United States to undergo regular inspections by the PCAOB. The auditor of Pubco and the Company is headquartered in Manhattan, New York, and has been inspected by the PCAOB on a regular basis with the last inspection in 2020.

Inspections of certain other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The PCAOB had historically been unable to conduct inspections of audit firms located in China and Hong Kong before 2022, and it issued its report on December 16, 2021, notifying the SEC of its determination that it was unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong (the “PCAOB Determination List”).

On August 26, 2022, the CSRC, the Ministry of Finance of China, and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the Protocol, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022, and the PCAOB board vacated its previous determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control. The PCAOB is continuing to demand complete access in mainland China and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed.

As of the date hereof, the independent auditor of Pubco and the Company, Marcum Asia CPAs LLP (Formerly Marcum Bernstein & Pinchuk LLP), is not among the auditor firms on the PCAOB Determination List. Should the PCAOB determine that it is unable to fully conduct inspections of the workpapers of the auditor of Pubco, it will make it more difficult to evaluate the effectiveness of the auditor’s audit procedures or quality control procedures. Investors may consequently lose confidence in the reported financial information and procedures of Pubco and the Company and the quality of their financial statements, which would adversely affect the financial condition and prospect of Pubco. If, in the future, the PCAOB determines that it is unable to inspect or investigate completely the Pubco’s registered accounting firm, the SEC may prohibit the ordinary shares of the Pubco from being traded on a national securities exchange or in the over-the-counter trading market in the United States and Pubco’s securities may be delisted by such exchange.

PRC regulations of loans to PRC entities and direct investment in PRC entities by offshore holding companies may delay or prevent us from using offshore funds to make loans or additional capital contributions to our PRC subsidiaries.

We may transfer funds to our PRC subsidiaries or finance our PRC subsidiaries by means of shareholder loans or capital contributions. Any loans from us to our PRC subsidiaries, which are foreign-invested enterprises, cannot exceed statutory limits based on the difference between the registered capital and the investment amount of such subsidiaries or alternatively, 200% of its net assets, as applicable, and shall be registered with the State Administration of Foreign Exchange, or SAFE, or its local counterparts. Any capital contributions we make to our PRC subsidiaries are subject to the requirement of necessary filings in the Foreign Investment Comprehensive Management Information System and registration with other governmental authorities. We may not be able to obtain these government registrations or approvals on a timely basis, if at all. If we fail to receive such registrations or approvals, our ability to provide loans or capital contributions to our PRC subsidiaries in a timely manner may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

On March 30, 2015, SAFE issued the Circular on Reform of the Administrative Rules of the Payment and Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015. SAFE Circular 19 adopts a concept of “discretionary conversion,” which is defined as the conversion of a foreign-invested enterprise’s foreign currency registered capital in accordance with the enterprise’s actual business needs. No review of the purpose of the funds is required at the time of conversion under SAFE Circular 19. However, use of any RMB funds converted from its registered capital shall be based on true transactions within the enterprise’s business scope. Although SAFE Circular 19 no longer prohibits equity investments within the PRC using foreign currency-converted registered capital, it reiterates the principle that Renminbi converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond the enterprise’s business scope, the investment in securities, the issuance of Renminbi entrusted loans (except for those that are permitted within the enterprise’s business scope), the repayment of inter-enterprise loans, the repayment of bank loans that have been transferred to a third party, or the purchase of real estate property not for the enterprise’s own use (except for foreign-invested real estate enterprises).

SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, on June 9, 2016, which became effective on the same day. Pursuant to SAFE Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to RMB on self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary basis which applies to all enterprises registered

in the PRC. SAFE Circular 16 reiterates the principle that RMB converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted RMB shall not be provided as loans to its non-affiliated entities, or used for construction and purchase of non-self-used real estate (excluding real estate enterprises) or unless otherwise expressly provided in law, directly or indirectly used in securities investment or other financial management excluding the bank capital preservation products.

Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from our equity offering and notes offering, to our PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in China.

On October 23, 2019, SAFE issued the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28. SAFE Circular 28 allows non-investment foreign-invested enterprises to use their capital funds to make equity investments in China, provided that such investments do not violate the existing Special Administrative Measures (Negative List) for Foreign Investment Access and that the target investment projects are genuine and in compliance with PRC laws and regulations.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or with respect to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we received from our equity offering and notes offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

We may be subject to penalties, including restriction on our ability to inject capital into our PRC subsidiaries and our PRC subsidiaries’ ability to distribute profits to us, if our PRC resident shareholders beneficial owners fail to comply with relevant PRC foreign exchange rules.

SAFE promulgated the Circular on Relevant Issues Relating to Foreign Exchange Control on Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 that requires PRC residents (including PRC individuals, PRC corporate entities and foreign individuals that are deemed as PRC residents for foreign exchange administration purposes) to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC resident as a shareholder, name and operation term), or any significant changes (including increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions). SAFE Circular 37 is issued to replace the Circular on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investments via Overseas Special Purpose Vehicles, or SAFE Circular 75.

If our shareholders who are PRC residents do not complete their registration with the local SAFE branches or update the previously filed registration, our PRC subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to our PRC subsidiaries. Moreover, failure to comply with the SAFE registration described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions. On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment (the “SAFE Notice 13”), which became effective on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including PRC residents’ direct establishment or indirect control of an offshore entity established for the purpose of overseas investment or financing with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, will be filed with qualified banks instead of SAFE or its local branch. The qualified banks will directly examine the applications and accept foreign exchange registration for overseas direct investment under the supervision of SAFE.

According to Circular 37, our shareholders or beneficial owners who are PRC residents are subject to Circular 37 or other foreign exchange administrative regulations in respect of their investment in our company. We have requested all of our current shareholders and/or beneficial owners to disclose whether they or their shareholders or beneficial owners fall within the ambit of Circular 37 and have urged relevant shareholders and beneficial owners, upon learning they are PRC residents, to register with the local SAFE branch as required under Circular 37. However, we may not be informed of the identities of

all the PRC residents holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. As a result, we cannot assure you that all of our shareholders or beneficial owners who are PRC residents have complied with, and will in the future make or obtain any applicable registrations or approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.

We and/or our Hong Kong subsidiary may be classified as a “PRC resident enterprise” for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment.

The Enterprise Income Tax Law provides that an enterprise established outside China or established pursuant to foreign (regional) laws whose “de facto management body” is located in China is considered a “PRC resident enterprise” and will generally be subject to the uniform 25% enterprise income tax on its global income. Under the Implementation Rules of the Enterprise Income Tax Law, “de facto management body” is defined as the organizational body which substantially and comprehensively manages and controls the production and operation, personnel, accounting and properties of an enterprise.

Pursuant to the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, issued by the State Administration of Taxation in 2009, a foreign enterprise controlled by PRC enterprises or PRC enterprise groups is considered a PRC resident enterprise if all of the following conditions are met: (1) the senior management and core management departments in charge of daily operations are located mainly within the PRC; (2) financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (3) major assets, accounting books, company seals and minutes and files of board and shareholders’ meetings are located or kept within the PRC; and (4) at least half of the enterprise’s directors with voting rights or senior management often reside within the PRC. Although the aforementioned notice states that these standards only apply to offshore enterprises that are controlled by PRC enterprises or PRC enterprise groups, such standards may reflect the general view of the State Administration of Taxation in determining the tax residence of foreign enterprises.

We believe that neither we nor our Hong Kong subsidiary is a PRC resident enterprise because neither our company nor our Hong Kong subsidiary meets all of the conditions enumerated. For example, board and shareholders’ resolutions of our company and our Hong Kong subsidiary are adopted in Hong Kong and the minutes and related files are kept in Hong Kong. However, if the PRC tax authorities were to disagree with our position, our company and/or our Hong Kong subsidiary may be subject to PRC enterprise income tax reporting obligations and to a 25% enterprise income tax on our global taxable income, except for our income from dividends received from our PRC subsidiary, which may be exempt from PRC tax. If we and/or our Hong Kong subsidiary are treated as a PRC resident enterprise, the 25% enterprise income tax may adversely affect our ability to satisfy any of our cash needs.

In addition, if we were to be classified as a PRC “resident enterprise” for PRC enterprise income tax purpose, dividends we pay to our non-PRC enterprise shareholders and gains derived by our non-PRC enterprise shareholders from the sale of our securities may be become subject to a 10% PRC withholding tax. In addition, future guidance may extend the withholding tax to dividends we pay to our non-PRC individual shareholders and gains derived by such shareholders from transferring our securities. In addition to the uncertainty in how the “resident enterprise” classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect. If PRC income tax were imposed on gains realized through the transfer of our securities or on dividends paid to our non-resident shareholders, the value of your investment in our securities may be materially and adversely affected.

Any limitation on the ability of our PRC subsidiaries to make payments to us, or the tax implications of making payments to us, could have a material adverse effect on our ability to conduct our business or our financial condition.

Pubco will become our holding company upon the completion of the Business Combination, and will rely principally on dividends and other distributions from our PRC subsidiaries for our cash needs, including the funds necessary to pay dividends to our shareholders or service any debt we may incur. Current PRC regulations permit our PRC subsidiaries to pay dividends only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until the aggregate amount of such reserve funds reaches 50% of its registered capital. Apart from these reserves, our PRC subsidiaries may allocate discretionary

portion of their after-tax profits to staff welfare and bonus funds at their discretion. These reserves and funds are not distributable as cash dividends. Furthermore, if our PRC subsidiaries incur debt, the debt instruments may restrict its ability to pay dividends or make other payments to us. We cannot assure you that our PRC subsidiaries will generate sufficient earnings and cash flows in the near future to pay dividends or otherwise distribute sufficient funds to enable us to meet our obligations, pay interest and expenses or declare dividends.

Distributions made by PRC companies to their offshore parents are generally subject to a 10% withholding tax under the Enterprise Income Tax Law. Pursuant to the Enterprise Income Tax Law and the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, the withholding tax rate on dividends paid by our PRC subsidiaries to our Hong Kong subsidiary would generally be reduced to 5%, provided that our Hong Kong subsidiary is the beneficial owner of the PRC sourced income. Further, the State Taxation Administration promulgated the Announcement of the Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties in 2018, which sets forth certain detailed factors in determining “beneficial owner” status, and specifically, if an applicant’s business activities do not constitute substantive business activities, the applicant will not qualify as a “beneficial owner.” Although, as of the date of this proxy statement/prospectus, our Hong Kong subsidiary is expected to own the right to receive dividend for 71.2769% of the then-issued and outstanding equity interests in our PRC Subsidiaries, we will not be able to enjoy the 5% withholding tax rate with respect to any dividends or distributions made by our PRC subsidiary to its parent company in Hong Kong if our Hong Kong subsidiary is not regarded as a “beneficial owner.”

In addition, if our Hong Kong subsidiary were deemed to be a PRC resident enterprise, then dividends payable by our Hong Kong subsidiary to us may become subject to 10% PRC dividend withholding tax. Under such circumstances, it is not clear whether dividends payable by our Hong Kong subsidiary to us would still be subject to PRC dividend withholding tax and whether such tax, if imposed, would be imposed at a rate of 5% or 10%.

Restrictions on the remittance of RMB into and out of China and governmental control of currency conversion may limit our ability to pay dividends and other obligations, and affect the value of your investment.

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and the remittance of currency out of China. We receive substantially all of our revenues in RMB and the majority of our cash inflows and outflows are denominated in RMB. Under Pubco’s current corporate structure upon completion of the Business Combination, our cash needs are dependent on dividend payments from our subsidiaries in China. We may convert a portion of our RMB into other currencies to meet our foreign currency obligations, such as payments of dividends declared in respect of our ordinary shares, if any. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy its foreign currency denominated obligations.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent government authorities is required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our securities.

Failure to comply with PRC regulations regarding the registration requirements for stock ownership plans or stock option plans may subject PRC plan participants or us to fines and other legal or administrative sanctions.

In February 2012, SAFE promulgated the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company (the “Stock Option Rule”), replacing the earlier rules promulgated in March 2007 and January 2008. Under the Stock Option Rule, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year (the “PRC residents”) who participate in an employee stock ownership plan or stock option plan in an overseas publicly listed company are required to register with SAFE or its local branch and complete certain other procedures. Participants of a stock incentive plan who are PRC residents must retain a qualified PRC agent, which could be a PRC subsidiary

of such overseas publicly listed company, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of these participants. Such participants must also retain an overseas entrusted institution to handle matters in connection with their exercise or sale of stock options. In addition, the PRC agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the PRC agent or the overseas entrusted institution or other material changes.

We intend to adopt the Pubco 2023 Plan upon the completion of the Business Combination. For details of the Pubco 2023 Plan, see “Proposal Three — 2023 Plan Proposal.” We and our PRC resident employees who participate in the Pubco 2023 Plan will be subject to these regulations after the we completed the Business Combination and became publicly listed in the United States. If we or our PRC resident employees who participate in the Pubco 2023 Plan fail to comply with these regulations in the future, we or our PRC resident employees who participate in our share incentive plans and their local employers may be subject to fines and legal sanctions. There may be additional restrictions on the ability of them to exercise their stock options or remit proceeds gained from the sale of their stock into the PRC. Pubco also faces regulatory uncertainties that could restrict its ability to adopt incentive plans for its directors, executive officers and employees under PRC law.

Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.

The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. The value of Renminbi against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future.

Our revenues and costs are mostly denominated in RMB, and a significant portion of our financial assets are also denominated in RMB, whereas our reporting currency is the U.S. dollar. Any significant depreciation of the RMB may materially and adversely affect our revenues, earnings and financial position as reported in U.S. dollars. To the extent that we need to convert U.S. dollars we received from offerings or debt financing into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.

We are subject to risks relating to the real properties that we lease, pledge or that are under judicial freezing, if there are any defects in lessors’ title to our leased properties, default of pledged properties, or any challenges by third parties to our use or ownership of these properties.

We lease office space, manufacturing plants and one brand store for our operations in China. Any defects in lessors’ title to the leased properties may disrupt our use of our offices, which may in turn adversely affect our business operations. In addition, some of our lessors have not provided us with documentation evidencing their title to the relevant leased properties. We cannot assure you that title to these properties we currently lease will not be challenged. In addition, we have not registered most of our lease agreements with relevant PRC governmental authorities as required by PRC law, and although failure to do so does not in itself invalidate the leases, we may not be able to defend these leases against bona fide third parties.

As of the date of this proxy statement/prospectus, we are not aware of any actions, claims or investigations being contemplated by government authorities with respect to the defects in our leased real properties or any challenges by third parties to our use of these properties. However, if third parties who purport to be property owners or beneficiaries of the leased properties challenge our right to use the leased properties, we may not be able to protect our leasehold interest and may be ordered to vacate the affected premises, which could in turn materially and adversely affect our business and operating results.

Furthermore, the land and fixtures owned by the Company’s subsidiary, Qiantu Automobile (Suzhou) Co., Ltd., where the Company’s Suzhou Plant is located, have been pledged as mortgage guarantee in favor of Suzhou Asset Management Co., Ltd. for the payment of debt in the amount of RMB249.0 million (US$39.1 million). 108 patents and software copyrights owned by us have been pledged as guarantee in favor of our shareholder Suzhou Trust Co., Ltd. for the potential redemption liability of Mr. Lu Qun as of the date of this proxy statement/prospectus. In addition, certain machinery equipment and the equity shares of our subsidiaries such as Suzhou Qiantu and the Company, were pledged for certain secured loans. We face risks of such properties being auctioned off if the relevant court decides to enforce court rulings with respect to the pledge.

Moreover, the equity shares of the Company and our subsidiaries such as Qingdao Zuki Industrial Design Co., Ltd., CH-Auto Automobile R&D Co., Ltd., Qiantu Financial Leasing (Tianjin) Co., Ltd. and Nanjing Qiantu Automobile Sales Co., Ltd. etc. are currently under pledge or judicial freezing due to our default on payments to suppliers or creditors and subsequent lawsuits. We face risks of such properties being auctioned off if the relevant court decides to enforce court rulings with respect to such equity shares.

Failure to comply with PRC labor laws and make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.

Companies operating in China are required to register with governmental authorities and participate in various government sponsored employee benefit plans, including pensions, medical insurance, work-related injury insurance, unemployment insurance, maternity insurance and housing funds, and contribute to these plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local government authorities from time to time at the locations where those employees are based. The relevant government agencies may examine whether an employer has made adequate payments of the requisite statutory employee benefits, and employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. However, requirements relating to employee benefit plans have not been implemented consistently by local governments in China, given the different levels of economic development in different regions. Historically, we failed to make adequate social insurance and housing fund contributions for certain of our employees. We may be required to make up the contributions for these employee benefit plans as well as to pay late fees and fines, and our financial condition may be adversely affected.

The ability of U.S. authorities to bring actions for violations of U.S. securities law and regulations against us, our directors, executive officers or the expert named in this proxy statement/prospectus may be limited. Therefore, you may not be afforded the same protection as provided to investors in U.S. domestic companies.

The SEC, the U.S. Department of Justice, or the DOJ, and other U.S. authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies such as us, and non-U.S. persons, such as our directors and executive officers in China. Due to jurisdictional limitations, matters of comity and various other factors, the SEC, the DOJ and other U.S. authorities may be limited in their ability to pursue bad actors, including in instances of fraud, in emerging markets such as China. We conduct our operations mainly in China and our assets are mainly located in China. In addition, a majority of our directors and executive officers reside within China. There are significant legal and other obstacles for U.S. authorities to obtain information needed for investigations or litigation against us or our directors, executive officers or other gatekeepers in case we or any of these individuals engage in fraud or other wrongdoing. In addition, local authorities in China may be constrained in their ability to assist U.S. authorities and overseas investors in connection with legal proceedings. As a result, if we, our directors, executive officers or other gatekeepers commit any securities law violation, fraud or other financial misconduct, the U.S. authorities may not be able to conduct effective investigations or bring and enforce actions against us, our directors, executive officers or other gatekeepers. Therefore, you may not be able to enjoy the same protection provided by various U.S. authorities as it is provided to investors in U.S. domestic companies.

Risks Relating to Our Corporate Governance

As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices for corporate governance matters that differ significantly from the Nasdaq Stock Market corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the corporate governance listing standards.

Upon the completion of the Business Combination, our Class A Ordinary Shares will be listed on the Nasdaq Stock Market. The Nasdaq Stock Market corporate governance listing standards permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Stock Market corporate governance listing standards.

For instance, we are not required to: (1) have a majority of the board be independent; (2) have an audit committee be composed of at least three members; (3) have a compensation committee or a nominations or corporate governance committee consisting entirely of independent directors; or (4) have regularly scheduled executive sessions with only independent directors each year. We intend to rely on some of these exemptions. As a result, you may not be provided with the benefits of certain corporate governance requirements of the Nasdaq Stock Market.

Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial.

Our authorized and issued ordinary shares will be divided into Class A Ordinary Shares and Class B Ordinary Shares. Holders of Class A Ordinary Shares will be entitled to one vote per share, while holders of Class B Ordinary Shares will be entitled to fifteen votes per share. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof, while Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Immediately upon the completion of the Business Combination, the Founders will beneficially own all of our Class B Ordinary Shares, representing approximately 30.8% of our total issued and outstanding share capital and 87.0% of our aggregate voting power, assuming Minimum Redemption scenario.

As a result of the dual-class voting structure and the concentration of ownership, the Founders will have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. This concentration of ownership may discourage, delay or prevent a change in control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our Class A Ordinary Shares. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A Ordinary Shares may view as beneficial.

The dual-class structure of our Class A Ordinary Shares may adversely affect the trading market for our Securities.

Certain shareholder advisory firms have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual-class structure of our Class A Ordinary Shares may prevent the inclusion of our Class A Ordinary Shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for the Class A Ordinary Shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of the Class A Ordinary Shares.

Upon the completion of the Business Combination, we will be a “controlled company” under the Nasdaq Stock Market Listing Rules, and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

Mr. Qun Lu, Mr. Kejian Wang, Ms. Hua Yao and Mr. Baihui Sun intend to enter into certain acting-in-concert agreement, pursuant to which each of Mr. Kejian Wang, Ms. Hua Yao and Mr. Baihui Sun agrees to exercise its voting power as a shareholder of Pubco at the direction of Mr. Qun Lu, and as a result, immediately upon the completion of the Business Combination, Mr. Qun Lu will beneficially own 14,405,985 Pubco Class B Ordinary Shares, representing approximately 14.9% of the total issued and outstanding share capital and 73.9% of the aggregate voting power of Pubco, assuming the Minimum Redemption scenario and no adjustment to the Company Equity Valuation as set forth in the Merger Agreement. Therefore, Pubco is, and expects to continue to be a “controlled company” under the Nasdaq Stock Market Listing Rules, and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of its directors be independent, as defined in the Nasdaq Stock Market Listing Rules, and the requirement that the compensation committee and nominating and corporate governance committee consist entirely of independent directors. We currently plan to rely on these exemptions, and as a result, you will not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq corporate governance requirements.

The Second Amended Articles of Pubco contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Ordinary Shares.

Our Second Amended Articles will become effective immediately prior to the completion of the Business Combination. Our Second Amended Articles will contain provisions which could limit the ability of others to acquire control of Pubco or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. Our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights

and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A Ordinary Shares. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our Company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of the Class A Ordinary Shares may fall and the voting and other rights of the holders of our Class A Ordinary Shares may be materially and adversely affected.

You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions against us or our management named in the proxy statement/prospectus based on foreign laws, and therefore you may not be afforded the same protection as provided to investors in U.S. domestic companies.

We are an exempted company incorporated under the laws of the Cayman Islands. Upon the completion of the Business Combination, we will conduct a majority of our operations, and a majority of our directors and executive officers after the completion of the Business Combination will reside outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. It may also be difficult for you to enforce 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. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against us, our assets, directors and officers or their assets. Therefore, you may not be able to enjoy the same protection provided by various U.S. authorities as it is provided to investors in U.S. domestic companies. For more information regarding the relevant laws of the Cayman Islands and the PRC, see “Enforcement of Civil Liabilities.”

Risks Relating to MCAF and the Business Combination

Unless the context otherwise requires, all references in this subsection to “we,” “us,” or “our” refer to MCAF and its subsidiaries prior to the consummation of the Business Combination.

Pubco and the Company may fail to complete the Reorganization prior to January 2, 2024, or at all and consequently we may not be able to consummate the Business Combination and the Pubco may be unable to list its securities on Nasdaq.

The completion of the Reorganization involves multiple steps, among others, board and shareholder approval by the Company for the Reorganization, pre-closing procedures for the domestic share transfer, such as foreign exchange registration procedures and special foreign exchange account setup, and share exchange by the Company Reorganization Stockholders for Pubco Class A Ordinary Shares. See “Proposal One — The Business Combination Proposal — The Merger Agreement — The Merger” for a detailed description of the Reorganization Plan. Despite the Company’s efforts to complete the Reorganization, as of the date of this proxy statement/prospectus, the Company has not completed the Reorganization. See “Proposal One — The Business Combination Proposal — Background of the Business Combination” for a detailed update of the Reorganization. We cannot assure you that all steps requisite for completing the Reorganization can be performed and completed prior to the Outside Date (which may be amended from time to time), or at all.

As of the date of this proxy statement/prospectus, there are in total 978,917,397 shares of Company Common Stock issued and outstanding on a fully diluted basis, including the Company Common Stock issued pursuant to the NextG Tech Convertible Debts. Specifically,

•        Non-participating stockholders collectively own a total of 281,175,062 shares of Company Common Stock, accounting for 28.7231% of the total issued and outstanding shares of Company Common Stock on a fully-diluted basis; and

•        Company Reorganization Stockholders collectively own a total of 697,742,335 shares of Company Common Stock, accounting for 71.2769% of the total issued and outstanding shares of Company Common Stock on a fully-diluted basis. Among the Company Common Stock owned by the Company Reorganization Stockholders,

•        The Company Reorganization Stockholders who are also Entrusting Stockholders collectively own a total of 355,358,966 out of 697,742,335 shares of Company Common Stock, accounting for 36.3012% of the total issued and outstanding shares of Company Common Stock on a fully-diluted basis;

•        A total of 229,451,760 out of 355,358,966 shares of Company Common Stock owned by certain Entrusting Stockholders are currently under equity pledge and judicial freezing and, accounting for 23.4393% of the total issued and outstanding shares of Company Common Stock on a fully-diluted basis.

To complete the Reorganization, each Company Reorganization Stockholder shall enter into the Domestic Share Purchase Agreement with the Holding Company, pursuant to which each Company Reorganization Stockholder shall transfer all Company Common Stock held to the Holding Company at par value or other value as agreed between the Holding Company and the Company Reorganization Stockholders. However, the Entrusting Stockholders other than Xiangchao Shen, can only each transfer up to 25% of the shares of Company Common Stock held by him or her due to the restrictions under the PRC laws for company limited by shares. In addition, certain shares of Company Common Stock owned by the Entrusting Stockholders are currently under equity pledge or judicial freezing, and therefore, are prohibited from being transferred unless such shares are released from the equity pledge or judicial freezing. In order to avoid the above transfer restrictions and to complete the Reorganization, each Entrusting Stockholder plans to enter into the Voting Rights Proxy Agreement and the Economic Rights Transfer Agreement with the Holding Company, pursuant to which each Entrusting Stockholder shall transfer and assign to the Holding Company, upon the consummation of the Reorganization, (i) all of their respective voting rights in connection with the Entrusting Stockholder’s Remaining Shares pursuant to the Voting Rights Proxy Agreement and (ii) all of their economic rights, including the right to receive dividends, in connection the Entrusting Stockholder’s Remaining Shares, pursuant to the Economic Rights Transfer Agreement.

The Voting Rights Proxy Agreement and Economic Rights Transfer Agreement generally are valid and legally binding on the signing parties under the PRC laws. However, such Voting Rights Proxy Agreement and Economic Rights Transfer Agreement may not be enforceable. Specifically, in judicial practice in China, even if a voting rights proxy agreement explicitly specifies that the delegation of non-property rights such as proposal rights, nomination rights, and voting rights are irrevocable, there are a few judicial precedents which hold that the will of the entrusting party should be respected when such entrusting party is unwilling to exercise these non-property rights as per the instruction of the entrusted party. Under such circumstance, the entrusted party is only entitled to claim for liabilities for breach of contract against the entrusting party. In addition, there remains a possibility that the Economic Rights Transfer Agreement would be null and void if any creditor of the transferor can establish that the arrangement under such Economic Rights Transfer Agreement is a malicious collusion of the entrusting and entrusted parties and infringed the legitimate interests of such creditor. Therefore, we will not be able to consummate the Business Combination if certain Voting Rights Proxy Agreements or the Economic Rights Transfer Agreements are deemed not be enforceable prior to the consummation of Business Combination. Further, if certain Voting Rights Proxy Agreements are deemed not be enforceable following the consummation of Business Combination and Pubco fails to obtain at least 66.6667% of the voting rights of all outstanding equity securities of the Company entitled to vote, consequently the auditor of Pubco may determine that Pubco is unable to consolidate the results of operations of the Company under the then applicable accounting standards, and as a result, the value of Pubco’s securities may decline significantly, and Pubco may be unable to meet the continuous listing requirement of Nasdaq.

In addition, as mentioned above, certain shares of Company Common Stock held by certain Entrusting Stockholders such as Qun Lu, Yanmin Wu, Baihui Sun and Kejian Wang were pledged to the Company’s creditors for certain secured loans. Additionally, certain shares of the Company Common Stock held by certain Entrusting Stockholders, such as Qun Lu, Yanmin Wu, Xiangchao Shen, Hua Yao, Baihui Sun and Kejian Wang are currently under judicial freezing due to such shareholders’ default on payments of certain shareholder arbitrations (the “Shareholder Arbitrations”). The Company is actively negotiating with its creditors and the claimants of the Shareholder Arbitrations regarding the repayment terms, and the court auction process in China typically takes six to twelve months. As a result, as of the date of this proxy statement/prospectus, the Company does not expect that, prior to the consummation of the Business Combination, (1) its creditors will exercise equity pledge or that (2) shares subject to judicial freezing will be auctioned off. The Holding Company will be prohibited from receiving the dividends derived from such pledged shares of Company Common Stock without the consent of the pledgees. For such shares of Company Common Stock under equity judicial freezing, paying dividends are prohibited unless such shares of Company Common Stock are released from judicial freezing.

As mentioned above, the Holding Company shall (1) have the ability to direct, directly or indirectly, at least 71.2184% of the voting rights of all outstanding equity securities of the Company entitled to vote, and (2) own, directly or indirectly, at least 71.2184% of the economic rights of all the outstanding equity securities in the Company, in order to satisfy the condition precedent of the Merger Agreement. Additionally, the Company’s articles of association

provide that its ordinary resolutions shall be adopted by more than 50% of the voting rights held by its stockholders while its special resolutions require more than 66.6667% (or two thirds). In light of the condition precedent pursuant to the Merger Agreement and the Company’s articles of association, and assuming that (1) the Company Reorganization Stockholders and the number of shares of Company Common Stock (including the Exercised Shares defined below) owned by the Company Reorganization Stockholders remain the same prior to the closing of the Business Combination and (2) the total issued and outstanding shares of Company Common Stock on a fully diluted basis remain the same prior to and after the closing of the Business Combination, the exercise of the equity pledge and auction of judicial freezing will have the following impacts:

Prior to the closing of the Business Combination:

•        If the equity pledge and judicial freezing are partially exercised or auctioned off with respect to up to 573,028 out of 229,451,760 shares of the Company Common Stock (“Exercised Shares”) prior to the completion of the Reorganization and the Business Combination, Ch-Auto HK will be able to direct the voting rights and economic rights of 697,169,307 shares of the Company Common Stock, which takes at least 71.2184% of all the outstanding shares of the Company entitled to vote and therefore the condition precedent of the Merger Agreement can still be satisfied. In this regard, Pubco will issue at least 89,023,000 Ordinary Shares (equal to the shares of Company Common Stock owned by the Company Reorganization Stockholders minus the Exercised Shares and then multiply by the Conversion Ratio) to the Company Reorganization Stockholders upon the consummation of the Reorganization and the remaining 281,175,062 shares representing 28.7231% voting rights thereof in the Company will be held by the non-participating stockholders and the holders of Exercised Shares. Pubco will need to account their shareholding in the Company of 28.7231%, calculated by dividing shares owned by such non-participating stockholders and the holders of Exercised Shares by the then-issued and outstanding shares of the Company, as non-controlling interest upon the consummation of Business Combination.

•        If there are less than 45,130,737 but more than 573,028 Exercised Shares prior to the completion of the Reorganization and the Business Combination, Ch-Auto HK will be able to direct the voting rights and economic rights of at least 652,611,598 shares of the Company Common Stock, which takes at least 66.6667% (or two thirds) of all the outstanding shares of the Company entitled to vote. Pursuant to the current articles of association of the Company, the auditor of the Company determines that the Holding Company shall have ability to direct, directly or indirectly, at least 66.6667% (or two thirds) of the voting rights of all outstanding equity securities of the Company entitled to vote to be able to consolidate the result of operations of the Company under the then applicable accounting standards. In the event that the Holding Company directs, directly or indirectly, more than 66.6667% (or two thirds) of the voting rights but less than 71.2184% of all outstanding equity securities of the Company entitled to vote, the condition precedent under the Merger Agreement that the Reorganization (as defined therein) shall be consummated will not be met, and SPAC is not obligated to effect and close the Merger, unless SPAC elects to waive this closing condition. If SPAC elects to waive this closing condition and the Business Combination thus can be consummated, Pubco will issue at least 83,333,333 Ordinary Shares (equal to the shares of Company Common Stock owned by the Company Reorganization Stockholders minus the Exercised Shares and then multiply by the Conversion Ratio) to the Company Reorganization Stockholders upon the consummation of the Reorganization and the remaining no less than 326,305,799 shares representing up to 33.3333% (or one third) voting rights thereof in the Company will be held by the non-participating stockholders and the holders of Exercised Shares. Pubco will need to account their shareholding in the Company of up to 33.3333% (or one third), calculated by dividing shares owned by such non-participating stockholders and the holders of Exercised Shares by the then-issued and outstanding shares of the Company, as non-controlling interest upon the consummation of Business Combination.

•        If there are more than 45,130,737 Exercised Shares, the Holding Company may only (1) have ability to direct, directly or indirectly, as little as 47.1306% of the voting rights of all outstanding equity securities of the Company entitled to vote, (2) own, directly or indirectly, as little as 47.1306% of the economic rights of all the outstanding equity securities in the Company, and (3) own, directly or indirectly, as little as 38.2662% of the then-issued and outstanding equity interest in the Company. In this regard, the condition precedent for closing the Business Combination under the Merger Agreement will not be satisfied and the auditor of Pubco will determine that Pubco is unable to consolidate the results of operations of the Company under the then applicable accounting standards. Consequently, we will not be able to consummate the Business Combination.

Following the closing of the Business Combination:

•        If there are up to 45,130,737 Exercised Shares following the completion of the Business Combination, the Holding Company will (1) have ability to direct, directly or indirectly, at least 66.6667% (or two thirds) of the voting rights of all outstanding equity securities of the Company entitled to vote, (2) own, directly or indirectly, at least 66.6667% (or two thirds) of the economic rights of all the outstanding equity securities in the Company, and (3) own, directly or indirectly, at least 38.2662% of the then-issued and outstanding equity interest in the Company. According to the auditor of Pubco, the results of operations of the Company can still be consolidated with those of Pubco under the then applicable accounting standards, and the remaining 33.3333% of the shares and voting rights in the Company will be recorded as non-controlling interest.

•        If there are more than 45,130,737 Exercised Shares following the completion of the Business Combination, Pubco will hold less than 66.6667% (or two thirds) of the outstanding securities of the Company through the Holding Company. Consequently, the auditor of Pubco may determine that Pubco is unable to consolidate the results of operations of the Company under the then applicable accounting standards. As a result, the value of Pubco’s securities may decline significantly and become worthless, and Pubco may be unable to meet the continuous listing requirement of Nasdaq.

In case that the auditor of Pubco determines that Pubco is unable to consolidate the results of operations of the Company under the then applicable accounting standards after the consummation of the Business Combination, Pubco will become a public shell company with no substantive operations, the share price of Pubco may decline significantly and become worthless. Pubco may be unable to meet (1) the total assets/revenue standard under Rule 5450(b)(3)(A) of the Nasdaq Listing Rules, (2) market value standard as to its publicly held shares under Rule 5450(b)(1)(C), Rule 5450(b)(2)(C) or Rule 5450(b)(3)(C) of the Nasdaq Listing Rules, or (3) minimum bid price standard under Rule 5450(a) of the Nasdaq Listing Rules.

The Voting Rights Proxy Agreement and Economic Rights Transfer Agreement may be deemed unenforceable under PRC laws.

In order to complete the Reorganization, each Entrusting Stockholder plans to enter into the Voting Rights Proxy Agreement and the Economic Rights Transfer Agreement with the Holding Company, pursuant to which, upon the consummation of the Reorganization, each Entrusting Stockholder shall transfer and assign to the Holding Company (i) all of their respective voting rights in connection with the Entrusting Stockholder’s Remaining Shares pursuant to the Voting Rights Proxy Agreement and (ii) all of their economic rights, including the right to receive dividends, in connection with the Entrusting Stockholder’s Remaining Shares, pursuant to the Economic Rights Transfer Agreement.

Generally, the Voting Rights Proxy Agreement and Economic Rights Transfer Agreement shall be valid and legally binding on the signing parties under the PRC laws. However, such Voting Rights Proxy Agreement and Economic Rights Transfer Agreement may not be enforceable. Specifically, in judicial practice in China, even if a voting rights proxy agreement explicitly specifies that the delegation of non-property rights such as proposal rights, nomination rights, and voting rights are irrevocable, there are a few judicial precedents which hold that the will of the entrusting party should be respected when such entrusting party is unwilling to exercise these non-property rights as per the instruction of the entrusted party. Under such circumstance, the entrusted party is only entitled to claim for liabilities for breach of contract against the entrusting party.

In addition, there remains a possibility that the Economic Rights Transfer Agreement would be null and void if any creditor of the transferor can establish that the arrangement under such Economic Rights Transfer Agreement is a malicious collusion of the entrusting and entrusted parties and infringed the legitimate interests of such creditor.

Therefore, we will not be able to consummate the Business Combination if certain Voting Rights Proxy Agreements or the Economic Rights Transfer Agreements are deemed not be enforceable prior to the consummation of Business Combination. Further, if certain Voting Rights Proxy Agreements are deemed not be enforceable following the consummation of Business Combination and Pubco fails to obtain at least 66.6667% of the voting rights of all outstanding equity securities of the Company entitled to vote, consequently the auditor of Pubco may determine that Pubco is unable to consolidate the results of operations of the Company under the then applicable accounting standards, and as a result, the value of Pubco’s securities may decline significantly, and Pubco may be unable to meet the continuous listing requirement of Nasdaq.

MCAF has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. If MCAF is unable to consummate a business combination, including the Business Combination, its public stockholders may be forced to wait more than months before receiving distributions from the Trust Account.

MCAF is a development stage blank check company, and it has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. MCAF has until January 2, 2024 to complete a business combination unless stockholders approve an amendment to the MCAF Charter to extend the time period in which a business combination may be consummated. MCAF has no obligation to return funds to investors prior to such date unless MCAF consummates its initial business combination prior thereto and only then in cases where investors have sought to convert their shares. Furthermore, there will be no distribution with respect to the MCAF Rights, which will expire worthless as a result of MCAF’s failure to complete a business combination.

We do not have a specified maximum redemption threshold in the MCAF Charter. The absence of such a redemption threshold may make it possible for us to complete a Business Combination with which a substantial majority of our public stockholders may redeem their public shares.

The MCAF Charter does not provide a specified maximum redemption threshold, except that we will not redeem our public shares in an amount that would cause MCAF’s net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and we are seeking stockholder approval of an amendment to the MCAF Charter to remove this requirement. See “Proposal Four – The NTA Requirement Amendment Proposal.” As a result, we may be able to complete our Business Combination even though a substantial portion of our public stockholders have redeemed their public shares.

In the event the aggregate cash consideration we would be required to pay for all shares of MCAF Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Merger Agreement (if such conditions are not waived) exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all public shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

If the NTA Requirement Amendment Proposal (Proposal No. 4) is approved Pubco can avoid the “penny stock rules” by either (1) having net tangible assets of at least $5,000,001 (the “NTA Rule” or (2) listing its Class A Ordinary Shares on the Nasdaq Stock Market (Rule 3a51-1(a)(2) or the “Exchange Rule”) If Pubco does not have net tangible assets of at least $5,000,001 and is unable to list Pubco’s Class A Ordinary Shares on Nasdaq, then Pubco may be required to comply with the “penny stock rules” and this could affect the market for Pubco securities and the ability of Pubco to raise capital following the Business Combination.

The NTA Requirement Amendment Proposal (Proposal No. 4) seeks to amend the MCAF Amended and Restated Certificate of Incorporation to expand remove the requirement that MCAF have net tangible assets of at least $5,000,001 at the closing of the Business Combination. As disclosed in MCAF’s IPO prospectus, because the net proceeds of the IPO were to be used to complete an initial business combination with a target business that had not been selected at the time of the IPO, MCAF may be deemed to be a “blank check company.” Under Rule 419 of the Securities Act the term “blank check company” means a company that (i) is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and (ii) is issuing “penny stock,” as defined in Rule 3a51-1 under the Exchange Act. Rule 3a51-1 sets forth that that term “penny stock” shall mean any equity security, unless it fits within certain enumerated exclusions including (1) the company has net tangible assets of at least $5,000,001 (the “NTA Rule”) or (2) the company is listed on the Nasdaq Stock Market (Rule 3a51-1(a)(2)) (the “Exchange Rule”). MCAF may avoid being deemed a penny stock issuer in reliance upon the NTA Rule or the Exchange Rule.

MCAF is asking its stockholders to vote on the NTA Requirement Amendment Proposal now, because based on the pro forma financial statements of the Combined Entity, the Combined Entity may not be able to satisfy the NTA Rule.

If Pubco is not able to list its Class A Ordinary Shares on Nasdaq, Pubco’s Class A Ordinary Shares would likely then trade only in the over-the-counter market and the market liquidity of shares could be adversely affected and their market price could decrease. If Pubco’s Class A Ordinary Shares were to trade on the over-the-counter market, selling Pubco’s Ordinary Shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; a

reduced amount of news and analyst coverage for Pubco; and a decreased ability to issue additional securities or obtain additional financing in the future. These factors could result in lower prices and larger spreads in the bid and ask prices for Pubco’s Ordinary Shares and would substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for Pubco.

If the NTA Requirement Amendment Proposal (Proposal No. 4) is approved, and Pubco fails to have net tangible assets of at least $5,000,001 and Pubco is unable to list Class A Ordinary Shares on Nasdaq, then Pubco may be required to comply with the “penny stock rules” and this could negatively affect the market for Pubco securities and the ability of Pubco to raise capital following the Business Combination.

If the NTA Requirement Amendment Proposal (Proposal No. 4) is approved and Pubco fails to have net tangible assets of at least $5,000,001, but Pubco is able to list Pubco’s Class A Ordinary Shares on Nasdaq, this would permit Pubco to avoid compliance with the “penny stock rules” and could affect our cash position following the Business Combination.

If the NTA Requirement Amendment Proposal (Proposal No. 4) is approved, there can be no guarantee that the Pubco will have net tangible assets of at least $5,000,001 immediately following the closing of the Business Combination, because Pubco can avoid being required to comply with the “penny stock rules” by listing Pubco’s Class A Ordinary Shares on Nasdaq. Having net tangible assets of less than $5,000,001 is not as good as having net tangible assets of at least $5,000,001. As disclosed in the pro forma financial statements for the Combined Entity herein, the Combined Entity will not have net tangible assets of at least $5,000,001 immediately following the closing of the Business Combination. Notwithstanding the foregoing, we do not expect the approval of the NTA Requirement Amendment Proposal to have a material adverse effect on Pubco’s cash position following the closing of the Business Combination. It is anticipated that following the Business Combination Pubco can and will be financed with cash flow from operations and equity and debt financings.

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the Business Combination, may cause an increase in our share price, and may result in a lower value realized now than a stockholder of MCAF might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of the Business Combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

You must tender your shares of MCAF Common Stock in order to validly seek redemption at the Special Meeting of stockholders.

In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to Continental or to deliver your MCAF Common Stock to Continental electronically using DTC’s DWAC (Deposit/Withdrawal At Custodian) System, in each case at least two business days before the Meeting. The requirement for physical or electronic delivery ensures that a redeeming holder’s election to redeem is irrevocable once the Business Combination is consummated. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the Business Combination.

The Sponsor has agreed to vote in favor of such initial business combination, regardless of how MCAF’s public stockholders vote.

The holders of the Founder Shares have agreed (1) to vote their insider shares, private shares and any public shares acquired in MCAF’s initial public offering in favor of any proposed business combination, (2) not to propose, or vote in favor of, an amendment to the MCAF Charter that would affect the substance or timing of MCAF’s obligation to redeem 100% of our public shares if it does not complete its initial business combination by January 2, 2024 unless MCAF provides its public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, net of taxes payable, divided by the number of then outstanding public shares, (3) not to convert any shares (including the insider shares) into the right to receive cash from the trust account in connection with a stockholder

vote to approve our proposed initial business combination (or sell any shares they hold to MCAF in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisions of the MCAF Charter relating to the substance or timing of our obligation to redeem 100% of MCAF’s public shares if it does not complete its initial business combination by January 2, 2024, and (4) that the insider shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the trust account if a business combination is not consummated. As a result, MCAF would need shares of MCAF Common Stock to be voted in favor of the Business Combination in order to have the Business Combination approved. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if the Sponsor agreed to vote its Founder Shares in accordance with the majority of the votes cast by MCAF’s public stockholders.

The Business Combination may not be consummated timely, and MCAF’s public stockholders may be forced to wait more than 24 months (if MCAF has extended the period of time) before receiving distributions from the trust account.

MCAF’s Amended and Restated Certificate of Incorporation initially provided that MCAF had until 12 months from the closing of its IPO (or 15 or 18 months if MCAF had extended the period of time) to consummate the Business Combination. On December 15, 2022, MCAF held a Special Meeting of its Stockholders and the MCAF stockholders approved the proposal to amend MCAF’s Amended and Restated Certificate of Incorporation to extend the time period MCAF has to consummate its Business Combination for three months, from January 2, 2023 to April 2, 2023, plus an option for MCAF to further extend such date to July 2, 2023. In connection with the with the stockholders’ vote, there were 2,432,520 shares tendered for redemption for an aggregate cash payment of $24.5 million. The Company deposited $581,000 into the Trust Account to extend the time period MCAF has to consummate a Business Combination for three months from January 2, 2023 to April 2, 2023. The Company deposited an additional $343,936 into the Trust Account, on March 29, 2023, to extend the time period MCAF has to consummate a Business Combination for three months from April 2, 2023 to July 2, 2023. On June 22, 2023. Stockholders approved another amendment to MCAF’s Amended and Restated Certificate of Incorporation to further extend the deadline by which MCAF may complete its Business Combination. This amendment provides for an extension of the time period MCAF has to consummate a Business Combination for six months to January 2, 2024, provided $250,000 is deposited into the Trust Account prior to July 2, 2023. On June 27, 2023, MCAF deposited $250,000 into the Trust Account, accordingly MCAF has until January 2, 2024, to consummate a Business Combination. It is possible that the closing may not occur by this deadline due to a number of reasons, including each party’s ability to satisfy the closing condition, such as the completion of the PIPE financing and the Reorganization.

Except in connection with a stockholder vote to approve an extension of the time period in which a business combination may be completed, MCAF has no obligation to return funds to investors prior to such date unless it consummates the Business Combination prior thereto and only then in cases where investors have sought to convert their shares. Only after the expiration of this full time period will holders of MCAF Common Stock be entitled to distributions from the trust account if it is unable to complete the Business Combination. Accordingly, investors’ funds may be unavailable to them until after such date and to liquidate your investment, public security holders may be forced to sell their public shares, potentially at a loss.

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what MCAF’s actual financial position or results of operations would have been.

The unaudited pro forma condensed combined financial information in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what MCAF’s actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

If third parties bring claims against MCAF, the proceeds held in trust could be reduced and the per-share redemption price received by stockholders may be less than $10.00.

MCAF’s placing of funds in trust may not protect those funds from third party claims against MCAF. Although MCAF will seek to have all vendors and service providers MCAF engages and prospective target businesses MCAF negotiates with execute agreements with MCAF waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of MCAF’s public stockholders, they may not execute such agreements. Furthermore, even if such entities execute such agreements with MCAF, they may seek recourse against the Trust Account. A court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of MCAF’s public stockholders.

Additionally, if MCAF is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against MCAF’s which is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in MCAF’s bankruptcy estate and subject to the claims of third parties with priority over the claims of MCAF’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, MCAF may not be able to return to MCAF’s public stockholders at least $10.00. As a result, if any such claims were successfully made against the Trust Account, the funds available for MCAF’s initial business combination, including the Business Combination, and redemptions could be reduced to less than $10.00 per Public Share.

MCAF’s stockholders may be held liable for claims by third parties against MCAF to the extent of distributions received by them.

The MCAF Charter provides that MCAF will continue in existence only until January 2, 2024 unless stockholders approve an amendment to the MCAF Charter to extend the period of time in which to consummate an initial business combination. If MCAF is unable to consummate a transaction within the required time periods, upon notice from MCAF, the trustee of the Trust Account will distribute the amount in its Trust Account to its public stockholders. Concurrently, MCAF shall pay, or reserve for payment, from funds not held in trust, its liabilities and obligations, although MCAF cannot assure you that there will be sufficient funds for such purpose. If there are insufficient funds held outside the Trust Account for such purpose, the Sponsor has contractually agreed that, if it liquidates prior to the consummation of a business combination, they will be liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by MCAF for services rendered or contracted for or products sold to it, but only if such a vendor or prospective target business does not execute such a waiver. However, we may not properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, third parties may seek to recover from our stockholders amounts owed to them by us.

If, after MCAF distributes the proceeds in the trust account to our public stockholders, it files a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.

If MCAF’s due diligence investigation of the Company was inadequate, then stockholders of MCAF following the Business Combination could lose some or all of their investment.

Even though MCAF conducted a due diligence investigation of the Company, it cannot be sure that this diligence uncovered all material issues that may be present inside the Company or its business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the Company and its business and outside of its control will not later arise. Among other things, there is no independent third-party underwriter selling the Class A Ordinary Shares, and, accordingly, the scope of due diligence conducted in conjunction with the Merger may be different than would typically be conducted in the event CH Auto pursued an underwritten initial public offering. Before entering into the Business Combination Agreement, MCAF and CH Auto performed a due diligence review of each other’s business, operations and disclosure. However, in a typical initial public offering, the underwriters of the offering conduct independent due diligence on the company to be taken public, and following the offering, the underwriters are subject to liability to private investors for any material misstatements or omissions in the registration statement. Due diligence reviews typically include an independent investigation of the background of the company, any advisors and their respective affiliates, review of the offering documents and independent analysis of the plan of business and any underlying financial assumptions. The lack of an independent due diligence review and investigation means that you must rely on the information included in this proxy statement/prospectus. Further, while potential investors in an initial public offering typically have a private right of action against the underwriters of the offering for any such material misstatements or omissions, there are no underwriters of Pubco Ordinary Shares that will be issued pursuant to the Business Combination and thus no corresponding right of action is available to investors in the Business Combination, for any material misstatements or omissions in this proxy statement/prospectus. Therefore, as an investor in the Business Combination, you may be exposed to increased risk when compared to investing in a traditional underwritten initial public offering.

Stockholder litigation and regulatory inquiries and investigations are expensive and could harm MCAF’s business, financial condition and operating results and could divert management attention.

In the past, securities class action litigation and/or stockholder derivative litigation and inquiries or investigations by regulatory authorities have often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, such as the Business Combination. Any stockholder litigation and/or regulatory investigations against MCAF, whether or not resolved in MCAF’s favor, could result in substantial costs and divert MCAF’s management’s attention from other business concerns, which could adversely affect MCAF’s business and cash resources and the ultimate value MCAF’s stockholders receive as a result of the Business Combination.

MCAF’s ability to successfully effect the Business Combination and to be successful thereafter will be totally dependent upon the efforts of its key personnel and the Company’s key personnel, all of whom are expected to remain with the Combined Entity following the Business Combination.

MCAF’s ability to successfully effect the Business Combination is dependent upon the efforts of MCAF’s key personnel, including key personnel of the Company. Although MCAF expects all of such key personnel to remain with the Combined Entity following the Business Combination, it is possible that MCAF will lose some key personnel, the loss of which could negatively impact the operations and profitability of the Combined Entity. While MCAF intends to closely scrutinize any individuals it engages after the Business Combination, it cannot assure you that its assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a public company which could cause MCAF to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect its operations.

MCAF is requiring stockholders who wish to redeem their public shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

MCAF is requiring stockholders who wish to redeem their Common Stock to either tender their certificates to Continental or to deliver their shares to Continental electronically using the DTC’s DWAC (Deposit/Withdrawal At Custodian) System at least two business days before the Meeting. In order to obtain a physical certificate, a stockholder’s broker and/or clearing broker, DTC and Continental will need to act to facilitate this request. It is MCAF’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from Continental. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, we cannot assure you of this fact. Accordingly, if it takes longer than MCAF anticipates for stockholders to deliver their Common Stock, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their Common Stock.

MCAF will require its public stockholders who wish to redeem their public shares in connection with the Business Combination to comply with specific requirements for redemption described above, such redeeming stockholders may be unable to sell their securities when they wish to in the event that the Business Combination is not consummated.

If MCAF requires public stockholders who wish to redeem their public shares in connection with the proposed Business Combination to comply with specific requirements for redemption as described above and the Business Combination is not consummated, MCAF will promptly return such certificates to its public stockholders. Accordingly, investors who attempted to redeem their public shares in such a circumstance will be unable to sell their securities after the failed acquisition until MCAF has returned their securities to them. The market price for shares of our MCAF Common Stock may decline during this time and you may not be able to sell your securities when you wish to, even while other stockholders that did not seek redemption may be able to sell their securities.

If MCAF’s security holders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of Pubco’s securities.

MCAF’s Initial Stockholders are entitled to make a demand that it registers the resale of their Insider Shares at any time commencing three months prior to the date on which their shares may be released from escrow. If such persons exercise their registration rights with respect to all of their securities, then there will be an additional 1,807,500 Pubco Class A Ordinary Shares eligible for trading in the public market. The presence of these additional Pubco Class A Ordinary Shares trading in the public market may have an adverse effect on the market price of Pubco securities.

MCAF will not obtain an opinion from an unaffiliated third party as to the fairness of the Business Combination to its stockholders.

MCAF is not required to obtain an opinion from an unaffiliated third party that the price it is paying in the Business Combination is fair to its public stockholders from a financial point of view. MCAF’s public stockholders, therefore, must rely solely on the judgment of the Board.

MCAF’s Sponsor, directors and officers have interests in the Business Combination which may be different from or in addition to (and which may conflict with) the interests of its stockholders.

MCAF’s Sponsor, officers and directors and their respective affiliates and associates have interests in and arising from the Business Combination that are different from or in addition to (and which may conflict with) the interests of MCAF’s public stockholders, which may result in a conflict of interest. These interests include:

•        unless MCAF consummates an initial business combination by January 2, 2024 (unless such date has been extended), MCAF’s officers, directors and sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account from the MCAF IPO and Private Placement;

•        With certain limited exceptions, 50% of the founder shares will not be transferred, assigned, sold or released from escrow until the earlier of six months after the date of the consummation of the Business Combination and the date the closing price of MCAF Common Stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the Business Combination and the remaining 50% of the insider shares will not be transferred, assigned, sold or released from escrow until six months after the date of the consummation of the Business Combination or earlier in either case if, subsequent to the Business Combination, MCAF completes a liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property;

•        the fact that Sponsor paid an aggregate of US$25,000 for its Founder Shares and such securities will have a significantly higher value at the time of the Business Combination; and

•        the fact that Sponsor has agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination.

A market for Pubco’s securities may not develop after the Business Combination, which would adversely affect the liquidity and price of its securities.

Following the Business Combination, the price of Pubco’s securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for Pubco’s securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of Pubco’s securities after the Business Combination can vary due to general economic conditions and forecasts, Pubco’s general business condition and the release of Pubco’s financial reports. Additionally, if Pubco’s securities are not listed on, or become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of Pubco’s securities may be more limited than if Pubco were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

There can be no assurance that Pubco will be able to be approved for listing or comply with the continued listing standards of Nasdaq.

Pubco’s eligibility for listing after the Business Combination may depend on the number of shares of MCAF Common Stock that are redeemed. If Pubco is unable to have its securities listed on Nasdaq, MCAF and its stockholders could face significant material adverse consequences including:

•        a limited availability of market quotations for Pubco Class A Ordinary Shares that are received in exchange for their shares of MCAF Common Stock;

•        a limited amount of analyst coverage; and

•        a decreased ability of Pubco to issue additional securities or obtain additional financing in the future.

If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of Pubco’s securities may decline as compared to MCAF Common Stock before the Business Combination.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of Pubco’s securities may decline. The market values of MCAF’s securities at the time of the consummation of the Business Combination may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement/prospectus, or the date on which MCAF’s stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of Pubco’s securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for the Company’s stock and trading in the shares of MCAF Common Stock has not been active. Accordingly, the valuation ascribed to the Company and MCAF Common Stock in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for Pubco’s securities develops and continues, the trading price of Pubco’s securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond Pubco’s control. Any of the factors listed below could have a material adverse effect on your investment in Pubco’s securities and Pubco’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of Pubco’s securities may not recover and may experience a further decline.

Factors affecting the trading price of the Combined Entity’s securities following the Business Combination may include:

•        actual or anticipated fluctuations in the Combined Entity’s quarterly financial results or the quarterly financial results of companies perceived to be similar to the Combined Entity’s;

•        changes in the market’s expectations about the Combined Entity’s operating results;

•        success of competitors;

•        the Combined Entity’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

•        changes in financial estimates and recommendations by securities analysts concerning the Combined Entity or the market in general;

•        operating and stock price performance of other companies that investors deem comparable to the Combined Entity;

•        the Combined Entity’s ability to develop product candidates;

•        changes in laws and regulations affecting the Combined Entity’s business;

•        commencement of, or involvement in, litigation involving the Combined Entity;

•        changes in the Combined Entity’s capital structure, such as future issuances of securities or the incurrence of additional debt;

•        the volume of shares of the Combined Entity’s securities available for public sale;

•        any major change in the board or management;

•        sales of substantial amounts of Pubco Class A Ordinary Shares directors, executive officers or significant stockholders or the perception that such sales could occur; and

•        general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of the Combined Entity’s securities irrespective of its operating performance. The stock market in general and Nasdaq in particular have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of the Combined Entity’s securities, may not be predictable. A loss of investor confidence in the market for EV stocks or the stocks of other companies which investors perceive to be similar to the Combined Entity could depress the Combined Entity’s stock

price regardless of the Combined Entity’s business, prospects, financial conditions or results of operations. A decline in the market price of the Combined Entity’s securities also could adversely affect the Combined Entity’s ability to issue additional securities and the Combined Entity’s ability to obtain additional financing in the future.

Following the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about the Combined Entity, its business, or its market, or if they change their recommendations regarding the Combined Entity’s securities adversely, the price and trading volume of the Combined Entity’s securities could decline.

The trading market for the Combined Entity’s securities will be influenced by the research and reports that industry or securities analysts may publish about Pubco, its business, its market, or its competitors. Securities and industry analysts do not currently, and may never, publish research on MCAF or the Combined Entity. If no securities or industry analysts commence coverage of the Combined Entity, MCAF’s stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover the Combined Entity change their recommendation regarding its securities adversely, or provide more favorable relative recommendations about its competitors, the price of the Combined Entity’s securities would likely decline. If any analyst who may cover the Combined Entity were to cease coverage of the Combined Entity or fail to regularly publish reports on it, Pubco could lose visibility in the financial markets, which could cause its stock price or trading volume to decline.

The future sales of shares by existing stockholders and future exercise of registration rights may adversely affect the market price of the Combined Entity’s securities.

Sales of a substantial number of shares of the Combined Entity’s securities in the public market could occur at any time. If the Combined Entity’s shareholders sell, or the market perceives that the Combined Entity’s shareholders intend to sell, substantial amounts of the Combined Entity’s securities in the public market, the market price of the Combined Entity’s securities could decline.

The holders of the Founder Shares are entitled to registration rights pursuant to a registration rights agreement entered into in connection with the MCAF IPO. The holders of the majority of these securities are entitled to make up to three demands that MCAF register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares are to be released from escrow. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to MCAF’s consummation of a business combination. The presence of these additional Pubco Class A Ordinary Shares trading in the public market may have an adverse effect on the market price of the Combined Entity’s securities.

MCAF’s public stockholders may experience dilution as a consequence of, among other transactions, the issuance of Class A Ordinary Shares as consideration in the Business Combination. Having a minority share position may reduce the influence that MCAF’s current stockholders have on the management of the Combined Entity.

It is anticipated that, upon the closing of the Business Combination, MCAF’s public stockholders will retain an ownership interest of approximately 2.2% in the Combined Entity, the Sponsor will retain an ownership interest of approximately 1.7% in the Combined Entity, the Representative will own 0.2%, the Financial Advisors will own 3.9% and the Reorganization Shareholders will own approximately 92.0% of the outstanding common stock of the Combined Entity, assuming the Minimum Redemption scenario.

The above ownership percentage with respect to the Combined Entity following the Business Combination is based on 96,805,412 Pubco Ordinary Shares to be issued and outstanding upon consummation of the Business Combination Such amount includes (1) the issuance of 89,096,171 Pubco Ordinary Shares in the Reorganization (assuming no adjustment to the Company Equity Valuation as set forth in the Merger Agreement), including 58,913,241 Pubco Class A Ordinary Shares to be issued to the Reorganization Shareholders (other than the Founders), which include 1,515,424 Pubco Class A Ordinary Shares to be issued to CBC and its affiliate pursuant to the NextG Tech Convertible Debts, and 30,182,930 Pubco Class B Ordinary Shares to be issued to the Founders; (2) the issuance of up to 2,081,991 Pubco Class A Ordinary Shares to MCAF’s public stockholders in connection with the Merger which includes the 575,000 shares issuable upon the conversion of the MCAF Rights; (3) the issuance of up to 1,688,500 Pubco Class A Ordinary Shares to the Sponsor in connection with the Merger; (4) the issuance of 188,750 Pubco Class A Ordinary Shares to the representative in MCAF’s IPO; (5) the issuance of an aggregate of 1,875,000 Pubco Class A Ordinary Shares to CBC and 625,000 Pubco Class A Ordinary Shares to Revere as financial advisors and M&A consultants to the Business Combination; and (6) the issuance of 1,250,000 Class A Ordinary Shares to BHTIC as due diligence consultant, assuming the Minimum Redemption scenario.

SPECIAL MEETING OF MCAF STOCKHOLDERS

General

We are furnishing this proxy statement/prospectus to the MCAF stockholders as part of the solicitation of proxies by the MCAF Board for use at the Special Meeting to be held on October 30, 2023 and at any adjournment or postponement thereof. This proxy statement/prospectus is first being furnished to our stockholders on or about October 5, 2023 in connection with the vote on the Business Combination Proposal, the Governance Proposals, the 2023 Plan Proposal, the NTA Requirement Amendment Proposal and Adjournment Proposal. This document provides you with the information you need to know to be able to vote or instruct your vote to be cast at the Special Meeting.

Date, Time and Place

The Special Meeting will be held on October 30, 2023 at 10:30 a.m. Eastern Time, or such other date, time and place to which such meeting may be adjourned or postponed. The MCAF Board has determined to convene and conduct the Special Meeting in a virtual meeting format at http://www.cstproxy.com/mcacquisitioniv/sm2023. Stockholders will NOT be able to attend the Special Meeting in person. This proxy statement includes instructions on how to access the virtual Special Meeting and how to listen and vote from home or any remote location with Internet connectivity. Stockholders may also listen to the Special Meeting using the following numbers:

Within the U.S. and Canada: 1-800-450-7155 (toll free)
Outside of the U.S. and Canada: +1 857-999-9155 (standard rates apply)
Conference ID: 5389093#

Purpose of the Special Meeting

At the Special Meeting, we are asking holders of MCAF Common Stock to approve the following Proposals:

1.      The Business Combination Proposal to approve the merger of Merger Sub a subsidiary of Pubco with and into MCAF whereby MCAF will be the surviving corporation. The completion of the Reorganization, among other things, is a condition precedent to the Merger.

2.      The Governance Proposals to approve, on a non-binding advisory basis, certain differences between MCAF and Pubco including the governance provisions set forth in the Pubco’s Second Amended Articles, as compared to MCAF’s current Certificate of Incorporation.

3.      The 2023 Plan Proposal to approve the CH AUTO Inc. 2023 Equity Incentive Plan.

4.      The NTA Requirement Amendment Proposal to approve an amendment to the MCAF Amended and Restated Certificate of Incorporation to expand the methods that MCAF may employ to not become subject to the “penny stock” rules of the Securities and Exchange Commission.

5.      The Adjournment Proposal to approve the adjournment of the Special Meeting in the event MCAF does not receive the requisite stockholder vote to approve any of the above Proposals.

Recommendation of the MCAF Board

The MCAF Board:

•        has determined that each of the Business Combination Proposal, the Governance Proposals, the 2023 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal, are fair to, and in the best interests of, MCAF and its stockholders;

•        has approved the Business Combination Proposal, the Governance Proposals, the 2023 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal; and

•        recommends that the MCAF stockholders vote “FOR” each of the Business Combination Proposal, the Governance Proposals, the 2023 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal.

The MCAF Board members have interests that may be different from or in addition to your interests as a stockholder. See “Proposal One — The Business Combination Proposal — Interest of MCAF’s Directors and Officers in the Business Combination” in this proxy statement/prospectus for further information.

Record Date; Who is Entitled to Vote

We have fixed the close of business on September 29, 2023, as the record date for determining those MCAF stockholders entitled to notice of and to vote at the Special Meeting. As of the close of business on September 29, 2023, there were 3,314,491 shares of MCAF Common Stock outstanding and entitled to vote. Each holder of MCAF Common Stock is entitled to one vote per share on each of the Business Combination Proposal, the Governance Proposals, the 2023 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal. As of June 30, 2023, the Initial Stockholders collectively own and are entitled to vote 1,807,500 shares of MCAF Common Stock, or approximately 54.5% of the issued and outstanding shares of MCAF Common Stock. With respect to the Business Combination, the Initial Stockholders have agreed to vote their MCAF Common Stock acquired by them in favor of the Business Combination. The Sponsor has indicated that it intends to vote its shares, as applicable, “FOR” the other Proposals, although there is no agreement in place with respect to the other Proposals.

Quorum and Required Vote for the Proposals

A quorum of MCAF stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the shares of capital stock issued and outstanding as of the record date and entitled to vote at the Special Meeting is represented in person or by proxy. A MCAF stockholder present in person or by proxy and abstaining from voting at the Special Meeting will count as present for the purposes of establishing a quorum but broker non-votes will not.

Approval of each of the Proposals will require the affirmative vote of the holders of a majority of the issued and outstanding shares of MCAF Common Stock present and entitled to vote at the Special Meeting. Attending the Special Meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the Proposals and, assuming a quorum is present, broker non-votes will have no effect on the voting on Proposals.

Voting Your Shares

Each share of MCAF Common Stock that you own in your name entitles you to one vote for each Proposal on which such shares are entitled to vote at the Special Meeting. Your proxy card shows the number of shares of MCAF Common Stock that you own.

There are two ways to ensure that your shares of MCAF Common Stock are voted at the Special Meeting:

•        You can cause your shares to be voted by signing and returning the enclosed proxy card. If you submit your proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted, as recommended by the MCAF Board, “FOR” the adoption of the Business Combination Proposal, the Governance Proposals, the 2023 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal. Votes received after a matter has been voted upon at the Special Meeting will not be counted.

•        You can attend the Special Meeting in a virtual meeting format at http://www.cstproxy.com/mcacquisitioniv/sm2023. Stockholders will NOT be able to attend the Special Meeting in person. This proxy statement includes instructions on how to access the virtual Special Meeting and how to listen and vote from home or any remote location with Internet connectivity. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or nominee has not already voted your shares. Stockholders may also listen to the Special Meeting using the following numbers:

Within the U.S. and Canada: 1-800-450-7155 (toll free)
Outside of the U.S. and Canada: +1 857-999-9155 (standard rates apply)
Conference ID: 5389093#

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF THE BUSINESS COMBINATION PROPOSAL (AS WELL AS THE OTHER PROPOSALS). IN ORDER TO REDEEM YOUR SHARES, YOU MUST TENDER YOUR SHARES TO OUR TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES FOR REDEMPTION BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE TENDERED SHARES WILL NOT BE REDEEMED FOR CASH AND WILL BE RETURNED TO THE APPLICABLE STOCKHOLDER. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BROKER OR BANK TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

•        you may send another proxy card with a later date;

•        if you are a record holder, you may notify our proxy solicitor, Advantage Proxy, in writing before the Special Meeting that you have revoked your proxy; or

•        you may attend the Special Meeting in virtual meeting format, revoke your proxy, and vote your shares, as indicated above.

Who Can Answer Your Questions About Voting Your Shares?

If you have any questions about how to vote or direct a vote in respect of your shares of MCAF Common Stock, you may contact Advantage Proxy, MCAF’s proxy solicitor, at 877-870-8565 or email Karen Smith at KSmith@advantageproxy.com and banks and brokers call Advantage Proxy, MCAF’s proxy solicitor at 206-870-8565.

No Additional Matters May Be Presented at the Special Meeting

This Special Meeting has been called only to consider the approval of the Proposals.

Redemption Rights

Pursuant to MCAF’s amended and restated certificate of incorporation, a holder of MCAF Common Stock has the right to have its public shares redeemed for cash equal to its pro rata share of the Trust Account (net of taxes payable) in connection with the Business Combination.

If you are a public stockholder and you seek to have your shares redeemed, you must (1) demand, no later than 5:00 p.m., Eastern time on October 26, 2023 (two (2) business days before the Special Meeting), that MCAF redeem your shares into cash; and (2) submit your request in writing to MCAF’s transfer agent, at the address listed at the end of this section and deliver your shares to MCAF’s transfer agent physically or electronically using the DWAC system at least two (2) business days prior to the vote at the Special Meeting. A stockholder is not required to submit a proxy card or vote in order to validly exercise redemption rights.

You may tender the MCAF Common Stock for which you are electing redemption by two (2) business days before the Special Meeting by either:

•        Delivering certificates representing the shares of MCAF Common Stock to MCAF’s transfer agent, or

•        Delivering the MCAF Common Stock electronically through the DWAC system.

MCAF stockholders will be entitled to redeem their MCAF Common Stock for a full pro rata share of the Trust Account (currently anticipated to be no less than approximately $10.00 per share) net of taxes payable.

Any corrected or changed written demand of redemption rights must be received by MCAF’s transfer agent no later than two (2) business days prior to the Special Meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the transfer agent at least two (2) business days prior to the vote at the Special Meeting.

Public stockholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of MCAF Common Stock as of the record date. Any public stockholder who holds MCAF Common Stock on or before October 26, 2023 (two (2) business days before the Special Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, at the consummation of the Business Combination. If you choose to deliver MCAF Common Stock electronically through the DWAC system, this electronic delivery process can be accomplished by contacting your broker and requesting delivery of your shares through the DWAC system. Delivering shares physically may take significantly longer. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC, and MCAF’s transfer agent will need to act together to facilitate this request. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker this cost and the broker would determine whether or not to pass this cost on to the redeeming holder. It is MCAF’s understanding that MCAF stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. MCAF does not have any control over this process or over the brokers or DTC, and it may take longer than two weeks to obtain a physical stock certificate. MCAF stockholders who request physical stock certificates and wish to redeem may be unable to meet the deadline for tendering their shares before exercising their redemption rights and thus will be unable to redeem their shares.

In the event that a stockholder tenders its shares and decides prior to the consummation of the Business Combination that it no longer wants to redeem its shares, the stockholder may withdraw the tender. In the event that a stockholder tenders shares and the Business Combination is not completed, these shares will not be redeemed for cash and the physical certificates representing these shares will be returned to the stockholder promptly following the determination that the Business Combination will not be consummated. MCAF anticipates that a stockholder who tenders shares for redemption in connection with the vote to approve the Business Combination would receive payment of the redemption price for such shares soon after the completion of the Business Combination.

If properly demanded by MCAF public stockholders, MCAF will redeem each share into a pro rata portion of the funds available in the Trust Account, calculated as of two business days prior to the anticipated consummation of the Business Combination. As of the record date, this would amount to approximately $10.00 per share. If you exercise your redemption rights, you will be exchanging your MCAF Common Stock for cash and will no longer own the shares. If MCAF is unable to complete the Business Combination by November 17, 2022 (or up to May 17, 2023 if such period is extended by our insiders as described herein), it will liquidate and dissolve and public stockholders would be entitled to receive approximately $10.00 per share upon such liquidation.

Holders of outstanding MCAF Units must separate the underlying MCAF Common Stock and MCAF Rights prior to exercising redemption rights with respect to the MCAF Common Stock. If MCAF Units are registered in a holder’s own name, the holder must deliver the certificate for its MCAF Units to the transfer agent with written instructions to separate the MCAF Units into their individual component parts. This must be completed far enough in advance to permit the mailing of the certificates back to the holder so that the holder may then exercise his, her or its redemption rights upon the separation of the MCAF Common Stock from the MCAF Units.

If a broker, dealer, commercial bank, trust company or other nominee holds MCAF Units for an individual or entity (such individual or entity, the “beneficial owner”), the beneficial owner must instruct such nominee to separate the beneficial owner’s MCAF Units into their individual component parts. The beneficial owner’s nominee must send written instructions by facsimile to the transfer agent. Such written instructions must include the number of MCAF Units to be separated and the nominee holding such MCAF Units. The beneficial owner’s nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant MCAF Units and a deposit of an equal number of MCAF Common Stock and MCAF Rights. This must be completed far enough in advance to permit the nominee to exercise the beneficial owner’s redemption rights upon the separation of the MCAF Common Stock from the MCAF

Units. While this is typically done electronically the same business day, beneficial owners should allow at least one full business day to accomplish the separation. If beneficial owners fail to cause their MCAF Common Stock to be separated in a timely manner, they will likely not be able to exercise their redemption rights.

Tendering Common Stock Certificates in connection with Redemption Rights

MCAF is requiring the MCAF public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to MCAF’s transfer agent, or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC System, at the holder’s option at least two (2) business days prior to the Special Meeting. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker this cost and it would be up to the broker whether to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether MCAF requires holders seeking to exercise redemption rights to tender their shares of MCAF Common Stock. The need to deliver shares of MCAF Common Stock is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

Any request for redemption, once made, may be withdrawn at any time up to the business day immediately preceding the consummation of the proposed Business Combination. Furthermore, if a stockholder delivered his certificate for redemption and subsequently decided prior to the date immediately preceding the consummation of the proposed Business Combination not to elect redemption, he may simply request that the transfer agent return the certificate (physically or electronically).

A redemption payment will only be made if the proposed Business Combination is consummated. If the proposed Business Combination is not completed for any reason, then public stockholders who exercised their redemption rights would not be entitled to receive the redemption payment. In such case, MCAF will promptly return the share certificates to the public stockholder.

Proxies and Proxy Solicitation Costs

We are soliciting proxies on behalf of the MCAF Board. This solicitation is being made by mail but also may be made by telephone or in person. MCAF and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Any solicitation made and information provided in such a solicitation will be consistent with the written proxy statement/prospectus and proxy card. Advantage Proxy, a proxy solicitation firm that MCAF has engaged to assist it in soliciting proxies, will be paid its customary fee and out-of-pocket expenses.

MCAF will ask banks, brokers and other institutions, nominees and fiduciaries to forward its proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. MCAF will reimburse them for their reasonable expenses.

If you send in your completed proxy card, you may still vote your shares in person if you revoke your proxy before it is exercised at the Special Meeting.

If the Business Combination is not approved and MCAF does not consummate an initial business combination by January 2, 2024 (unless such date has been extended), MCAF will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the public shareholders and the MCAF Rights will expire worthless.

PROPOSAL ONE — THE BUSINESS COMBINATION PROPOSAL

Background of the Business Combination

MCAF is a blank check company incorporated in Delaware on March 2, 2021. MCAF was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

On July 2, 2021, MCAF consummated its IPO of 5,000,000 MCAF Units, each MCAF Unit consisting of one share of MCAF Common Stock, and one MCAF Right. The MCAF Units were sold at a price of US$10.00 per Unit, generating gross proceeds to MCAF of US$50,000,000. Simultaneously with the closing of the IPO, MCAF consummated a private placement with the sponsor of 195,000 Private Units at a price of US$10.00 per Unit, for a total purchase price of US$1,950,000.

On July 6, 2021, the underwriters exercised the over-allotment option in full and MCAF issued the over-allotment option MCAF Units to the underwriters. The total aggregate issuance by MCAF of the over-allotment option MCAF Units at a price of US$10.00 per unit resulted in total gross proceeds of US$7,500,000. Also on July 6, 2021, simultaneously with the sale of the over-allotment option MCAF Units, MCAF consummated the private sale of an additional 15,000 Private Units, generating gross proceeds of US$150,000.

After deducting the underwriting fee (excluding the deferred underwriting commission of US$1,725,000, which amount will be payable upon consummation of the Business Combination, if consummated), the IPO expenses and post IPO working capital, the total net proceeds from our IPO and the sale of the Private Placement Units, US$57,500,000 (or US$10.00 per Unit sold), was placed in the Trust Account.

Prior to the consummation of its IPO, neither MCAF nor anyone on its behalf, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction with MCAF. After closing the IPO, the officers and directors of MCAF initiated contact with and were approached by several potential targets and/or advisors. From the IPO through our entering into an exclusive term sheet with the Company, MCAF had communicated with approximately 20 potential targets and/or their advisors. Of those potential targets, MCAF entered into non-disclosure agreements with three and conducted additional due diligence and/or detailed discussions with them. Besides the Company, MCAF did not continue talks with the other two companies (Target A and Target B) due to discrepancies in valuation expectations and commercial terms.

On December 9, 2021, an investment bank who served as Target A’s advisor reached out to Dr. Liu introducing Target A. Target A is a leading manufacturer in the touch sensor and display industry using advanced materials headquartered in the United States. On December 16, 2021, MCAF was provided with an overview of Target A along with some of its key business and financial highlights on a teleconference call, and was later provided access to Target A’s data room as well. After reviewing the information, MCAF began preliminary due deal discussions with Target A on December 19, 2021. Initially, MCAF found Target A enticing given both the size (approximately US$3.5 trillion for end-users) and diversity (applications in display/touch, automotive and life sciences, among other industries) of its total addressable markets. The growth trajectory of Target A’s financials also appeared attractive, with projected revenues to increase from about US$10 million to over US$200 million during the 5-year span of 2022 to 2026. However, through further diligence MCAF learned that the achievability of this growth would depend heavily on the financing to be raised, with a total of more than US$100 million desired between the trust account of a SPAC and a PIPE. Without this financing, it appeared a significant challenge for Target A to breakthrough its current stage of product and commercial development. In light of the capital markets challenges especially around PIPEs, MCAF ultimately decided not to proceed with this target company and the parties stopped further discussions on January 26, 2022.

On January 5, 2022, a New York-based advisory firm, whose principals are friends with Dr. Liu, introduced Target B to MCAF. Target B is in the lithium battery industry developing and deploying solutions for light electric vehicles such as e-bikes and e-scooters. Based in China, Target B leads in the region in terms of market share, while it also has significant presence in Europe and the rest of the world. On January 10, 2022, the parties held a teleconference call where an overview as well as a financial model was presented to MCAF. After reviewing the information provided, MCAF began preliminary deal discussions with Target B. Although Target B’s proposed pre-transaction equity value of US$2.6 billion, corresponding to approximately 65x in estimated 2022 P/E multiple, was in line with the valuation of the lithium battery market leader Contemporary Amperex Technology Co., Limited (300750.SZ), MCAF sought discount to this comparative valuation considering the economy of scale as well as the brand awareness advantages that

Contemporary Amperex Technology Co., Limited has over Target B. However, Target B argued for more nimbleness and faster growth as counter factors and would not accept the discount. Given this differential in valuation, the parties agreed to pause further discussions in late January 2022.

On November 3, 2021, Mr. Qiang Zeng, the chairman and partner of CBC reached out to Dr. Liu to explore, inter alia, a possible merger between MCAF and the Company. CBC reached out to Dr. Liu, the CEO of MCAF, because Dr. Liu had previously served as part of the sponsor of a special purpose acquisition company that had successfully completed a business combination transaction.

On November 7, 2021, Dr. Liu had an introductory meeting with Mr. Qun Lu, the Chairman and CEO of the Company, along with CBC via teleconference. During the meeting, Mr. Lu provided a business presentation with an overview of the Company, including high level financials and projected financing needs. There was no discussion of valuation during this meeting.

Following the meeting, MCAF conferred with CBC during November 2021. The parties discussed, inter alia, the Company’s first mover advantage in all-electric sports vehicle production in China, its production and sales plan, and CBC’s suggestion on a potential PIPE financing plan.

On December 4, MCAF, the Company and CBC held another teleconference. the Company updated MCAF on its potential geographic expansion into especially the Middle East region. MCAF requested, as due diligence items, the Company’s detailed ownership information and estimated audit completion timeline.

In the following weeks, the Company provided MCAF with the ownership information requested and began the engagement process of an auditor. The parties kept in touch although there were only periodic interactions between the parties due to the holiday season of December 2021 in the United States and the holiday season of January 2022 in China.

After the holidays, discussions on deal terms increased in cadence. On February 2, 2022, MCAF received a summary of key terms agreed to by the Company setting forth, inter alia, a pre-money equity value of US$1.3 billion, a PIPE financing of US$100 million that the Company would use best efforts to raise, a purchase of 200,000 shares of common stock of MCAF by the Company from Sponsor for a total purchase price of US$3 million, a mutual exclusivity period of 4 weeks, completion of audited consolidated financial statements of the Company as of and for the years ended December 31, 2020 and 2021, prepared in conformity with U.S. GAAP under the standards of the PCAOB by April 30, 2022, and the post-merger board of directors to consist of the existing members of the Company’s board of directors and one additional member to be designated by MCAF.

Following a consultation on the summary of key terms with Loeb & Loeb LLP (“L&L”), MCAF’s legal counsel, on February 7, 2022, MCAF provided a term sheet to the Company, which, inter alia, confirmed the terms presented by the Company (including the PIPE financing of US$100 million that the Company would use its best efforts to raise, where MCAF considered the size of $100 million as reasonable given the best efforts basis that the Company shall use to raise), except the pre-money equity value, while adding customary conditions including shareholders’ support agreements, a mutual non-disclosure provision, and customary representations and warranties, among others. MCAF proposed the pre-money equity value to be US$1.2 billion, subject to certain adjustments, as MCAF sought an approximately 60% discount in P/S multiple to the average of the P/S multiples of the comparable companies (NIO Inc., Li Auto Inc. and XPeng Inc.) of 9.86x (see “— MCAF’s Board’s Reasons for the Business Combination (including financial metrics)” for more details), or 3.9x, which applying to the Company’s estimated 2023 revenue of US$310 million gives US$1.2 billion.

On February 9, 2022, the Company proposed the parties meet in the middle on the valuation, which MCAF accepted, and the parties reached an agreement on previously discussed terms, with a final pre-money equity value of US$1.25 billion, subject to certain adjustments, and both parties executed the term sheet.

After the execution of the term sheet on February 9, 2022, the Company had additional discussions with its auditor, who provided feedback to the Company on the challenge of audit completion by April 30, 2022. On February 14, 2022, MCAF, CBC and the Company held another teleconference where an extension of the mutual exclusivity period, payment schedule of the Company’s purchase of common stock of MCAF from Sponsor and a revision of the audit completion date were discussed.

MCAF and the Company continued the discussion on term sheet revisions during the following week. Then on February 25, the parties reached an agreement where the mutual exclusivity period was extended to March 30, 2022, payment schedule for the purchase of common stock of MCAF by the Company from Sponsor became half due at term sheet execution as an advance and the other half due at the signing of the Merger Agreement, and the audit completion date was deferred to June 15, 2022. The parties entered into a letter agreement amending the term sheet accordingly.

On March 4, 2022, an initial virtual kickoff conference call was held by the working groups, consisting of MCAF, L&L, the Company, its U.S. legal counsel Wilson, Sonsini, Goodrich & Rosati (“WSGR”), its PRC counsel JunHe LLP (“JunHe”), and CBC. During the following week, the working groups were granted access to the Company’s virtual data room to facilitate due diligence activities.

Given the travel restrictions due to COVID-19, MCAF engaged Beijing Haohan Tianyu Investment Consulting Co., Ltd. (“BHTIC”) as its China-based consultant to conduct due diligence in the region on MCAF’s behalf. On March 17, 2022 and under MCAF’s instruction, BHTIC held a due diligence call with the Company team where a business presentation, product overview, market size and the Company’s market positioning were discussed. The parties also coordinated logistics on-site visits for further due diligence.

After the diligence call between the Company and BHTIC, MCAF and BHTIC reviewed the content of the call and prepared a follow-up due diligence request list covering topics such as product attributes, especially the parameters of the Company’s K50 series of vehicles, product development pipeline, in particular the Company’s K20 series of automobiles, the production line and process, as well as sales and distribution plan. The request was provided to the Company on March 22, 2022, when BHTIC visited the Company’s Beijing office. The parties held a nearly two-hour meeting where MCAF also joined via videoconferencing, and the parties toured the Company’s office and walked through the diligence request list.

After the on-site visit, the Company provided a written summary to recap its responses during the meeting, and BHTIC requested another meeting with a focus on testing the K50 series, which was then conducted on March 29, 2022, where BHTIC enlisted professional drivers to test, inter alia, K50’s zero-to-60 performance, maximum torque, handling stability and battery range. The vehicles tested reflected parameters as reported by the Company.

Throughout the second half of March 2022 and most of April 2022, MCAF and its legal counsel L&L also conducted additional legal due diligence review of a prospective Business Combination with the Company. More specifically, the due diligence questions asked related to and the corresponding materials requested for included corporate records, stockholder information, a history of securities issuances by the Company, financing documents, material contracts, management and employees, financial information, sales and marketing, real property, intellectual property, IT systems and networks, privacy and data security, environmental matters, governmental regulations and filing, litigation and audits, insurance policies and claims, tax returns and related records, and other miscellaneous items.

In parallel with the due diligence activities, the parties drafted and negotiated on the Merger Agreement. On March 28, 2022, MCAF and L&L shared the first draft of the Merger Agreement with the Company and WSGR.

On April 4, 2022, the Company and WSGR shared a response draft of the Merger Agreement with MCAF and L&L, along with a summary of key issues on April 5, 2022 that included, inter alia, the valuation adjustment mechanism by net debt, audit completion date, PIPE financing deferment, addition of minimum cash requirement on the post-redemption balance of MCAF’s Trust Account, a dual class structure, and change of the outside date of the transaction.

Specifically, the Company proposed to have no net debt adjustment, arguing debt is part of the Company’s capital structure that should be looked at together with its equity for value consideration, extend the audit completion date from June 15, 2022 to June 30, 2022 for logistical reasons, defer PIPE financing commitment to after execution of the Merger Agreement so that the transaction itself can also be part of the traction for potential investors, add a minimum cash requirement of $10 million to cover expenses, super voting rights for Pubco Class B Ordinary Shares so the Company’s management can have more control, and move the outside date from August 15, 2022 to December 31, 2022 to allow for more time for the transaction process.

On April 12, 2022, the Company and WSGR shared an initial draft of the disclosure schedules to the Merger Agreement with MCAF and L&L.

On April 19, 2022, MCAF and L&L shared a response draft of the Merger Agreement with the Company and WSGR which, inter alia, rejected the proposal of no net debt adjustment arguing debt also presented risk so assumption of debt would lower the overall attractiveness of the transaction, accepted June 30, 2022 as the audit completion date, accepted the deferment of PIPE financing commitment to after execution of the Merger Agreement provided the

commitment shall be completed by the two-month anniversary of the date of execution of the Merger Agreement, rejected the minimum cash requirement since it would create uncertainty around the closing, accepted the Company request for super voting rights for Pubco Class B Ordinary Shares and counter-proposed by changing the outside date to September 30, 2022 to allow for some more time for the transaction process, along with updates and revisions to the representations and warranties of MCAF and the Company.

Also on April 19, 2022, MCAF and L&L shared a response draft of the disclosure schedules to the Merger Agreement with the Company and WSGR.

On April 26, 2022, the Company and WSGR shared a response draft of the Merger Agreement with MCAF and L&L which, inter alia, re-proposed no net debt adjustment, proposed the deferment of PIPE financing commitment to July 28, 2022, accepted that there shall be no minimum cash requirement, and counter-proposed by changing the outside date to November 15, 2022, re-iterating the same reasoning on these terms previously.

On April 27, 2022, MCAF and L&L shared a response draft of the Merger Agreement with the Company and WSGR which, inter alia, rejected no net debt adjustment, accepted the deferment of PIPE financing commitment to July 28, 2022, and accepted the change of the outside date to November 15, 2022, provided that the outside date shall automatically be extended to May 15, 2023 if the transaction is not completed by November 15, 2022, and the Company shall be responsible for depositing proceeds to MCAF’s Trust Account to extend the deadline of MCAF to complete its initial business combination, five business days prior to January 2, 2023, if the transaction is not reasonably expected to be consummated by then, and again by five business days prior to April 2, 2023, if the transaction is still not reasonably expected to be consummated by such date, so that extension of the time MCAF has to complete the transaction would be secured by commitment from the Company.

Also on April 27, 2022, MCAF’s Board met to review the terms of the proposed Business Combination with the Company to date. The MCAF Board also reviewed proposed resolutions which would be adopted by the MCAF Board in order to approve the entry into the Merger Agreement, allowing for further changes to the Merger Agreement and other transaction documents at the discretion of MCAF’s management. During the meeting, MCAF’s management provided MCAF’s Board with a comprehensive overview of the Company’s business, strategy, and future operating plans and prospects, the results and findings of MCAF’s due diligence process, financial analyses and comparable transactions. MCAF’s Board unanimously determined that it was in the best interests of MCAF to proceed with a business combination transaction with the Company, and authorized MCAF’s officers to finalize the transaction.

On April 28, 2022, the Company and WSGR shared a response draft of the Merger Agreement with MCAF and L&L which proposed a net debt adjustment with a floor equal to the aggregate debt of the Company as of the date of execution of the Merger Agreement or approximately US$457 million, so that existing debt would not be subject to the net debt adjustment but agreed to any new debt being subject to the net debt adjustment, and accepted conditions that MCAF and L&L proposed for acceptance of the change of the outside date to November 15, 2022.

On April 29, 2022, MCAF and L&L shared a response draft of the Merger Agreement with the Company and WSGR which, inter alia, accepted the Company and WSGR’s proposal of a net debt adjustment subject to a floor equal to the aggregate debt of the Company as of the date of execution of the Merger Agreement or approximately US$457 million, along with other customary updates.

During April 2022, L&L and WSGR exchanged drafts and/or summaries of the ancillary documents, including the shareholders’ support agreements, form of certificate of merger, the proposed amendments to the post-merger company’s memorandum and articles of association, forms of the registration rights agreement and the Company Lock-up Agreement. The various drafts exchanged reflected the parties’ negotiations on the interim operating covenants, allocation of tax risk and responsibility, treatment of tax benefits, post-closing governance matters, scope of registration rights and other matters.

On April 30, 2022, the parties reached agreement on all language of the Merger Agreement, which was then executed.

In February 2022, in order to facilitate the entry into the Merger Agreement between CH-Auto Tech and MCAF, CBC entered into a loan agreement with CH-Auto Tech, pursuant to which CBC shall provide the Company with a loan of US$3 million, and that such loan shall be used to purchase 20,000 shares of MCAF common stock from the Sponsor. In connection with the execution of the Merger Agreement, the Sponsor, Qiantu Motor USA Inc. (the “Transferee”), and NextG Tech Limited, an affiliate of CBC, entered into a stock purchase agreement, dated April 30, 2022 (the “Stock Purchase Agreement”), pursuant to which the Transferee purchased 200,000 shares of MCAF

common stock from the Sponsor for a purchase price of US$3,000,000. Subject to the satisfaction of conditions set forth in the Stock Purchase Agreement, the Sponsor shall cause the MCAF Shares to be transferred on the books and records of MCAF to the Transferee upon the closing of the Business Combination.

On May 2, 2022, a press release was issued announcing the transaction. Shortly thereafter, MCAF filed a current report on Form 8-K attaching the Merger Agreement, ancillary documents, and the press release.

On December 23, 2022, the parties entered into an Amended and Restated Agreement and Plan of Merger (the “Amended MA”). The Amended MA provides that all options issued by the Company prior to the Business Combination shall be included in the aggregated Pubco Ordinary Shares that will be issued or reserved for future issuance in connection with the closing of the Business Combination. The Amended MA also extends the date by which Pubco shall secure subscription agreements with investors relating to a purchase of Pubco Class A Ordinary Shares through a private placement (collectively, the “PIPE Agreements”), in each case on terms consented by SPAC (which consent shall not be unreasonably withheld, conditioned or delayed), pursuant to which the aggregate amount of investment is no less than $100,000,000 at the Closing.

On February 17, 2023, in order to facilitate the completion of the Business Completion, CBC entered into a loan agreement with CH-Auto Tech, pursuant to which CBC shall provide the Company with a loan facility of up to US$5.9 million. CBC and its affiliate extended to the Company a total amount of US$1.5 million and parties to the Convertible Debt Agreement as of February 17, 2023 later agreed to reduce the loan amount to US$1.5 million.

On February 17, 2023, CH-Auto Tech mailed out inquiry letters to its shareholders and sought shareholder responses on their election regarding Reorganization.