If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided
pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
SUBJECT
TO COMPLETION, DATED NOVEMBER 4, 2022
PROSPECTUS
$200,000,000
of
Class
A Ordinary Shares
Debt
Securities
Warrants
Rights
and
Units
Pop
Culture Group Co., Ltd
We
may, from time to time, in one or more offerings, offer and sell up to $200,000,000 of our Class A ordinary shares, par value $0.001
per share (“Class A Ordinary Shares”), debt securities, warrants, rights, and units, or any combination thereof, together
or separately as described in this prospectus. In this prospectus, references to the term “securities” refers, collectively,
to our Class A Ordinary Shares, debt securities, warrants, rights, and units. The prospectus supplement for each offering of securities
will describe in detail the plan of distribution for that offering. For general information about the distribution of the securities
offered, please see “Plan of Distribution” in this prospectus.
This
prospectus provides a general description of the securities we may offer. We will provide the specific terms of the securities offered
in one or more supplements to this prospectus.
We
may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. You should read this
prospectus, any prospectus supplement, and any free writing prospectus before you invest in any of our securities. The prospectus supplement
and any related free writing prospectus may add, update, or change information contained in this prospectus. You should read carefully
this prospectus, the applicable prospectus supplement, and any related free writing prospectus, as well as the documents incorporated
or deemed to be incorporated by reference, before you invest in any of our securities. This prospectus may not be used to offer or sell
any securities unless accompanied by the applicable prospectus supplement.
Unless
otherwise stated, as used in this prospectus, the terms “we,” “us,” “our,” “Pop Culture Group,”
“our Company,” and the “Company” refer to Pop Culture Group Co., Ltd, an exempted company limited by shares incorporated
under the laws of the Cayman Islands; “Pop Culture HK” refers to Pop Culture (HK) Holding Limited, a Hong Kong corporation
and wholly owned subsidiary of Pop Culture Group; “Heliheng” refers to Heliheng Culture Co., Ltd., a limited liability company
organized under PRC laws and regulations, which company is wholly owned by Pop Culture
HK; “PRC subsidiaries” refers to Heliheng and Xiamen Pop Investment Co., Ltd., a limited liability company organized under
PRC laws and regulations, both of which are subsidiaries of Pop Culture HK; and “the PRC operating entities” refer to Xiamen
Pop Culture Co., Ltd., a limited liability company organized under PRC laws and regulations (“Xiamen Pop Culture” or the “VIE”)
and its subsidiaries. See “Prospectus Summary—Business Overview.”
We are a holding company incorporated in the
Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations
through the VIE and its subsidiaries in the PRC. For accounting purposes, we control and receive the economic benefits of the business
operations of the VIE and its subsidiaries through certain contractual arrangements (the “VIE Agreements”), which enables
us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under generally accepted
accounting principles in the United States (“U.S. GAAP”), and the structure involves unique risks to investors. We have evaluated
the guidance in Financial Accounting Standards Board Accounting Standards Codification 810 and determined that we are regarded as the
primary beneficiary of the VIE for accounting purposes. Our securities offered in this offering are securities of Pop Culture Group,
the offshore holding company in the Cayman Islands, instead of securities of the VIE or its subsidiaries in the PRC. The VIE structure
provides contractual exposure to foreign investment in China-based companies where PRC laws and regulations prohibit direct foreign investment
in the operating companies. For a description of the VIE Agreements, see “Prospectus Summary—Our Corporate Structure—The
VIE Agreements.” As a result of our use of the VIE structure, you may never hold equity interests in the VIE or its subsidiaries.
Our Class A Ordinary Shares are listed on
the Nasdaq Global Market, or “Nasdaq,” under the symbol “CPOP.” On November 3, 2022, the last reported sale price
of our Class A Ordinary Shares on Nasdaq was $0.90 per share. The aggregate market value of our outstanding Class A Ordinary Shares held
by non-affiliates, or public float, as of November 4, 2022, was approximately $22.0 million, which was calculated based on 18,053,923
Class A Ordinary Shares held by non-affiliates and the price of $1.22 per share, which was the closing price of our Class A Ordinary
Shares on Nasdaq on September 12, 2022. Pursuant to General Instruction I.B.5 of Form F-3, in no event will we sell our securities
in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public
float remains below $75 million. During the 12 calendar months prior to and including the date of this prospectus, we have not offered
or sold any securities pursuant to General Instruction I.B.5 of Form F-3.
Investing
in our securities involves a high degree of risk. Before making an investment decision, please read the information under the heading
“Risk Factors” beginning on page 21 of this prospectus and risk factors set forth in our most recent annual report
on Form 20-F, in other reports incorporated herein by reference, and in an applicable prospectus supplement under the heading “Risk
Factors.”
We
may offer and sell the securities from time to time at fixed prices, at market prices, or at negotiated prices, to or through underwriters,
to other purchasers, through agents, or through a combination of these methods. If any underwriters are involved in the sale of any securities
with respect to which this prospectus or any prospectus supplements are being delivered, the names of such underwriters and any applicable
commissions or discounts will be set forth in the applicable prospectus supplement. The offering price of such securities and the net
proceeds we expect to receive from such sale will also be set forth in a prospectus supplement. See “Plan of Distribution”
elsewhere in this prospectus for a more complete description of the ways in which the securities may be sold.
Because we do not hold equity interests in
the VIE or its subsidiaries, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations,
including regulatory review of overseas listing of companies in the PRC through special purpose vehicles and the validity and enforcement
of the VIE Agreements. We are also subject to the risks and uncertainties about any future actions of the PRC government in this regard
that could disallow the VIE structure, which would likely result in a material change in our operations, and the value of all the securities
we are registering for sale may depreciate significantly or become worthless. The VIE Agreements have not been tested in a court of law
in the PRC as of the date of this prospectus. See “Risk Factors––Risks Relating to Our Corporate Structure––If
the PRC government determines that the VIE Agreements do not comply with PRC regulatory restrictions on foreign investment in the relevant
industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe
penalties or be forced to relinquish our interests in those operations.”
Hong Kong was established as a special administrative
region of the PRC in accordance with Article 31 of the Constitution of the PRC. The Basic Law of the Hong Kong Special Administrative
Region of the PRC (the “Basic Law”) was adopted and promulgated on April 4, 1990 and became effective on July 1, 1997,
when the PRC resumed the exercise of sovereignty over Hong Kong. Pursuant to the Basic Law, Hong Kong is authorized by the National People’s
Congress of the PRC to exercise a high degree of autonomy and enjoy executive, legislative, and independent judicial power, under the
principle of “one country, two systems,” and the PRC laws and regulations shall not be applied in Hong Kong except for those
listed in Annex III of the Basic Law (which is confined to laws relating to national defense, foreign affairs, and other matters that
are not within the scope of autonomy). However, there is no assurance that there will not be any changes in the economic, political,
and legal environment in Hong Kong in the future. If there is a significant change to current political arrangements between mainland
China and Hong Kong, or the applicable laws, regulations, or interpretations change, our Hong Kong subsidiary may become subject to PRC
laws or authorities. As a result, our Hong Kong subsidiary could incur material costs to ensure compliance, be subject to fines, experience
devaluation of securities or delisting, no longer conduct offerings to foreign investors, and no longer be permitted to continue its
current business operations.
We are subject to certain legal and operational
risks associated with being based in the PRC, which could result in a material change in the VIE’s operations and/or the value
of the securities we are registering for sale, or 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. PRC laws and regulations
governing our current business operations are sometimes vague and uncertain. Recently, the PRC government adopted a series of regulatory
actions and issued statements to regulate business operations in the PRC with little advance notice, including cracking down on illegal
activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in
anti-monopoly enforcement. For example, the General Office of the Central Committee of the Communist Party of China and the General Office
of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,
or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration
over illegal securities activities and the need to strengthen the supervision over overseas listings by Chinese companies. As of the
date of this prospectus, we, our subsidiaries, and the PRC operating entities have not been involved in any investigations on cybersecurity
review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our
PRC counsel, Jincheng Tongda & Neal Law Firm (“JT&N”), as of the date of this prospectus, we are not subject to cybersecurity
review with the Cyberspace Administration of China, or the CAC, under the Cybersecurity Review Measures that became effective on February
15, 2022, or if the Security Administration Draft is enacted as proposed, since (i) as companies that host entertainment events, operate
hip-hop related online programs, and provide event planning and execution services and brand promotion services to corporate clients,
we and the PRC operating entities are unlikely to be classified as critical information infrastructure operators (“CIIOs”)
by the PRC regulatory agencies; (ii) we and the PRC operating entities currently possess personal information of a relatively small number
of users in their business operations, significantly less than the one million user threshold set for a data processing operator applying
for listing on a foreign exchange that may be required to pass such cybersecurity review, and they do not anticipate that they will be
collecting over one million users’ personal information in the foreseeable future; and (iii) since we and the PRC operating entities
are in the hip-hop industry, data processed in their business is unlikely to have a bearing on national security and therefore is unlikely
to be classified as core or important data by the authorities. There remains uncertainty, however, as to how the Cybersecurity Review
Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including
the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures
and the Security Administration Draft. See “Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater
oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange,
could adversely impact our business and our offering.” Furthermore, on December 24, 2021, the China Securities Regulatory Commission
(the “CSRC”) released the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of Securities
by Domestic Enterprises (Draft for Comments) (the “Administrative Provisions”) and the Measures for the Overseas Issuance
of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the “Filing Measures” and, together
with the Administrative Provisions, the “Draft Rules Regarding Overseas Listings”), both of which had a comment period that
expired on January 23, 2022. The Administrative Provisions and the Filing Measures regulate overseas securities offering and listing
activities by domestic enterprises in direct or indirect form. The Administrative Provisions specify that the CSRC has regulatory authority
over the “overseas securities offering and listing by domestic enterprises,” and requires “domestic” enterprises
to complete filing procedures with the CSRC if they wish to list overseas. The Administrative Provisions also contain regulatory red
lines for overseas offerings and listings by “domestic” enterprises. The Filing Measures provide supplementary rules for
the Administrative Provisions by specifying the primary filing procedures for overseas offerings and listing by domestic enterprises.
If the Administrative Provisions and the Filing Measures are fully implemented in the current form, we may be required to file in accordance
with the Filing Measures. As of the date of this prospectus, these drafts have not been formally adopted, and, due to the lack of detailed
guidance or implementation rules, there are still uncertainties regarding the Administrative Provisions and the Filing Measures. Since
these statements and regulatory actions are newly published, however, official guidance and related implementation rules have not
been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business
operations of our subsidiaries and the VIE, our ability to accept foreign investments, and our listing on an U.S. exchange. The Standing
Committee of the National People’s Congress or PRC regulatory authorities may in the future promulgate laws, regulations, or implementing
rules that require us, our subsidiaries, or the VIE to obtain regulatory approval from Chinese authorities for listing in the U.S.
See “Risk Factors—Risks Relating to Doing Business in the PRC—The Chinese government may exert more oversight and control
over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder our ability to
offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline or become
worthless.”
Since 2021, the Chinese government has strengthened
its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating
anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1,
2022), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review
System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises. As of the date of this
prospectus, the Chinese government’s recent statements and regulatory actions related to anti-monopoly concerns have not impacted
our or the PRC operating entities’ ability to conduct business, our ability to accept foreign investments or issue our securities
to foreign investors because neither we and our subsidiaries, nor the PRC operating entities engage in monopolistic behaviors that are
subject to these statements or regulatory actions.
As of the date of this prospectus, our PRC
subsidiaries and the PRC operating entities have received from PRC authorities all requisite licenses, permissions, and approvals needed
to engage in the businesses currently conducted in the PRC, and no permission or approval has been denied. These licenses, permissions,
and approvals, which have been successfully obtained, are: (i) business licenses; (ii) the Electronic Data Interchange (“EDI”)
and Internet Content Provider (“ICP”) Licenses; (iii) the Commercial Performance License; (iv) the Radio and Television Program
Production and Operation Permit; and (v) the filing-for-record procedures before engaging in non-commercial Internet content service
operations. Besides, the PRC operating entities are in the process of applying for the following licenses, permissions, or approvals,
which may be required for their new operations in the PRC: (i) the Internet Culture Business Operating License; (ii) the Internet Publication
License; (iii) the filing-for-record procedures with the CAC’s filing management system for blockchain information services; and
(iv) the filing-for-record procedures for artworks related business activities with local cultural administrative authorities. However,
we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a timely manner,
or at all. Any failure of these entities to fully comply with such compliance requirements may cause our PRC subsidiaries or the PRC
operating entities to be unable to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses
or operations suspension for rectification, or other sanctions. See “Item 3. Key Information—D. Risk Factors—Risks
Relating to Doing Business in the PRC—If the PRC operating entities fail to obtain or renew any of the requisite approvals, licenses,
or permits applicable to their business, it could materially and adversely affect their business and results of operations” in
our most recent annual report on Form 20-F (the “2022 Annual Report”).
In
addition, all the securities we are registering for sale may be prohibited from trading on a national exchange or over-the-counter under
the Holding Foreign Companies Accountable Act, if the Public Company Accounting Oversight Board (United States) (the “PCAOB”)
is unable to inspect our auditor for three consecutive years beginning in 2021. Our auditor, WWC, P.C., is an independent registered
public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S., pursuant
to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The PCAOB currently
has access to inspect the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on
December 16, 2021. If trading in our securities is prohibited under the Holding Foreign Companies Accountable Act in the future because
the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our
Class A Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which,
if passed by the U.S. House of Representatives and signed into law, would reduce the period of time for foreign companies to comply with
PCAOB audits to two consecutive years instead of three, thus reducing the time period for triggering the delisting of our Company and
the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at such future time. On August 26,
2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”)
governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access
for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to
the fact sheet with respect to the Protocol disclosed by the U.S. Securities and Exchange Commission (the “SEC”), 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. However, uncertainties still exist as to whether and how this new Protocol will be implemented and whether the
PCAOB can make a determination that it is able to inspect and investigate completely in mainland China and Hong Kong. When the PCAOB
reassesses its determinations by the end of 2022, it could determine that it is still unable to inspect and investigate completely audit
firms based in mainland China and Hong Kong. See “Risk Factors—Risks Relating to Doing Business in the PRC—Recent joint
statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional
and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors. These developments
could add uncertainties to our continued listing or future offerings of our securities in the U.S.”
Cash is transferred among our Company, our
subsidiaries, and the VIE, in the following manners: (i) funds are transferred to Heliheng, our WFOE, from our Company as needed through
Pop Culture HK, our Hong Kong subsidiary, in the form of capital contributions or shareholder loans, as the case may be; (ii) funds may
be paid by the VIE to Heliheng, as service fees according to the VIE Agreements; (iii) dividends or other distributions may be paid by
Heliheng, to our Company through Pop Culture HK; and (iv) Heliheng and the VIE, lend to and borrow from each other from time to time
for business operation purposes. For more details, see “Prospectus Summary—Dividends or Distributions Made to Our Company
and U.S. Investors and Tax Consequences” and “Corporate History and Structure—The VIE Agreements.” As of the
date of this prospectus, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under
the VIE Agreements, nor do they have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable
future. As of the date of this prospectus, none of our subsidiaries or the VIE have made any dividends or distributions to our Company
and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the
expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. If we determine to
pay dividends on any of our Class A Ordinary Shares or Class B Ordinary Shares in the future, as a holding company, we will be dependent
on receipt of funds from our Hong Kong subsidiary, Pop Culture HK. Pop Culture HK will rely on payments made from Xiamen Pop Culture
to our PRC subsidiary, Heliheng, pursuant to the VIE Agreements, and the distribution of such payments to Pop Culture HK. There are no
laws or regulations that restrict us from providing funding to or receiving dividends from our Hong Kong subsidiary, except for the transfer
of funds involving money laundering and criminal activities. To the extent cash in the business is in the PRC, the funds may not be available
to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the
ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash. See “Risk Factors—Risks Relating
to Our Corporate Structure—To the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may
not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions
and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash.” The Company’s
management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies
and procedures among our subsidiaries and departments and the PRC operating entities. Each subsidiary, department, or PRC operating entity
initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and
submitting it to designated management members of the Company, based on the amount and the use of cash requested. The designated management
member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submit it to the
cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management
policies or procedures that dictate how funds are transferred. During the fiscal years ended June 30, 2022, 2021, and 2020, cash transfers
and transfers of other assets between Pop Culture Group, its subsidiaries, and the VIE were as follows: in July 2020, Pop Culture Group
transferred approximately $600,000 to its subsidiary in Hong Kong, which in turn transferred approximately $599,000 to its PRC subsidiary;
in July 2021, Pop Culture Group transferred approximately $7,681,000 of the net proceeds from our initial public offering to its Hong
Kong subsidiary, which in turn transferred approximately $7,649,000 to its PRC subsidiary; and in May and June 2022, Pop Culture Group
transferred approximately $3,019,000 to Pop Culture HK, which in turn transferred approximately $3,008,400 to Heliheng. See “Prospectus
Summary—Asset Transfers between Our Company, Our Subsidiaries, and the VIE,” “Prospectus Summary—Selected Condensed
Consolidated Financial Schedule of Pop Culture Group and its Subsidiaries and the VIE,” and our audited consolidated financial
statements in the 2022 Annual Report.
Neither
the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved
of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2022.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, an applicable prospectus supplement, and our SEC filings that are incorporated by reference into this prospectus contain
or incorporate by reference forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E
of the Exchange Act. All statements other than statements of historical fact are “forward-looking statements,” including
any projections of earnings, revenue or other financial items, any statements of the plans, strategies, and objectives of management
for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic
conditions or performance, any statements of management’s beliefs, goals, strategies, intentions, and objectives, and any statements
of assumptions underlying any of the foregoing. The words “believe,” “anticipate,” “estimate,” “plan,”
“expect,” “intend,” “may,” “could,” “should,” “potential,” “likely,”
“projects,” “continue,” “will,” and “would” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements reflect
our current views with respect to future events, are based on assumptions, and are subject to risks and uncertainties. We cannot guarantee
that we actually will achieve the plans, intentions, or expectations expressed in our forward-looking statements and you should not place
undue reliance on these statements. There are a number of important factors that could cause our actual results to differ materially
from those indicated or implied by forward-looking statements. These important factors include those discussed under the heading “Risk
Factors” contained or incorporated by reference in this prospectus and in the applicable prospectus supplement and any free writing
prospectus we may authorize for use in connection with a specific offering. These factors and the other cautionary statements made in
this prospectus should be read as being applicable to all related forward-looking statements whenever they appear in this prospectus.
Except as required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information,
future events, or otherwise.
Prospectus
Summary
Our
Corporate Structure
We are a holding company incorporated in the
Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations
through the VIE and its subsidiaries in the PRC. The VIE Agreements were entered into by and among Heliheng, Xiamen Pop Culture, and
the Xiamen Pop Culture Shareholders and include the Exclusive Services Agreement, Share Pledge Agreement, Exclusive Option Agreement,
Shareholders’ Powers of Attorney, and Spousal Consents. For a description of the VIE Agreements, see “—The VIE Agreements.”
For accounting purposes, we control and receive the economic benefits of the business operations of the VIE and its subsidiaries through
the VIE Agreements, which enables us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial
statements under U.S. GAAP, and the structure involves unique risks to investors. Our securities offered in this offering are securities
of Pop Culture Group, the offshore holding company in the Cayman Islands, instead of securities of the VIE or its subsidiaries in the
PRC. The VIE structure provides contractual exposure to foreign investment in China-based companies where PRC laws and regulations prohibit
direct foreign investment in the operating companies. As a result of our use of the VIE structure, you may never hold equity interests
in the VIE or its subsidiaries.
The
following diagram illustrates our corporate structure, including our subsidiaries and the PRC operating entities, as of the date of this
prospectus:
Notes:
All percentages reflect the voting ownership interests instead of the equity interests held by each of our shareholders given that each
holder of Class B Ordinary Shares is entitled to seven votes per one Class B Ordinary Share and each holder of Class A Ordinary Shares
is entitled to one vote per one Class A Ordinary Share.
| |
(1) |
Represents
5,763,077 Class B Ordinary Shares indirectly held by Zhuoqin Huang, the 100% owner of Joya Enterprises Limited, as of the date of
this prospectus. |
| |
|
|
| |
(2) |
Represents
233,000 Class A Ordinary Shares indirectly held by Weiyi Lin, the 100% owner of Victory Quest Industries Limited, as of the date
of this prospectus. |
| |
(3) |
Represents
an aggregate of 755,089 Class A Ordinary Shares held by five shareholders of Pop Culture Group, each one of which holds less than
5% of our voting ownership interests, as of the date of this prospectus. |
| |
(4) |
As of the date of this prospectus, Xiamen Pop Culture is held by
Zhuoqin Huang as to 61.58%, Weiyi Lin as to 10.02%, Rongdi Zhang as to 9.10%, Chunxiao Cui as to 6.11%, Xiayu Cui as to 6.11%, Junlong
He as to 4.42%, Yu Huang as to 2.42%, Azhen Lin as to 0.12%, and Wuyang Chen as to 0.12%, respectively, together holding 100% of
the shares. |
| |
|
|
| |
(5) |
Xiamen Sikai Culture Media Co., Ltd., an unrelated third party,
holds 49% of the equity interests in Xiamen Pop Sikai Interactive Technology Co., Ltd. (“Pop Sikai”). |
| |
|
|
| |
(6) |
Fujian Zhongshi Communication Co., Ltd. and Bo Lan,
two unrelated third parties, collectively hold 39% of the equity interests in Zhongpu Shuyuan (Xiamen) Digital Technology Co., Ltd.
(“Zhongpu Shuyuan”). Junpu Era (defined below) holds 10% of the equity interests in Zhongpu Shuyuan. |
| |
|
|
| |
(7) |
Fuzhou Xinsiyu Culture Communication Co., Ltd., an unrelated third
party, holds 49% of the equity interests in Fujian Shuzhi Fuxin Exhibition Co., Ltd. (“Fujian Shuzhi”). |
| |
|
|
| |
(8) |
Shenzhen HipHopJust Information Technology Co., Ltd. and Zhaowei
Wu, two unrelated third parties, collectively hold 40% of the equity interests in Shenzhen Jam Box Technology Co., Ltd. (“Shenzhen
Jam Box”). |
Investors
are purchasing securities of Pop Culture Group, the offshore holding company in the Cayman Islands, instead of securities of the PRC
operating entities, Xiamen Pop Culture and its subsidiaries.
The
VIE Agreements
Neither
we nor our subsidiaries own any share in Xiamen Pop Culture or its subsidiaries. Instead, for accounting purposes, we control and receive
the economic benefits of the business operations of the VIE and its subsidiaries through the VIE Agreements, which enables us to consolidate
the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP. Heliheng, Xiamen Pop
Culture, and the Xiamen Pop Culture Shareholders entered into the VIE Agreements on March 30, 2020, which were amended and restated on
February 19, 2021. The VIE Agreements are designed to provide Heliheng with the power, rights, and obligations with respect to Xiamen
Pop Culture as set forth under the VIE Agreements. We have evaluated the guidance in Financial Accounting Standards Board Accounting
Standards Codification 810 and determined that we are regarded as the primary beneficiary of the VIE for accounting purposes, as a result
of our direct ownership in Heliheng and the provisions of the VIE Agreements.
Each
of the VIE Agreements is described in detail below:
Exclusive
Business Cooperation Agreement
Pursuant
to the Exclusive Services Agreement between Xiamen Pop Culture and Heliheng, Heliheng provides Xiamen Pop Culture with technical support,
intellectual services, and other management services relating to its day-to-day business operations and management, on an exclusive basis,
utilizing its advantages in technology, human resources, and information. For services rendered to Xiamen Pop Culture by Heliheng under
the Exclusive Services Agreement, Heliheng is entitled to collect a service fee equal to 100% of the net income of Xiamen Pop Culture,
which is Xiamen Pop Culture’s earnings before tax after deducting relevant costs and reasonable expenses.
The
Exclusive Services Agreement became effective on March 30, 2020, was amended and restated on February 19, 2021, and will remain effective
unless otherwise terminated as required by laws or regulations, or by relevant governmental or regulatory authorities. Nevertheless,
the Exclusive Services Agreement will be terminated after all shares in Xiamen Pop Culture held by the Xiamen Pop Culture Shareholders
and/or all the assets of Xiamen Pop Culture have been legally transferred to Heliheng and/or its designee in accordance with the Exclusive
Option Agreement.
The
Exclusive Services Agreement does not prohibit related party transactions. Our audit committee is required to review and approve in advance
any related party transactions, including transactions involving Heliheng or Xiamen Pop Culture.
Share
Pledge Agreement
Under
the Share Pledge Agreement between Heliheng and the Xiamen Pop Culture Shareholders, together holding 100% of the shares in Xiamen
Pop Culture, the Xiamen Pop Culture Shareholders pledged their shares in Xiamen Pop Culture to Heliheng to guarantee the performance
of Xiamen Pop Culture’s obligations under the Exclusive Services Agreement. Under the terms of the Share Pledge Agreement, in
the event that Xiamen Pop Culture or the Xiamen Pop Culture Shareholders breach their respective contractual obligations under the
Exclusive Services Agreement, Heliheng, as pledgee, will be entitled to certain rights, including, but not limited to, the right to
collect dividends generated by the pledged shares. The Xiamen Pop Culture Shareholders also agreed that upon occurrence of any event
of default, as set forth in the Share Pledge Agreement, Heliheng is entitled to dispose of the pledged shares in accordance with
applicable PRC laws and regulations. The Xiamen Pop Culture Shareholders further agreed not to dispose of the pledged shares or take
any action that would prejudice Heliheng’s interest.
The
Share Pledge Agreement is effective until the full payment of the service fees under the Exclusive Services Agreement and upon termination
of Xiamen Pop Culture’s obligations under the Exclusive Services Agreement, or upon the transfer of shares under the Exclusive
Option Agreement.
The
purposes of the Share Pledge Agreement are to (1) guarantee the performance of Xiamen Pop Culture’s obligations under the Exclusive
Services Agreement and (2) make sure the Xiamen Pop Culture Shareholders do not transfer or assign the pledged shares, or create or allow
any encumbrance that would prejudice Heliheng’s interests without Heliheng’s prior written consent. In the event Xiamen Pop
Culture breaches its contractual obligations under the Exclusive Services Agreement, Heliheng will be entitled to dispose of the pledged
shares in accordance with relevant PRC laws and regulations.
As
of the date of this prospectus, the share pledges under the Share Pledge Agreement have been registered with the competent PRC regulatory
authority.
Exclusive
Option Agreement
Under
the Exclusive Option Agreement, the Xiamen Pop Culture Shareholders, together holding 100% of the shares in Xiamen Pop Culture, irrevocably
granted Heliheng (or its designee) an exclusive option to purchase, to the extent permitted under PRC laws and regulations, once or at multiple times,
at any time, part or all of their shares in Xiamen Pop Culture. The option price is RMB10 or the minimum amount to the extent permitted
under PRC laws and regulations, whichever is lower.
Under
the Exclusive Option Agreement, Heliheng may at any time under any circumstances, purchase or have its designee purchase, at its discretion,
to the extent permitted under PRC laws and regulations, all or part of the Xiamen Pop Culture Shareholders’ shares in Xiamen Pop Culture. The Exclusive
Option Agreement, together with the Share Pledge Agreement, the Exclusive Services Agreement, and the Shareholders’ Powers of Attorney,
enable us to consolidate the financial results of Xiamen Pop Culture and its subsidiaries in our consolidated financial statements under
U.S. GAAP.
The
Exclusive Option Agreement remains effective until all the equity of Xiamen Pop Culture is legally transferred under the name of Heliheng
and/or other entity or individual designated by it, unless terminated earlier by Heliheng with a 30-day prior notice.
Shareholders’
Powers of Attorney
Under
each of the Powers of Attorney, the Xiamen Pop Culture Shareholders authorized Heliheng to act on their behalf as their exclusive agent
and attorney with respect to all rights as shareholders, including but not limited to: (a) attending shareholders’ meetings; (b)
exercising all the shareholder’s rights, including voting, that shareholders are entitled to under PRC laws and regulations and the Articles
of Association, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating
and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer, and
other senior management members of Xiamen Pop Culture.
The
Powers of Attorney are irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the Xiamen
Pop Culture Shareholders are shareholders of Xiamen Pop Culture.
Spousal
Consents
The
spouses of certain of the Xiamen Pop Culture Shareholders agreed, via a spousal consent, to the execution of the “Transaction Documents”
including: (a) Exclusive Option Agreement entered into with Heliheng and Xiamen Pop Culture; (b) Share Pledge Agreement entered into
with Heliheng; and (c) Powers of Attorney executed by the Xiamen Pop Culture Shareholders, and the disposal of the shares of Xiamen Pop
Culture held by the Xiamen Pop Culture Shareholders and registered in their names.
The
spouses of certain of the Xiamen Pop Culture Shareholders further undertook not to make any assertions in connection with the shares
of Xiamen Pop Culture which are held by the Xiamen Pop Culture Shareholders. The spouses of certain of the Xiamen Pop Culture Shareholders
confirmed that the Xiamen Pop Culture Shareholders can perform, amend, or terminate the Transaction Documents without their authorization
or consent. They undertook to execute all necessary documents and take all necessary actions to ensure appropriate performance of the
agreements.
The
spouses of certain of the Xiamen Pop Culture Shareholders also undertook that if they obtain any share of Xiamen Pop Culture which are
held by the Xiamen Pop Culture Shareholders for any reasons, they will be bound by the Transaction Documents and comply with the obligations
thereunder as shareholders of Xiamen Pop Culture. For this purpose, upon Heliheng’s request, they will sign a series of written
documents in substantially the same format and content as the Transaction Documents and Exclusive Services Agreement (as amended from
time to time).
Risks
Associated with Our Corporate Structure and the VIE Agreements
Because we do not directly hold equity interests
in the VIE and its subsidiaries, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations,
including but not limited to, regulatory review of overseas listing of companies in the PRC through special purpose vehicles, and the
validity and enforcement of the VIE Agreements. We are also subject to the risks and uncertainties about any future actions of the PRC
government in this regard that could disallow the VIE structure, which would likely result in a material change in the VIE’s operations,
and the value of all the securities we are registering for sale may depreciate significantly or become worthless. The VIE Agreements
have not been tested in a court of law in the PRC as of the date of this prospectus.
The VIE Agreements may not be effective as
direct ownership in providing operational control. For instance, Xiamen Pop Culture and the Xiamen Pop Culture Shareholders could breach
their VIE Agreements with Heliheng by, among other things, failing to conduct their operations in an acceptable manner or taking other
actions that are detrimental to our interests. The Xiamen Pop Culture Shareholders may not act in the best interests of our Company or
may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain
portions of our business through the VIE Agreements with Xiamen Pop Culture. In the event that Xiamen Pop Culture or the Xiamen Pop Culture
Shareholders fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial costs and expend
additional resources to enforce such arrangements. In addition, even if legal actions are taken to enforce such arrangements, there is
uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated
upon the civil liability provisions of the securities laws of the United States or any state. See “Risk Factors—Risks Relating
to Our Corporate Structure—If the PRC government determines that the VIE Agreements do not comply with PRC regulatory restrictions
on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the
future, we could be subject to severe penalties or be forced to relinquish our interests in those operations,” “Item 3. Key
Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The VIE Agreements may not be effective in providing
control over Xiamen Pop Culture,” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate
Structure—The VIE Agreements are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have
under the VIE Agreements” in the 2022 Annual Report.
On December 28, 2021, 13 governmental departments
of the PRC, including the CAC, issued the revised Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity
Review Measures require that an online platform operator which possesses the personal information of at least one million users must
apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries. Such requirement is reiterated on the Security
Administration Draft, which was released by the CAC on November 14, 2021 for public consultation. As advised by our PRC counsel, JT&N,
as of the date of this prospectus, we are not subject to cybersecurity review or network data security review by the CAC, since (i) as
companies that host entertainment events, operate hip-hop related online programs, and provide event planning and execution services
and brand promotion services to corporate clients, we and the PRC operating entities are unlikely to be classified as CIIOs by the PRC
regulatory agencies; (ii) we and the PRC operating entities currently possess personal information of a relatively small number of users
in our business operations, significantly less than the one million user threshold set for a data processing operator applying for listing
on a foreign exchange that may be required to pass such cybersecurity review, and we do not anticipate that we will be collecting over
one million users’ personal information in the foreseeable future; and (iii) since we and the PRC operating entities are in the
hip-hop industry, data processed in our business is unlikely to have a bearing on national security and therefore is unlikely to be classified
as core or important data by the authorities. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the
Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt
new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security
Administration Draft. See “Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater oversight by the
Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely
impact our business and our offering.”
In
addition, on December 24, 2021, the CSRC and relevant departments of the State Council issued the Draft Rules Regarding Overseas Listings,
which aim to regulate overseas securities offerings and listings by China-based companies, for public consultation. According to the
Draft Rules Regarding Overseas Listings, among other things, after making initial applications with overseas stock markets for initial
public offerings or listings, or after the completion of issuance of overseas listed securities by the overseas listed issuer, all China-based
companies shall file the required filing materials with the CSRC within three working days. In addition, overseas offerings and listings
may be prohibited for such China-based companies when any of six occasions occur. As of the date of this prospectus, the Draft Rules
Regarding Overseas Listings have been released for public comment only and have not been formally promulgated, and neither we nor any
of the PRC operating entities have been required to complete the filing procedures. There remain, however, uncertainties as to the enactment
or future interpretations and implementations of the Draft Rules Regarding Overseas Listings. See “Risk Factors—Risks Relating
to Doing Business in the PRC—The Chinese government may exert more oversight and control over overseas public offerings conducted
by China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer our securities
to investors and could cause the value of our securities to significantly decline or become worthless.”
In
addition, all of the securities we are offering may be prohibited from trading on a national exchange or over-the-counter under the Holding
Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditor for three consecutive years beginning in 2021. Our auditor,
WWC, P.C., is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the
U.S., is subject to laws in the U.S., pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable
professional standards. The PCAOB currently has access to inspect the working papers of our auditor and our auditor is not subject to
the determinations announced by the PCAOB on December 16, 2021. If trading in our Class A Ordinary Shares is prohibited under the Holding
Foreign Companies Accountable Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor
at such future time, Nasdaq may determine to delist our Class A Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating
Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives and signed into law, would reduce the
period of time for foreign companies to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period
for triggering the delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting
firm at such future time. On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol governing inspections and investigations
of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate
registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol
disclosed by the SEC, 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. However, uncertainties still exist as to whether and how this new Protocol
will be implemented and whether the PCAOB can make a determination that it is able to inspect and investigate completely in mainland
China and Hong Kong. When the PCAOB reassesses its determinations by the end of 2022, it could determine that it is still unable to inspect
and investigate completely audit firms based in mainland China and Hong Kong. See “Risk Factors—Risks Relating to Doing Business
in the PRC—Recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable
Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of
their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our
continued listing or future offerings of our securities in the U.S.”
Business
Overview
We conduct our business in the PRC through
the PRC operating entities. The following description of our business is a description of the business of the PRC operating entities.
See “—Our Corporate Structure—The VIE Agreements” for a summary of the VIE Agreements.
With
the values of hip-hop culture at their core and the younger generation as their primary target audience, the PRC operating entities host
entertainment events, operate hip-hop related online programs, and provide event planning and execution services and brand promotion
services to corporate clients. They seek to create value for stakeholders in all parts of the hip-hop ecosystem, from fans to artists,
corporate clients, and sponsors.
The PRC operating entities have in recent
years focused on developing and hosting their own hip-hop events. The PRC operating entities own an extensive portfolio of intellectual
property rights related to hip-hop events, including a stage play, three dance competitions or events, two cultural and musical festivals,
and two promotional parties that feature live hip-hop performances in karaoke bars or amusement parks to promote hip-hop culture, and
they cooperate with music companies and artists to host various concerts in the PRC; starting from March 2020, the PRC operating entities
have been developing and operating hip-hop related online programs (collectively, “Event Hosting”). The PRC operating entities’
hip-hop events generated an aggregate attendance of 203,233, 159,200, and 127,930 during the fiscal years ended June 30, 2022, 2021,
and 2020, respectively, and their online hip-hop programs generated over 210 million, 314 million, and 100 million views during the fiscal
years ended June 30, 2022, 2021, and 2020, respectively. The PRC operating entities generate revenue from their Event Hosting business
by providing sponsorship packages to advertisers in exchange for sponsorship fees and by selling tickets for those concerts.
The PRC operating entities help corporate
clients with the design, logistics, and layout of events, coordinate and supervise the actual event set-up and implementation, and generate
revenue through service fees (“Event Planning and Execution”). Their services feature significant hip-hop elements and cover
each aspect of corporate and marketing events, including communication, planning, design, production, reception, execution, and analysis.
During the fiscal years ended June 30, 2022, 2021, and 2020, the PRC operating entities served 21, 24, and 16 clients in 56, 59, and
49 events with respect to event planning and execution, respectively.
The PRC operating entities provide brand promotion
services, such as trademark and logo design, visual identity system design, brand positioning, brand personality design, and digital
solutions, to corporate clients for service fees (“Brand Promotion”).
We believe that the main reason corporate
clients hire the PRC operating entities to plan and execute events and provide brand promotion services geared towards the younger generation
is for their deep understanding of the taste and preferences of this generation.
The PRC operating entities also sell digital
collections to individual collectors, provide music recording services to a corporate client and Software-as-a-Service software services
to hip-hop dance training institutions for service fees, and distribute advertisements for corporate customers for service fees (“Other
Services”).
For the fiscal years ended June 30, 2022,
2021, and 2020, we had total revenue of $32,281,543, $25,526,557, and $15,688,080, and net income of $687,891, $4,267,542, and $2,625,817,
respectively. Revenue derived from the Event Hosting business accounted for 46%, 59%, and 49% of our total revenue for those fiscal years,
respectively. Revenue derived from the Event Planning and Execution business accounted for 26%, 36%, and 35% of our total revenue for
those fiscal years, respectively. Revenue derived from the Brand Promotion business accounted for 27%, 3%, and 14% of our total revenue
for those fiscal years, respectively. Revenue derived from Other Services accounted for 1%, 2%, and 2% of our total revenue for those
fiscal years, respectively.
Recent
Development
On December 3, 2021, we incorporated a wholly
owned subsidiary, Pop Culture Global Operations Inc. (“Pop Culture Global”), in California. As of the date of this prospectus,
Pop Culture Global has not been operative, nor has it generated any revenue.
On January 25, 2022, Heliheng and Xiamen Pop Culture
established a subsidiary, Xiamen Pop Investment Co., Ltd. (“Pop Investment”), under PRC laws and regulations. Heliheng holds
60% equity interests in Pop Investment and Xiamen Pop Culture holds 40%. Pop Investment is engaged in cross-border funds management for
the Company.
On March 30, 2022, Xiamen Pop Network Technology
Co., Ltd. (“Pop Network”) established a subsidiary, Zhongpu Shuyuan, under PRC laws and regulations. Pop Network holds 51%
equity interests in Zhongpu Shuyuan and Junpu Era holds 10% equity interests in Zhongpu Shuyuan. Zhongpu Shuyuan is engaged in digital
collection and metaverse related business and launched a digital collection trading platform in China, Shuyuan Meta, on May 3, 2022 for
the development, promotion, and distribution of digital collections.
On April 12, 2022, Zhongpu Shuyuan entered
into a share purchase agreement with Mouqing He and Lin Jiang, the two former shareholders of Xiamen Qiqin Technology Co., Ltd. (“Xiamen
Qiqin”), pursuant to which Zhongpu Shuyuan acquired 100% of Xiamen Qiqin’s equity interests. As a result, Xiamen Qiqin became
a wholly owned subsidiary of Zhongpu Shuyuan on April 12, 2022. Xiamen Qiqin is engaged in online digital collection sales.
On April 14, 2022, Xiamen Pop Culture established
a wholly owned subsidiary, Hualiu Digital Entertainment (Beijing) International Culture Media Co., Ltd. (“Hualiu Digital”),
under the PRC laws and regulations. Hualiu Digital is still in the process of exploring its business plan. As of the date of this prospectus,
Hualiu Digital has not been operative, nor has it generated any revenue.
On
May 16, 2022, Guangzhou Shuzhi Culture Communication Co., Ltd. (“Guangzhou Shuzhi”), a wholly owned subsidiary of Xiamen
Pop Culture, established a subsidiary, Xiamen Shuzhi, under PRC laws and regulations. Guangzhou Shuzhi held 70% equity interests in Xiamen
Shuzhi. On August 18, 2022, Guangzhou Shuzhi acquired the remaining 30% equity interests, and Xiamen Shuzhi became a wholly owned subsidiary.
Xiamen Shuzhi is engaged in online and offline marketing and exhibitions.
On
May 18, 2022, Guangzhou Shuzhi established a subsidiary, Fujian Shuzhi, under PRC laws and regulations. Guangzhou Shuzhi holds 51% equity
interests in Fujian Shuzhi. Fujian Shuzhi is engaged in online and offline marketing and exhibitions.
On June 20, 2022, Xiamen Pop Culture established
a wholly owned subsidiary, Xiamen Pupu Digital Technology Co., Ltd. (“Pupu Digital”), under PRC laws and regulations. Pupu
Digital is engaged in culture-related digital content production services.
On June 28, 2022, Pop Network and two unrelated
third parties established Junpu Era (Xiamen) Digital Industry Co., Ltd. (“Junpu Era”) under PRC laws and regulations. Pop
Network holds 30% of the equity interests in Junpu Era. Junpu Era is engaged in digital collection and metaverse-related services.
On July 21, 2022, Pop Culture HK established a wholly owned subsidiary,
Fujian Pupu Shuzhi Sports Industry Development Co., Ltd. (“Shuzhi Sports”), under PRC laws and regulations. Shuzhi Sports
is still in the process of exploring its business plan. As of the date of this prospectus, Shuzhi Sports has not been operative, nor
has it generated any revenue.
COVID-19
Impact
The COVID-19 pandemic has, since
its initial outbreak, affected our business and results of operations. The COVID-19 situations improved in China after the
first quarter of 2020, but the ultimate impacts of the pandemic are highly uncertain and subject to change, even though conditions have
been gradually improving.
Variations of the COVID-19 virus,
including notably the Omicron variant, have caused new outbreaks in China and across the world. For example, the recent resurgence of
the Omicron variant in China since the beginning of 2022 resulted in city-wide lockdowns in a number of Chinese cities with heightened
prevention measures adopted across China to curb the outbreak. This caused disruptions to varying degrees to normal business activities
in China. In 2022, the PRC operating entities postponed most of their Move It campaigns until July 2022 and their other dance competition
events, music festivals, and promotional parties also had delays. In addition, some of the PRC operating entities’ clients reduced
their budget for offline marketing events, which negatively affected the PRC operating entities’ event hosting and event planning
and execution businesses.
The PRC operating
entities have taken precautionary measures in line with government guidelines to minimize the risks of the COVID-19 to their employees,
and to ease the impact of the COVID-19 pandemic on their normal business operations.
The extent to which
the COVID-19 pandemic may continue to impact our business will depend on future developments, which are highly uncertain and
unpredictable, such as the duration of the pandemic, the effectiveness of travel restrictions and other measures to contain the outbreak,
and its impact, such as social distancing, quarantines and lockdowns.
As of June 30, 2022,
our cash and cash equivalents were $14,396,032. Our principal sources of liquidity have been cash generated from our operating activities.
We believe this level of liquidity, coupled with our existing cash balance and strong monetization capabilities, is sufficient to allow
us to successfully weather adverse changes and economic downturns during an extended period of uncertainty caused by the COVID-19 pandemic.
Summary
of Risk Factors
Investing
in our securities involves significant risks. You should carefully consider all of the information in this prospectus before making an
investment in our securities. Below please find a summary of the principal risks we face, organized under relevant headings. These risks
are discussed more fully under “Item 3. Key Information—D. Risk Factors” in the 2022 Annual Report and in the section
titled “Risk Factors” beginning on page 21 of this prospectus.
Risks Relating to Our Corporate Structure
(for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure”
in the 2022 Annual Report and “Risk Factors—Risks Relating to Our Corporate Structure” of this prospectus)
Risks
and uncertainties related to our business include, but are not limited to, the following:
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the VIE Agreements may not be effective in providing
control over Xiamen Pop Culture (see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The
VIE Agreements may not be effective in providing control over Xiamen Pop Culture” on page 12 of the 2022 Annual Report); |
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the VIE Agreements are governed by the laws of
the PRC and we may have difficulty in enforcing any rights we may have under the VIE Agreements (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Corporate Structure—The VIE Agreements are governed by the laws of the PRC and we
may have difficulty in enforcing any rights we may have under the VIE Agreements” on page 13 of the 2022 Annual Report); |
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we may not be able to consolidate the financial
results of Xiamen Pop Culture or such consolidation could materially and adversely affect our operating results and financial condition
(see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—We may not be able
to consolidate the financial results of Xiamen Pop Culture or such consolidation could materially and adversely affect our operating
results and financial condition” on page 13 of the 2022 Annual Report); |
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the VIE Agreements may result in adverse tax consequences
(see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The VIE Agreements
may result in adverse tax consequences” on page 13 of the 2022 Annual Report); |
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the Xiamen Pop Culture Shareholders have potential
conflicts of interest with our Company, which may adversely affect our business and financial condition (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Corporate Structure—The Xiamen Pop Culture Shareholders have potential conflicts of
interest with our Company which may adversely affect our business and financial condition” on page 14 of the 2022 Annual Report); |
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we rely on the approvals, certificates, and business licenses held
by Xiamen Pop Culture and any deterioration of the relationship between Heliheng and Xiamen Pop Culture could materially and adversely
affect our overall business operations (see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate
Structure—We rely on the approvals, certificates, and business licenses held by Xiamen Pop Culture and any deterioration of
the relationship between Heliheng and Xiamen Pop Culture could materially and adversely affect our overall business operations”
on page 14 of the 2022 Annual Report); |
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the exercise of our option to purchase part or all of the shares
in Xiamen Pop Culture under the exclusive option agreement might be subject to certain limitations and substantial costs (see “Item
3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The exercise of our option to purchase
part or all of the shares in Xiamen Pop Culture under the exclusive option agreement might be subject to certain limitations and
substantial costs” on page 14 of the 2022 Annual Report); and |
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if the PRC government determines that the VIE Agreements do not
comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation
of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in
those operations (see “Risk Factors––Risks Relating to Our Corporate Structure––If the PRC government
determines that the VIE Agreements do not comply with PRC regulatory restrictions on foreign investment in the relevant industries,
or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties
or be forced to relinquish our interests in those operations” on page 21 of this prospectus). |
Risks
Relating to Doing Business in the PRC (for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Doing Business in the PRC” in our 2022 Annual Report and “Risk Factors—Risks Relating to Doing Business
in the PRC” of this prospectus)
We
face risks and uncertainties relating to doing business in the PRC in general, including, but not limited to, the following:
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there are uncertainties under the Foreign Investment
Law relating to the status of businesses in China controlled by foreign invested projects primarily through contractual arrangements,
such as our business (see “Item 3. Key Information—D. Risk Factors––Risks Relating to Doing Business in PRC––There
are uncertainties under the Foreign Investment Law relating to the status of businesses in China controlled by foreign invested projects
primarily through contractual arrangements, such as our business” on page 15 of the 2022 Annual Report); |
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changes in China’s economic, political, social
conditions, or government policies could have a material adverse effect on the PRC operating entities’ business and operations
(see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in the PRC—Changes in China’s
economic, political, or social conditions or government policies could have a material adverse effect on the PRC operating entities’
business and operations” on page 16 of the 2022 Annual Report); |
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you may experience difficulties in effecting service
of legal process, enforcing foreign judgments, or bringing actions in China against us or our management named in this annual report
based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within
China (see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in the PRC—You may experience
difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management
named in this annual report based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations
or collect evidence within China” on page 17 of the 2022 Annual Report); |
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increases in labor costs in the PRC may adversely
affect the PRC operating entities’ business and profitability (see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Doing Business in the PRC—Increases in labor costs in the PRC may adversely affect the PRC operating entities’
business and profitability” on page 22 of the 2022 Annual Report); |
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if the PRC operating entities fail to obtain or
renew any of the requisite approvals, licenses, or permits applicable to our business, it could materially and adversely affect their
business and results of operations (see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business
in the PRC—if the PRC operating entities fail to obtain or renew any of the requisite approvals, licenses, or permits applicable
to their business, it could materially and adversely affect their business and results of operations” on page 23 of the 2022
Annual Report); |
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the PRC operating entities have not made adequate
social insurance and housing fund contributions for all employees as required by PRC regulations, which may subject them to penalties
(see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in the PRC—The PRC operating
entities have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations,
which may subject them to penalties” on page 23 of the 2022 Annual Report); |
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PRC regulations relating to offshore investment
activities by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit
our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its registered capital
or distribute profits to us, or may otherwise adversely affect us (see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Doing Business in the PRC—PRC regulations relating to offshore investment activities by PRC residents may subject
our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our
PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its registered capital or distribute profits to us, or may
otherwise adversely affect us” on page 24 of the 2022 Annual Report); |
| |
● |
PRC regulation of parent/subsidiary loans and direct
investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of offshore offerings to
make loans or additional capital contributions to our PRC subsidiaries and to make loans to Xiamen Pop Culture, which could materially
and adversely affect their liquidity and their ability to fund and expand their business (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Doing Business in the PRC—PRC regulation of parent/subsidiary loans and direct investment
by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of offshore offerings to make loans
or additional capital contributions to our PRC subsidiaries and to make loans to Xiamen Pop Culture, which could materially and adversely
affect their liquidity and their ability to fund and expand their business” on page 24 of the 2022 Annual Report); |
| |
● |
we face uncertainty with respect to indirect transfers
of equity interests in PRC resident enterprises by their non-PRC holding companies (see “Item 3. Key Information—D. Risk
Factors—Risks Relating to Doing Business in the PRC—We face uncertainty with respect to indirect transfers of equity
interests in PRC resident enterprises by their non-PRC holding companies” on page 27 of the 2022 Annual Report); |
| |
● |
fluctuations in exchange rates could have a material and adverse
effect on our results of operations and the value of your investment (see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Doing Business in the PRC—Fluctuations in exchange rates could have a material and adverse effect on our results
of operations and the value of your investment” on page 25 of the 2022 Annual Report); |
| |
● |
under the PRC Enterprise Income Tax Law, we may be classified as
a “resident enterprise” of China, which could 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 (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Doing Business in the PRC—Under the PRC Enterprise Income Tax Law, we 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” on page 26 of the 2022 Annual Report); |
| |
● |
we face uncertainty with respect to indirect transfers
of equity interests in PRC resident enterprises by their non-PRC holding companies (see “Item 3. Key Information—D. Risk
Factors—Risks Relating to Doing Business in the PRC—We face uncertainty with respect to indirect transfers of equity
interests in PRC resident enterprises by their non-PRC holding companies” on page 27 of the 2022 Annual Report); |
| |
● |
our PRC subsidiaries are subject to restrictions on paying dividends
or making other payments to us, which may have a material adverse effect on our ability to conduct our business (see “Item
3. Key Information—D. Risk Factors—Risks Relating to Doing Business in the PRC—Our PRC subsidiaries are subject
to restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct
our business” on page 28 of the 2022 Annual Report); |
| |
● |
governmental control of currency conversion may affect the value
of your investment and our payment of dividends (see “Item 3. Key Information—D. Risk Factors—Risks Relating to
Doing Business in the PRC—Governmental control of currency conversion may affect the value of your investment and our payment
of dividends” on page 28 of the 2022 Annual Report); |
| |
● |
there are significant uncertainties under the EIT Law relating to
the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries
may not qualify to enjoy certain treaty benefits (see “Item 3. Key Information—D. Risk Factors—Risks Relating to
Doing Business in the PRC—There are significant uncertainties under the EIT Law relating to the withholding tax liabilities
of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain
treaty benefits” on page 28 of the 2022 Annual Report); |
| |
● |
the disclosures in our reports and other filings with the SEC and
our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Doing Business in the PRC—The disclosures in our reports and other filings with the SEC
and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC” on page 29 of the
2022 Annual Report); |
| |
● |
the M&A Rules and certain other PRC regulations establish complex
procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue
growth through acquisitions in China (see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business
in the PRC—The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese
companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China” on
page 30 of the 2022 Annual Report); |
| |
● |
uncertainties in the interpretation and enforcement of PRC laws
and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit
the legal protection available to you and us (see “Risk Factors—Risks Relating to Doing Business in the PRC—Uncertainties
in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which
may be quick with little advance notice, could limit the legal protection available to you and us” on page 22 of this prospectus); |
| ● | given the Chinese
government’s significant oversight and discretion over the conduct of our business, the Chinese government may intervene or
influence our operations at any time, which could result in a material change in our operations and/or the value of our securities
(see “Risk Factors––Risks Relating to Doing Business in PRC––Given the Chinese government’s
significant oversight and discretion over the conduct of our business, the Chinese government may intervene or influence our
operations at any time, which could result in a material change in our operations and/or the value of our securities” on page
22 of this prospectus); |
| ● | the
Chinese government may exert more oversight and control over overseas public offerings conducted
by China-based issuers, which could significantly limit or completely hinder our ability
to offer or continue to offer our securities to investors and could cause the value of our
securities to significantly decline or become worthless (see “Risk Factors––Risks
Relating to Doing Business in PRC––The Chinese government may exert more oversight
and control over overseas public offerings conducted by China-based issuers, which could
significantly limit or completely hinder our ability to offer or continue to offer our securities
to investors and could cause the value of our securities to significantly decline or become
worthless” on page 23 of this prospectus); |
| ● | recent
greater oversight by the Cyberspace Administration of China over data security, particularly
for companies seeking to list on a foreign exchange, could adversely impact our business
and our offering (see “Risk Factors—Risks Relating to Doing Business in the PRC—Recent
greater oversight by the Cyberspace Administration of China over data security, particularly
for companies seeking to list on a foreign exchange, could adversely impact our business
and our offering” on page 23 of this prospectus); |
| ● | recent joint statement by the
SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent
criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors
who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings of our securities
in the U.S. (see “Risk Factors—Risks Relating to Doing Business in the PRC—Recent joint statement by the SEC and the
PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria
to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are
not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings of our securities
in the U.S.” on page 24 of this prospectus); and |
| ● | to
the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds
may not be available to fund operations or for other use outside of the PRC/Hong Kong due
to interventions in or the imposition of restrictions and limitations on the ability of our
Company, our subsidiaries, or the consolidated VIE by the PRC government to transfer cash
(see “Risk Factors—Risks Relating to Our Corporate Structure—To the extent
cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not
be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions
in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries,
or the VIE by the PRC government to transfer cash” on page 25 of this prospectus). |
Risks Related to Our Business (for a
more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business” in our
2022 Annual Report and “Risk Factors—Risks Relating to Our Business” of this prospectus)
Risks and uncertainties related to our business
include, but are not limited to, the following:
| |
● |
the PRC operating entities
have in recent years shifted their focus to the Event Hosting business, which makes it difficult
to predict our prospects and our business and financial performance (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—The PRC operating entities have in recent
years shifted their focus to the Event Hosting business, which makes it difficult to predict our
prospects and our business and financial performance” on page 31 of the 2022 Annual Report); |
| |
|
|
| |
● |
if the PRC operating entities
are unable to retain the existing clients for their Event Planning and Execution and Brand Promotion
businesses, our results of operations will be materially and adversely affected (see “Item
3. Key Information—D. Risk Factors—Risks Relating to Our Business—If the PRC operating
entities are unable to retain the existing clients for their Event Planning and Execution and Brand
Promotion businesses, our results of operations will be materially and adversely affected”
on page 31 of the 2022 Annual Report); |
| |
|
|
| |
● |
a substantial portion of the
PRC operating entities’ revenue and accounts receivable are currently derived from a small
number of customers. If any of these customers experiences a material business disruption, the PRC
operating entities would likely incur substantial losses of revenue (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—A substantial portion of the PRC operating
entities’ revenue and accounts receivable are currently derived from a small number of customers.
If any of these customers experiences a material business disruption, the PRC operating entities
would likely incur substantial losses of revenue” on page 31 of the 2022 Annual Report); |
| ● | the
PRC operating entities’ success is tied to events generally and, in particular, to
changes in popularity of hip-hop events on which they choose to focus (see “Item 3.
Key Information—D. Risk Factors—Risks Relating to Our Business—The PRC
operating entities’ success is tied to events generally and, in particular, to changes
in popularity of hip-hop events on which they choose to focus” on page 33 of the 2022
Annual Report); |
| |
● |
the PRC operating entities depend on the success
of live entertainment events, which are inherently susceptible to risks, and their exposure to such risks is potentially heightened
as a result of the nature of entertainment events and the fan experiences they seek to create (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—The PRC operating entities depend on the success of live entertainment events,
which are inherently susceptible to risks, and their exposure to such risks is potentially heightened as a result of the nature of
entertainment events and the fan experiences they seek to create” on page 34 of the 2022 Annual Report); |
| |
● |
the PRC operating entities
use third-party services in connection with their business, and any disruption to these services
could result in a disruption to their business, negative publicity, and a slowdown in the growth
of their customer base, materially and adversely affecting their business, financial condition, and
results of operations (see “Risk Factors—Risks Relating to Our Business—The PRC
operating entities use third-party services in connection with their business, and any disruption
to these services could result in a disruption to their business, negative publicity, and a slowdown
in the growth of their customer base, materially and adversely affecting their business, financial
condition, and results of operations” on page 34 of the 2022 Annual Report); and |
| |
● |
the PRC operating entities’
business depends on the continued success of their brands, and if they fail to maintain and enhance
the recognition of their brands, they may face difficulty increasing their network of partners and
clients, and their reputation and operating results may be harmed (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—The PRC operating entities’ business
depends on the continued success of their brands, and if they fail to maintain and enhance the recognition
of their brands, they may face difficulty increasing their network of partners and clients, and their
reputation and operating results may be harmed” on page 25 of the 2022 Annual Report). |
Risks Relating to Our Class A Ordinary
Shares and the Trading Market (for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Relating
to Risks Relating to Our Class A Ordinary Shares and the Trading Market” in our 2022 Annual Report)
In addition to the risks described above, we are
subject to general risks and uncertainties relating to our Class A Ordinary Shares and the trading market, including, but not limited
to, the following:
| ● | we
do not intend to pay dividends for the foreseeable future (see “Item 3. Key Information—D.
Risk Factors—Risks Relating to Risks Relating to Our Class A Ordinary Shares and the
Trading Market—We do not intend to pay dividends for the foreseeable future”
on page 40 of the 2022 Annual Report); |
| ● | the
market price of our Class A Ordinary Shares may be volatile or may decline regardless of
our operating performance (see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Risks Relating to Our Class A Ordinary Shares and the Trading Market—The
market price of our Class A Ordinary Shares may be volatile or may decline regardless of
our operating performance, and you may not be able to resell your shares at or above the
public offering price” on page 41 of the 2022 Annual Report); |
| ● | if
we cease to qualify as a foreign private issuer, we would be required to comply fully with
the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we
would incur significant additional legal, accounting and other expenses that we would not
incur as a foreign private issuer (see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Risks Relating to Our Class A Ordinary Shares and the Trading Market—If
we cease to qualify as a foreign private issuer, we would be required to comply fully with
the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we
would incur significant additional legal, accounting, and other expenses that we would not
incur as a foreign private issuer” on page 41 of the 2022 Annual Report); |
| ● | because
we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards
applicable to U.S. issuers, you will have less protection than you would have if we were
a domestic issuer (see “Item 3. Key Information—D. Risk Factors— Risks
Relating to Risks Relating to Our Class A Ordinary Shares and the Trading Market—Because
we are a foreign private issuer and intend to take advantage of exemptions from certain Nasdaq
corporate governance standards applicable to U.S. issuers, you will have less protection
than you would have if we were a domestic issuer” on page 42 of the 2022 Annual Report); |
| ● | the
laws of the Cayman Islands may not provide our shareholders with benefits comparable to those
provided to shareholders of corporations incorporated in the United States (see “Item
3. Key Information—D. Risk Factors—Risks Relating to Risks Relating to Our Class
A Ordinary Shares and the Trading Market—The laws of the Cayman Islands may not provide
our shareholders with benefits comparable to those provided to shareholders of corporations
incorporated in the United States” on page 44 of the 2022 Annual Report); |
| ● | anti-takeover
provisions in our amended and restated memorandum and articles of association may discourage,
delay, or prevent a change in control (see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Risks Relating to Our Class A Ordinary Shares and the Trading Market—Anti-takeover
provisions in our amended and restated memorandum and articles of association may discourage,
delay, or prevent a change in control” on page 45 of the 2022 Annual Report); |
| ● | the
dual class structure of our ordinary shares has the effect of concentrating voting control
with our chief executive officer and chairman, and his interests may not be aligned with
the interests of our other shareholders (see “Item 3. Key Information—D. Risk
Factors—Risks Relating to Risks Relating to Our Class A Ordinary Shares and the Trading
Market—The dual class structure of our ordinary shares has the effect of concentrating
voting control with our chief executive officer and chairman, and his interests may not be
aligned with the interests of our other shareholders” on page 45 of the 2022 Annual
Report); and |
| ● | we
are a “controlled company” within the meaning of the Nasdaq listing rules, and
may follow certain exemptions from certain corporate governance requirements that could adversely
affect our public shareholders (see “Item 3. Key Information—D. Risk Factors—Risks
Relating to Risks Relating to Our Class A Ordinary Shares and the Trading Market—We
are a “controlled company” within the meaning of the Nasdaq listing rules, and
may follow certain exemptions from certain corporate governance requirements that could adversely
affect our public shareholders” on page 46 of the 2022 Annual Report). |
Permissions Required from PRC Authorities
As of the date of this prospectus, we, our
PRC subsidiaries, and the PRC operating entities, (i) are not covered by additional permissions or approval requirements from any governmental
agency that is required to approve the PRC operating entities’ operations, (ii) have received from PRC authorities all requisite
licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, and (iii) no such permission
or approval has been denied. These licenses, permissions, and approvals, which have been successfully obtained, are: (i) business licenses;
(ii) the EDI and ICP Licenses; (iii) the Commercial Performance License; (iv) the Radio and Television Program Production and Operation
Permit; and (v) the filing-for-record procedures before engaging in non-commercial Internet content service operations. Besides, the
PRC operating entities are in the process of applying for the following licenses, permissions, or approvals, which may be required for
their new operations in the PRC: (i) the Internet Culture Business Operating License; (ii) the Internet Publication License; (iii) the
filing-for-record procedures with the CAC’s filing management system for blockchain information services; and (iv) the filing-for-record
procedures for artworks related business activities with local cultural administrative authorities. However, we cannot assure you that
any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure of
these entities to fully comply with such compliance requirements may cause our PRC subsidiaries or the PRC operating entities to be unable
to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification,
or other sanctions. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in the PRC—If
the PRC operating entities fail to obtain or renew any of the requisite approvals, licenses, or permits applicable to their business,
it could materially and adversely affect their business and results of operations” in the 2022 Annual Report.
As advised by our PRC counsel, JT&N, as
of the date of this prospectus, our Company, our subsidiaries, and the PRC operating entities, (i) are not required to obtain additional
permissions or approvals to operate their current business, (ii) are not required to obtain permission from the CSRC, the CAC, or any
other Chinese authorities to issue our securities to foreign investors based on PRC laws and regulations currently in effect, and (iii)
have not received or were denied such permission by any Chinese authorities. However, we cannot assure you that the PRC regulatory agencies,
including the CAC or the CSRC, would take the same view as we do, and there is no assurance that our PRC subsidiaries and the PRC operating
entities are always able to successfully update or renew the licenses or permits required for the relevant business in a timely manner
or that these licenses or permits are sufficient to conduct all of their present or future business. If our PRC subsidiaries or the PRC
operating entities (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions
or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and our PRC subsidiaries and the PRC
operating entities are required to obtain such permissions or approvals in the future, they could be subject to fines, legal sanctions,
or an order to suspend their relevant services, which may materially and adversely affect our financial condition and results of operations
and cause our securities to significantly decline in value or become worthless.
Recently, the General Office of the Central
Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions, which were made available
to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities and
the need to strengthen the supervision over overseas listings by Chinese companies. See “Item 3. Key Information—D. Risk
Factors—Risks Relating to Doing Business in the PRC—The Chinese government may exert more oversight and control over overseas
public offerings conducted by China-based issuers, which could significantly limit or completely hinder our ability to offer or continue
to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless”
of the 2022 Annual Report.
On December 28, 2021, 13 governmental departments
of the PRC, including the CAC, issued the revised Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity
Review Measures require that an online platform operator which possesses the personal information of at least one million users must
apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries. Such requirement is reiterated on the Security
Administration Draft, which was released by the CAC on November 14, 2021 for public consultation. As advised by our PRC counsel, JT&N,
as of the date of this prospectus, we are not subject to cybersecurity review or network data security review by the CAC, since (i) as
companies that host entertainment events, operate hip-hop related online programs, and provide event planning and execution services
and brand promotion services to corporate clients, we and the PRC operating entities are unlikely to be classified as CIIOs by the PRC
regulatory agencies; (ii) we and the PRC operating entities currently possess personal information of a relatively small number of users
in our business operations, significantly less than the one million user threshold set for a data processing operator applying for listing
on a foreign exchange that may be required to pass such cybersecurity review, and we do not anticipate that we will be collecting over
one million users’ personal information in the foreseeable future; (iii) since we and the PRC operating entities are in the hip-hop
industry, data processed in our business is unlikely to have a bearing on national security and therefore is unlikely to be classified
as core or important data by the authorities. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the
Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt
new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security
Administration Draft. See “Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater oversight by the
Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely
impact our business and our offering.”
In addition, on December 24, 2021, the CSRC and
relevant departments of the State Council issued the Draft Rules Regarding Overseas Listings, which aim to regulate overseas securities
offerings and listings by China-based companies, for public consultation. According to the Draft Rules Regarding Overseas Listings, among
other things, after making initial applications with overseas stock markets for initial public offerings or listings, or after the completion
of issuance of overseas listed securities by the overseas listed issuer, all China-based companies shall file the required filing materials
with the CSRC within three working days. In addition, overseas offerings and listings may be prohibited for such China-based companies
when any of six occasions occur. As of the date of this prospectus, the Draft Rules Regarding Overseas Listings have been released for
public comment only and have not been formally promulgated, and neither we nor any of the PRC operating entities have been required to
complete the filing procedures. There remain, however, uncertainties as to the enactment or future interpretations and implementations
of the Draft Rules Regarding Overseas Listings. See “Risk Factors—Risks Relating to Doing Business in the PRC—The Chinese
government may exert more oversight and control over overseas public offerings conducted by China-based issuers, which could significantly
limit or completely hinder our ability to offer or continue to offer our securities to investors and could cause the value of our securities
to significantly decline or become worthless.”
We have been closely monitoring the development
in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the
CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed on us.
Asset Transfers Between Our Company, Our
Subsidiaries, and the VIE
As of the date of this prospectus, our Company,
our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements. Our Company, our
subsidiaries, and the VIE do not have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable
future.
The Company’s management is directly
supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among
our subsidiaries and departments and the PRC operating entities. Each subsidiary, department, or PRC operating entity initiates a cash
request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to
designated management members of the Company, based on the amount and the use of cash requested. The designated management member examines
and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submit it to the cashier specialists
of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures
that dictate how funds are transferred.
During the fiscal years ended June 30, 2022,
2021, and 2020, cash transfers and transfers of other assets between Pop Culture Group, its subsidiaries, and the VIE were as follows:
in July 2020, Pop Culture Group transferred approximately $600,000 to its subsidiary in Hong Kong, which in turn transferred approximately
$599,000 to its PRC subsidiary; in July 2021, Pop Culture Group transferred approximately $7,081,000 of the net proceeds from our initial
public offering to its Hong Kong subsidiary, which in turn transferred approximately $7,050,000 to its PRC subsidiary; and in May and
June 2022, Pop Culture Group transferred approximately $3,019,000 to Pop Culture HK, which in turn transferred approximately $3,008,400
to Heliheng. See our audited consolidated financial statements in the 2022 Annual Report.
Dividends or Distributions Made to Our Company
and U.S. Investors and Tax Consequences
As of the date of this prospectus, none of our
subsidiaries or the VIE have made any dividends or distributions to our Company and our Company has not made any dividends or distributions
to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any
cash dividends will be paid in the foreseeable future. Subject to the passive foreign investment company (“PFIC”) rules, the
gross amount of distributions we make to investors with respect to our securities (including the amount of any taxes withheld therefrom)
will be taxable as a dividend, to the extent that the distribution is paid out of our current or accumulated earnings and profits, as
determined under U.S. federal income tax principles.
Under Cayman Islands law, a Cayman Islands company
may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid
if this would result in the company being unable to pay its debts due in the ordinary course of business.
Cash is transferred among our Company, our subsidiaries,
and the VIE, in the following manners: (i) funds are transferred to Heliheng, our WFOE, from our Company as needed through Pop Culture
HK, our Hong Kong subsidiary, in the form of capital contributions or shareholder loans, as the case may be; (ii) funds may be paid by
the VIE to Heliheng, as service fees according to the VIE Agreements; (iii) dividends or other distributions may be paid by Heliheng,
to our Company through Pop Culture HK; and (iv) Heliheng and the VIE, lend to and borrow from each other from time to time for business
operation purposes.
Relevant PRC laws and regulations permit the
companies in the PRC to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards
and regulations. Additionally, each of the companies in the PRC are required to set aside at least 10% of its after-tax profits each
year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. The companies in the PRC are also
required to further set aside a portion of their after-tax profits to fund the employee welfare fund, although the amount to be set aside,
if any, is determined at their discretion. These reserves are not distributable as cash dividends. Furthermore, in order for us to pay
dividends to our shareholders, we will rely on payments made from Xiamen Pop Culture to Heliheng, pursuant to the VIE Agreements, and
the distribution of such payments to Pop Culture HK as dividends from Heliheng, and then to our Company. If our PRC subsidiaries and
the PRC operating entities incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability
to pay dividends or make other payments to us.
Our cash dividends, if any, will be paid in
U.S. dollars. If we are considered a tax resident enterprise of the PRC for tax purposes, any dividends we pay to our overseas shareholders
may be regarded as PRC-sourced income and as a result may be subject to PRC withholding tax. See “Item 3. Key Information—D.
Risk Factors—Risks Relating to Doing Business in the PRC—Under the PRC Enterprise Income Tax Law, we 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” of the 2022 Annual Report.
The PRC government also imposes controls on
the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The majority
of our and the PRC operating entities’ income is received in Renminbi and shortages in foreign currencies may restrict our ability
to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign
exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related
transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange as long as certain
procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency
and remitted out of the PRC to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government
may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the
future, we may not be able to pay dividends in foreign currencies to our shareholders.
Any limitation on the ability of our PRC subsidiaries
and the PRC operating entities to distribute dividends or other payments to their respective shareholders could materially and adversely
limit our ability to conduct operations, make investments, engage in acquisitions, or undertake other activities requiring working capital.
However, our operations and business, including investment and/or acquisitions by our PRC subsidiaries and the PRC operating entities
within the PRC, will not be affected as long as the capital is not transferred in or out of the PRC.
Selected Condensed Consolidating Financial
Schedule
As a holding company with no material operations
of our own, we conduct our operations through the VIE and its subsidiaries in the PRC. Our subsidiaries and the VIE and its subsidiaries
as of the date of this prospectus are described below:
| Name of Entity |
|
Date of
Incorporation/Acquisition |
|
Place of
Incorporation/Acquisition |
|
Effective Interest
Held Through Equity Ownership/ Contractual Arrangements |
|
Principal Activities |
| Pop culture Group |
|
January 3, 2020 |
|
Cayman Islands |
|
100% |
|
Parent Holding |
| |
|
|
|
|
|
|
|
|
| Subsidiaries |
|
|
|
|
|
|
|
|
| Pop Culture HK |
|
January 20, 2020 |
|
Hong Kong |
|
100% |
|
Investment holding |
| Heliheng |
|
March 13, 2020 |
|
PRC |
|
100% |
|
WFOE, consultancy and information technology support |
| Pop Culture Global |
|
December 3, 2021 |
|
California |
|
100% |
|
Overseas hip-hop resource integration and business development |
| Pop Investment |
|
January 25, 2022 |
|
PRC |
|
60% owned by Heliheng; 40% owned by the VIE |
|
Cross-border funds management |
| Shuzhi Sports |
|
July 21, 2022 |
|
PRC |
|
100% |
|
Holding sports performance activities |
| |
|
|
|
|
|
|
|
|
| VIE |
|
|
|
|
|
|
|
|
| Xiamen Pop Culture |
|
March 29, 2007 |
|
PRC |
|
VIE |
|
Event planning, execution, and hosting |
| |
|
|
|
|
|
|
|
|
| VIE’s subsidiaries |
|
|
|
|
|
|
|
|
| Shanghai Pupu Sibo Sports Technology Development
Co., Ltd. |
|
March 30, 2017 |
|
PRC |
|
100% owned by the VIE |
|
Event planning and execution |
| Pop Network |
|
June 6, 2017 |
|
PRC |
|
100% owned by the VIE |
|
Marketing |
| Guangzhou Shuzhi |
|
December 19, 2018 |
|
PRC |
|
100% owned by the VIE |
|
Event planning and execution |
| Shenzhen Pop Digital Industry Development Co.,
Ltd. |
|
January 17, 2020 |
|
PRC |
|
100% owned by the VIE |
|
Event planning and execution |
| Pupu Digital |
|
June 20, 2022 |
|
PRC |
|
100% owned by the VIE |
|
Cultural technology |
| Hualiu Digital |
|
April 14, 2022 |
|
PRC |
|
100% owned by the VIE |
|
Acting broker and self-branding development |
| Pop Sikai |
|
August 18, 2020 |
|
PRC |
|
51% owned by the VIE |
|
Event planning and execution |
| Zhongpu Shuyuan |
|
March 30, 2022 |
|
PRC |
|
51% owned by the VIE |
|
Digital collection and Metaverse |
| Xiamen Qiqin |
|
April 12, 2022 |
|
PRC |
|
51% owned by the VIE |
|
IPC License |
| Shenzhen Jam box |
|
November 18, 2021 |
|
PRC |
|
60% owned by the VIE |
|
Event planning and execution |
| Xiamen Shuzhi |
|
May 16, 2022 |
|
PRC |
|
100% owned by the VIE |
|
Online and offline advertising marketing and
exhibitions |
| Fujian Shuzhi |
|
May 18, 2022 |
|
PRC |
|
51% owned by the VIE |
|
Online and offline advertising marketing and
exhibitions |
The following tables present selected condensed
consolidated financial data of Pop Culture Group and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended June
30, 2022, 2021, and 2020, and balance sheet data as of June 30, 2022 and 2021.
SELECTED CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME (LOSS)
| |
|
For the Fiscal
Year Ended
June 30, 2022 |
|
| |
|
Pop Culture
Group |
|
|
Subsidiaries |
|
|
VIE and its
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated
Total |
|
| Revenue |
|
$ |
- |
|
|
$ |
7,520,431 |
|
|
$ |
24,761,112 |
|
|
$ |
- |
|
|
$ |
32,281,543 |
|
| Cost of revenue |
|
$ |
- |
|
|
$ |
6,542,201 |
|
|
$ |
19,493,810 |
|
|
$ |
- |
|
|
$ |
26,036,011 |
|
| Gross profit |
|
$ |
- |
|
|
$ |
978,230 |
|
|
$ |
5,267,302 |
|
|
$ |
- |
|
|
$ |
6,245,532 |
|
| Service fee income |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,882,512 |
|
|
$ |
(1,882,512 |
)* |
|
$ |
- |
|
| Net income |
|
$ |
(1,583,761 |
) |
|
$ |
389,137 |
|
|
$ |
1,882,512 |
|
|
$ |
- |
|
|
$ |
687,888 |
|
| Comprehensive income |
|
$ |
(1,583,761 |
) |
|
$ |
124,256 |
|
|
$ |
1,273,590 |
|
|
$ |
- |
|
|
$ |
(185,915 |
) |
| * | To
eliminate income generated by the VIE and its subsidiaries. |
| | |
For the Fiscal Year Ended
June 30, 2021 | |
| | |
Pop Culture
Group | | |
Subsidiaries | | |
VIE and its
Subsidiaries | | |
Eliminations | | |
Consolidated
Total | |
| Revenue | |
$ | - | | |
$ | 655,255 | | |
$ | 24,871,302 | | |
$ | - | | |
$ | 25,526,557 | |
| Cost of revenue | |
$ | - | | |
$ | 579,454 | | |
$ | 17,723,040 | | |
$ | - | | |
$ | 18,302,494 | |
| Gross profit | |
$ | - | | |
$ | 75,801 | | |
$ | 7,148,262 | | |
$ | - | | |
$ | 7,224,063 | |
| Service fee income | |
$ | - | | |
$ | 4,571,795 | | |
$ | - | | |
$ | (4,571,795 | ) | |
$ | - | |
| Net (loss) income | |
$ | (330,734 | ) | |
$ | 4,598,276 | | |
$ | 4,571,795 | | |
$ | (4,571,795 | ) | |
$ | 4,267,542 | |
| Comprehensive (loss) income | |
$ | (330,734 | ) | |
$ | 4,648,657 | | |
$ | 5,857,171 | | |
$ | (4,571,795 | ) | |
$ | 5,603,299 | |
| |
|
For the Fiscal Year Ended
June 30, 2020 |
|
| |
|
Pop Culture
Group |
|
|
Subsidiaries |
|
|
VIE and its
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated
Total |
|
| Revenue |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
15,688,080 |
|
|
$ |
- |
|
|
$ |
15,688,080 |
|
| Cost of revenue |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
11,158,847 |
|
|
$ |
- |
|
|
$ |
11,158,847 |
|
| Gross profit |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
4,529,233 |
|
|
$ |
- |
|
|
$ |
4,529,233 |
|
| Net (loss) income |
|
$ |
(318,634 |
) |
|
$ |
(99 |
) |
|
$ |
2,944,550 |
|
|
$ |
- |
|
|
$ |
2,625,817 |
|
| Comprehensive (loss) income |
|
$ |
(318,634 |
) |
|
$ |
(100 |
) |
|
$ |
2,702,712 |
|
|
$ |
- |
|
|
$ |
2,383,978 |
|
SELECTED CONDENSED CONSOLIDATED BALANCE SHEETS
| |
|
As of June 30,
2022 |
|
| |
|
Pop Culture
Group |
|
|
Subsidiaries |
|
|
VIE and its
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated
Total |
|
| Cash |
|
$ |
9,085,082 |
|
|
$ |
1,741,047 |
|
|
$ |
3,569,903 |
|
|
$ |
- |
|
|
$ |
14,396,032 |
|
| Receivable from the VIE |
|
$ |
- |
|
|
$ |
1,882,512 |
|
|
$ |
- |
|
|
$ |
(1,882,512 |
) |
|
$ |
- |
|
| Total current assets |
|
$ |
13,335,083 |
|
|
$ |
10,047,766 |
|
|
$ |
29,331,187 |
|
|
$ |
(1,882,512 |
) |
|
$ |
50,831,524 |
|
| Investments in subsidiaries and the VIE |
|
$ |
10,700,049 |
|
|
$ |
10,657,426 |
|
|
$ |
- |
|
|
$ |
(21,357,475 |
) |
|
$ |
- |
|
| Total assets |
|
$ |
33,634,367 |
|
|
$ |
23,826,005 |
|
|
$ |
30,147,583 |
|
|
$ |
(23,239,987 |
) |
|
$ |
64,367,968 |
|
| Total liabilities |
|
$ |
90,165 |
|
|
$ |
395,324 |
|
|
$ |
11,110,127 |
|
|
$ |
- |
|
|
$ |
11,595,616 |
|
| Total shareholders’ equity |
|
$ |
33,544,203 |
|
|
$ |
23,430,680 |
|
|
$ |
19,037,456 |
|
|
$ |
(23,239,987 |
) |
|
$ |
52,772,352 |
|
| Total liabilities and shareholders’ equity |
|
$ |
33,634,367 |
|
|
$ |
23,826,005 |
|
|
$ |
30,147,583 |
|
|
$ |
(23,239,987 |
) |
|
$ |
64,367,968 |
|
| | |
As of June 30, 2021 | |
| | |
Pop Culture
Group | | |
Subsidiaries | | |
VIE and its
Subsidiaries | | |
Eliminations | | |
Consolidated Total | |
| Cash | |
$ | 4,260 | | |
$ | 27,654 | | |
$ | 1,288,063 | | |
$ | - | | |
$ | 1,319,977 | |
| Receivable from the VIE | |
$ | - | | |
$ | 4,571,795 | | |
$ | - | | |
$ | (4,571,795 | ) | |
$ | - | |
| Total current assets | |
$ | 683,526 | | |
$ | 5,243,936 | | |
$ | 31,054,450 | | |
$ | (4,571,795 | ) | |
$ | 32,410,117 | |
| Investments in subsidiaries and the VIE | |
$ | 18,869,579 | | |
$ | 599,000 | | |
$ | - | | |
$ | (19,468,579 | ) | |
$ | - | |
| Total assets | |
$ | 19,553,105 | | |
$ | 5,849,445 | | |
$ | 33,067,159 | | |
$ | (24,040,374 | ) | |
$ | 34,429,335 | |
| Total liabilities | |
$ | 225,000 | | |
$ | 1,888 | | |
$ | 14,874,342 | | |
$ | - | | |
$ | 15,101,230 | |
| Total shareholders’ equity | |
$ | 19,328,105 | | |
$ | 5,847,557 | | |
$ | 18,192,817 | | |
$ | (24,040,374 | ) | |
$ | 19,328,105 | |
| Total liabilities and shareholders’ equity | |
$ | 19,553,105 | | |
$ | 5,849,445 | | |
$ | 33,067,159 | | |
$ | (24,040,374 | ) | |
$ | 34,429,335 | |
SELECTED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
| |
|
For the Fiscal Year Ended
June 30, 2022 |
|
| |
|
Pop Culture
Group |
|
|
Subsidiaries |
|
|
VIE and its Subsidiaries |
|
|
Eliminations |
|
|
Consolidated
Total |
|
| Net cash used in operating activities |
|
$ |
(10,391,828 |
) |
|
$ |
1,713,393 |
|
|
$ |
(22,495,295 |
) |
|
$ |
- |
|
|
$ |
(31,173,730 |
) |
| Net used in investing activities |
|
$ |
(10,100,049 |
) |
|
$ |
- |
|
|
$ |
(82,733 |
) |
|
$ |
10,100,049 |
|
|
$ |
(82,733 |
) |
| Net cash used in (provided by) financing activities |
|
$ |
29,572,699 |
|
|
$ |
- |
|
|
$ |
10,463,813 |
|
|
$ |
- |
|
|
$ |
40,036,512 |
|
| |
|
For the Fiscal Year Ended
June 30, 2021 |
|
| |
|
Pop Culture
Group |
|
|
Subsidiaries |
|
|
VIE and its
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated
Total |
|
| Net cash used in operating activities |
|
$ |
(75,805 |
) |
|
$ |
(651,453 |
) |
|
$ |
(3,310,074 |
) |
|
$ |
- |
|
|
$ |
(4,037,332 |
) |
| Net used in investing activities |
|
$ |
(600,000 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
600,000 |
|
|
$ |
- |
|
| Net cash used in (provided by) financing activities |
|
$ |
(459,164 |
) |
|
$ |
(568,241 |
) |
|
$ |
4,378,228 |
|
|
$ |
600,000 |
|
|
$ |
3,950,823 |
|
| |
|
For the Fiscal Year Ended
June 30, 2020 |
|
| |
|
Pop Culture
Group |
|
|
Subsidiaries |
|
|
VIE and its
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated
Total |
|
| Net cash used in operating activities |
|
$ |
(348,870 |
) |
|
$ |
- |
|
|
$ |
(2,255,959 |
) |
|
$ |
- |
|
|
$ |
(2,604,829 |
) |
| Net provided by investing activities |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
3,261 |
|
|
$ |
- |
|
|
$ |
3,261 |
|
| Net cash provided by financing activities |
|
$ |
1,487,862 |
|
|
$ |
- |
|
|
$ |
1,777,271 |
|
|
$ |
- |
|
|
$ |
3,265,133 |
|
Corporate Information
Our principal executive offices are located at
3rd Floor, No. 168, Fengqi Road, Jimei District, Xiamen City, Fujian Province, the PRC, and our phone number is +86-0592-5968169. Our
registered office in the Cayman Islands is located at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman
KY1-1002, Cayman Islands, and the phone number of our registered office is +1-3459498599. We maintain a corporate website at http://cpop.cn/.
The information contained in, or accessible from, our website or any other website does not constitute a part of this prospectus. Our
agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
RISK FACTORS
Investing in our securities involves risks.
Before making an investment decision, you should carefully consider the risks described under “Risk Factors” in the applicable
prospectus supplement and under the heading “Item 3. Key Information—D. Risk Factors” in the 2022 Annual Report, which
is incorporated in this prospectus by reference, as updated by our subsequent filings under the Exchange Act that are incorporated herein
by reference, together with all of the other information appearing in this prospectus or incorporated by reference into this prospectus
and any applicable prospectus supplement, in light of your particular investment objectives and financial circumstances. In addition
to those risk factors, there may be additional risks and uncertainties of which management is not aware or focused on or that management
deems immaterial. Our business, financial condition, or results of operations could be materially adversely affected by any of these
risks. The trading price of our securities could decline due to any of these risks, and you may lose all or part of your investment.
In addition, investing in our securities is
highly speculative and involves a significant degree of risk. We are a holding company incorporated in the Cayman Islands and not a Chinese
operating company. As a holding company with no material operations of our own, we conduct our operations through the VIE and its subsidiaries
in the PRC. We do not have any equity ownership of the VIE; instead, for accounting purposes, we control and receive the economic benefits
of the VIE’s business operations through the VIE Agreements, which enables us to consolidate the financial results of the VIE and
its subsidiaries in our consolidated financial statements under U.S. GAAP. Our securities offered in this offering are securities of
Pop Culture Group, the offshore holding company in the Cayman Islands, instead of securities of the VIE or its subsidiaries in the PRC.
The Chinese regulatory authorities could disallow our structure, which could result in a material change in our operations and the value
of our securities could decline or become worthless. Set forth below are certain risks related to the VIE structure and recent regulatory
initiatives implemented by the relevant PRC government entities.
Risks Relating to Our Corporate Structure
If the PRC government determines that the
VIE Agreements do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations
or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish
our interests in those operations.
Foreign ownership of Internet content services
and radio and television program production and distribution business is prohibited under current PRC laws and regulations. Accordingly,
we currently operate our radio and television program production and distribution business through Xiamen Pop Culture, a VIE, pursuant
to the VIE Agreements. For a description of the VIE Agreements, see “Our Corporate Structure—The VIE Agreements.”
According to our PRC counsel, JT&N, based
on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of Xiamen Pop Culture and Heliheng is currently
not in violation of applicable PRC laws and regulations currently in effect; and (ii) each of the VIE Agreements is legal, valid, binding,
and enforceable in accordance with its terms and applicable PRC laws and regulations. Our PRC counsel, JT&N, however, has also advised
us that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations.
The VIE Agreements have not been tested in a court of law in the PRC as of the date of this prospectus. Accordingly, the PRC regulatory
authorities may ultimately take a view contrary to the opinion of our PRC counsel. It is uncertain whether any new PRC laws or regulations
relating to VIE structures will be adopted or, if adopted, what they would provide.
If our corporate structure and the VIE Agreements
are determined as illegal or invalid by the competent court in the PRC, arbitral tribunal, or regulatory authorities, we may be unable
to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP and have
to modify such structure to comply with regulatory requirements. However, there can be no assurance that we can achieve this without
material disruption to our business. Further, if our corporate structure and contractual arrangements are found to be in violation of
any existing or future PRC laws or regulations, or we or Xiamen Pop Culture fails to obtain or maintain any required permits or approvals,
the relevant regulatory authorities would have broad discretion in dealing with such violations, including:
| |
● |
revoking the business and/or operating licenses of Heliheng or Xiamen Pop Culture; |
| |
|
|
| |
● |
discontinuing or restricting the operations of Heliheng or Xiamen Pop Culture; |
| |
|
|
| |
● |
imposing conditions or requirements with which we, Heliheng, or Xiamen Pop Culture may not be able to comply; |
| |
|
|
| |
● |
requiring us, Heliheng, or Xiamen Pop Culture to change our corporate structure and contractual arrangements; |
| |
|
|
| |
● |
restricting or prohibiting our use of the proceeds from our public
offering to finance the PRC operating entities’ business and operations in the PRC; and |
| |
|
|
| |
● |
imposing fines. |
The imposition of any of these penalties would
result in a material and adverse effect on the PRC operating entities’ ability to conduct their business. In addition, it is unclear
what impact the PRC government actions would have on us and on our ability to consolidate the financial results of Xiamen Pop Culture
in our consolidated financial statements, if the PRC government authorities were to find our legal structure and the VIE Agreements to
be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct
the activities of Xiamen Pop Culture or our right to receive substantially all the economic benefits and residual returns from Xiamen
Pop Culture and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be
able to consolidate the financial results of Xiamen Pop Culture in our consolidated financial statements. Either of these results, or
any other significant penalties that might be imposed on us in this event, would have a material adverse effect on our financial condition
and results of operations, and our securities may decline in value or become worthless.
Risks Relating to Doing Business in the PRC
Uncertainties in the interpretation and
enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance
notice, could limit the legal protection available to you and us.
There are substantial uncertainties regarding
the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business
and the enforcement and performance of our arrangements with third parties in certain circumstances. The laws and regulations are sometimes
vague and may be subject to future changes, and their official interpretation and enforcement could be unpredictable, with little advance
notice. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations,
may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a
manner different from our current understanding of these laws and regulations. New laws and regulations that affect existing and proposed
future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations
may have on our business.
The legal system in the PRC is a civil law
system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference
but have limited precedential value. In addition, any new or changes in PRC laws and regulations related to foreign investment in the
PRC could affect the business environment and our ability to operate our business in the PRC.
From time to time, we may have to resort to
administrative and court proceedings to enforce our legal rights. Any administrative and court proceedings in the PRC may be protracted,
resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have
significant discretion in interpreting and implementing statutory and contractual terms, however, it may be more difficult to evaluate
the outcome of administrative and court proceedings and the level of legal protection we enjoy in the legal system in the PRC than in
more developed legal systems. Furthermore, the legal system in the PRC is based in part on government policies, internal rules, and regulations
(some of which are not published in a timely manner or at all) that may have retroactive effect and may change quickly with little advance
notice. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties,
including uncertainties 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 the PRC could materially and adversely affect our business and
impede our ability to continue our operations.
Such uncertainties, including the promulgation
of new laws, or changes to existing laws or the interpretation or enforcement thereof, could limit the legal protections available to
us and our investors, including you.
Given the Chinese government’s significant
oversight and discretion over the conduct of our business, the Chinese government may intervene or influence our operations at any time,
which could result in a material change in our operations and/or the value of our securities.
The Chinese government has exercised and continues
to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Substantially
all of our operations are located in the PRC. Our ability to operate in the PRC may be harmed by changes in its laws and regulations,
including those relating to taxation, foreign investment, information security, Internet, and other matters. The central or local governments
of the PRC 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, 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 the PRC or
particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
For example, the Chinese cybersecurity regulator announced on July
2, 2021, that it had begun an investigation of Didi Global Inc. and two days later ordered that the company’s app be removed from
smartphone app stores. On July 24, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office
of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students
at the Stage of Compulsory Education, pursuant to which foreign investment in such firms via mergers and acquisitions, franchise development,
and variable interest entities are banned from this sector. We cannot rule out the possibility that the Chinese government will in the
future release regulations or policies regarding our industry that could adversely affect our business, financial condition, and results
of operations.
As such, the PRC operating entities’
business segments may be subject to various government and regulatory interference, and they could be subject to new regulation by various
political and regulatory entities, including various local and municipal agencies and government sub-divisions. The PRC operating entities
may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.
As a result, we face uncertainty about future actions by the PRC government that could significantly affect our ability to offer or continue
to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
The Chinese government may exert more oversight
and control over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder our
ability to offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline
or become worthless.
Recent statements made by the Chinese government
have indicated an intent to increase the government’s oversight and control over offerings of companies with significant operations
in the PRC that are to be conducted in foreign markets, as well as foreign investment in China-based issuers. For example, the General
Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions,
which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal
securities activities and the need to strengthen the supervision over overseas listings by Chinese companies.
Furthermore, on December 24, 2021, the CSRC
and relevant departments of the State Council issued the Draft Rules Regarding Overseas Listings, which aim to regulate overseas securities
offerings and listings by China-based companies, for public consultation. The Draft Rules Regarding Overseas Listing aim to lay out the
filing regulation arrangement for both direct and indirect overseas listing and clarify the determination criteria for indirect overseas
listing in overseas markers. Where an enterprise whose principal business activities are conducted in the PRC seeks to issue and list
its shares in the name of an overseas enterprise based on equity, assets, income, or other similar rights and interests of the relevant
domestic enterprise in the PRC, such activities are deemed an indirect overseas issuance and listing. According to the Draft Rules Regarding
Overseas Listings, among other things, after making initial applications with overseas stock markets for initial public offerings or
listings, or after the completion of issuance of overseas listed securities by the overseas listed issuer, all China-based companies
shall file the required filing materials with the CSRC within three working days. In addition, overseas offerings and listings may be
prohibited for such China-based companies when any of the following applies: (i) if the intended securities offerings and listings are
specifically prohibited by the PRC laws and regulations; (ii) if the intended securities offerings and listings may constitute a threat
to, or endanger national security as reviewed and determined by competent authorities under the State Council in accordance with laws;
(iii) if there are material ownership disputes over applicants’ equity interests, major assets, core technologies, or the others;
(iv) if, in the past three years, applicants’ domestic enterprises, controlling shareholders, or de facto controllers have committed
corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist
market economy, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for suspicion
of major violations; (v) if, in the past three years, any directors, supervisors, or senior executives of applicants have been subject
to administrative punishments for severe violations, or are currently under judicial investigation for suspicion of criminal offenses,
or are under investigation for suspicion of major violations; or (vi) other circumstances as prescribed by the State Council. The Administrative
Provisions further stipulate that a fine between RMB1 million (approximately $157,255) and RMB10 million (approximately $1,572,550) may
be imposed if an applicant fails to fulfill the filing requirements with the CSRC or conducts an overseas offering or listing in violation
of the Draft Rules Regarding Overseas Listings, and in cases of severe violations, a parallel order to suspend relevant businesses or
halt operations for rectification may be issued, and relevant business permits or operational license revoked.
As of the date of this prospectus, the Draft
Rules Regarding Overseas Listings have been released for public comment only and have not been formally promulgated, and neither we,
our subsidiaries, nor any of the PRC operating entities have been required to complete the filing procedures. However, uncertainties
remain as to its enactment or future interpretations and implementations. Our PRC counsel, JT&N, has advised us that, even if the
final rules are promulgated as proposed in the current Draft Rules Regarding Overseas Listings, none of the situations that would clearly
prohibit overseas offering and listings would apply to us. In addition, we would only need to submit the filing materials and no CSRC
approval would be required under such rules.
Notwithstanding the above, our PRC counsel
has further advised us that uncertainties still exist as to whether we, our subsidiaries, or the PRC operating entities are required
to obtain permissions from the CAC, the CSRC, or any other governmental agency that is required to approve our operations and/or offering.
We have been closely monitoring the development in the regulatory landscape in the PRC, particularly regarding the requirement of approvals,
including on a retrospective basis, from the CAC, the CSRC, or other PRC authorities with respect to this offering, as well as other
procedures that may be imposed on us. In the event that we, our subsidiaries, or the PRC operating entities are subject to the compliance
requirements, we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a
timely manner, or at all. Any failure of our Company, our subsidiaries, or the PRC operating entities to fully comply with new regulatory
requirements may subject us to regulatory actions, such as fines, relevant businesses or operations suspension for rectification, revocation
of relevant business permits or operational license, or other sanctions, which may significantly limit or completely hinder our ability
to offer or continue to offer our securities cause significant disruption to our business operations, severely damage our reputation,
materially and adversely affect our financial condition and results of operations and cause our securities to significantly decline in
value or become worthless.
Recent greater oversight by the Cyberspace
Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our
business and our offering.
On December 28, 2021, the CAC and other relevant
PRC governmental authorities jointly promulgated the Cybersecurity Review Measures, which took effect on February 15, 2022. The Cybersecurity
Review Measures provide that, in addition to CIIOs that intend to purchase Internet products and services, net platform operators engaging
in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity
Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security
risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that
an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review
by the CAC if it intends to be listed in foreign countries.
On November 14, 2021, the CAC published the Security
Administration Draft, which provides that data processing operators engaging in data processing activities that affect or may affect national
security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Security
Administration Draft, data processing operators who possess personal data of at least one million users or collect data that affects or
may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The
deadline for public comments on the Security Administration Draft was December 13, 2021.
As of the date of this prospectus, we have not
received any notice from any authorities identifying our PRC subsidiaries or the PRC operating entities as CIIOs or requiring us to go
through cybersecurity review or network data security review by the CAC. As confirmed by our PRC counsel, JT&N, neither the operations
of our PRC subsidiaries, nor of the PRC operating entities, nor this offering are expected to be affected, and that we will not be subject
to cybersecurity review by the CAC under the Cybersecurity Review Measures, nor will any such entity be subject to the Security Administration
Draft, if it is enacted as proposed, given that our PRC subsidiaries and the PRC operating entities possess personal data of fewer than
one million individual clients and do not collect data that affects or may affect national security in their business operations as of
the date of this prospectus and do not anticipate that they will be collecting over one million users’ personal information or data
that affects or may affect national security in the near future. In general, we believe we are compliant with the regulations or policies
that have been issued by the CAC to date. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security
Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws,
regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration
Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures
and actions to comply and to minimize the adverse effect of such laws on us. We cannot assure you that PRC regulatory agencies, including
the CAC, would take the same view as we do. In the event that we are subject to any mandatory cybersecurity review and other specific
actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at
all. If we inadvertently conclude that such approval is not required, fail to obtain and maintain such approvals, licenses, or permits
required for our business or respond to changes in the regulatory environment, we could be subject to liabilities, penalties and operational
disruption, which may materially and adversely affect our business, operating results, financial condition, and the value of our securities,
significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to
significantly decline in value or become worthless.
Recent joint statement by the SEC and the
PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to
be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not
inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings of our securities in the
U.S.
On April 21, 2020, SEC Chairman Jay Clayton and
PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated
with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized
the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in
emerging markets.
On May 18, 2020, Nasdaq filed three proposals
with the SEC to (i) apply a minimum offering size requirement for companies primarily operating in a “Restrictive Market,”
(ii) adopt a new requirement relating to the qualification of management or the board of directors for Restrictive Market companies, and
(iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s
auditor. On October 4, 2021, the SEC approved Nasdaq’s revised proposal for the rule changes.
On May 20, 2020, the U.S. Senate passed the Holding
Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the
PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is
unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a
national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December
18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
On March 24, 2021, the SEC adopted interim final
rules relating to the implementation of certain disclosure and documentation requirements of the Holding Foreign Companies Accountable
Act.
On June 22, 2021, the U.S. Senate passed the Accelerating
Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives and signed into law, would reduce the
number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act
from three years to two, and thus, would reduce the time before our securities may be prohibited from trading or delisted.
On September 22, 2021, the PCAOB adopted a final
rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining, as
contemplated under the Holding Foreign Companies Accountable Act, whether the board of directors of a company is unable to inspect or
investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more
authorities in that jurisdiction.
On December 2, 2021, the SEC adopted amendments
to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act.
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
the PRC and in Hong Kong because of positions taken by the PRC and Hong Kong authorities in those jurisdictions.
The lack of access to the PCAOB inspection in
China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, investors
may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes
it more difficult to evaluate the effectiveness of these accounting firm’s audit procedures or quality control procedures as compared
to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors to lose confidence
in the audit procedures and reported financial information and the quality of the financial statements of those companies who have China-based
auditors.
Our auditor, WWC, P.C., is an independent registered
public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S., pursuant
to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The PCAOB currently
has access to inspect the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on
December 16, 2021. However, the recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or
regulatory authorities would apply additional and more stringent criteria to us since we are an emerging growth company and substantial
all of our operations are conducting in China. Furthermore, the Holding Foreign Companies Accountable Act, which requires that the PCAOB
be permitted to inspect an issuer’s public accounting firm within three years, may result in the delisting of our Company or prohibition
of trading in our securities in the future if the PCAOB is unable to inspect our accounting firm at such future time. The Accelerating
Holding Foreign Companies Accountable Act, if passed by the U.S. House of Representatives and signed into law, would reduce the period
of time for foreign companies to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period for
triggering the delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting
firm at such future time. In addition, delisting may cause a significant decrease in or a total loss of the value of our securities.
Although a shareholder's ownership of our Company may not decrease directly from delisting, the ownership may become worth much less,
or, in some cases, lose its entire value.
On August 26, 2022, the CSRC, the MOF, and
the PCAOB signed the Protocol governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the
first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland
China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, 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. However,
uncertainties still exist as to whether and how this new Protocol will be implemented and whether the PCAOB can make a determination
that it is able to inspect and investigate completely in mainland China and Hong Kong. When the PCAOB reassesses its determinations by
the end of 2022, it could determine that it is still unable to inspect and investigate completely audit firms based in mainland China
and Hong Kong.
To the extent
cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other
use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company,
our subsidiaries, or the VIE by the PRC government to transfer cash.
Relevant PRC laws and regulations permit the
companies in the PRC to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards
and regulations. Additionally, each of the companies in the PRC are required to set aside at least 10% of its after-tax profits each
year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. The companies in the PRC are also
required to further set aside a portion of their after-tax profits to fund the employee welfare fund, although the amount to be set aside,
if any, is determined at their discretion. These reserves are not distributable as cash dividends. Furthermore, in order for us to pay
dividends to our shareholders, we will rely on payments made from Xiamen Pop Culture to Heliheng, pursuant to the VIE Agreements, and
the distribution of such payments to Pop Culture HK as dividends from Heliheng, and then to our Company. If our PRC subsidiaries and
the PRC operating entities incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability
to pay dividends or make other payments to us.
Our cash dividends, if any, will be paid in
U.S. dollars. If we are considered a tax resident enterprise of the PRC for tax purposes, any dividends we pay to our overseas shareholders
may be regarded as China-sourced income and as a result may be subject to PRC withholding tax. See “Item 3. Key Information—D.
Risk Factors—Risks Relating to Doing Business in the PRC—Under the PRC Enterprise Income Tax Law, we 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” of the 2022 Annual Report.
The PRC government also imposes controls on
the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The majority
of our and the PRC operating entities’ income is received in Renminbi and shortages in foreign currencies may restrict our ability
to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign
exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related
transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange as long as certain
procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency
and remitted out of the PRC to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government
may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the
future, we may not be able to pay dividends in foreign currencies to our shareholders.
As of the date of this prospectus, there are
no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into, and out of Hong Kong (including
funds from Hong Kong to mainland China), except for the transfer of funds involving money laundering and criminal activities. However,
there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in
the future. If there is a significant change to current political arrangements between mainland China and Hong Kong, or the applicable
laws, regulations, or interpretations change, our Hong Kong subsidiary may become subject to PRC laws or authorities. As a result, our
Hong Kong subsidiary could be subject to similar government controls on the convertibility of foreign currency and the remittance of
currency out of Hong Kong as described above.
As a result of the above, to the extent cash
in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, such funds or assets may not be available to fund operations or for
other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of us,
our subsidiaries, or the VIE by the competent government to the transfer of cash.
OFFER STATISTICS AND EXPECTED TIMETABLE
We may from time to time, offer and sell any combination
of the securities described in this prospectus up to a total dollar amount of $200,000,000 in one or more offerings. The securities offered
under this prospectus may be offered separately, together, or in separate series, and in amounts, at prices, and on terms to be determined
at the time of sale. We will keep the registration statement of which this prospectus is a part effective until such time as all of the
securities covered by this prospectus have been disposed of pursuant to and in accordance with such registration statement.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization will be set forth in the applicable
prospectus supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated by reference into this
prospectus.
DILUTION
If required, we will set forth in a prospectus
supplement the following information regarding any material dilution of the equity interests of investors purchasing securities in an
offering under this prospectus:
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the net tangible book value per share of our equity securities before and after the offering; |
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the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering; and |
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the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers. |
USE OF PROCEEDS
We intend to use the net proceeds from the sale
of securities we offer as indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
DESCRIPTION OF SHARE CAPITAL
The following description of our share capital
and provisions of our amended and restated memorandum and articles of association, as amended from time to time, are summaries and do
not purport to be complete. Reference is made to our amended and restated memorandum and articles of association which are currently effective
(and which is referred to in this section as, respectively, the “memorandum” and the “articles”).
We were incorporated as an exempted company with
limited liability under the Companies Act of the Cayman Islands, as amended, or the “Cayman Companies Act,” on January 3,
2020. A Cayman Islands exempted company:
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is a company that conducts its business mainly outside the Cayman Islands; |
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is prohibited from trading in the Cayman Islands with any person, firm, or corporation except in furtherance of the business of the exempted company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands); |
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does not have to hold an annual general meeting; |
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does not have to make its register of members open to inspection by shareholders of that company; |
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may obtain an undertaking against the imposition of any future taxation; |
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may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
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may register as a limited duration company; and |
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may register as a segregated portfolio company. |
Ordinary Shares
Our authorized share capital is $50,000 divided
into 44,000,000 Class A Ordinary Shares, par value $0.001 per share, and 6,000,000 Class B Ordinary Shares, par value $0.001 per share.
As of the date of this prospectus, there are 18,286,923 Class A Ordinary Shares and 5,763,077 Class B Ordinary Shares issued and outstanding.
Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. In respect
of matters requiring a shareholder vote, each holder of Class A Ordinary Shares will be entitled to one vote per one Class A Ordinary
Share and each holder of Class B Ordinary Shares will be entitled to seven votes per one Class B Ordinary Share. The Class A Ordinary
Shares are not convertible into shares of any other class. The Class B Ordinary Shares are convertible into Class A Ordinary Shares at
any time after issuance at the option of the holder on a one-to-one basis.
All of our issued and outstanding Class A Ordinary
Shares and Class B Ordinary Shares are fully paid and non-assessable. Our Class A Ordinary Shares and Class B Ordinary Shares are issued
in registered form, and are issued when registered in our register of members. Unless the board of directors determine otherwise, each
holder of our Class A Ordinary Shares or Class B Ordinary Shares will not receive a certificate in respect of such shares. Our shareholders
who are non-residents of the Cayman Islands may freely hold and vote their Class A Ordinary Shares and Class B Ordinary Shares. We may
not issue shares or warrants to bearer.
Subject to the provisions of the Cayman Companies
Act and our articles regarding redemption and purchase of the shares, the directors have general and unconditional authority to allot
(with or without confirming rights of renunciation), grant options over or otherwise deal with any unissued shares to such persons, at
such times and on such terms and conditions as they may decide. Such authority could be exercised by the directors to allot shares which
carry rights and privileges that are preferential to the rights attaching to Class A Ordinary Shares or Class B Ordinary Shares. No share
may be issued at a discount except in accordance with the provisions of the Cayman Companies Act. The directors may refuse to accept any
application for shares, and may accept any application in whole or in part, for any reason or for no reason.
Markets
Our Class A Ordinary Shares have been listed
on the Nasdaq Global Market under the symbol “CPOP.”
Transfer Agent and Registrar
The transfer agent and registrar for our Class
A Ordinary Shares and Class B Ordinary Shares is Transhare Corporation, at Bayside Center 1, 17755 North U.S. Highway 19, Suite #140,
Clearwater FL 33764.
Dividends
Subject to the provisions of the Cayman Companies
Act and any rights attaching to any class or classes of shares under and in accordance with the articles:
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the directors may declare dividends or distributions out of our funds which are lawfully available for that purpose; and |
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our shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors. |
Subject to the requirements of the Cayman Companies
Act regarding the application of a company’s share premium account and with the sanction of an ordinary resolution, dividends may
be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment either
in cash or in specie.
Unless provided by the rights attached to a share,
no dividend shall bear interest.
Voting Rights
On a poll, every shareholder who is present in
person and every person representing a shareholder by proxy shall have one vote for each Class A Ordinary Share and seven votes for each
Class B Ordinary Share of which he or the person represented by proxy is the holder. In addition, all shareholders holding shares of a
particular class are entitled to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by
proxy.
Conversion Rights
Class A Ordinary Shares are not convertible. Class
B Ordinary Shares are convertible, at the option of the holder thereof, into Class A Ordinary Shares on a one-to-one basis.
Variation of Rights of Shares
Whenever our capital is divided into different
classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class)
may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with
the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present in person
or by proxy at a separate general meeting of the holders of shares of that class.
Unless the terms on which a class of shares was
issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation
or issue of further shares ranking pari passu with the existing shares of that class.
Alteration of Share Capital
Subject to the Cayman Companies Act, we may, by
ordinary resolution:
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increase our share capital by new shares of the amount fixed by that ordinary resolution and with the attached rights, priorities and privileges set out in that ordinary resolution; |
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consolidate and divide all or any of our share capital into shares of larger amount than our existing shares; |
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convert all or any of our paid up shares into stock, and reconvert that stock into paid up shares of any denomination; |
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sub-divide our shares or any of them into shares of an amount smaller than that fixed, so, however, that in the sub-division, the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and |
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cancel shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled or, in the case of shares without nominal par value, diminish the number of shares into which our capital is divided. |
Subject to the Cayman Companies Act and to any
rights for the time being conferred on the shareholders holding a particular class of shares, our shareholders may, by special resolution,
reduce our share capital in any way.
Calls on Shares and Forfeiture
Subject to the terms of allotment, the directors
may make calls on the shareholders in respect of any monies unpaid on their shares including any premium and each shareholder shall (subject
to receiving at least 14 clear days’ notice specifying when and where payment is to be made), pay to us the amount called on the
shareholder’s shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay all calls
in respect of the share. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall
pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment
of the share or in the notice of the call or if no rate is fixed, at the rate of 10 percent per annum. The directors may, at their discretion,
waive payment of the interest wholly or in part.
We have a first and paramount lien on all shares
(whether fully paid up or not) registered in the name of a shareholder (whether solely or jointly with others). The lien is for all monies
payable to us by the shareholder or the shareholder’s estate:
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either alone or jointly with any other person, whether or not that other person is a shareholder; and |
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whether or not those monies are presently payable. |
At any time the directors may declare any share
to be wholly or partly exempt from the lien on shares provisions of the articles.
We may sell, in such manner as the directors may
determine, any share on which the sum in respect of which the lien exists is presently payable, if due notice that such sum is payable
has been given (as prescribed by the articles) and, within 14 days of the date on which the notice is deemed to be given under the articles,
such notice has not been complied with.
Unclaimed Dividend
A dividend that remains unclaimed for a period
of six years after it became due for payment shall be forfeited to, and shall cease to remain owing by, the Company.
Forfeiture or Surrender of Shares
If a shareholder fails to pay any call, the directors
may give to such shareholder not less than 14 clear days’ notice requiring payment and specifying the amount unpaid including any
interest which may have accrued, any expenses which have been incurred by us due to that person’s default and the place where payment
is to be made. The notice shall also contain a warning that if the notice is not complied with, the shares in respect of which the call
is made will be liable to be forfeited.
If such notice is not complied with, the directors
may, before the payment required by the notice has been received, resolve that any share the subject of that notice be forfeited (which
forfeiture shall include all dividends or other monies payable in respect of the forfeited share and not paid before such forfeiture).
A forfeited share may be sold, re-allotted or
otherwise disposed of on such terms and in such manner as the directors determine and at any time before a sale, re-allotment or disposition
the forfeiture may be cancelled on such terms as the directors think fit.
A person whose shares have been forfeited shall
cease to be a shareholder in respect of the forfeited shares, but shall, notwithstanding such forfeiture, remain liable to pay to us all
monies which at the date of forfeiture were payable by him to us in respect of the shares, together with all expenses and interest from
the date of forfeiture or surrender until payment, but his liability shall cease if and when we receive payment in full of the unpaid
amount.
A declaration, whether statutory or under oath,
made by a director or the secretary shall be conclusive evidence that the person making the declaration is a director or secretary and
that the particular shares have been forfeited or surrendered on a particular date.
Subject to the execution of an instrument of transfer,
if necessary, the declaration shall constitute good title to the shares.
Share Premium Account
The directors shall establish a share premium
account and shall carry the credit of such account from time to time to a sum equal to the amount or value of the premium paid on the
issue of any share or capital contributed or such other amounts required by the Cayman Companies Act.
Redemption and Purchase of Own Shares
Subject to the Cayman Companies Act and any rights
for the time being conferred on the shareholders holding a particular class of shares, we may by action of our directors:
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issue shares that are to be redeemed or liable to be redeemed, at our option or the shareholder holding those redeemable shares, on the terms and in the manner our directors determine before the issue of those shares; |
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with the consent by special resolution of the shareholders holding shares of a particular class, vary the rights attaching to that class of shares so as to provide that those shares are to be redeemed or are liable to be redeemed at our option on the terms and in the manner which the directors determine at the time of such variation; and |
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purchase all or any of our own shares of any class including any redeemable shares on the terms and in the manner which the directors determine at the time of such purchase. |
We may make a payment in respect of the redemption
or purchase of its own shares in any manner authorized by the Cayman Companies Act, including out of any combination of capital, our profits
and the proceeds of a fresh issue of shares made for the purpose of the redemption.
We may make a payment in respect of the redemption
or purchase of our own shares in any manner authorized by the Cayman Companies Act, including out of any combination of capital, our profits
and the proceeds of a fresh issue of shares.
When making a payment in respect of the redemption
or purchase of shares, the directors may make the payment in cash or in specie (or partly in one and partly in the other) if so authorized
by the terms of the allotment of those shares or by the terms applying to those shares, or otherwise by agreement with the shareholder
holding those shares.
Transfer of Shares
Provided that a transfer of Class A Ordinary Shares
complies with applicable rules of the Nasdaq Global Market, a shareholder may transfer Class A Ordinary Shares or Class B Ordinary Shares
to another person by completing an instrument of transfer in a common form or, with respect to Class A Ordinary Shares, in a form prescribed
by Nasdaq, or in any other form approved by the directors, executed:
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where the Class A Ordinary Shares or Class B Ordinary Shares are fully paid, by or on behalf of that shareholder; and |
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where the Class A Ordinary Shares or Class B Ordinary Shares are partly paid, by or on behalf of that shareholder and the transferee. |
The transferor shall be deemed to remain the holder
of a Class A Ordinary Share or Class B Ordinary Share until the name of the transferee is entered into the register of members of the
Company.
Our board of directors may, in its absolute discretion,
decline to register any transfer of any Class A Ordinary Share or Class B Ordinary Share that has not been fully paid up or is subject
to a company lien. Our board of directors may also decline to register any transfer of such Class A Ordinary Share or Class B Ordinary
Share unless:
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the instrument of transfer is lodged with the Company, accompanied by the certificate for the Class A Ordinary Shares or Class B Ordinary Shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
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the instrument of transfer is in respect of only one class of shares; |
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the instrument of transfer is properly stamped, if required; |
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the Class A Ordinary Share or Class B Ordinary Share transferred is fully paid and free of any lien in favor of us; |
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any fee related to the transfer has been paid to us; and |
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the transfer is not to more than four joint holders. |
If our directors refuse to register a transfer,
they are required, within three months after the date on which the instrument of transfer was lodged, to send to each of the transferor
and the transferee notice of such refusal.
This, however, is unlikely to affect market transactions
of the Class A Ordinary Shares purchased by investors in the public offering. The legal title to such Class A Ordinary Shares and the
registration details of those Class A Ordinary Shares in our register of members remains with the Depository Trust Company. All market
transactions with respect to those Class A Ordinary Shares are carried out without the need for any kind of registration by the directors,
as the market transactions will all be conducted through the Depository Trust Company systems.
The registration of transfers may, on 14 calendar
days’ notice being given by advertisement in one or more newspapers or by electronic means, be suspended and our register of members
closed at such times and for such periods as our board of directors may from time to time determine. The registration of transfers, however,
may not be suspended, and the register may not be closed, for more than 30 days in any year.
Inspection of Books and Records
Holders of our Class A Ordinary Shares and Class
B Ordinary Shares will have no general right under the Cayman Companies Act to inspect or obtain copies of our register of members or
our corporate records.
General Meetings
As a Cayman Islands exempted company, we are not
obligated by the Cayman Companies Act to call shareholders’ annual general meetings; accordingly, we may, but shall not be obliged
to, in each year hold a general meeting as an annual general meeting. Any annual general meeting held shall be held at such time and place
as may be determined by our board of directors. All general meetings other than annual general meetings shall be called extraordinary
general meetings.
The directors may convene general meetings whenever
they think fit. General meetings shall also be convened on the written requisition of one or more of the shareholders entitled to attend
and vote at our general meetings who (together) hold not less than ten percent of the rights to vote at such general meeting in accordance
with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders making the requisition.
If the directors do not convene such meeting for a date not later than 21 clear days’ after the date of receipt of the written requisition,
those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period
of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be
reimbursed by us.
At least 14 clear days’ notice of an extraordinary
general meeting and 21 clear days’ notice of an annual general meeting shall be given to shareholders entitled to attend and vote
at such meeting. The notice shall specify the place, the day and the hour of the meeting and the general nature of that business. In addition,
if a resolution is proposed as a special resolution, the text of that resolution shall be given to all shareholders. Notice of every general
meeting shall also be given to the directors and our auditors.
Subject to the Cayman Companies Act and with the
consent of the shareholders who, individually or collectively, hold at least 90 percent of the voting rights of all those who have a right
to vote at a general meeting, a general meeting may be convened on shorter notice.
A quorum shall consist of the presence (whether
in person or represented by proxy) of one or more shareholders holding shares that represent not less than one-third of the outstanding
shares carrying the right to vote at such general meeting.
If, within 15 minutes from the time appointed
for the general meeting, or at any time during the meeting, a quorum is not present, the meeting, if convened upon the requisition of
shareholders, shall be cancelled. In any other case, it shall stand adjourned to the same time and place seven days or to such other time
or place as is determined by the directors.
The chairman may, with the consent of a meeting
at which a quorum is present, adjourn the meeting. When a meeting is adjourned for seven days or more, notice of the adjourned meeting
shall be given in accordance with the articles.
At any general meeting a resolution put to the
vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on, the declaration of the result of the show of
hands) demanded by the chairman of the meeting or by at least two shareholders having the right to vote on the resolutions or one or more
shareholders present who together hold not less than ten percent of the voting rights of all those who are entitled to vote on the resolution.
Unless a poll is so demanded, a declaration by the chairman as to the result of a resolution and an entry to that effect in the minutes
of the meeting, shall be conclusive evidence of the outcome of a show of hands, without proof of the number or proportion of the votes
recorded in favor of, or against, that resolution.
If a poll is duly demanded it shall be taken in
such manner as the chairman directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was
demanded.
In the case of an equality of votes, whether on
a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall
not be entitled to a second or casting vote.
Directors
We may by ordinary resolution, from time to time,
fix the maximum and minimum number of directors to be appointed. Under the Articles, we are required to have a minimum of one director
and the maximum number of Directors shall be unlimited.
A director may be appointed by ordinary resolution
or by the directors. Any appointment may be to fill a vacancy or as an additional director.
Unless the remuneration of the directors is determined
by the shareholders by ordinary resolution, the directors shall be entitled to such remuneration as the directors may determine.
The shareholding qualification for directors may
be fixed by our shareholders by ordinary resolution and unless and until so fixed no share qualification shall be required.
Unless removed or re-appointed, each director
shall be appointed for a term expiring at the next-following annual general meeting, if one is held. At any annual general meeting held,
our directors will be elected by an ordinary resolution of our shareholders. At each annual general meeting, each director so elected
shall hold office for a one-year term and until the election of their respective successors in office or removed.
A director may be removed by ordinary resolution.
A director may at any time resign or retire from
office by giving us notice in writing. Unless the notice specifies a different date, the director shall be deemed to have resigned on
the date that the notice is delivered to us.
Subject to the provisions of the articles, the
office of a director may be terminated forthwith if:
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the director is prohibited by the law of the Cayman Islands from acting as a director; |
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the director is made bankrupt or makes an arrangement or composition with his creditors generally; |
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the director resigns office by notice to us; |
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the director only held office as a director for a fixed term and such term expires; |
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in the opinion of a registered medical practitioner by whom the director is being treated the director becomes physically or mentally incapable of acting as a director; |
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the director is given notice by the majority of the other directors (not being less than two in number) to vacate office (without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of such director); |
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the director is made subject to any law relating to mental health or incompetence, whether by court order or otherwise; or |
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without the consent of the other directors, the director is absent from meetings of directors for continuous period of six months. |
Each of the compensation committee and the nominating
and corporate governance committee shall consist of at least three directors and the majority of the committee members shall be independent
within the meaning of Section 5605(a)(2) of the Nasdaq listing rules. The audit committee shall consist of at least three directors, all
of whom shall be independent within the meaning of Section 5605(a)(2) of the Nasdaq listing rules and will meet the criteria for independence
set forth in Rule 10A-3 or Rule 10C-1 of the Exchange Act.
Powers and Duties of Directors
Subject to the provisions of the Cayman Companies
Act and our amended and restated memorandum and articles of association, our business shall be managed by the directors, who may exercise
all our powers. No prior act of the directors shall be invalidated by any subsequent alteration of our memorandum or articles of association.
To the extent allowed by the Cayman Companies Act, however, shareholders may by special resolution validate any prior or future act of
the directors which would otherwise be in breach of their duties.
The directors may delegate any of their powers
to any committee consisting of one or more persons who need not be shareholders and may include non-directors so long as the majority
of those persons are directors; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that
may be imposed on it by the directors. Upon the initial closing of this offering, our board of directors will have established an audit
committee, compensation committee, and nomination and corporate governance committee.
The board of directors may establish any local
or divisional board of directors or agency and delegate to it its powers and authorities (with power to sub-delegate) for managing any
of our affairs whether in the Cayman Islands or elsewhere and may appoint any persons to be members of a local or divisional board of
directors, or to be managers or agents, and may fix their remuneration.
The directors may from time to time and at any
time by power of attorney or in any other manner they determine appoint any person, either generally or in respect of any specific matter,
to be our agent with or without authority for that person to delegate all or any of that person’s powers.
The directors may from time to time and at any
time by power of attorney or in any other manner they determine appoint any person, whether nominated directly or indirectly by the directors,
to be our attorney or our authorized signatory and for such period and subject to such conditions as they may think fit. The powers, authorities
and discretions, however, must not exceed those vested in, or exercisable, by the directors under the articles.
The board of directors may remove any person so
appointed and may revoke or vary the delegation.
The directors may exercise all of our powers to
borrow money and to mortgage or charge its undertaking, property and assets both present and future and uncalled capital or any part thereof,
to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of ours or our
parent undertaking (if any) or any subsidiary undertaking of us or of any third party.
A director shall not, as a director, vote in respect
of any contract, transaction, arrangement or proposal in which he has an interest which (together with any interest of any person connected
with him) is a material interest (otherwise than by virtue of his interests, direct or indirect, in shares or debentures or other securities
of, or otherwise in or through, us) and if the director shall do so their vote shall not be counted, nor in relation thereto shall the
director be counted in the quorum present at the meeting, but (in the absence of some other material interest than is mentioned below)
none of these prohibitions shall apply to:
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the giving of any security, guarantee or indemnity in respect of: |
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money lent or obligations incurred by the director or by any other person for our benefit or any of our subsidiaries; or |
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a debt or obligation of ours or any of our subsidiaries for which the director has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security; |
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where we or any of our subsidiaries is offering securities in which offer the director is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which the director is to or may participate; |
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any contract, transaction, arrangement or proposal affecting any other body corporate in which the director is interested, directly or indirectly and whether as an officer, shareholder, creditor or otherwise howsoever, provided that the director (together with persons connected with the director) does not to the director’s knowledge hold an interest representing one percent or more of any class of the equity share capital of such body corporate (or of any third body corporate through which the director’s interest is derived) or of the voting rights available to shareholders of the relevant body corporate; |
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any act or thing done or to be done in respect of any arrangement for the benefit of the employees of us or any of our subsidiaries under which he is not accorded as a director any privilege or advantage not generally accorded to the employees to whom such arrangement relates; or |
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any matter connected with the purchase or maintenance for any director of insurance against any liability or (to the extent permitted by the Cayman Companies Act) indemnities in favor of directors, the funding of expenditure by one or more directors in defending proceedings against them or the doing of anything to enable such director or directors to avoid incurring such expenditure. |
A director may, as a director, vote (and be counted
in the quorum) in respect of any contract, transaction, arrangement or proposal in which the director has an interest which is not a material
interest or as described above.
Capitalization of Profits
The directors may resolve to capitalize:
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any part of our profits not required for paying any preferential dividend (whether or not those profits are available for distribution); or |
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any sum standing to the credit of our share premium account or capital redemption reserve, if any. |
The amount resolved to be capitalized must be
appropriated to the shareholders who would have been entitled to it had it been distributed by way of dividend and in the same proportions.
Liquidation Rights
If we are wound up, the shareholders may, subject
to the articles and any other sanction required by the Cayman Companies Act, pass a special resolution allowing the liquidator to do either
or both of the following:
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to divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine how the division shall be carried out as between the shareholders or different classes of shareholders; and |
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to vest the whole or any part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up. |
The directors have the authority to present a
petition for our winding up to the Grand Court of the Cayman Islands on our behalf without the sanction of a resolution passed at a general
meeting.
Register of Members
Under the Cayman Companies Act, we must keep a
register of members and there should be entered therein:
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the names and addresses of the members of the company, a statement of the shares held by each member, which: distinguishes each share by its number (so long as the share has a number); confirms the amount paid, or agreed to be considered as paid, on the shares of each member; confirms the number and category of shares held by each member; and confirms whether each relevant category of shares held by a member carries voting rights under the Articles, and if so, whether such voting rights are conditional; |
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the date on which the name of any person was entered on the register as a member; and |
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the date on which any person ceased to be a member. |
For these purposes, “voting rights”
means rights conferred on shareholders, including the right to appoint or remove directors, in respect of their shares to vote at general
meetings of the company on all or substantially all matters. A voting right is conditional where the voting right arises only in certain
circumstances.
Under the Cayman Companies Act, the register of
members of our Company is prima facie evidence of the matters set out therein (that is, the register of members will raise a presumption
of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of members is deemed as a matter
of the Cayman Companies Act to have legal title to the shares as set against its name in the register of members. Upon the completion
of this offering, the register of members will be immediately updated to record and give effect to the issuance of shares by us to the
custodian or its nominee. Once our register of members has been updated, the shareholders recorded in the register of members will be
deemed to have legal title to the shares set against their name.
If the name of any person is incorrectly entered
in or omitted from our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any
person having ceased to be a shareholder of our company, the person or shareholder aggrieved (or any shareholder of our Company or our
Company itself) may apply to the Grand Court of the Cayman Islands for an order that the register be rectified, and the Court may either
refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.
Differences in Corporate Law
The Cayman Companies Act is derived, to a large
extent, from the older Companies Acts of England and Wales but does not follow recent United Kingdom statutory enactments, and accordingly
there are significant differences between the Cayman Companies Act and the current Companies Act of England and Wales. In addition, the
Cayman Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of
certain significant differences between the provisions of the Cayman Companies Act applicable to us and the comparable laws applicable
to companies incorporated in the State of Delaware in the United States.
Mergers and Similar Arrangements
The Cayman Companies Act permits mergers and consolidations
between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) “merger”
means the merging of two or more constituent companies and the vesting of their undertaking, property, and liabilities in one of such
companies as the surviving company, and (b) a “consolidation” means the combination of two or more constituent companies
into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company.
In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or
consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such
other authorization, if any, as may be specified in such constituent company’s articles of association. The plan must be filed with
the Registrar of Companies together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets
and liabilities of each constituent company, and an undertaking that a copy of the certificate of merger or consolidation will be given
to the shareholders and creditors of each constituent company and that notification of the merger or consolidation will be published in
the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory
procedures.
A merger between a Cayman Islands parent company
and its Cayman Islands subsidiary or subsidiaries does not require authorization by a resolution of shareholders. For this purpose, a
subsidiary is a company of which at least 90% of the issued shares entitled to vote are owned by the parent company.
The consent of each holder of a fixed or floating
security interest of a constituent company is required unless this requirement is waived by a court in the Cayman Islands.
Except in certain limited circumstances, a dissenting
shareholder of a Cayman Islands constituent company is entitled to payment of the fair value of his or her shares upon dissenting from
a merger or consolidation. The exercise of such dissenter rights will preclude the exercise by the dissenting shareholder of any other
rights to which he or she might otherwise be entitled by virtue of holding shares, except for the right to seek relief on the grounds
that the merger or consolidation is void or unlawful.
In addition, there are statutory provisions that
facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in number of each
class of shareholders and creditors with whom the arrangement is to be made, and who must, in addition, represent three-fourths in value
of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting,
or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand
Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought
not to be approved, the court can be expected to approve the arrangement if it determines that:
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the statutory provisions as to the required majority vote have been met; |
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the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class; |
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the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
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the arrangement is not one that would more properly be sanctioned under some other provision of the Cayman Companies Act. |
When a takeover offer is made and accepted by
holders of 90% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such
four month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be
made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless
there is evidence of fraud, bad faith or collusion.
If an arrangement and reconstruction is thus approved,
or if a takeover offer is made and accepted, a dissenting shareholder would have no rights comparable to appraisal rights, which would
otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for
the judicially determined value of the shares.
Shareholders’ Suits
In principle, we will normally be the proper plaintiff
to sue for a wrong done to us as a company, and as a general rule, a derivative action may not be brought by a minority shareholder. However,
based on English law authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands courts
can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto)
so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company
to challenge:
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an act which is illegal or ultra vires with respect to the company and is therefore incapable of ratification by the shareholders; |
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an act which, although not ultra vires, requires authorization by a qualified (or special) majority (that is, more than a simple majority) which has not been obtained; and |
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an act which constitutes a “fraud on the minority” where the wrongdoers are themselves in control of the company. |
Indemnification of Directors and Executive
Officers and Limitation of Liability
Cayman Islands law does not limit the extent to
which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such
provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud
or the consequences of committing a crime. Our articles provide to the extent permitted by law, we shall indemnify each existing or former
secretary, director (including alternate director), and any of our other officers (including an investment adviser or an administrator
or liquidator) and their personal representatives against:
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all actions, proceedings, costs, charges, expenses, losses, damages, or liabilities incurred or sustained by the existing or former director (including alternate director), secretary, or officer in or about the conduct of our business or affairs or in the execution or discharge of the existing or former director (including alternate director), secretary’s or officer’s duties, powers, authorities, or discretions; and |
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without limitation to paragraph (a) above, all costs, expenses, losses, or liabilities incurred by the existing or former director (including alternate director), secretary, or officer in defending (whether successfully or otherwise) any civil, criminal, administrative, or investigative proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere. |
No such existing or former director (including
alternate director), secretary, or officer, however, shall be indemnified in respect of any matter arising out of his own dishonesty.
To the extent permitted by law, we may make a
payment, or agree to make a payment, whether by way of advance, loan, or otherwise, for any legal costs incurred by an existing or former
director (including alternate director), secretary, or any of our officers in respect of any matter identified in above on condition that
the director (including alternate director), secretary, or officer must repay the amount paid by us to the extent that it is ultimately
found not liable to indemnify the director (including alternate director), the secretary, or that officer for those legal costs.
This standard of conduct is generally the same
as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification
agreements with our directors and executive officers that will provide such persons with additional indemnification beyond that provided
in our articles.
Anti-Takeover Provisions in Our Articles
Some provisions of our articles may discourage,
delay, or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that
authorize our board of directors to issue shares at such times and on such terms and conditions as the board of directors may decide without
any further vote or action by our shareholders.
Under the Cayman Companies Act, our directors
may only exercise the rights and powers granted to them under our articles for what they believe in good faith to be in the best interests
of our company and for a proper purpose.
Directors’ Fiduciary Duties
Under Delaware corporate law, a director of a
Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and
the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would
exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information
reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably
believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage.
This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence
over any interest possessed by a director, officer, or controlling shareholder and not shared by the shareholders generally. In general,
actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken
was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary
duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the
transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director
owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The
Cayman Companies Act imposes a number of statutory duties on a director. A Cayman Islands director’s fiduciary duties are not codified,
however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what
the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes
they were conferred, (c) a duty to avoid fettering his or her discretion in the future, and (d) a duty to avoid conflicts of
interest and of duty. The common law duties owed by a director are those to act with skill, care, and diligence that may reasonably be
expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act
with the skill, care, and diligence in keeping with a standard of care commensurate with any particular skill they have which enables
them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure
compliance with our articles, as amended and restated from time to time. We have the right to seek damages if a duty owed by any of our
directors is breached.
Shareholder Proposals
Under the Delaware General Corporation Law, a
shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions
in the governing documents. The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before
the annual meeting of shareholders, but in keeping with common law, Delaware corporations generally afford shareholders an opportunity
to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws.
A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders
may be precluded from calling special meetings.
The Cayman Companies Act provides shareholders
with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before
a general meeting. However, these rights may be provided in a company’s articles of association. Our articles provide that general
meetings shall be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings
who (together) hold not less than 10 percent of the rights to vote at such general meeting in accordance with the notice provisions in
the articles of association, specifying the purpose of the meeting and signed by each of the shareholders making the requisition. If the
directors do not convene such meeting for a date not later than 21 clear days’ after the date of receipt of the written requisition,
those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period
of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be
reimbursed by us. Our articles provide no other right to put any proposals before annual general meetings or extraordinary general meetings.
As a Cayman Islands exempted company, we are not obligated by law to call shareholders’ annual general meetings. However, our corporate
governance guidelines require us to call such meetings every year.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative
voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for
it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the
minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s
voting power with respect to electing such director. As permitted under the Cayman Companies Act, our articles do not provide for cumulative
voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
Under the Delaware General Corporation Law, a
director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares
entitled to vote, unless the certificate of incorporation provides otherwise. Subject to the provisions of our articles (which include
the removal of a director by ordinary resolution), the office of a director may be terminated forthwith if (a) he is prohibited by
the laws of the Cayman Islands from acting as a director, (b) he is made bankrupt or makes an arrangement or composition with his
creditors generally, (c) he resigns his office by notice to us, (d) he only held office as a director for a fixed term and such
term expires, (e) in the opinion of a registered medical practitioner by whom he is being treated he becomes physically or mentally
incapable of acting as a director, (f) he is given notice by the majority of the other directors (not being less than two in number)
to vacate office (without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of
such director), (g) he is made subject to any law relating to mental health or incompetence, whether by court order or otherwise,
or (h) without the consent of the other directors, he is absent from meetings of directors for continuous period of six months.
Transactions with Interested Shareholders
The Delaware General Corporation Law contains
a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not
to be governed by such statute by amendment to its certificate of incorporation or bylaws that is approved by its shareholders, it is
prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date
that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned
15% or more of the target’s outstanding voting stock or who or which is an affiliate or associate of the corporation and owned 15%
or more of the corporation’s outstanding voting stock within the past three years. This has the effect of limiting the ability of
a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does
not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors
approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages
any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of
directors.
The Cayman Companies Act has no comparable statute.
As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although
the Cayman Companies Act does not regulate transactions between a company and its significant shareholders, under Cayman Islands law such
transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect
of constituting a fraud on the minority shareholders.
Dissolution; Winding Up
Under the Delaware General Corporation Law, unless
the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting
power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the
corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority
voting requirement in connection with dissolutions initiated by the board of directors.
Under the Cayman Companies Act and our articles,
the Company may be wound up by a special resolution of our shareholders, or if the winding up is initiated by our board of directors,
by either a special resolution of our members or, if our company is unable to pay its debts as they fall due, by an ordinary resolution
of our members. In addition, a company may be wound up by an order of the courts of the Cayman Islands. The court has authority to order
winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Variation of Rights of Shares
Under the Delaware General Corporation Law, a
corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the
certificate of incorporation provides otherwise. Under the Cayman Companies Act and our articles, if our share capital is divided into
more than one class of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares
of that class) may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that
class, or with the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present
in person or by proxy at a separate general meeting of the holders of shares of that class.
Amendment of Governing Documents
Under the Delaware General Corporation Law, a
corporation’s certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved
by a majority of the outstanding shares entitled to vote, and the bylaws may be amended with the approval of a majority of the outstanding
shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. Under
the Cayman Companies Act, our articles may only be amended by special resolution of our shareholders.
Anti-money Laundering—Cayman Islands
In order to comply with legislation or regulations
aimed at the prevention of money laundering, we may be required to adopt and maintain anti-money laundering procedures and may require
subscribers to provide evidence to verify their identity. Where permitted, and subject to certain conditions, we may also delegate the
maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.
We reserve the right to request such information
as is necessary to verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber in producing any
information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned
without interest to the account from which they were originally debited.
We also reserve the right to refuse to make any
redemption payment to a shareholder if our directors or officers suspect or are advised that the payment of redemption proceeds to such
shareholder might result in a breach of applicable anti-money laundering or other laws or regulations by any person in any relevant jurisdiction,
or if such refusal is considered necessary or appropriate to ensure our compliance with any such laws or regulations in any applicable
jurisdiction.
If any person resident in the Cayman Islands knows
or suspects or has reason for knowing or suspecting that another person is engaged in criminal conduct or is involved with terrorism or
terrorist property and the information for that knowledge or suspicion came to their attention in the course of their business in the
regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion
to (i) a nominated officer (appointed in accordance with the Proceeds of Crime Act (Revised) of the Cayman Islands) or the Financial
Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (Revised), if the disclosure relates to criminal conduct
or money laundering or (ii) to a police constable or a nominated officer (pursuant to the Terrorism Act (Revised) of the Cayman Islands)
or the Financial Reporting Authority, pursuant to the Terrorism Act (Revised), if the disclosure relates to involvement with terrorism
or terrorist financing and terrorist property. Such a report shall not be treated as a breach of confidence or of any restriction upon
the disclosure of information imposed by any enactment or otherwise.
Data Protection in the Cayman Islands –
Privacy Notice
This privacy notice explains the manner in which
we collect, process, and maintain personal data about investors of the Company pursuant to the Data Protection Act, 2021 of the Cayman
Islands, as amended from time to time and any regulations, codes of practice, or orders promulgated pursuant thereto (the “DPA”).
We are committed to processing personal data in
accordance with the DPA. In our use of personal data, we will be characterized under the DPA as a “data controller,” whilst
certain of our service providers, affiliates, and delegates may act as “data processors” under the DPA. These service providers
may process personal information for their own lawful purposes in connection with services provided to us.
By virtue of your investment in the Company, we
and certain of our service providers may collect, record, store, transfer, and otherwise process personal data by which individuals may
be directly or indirectly identified.
Your personal data will be processed fairly and
for lawful purposes, including (a) where the processing is necessary for us to perform a contract to which you are a party or for
taking pre-contractual steps at your request, (b) where the processing is necessary for compliance with any legal, tax, or regulatory
obligation to which we are subject, or (c) where the processing is for the purposes of legitimate interests pursued by us or by a
service provider to whom the data are disclosed. As a data controller, we will only use your personal data for the purposes for which
we collected it. If we need to use your personal data for an unrelated purpose, we will contact you.
We anticipate that we will share your personal
data with our service providers for the purposes set out in this privacy notice. We may also share relevant personal data where it is
lawful to do so and necessary to comply with our contractual obligations or your instructions or where it is necessary or desirable to
do so in connection with any regulatory reporting obligations. In exceptional circumstances, we will share your personal data with regulatory,
prosecuting, and other governmental agencies or departments, and parties to litigation (whether pending or threatened), in any country
or territory including to any other person where we have a public or legal duty to do so (e.g. to assist with detecting and preventing
fraud, tax evasion, and financial crime or compliance with a court order).
Your personal data shall not be held by the Company
for longer than necessary with regard to the purposes of the data processing.
We will not sell your personal data. Any transfer
of personal data outside of the Cayman Islands shall be in accordance with the requirements of the DPA. Where necessary, we will ensure
that separate and appropriate legal agreements are put in place with the recipient of that data.
We will only transfer personal data in accordance
with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect
against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction, or damage to the personal
data.
If you are a natural person, this will affect
you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships)
that provides us with personal data on individuals connected to you for any reason in relation to your investment into the Company, this
will be relevant for those individuals and you should inform such individuals of the content.
You have certain rights under the DPA, including
(a) the right to be informed as to how we collect and use your personal data (and this privacy notice fulfils our obligation in this
respect), (b) the right to obtain a copy of your personal data, (c) the right to require us to stop direct marketing, (d) the
right to have inaccurate or incomplete personal data corrected, (e) the right to withdraw your consent and require us to stop processing
or restrict the processing, or not begin the processing of your personal data, (f) the right to be notified of a data breach (unless
the breach is unlikely to be prejudicial), (g) the right to obtain information as to any countries or territories outside the Cayman
Islands to which we, whether directly or indirectly, transfer, intend to transfer, or wish to transfer your personal data, general measures
we take to ensure the security of personal data, and any information available to us as to the source of your personal data, (h) the
right to complain to the Office of the Ombudsman of the Cayman Islands, and (i) the right to require us to delete your personal data
in some limited circumstances.
If you consider that your personal data has not
been handled correctly, or you are not satisfied with our responses to any requests you have made regarding the use of your personal data,
you have the right to complain to the Cayman Islands’ Ombudsman. The Ombudsman can be contacted by calling +1 (345) 946-6283 or
by email at info@ombudsman.ky.
History of Share Capital
The following is a summary of our share issuances
for the last three years.
On January 3, 2020, 9,165,000 ordinary shares,
par value $0.001 per share, were held by Joya Enterprises Limited.
As part of the Reorganization, we undertook the
following corporate actions:
Share Issuances in February 2020
On February 22, 2020, we issued the following
ordinary shares, par value $0.001 per share, to certain founding shareholders of Pop Culture Group:
| Purchaser | |
Number of
Ordinary
Shares | | |
Consideration | |
| Joya Enterprises Limited | |
| 165,000 | | |
$ | 165 | |
| Victory Quest Industries Limited | |
| 1,653,911 | | |
$ | 1,654 | |
| Billion Hill Investment Corporation | |
| 1,502,000 | | |
$ | 1,502 | |
| Bofeng Holdings Limited | |
| 1,007,700 | | |
$ | 1,008 | |
| Sense Venture International Limited | |
| 1,007,700 | | |
$ | 1,008 | |
| Dragon Bright Asia Corporation | |
| 400,000 | | |
$ | 400 | |
| Wealth Progress International Corporation | |
| 40,000 | | |
$ | 40 | |
Re-designation of Ordinary Shares in April
2020
On April 28, 2020, our shareholders approved the
re-designation of 5,763,077 of our issued ordinary shares held by Joya Enterprises Limited into 5,763,077 Class B Ordinary Shares.
On April 28, 2020, our shareholders approved the
re-designation of certain already issued ordinary shares into Class A Ordinary Shares as set out in the table below:
| Shareholder | |
Number of
Class A
Ordinary
Shares | |
| Joya Enterprises Limited | |
| 3,566,923 | |
| Victory Quest Industries Limited | |
| 1,653,911 | |
| Billion Hill Investment Corporation | |
| 1,502,000 | |
| Bofeng Holdings Limited | |
| 1,007,700 | |
| Sense Venture International Limited | |
| 1,007,700 | |
| Dragon Bright Asia Corporation | |
| 400,000 | |
| Wealth Progress International Corporation | |
| 40,000 | |
Share Issuances and Transfers in May 2020
On May 30, 2020, we issued Class A Ordinary Shares
to the following shareholders pursuant to certain share purchase agreements entered into on September 30, 2019:
| Purchaser | |
Number of
Class A
Ordinary
Shares | | |
Consideration | |
| Monica Hon Yau Tse | |
| 190,000 | | |
$ | 241,515.19 | |
| Yuen Ching Wong | |
| 190,000 | | |
$ | 241,515.19 | |
| Yee Man Yau | |
| 190,000 | | |
$ | 241,515.19 | |
| Chau Hung Yeung | |
| 190,000 | | |
$ | 241,515.19 | |
| New Rise International Limited | |
| 583,600 | | |
$ | 741,832.57 | |
On May 30, 2020, we issued Class A Ordinary Shares
to the following shareholders, who are original shareholders of Xiamen Pop Culture:
| Purchaser | |
Number of
Class A
Ordinary
Shares | | |
Consideration | |
| Hengzhang Qiu | |
| 100,000 | | |
$ | 100 | |
| Yuling Yan | |
| 400,000 | | |
$ | 400 | |
On May 30, 2020, our board of directors approved
the following transfers of Class A Ordinary Shares:
| Transferor |
|
Transferee |
|
Number of Class A
Ordinary Shares |
|
| Joya Enterprises Limited |
|
China Young Group Limited |
|
|
2,180,000 |
|
| Joya Enterprises Limited |
|
Chen Li |
|
|
200,000 |
|
| Joya Enterprises Limited |
|
Yi Zhang |
|
|
100,000 |
|
| Joya Enterprises Limited |
|
Yamo Zhao |
|
|
100,000 |
|
| Joya Enterprises Limited |
|
Qiuyan Zhang |
|
|
10,000 |
|
| Joya Enterprises Limited |
|
Lingyun Wu |
|
|
936,923 |
|
| Joya Enterprises Limited |
|
Wenjuan Qiu |
|
|
40,000 |
|
| Billion Hill Investment Corporation |
|
Fengying Qiu |
|
|
182,000 |
|
| Billion Hill Investment Corporation |
|
Chunhui Liu |
|
|
168,000 |
|
| Billion Hill Investment Corporation |
|
Shuangyan Qiu |
|
|
175,000 |
|
| Billion Hill Investment Corporation |
|
Xingbin Qiu |
|
|
175,000 |
|
| Billion Hill Investment Corporation |
|
Qiuyan Zhang |
|
|
152,600 |
|
| Billion Hill Investment Corporation |
|
Ronghui Qiu |
|
|
150,000 |
|
| Billion Hill Investment Corporation |
|
Meihua Li |
|
|
100,000 |
|
| Billion Hill Investment Corporation |
|
Meirong Qiu |
|
|
100,000 |
|
| Victory Quest Industries Limited |
|
HK Weiyi Culture Media Limited |
|
|
632,911 |
|
| Victory Quest Industries Limited |
|
HK Longren Number Media Limited |
|
|
320,000 |
|
| Victory Quest Industries Limited |
|
Xiaosong Ye |
|
|
300,000 |
|
| Victory Quest Industries Limited |
|
Hailong Huang |
|
|
80,000 |
|
| Victory Quest Industries Limited |
|
Lei Wang |
|
|
68,000 |
|
| Victory Quest Industries Limited |
|
Juyuan Hong |
|
|
20,000 |
|
Share Issuances in February 2021
On February 9, 2021, we issued Class A Ordinary
Shares to the following shareholders of Xiamen Pop Culture to acquire 6.45% non-controlling interests in Xiamen Pop Culture:
| Purchaser | |
Number of
Class A
Ordinary
Shares | | |
Consideration | |
| Bravo Great Group Limited | |
| 730,000 | | |
$ | 730 | |
| Huadi Qiu | |
| 300,000 | | |
$ | 300 | |
| Jiapeng Lin | |
| 35,089 | | |
$ | 35.089 | |
Share Issuances in Our Initial Public Offering
On July 2, 2021, at the closing of our initial
public offering, we issued and sold a total of 6,200,000 Class A Ordinary Shares at $6.00 per share on a firm commitment basis.
DESCRIPTION OF DEBT SECURITIES
General
As used in this prospectus, the term “debt
securities” means the debentures, notes, bonds, and other evidences of indebtedness that we may issue from time to time. The debt
securities will either be senior debt securities or subordinated debt securities. Debt securities will be issued under an indenture between
us and a trustee to be named therein. We have filed the forms of indentures as exhibits to the registration statement of which this prospectus
is a part. We may issue debt securities which may or may not be converted into our Class A Ordinary Shares or Class B Ordinary Shares.
It is likely that convertible debt securities will not be issued under an indenture. We may issue the debt securities independently or
together with any underlying securities, and debt securities may be attached or separate from the underlying securities.
The following description is a summary of selected
provisions relating to the debt securities that we may issue. The summary is not complete. When debt securities are offered in the future,
a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular
terms of those securities and the extent to which these general provisions may apply. The specific terms of the debt securities as described
in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may
modify or replace the general terms described in this section.
This summary and any description of debt securities
in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific debt securities document or agreement. We will file each of these documents,
as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus is
a part on or before the time we issue a series of debt securities. See “Where You Can Find Additional Information” and “Incorporation
of Documents by Reference” below for information on how to obtain a copy of a debt securities document when it is filed.
When we refer to a series of debt securities,
we mean all debt securities issued as part of the same series under the applicable indenture.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any debt securities that we may offer, including, but
not limited to, the following:
| |
● |
the title of the debt securities; |
| |
|
|
| |
● |
the total amount of the debt securities; |
| |
|
|
| |
● |
the amount or amounts of the debt securities will be issued and interest rate; |
| |
|
|
| |
● |
the conversion price at which the debt securities may be converted; |
| |
|
|
| |
● |
the date on which the right to convert the debt securities will commence and the date on which the right will expire; |
| |
|
|
| |
● |
if applicable, the minimum or maximum amount of debt securities that may be converted at any one time; |
| |
|
|
| |
● |
if applicable, a discussion of material federal income tax consideration; |
| |
|
|
| |
● |
if applicable, the terms of the payoff of the debt securities; |
| |
|
|
| |
● |
the identity of the indenture agent, if any; |
| |
|
|
| |
● |
the procedures and conditions relating to the conversion of the debt securities; and |
| |
|
|
| |
● |
any other terms of the debt securities, including terms, procedure and limitation relating to the exchange or conversion of the debt securities. |
Form, Exchange, and Transfer
We may issue the debt securities in registered
form or bearer form. Debt securities issued in registered form, i.e., book-entry form, will be represented by a global security registered
in the name of a depository, which will be the holder of all the debt securities represented by the global security. Those investors who
own beneficial interests in global debt securities will do so through participants in the depository’s system, and the rights of
these indirect owners will be governed solely by the applicable procedures of the depository and its participants. In addition, we may
issue debt securities in non-global form, i.e., bearer form. If any debt securities are issued in non-global form, debt securities certificates
may be exchanged for new debt securities certificates of different denominations, and holders may exchange, transfer, or convert their
debt securities at the debt securities agent’s office or any other office indicated in the applicable prospectus supplement, information
incorporated by reference or free writing prospectus.
Prior to the conversion of their debt securities,
holders of debt securities convertible for Class A Ordinary Shares or Class B Ordinary Shares will not have any rights of holders of Class
A Ordinary Shares or Class B Ordinary Shares, and will not be entitled to dividend payments, if any, or voting rights of the Class A Ordinary
Shares or Class B Ordinary Shares.
Conversion of Debt Securities
A debt security may entitle the holder to purchase,
in exchange for the extinguishment of debt, an amount of securities at a conversion price that will be stated in the debt security. Debt
securities may be converted at any time up to the close of business on the expiration date set forth in the terms of such debt security.
After the close of business on the expiration date, debt securities not exercised will be paid in accordance with their terms.
Debt securities may be converted as set forth
in the applicable offering material. Upon receipt of a notice of conversion properly completed and duly executed at the corporate trust
office of the indenture agent, if any, or to us, we will forward, as soon as practicable, the securities purchasable upon such exercise.
If less than all of the debt security represented by such security is converted, a new debt security will be issued for the remaining
debt security.
DESCRIPTION OF WARRANTS
General
We may issue warrants to purchase our securities.
We may issue the warrants independently or together with any underlying securities, and the warrants may be attached or separate from
the underlying securities. We may also issue a series of warrants under a separate warrant agreement to be entered into between us and
a warrant agent. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of warrants.
The following description is a summary of selected
provisions relating to the warrants that we may issue. The summary is not complete. When warrants are offered in the future, a prospectus
supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those
securities and the extent to which these general provisions may apply. The specific terms of the warrants as described in a prospectus
supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace
the general terms described in this section.
This summary and any description of warrants in
the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific warrant document or agreement, if applicable. We will file each of
these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this
prospectus is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a warrant document when it
is filed.
When we refer to a series of warrants, we mean
all warrants issued as part of the same series under the applicable warrant agreement.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any warrants that we may offer, including, but not limited
to, the following:
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the title of the warrants; |
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the total number of warrants; |
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the price or prices at which the warrants will be issued; |
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the price or prices at which the warrants may be exercised; |
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the currency or currencies that investors may use to pay for the warrants; |
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the date on which the right to exercise the warrants will commence and the date on which the right will expire; |
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whether the warrants will be issued in registered form or bearer form; |
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information with respect to book-entry procedures, if any; |
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if applicable, the minimum or maximum amount of warrants that may be exercised at any one time; |
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if applicable, the designation and terms of the underlying securities with which the warrants are issued and the number of warrants issued with each underlying security; |
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if applicable, the date on and after which the warrants and the related underlying securities will be separately transferable; |
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if applicable, a discussion of material federal income tax considerations; |
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if applicable, the terms of redemption of the warrants; |
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the identity of the warrant agent, if any; |
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the procedures and conditions relating to the exercise of the warrants; and |
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any other terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants. |
Warrant Agreement
We may issue the warrants in one or more series
under one or more warrant agreements, each to be entered into between us and a bank, trust company, or other financial institution as
warrant agent. We may add, replace, or terminate warrant agents from time to time. We may also choose to act as our own warrant agent
or may choose one of our subsidiaries to do so.
The warrant agent under a warrant agreement will
act solely as our agent in connection with the warrants issued under that agreement. Any holder of warrants may, without the consent of
any other person, enforce by appropriate legal action, on its own behalf, its right to exercise those warrants in accordance with their
terms.
Form, Exchange, and Transfer
We may issue the warrants in registered form or
bearer form. Warrants issued in registered form, i.e., book-entry form, will be represented by a global security registered in the name
of a depository, which will be the holder of all the warrants represented by the global security. Those investors who own beneficial interests
in a global warrant will do so through participants in the depository’s system, and the rights of these indirect owners will be
governed solely by the applicable procedures of the depository and its participants. In addition, we may issue warrants in non-global
form, i.e., bearer form. If any warrants are issued in non-global form, warrant certificates may be exchanged for new warrant certificates
of different denominations, and holders may exchange, transfer, or exercise their warrants at the warrant agent’s office or any
other office indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
Prior to the exercise of their warrants, holders
of warrants exercisable for Class A Ordinary Shares or Class B Ordinary Shares will not have any rights of holders of Class A Ordinary
Shares or Class B Ordinary Shares and will not be entitled to dividend payments, if any, or voting rights of the Class A Ordinary Shares
or Class B Ordinary Shares.
Exercise of Warrants
A warrant will entitle the holder to purchase
for cash an amount of securities at an exercise price that will be stated in, or that will be determinable as described in, the applicable
prospectus supplement, information incorporated by reference, or free writing prospectus. Warrants may be exercised at any time up to
the close of business on the expiration date set forth in the applicable offering material. After the close of business on the expiration
date, unexercised warrants will become void. Warrants may be redeemed as set forth in the applicable offering material.
Warrants may be exercised as set forth in the
applicable offering material. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate
trust office of the warrant agent or any other office indicated in the applicable offering material, we will forward, as soon as practicable,
the securities purchasable upon such exercise. If less than all of the warrants represented by such warrant certificate are exercised,
a new warrant certificate will be issued for the remaining warrants.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our securities.
The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering, we
may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters
or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will
be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies, or other financial
institutions, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent
in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights
certificates or beneficial owners of rights.
The prospectus supplement relating to any rights
that we offer will include specific terms relating to the offering, including, among other matters:
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the date of determining the security holders entitled to the rights distribution; |
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the aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights; |
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the exercise price; |
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the conditions to completion of the rights offering; |
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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and |
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any applicable federal income tax considerations. |
Each right would entitle the holder of the rights
to purchase for cash the principal amount of securities at the exercise price set forth in the applicable prospectus supplement. Rights
may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement.
After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any rights
offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents,
underwriters, or dealers, or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable
prospectus supplement.
DESCRIPTION OF UNITS
We may issue units composed of any combination
of our securities. We will issue each unit so that the holder of the unit is also the holder of each security included in the unit. As
a result, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which
a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any
time before a specified date.
The following description is a summary of selected
provisions relating to units that we may offer. The summary is not complete. When units are offered in the future, a prospectus supplement,
information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those securities
and the extent to which these general provisions may apply. The specific terms of the units as described in a prospectus supplement, information
incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described
in this section.
This summary and any description of units in the
applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified in
its entirety by reference to the unit agreement, collateral arrangements, and depositary arrangements, if applicable. We will file each
of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which
this prospectus is a part on or before the time we issue a series of units. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a document when it is filed.
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus may describe:
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The designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
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Any provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units; |
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Whether the units will be issued in fully registered or global form; and |
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Any other terms of the units. |
The applicable provisions described in this section,
as well as those described under “Description of Share Capital,” “Description of Debt Securities,” “Description
of Warrants,” and “Description of Rights” above, will apply to each unit and to each security included in each unit,
respectively.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus
from time to time in one or more transactions, including, without limitation:
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through agents; |
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to or through underwriters; |
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through broker-dealers (acting as agent or principal); |
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directly by us to purchasers (including our affiliates and shareholders), through a specific bidding or auction process, a rights offering, or other method; |
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through a combination of any such methods of sale; or |
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through any other methods described in a prospectus supplement. |
The distribution of securities may be effected,
from time to time, in one or more transactions, including:
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block transactions (which may involve crosses) and transactions on Nasdaq or any other organized market where the securities may be traded; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement; |
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ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers; |
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sales “at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise; and |
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sales in other ways not involving market makers or established trading markets, including direct sales to purchasers. |
The securities may be sold at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to the prevailing market prices or
at negotiated prices. The consideration may be cash, extinguishment of debt, or another form negotiated by the parties. Agents, underwriters,
or broker-dealers may be paid compensation for offering and selling the securities. That compensation may be in the form of discounts,
concessions, or commissions to be received from us or from the purchasers of the securities. Dealers and agents participating in the distribution
of the securities may be deemed to be underwriters, and compensation received by them on resale of the securities may be deemed to be
underwriting discounts and commissions under the Securities Act. If such dealers or agents were deemed to be underwriters, they may be
subject to statutory liabilities under the Securities Act.
We may also make direct sales through subscription
rights distributed to our existing shareholders on a pro rata basis, which may or may not be transferable. In any distribution of subscription
rights to our shareholders, if all of the underlying securities are not subscribed for, we may then sell the unsubscribed securities directly
to third parties or may engage the services of one or more underwriters, dealers, or agents, including standby underwriters, to sell the
unsubscribed securities to third parties.
Some or all of the securities that we offer through
this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell our securities for
public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any market
making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any securities
that we offer.
Agents may, from time to time, solicit offers
to purchase the securities. If required, we will name in the applicable prospectus supplement, document incorporated by reference, or
free writing prospectus, as applicable, any agent involved in the offer or sale of the securities and set forth any compensation payable
to the agent. Unless otherwise indicated, any agent will be acting on a best efforts basis for the period of its appointment. Any agent
selling the securities covered by this prospectus may be deemed to be an underwriter of the securities.
If underwriters are used in an offering, securities
will be acquired by the underwriters for their own account and may be resold, from time to time, in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery
contracts or other contractual commitments. Securities may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used
in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters at the time an agreement for
the sale is reached. The applicable prospectus supplement will set forth the managing underwriter or underwriters, as well as any other
underwriter or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions,
including compensation of the underwriters and dealers and the public offering price, if applicable. This prospectus, the applicable prospectus
supplement and any applicable free writing prospectus will be used by the underwriters to resell the securities.
If a dealer is used in the sale of the securities,
we, or an underwriter, will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at
varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement,
document incorporated by reference, or free writing prospectus, as applicable, the name of the dealer and the terms of the transactions.
We may directly solicit offers to purchase the
securities and may make sales of securities directly to institutional investors or others. These persons may be deemed to be underwriters
with respect to any resale of the securities. To the extent required, the prospectus supplement, document incorporated by reference, or
free writing prospectus, as applicable, will describe the terms of any such sales, including the terms of any bidding or auction process,
if used.
Agents, underwriters, and dealers may be entitled
under agreements which may be entered into with us to indemnification by us against specified liabilities, including liabilities incurred
under the Securities Act, or to contribution by us to payments they may be required to make in respect of such liabilities. If required,
the prospectus supplement, document incorporated by reference, or free writing prospectus, as applicable, will describe the terms and
conditions of such indemnification or contribution. Some of the agents, underwriters, or dealers, or their affiliates may be customers
of, engage in transactions with or perform services for us or our subsidiaries or affiliates in the ordinary course of business.
Under the securities laws of some states, the
securities offered by this prospectus may be sold in those states only through registered or licensed brokers or dealers.
Any person participating in the distribution of
securities registered under the registration statement that includes this prospectus will be subject to applicable provisions of the Exchange
Act, and the applicable SEC rules and regulations, including, among others, Regulation M, which may limit the timing of purchases
and sales of any of our securities by any such person. Furthermore, Regulation M may restrict the ability of any person engaged in the
distribution of our securities to engage in market-making activities with respect to our securities.
These restrictions may affect the marketability
of our securities and the ability of any person or entity to engage in market-making activities with respect to our securities.
Certain persons participating in an offering may
engage in over-allotment, stabilizing transactions, short-covering transactions, and penalty bids in accordance with Regulation M under
the Exchange Act that stabilize, maintain, or otherwise affect the price of the offered securities. If any such activities will occur,
they will be described in the applicable prospectus supplement.
To the extent required, this prospectus may be
amended or supplemented from time to time to describe a specific plan of distribution.
TAXATION
Material income tax consequences relating
to the purchase, ownership, and disposition of the securities offered by this prospectus are set forth in “Item 10. Additional
Information—E. Taxation” in the 2022 Annual Report, which is incorporated herein by reference, as updated by our subsequent
filings under the Exchange Act that are incorporated by reference and, if applicable, in any accompanying prospectus supplement or relevant
free writing prospectus.
EXPENSES
The following table sets forth the aggregate expenses
in connection with this offering, all of which will be paid by us. All amounts shown are estimates, except for the SEC registration fee.
| SEC registration fee | |
$ | 18,540 | |
| FINRA fees | |
$ | 30,500 | |
| Legal fees and expenses | |
$ | * | |
| Accounting fees and expenses | |
$ | * | |
| Printing and postage expenses | |
$ | * | |
| Miscellaneous expenses | |
$ | * | |
| Total | |
$ | * | |
| * |
To be provided by a prospectus supplement or as an exhibit to a report of foreign private issuer on Form 6-K that is incorporated by reference into this registration statement. Estimated solely for this item. Actual expenses may vary. |
MATERIAL CONTRACTS
Our material contracts are described in the documents
incorporated by reference into this prospectus. See “Incorporation of Documents by Reference” below.
MATERIAL CHANGES
Except as otherwise described in the 2022
Annual Report, in our reports of foreign issuer on Form 6-K filed or submitted under the Exchange Act and incorporated by reference
herein, and as disclosed in this prospectus or the applicable prospectus supplement, no reportable material changes have occurred since
June 30, 2022.
LEGAL MATTERS
We are being represented by Hunter Taubman Fischer &
Li LLC with respect to certain legal matters of U.S. federal securities and New York State law. The validity of the securities offered
in this offering and certain other legal matters as to Cayman Islands law will be passed upon for us by Ogier, our counsel as to Cayman
Islands law. Legal matters as to PRC laws and regulations will be passed upon for us by JT&N. If legal matters in connection with
offerings made pursuant to this prospectus are passed upon by counsel to underwriters, dealers, or agents, such counsel will be named
in the applicable prospectus supplement relating to any such offering.
EXPERTS
The consolidated financial statements in the
2022 Annual Report incorporated by reference in this prospectus have been so incorporated in reliance on the reports of WWC, P.C., our
independent registered public accounting firm since April 5, 2022, and Friedman LLP, our independent registered public accounting firm
prior to April 5, 2022, given on the authority of said firms as experts in auditing and accounting. The office of WWC, P.C. is located
at 2010 Pioneer Court, San Mateo, CA 94403. The office of Friedman LLP is located at One Liberty Plaza, 165 Broadway, Floor 21, New York,
NY 10006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference”
into this prospectus certain information we file with the SEC. This means that we can disclose important information to you by referring
you to those documents. Any statement contained in a document incorporated by reference in this prospectus shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein, or in any subsequently filed document,
which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We hereby incorporate by reference into this prospectus
the following documents:
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our annual report on Form
20-F for the fiscal year ended June 30, 2022, filed with the SEC on October 28, 2022; |
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(2) |
our report of foreign private issuer on Form
6-K filed with the SEC on October 28, 2022; |
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(3) |
the description of our Class A Ordinary Shares
contained in our registration statement on Form 8-A,
filed with the SEC on June 25, 2021, and any amendment or report filed for the purpose of updating such description; |
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any future annual reports on Form 20-F
filed with the SEC after the date of this prospectus and prior to the termination of the offering of the securities offered by this
prospectus; and |
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(5) |
any future reports of foreign private issuer
on Form 6-K that we furnish to the SEC after the date of this prospectus that are identified in such reports as being incorporated
by reference into the registration statement of which this prospectus forms a part. |
Our annual report on Form 20-F for the
fiscal year ended June 30, 2022 filed with the SEC on November 28, 2022 contains a description of our business and audited consolidated
financial statements with a report by our independent auditors. These statements were prepared in accordance with U.S. GAAP.
Unless expressly incorporated by reference, nothing
in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC. Copies of all documents
incorporated by reference in this prospectus, other than exhibits to those document unless such exhibits are specially incorporated by
reference in this prospectus, will be provided at no cost to each person, including any beneficial owner, who receives a copy of this
prospectus on the written or oral request of that person made to:
Pop Culture Group Co., Ltd
3rd Floor, No. 168, Fengqi Road
Jimei District, Xiamen City, Fujian Province
People’s Republic of China
+ 86-0592-5968169
You should rely only on the information that we
incorporate by reference or provide in this prospectus. We have not authorized anyone to provide you with different information. We are
not making any offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that
the information contained or incorporated in this prospectus by reference is accurate as of any date other than the date of the document
containing the information.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
As permitted by SEC rules, this prospectus omits
certain information and exhibits that are included in the registration statement of which this prospectus forms a part. Since this prospectus
may not contain all of the information that you may find important, you should review the full text of these documents. If we have filed
a contract, agreement, or other document as an exhibit to the registration statement of which this prospectus forms a part, you should
read the exhibit for a more complete understanding of the document or matter involved. Each statement in this prospectus, including statements
incorporated by reference as discussed above, regarding a contract, agreement, or other document is qualified in its entirety by reference
to the actual document.
We are subject to periodic reporting and other
informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports,
including annual reports on Form 20-F, and other information with the SEC. All information electronically filed with the SEC can
be inspected over the Internet at the SEC’s website at www.sec.gov.
As a foreign private issuer, we are exempt under
the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive
officers, directors, and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic or current reports and
financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the Cayman
Islands as an exempted company with limited liability. We incorporated under the laws of the Cayman Islands because of certain benefits
associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax
system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. The
Cayman Islands, however, has a less developed body of securities laws as compared to the United States and provides significantly less
protection for investors than the United States. Additionally, Cayman Islands companies may not have standing to sue in the Federal courts
of the United States.
Substantially all of the assets of the PRC
operating entities are located in the PRC. In addition, all of our officers are nationals or residents of the PRC and all or a substantial
portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process
within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including
judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
We have appointed Cogency Global Inc. as our agent
to receive service of process with respect to any action brought against us in the United States District Court for the Southern District
of New York under the federal securities laws of the United States or of any state in the United States or any action brought against
us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.
Ogier, our counsel with respect to the laws
of the Cayman Islands, and JT&N, our counsel with respect to PRC laws and regulations, have advised us that there is uncertainty
as to whether the courts of the Cayman Islands or the PRC would (i) recognize or enforce judgments of United States courts obtained against
us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state
in the United States or (ii) entertain original actions brought in the Cayman Islands or the PRC against us or our directors or officers
predicated upon the securities laws of the United States or any state in the United States.
Ogier has further advised us that there is currently
no statutory enforcement law in the Cayman Islands nor any treaty between the United States and the Cayman Islands providing for enforcement
of judgments. A judgment obtained in the United States, however, may be recognized and enforced in the courts of the Cayman Islands at
common law, without any re-examination on the merits of the underlying dispute, by an action commenced on the foreign judgment debt in
the Grand Court of the Cayman Islands, provided such judgment: (i) is given by a foreign court of competent jurisdiction; (ii) is final;
(iii) is not in respect of taxes, a fine or a penalty; and (iv) was not obtained in a manner and is not of a kind the enforcement of which
is contrary to natural justice or public policy of the Cayman Islands. Furthermore, it is uncertain that Cayman Islands courts would enforce:
(1) judgments of U.S. courts obtained in actions against us or other persons that are predicated upon the civil liability provisions of
the U.S. federal securities laws; or (2) original actions brought against us or other persons predicated upon the Securities Act. Ogier
has informed us that there is uncertainty with regard to Cayman Islands law relating to whether a judgment obtained from the U.S. courts
under civil liability provisions of the securities laws will be determined by the courts of the Cayman Islands as penal or punitive in
nature.
JT&N has further advised us that the recognition
and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. Courts in the PRC may recognize and enforce
foreign judgments in accordance with the requirements of the PRC Civil Procedure Law based either on treaties between the PRC and the
country where the judgment is made or on reciprocity between jurisdictions. There are no treaties or other forms of reciprocity between
the PRC and the United States for the mutual recognition and enforcement of court judgments. JT&N has further advised us that under
PRC laws and regulations, courts in the PRC will not enforce a foreign judgment against us or our officers and directors if the court
decides that such judgment violates the basic principles of PRC laws and regulations or national sovereignty, security or public interest,
thus making the recognition and enforcement of a U.S. court judgment in the PRC difficult.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
Cayman Islands law does not limit the extent to
which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such
provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud
or the consequences of committing a crime. Our amended and restated articles of association provide that, to the extent permitted by law,
we shall indemnify each existing or former secretary, director (including alternate director), and any of our other officers (including
an investment adviser or an administrator or liquidator) and their personal representatives against:
(a) all actions, proceedings,
costs, charges, expenses, losses, damages, or liabilities incurred or sustained by the existing or former director (including alternate
director), secretary, or officer in or about the conduct of our business or affairs or in the execution or discharge of the existing or
former director (including alternate director)’s, secretary’s, or officer’s duties, powers, authorities, or discretions;
and
(b) without limitation to
paragraph (a) above, all costs, expenses, losses, or liabilities incurred by the existing or former director (including alternate director),
secretary, or officer in defending (whether successfully or otherwise) any civil, criminal, administrative, or investigative proceedings
(whether threatened, pending, or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere.
No such existing or former director (including
alternate director), secretary, or officer, however, shall be indemnified in respect of any matter arising out of his own dishonesty.
To the extent permitted by law, we may make a
payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing secretary,
or any of our officers in respect of any matter identified in above on condition that the secretary, or officer must repay the amount
paid by us to the extent that it is ultimately found not liable to indemnify the secretary or that officer for those legal costs.
Item 9. Exhibits
| * |
To be filed, if applicable, by amendment or as an exhibit to a report
filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and incorporated herein
by reference. |
| ** |
Filed herewith. |
| *** |
Previously filed. |
| **** |
To be filed, if necessary, on electronic Form 305b2 pursuant to
Section 305(b)(2) of the Trust Indenture Act of 1939. |
Item 10 Undertakings
| (a) | The undersigned registrant
hereby undertakes: |
| (1) | To file, during any period in
which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement. |
| (iii) | To include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information
in the registration statement. |
provided, however, that paragraphs
(a)(1)(i), (a)(1)(ii), and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b).
| (2) | That, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof. |
| (3) | To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To
file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F
at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by
Section 10(a)(3) of the Securities Act of 1933 need not be furnished, provided, that the registrant includes in the prospectus,
by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary
to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding
the foregoing, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of
the Securities Act of 1933 or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic
reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration statement. |
| (5) | That, for the purpose of determining
liability under the Securities Act of 1933 to any purchaser: |
| (i) | Each prospectus filed by the
registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and |
| (ii) | Each prospectus required to
be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating
to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of
the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date. |
| (6) | That, for the purpose of determining
liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned
registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser: |
| (i) | Any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free
writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that
is an offer in the offering made by the undersigned registrant to the purchaser. |
| (b) | That, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Xiamen, the People’s Republic of China, on November 4, 2022.
| |
Pop Culture Group Co., Ltd |
| |
|
|
| |
By: |
/s/ Zhuoqin Huang |
| |
|
Zhuoqin Huang |
| |
|
Chief Executive Officer, Director, and
Chairman of the Board of Directors |
| |
|
(Principal Executive Officer) |
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Zhuoqin Huang |
|
Chief Executive Officer,
Director, and |
|
November
4, 2022 |
| Name: Zhuoqin Huang |
|
Chairman of the Board
of Directors |
|
|
| |
|
(Principal Executive Officer) |
|
|
| |
|
|
|
|
| /s/ Renrong
Zhu |
|
Chief Financial Officer |
|
November 4, 2022 |
| Name: Renrong Zhu |
|
(Principal Accounting and Financial Officer) |
|
|
| |
|
|
|
|
| * |
|
Vice President and Director |
|
November 4, 2022 |
| Name: Weiyi Lin |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
November 4, 2022 |
| Name: Xiaolin Hu |
|
|
|
|
| *By: |
/s/ Zhuoqin Huang |
|
| |
Name: Zhuoqin Huang |
|
| |
Attorney-in-fact |
|
SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE
UNITED STATES
Pursuant to the Securities Act of 1933, as
amended, the undersigned, the duly authorized representative in the United States of America of Pop Culture Group Co., Ltd, has signed
this registration statement or amendment thereto in New York, NY on November 4, 2022.
| |
Cogency Global Inc. |
| |
Authorized U.S. Representative |
| |
|
|
| |
By: |
/s/ Colleen A. De Vries |
| |
|
Name: |
Colleen A. De Vries |
| |
|
Title: |
Senior Vice President on behalf of Cogency Global Inc. |
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