盈兹（ETZ）美股IPO招股说明书（226页）（226页）.pdf

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1、2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm1/226F-1 1 ea173306-f1_earntzhealth.htm REGISTRATION STATEMENTAs filed with the U.S.Securities and Exch

2、ange Commission on February 15,2023.Registration No.333-UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 Earntz Healthcare Products,Inc.(Exact name of Registrant as specified in its charter)Not Applicable(Translation of

3、 Registrants name into English)Cayman Islands 5047 Not Applicable(State or other jurisdiction of(Primary Standard Industrial(I.R.S.Employerincorporation or organization)Classification Code Number)Identification number)Mr.Junjie Hu88 Jiangong Road,Building#3Fengjing,Jinshan District,Shanghai China 20

4、1502Tel:+(86)21 5735-8082(Address,including zip code,and telephone number,including area code,of Registrants principal executive offices)Cogency Global Inc.122 East 42nd Street,18th Floor New York,NY 10168Phone:(800)221-0102Fax:(800)944-6607(Name,address,including zip code,and telephone number,inclu

5、ding area code,of agent for service)Copies to:Jeffrey Li,Esq.FisherBroyles,LLP1200 G Street NW,Suite 800Washington,D.C.20005(202)830-5905 Lawrence S.Venick,Esq.Loeb&Loeb LLP 2206-19 Jardine House 1 Connaught Place Central Hong Kong SAR 852-3923-1111 Approximate date of commencement of proposed s

6、ale to the public:as soon as practicable after the effective date of this registrationstatement.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under theSecurities Act of 1933,check the following box.If this Form is filed

7、 to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,please check thefollowing box and list the Securities Act registration statement number of the earlier effective registration statement for the sameoffering.If this Form is a post-effective amendment f

8、iled pursuant to Rule 462(c)under the Securities Act,check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the Securities Act

9、,check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of1933.Emerging growth comp

10、any If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to section 7(a)(2)(

11、B)of the Securities Act.2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm2/226 The term“new or revised financial accounting standard”refers to any updat

12、e issued by the Financial Accounting Standards Board to itsAccounting Standards Codification after April 5,2012.The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date untilthe Registrant shall file a further amendment which spec

13、ifically states that this registration statement shall thereafter becomeeffective in accordance with Section 8(a)of the Securities Act of 1933,as amended,or until the registration statement shall becomeeffective on such date as the Commission,acting pursuant to said Section 8(a),may determine.2023/2

14、/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm3/226 The information in this preliminary prospectus is not complete and may be changed.We may not sell these

15、 securities until theregistration statement filed with the Securities and Exchange Commission is effective.This preliminary prospectus is not an offer tosell these securities and it is not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.PRELIMIN

16、ARY PROSPECTUS Subject to CompletionDated February 15,2023 2,500,000 Ordinary Shares Earntz Healthcare Products,Inc.This is the initial public offering of the ordinary shares of Earntz Healthcare Products,Inc.,par value$0.0001 per share(“Ordinary Shares”).We are offering on a firm commitment basis 2

17、,500,000 ordinary shares.We expect the initial public offering price of the shares to be in therange of$4 to$5 per Ordinary Share.Prior to the completion of this offering,there has been no public market for our Ordinary Shares.Wehave applied to have our Ordinary Shares listed on the Nasdaq Capital M

18、arket(“NASDAQ”).We have reserved the trading symbol ETZ forlisting on the NASDAQ.There is no guarantee or assurance that our Ordinary Shares will be approved for listing on NASDAQ.However,we will not complete this offering unless we are so listed.Upon the completion of this offering,we will be a“con

19、trolled company”as defined under Nasdaq Stock Market Rules because Mr.JunjieHu,the chairman of our board of directors and our Chief Executive Officer,will beneficially own 67.75%of our total outstanding OrdinaryShares assuming the Underwriter does not exercise its over-allotment option,or 66.50%of o

20、ur total outstanding Ordinary Shares if theUnderwriter exercises its over-allotment option in full.As a“controlled company,”we are permitted to elect not to comply with certaincorporate governance requirements.If we rely on these exemptions,you will not have the same protection afforded to sharehold

21、ers ofcompanies that are subject to these corporate governance requirements.We are an“emerging growth company,”as that term is used in the Jumpstart Our Business Startups Act of 2012,and will besubject to reduced public company reporting requirements.Investing in our Ordinary Shares is highly specul

22、ative and involves a significant degree of risk.See“Risk Factors”beginning onpage 19 of this prospectus for a discussion of information that should be considered before making a decision to purchase ourOrdinary Shares.We are not a Chinese operating company but a Cayman Islands holding company withou

23、t material operations and our business is conductedby our subsidiaries and through contractual arrangements with a variable interest entity(“VIE”)based in China and this structure involvesunique risks to investors.Such contractual arrangements have not been tested in the PRC courts and there are sub

24、stantial uncertaintiesregarding the interpretation and application of current and future PRC laws,regulations,and rules relating to these contractual arrangements.If the PRC government finds these contractual arrangements non-compliant with the restrictions on direct foreign investment in the releva

25、ntindustries,or if the relevant PRC laws,regulations,and rules or the interpretation thereof change in the future,we may be subject to severepenalties or be forced to relinquish our interests in the VIEs or forfeit our rights under the contractual arrangements.PRC laws,regulations,and rules restrict

26、 and impose conditions on direct foreign investment in certain types of business.Although we are not currently operating insuch businesses in China,we might expand our business scope into the areas that are prohibited or restricted for foreign investment.Through the VIE structure which provides inve

27、stors with exposure to foreign investment in the Chinese operating companies where Chineselaw prohibits or restricts us from direct foreign investment,we will be able to freely expand our business operation in the future.Chineseregulatory authorities could disallow the VIE structure,which would like

28、ly result in a material change in our operations and/or a materialchange in the value of the securities we are registering for sale,including that it could cause the value of such securities to significantlydecline or become worthless.See“Risk Factors Risks Related to Doing Business in China Changes

29、 in Chinas economic,political orsocial conditions or government policies could have a material adverse effect on our business and results of operations”and“Uncertaintiesand quick change in the PRC legal system with little advance notice could result in a material and negative impact our business ope

30、rations,decrease the value of our Ordinary Shares and limit the legal protections available to you and us.“Risks Related to Our CorporateStructure If the Chinese government determines that the contractual arrangements with the VIEs do not comply with applicableregulations,our business could be adver

31、sely affected.”2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm4/226 There are legal and operational risks associated with being based in and having al

32、l our operations in China and these risks could result in amaterial change in our operations and/or the value of the securities we are registering for sale or could significantly limit or completelyhinder our ability to offer or continue to offer securities to investors and cause the value of such s

33、ecurities to significantly decline or beworthless.Recently,the PRC government initiated a series of regulatory actions and statements to regulate business operations in China withlittle advance notice,including the proposed post-application/post-listing filing procedures with the authority,enhancing

34、 supervision overChina-based companies listed overseas using variable interest entity structure,adopting new measures to extend the scope of cybersecurityand data privacy reviews,and expanding the efforts in anti-monopoly enforcement.On July 6,2021,the General Office of the CommunistParty of China C

35、entral Committee and the General Office of the State Council jointly issued an announcement to crack down on illegalactivities in the securities market and promote the high-quality development of the capital market,which,among other things,requires therelevant governmental authorities to strengthen

36、cross-border oversight of law-enforcement and judicial cooperation,to enhance supervisionover China-based companies listed overseas,and to establish and improve the system of extraterritorial application of the PRC securitieslaws.On December 28,2021,Cybersecurity Review Measures were published by Cy

37、berspace Administration of China or the CAC,National Development and Reform Commission,Ministry of Industry and Information Technology,Ministry of Public Security,Ministry ofState Security,Ministry of Finance,Ministry of Commerce,Peoples Bank of China,State Administration of Radio and Television,Chi

38、naSecurities Regulatory Commission,State Secrecy Administration and State Cryptography Administration,and became effective on February15,2022,which provides that,Critical Information Infrastructure Operators(“CIIOs”)that purchase internet products and services andOnline Platform Operators engaging i

39、n data processing activities that affect or may affect national security shall be subject to thecybersecurity review by the Cybersecurity Review Office.On November 14,2021,CAC published the Administration Measures for CyberData Security(Draft for Public Comments),or the“Cyber Data Security Measure(D

40、raft)”,which requires cyberspace operators withpersonal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of CybersecurityReview.On December 24,2021,the CSRC released the Administrative Provisions of the State Council Regarding the Overse

41、as Issuanceand Listing of Securities by Domestic Enterprises(Draft for Comments)and the Management Rules Regarding the Overseas Issuance andListing of Securities by Domestic Enterprises(Draft for Comments),or the“New Overseas Listing Rules”.The New Overseas Listing Rulesrequire Chinese domestic ente

42、rprises to complete filings with relevant governmental authorities and report related information under certaincircumstances,such as,a)an issuer making an application for initial public offering and listing in an overseas market;b)an issuer makingan overseas securities offering after having been lis

43、ted on an overseas market;c)an issuer offering securities on an overseas market topurchase assets after having been listed overseas;and d)a domestic company seeking an overseas direct or indirect listing of its assetsthrough single or multiple acquisition(s),share swap,transfer of shares or other me

44、ans.On April 2,2022,the CSRC released the Provisionson Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies(Draftfor Comments),which provide that a domestic company that seeks to offer and list its securities in a overseas market

45、 shall strictly abide byapplicable PRC laws and regulations,enhance legal awareness of keeping state secrets and strengthening archives administration,institute asound confidentiality and archives administration system,and take necessary measures to fulfill confidentiality and archives administratio

46、nobligations.In the event that the above proposed provisions and rules are enacted,the relevant filing procedures of the CSRC and othergovernmental authorities may be required in connection with this offering.On July 7,2022,CAC promulgated the Measures for the SecurityAssessment of Data Cross-border

47、 Transfer,effective on September 1,2022,which requires the data processors to apply for data cross-bordersecurity assessment coordinated by the CAC under the following circumstances:(i)any data processor transfers important data to overseas;(ii)any critical information infrastructure operator or dat

48、a processor who processes personal information of over 1 million people providespersonal information to overseas;(iii)any data processor who provides personal information to overseas and has already provided personalinformation of more than 100,000 people or sensitive personal information of more th

49、an 10,000 people to overseas since January 1st of theprevious year;and(iv)other circumstances under which the data cross-border transfer security assessment is required as prescribed by theCAC.As of the date of this prospectus,these new laws and guidelines have not impacted the Companys ability to c

50、onduct its business,accept foreign investments,or list and trade on a U.S.or other foreign exchange;however,there are uncertainties in the interpretation andenforcement of these new laws and guidelines,which could materially and adversely impact our business and financial outlook and mayimpact our a

51、bility to accept foreign investments or continue to list on a U.S.or other foreign exchange.Any change in foreign investmentregulations,and other policies in China or related enforcement actions by Chinese government could result in a material change in ouroperations and the value of our securities

52、and could significantly limit or completely hinder our ability to offer our securities to investors orcause the value of our securities to significantly decline or be worthless.The Companys auditor,Wei,Wei&Co.,LLP is headquartered inthe U.S.and the Public Company Accounting Oversight Board(Unite

53、d States)(the“PCAOB”)currently has access to inspect the workingpapers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on December 16,2021.On December15,2022,the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investi

54、gate registered publicaccounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.However,should PRC authorities obstruct or otherwise fail to facilitate the PCAOBs access in the future,the PCAOB Board will consider the need toissue

55、a new determination.On December 29,2022,a legislation entitled“Consolidated Appropriations Act,2023”(the“ConsolidatedAppropriations Act”),was signed into law by President Biden.The Consolidated Appropriations Act contained,among other things,anidentical provision to Accelerating Holding Foreign Comp

56、anies Accountable Act,which reduces the number of consecutive non-inspectionyears required for triggering the prohibitions under the HFCA Act from three years to two.The Holding Foreign Companies AccountableAct and related regulations currently do not affect the Company as the Companys auditor is ba

57、sed in the U.S.and subject to PCAOBsinspections and investigations.We are a holding company incorporated in the Cayman Islands.As a holding company with no material operations of our own,we conduct asubstantial majority of our business through the operating variable interest entities(“VIEs”)in China

58、.Our ordinary shares offered in thisprospectus are shares of our Cayman Islands holding company,and we do not have any equity ownership in the VIEs,instead weconsolidate financial results and receive the economic benefits of the VIEs business operations through certain contractual arrangements,which

59、 are used to replicate foreign investment in Chinese-based companies where Chinese law may restrict or prohibit certain direct foreigninvestment in the Chinese operating companies.Investors of our ordinary shares will not own any equity interests in the operating VIEs,butinstead own shares of a Caym

60、an Islands holding company.2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm5/226 2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/00012139002301

61、2113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm6/226 As of the date of this prospectus,we do not have any cash management policies and procedures in place that dictate how funds aretransferred through our organization.Ra

62、ther,the funds can be transferred in accordance with the applicable PRC laws and regulations.See“Dividend Distributions and Cash Transfer Between the Holding Company,Subsidiaries and VIEs”on page 4.The Company,we,us,our Company,and our are referred to Earntz Healthcare Products,Inc.,a holding compan

63、y incorporated under thelaws of the Cayman Islands,and its subsidiaries and VIEs.We currently conduct our business through the operating VIE Shanghai EarntzNonwoven Co.,Ltd.,a company incorporated under the laws of China,which manufactures and sells nonwoven fabrics and relatedproducts.Our subsidiar

64、y in Hong Kong is a holding company with no operations on their own.Our subsidiaries in China are wholly foreignowned enterprises of the Company and have entered into contractual arrangements with the VIEs and become their primary beneficiary.Currently,Shanghai Earntz Nonwoven Co.,Ltd.is the only op

65、erating variable interest entity of the Company and Beijing Earntz TechnologyCo.,Ltd.has no operation.As a holding company,we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financingrequirements.If any of our PRC subsidiaries incurs debt on its

66、own behalf in the future,the instruments governing such debt may restricttheir ability to pay dividends to us.Neither of our subsidiaries nor the VIEs have made any dividends or other distributions to our holdingcompany and the holding company has not made any dividends or distributions to any inves

67、tors including U.S.investors as of the date ofthis prospectus.The holding company,its subsidiaries,and VIEs do not have any plan to distribute dividend or settle amounts owed underthe VIE agreements in the foreseeable future.However,to the extent cash/assets in the business is in PRC/Hong Kong or ou

68、r PRC/HongKong entity,the funds/assets may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions inor the imposition of restrictions and limitations on the ability of us,our subsidiaries or the VIEs by the PRC government to transfercash/assets.See“Div

69、idend Distributions and Cash Transfer Between the Holding Company,Subsidiaries and VIEs”,“Selected CondensedConsolidated Financial Schedule of Earntz Cayman and Its Subsidiaries and VIEs”and“Risk FactorsRisks Related to Doing Business inChina Governmental control of currency conversion may limit our

70、 ability to transfer cash between us,our subsidiaries,VIEs or investorsincluding to utilize our net revenues effectively and affect the value of your investment.”In the future,cash proceeds raised from overseasfinancing activities,including this offering,may be transferred by us to our PRC subsidiar

71、ies via capital contribution or shareholder loans,asthe case may be.We currently dont have any cash management policies and procedures in place that dictate how funds are transferredthrough our organization.Rather,the funds can be transferred in accordance with the applicable PRC laws and regulation

72、s.As of the date ofthis prospectus,no cash transfer has been made among the holding company,its subsidiaries and VIE.Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of thesesecurities or passed upon the accuracy or adequacy of this prosp

73、ectus.Any representation to the contrary is a criminal offense.Per Share TotalWithoutOver-AllotmentOption Total WithOver-AllotmentOption Initial public offering price$Underwriters discounts(1)$Proceeds to our company before expenses(2)$(1)Represents underwriting discounts equal to 7%per Ordinary Sha

74、re.(2)In addition to the underwriting discounts listed above,we have agreed to issue,upon closing of this offering,warrants to Network 1Financial Securities,Inc.,as representative of the several underwriters(the“Representative”),exercisable beginning from six monthsafter the date of issuance and for

75、 a five-year period after the date of commencement of sales of Ordinary Shares in this offering,entitling the representative to purchase 7%of the total number of Ordinary Shares sold in this offering(including any Ordinary Sharessold as a result of the exercise of the underwriters over-allotment opt

76、ion)at a per share price equal to 135%of the public offering price(the“Representatives Warrants”).The registration statement of which this prospectus is a part also covers the RepresentativesWarrants and the Ordinary Shares issuable upon the exercise thereof.See“Underwriting”for additional informati

77、on regarding totalunderwriter compensation.We have granted the Representative a 45-day option to purchase up to an additional 375,000 Ordinary Shares at the public offering price,less the underwriting discounts,to cover any over-allotments.This offering is being conducted on a firm commitment basis.

78、Theunderwriters are obligated to take and pay for all of the Ordinary Shares if any such Ordinary Shares are taken.For a description of otherterms of the Representatives warrants and a description of the other compensation to be received by the Representative,see“Underwriting.”The Underwriters expec

79、t to deliver the Ordinary Shares against payment as set forth under“Underwriting,”on or about ,2023.The date of this prospectus is,2023 2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/00012139002301

80、2113/ea173306-f1_earntzhealth.htm7/226 2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm8/226 TABLE OF CONTENTS Page PROSPECTUS SUMMARY1RISK FACTORS19SP

81、ECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS56USE OF PROCEEDS57DIVIDEND POLICY58CAPITALIZATION59DILUTION60EXCHANGE RATE INFORMATION62ENFORCEABILITY OF CIVIL LIABILITIES63CORPORATE HISTORY AND STRUCTURE64SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA67MANAGEMENTS DISCUSSION AND ANALYSIS OF FIN

82、ANCIAL CONDITION AND RESULTS OF OPERATIONS69INDUSTRY OVERVIEW82BUSINESS87MANAGEMENT104PRINCIPAL SHAREHOLDERS109RELATED PARTY TRANSACTIONS110DESCRIPTION OF SHARE CAPITAL112SHARES ELIGIBLE FOR FUTURE SALE117TAXATION119UNDERWRITING125EXPENSES RELATING TO THIS OFFERING131LEGAL MATTERS132EXPERTS132WHERE

83、YOU CAN FIND ADDITIONAL INFORMATION132INDEX TO CONSOLIDATED FINANCIAL STATEMENTSF-1 i2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm9/226 About this P

84、rospectus We are responsible for the information contained in this prospectus and any free writing prospectus we prepare or authorize.You should relyonly on the information contained in this prospectus or in any related free-writing prospectus.We have not authorized anyone to provide youwith informa

85、tion different from that contained in this prospectus or any free-writing prospectus.We are offering to sell,and seeking offers tobuy,the Ordinary Shares only in jurisdictions where offers and sales are permitted.The information contained in this prospectus is currentonly as of the date of this pros

86、pectus,regardless of the time of delivery of this prospectus or of any sale of the Ordinary Shares.For investors outside the United States,neither we nor the underwriters have done anything that would permit this offering or possession ordistribution of this prospectus in any jurisdiction,other than

87、 the United States,where action for that purpose is required.Persons outside theUnited States who come into possession of this prospectus must inform themselves about,and observe any restrictions relating to,theoffering of the Ordinary Shares and the distribution of this prospectus outside the Unite

88、d States.We were incorporated under the laws of the Cayman Islands as an exempted company with limited liability and a majority of ouroutstanding securities are owned by non-U.S.residents.Under the rules of the SEC,we currently qualify for treatment as a“foreign privateissuer.”As a foreign private i

89、ssuer,we will not be required to file periodic reports and financial statements with the SEC as frequently or aspromptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934.Until and including,2023(25 days after the date of this prospectus),all dealers t

90、hat effect transactions in these securities,whetheror not participating in this offering,may be required to deliver a prospectus.This is in addition to the dealers obligation to delivera prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.You should re

91、ly only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered toyou.Neither we nor the underwriters have authorized anyone to provide you with information different from,or in addition to,thatcontained in this prospectus and any related free

92、 writing prospectus.We and the underwriters take no responsibility for and can provide noassurances as to the reliability of any information that others may give you.This prospectus is not an offer to sell,nor is it seeking an offerto buy,these securities in any jurisdiction where the offer or sale

93、is not permitted.The information contained in this prospectus is onlyaccurate as of the date of this prospectus,regardless of the time of delivery of this prospectus and any sale of our Ordinary Shares.Ourbusiness,financial condition,results of operations and prospects may have changed since that da

94、te.ii2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm10/226 Other Pertinent Information Unless otherwise indicated or the context requires otherwise,re

95、ferences in this prospectus to:“Beijing Earn and Earn”and“Beijing WFOE”are to Beijing Earn and Earn Management Consulting Co.,Ltd.,wholly foreign-owned entity incorporated by Earntz International under the laws of the Peoples Republic of China on September 17,2021;“Beijing Earntz”are to Beijing Earn

96、tz Technology Co.,Ltd.”incorporated on August 3,2021 under the laws of the PeoplesRepublic of China,which is our variable interest entity that currently has no operation;“China”or the“PRC”are to the Peoples Republic of China,excluding Taiwan and the special administrative regions of HongKong and Mac

97、au for the purposes of this prospectus only;“EIT”is to PRC enterprise income tax;“Earntz Healthcare,”“Earntz Cayman,”“we,”“us,”“our Company,”“the Company”and“our”are to Earntz Healthcare Products,Inc.,a Cayman Islands exempted company with limited liability,and its subsidiaries and variable interest

98、 entities;“Earntz International”or“Earntz HK”are to Earntz International Limited,which was incorporated under the laws of Hong Kongon March 19,2021 and is a wholly owned subsidiary of Earntz Healthcare;“Exchange Act”are to the Securities and Exchange Act of 1934,as amended;“MOFCOM”are to the Ministr

99、y of Commerce of the PRC;“Ordinary Share(s)”are to our Ordinary Shares with a par value of US$0.0001 per share;“PCAOB”are to Public Company Accounting Oversight Board;“RMB”and“Renminbi”are to the legal currency of China;“SAFE”are to the State Administration of Foreign Exchange;“Securities Act”are to

100、 the Securities Act of 1933,as amended;“Shanghai Earn and Earn”and“Shanghai WFOE”are to Shanghai Earn and Earn Management Consulting Co.,Ltd.a whollyforeign-owned entity incorporated by Earntz International under the laws of the Peoples Republic of China on July 8,2021;“Shanghai Earntz”are to Shangh

101、ai Earntz Nonwoven Co.,Ltd.,incorporated on July 25,2016 under the laws of the PeoplesRepublic of China,which is our variable interest entity that carries out our business operations in China;“U.S.”are to the United States of America;“US$,”“U.S.dollars,”“$”and“dollars”is to the legal currency of the

102、 United States;and VIE”are to variable interest entity;“VIEs”are to our variable interest entities,Shanghai Earntz and Beijing Earntz;“WFOEs”are to Shanghai WFOE and Beijing WFOE.Unless the context indicates otherwise,all information in this prospectus assumes no exercise by the Representative of it

103、s over-allotmentoption.Our business is conducted by the operating VIE Shanghai Earntz in the PRC,using Renminbi(“RMB”),the currency of China.Ourconsolidated financial statements are presented in U.S.dollars.In this prospectus,we refer to assets,obligations,commitments,andliabilities in our consolida

104、ted financial statements in U.S.dollars.These dollar references are based on the exchange rate of RMB to U.S.dollars,determined as of a specific date or for a specific period.Changes in the exchange rate will affect the amount of our obligations andthe value of our assets in terms of U.S.dollars whi

105、ch may result in an increase or decrease in the amount of our obligations(expressed indollars)and the value of our assets,including accounts receivable(expressed in dollars).iii2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/A

106、rchives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm11/226 PROSPECTUS SUMMARY This summary highlights certain information contained elsewhere in this prospectus.You should read the entire prospectus carefully,including our financial statements and related notes and the risks de

107、scribed under“Risk Factors”beginning on page 19.We note thatour actual results and future events may differ significantly based upon a number of factors.This prospectus contains information froman industry report commissioned by us dated and prepared by CEVSN Information Consulting Co.,Ltd.(“CEVSN”)

108、,an independentresearch firm,to provide information regarding our industry and our market position in China.We refer to this report as the“CEVSNReport.”The reader should not put undue reliance on the forward-looking statements in this document,which speak only as of the dateon the cover of this pros

109、pectus.Overview We are a holding company incorporated in the Cayman Islands.Our ordinary shares offered in this prospectus are shares of our CaymanIslands holding company.As a holding company with no material operations of our own,we conduct our business through the operatingVIE in China.Neither we

110、nor our subsidiaries own any shares in the VIEs.Instead,we consolidate financial results and receive theeconomic benefits of the business operations of the VIEs through a series of contractual arrangements(the“VIE Agreements”).Investorsof our ordinary shares will not own any equity interests in the

111、operating VIEs,but instead own shares of a Cayman Islands holdingcompany.We,through the operating VIE Shanghai Earntz,are engaged in the business of manufacturing and selling nonwoven fabrics and relatedproducts,such as disposable non-surgical face masks as well as eye masks.We are also in the proce

112、ss of developing sanitary products,including adult diapers and feminine hygiene pads.Nonwoven fabrics provide specific functions,such as absorbency,liquid repellence,resilience,stretch,softness,strength,flame retardancy,washability,cushioning,thermal insulation,acoustic insulation,filtration,and use

113、as a bacterial barrier and sterility.Combined with other materials,nonwoven fabrics are widely used in healthcare and consumer productsindustries.Shanghai Earntz has two high quality Kasen melt-blown production lines imported from Japan and two Andritz air-through nonwovenproduction lines made in Fr

114、ance.These production lines can produce melt-blown nonwoven fabrics with a filtration efficiency of 99.99%,which can be used to manufacture European FFP3 masks that have the highest protection level.Our mask products obtained manyqualifications and test certifications,such as CE certification(FFP2 a

115、nd FFP3 level),China KN95 level certification,and EUA(Emergency Use Authorization)certification of US FDA.The EUA certification of US FDA was received on August 19,2020 and hasexpired on June 30,2021.We have not exported face masks since the expiration of the EUA certification.Shanghai Earntz also h

116、asobtained all required permits and licenses for its mask products issued by Shanghai Administration of Market Regulation.Our primary raw materials are fibers and fabrics.Shanghai Earntz sources raw materials from recognized international brands such asToray Chemical.Our products have been sold to i

117、nternational markets and countries such as the United States,Germany,Spain,Italy,Portugal,Netherlands,United Arab Emirates,Japan and South Korea.In August 2021,Shanghai Earntz was ranked at No.4 of the top 50growth companies in Shanghai by Shanghai Enterprise Federation,Shanghai Entrepreneurs Associ

118、ation and Jiefang Daily.We generate revenue primarily from sales of nonwoven fabrics and face masks to domestic and international customers.Our total revenuedecreased significantly by approximately$29.4 million,or 63%,from approximately$46.9 million for the year ended December 31,2020to approximatel

119、y$17.5 million for the year ended December 31,2021,of which approximately 90%of our revenues were generated fromdomestic sales and 10%from international sales in 2021.Our net income decreased significantly by approximately$13 million,or 129%,from approximately$10.1 million for the year ended Decembe

120、r 31,2020 to a net loss of approximately$2.9 million for the year endedDecember 31,2021.Our unaudited total revenue decreased significantly by approximately$6.0 million,or 53%,from approximately$11.5 million for the six months ended June 30,2021 to approximately$5.4 million for the six months ended

121、June 30,2022,of which98%of our revenue was generated from domestic sales and 2%from international sales.Our net income decreased significantly byapproximately$1.4 million,or 139%,from approximately$1.0 million net income for the six months ended June 30,2021 toapproximately$0.4 million net loss for

122、the six months ended June 30,2022.Our sales and net income increased significantly during theoutbreak of COVID-19 pandemic as the demand for Personal Protective Equipment(“PPE”)reached an all-time high in 2020.There arestill great uncertainties surrounding the future development of COVID-19 includin

123、g new variants,the efficacy and distribution ofvaccines and mandatory face mask requirements by government authorities.For example,due to the outbreak of Omicron variant inChina in early 2022,certain cities in China have imposed new restrictions and quarantine requirements with office closures and s

124、tayhome orders,including Shanghai where our headquarters are located.The office and factory of Shanghai Earntz were closed from March28,2022 to April 1,2022 and reopened with reduced production capacity and limited employees for PPE products only since April 2,2022 while the city was under a stay ho

125、me order until June 1,2022 to contain the spread of COVID-19.Our business operations havefully resumed since June 1,2022.At the end of November 2022,Chinese government eased strict zero COVID-19 policy which causedsurge of COVID-19 cases in December 2022 and January 2023 and increased demand for our

126、 face masks during these two months.Therefore,the market demand for PPE products is highly uncertain and is dependent on numerous factors,including the duration andspread of the pandemic and any resurgence of COVID-19 and any new COVID-19 variants and face mask requirements by thegovernment.The rela

127、ted financial impact cannot be reasonably estimated at this time.However,we expect face mask,the PPE productthat we currently produce,will represent a relatively smaller percentage of our revenues in the long-term after COVID-19 dissipates andis fully under control worldwide.We intend to allocate mo

128、re resources and efforts on the development of sanitary products includingadult diapers and feminine hygiene pads.2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earnt

129、zhealth.htm12/22612023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm13/226 The following diagram illustrates our corporate structure,including our subsid

130、iaries and consolidated affiliated entities,as of the date ofthis prospectus and immediately upon the completion of this offering,assuming no exercise of the over-allotment by the Representative:As a result of our corporate structure,Earntz Healthcares ability to pay dividends may depend upon divide

131、nds paid by our subsidiaries.Ifour existing subsidiaries or any newly formed ones incur debt on their own behalf in the future,the instruments governing their debt mayrestrict their ability to pay dividends to us.The VIEs and China Operations We are not a Chinese operating company but a Cayman Islan

132、ds holding company without material operations and our business isconducted by our subsidiaries and through contractual arrangements with a VIE based in China and this structure involves unique risks toinvestors.Such contractual arrangements have not been tested in the PRC courts and there are subst

133、antial uncertainties regarding theinterpretation and application of current and future PRC laws,regulations,and rules relating to these contractual arrangements.If thePRC government finds these contractual arrangements non-compliant with the restrictions on direct foreign investment in the relevanti

134、ndustries,or if the relevant PRC laws,regulations,and rules or the interpretation thereof change in the future,we may be subject tosevere penalties or be forced to relinquish our interests in the VIEs or forfeit our rights under the contractual arrangements.PRC laws,regulations,and rules restrict an

135、d impose conditions on direct foreign investment in certain types of business.Although we are notcurrently operating in such businesses in China,we might expand our business scope into the areas that are prohibited or restricted forforeign investment.Through the VIE structure which provides investor

136、s with exposure to foreign investment in the Chinese operatingcompanies where Chinese law prohibits or restricts us from direct foreign investment,we will be able to freely expand our businessoperation in the future.Chinese regulatory authorities could disallow the VIE structure,which would likely r

137、esult in a material change inour operations and/or a material change in the value of the securities we are registering for sale,including that it could cause the value ofsuch securities to significantly decline or become worthless.See“Risk Factors Risks Related to Doing Business in China Ourcorporat

138、e structure and being based in or having the majority of our operations in China poses to investors and Changes in Chinaseconomic,political or social conditions or government policies could have a material adverse effect on our business and results ofoperations”,“Uncertainties and quick change in th

139、e PRC legal system with little advance notice could result in a material and negativeimpact our business operations,decrease the value of our Ordinary Shares and limit the legal protections available to you and us”,and“Risks Related to Our Corporate Structure If the Chinese government determines tha

140、t the contractual arrangements with the VIEsdo not comply with applicable regulations,our business could be adversely affected.”22023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea

141、173306-f1_earntzhealth.htm14/226 The operating VIE Shanghai Earntz is incorporated and operating in mainland China.Shanghai Earntz has received all requiredpermissions(including relevant permits and licenses)from Chinese authorities to operate its current business in China,including abusiness licens

142、e,a customs registration certificate,a bank account open permit,and an approval regarding environmental protection.There are legal and operational risks associated with being based in and having all our operations in China and these risks could result ina material change in our operations and/or the

143、 value of the securities we are registering for sale or could significantly limit or completelyhinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or beworthless.Recently,the PRC government initiated a series of reg

144、ulatory actions and statements to regulate business operations in Chinawith little advance notice,including the proposed post-application/post-listing filing procedures with the authority,enhancingsupervision over China-based companies listed overseas using variable interest entity structure,adoptin

145、g new measures to extend thescope of cybersecurity reviews,and expanding the efforts in anti-monopoly enforcement.On July 6,2021,the General Office of theCommunist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack downon illegal acti

146、vities in the securities market and promote the high-quality development of the capital market,which,among other things,requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,toenhance supervision over China-based companies lis

147、ted overseas,and to establish and improve the system of extraterritorial applicationof the PRC securities laws.As a manufacturer and seller of nonwoven fabrics and related products,based on the advice of King&Capital Law Firm,our PRCcounsel,we do not believe that we are a Critical Information In

148、frastructure Operator(“CIIO”)or a Online Platform Operator as defined inCybersecurity Review Measures published by Cyberspace Administration of China or the CAC National Development and ReformCommission,Ministry of Industry and Information Technology,Ministry of Public Security,Ministry of State Sec

149、urity,Ministry ofFinance,Ministry of Commerce,Peoples Bank of China,State Administration of Radio and Television,China Securities RegulatoryCommission,State Secrecy Administration and State Cryptography Administration on December 28,2021,effective on February 15,2022.As of the date of this prospectu

150、s,as advised by our Chinese counsel,King&Capital Law Firm,we,our subsidiaries,or the VIEs(1)are not required to obtain permissions from any PRC authorities to offer and issue our Ordinary Shares to foreign investors,(2)are notsubject to permission requirements from the CSRC,Cyberspace Administra

151、tion of China(“CAC”)or any other entity that is required toapprove of the VIEs operations,and(3)have not received or were denied such permissions by any PRC authorities.Nevertheless,theGeneral Office of the Central Committee of the Communist Party of China and the General Office of the State Council

152、 jointly issued the“Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,”or the Opinions,which were made available tothe public on July 6,2021.The Opinions emphasized the need to strengthen the administration over illegal securities activities,and theneed to strength

153、en the supervision over overseas listings by Chinese companies.On November 14,2021,CAC published theAdministration Measures for Cyber Data Security(Draft for Public Comments),or the“Cyber Data Security Measure(Draft)”,whichrequires cyberspace operators with personal information of more than 1 millio

154、n users who want to list abroad to file a cybersecurityreview with the Office of Cybersecurity Review.On December 24,2021,the CSRC released the Administrative Provisions of the StateCouncil Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises(Draft for Comments)and the M

155、anagementRules Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises(Draft for Comments),or the“New OverseasListing Rules”.The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmentalauthorities and report related info

156、rmation under certain circumstances,such as,a)an issuer making an application for initial publicoffering and listing in an overseas market;b)an issuer making an overseas securities offering after having been listed on an overseasmarket;c)an issuer offering securities on an overseas market to purchas

157、e assets after having been listed overseas;and d)a domesticcompany seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s),share swap,transfer of sharesor other means.On April 2,2022,the CSRC released the Provisions on Strengthening Confidentiality and

158、Archives Administration ofOverseas Securities Offering and Listing by Domestic Companies(Draft for Comments),which provide that a domestic company thatseeks to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations,enhance legalawareness of kee

159、ping state secrets and strengthening archives administration,institute a sound confidentiality and archives administrationsystem,and take necessary measures to fulfill confidentiality and archives administration obligations.In the event that the aboveproposed provisions and rules are enacted,the rel

160、evant filing procedures of the CSRC and other governmental authorities may berequired in connection with this offering.On July 7,2022,CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer,effective on September 1,2022,which requires the data processors to apply for d

161、ata cross-border security assessmentcoordinated by the CAC under the following circumstances:(i)any data processor transfers important data to overseas;(ii)any criticalinformation infrastructure operator or data processor who processes personal information of over 1 million people provides personali

162、nformation to overseas;(iii)any data processor who provides personal information to overseas and has already provided personalinformation of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st ofthe previous year;and(iv)other circumstan

163、ces under which the data cross-border transfer security assessment is required as prescribed bythe CAC.As of the date of this prospectus,these new laws and guidelines have not impacted the Companys ability to conduct itsbusiness,accept foreign investments,or list and trade on a U.S.or other foreign

164、exchange;however,there are uncertainties in theinterpretation and enforcement of these new laws and guidelines,which could materially and adversely impact our business and financialoutlook and may impact our ability to accept foreign investments or continue to list on a U.S.or other foreign exchange

165、.Any change inforeign investment regulations,and other policies in China or related enforcement actions by Chinese government could result in amaterial change in our operations and the value of our securities and could significantly limit or completely hinder our ability to offer oursecurities to in

166、vestors or cause the value of our securities to significantly decline or be worthless.Given the current PRC regulatoryenvironment,it is uncertain when and whether we,our PRC subsidiaries or VIE,will be required to obtain permission from the PRCgovernment to list on U.S.exchanges in the future,and ev

167、en when such permission is obtained,whether it will be denied or rescinded.Ifwe or any of our subsidiaries or VIEs do not receive or maintain such permissions or approvals,inadvertently conclude that suchpermissions or approvals are not required,or applicable laws,regulations,or interpretations chan

168、ge and we,our subsidiaries and VIEs arerequired to obtain such permissions or approvals in the future,it could significantly limit or completely hinder our ability to offer orcontinue to offer our securities to investors and cause the value of our securities to significantly decline or become worthl

169、ess.2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm15/22632023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earnt

170、zhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm16/226 Our independent registered public accounting firm that issues the audit report included elsewhere in this prospectus,as an auditor ofcompanies that are traded publicly in the United States

171、 and a firm registered with the PCAOB,is subject to laws in the United Statespursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.Ourauditor,Wei,Wei&Co.,LLP,is headquartered in New York City and has been inspected by the PCA

172、OB on a regular basis with the lastinspection in 2020 and is not subject to the determinations announced by the PCAOB on December 16,2021.Also,on August 26,2022,PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the Peoples Republic of China governinginspections and in

173、vestigations of audit firms based in China and Hong Kong.On December 15,2022,the PCAOB Board determined thatthe PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainlandChina and Hong Kong and voted to vacate its previous determi

174、nations to the contrary.However,should PRC authorities obstruct orotherwise fail to facilitate the PCAOBs access in the future,the PCAOB Board will consider the need to issue a new determination.andwe cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringen

175、t criteria to us after consideringthe effectiveness of our auditors audit procedures and quality control procedures,adequacy of personnel and training,or sufficiency ofresources,geographic reach,or experience as it relates to our audit.If it is later determined that the PCAOB is unable to inspect or

176、investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction or any other reasons,the lack ofinspection could cause the trading in our securities to be prohibited under the Holding Foreign Companies Accountable Act and relatedregulations,and as a result Na

177、sdaq may delist our securities.If our securities are unable to be listed on another securities exchange,such adelisting would substantially impair your ability to sell or purchase our securities when you wish to do so,and the risk and uncertaintyassociated with a potential delisting would have a neg

178、ative impact on the price of our ordinary shares.Further,new laws and regulationsor changes in laws and regulations in both the United States and China could affect our ability to list our ordinary shares on Nasdaq,which could materially impair the market for and market price for our securities.Divi

179、dend Distributions and Cash Transfer Between the Holding Company,Subsidiaries and VIEs Our PRC operating VIE receives substantially all of our revenue and all domestic sales in China are paid in RMB.Under our currentcorporate structure,to fund any cash and financing requirements we may have,Earntz H

180、ealthcare may rely on dividend payments fromEarntz International Limited.Shanghai WFOE will receive payments from Shanghai Earntz,pursuant to the VIE Agreements whenparties settle the amounts owed under such agreements.Shanghai WFOE may make distribution of such payments to Earntz InternationalLimit

181、ed as dividends.Under existing PRC foreign exchange regulations,payments of current account items,such as profit distributions and trade and service-related foreign exchange transactions,can be made in foreign currencies without prior approval from SAFE by complying with certainprocedural requiremen

182、ts.Therefore,our WFOE is able to pay dividends in foreign currencies to us without prior approval from SAFE,subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreignexchange regulations,such as the overseas investment registr

183、ations by the ultimate shareholders of Earntz Healthcare who are PRCresidents.Approval from or registration with appropriate government authorities is,however,required where the RMB is to be convertedinto foreign currency and remitted out of China to pay capital expenses such as the repayment of loa

184、ns denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions.For oursubsidiary in Hong Kong and the holding company in Cayman Islands(“Non-PRC Entities”),there is no restrictions on foreign exc

185、hangefor such entities and they are able to transfer cash among these entities,across borders and to US investors.Also,there is no restrictionsand limitations on the abilities of Non-PRC Entities to distribute earnings from their businesses,including from subsidiaries to the parentcompany or from th

186、e holding company to the U.S.investors as well as the abilities to settle amounts owed.There is also no restrictionand limitations on the ability of the WFOE to settle amounts owed by VIEs under the VIEs agreements as both companies areincorporated in China and the amount to be settled will be in RM

187、B without foreign exchange control.However,to the extent cash/assetsin the business is in PRC/Hong Kong or our PRC/Hong Kong entity,the funds/assets may not be available to fund operations or for otheruse outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limi

188、tations on the ability of us,oursubsidiaries or the VIEs by the PRC government to transfer cash/assets.For our Hong Kong subsidiary and the holding company(“Non-PRC Entities”),there is no restrictions on foreign exchange for such entities and they are able to transfer cash among these entities,acros

189、sborders and to US investors.Also,there is no regulatory restrictions and limitations on the abilities of Non-PRC Entities to distributeearnings from their businesses,including from subsidiaries to the parent company or from the holding company to the U.S.investors.However,to the extent cash/assets

190、in the business is in PRC/Hong Kong or our PRC/Hong Kong entity,the funds/assets may not beavailable to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions andlimitations on the ability of us or our subsidiaries by the PRC governmen

191、t to transfer cash/assets.See“Risk FactorsRisks Related toDoing Business in China Governmental control of currency conversion may limit our ability to transfer cash between us,oursubsidiaries,VIEs or investors including to utilize our net revenues effectively and affect the value of your investment.

192、”42023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm17/226 Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out o

193、f their accumulated profits,if any,determined in accordance with Chinese accounting standards and regulations.In addition,our subsidiaries in China are required to setaside at least 10%of their after-tax profits each year,if any,to fund a statutory reserve until such reserve reaches 50%of its regist

194、eredcapital.Each such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund,although the amount to be set aside,if any,is determined at the discretion of its board of directors.Although the statutory reserves can beused,among other

195、 ways,to increase the registered capital and eliminate future losses in excess of retained earnings of the respectivecompanies,the reserve funds are not distributable as cash dividends except in the event of liquidation.Under the existing laws of HongKong,funds from capital accounts can be repatriat

196、ed and remitted overseas without restrictions,and there is no foreign exchange controlimposed.According to the current tax practice of the Hong Kong Inland Revenue Department,dividends paid on the Ordinary Shareswould not be subject to any Hong Kong tax.As of the date of this prospectus,neither of o

197、ur subsidiaries nor the VIEs have made any dividends or other distributions to our holdingcompany and the holding company has not made any dividends or distributions to any investors including U.S.investors as of the date ofthis prospectus.The holding company,its subsidiaries,and VIEs do not have an

198、y plan to distribute dividend or settle amounts owed underthe VIE agreements in the foreseeable future.To the extent cash and/or assets in the business are in the PRC and/or Hong Kong or ourPRC and/or Hong Kong entities,including Earntz HK,the VIEs,and the WFOE,such funds and/or assets may not be av

199、ailable to fundoperations or for other use outside of the PRC and/or Hong Kong due to interventions in or the imposition of restrictions and limitationson the ability of us or our subsidiaries by the PRC government to transfer cash and/or assets.We intend to keep any future earnings to re-invest in

200、and finance the expansion of our business,and we do not anticipate that any cash dividends will be paid in the foreseeablefuture.Under the Cayman Islands law,a Cayman Islands company may pay a dividend on its shares out of either profit or share premiumamount,provided that in no circumstances may a

201、dividend be paid if this would result in the company being unable to pay its debts due inthe ordinary course of business.We currently dont have any cash management policies and procedures in place that dictate how fundsare transferred through our organization.Rather,the funds can be transferred in a

202、ccordance with the applicable PRC laws and regulations.Cash dividends,if any,on our Ordinary Shares will be paid in U.S.dollars.If we are considered a PRC tax resident enterprise for taxpurposes,any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result

203、 may be subject toPRC withholding tax at a rate of up to 10.0%.Pursuant to the Arrangement between Mainland China and the Hong Kong SpecialAdministrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Tax Evasion With Respect to Taxes OnIncome,or the Double Tax Avoidance Ar

204、rangement,the 10%withholding tax rate may be lowered to 5%,if the recipient of the relevantdividends qualifies certain necessary requirements,including without limitation that(a)the Hong Kong project must be the beneficialowner of the relevant dividends;and(b)the Hong Kong project must directly hold

205、 no less than 25%share ownership in the PRC projectduring the 12 consecutive months preceding its receipt of the dividends.The 5%withholding tax rate,however,does not automaticallyapply and in current practice,a Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authorit

206、y to apply forthe 5%lower PRC withholding tax rate.As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis,we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy thepreferential wi

207、thholding tax rate of 5%under the Double Taxation Arrangement with respect to any dividends paid by our WFOE to theirimmediate holding company,Earntz International.As of the date of this prospectus,we have not applied for the tax resident certificatefrom the relevant Hong Kong tax authority.Earntz I

208、nternational intends to apply for the tax resident certificate if and when any of ourWFOE plan to declare and pay dividends to Earntz International.Pursuant to the Second Amended and Restated Exclusive Consultingand Services Agreement,our Shanghai WFOE has the exclusive rights and ability to receive

209、 service fees based on all of the audited netincome of the operating VIE Shanghai Earntz,however,we have no plan to settle amounts owed under the VIE agreement.As of the date of this prospectus,no cash transfer has been made among the holding company,its subsidiaries and VIEs.We currently donot have

210、 any cash management policies and procedures in place that dictate how funds are transferred through our organization.Rather,the funds can be transferred in accordance with the applicable PRC laws and regulations as described in this section.Our Competitive Strengths We believe the following strengt

211、hs differentiate us from our competitors and are key drivers of our success:Our Research and Development Capability:During last four years,our highly qualified research and development team of ShanghaiEarntz has obtained 35 patents regarding nonwoven fabric,its production process and methods,mask de

212、sign,mask production processand methods in China.Our technical team of 20 people includes technology personnel with many years of industry experience and someof them hold PhD or masters degrees.In addition,we entered into a technology development(cooperation)agreement with ZhongyuanUniversity of Tec

213、hnology to jointly develop nonwoven flexible filer materials for PPE in 2020.52023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm18/226 Cutting Edge Produ

214、ction Line and High Production Capacity:Currently,Shanghai Earntz has a maximum annual production capacity of7,500 tons of nonwoven fabrics and over 1 billion masks.By the end of the first quarter of 2023,we expect Shanghai Earntz will reach amaximum annual production capacity of 15,000 tons of nonw

215、oven fabrics as we have ordered two more German Truetzschler productionlines with a total purchase price of RMB17 million(approximately$2.6 million)We have paid full balance for these two production lines.The first new production line is currently under testing and we expected to start installation

216、on the second production line in December2022 and complete in the first quarter of 2023.We believe that our current and expected production capacity of nonwoven fabrics andmasks will provide us with a competitive advantage over many of our small competitors in China.Experienced And Accomplished Lead

217、ership Team with a Proven Track Record:We and Shanghai Earntz have an experiencedmanagement team,and most have many years of R&D,manufacturing,sales and marketing and product commercialization experience inthe nonwoven fabrics or related industry.Some of our management team members also have man

218、y years of studying and workingoverseas,which will help us to expand our international markets to become a global company in the years to come.Our Growth Strategy In order to enhance our competitive position and expand our market,we intend to pursue the following strategies and leverage ourstrengths

219、 to further grow our business:Strengthen our market position with more sales and marketing efforts to expand into additional regions and industries for the useof our products;Further expand our production capacities with two more nonwoven production lines;Continue to invest in technologies to enhanc

220、e our operating efficiency and our product innovations;Continue our efforts to develop new degradable nonwoven products;and Selectively pursue acquisition and investment opportunities.Corporate History and Structure In July 2016,the operating VIE,Shanghai Earntz,was incorporated in Shanghai,China an

221、d began production in July 2017.Earntz Healthcare is a holding company incorporated in the Cayman Islands on March 8,2021.Earntz Healthcare established its directlywholly-owned subsidiary Earntz International,a Hong Kong holding company,on March 19,2021.Earntz International establishedShanghai Earn

222、and Earn,as a wholly foreign-owned subsidiary in China,on July 8,2021.Earntz Healthcare and its subsidiaries have nomaterial operations.In anticipation of this offering,we completed a reorganization of the Company by entering into a series of contractualarrangements with Shanghai Earntz and its shar

223、eholders pursuant to which we gained contractual rights over Shanghai Earntz,as a VIE,because of the conditions we have satisfied for consolidation of the VIE under U.S.GAAP and we are the primary beneficiary of the VIEfor accounting purposes.Thereafter,we conduct our operations primarily through Sh

224、anghai Earntz.On July 9,2021,Shanghai WFOE entered into a series of contractual arrangements with Shanghai Earntz and the shareholders ofShanghai Earntz.These agreements include:(1)an Exclusive Consulting and Services Agreement,amended and restated on January 30,2022 and September 26,2022;(2)an Equi

225、ty Interest Pledge Agreement;(3)an Exclusive Option Agreements;(4)Powers of Attorney;and(5)Spousal Consent Letters.Pursuant to these agreements,Shanghai WFOE has the exclusive rights to provide consulting services toShanghai Earntz related to the business operations and management of Shanghai Earntz

226、.For such services,Shanghai Earntz agrees to payservice fees determined based on all of its audited net income to Shanghai WFOE and Shanghai WFOE is obligated to reimburse all ofShanghai Earntzs losses.The agreements remain in effect until and unless Shanghai Earn and Earn agrees to its termination,

227、except theExclusive Option Agreement that the effective term until all of the option equity interest and the assets of Shanghai Earntz have beenlawfully transferred to Shanghai WFOE and/or its designated entity or individual.Until such termination,Shanghai Earntz may not enterinto another agreement

228、for the provision of management consulting services without the prior consent of Shanghai WFOE.Also,pursuantto the equity interest pledge agreement between the shareholders of Shanghai Earntz and Shanghai WFOE,such shareholders pledged allof their equity interests in Shanghai Earntz to Shanghai WFOE

229、,to guarantee Shanghai Earntzs performance of its obligations under theExclusive Consulting and Services Agreement.Without Shanghai WFOEs prior written consent,the shareholders of Shanghai Earntzshall not transfer or assign the pledged equity interests,or incur or allow any encumbrance that would je

230、opardize Shanghai WFOEsinterests.If Shanghai Earntz breaches its contractual obligations under the aforesaid agreement,Shanghai WFOE,as the pledgee,will beentitled to certain rights and entitlements,including priority in receiving payments by the evaluation or proceeds from the auction or saleof all

231、 or part of the pledged equity interests of Shanghai Earntz,in accordance with legal procedures.In essence,Shanghai WFOE hasgained contractual rights over Shanghai Earntz.Therefore,Shanghai Earntz is considered a VIE under the Statement of FinancialAccounting Standards Board(“FASB”)Accounting Standa

232、rds Codification(“ASC”)810“Consolidation”,because the equityinvestments in Shanghai Earntz no longer have the characteristics of a controlling financial interest,and the Company,through ShanghaiWFOE,is the primary beneficiary of Shanghai Earntz.Accordingly,Shanghai Earntz has been consolidated(See N

233、ote 3 to the financialstatements attached to the registration statement of which this prospectus forms a part of Consolidation of Variable Interest Entity).2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/18

234、83934/000121390023012113/ea173306-f1_earntzhealth.htm19/22662023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm20/226 Beijing Earntz was incorporated in B

235、eijing,China on August 3,2021 and has no operations as of the date of this report.On September17,2021,Earntz International incorporated Beijing WOFE in Beijing,China.On March 17,2022,Beijing WOFE entered into a series ofVIE Agreements with Beijing Earntz and the shareholders of Beijing Earntz.These

236、agreements include:(1)an Exclusive Consulting andServices Agreement,amended and restated on September 26,2022;(2)an Equity Interest Pledge Agreement;(3)an Exclusive OptionAgreement;(4)Powers of Attorney;and(5)Spousal Consent Letters.Pursuant to these agreements,Beijing WOFE has the exclusiverights t

237、o provide consulting services to Beijing Earntz related to the business operation and management of Beijing Earntz.For suchservices,Beijing Earntz agrees to pay an annual service fee in the amount of audited net income to Beijing WFOE and Beijing WFOE hasan obligation to reimburse all of Beijing Ear

238、ntzs losses.The agreements remain in effect until and unless Beijing WFOE agrees to itstermination,except the Exclusive Option Agreement that the effective term until all of the option equity interest and the assets of BeijingEarntz have been lawfully transferred to Beijing WFOE and/or its designate

239、d entity or individual.Until such termination,Beijing Earntzmay not enter into another agreement for the provision of management consulting services without the prior consent of Beijing WFOE.Also,pursuant to the equity interest pledge agreement between the shareholders of Beijing Earntz and Beijing

240、WFOE,such shareholderspledged all of their equity interests in Beijing Earntz to Beijing WFOE,to guarantee Beijing Earntzs performance of its obligations underthe Exclusive Consulting and Services Agreement.Without Beijing WFOEs prior written consent,the shareholders of Beijing Earntzshall not trans

241、fer or assign the pledged equity interests,or incur or allow any encumbrance that would jeopardize Beijing WFOEsinterests.If Beijing Earntz breaches its contractual obligations under the aforesaid agreement,Beijing WFOE,as the pledgee,will beentitled to certain rights and entitlements,including prio

242、rity in receiving payments by the evaluation or proceeds from the auction or saleof all or part of the pledged equity interests of Beijing Earntz,in accordance with legal procedures.In essence,Beijing WFOE has gainedcontractual rights over Beijing Earntz.Therefore,Beijing Earntz is considered a VIE

243、under the Statement of FASB ASC 810“Consolidation”,because the equity investments in Beijing Earntz no longer have the characteristics of a controlling financial interest,and the Company,through Beijing WFOE,is the primary beneficiary of Beijing Earntz.Accordingly,Beijing Earntz has beenconsolidated

244、(See Note 3 to the financial statements attached to the registration statement of which this prospectus forms a part of Consolidation of Variable Interest Entity).The Ordinary Shares offered in this offering are shares of the Cayman Islands holding company.Investors in our Ordinary Shares shouldbe a

245、ware that they may never directly hold equity interests in the VIEs.As a holding company with no material operations of our own,weconduct a substantial majority of our operations through our subsidiaries and contractual arrangements with the VIEs based in China andthis structure involves unique risk

246、s to investors.We do not have any equity ownership of the VIEs,instead we consolidate the financialresults and receive the economic benefits of the VIEs business operations through certain contractual arrangements,which are used toreplicate foreign investment in Chinese-based companies where Chinese

247、 law prohibits direct foreign investment.Investors of ourOrdinary Shares will not own any equity interests in the VIEs,but instead own shares of a Cayman holding company.Chinese regulatoryauthorities could disallow the VIE structure,which would likely result in a material change in our operations an

248、d/or value of our shares,including that it could cause the value of shares to significantly decline or become worthless.The VIE structure is subject to various risks.For example,the contractual arrangements may not be as effective as direct ownership inproviding us with control over VIEs.We expect t

249、o rely on the performance by the VIEs shareholders of their respective obligationsunder the contracts to exercise our contractual rights over.The VIEs shareholders may not act in the best interests of our Company ormay not perform their obligations under these contracts.Such risks will exist through

250、out the period in which we operate our businessthrough the contractual arrangements.If any dispute relating to these contracts remains unresolved,we will have to enforce our rightsunder these contracts through the operations of PRC law and arbitration,litigation or other legal proceedings which coul

251、d be a lengthyprocess and very costly.Since Earntz Healthcare and its subsidiaries are effectively controlled by the same controlling shareholders before and after theReorganization,they are considered under common control.The transactions were accounted for as a recapitalization.The consolidationof

252、 the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementionedtransactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.Upon the Reorganization,the Company

253、has subsidiaries in countries and jurisdictions including PRC and Hong Kong.Details of thesubsidiaries of the Company are set out below:Name of Entity Date ofIncorporation Place ofIncorporation%ofOwnership Principal ActivitiesEarntz International March 19,2021 Hong Kong 100 Holding CompanyShanghai E

254、arn and Earn July 8,2021 Shanghai,China 100 Holding CompanyBeijing Earn and Earn September 17,2021 Beijing,China 100 Holding Company Upon the Reorganization,the Company has VIEs in PRC.Details of the VIEs of the Company are set out below:Name of Entity Date ofIncorporation Place ofIncorporation Prim

255、ary beneficiary Principal ActivitiesShanghai Earntz July 25,2016 Shanghai,China Shanghai Earn and Earn Manufacture and sellnonwoven fabrics andrelated productsBeijing Earntz August 3,2021 Beijing,China Beijing Earn and Earn Currently inactive 2023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/0

256、00121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm21/22672023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000

257、121390023012113/ea173306-f1_earntzhealth.htm22/226 Implications of Being a“Foreign Private Issuer”We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934,as amended(the“ExchangeAct”).As such,we are exempt from certain provisions applicable to United

258、States domestic public companies.For example:we are not required to provide as many Exchange Act reports,or as frequently,as a domestic public company;for interim reporting,we are permitted to comply solely with our home country requirements,which are less rigorous than therules that apply to domest

259、ic public companies;we are not required to provide the same level of disclosure on certain issues,such as executive compensation;we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of materialinformation;we are not required to comply with the

260、sections of the Exchange Act regulating the solicitation of proxies,consents orauthorizations in respect of a security registered under the Exchange Act;and our insiders are not required to comply with Section 16 of the Exchange Act requiring such individuals and entities to file publicreports of th

261、eir share ownership and trading activities and establishing insider liability for profits realized from any“short-swing”trading transaction.Variable Interest Entity Arrangements In establishing our business,we have used a VIE structure.In the PRC,investment activities by foreign investors are princi

262、pallygoverned by Special Administrative Measures(Negative List)for Foreign Investment Access(the“Negative List”),which waspromulgated and is amended from time to time by the PRC Ministry of Commerce(“MOFCOM”)and the PRC National Developmentand Reform Commission(“NDRC”).In December 2021,the MOFCOM an

263、d the NDRC promulgated the Special AdministrativeMeasures(Negative List)for Foreign Investment Access(2021 Version),which became effective on January 1,2022.Industries not listedin the Negative List are generally open to foreign investment unless specifically restricted by other PRC regulations.Our

264、Company andWFOE are considered as foreign investors or foreign invested enterprises under PRC law.82023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm23/2

265、26 The business we currently conduct through the operating VIE is not within the category for which foreign investment is restricted underthe current Negative List or other PRC laws.However,we intend to expand our business and operations in the PRC without beingrestricted to the business activities

266、not subject to the Negative List,which are important for our future business development and growth.As such,we believe the agreements between the WFOE and the VIEs are necessary and essential to our business operations.Thesecontractual arrangements with the VIEs and their shareholders enable us to e

267、xercise effective contractual rights over the VIEs because ofthe conditions we have satisfied for consolidation of the VIE under U.S.GAAP and we are the primary beneficiary of the VIE foraccounting purposes and hence consolidate their financial results as well as provide us freedom to conduct and de

268、velop our businesswithout the restriction of the Negative List.Our WFOE effectively assumed management of the business activities of the VIEs through a series of agreements which are referred to asthe VIE Agreements.The VIE Agreements are comprised of a series of agreements,including Exclusive Consu

269、lting and ServicesAgreements,Equity Interest Pledge Agreements,Exclusive Option Agreements,Powers of Attorney and Spousal Consent Letters.Through the VIE Agreements,WFOE has the rights to advise,consult,manage and operate the VIEs for an annual consulting service feein an amount equal to the VIEs au

270、dited net income.The shareholders of the VIEs have pledged all of their rights,titles and equityinterests in the VIEs as security for WFOE to collect consulting services fees provided to the VIEs through the Equity Interest PledgeAgreement.In order to further reinforce our WFOEs rights to consolidat

271、e and operate the variable interest entities,the VIEsshareholders have granted the WFOE an exclusive rights and options to acquire all of their equity interests in the VIEs through theExclusive Option Agreements.In essence,WFOE has gained effective contractual rights over Shanghai Earntz and Beijing

272、 Earntz because of the conditions we havesatisfied for consolidation of the VIEs under U.S.GAAP and we are the primary beneficiary of the VIEs for accounting purposes.Therefore,Shanghai Earntz and Beijing Earntz are considered VIEs under the Statement of FASB ASC 810“Consolidation”,because theequity

273、 investments in Shanghai Earntz and Beijing Earntz no longer have the characteristics of a controlling financial interest,and theCompany,through WFOE,is the primary beneficiary of Shanghai Earntz and Beijing Earntz.Accordingly,Shanghai Earntz and BeijingEarntz have been consolidated(See Note 3 to th

274、e financial statements attached to the registration statement Consolidation of VariableInterest Entity).Implications of Being an“Emerging Growth Company”We are an“emerging growth company,”as defined in the Jumpstart Our Business Startups Act(the“JOBS Act”),and we are eligible totake advantage of cer

275、tain exemptions from various reporting and financial disclosure requirements that are applicable to other publiccompanies that are not emerging growth companies,including but not limited to(1)presenting only two years of audited financialstatements and only two years of related managements discussio

276、n and analysis of financial condition and results of operations in thisprospectus,(2)not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002(the“Sarbanes-Oxley Act”),(3)reduced disclosure obligations regarding executive compensation in

277、our periodic reports and proxystatements,and(4)exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholderapproval of any golden parachute payments not previously approved.We intend to take advantage of these exemptions.As a result,investors may

278、find investing in our Ordinary Shares less attractive.In addition,Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transitionperiod provided in Section 7(a)(2)(B)of the Securities Act,for complying with new or revised accounting standards.A

279、s a result,anemerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to privatecompanies.We intend to take advantage of such extended transition period.We could remain an emerging growth company for up to five years,or until the earl

280、iest of(1)the last day of the first fiscal year in whichour annual gross revenues exceed$1.07 billion,(2)the date that we become a“large accelerated filer”as defined in Rule 12b-2 under theExchange Act,which would occur if the market value of our Ordinary Shares that is held by non-affiliates exceed

281、s$700 million as of thelast business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months,or(3)the date on which we have issued more than$1 billion in non-convertible debt during the preceding three-year period.92023/2/17https:/www.sec.g

282、ov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm24/226 Implications of Being a“Controlled Company”Under the Nasdaq rules,a“controlled company”is a company with more than 50%of

283、its voting power held by a single person,entity orgroup.Public Companies that qualify as a“Controlled Company”with securities listed on the Nasdaq Stock Market(Nasdaq),mustcomply with the exchanges continued listing standards to maintain their listings.Nasdaq has adopted qualitative listing standard

284、s.Companies that do not comply with these corporate governance requirements may lose their listing status.Under Nasdaq rules,acontrolled company is exempt from certain corporate governance requirements including:the requirement that a majority of the board of directors consist of independent directo

285、rs;the requirement that a listed company have a nominating and governance committee that is composed entirely of independentdirectors with a written charter addressing the committees purpose and responsibilities;the requirement that a listed company have a compensation committee that is composed ent

286、irely of independent directors with awritten charter addressing the committees purpose and responsibilities;and the requirement for an annual performance evaluation of the nominating and governance committee and compensationcommittee.Controlled companies must still comply with the exchanges other co

287、rporate governance standards.These include having an auditcommittee and the special meetings of independent or non-management directors.Upon the completion of this offering,Mr.Junjie Hu,the chairman of our board of directors and our Chief Executive Officer,willbeneficially own 67.75%of our total vot

288、ing power,assuming that the Representative do not exercise their option to purchase additionalOrdinary Shares,or 66.50%of our total voting power,assuming that the option to purchase additional Ordinary Shares is exercised by theRepresentative in full.As a result,upon completion of this offering,we w

289、ill be a“controlled company”as defined under the NasdaqStock Market Rules.As a“controlled company,”we will be permitted to elect not to comply with certain corporate governancerequirements.See“Risk FactorsRisks related to our Ordinary Shares and this offering We will be a“controlled company”as defin

290、edunder the Nasdaq Stock Market Rules.As a result,we may rely on exemptions from certain corporate governance requirements andholders of our Ordinary Shares may not have the same protections generally available to shareholders of other companies listed on stockexchanges in the United States.”Selecte

291、d Condensed Consolidated Financial Schedule of Earntz Cayman and Its Subsidiaries and VIEs The following tables present selected condensed consolidated financial data of Earntz Cayman and its subsidiaries and VIEs for the sixmonths ended June 30,2022 and 2021,and balance sheet data as of June 30,202

292、2 and 2021,which has been derived from our unauditedconsolidated interim financial statements for those periods.The following tables also present selected condensed consolidated financialdata of Earntz Cayman and its subsidiaries and VIEs for the years ended December 31,2021 and 2020,and balance she

293、et data as ofDecember 31,2021 and 2020,which has been derived from our audited consolidated financial statements for those periods.EarntzCayman records its investments in its subsidiaries under the equity method of accounting.Such investments are presented in the selectedcondensed consolidated balan

294、ce sheets of Earntz Cayman as“Investments in VIE”and the profit of the subsidiaries is presented as“Income for equity method investment”in the selected condensed consolidated statements of income and comprehensive income.BeijingEarntz and Beijing Earn and Earn are not included in the financials for

295、the year ended December 31,2020 or the six months ended June30,2021 since they were formed subsequent to June 30,2021.102023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1

296、_earntzhealth.htm25/226 SELECTED CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Six months Ended June 30,2022 EarntzCayman(Unaudited)ShanghaiWFOE(Unaudited)VIE(Unaudited)Eliminations(Unaudited)ConsolidatedTotal(Unaudited)Revenue$-$-$5,417,826$-$5,417,826 Fees to VIE$-$(389,691)$-$389,691$-Equit

297、y loss of subsidiaries$(389,691)$-$-$389,691$-Net loss$(389,691)$(389,691)$(389,691)$779,382$(389,691)For the Six months Ended June 30,2021 EarntzCayman(Unaudited)ShanghaiWFOE(Unaudited)VIE(Unaudited)Eliminations(Unaudited)ConsolidatedTotal (Unaudited)Revenue$-$-$11,450,161$-$11,450,161 Net income$-

298、$-$1,008,878$-$1,008,878 For the Year Ended December 31,2021 EarntzCayman Shanghai*WFOE VIE Eliminations ConsolidatedTotal Revenue$-$-$17,507,069$-$17,507,069 VIE loss$-$-$(2,924,831)$-$(2,924,831)Fees to VIE$-$(3,933,709)$3,933,709$-$-Equity(loss)of subsidiary$(3,933,709)$-$-$3,933,709$-Net(loss)$(

299、3,933,709)$(3,933,709)$1,008,878$3,933,709$(2,924,831)For the Year Ended December 31,2020 Earntz Cayman Shanghai WFOE VIE Eliminations ConsolidatedTotal Revenue$-$-$46,901,200$-$46,901,200 Net income$-$-$10,078,404$-$10,078,404 112023/2/17https:/www.sec.gov/Archives/edgar/data/1883934/00012139002301

300、2113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm26/226 SELECTED CONDENSED CONSOLIDATED BALANCE SHEETS As of June 30,2022 EarntzCayman(Unaudited)ShanghaiWFOE(Unaudited)VIE(Unaudited)Eliminations(Unaudited)ConsolidatedTotal

301、(Unaudited)Cash$-$-$3,327,262$-$3,327,262 Total current assets$-$-$12,348,176$-$12,348,176 Investment in subsidiary$(4,323,400)-$-$4,323,400$-Intercompany receivable$-$-$4,545,695$(4,545,695)$-Total noncurrent assets$222,295$-$13,215,249$13,437,544 Total assets$(4,101,105)$-$30,109,120$(222,295)$25,

302、785,720 Intercompany payable$222,295$4,323,400$-$(4,545,695)$-Total Liabilities$222,295$4,323,400$13,733,326$(4,545,695)$13,733,326(Deficit)equity$(4,323,400)$(4,323,400)$16,375,794$4,323,400$12,052,394 Total liabilities and(deficit)equity$(4,101,105)$-$30,109,120$(222,295)$25,785,720 As of December

303、 31,2021 EarntzCayman ShanghaiWFOE*VIE Eliminations ConsolidatedTotal Cash$-$-$858,916$-$858,916 Total current assets$-$-$11,858,677$-$11,858,677 Investment in subsidiary$(3,933,709)$-$-$3,933,709$-Intercompany receivable$-$-$4,133,171$(4,133,171)$-Total noncurrent assets$199,462$-$9,401,447$9,600,9

304、09 Total assets$(3,734,247)$-$25,393,295$(199,462)$21,459,586 Intercompany payable$199,462$3,933,709$-$(4,133,171)$-Total liabilities$199,462$3,933,709$8,397,667$(4,133,171)$8,397,667(Deficit)equity$(3,933,709)$(3,933,709)$16,995,628$3,933,709$13,061,919 Total liabilities and(deficit)equity$(3,734,2

305、47)$-$25,393,295$(199,462)$21,459,586 *For the period from July 9,2021 to December 31,2021,the VIE is in a loss position.As of December 31,2020 Earntz Cayman Shanghai WFOE VIE Eliminations ConsolidatedTotal Cash$-$-$4,414,205$-$4,414,205 Total current assets$-$-$19,126,666$-$19,126,666 Intercompany

306、receivable$-$-$-$-$-Total noncurrent assets$-$-$7,798,319$-$7,798,319 Total assets$-$-$26,924,985$-$26,924,985 Intercompany payable$-$-$-$-$-Total liabilities$-$-$11,270,016$-$11,270,016 Equity$-$-$15,654,969$-$15,654,969 Total liabilities and equity$-$-$26,924,985$-$26,924,985 122023/2/17https:/www

307、.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm27/226 SELECTED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW For the Six months Ended June 30,2022 Earntz Cayman(Unaudit

308、ed)Shanghai WFOE(Unaudited)VIE(Unaudited)Eliminations(Unaudited)ConsolidatedTotal(Unaudited)Net cash(used in)operating activities$-$-$(1,467,630)$-$(1,467,630)Net cash(used in)investing activities$-$-$(457,878)$-$(457,878)Net cash provided by financing activities$-$-$4,521,196$-$4,521,196 For the Si

309、x months Ended June 30,2021 Earntz Cayman(Unaudited)Shanghai WFOE(Unaudited)VIE(Unaudited)Eliminations(Unaudited)ConsolidatedTotal(Unaudited)Net cash(used in)operating activities$-$-$(2,475,249)$-$(2,475,249)Net cash(used in)investing activities$-$-$(825,695)$-$(825,695)Net cash provided by financin

310、g activities$-$-$773,000$-$773,000 For the Year Ended December 31,2021 Earntz Cayman Shanghai WFOE VIE Eliminations ConsolidatedTotal Net cash(used in)operating activities$-$-$(3,319,709)$-$(3,319,709)Net cash(used in)investing activities$-$-$(2,422,888)$-$(2,422,888)Net cash provided by financing a

311、ctivities$-$-$2,127,954$-$2,127,954 For the Year Ended December 31,2020 Earntz Cayman Shanghai WFOE VIE Eliminations ConsolidatedTotal Net cash provided by operating activities$-$-$11,528,883$-$11,528,883 Net cash(used in)investing activities$-$-$(5,942,154)$-$(5,942,154)Net cash(used in)financing a

312、ctivities$-$-$(1,832,788)$-$(1,832,788)Corporate Information Our principal executive offices are located at 88 Jiangong Road,Building#3 Fengjing,Jinshan District,Shanghai China 201502.Ourtelephone number at this address is+86-21-5735-8082.Our registered office in the Cayman Islands is located at Sui

313、te 102,Cannon Place,P.O.Box 712,North Sound Rd.,George Town,Grand Cayman,KY1-9006 Cayman Islands.Our agent for service of process in theUnited States is Cogency Global Inc.located at 122 East 42nd Street,18th Floor,New York,NY 10168.Investors should contact us forany inquiries through the address an

314、d telephone number of our principal executive offices.Our website is www.sh-.Theinformation contained on our website is not a part of this prospectus.Summary of Risk Factors We are a holding company incorporated in the Cayman Islands,investing in our Ordinary Shares involves significant risks.All of

315、 ourrevenues were generated by our PRC operating VIE.You should carefully consider all of the information in this prospectus beforemaking an investment in our Ordinary Shares.We are subject to a number of risks,including risks that may prevent us from achieving ourbusiness objectives or may adversel

316、y affect our business,financial condition,results of operations,cash flows and prospects.Risks Related to Our Business As a manufacture of healthcare products,the Company especially subject to risks related to public health crises such as theglobal pandemic associated with the coronavirus(COVID-19)(

317、see more detailed discussion of this risk factor on page 19 of thisprospectus).We have a substantial customer concentration,with a limited number of customers accounting for a large portion of our revenues(see more detailed discussion of this risk factor on page 19 of this prospectus).132023/2/17htt

318、ps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm28/226 The growth of our business depends on our ability to accurately predict consumer trends and demand and succe

319、ssfully introducenew products and product line extensions and improve existing products(see more detailed discussion of this risk factor on page20 of this prospectus).We face fierce competition in the nonwoven fabrics and related products market in China.We may not be able to keep pace withcompetiti

320、on in our industry,which could adversely affect our market share and result in a decrease in our future sales andearnings(see more detailed discussion of this risk factor on page 21 of this prospectus).We may be subject to product liability claims,and we do not have insurance coverage to cover these

321、 claims(see more detaileddiscussion of this risk factor on page 27 of this prospectus).We may not be able to prevent others from unauthorized use of our intellectual property,which could harm our business andcompetitive position(see more detailed discussion of this risk factor on page 27 of this pro

322、spectus).We may be subject to intellectual property infringement claims,which may be expensive to defend and may disrupt our businessand operations(see more detailed discussion of this risk factor on page 27 of this prospectus).The global economy,including the U.S.economy,has experienced rising infl

323、ation in recent months.Increased inflation mayhave an adverse impact on our expenses and,as a result,our results of operations.Sustained or rising inflation may result inincreased costs to us in obtaining supplies of key materials to produce our products.As a result,our results of operations may bea

324、dversely impacted.(see more detailed discussion of this risk factor on page 30 of this prospectus)Risks Related to Our Corporate Structure If the Chinese government determines that the contractual arrangements with the VIEs do not comply with applicableregulations,our business could be adversely aff

325、ected(see more detailed discussion of this risk factor on page 30 of thisprospectus).Our contractual arrangements with the VIEs may not be as effective in providing operational control as direct ownership(seemore detailed discussion of this risk factor on page 31 of this prospectus).The shareholders

326、 of the VIEs may have potential conflicts of interest with us,which may materially and adversely affect ourbusiness(see more detailed discussion of this risk factor on page 32 of this prospectus).We may rely on dividends and other distributions on equity paid by our WFOE to fund any cash and financi

327、ng requirements wemay have.Any limitation on the ability of our WFOE to pay dividends to us could have a material adverse effect on our abilityto conduct our business(see more detailed discussion of this risk factor on page 33 of this prospectus).PRC regulation of loans to,and direct investment in,P

328、RC entities by offshore holding companies and governmental control ofcurrency conversion may restrict or prevent us from using the proceeds of this offering to make loans to our PRC subsidiariesand VIEs or to make additional capital contributions to our PRC subsidiaries,which may materially and adve

329、rsely affect ourliquidity and our ability to fund and expand our business(see more detailed discussion of this risk factor on page 34 of thisprospectus).Risks Related to Doing Business in China Our corporate structure and being based in or having the majority of our operations in China poses to inve

330、stors and changes inChinas economic,political or social conditions or government policies could have a material adverse effect on our business andresults of operations(see more detailed discussion of this risk factor on page 37 of this prospectus).Uncertainties and quick change in the PRC legal syst

331、em with little advance notice could result in a material and negative impactour business operations,decrease the value of our Ordinary Shares and limit the legal protections available to you and us(seemore detailed discussion of this risk factor on page 38 of this prospectus).142023/2/17https:/www.s

332、ec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htmhttps:/www.sec.gov/Archives/edgar/data/1883934/000121390023012113/ea173306-f1_earntzhealth.htm29/226 The Chinese government exerts substantial influence over the manner in which we must conduct our business,and mayinte

333、rvene or influence our operations at any time,which could result in a material and negative impact to our operations and/orthe value of the securities we are registering for sale,and it may also exert more control over offerings conducted overseasand/or foreign investment in China-based issuers and significantly limit or completely hinder our ability to offer or continue tooffer securities to investors and,and cause the