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1、F-1 1 formf-1.htm As filed with the U.S.Securities and Exchange Commission on January 24,2025.Registration No.333-UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM F-1 REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 SOFTTO,INC.(Exact name of Registrant as specified in it
2、s charter)Not Applicable(Translation of Registrants name into English)Cayman Islands 2840 Not Applicable(State or other jurisdiction of(Primary Standard Industrial(I.R.S.Employerincorporation or organization)Classification Code Number)Identification number)Mr.Yuhao Liang501 Block B,Huijin Plaza,Baiy
3、un Avenue NorthBaiyun District,Guangzhou CityGuangdong Province,China 510400Tel:+(86)20-31232634(Address,including zip code,and telephone number,including area code,of Registrants principal executive offices)Cogency Global Inc.122 East 42nd Street,18th FloorNew York,NY 10168Phone:(800)221-0102Fax:(8
4、00)944-6607(Name,address,including zip code,and telephone number,including area code,of agent for service)Copies to:Jeffrey Li,Esq.FisherBroyles,LLP1200 G Street NW,Suite 800Washington,D.C.20005(202)830-5905 Fang Liu,Esq.VCL Law LLP1945 Old Gallows Road,Suite 260Vienna,VA 22182Tel:(703)919-7285 Appr
5、oximate date of commencement of proposed sale to the public:as soon as practicable after the effective date of this registration statement.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,c
6、heck thefollowing box.If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,please check the following box and list the Securities Actregistration statement number of the earlier effective registration statement for the same offering.
7、If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the Securities Act,check the following box and list the Securities Act registration statementnumber of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pur
8、suant to Rule 462(d)under the Securities Act,check the following box and list the Securities Act registration statementnumber 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 th
9、e Securities Act of 1933.Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected not to use theextended transition period for complying with any new or revised financial accounting s
10、tandards provided pursuant to section 7(a)(2)(B)of the Securities Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codificationafter April 5,2012.The Registrant hereby amends this registratio
11、n statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a furtheramendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a)of the Securities Act of 1933,asamended,or
12、until the registration statement shall become effective on such date as the Commission,acting pursuant to said Section 8(a),may determine.The information in this preliminary prospectus is not complete and may be changed.We may not sell these securities until the registration statement filed with the
13、Securities and Exchange Commission is effective.This preliminary prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securitiesin any jurisdiction where the offer or sale is not permitted.PRELIMINARY PROSPECTUS Subject to CompletionDated January 24,2025 3
14、,000,000 Ordinary Shares SOFTTO,INC.This is the initial public offering of the ordinary shares of Softto,Inc.,par value$0.0001 per share(“Ordinary Shares”).We are offering on a firm commitment basis 3,000,000ordinary shares.We expect the initial public offering price of the shares to be in the range
15、 of$4 to$6 per Ordinary Share.Prior to the completion of this offering,there has beenno public market for our Ordinary Shares.We have applied to have our Ordinary Shares listed on the Nasdaq Capital Market(“NASDAQ”).We have reserved the tradingsymbol SFTO for listing on the NASDAQ.There is no guaran
16、tee or assurance that our Ordinary Shares will be approved for listing on NASDAQ.However,we will notcomplete this offering unless we are so listed.Upon the completion of this offering,we will be a“controlled company”as defined under Nasdaq Stock Market Rules 5615(c)because Mr.Yuhao Liang,the Chairma
17、n of ourboard of directors and our Chief Executive Officer,and his spouse Luhan Wang,a director of the Board,through Liangs Family Limited,will beneficially own 58.4%of thevoting power of our total issued and outstanding shares assuming the Underwriter does not exercise its over-allotment option,or
18、56.4%of the voting power our total issued andoutstanding shares if the Underwriter exercises its over-allotment option in full.As a“controlled company,”we are permitted to elect not to comply with certain corporategovernance requirements.We currently do not intend to rely on the corporate governance
19、 exemptions available to“controlled companies,”we may choose to rely on suchexemptions in the future.If we rely on these exemptions,you will not have the same protection afforded to shareholders of companies that are subject to these corporategovernance requirements.We are an“emerging growth company
20、,”as that term is used in the Jumpstart Our Business Startups Act of 2012,and will be subject to reduced public companyreporting requirements.Investing in our Ordinary Shares is highly speculative and involves a significant degree of risk.See“Risk Factors”beginning on page 12 of this prospectus for
21、adiscussion of information that should be considered before making a decision to purchase our Ordinary Shares.We are not a Chinese operating company but rather a Cayman Islands holding company without material operations and our business is conducted by our subsidiaries in Chinaand this structure in
22、volves unique risks to investors.See“Risk Factors Risks Related to Doing Business in China Changes in Chinas economic,political or socialconditions or government policies could have a material adverse effect on our business and results of operations”and“Change in Chinese laws and regulations could r
23、esult ina material and negative impact on our business operations,decrease the value of our Ordinary Shares and limit the legal protections available to you and us.”There are legal and operational risks associated with being based in and having all our operations in China.Recently,the PRC government
24、 initiated a series of regulatoryactions and statements to regulate business operations in China with little advance notice,including cracking down on illegal activities in the securities market,enhancingsupervision over China-based companies listed overseas using variable interest entity structure,
25、adopting new measures to extend the scope of cybersecurity reviews,andexpanding the efforts in anti-monopoly enforcement.On July 6,2021,the General Office of the Communist Party of China Central Committee and the General Office of theState Council jointly issued an announcement to crack down on ille
26、gal activities 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,to enhancesupervision over China-based compa
27、nies listed overseas,and to establish and improve the system of extraterritorial application of the PRC securities laws.On December 28,2021,Cybersecurity Review Measures was published by Cyberspace Administration of China or the CAC,National Development and Reform Commission,Ministry ofIndustry and
28、Information Technology,Ministry of Public Security,Ministry of State Security,Ministry of Finance,Ministry of Commerce,Peoples Bank of China,StateAdministration of Radio and Television,China Securities Regulatory Commission,State Secrecy Administration and State Cryptography Administration,effective
29、 on February15,2022,which provides that,Critical Information Infrastructure Operators(“CIIOs”)that purchase internet products and services and Online Platform Operators engaging indata processing activities that affect or may affect national security shall be subject to the cybersecurity review by t
30、he Cybersecurity Review Office.It also requires cyberspaceoperators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity Review.On July 7,2022,CAC promulgated the Measures for the Security Assessment of Data Cr
31、oss-border Transfer,effective on September 1,2022,which requires the data processors to applyfor data cross-border security assessment coordinated by the CAC under the following circumstances:(i)any data processor transfers important data to overseas;(ii)any criticalinformation infrastructure operat
32、or or data processor who processes personal information of over 1 million people provides personal information to overseas;(iii)any dataprocessor who provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information
33、of morethan 10,000 people to overseas since January 1st of the previous year and;and(iv)other circumstances under which the data cross-border transfer security assessment isrequired as prescribed by the CAC.Our sale of products on the online stores and wechat apps only have the general business data
34、 and financial data and we dont collect orstore of any customers personal information.In fact,we only receive customers shipping address,contact information and contact person(no real name is required)forshipment through the online platform.There is no processing,use,or provision of personal informa
35、tion or data to a third party,or obtaining of personal information or datafrom an external source in our business.There is also no transmission of data to countries other than China.According to the advice of our PRC counsel,our business is notsubject to or involve in PRC laws and regulations regard
36、ing personal information protection and cyber data security.On February 17,2023,the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises(the“New Overseas ListingRules”)with five interpretive guidelines,which took effect on March 31,2023.
37、The New Overseas Listing Rules require Chinese domestic enterprises to complete filings withrelevant governmental authorities and report related information under certain circumstances,such as:a)an issuer making an application for initial public offering and listing inan overseas market;b)an issuer
38、making an overseas securities offering after having been listed on an overseas market;c)a domestic company seeking an overseas direct orindirect listing of its assets through single or multiple acquisition(s),share swap,transfer of shares or other means.Pursuant to the New Overseas Listing Rules,dom
39、esticcompanies that seek initial public offering or listing securities overseas,both directly and indirectly,shall file with the CSRC within three working days after the submission ofoverseas offering/listing application.We have submitted initial documents in connection with this offering and our li
40、sting on the Nasdaq Capital Market to the CSRC.However,we cannot assure you that we will be able to complete the review process by CSRC for such filings.Any failure by us to comply with such filing requirements under the TrialMeasures may result in an order to rectify,warnings and fines against us a
41、nd could materially hinder our ability to offer or to continue to offer our securities.Furthermore,uponthe occurrence of any of the material events specified below after an issuer has completed its offering and listed its securities on an overseas stock exchange,the issuer shallsubmit a report there
42、of to the CSRC within three working days after the occurrence and public disclosure of the event:(i)change of control;(ii)investigations or sanctionsimposed by overseas securities regulatory agencies or other competent authorities;(iii)change of listing status or transfer of listing segment;or(iv)vo
43、luntary or mandatorydelisting.The New Overseas Listing Rules stipulate the legal consequences to the companies for breaches,including failure to fulfil filing obligations or filing documentshaving false statement or misleading information or material omissions,which may result in a fine ranging from
44、 RMB 1 million to RMB 10 million,and in cases of severeviolations,the relevant responsible persons may also be barred from entering the securities market.On February 24,2023,the CSRC,the Ministry of Finance,the NationalAdministration of State Secretes Protection and the National Archives Administrat
45、ion released the Provisions on Strengthening the Confidentiality and Archives AdministrationRelated to the Overseas Securities Offering and Listing by Domestic Companies,or the Confidentiality and Archives Administration Provisions,which took effect on March31,2023.Chinese domestic enterprises seeki
46、ng to offer securities and list on overseas markets,either directly or indirectly,shall establish and improve the system ofconfidentiality and archives work,and shall complete approval and filing procedures with competent authorities,if such PRC domestic enterprises or their overseas listingentities
47、 provide or publicly disclose documents or materials involving state secrets and work secrets of state organs to relevant securities companies,securities serviceinstitutions,overseas regulatory agencies and other entities and individuals.It further stipulates that(i)providing or publicly disclosing
48、documents and materials which mayadversely affect national security or public interests,and accounting records or photocopies thereof to relevant securities companies,securities service institutions,overseasregulatory agencies and other entities and individuals shall be subject to corresponding proc
49、edures in accordance with relevant laws and regulations;and(ii)any workingpapers formed in the territory of the PRC by securities companies and securities service agencies that provide domestic enterprises with securities services relating to overseassecurities issuance and listing shall be stored i
50、n the territory of the PRC,the outbound transfer of which shall be subject to corresponding procedures in accordance withrelevant laws and regulations.As of the date of this prospectus,these new laws and guidelines have not impacted the Companys ability to conduct its business,accept foreigninvestme
51、nts,or list and trade on a U.S.or other foreign exchange except for the filing requirement with CSRC under New Overseas Listing Rules.We develop,sell anddistribute hair care,skin care,personal care and beauty products in China.We are not cyberspace operators with personal information of more than 1
52、million users or activitiesthat affect or may affect national security and we dont have documents and materials which may adversely affect national security or public interests.However,there areuncertainties in the interpretation and enforcement of these new laws and guidelines,which could materiall
53、y and adversely impact our business and financial outlook,mayimpact our ability to accept foreign investments,offer our securities to investors or to list on a U.S.or other foreign exchange,and could impact our ability to conduct ourbusiness.Any change in foreign investment regulations,and other pol
54、icies in China or related enforcement actions by China government could result in a material change in ouroperations and the value of our securities and could significantly limit or completely hinder our ability to offer our securities to investors or cause the value of our securities tosignificantl
55、y decline or be worthless.The Holding Foreign Companies Accountable Act,or the HFCA Act,was enacted on December 18,2020.In accordance with the HFCAAct,trading in securities of any registrant on a national securities exchange or in the over-the-counter trading market in the United States may be prohi
56、bited if the PCAOBdetermines that it cannot inspect or fully investigate the registrants auditor for three consecutive years beginning in 2021,and,as a result,an exchange may determine to delistthe securities of such registrant.On December 29,2022,a legislation entitled“Consolidated Appropriations A
57、ct,2023”(the“Consolidated Appropriations Act”)was signedinto law by President Biden,which has shortened the Holding Foreign Companies Accountable Acts timeline for a potential trading prohibition from three years to two years,thus reducing the time period before our securities may be prohibited from
58、 trading or delisted if our auditor is unable to meet the PCAOB inspection requirement.TheCompanys auditor is headquartered in the U.S.and the Public Company Accounting Oversight Board(United States)(the“PCAOB”)currently has access to inspect theworking papers of our auditor and our auditor is not s
59、ubject to the determinations announced by the PCAOB on December 16,2021,which determinations were vacated onDecember 15,2022.The Holding Foreign Companies Accountable Act and related regulations currently does not affect the Company as the Companys auditor is subject toPCAOBs inspection and investig
60、ation.See“Risk Factors The Holding Foreign Companies Accountable Act,or the HFCA Act,and the related regulations are evolvingquickly.Further implementations and interpretations of or amendments to the HFCA Act or the related regulations,or a PCOABs determination of its lack of sufficient accessto in
61、spect our auditor,might pose regulatory risks to and impose restrictions on us because of our operations in Hong Kong and mainland China.A potential consequence isthat our ordinary shares may be delisted by the exchange.The delisting of our ordinary shares,or the threat of our ordinary shares being
62、delisted,may materially andadversely affect the value of your investment.Additionally,the inability of the PCAOB to conduct full inspections of our auditor deprives our investors of the benefits of suchinspections.”We are a holding company incorporated as an exempted company with limited liability i
63、n the Cayman Islands.As a holding company with no material operations of our own,we conduct a substantial majority of our business through our operating subsidiaries in China.Our Ordinary Shares offered in this prospectus are shares of our Cayman Islandsholding company,not the shares of our operatin
64、g subsidiaries.As a holding company,we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements.If any of our PRCsubsidiaries incurs debt on its own behalf in the future,the instruments governing such debt may restrict their ability
65、 to pay dividends to us.However,our subsidiaries have notmade any dividends or other distributions to our holding company or any U.S.investors as of the date of this prospectus.In the future,cash proceeds raised from overseasfinancing activities,including this offering,may be transferred by us to ou
66、r PRC subsidiaries via capital contribution or shareholder loans,as the case may be.See“SelectedCondensed Consolidated Financial Schedule of the Company and Its Subsidiaries”beginning on page 8 of this prospectus and“Selected Consolidated Financial Statements”on page F-1 of this prospectus.Under exi
67、sting 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 the State Administration of Foreign Exchange in China(“SAFE”)by complying wi
68、th certain proceduralrequirements.Therefore,our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE,subject to the condition that theremittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulat
69、ions,such as the overseas investment registrations byour shareholders or the ultimate shareholders of the Company who are PRC residents.Approval from or registration with appropriate government authorities is,however,required where the RMB is to be converted into foreign currency and remitted out of
70、 China to pay capital expenses such as the repayment of loans denominated in foreigncurrencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions.For our Hong Kong subsidiary andthe holding company(“Non-PRC Entities”),th
71、ere is no restrictions on foreign exchange for such entities and they are able to transfer cash among these entities,across bordersand to US investors.Also,there is no regulatory restrictions and limitations on the abilities of Non-PRC Entities to distribute earnings from their businesses,including
72、fromsubsidiaries to the parent company or from the holding company to the U.S.investors.However,to the extent cash/assets in the business is in PRC/Hong Kong or ourPRC/Hong Kong entity,the funds/assets may not be available to fund operations or for other use outside of the PRC/Hong Kong due to inter
73、ventions in or the imposition ofrestrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash/assets.Current PRC regulations permit our PRC subsidiaries to paydividends to the Company only out of their accumulated profits,if any,determined in accordance
74、 with Chinese accounting standards and regulations.In addition,oursubsidiaries in China are required to set aside at least 10%of its after-tax profits each year,if any,to fund a statutory reserve until such reserve reaches 50%of their respectiveregistered capital.Each such entity in China is also re
75、quired to further set aside a portion of its after-tax profits to fund the employee welfare fund,although the amount to beset aside,if any,is determined at the discretion of its board of directors.Although the statutory reserves can be used,among other ways,to increase the registered capital andelim
76、inate future losses in excess of retained earnings of the respective companies,the reserve funds are not distributable as cash dividends except in the event of liquidation.See“Dividend Distribution and Cash Transfer Between the Holding Company and Subsidiaries”and“Risk FactorsRisks Related to Doing
77、Business in China Governmentalcontrol of currency conversion may limit our ability to transfer cash between us and our subsidiaries or investors including our ability to utilize our net revenues effectively andaffect the value of your investment.”As of the date of this prospectus,we do not have cash
78、 management policies and procedures in place that dictate how funds are transferred through our organization.Rather,thefunds can be transferred in accordance with the applicable PRC laws and regulations.See“Dividend Distribution and Cash Transfer Between the Holding Company andSubsidiaries”on page 3
79、.The terms“the Company”,“Softto”,“we”,“us”,“our company”,and“our”refer to Softto,Inc.,an exempted company incorporated under the laws of the Cayman Islands.Wecurrently conduct substantially all of our business through Softto Smart Brand Management Co.,Ltd.,our indirectly wholly owned subsidiary in C
80、hina and its wholly ownedsubsidiaries including Guangzhou Douyue Technology Innovation Co.,LTD.,Guangzhou Haoyuan Cosmetics Trading Co.,LTD,Tikas(Guangzhou)High-tech Co.,LTD.andGuangzhou Yuebang Personal Care Products Co.,LTD.,all those which are incorporated in China.The securities offered in this
81、prospectus are securities of Softto Inc.,ourCayman Islands holding company and investors are purchasing an interest in Softto,Inc.,not our operating entities in China.Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
82、 passed upon the accuracy oradequacy of this prospectus.Any representation to the contrary is a criminal offense.Per Share Total Public offering price$Underwriting discounts(1)Proceeds to us,before expenses(2)$(1)We have agreed to pay the underwriter a discount equal to seven percent(7%)of the publi
83、c offering price.(2)We expect our total cash expense of this offering(including cash expenses payable to our underwriter for its out-of-pocket expense)not to exceed$250,000,exclusive ofthe discount above.In addition,we will pay to our underwriter 2%of the total offering amount as the underwriters no
84、n-accountable expenses.These payments will furtherreduce proceeds available to us before expenses.For a detailed description of the compensation to be received by the underwriter,see“Underwriting.”We have granted the underwriter a 45-day option to purchase up to an additional 15%of the total number
85、of our ordinary shares at the public offering price,less theunderwriting discounts,to cover any over-allotments.We have agreed to issue,on the closing date of this offering,the underwriters warrants to the representative of theunderwriters,Revere Securities LLC,to purchase a number of ordinary share
86、s equal to four percent(4%)of the total number of shares sold in this offering at an exercise priceequal to one hundred and twenty five percent(125%)of the public offering price of the shares sold in this offering.For a description of other terms of the underwriterswarrants and a description of the
87、other compensation to be received by the underwriter,see“Underwriting.”The offering is being made on a“firm commitment”basis.The underwriter is obligated to take and pay for all of the Ordinary Shares if any such Ordinary Shares are taken.Ifthe Underwriter exercises this option in full,the total und
88、erwriting discounts payable will be$based on an assumed offering price of$per Ordinary Share,and the totalgross proceeds to us,before underwriting discounts and expenses,will be$.For a description of other terms of the underwriters warrants and a description of the othercompensation to be received b
89、y the underwriter,see“Underwriting.”The Underwriter expect to deliver the Ordinary Shares against payment as set forth under“Underwriting,”on or about,2025.REVERE SECURITIES LLC The date of this prospectus is,2025 TABLE OF CONTENTS PagePROSPECTUS SUMMARY1RISK FACTORS12SPECIAL NOTE REGARDING FORWARD-
90、LOOKING STATEMENTS47USE OF PROCEEDS49DIVIDEND POLICY50CAPITALIZATION51DILUTION52EXCHANGE RATE INFORMATION54ENFORCEABILITY OF CIVIL LIABILITIES55CORPORATE HISTORY AND STRUCTURE57MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS58INDUSTRY OVERVIEW74OUR BUSINESS77REGU
91、LATIONS92MANAGEMENT103PRINCIPAL SHAREHOLDERS108RELATED PARTY TRANSACTIONS109DESCRIPTION OF SHARE CAPITAL111SHARES ELIGIBLE FOR FUTURE SALE118TAXATION121UNDERWRITING127EXPENSES RELATING TO THIS OFFERING133LEGAL MATTERS133EXPERTS133WHERE YOU CAN FIND ADDITIONAL INFORMATION133INDEX TO CONSOLIDATED FINA
92、NCIAL STATEMENTSF-1 i About this Prospectus You should rely only on the information contained in this prospectus or in any related free-writing prospectus.We have not authorized anyone to provide you with informationdifferent from that contained in this prospectus or any free-writing prospectus.We a
93、re offering to sell,and seeking offers to buy,the Ordinary Shares only in jurisdictions whereoffers and sales are permitted.The information contained in this prospectus is current only as of the date of this prospectus,regardless of the time of delivery of this prospectusor of any sale of the Ordina
94、ry Shares.For investors outside the United States,neither we nor the Underwriter have done anything that would permit this offering or possession or distribution of this prospectus in anyjurisdiction,other than the United States,where action for that purpose is required.Persons outside the United St
95、ates who come into possession of this prospectus must informthemselves about,and observe any restrictions relating to,the offering of the Ordinary Shares and the distribution of this prospectus outside the United States.We were incorporated under the laws of the Cayman Islands as an exempted company
96、 with limited liability and a majority of our outstanding securities are owned by non-U.S.residents.Under the rules of the SEC,we currently qualify for treatment as a“foreign private issuer.”As a foreign private issuer,we will not be required to file periodic reportsand financial statements with the
97、 SEC as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934.Until and including,2025(25 days after the date of this prospectus),all dealers that effect transactions in these securities,whether or not participating in thisofferin
98、g,may be required to deliver a prospectus.This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect totheir unsold allotments or subscriptions.You should rely only on the information contained in this prospectus and any free writing prospectus
99、 we may authorize to be delivered to you.Neither we nor the Underwriterhave authorized anyone to provide you with information different from,or in addition to,that contained in this prospectus and any related free writing prospectus.We and theUnderwriter take no responsibility for and can provide no
100、 assurances as to the reliability of any information that others may give you.This prospectus is not an offer to sell,noris it seeking an offer to buy,these securities in any jurisdiction where the offer or sale is not permitted.The information contained in this prospectus is only accurate as of the
101、date of this prospectus,regardless of the time of delivery of this prospectus and any sale of our Ordinary Shares.Our business,financial condition,results of operations andprospects may have changed since that date.ii Other Pertinent Information Unless otherwise indicated or the context requires oth
102、erwise,references in this prospectus to:“China”or the“PRC”are to the Peoples Republic of China,excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes ofthis prospectus only;“EIT”is to PRC enterprise income tax;“Exchange Act”are to the Securities and Exchange
103、Act of 1934,as amended;“Guangzhou Douyue”are to Guangzhou Douyue Technology Innovation Co.,LTD,a wholly owned subsidiary of Softto Smart and is incorporated under the laws ofthe Peoples Republic of China on March 1,2022;“Guangzhou Haoyuan”are to Guangzhou Haoyuan Daily Chemical Trading Co.,LTD,a who
104、lly owned subsidiary of Softto Smart and is incorporated under the lawsof the Peoples Republic of China on March 24,2022;“Guangzhou Yuebang”are to Guangzhou Yuebang Personal Care Products Co.,LTD,a wholly owned subsidiary of Softto Smart and is incorporated under the laws ofthe Peoples Republic of C
105、hina on January 6,2022;“Guangzhou Softto”are to Guangzhou Softto Brand Management and Operation Co.,Ltd.,a wholly owned subsidiary of Softto Investment and is incorporated underthe laws of the PRC on October 13,2023.“MOFCOM”are to the Ministry of Commerce of the PRC;“Ordinary Share(s)”are to our Ord
106、inary Shares with a par value of US$0.0001 per share;“PCAOB”are to Public Company Accounting Oversight Board;“RMB”and“Renminbi”are to the legal currency of China;“SAFE”are to the State Administration of Foreign Exchange;“Securities Act”to the Securities Act of 1933,as amended;“Softto,”“we,”“us,”“our
107、 company,”“the Company”and“our”are to Softto,Inc.,is incorporated on November 27,2023 as a Cayman Islands exempted companywith limited liability and its subsidiaries;“Softto BVI”are to Softto Holdings Limited,a wholly owned subsidiary of Softto,Inc.and is incorporated under the laws of British Virgi
108、n Islands on December 4,2023;“Softto E-Commerce”are to Softto E-Commerce(Guangzhou)Co.,Ltd.,a wholly owned subsidiary of Softto Investment and is incorporated under the laws of thePeoples Republic of China on October 29,2024.“Softto HK”are to Softto Co.,Limited,a wholly owned subsidiary of Softto BV
109、I and is incorporated under the laws of Hong Kong on December 11,2023;“Softto Retail Trading”are to Softto Retail Trading(Guangzhou)Co.,Ltd.,a wholly owned subsidiary of Softto Investment and is incorporated under the laws of thePeoples Republic of China on November 18,2024.Softto Trading(Guangzhou)
110、”are to Softto Trading(Guangzhou)Co.Ltd.,a wholly owned subsidiary of Softto Investment and is incorporated under the laws of thePeoples Republic of China on November 18,2024.“Softto US”are to Softto Inc.,a wholly owned subsidiary of Softto BVI and is incorporated under the laws of the State of Wash
111、ington,the United States on June 11,2024;“Softto Smart”are to Softto Smart Brand Management Co.,Ltd.,a wholly owned subsidiary of WFOE and is incorporated under the laws of the Peoples Republic ofChina on December 28,2017;“Tikas Guangzhou”are to Tikas(Guangzhou)High-tech Co.,LTD a wholly owned subsi
112、diary of Softto Smart and is incorporated under the laws of the PeoplesRepublic of China on September 26,2022;“U.S.”are to the United States of America;“US$,”“U.S.dollars,”“$”and“dollars”are to the legal currency of the United States;“VIE”are to variable interest entity;and “WFOE”or“Softto Investmen
113、t”are to Guangzhou Softto Investment Holdings Co.,Ltd.,a wholly owned subsidiary of Softto HK and is incorporated under the lawsof the Peoples Republic of China on January 8,2024.Unless the context indicates otherwise,all information in this prospectus assumes no exercise by the Underwriter of its o
114、ver-allotment option.Our business is conducted by our subsidiaries in the PRC,using Renminbi(“RMB”),the currency of China.Our consolidated financial statements are presented in U.S.dollars.In this prospectus,we refer to assets,obligations,commitments,and liabilities in our consolidated financial sta
115、tements in U.S.dollars.These dollar references are based on theexchange 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 and thevalue of our assets in terms of U.S.dollars which may result in a
116、n increase or decrease in the amount of our obligations(expressed in dollars)and the value of our assets,including accounts receivable(expressed in dollars).iii PROSPECTUS SUMMARY This summary highlights certain information contained elsewhere in this prospectus.You should read the entire prospectus
117、 carefully,including our financial statements andrelated notes and the risks described under“Risk Factors”beginning on page 12.We note that our actual results and future events may differ significantly based upon anumber of factors.This prospectus contains information derived from the industry repor
118、t from Frost&Sullivan,an independent research firm,commissioned by us inSeptember 2023 entitled“Independent Study on Personal Care Products Industry”(the“Frost&Sullivan Report”),to provide information regarding our industry and ourmarket position in China.We refer to this report as the“Frost&Sulliva
119、n Report.”The reader should not put undue reliance on the forward-looking statements in thisdocument,which speak only as of the date on the cover of this prospectus.Overview We are a holding company incorporated in the Cayman Islands.Our ordinary shares offered in this prospectus are shares of our C
120、ayman Islands holding company.As a holdingcompany with no material operations of our own,we conduct our business through our operating subsidiaries in China.We own 100%equity interest of all our subsidiariesincluding the operating subsidiary in China and do not have a VIE structure.We,through Softto
121、 Smart,are engaged in the business of personal care and beauty products,including cleansing,skincare,shampoo and oral care products.We adhere to thegoal of being a leader in the Chinese personal care products industry.Softto brand started in 1988 and we have been carrying forward our product develop
122、ment philosophy as“Our product and its quality speak for itself”.We keep up with the development and change of trends in personal care products industry in China and pursue constantimprovements of our products.We develop and sell every type and model of our products with high standards to meet marke
123、t and consumer demands,and to provide qualitybody skin care brand products for our customers.We do not manufacture our products ourselves;instead,we contract OEM manufacturers to produce our products for us andone of the OEM manufacturers is our largest supplier and related party of the Company.We h
124、ave entered into OEM agreements with our largest OEM manufacturer/supplierGuangzhou Tianwen Jiaoyan Cosmetics Co.,Ltd.The material terms of the OEM agreements between Guangzhou Douyue Technology Innovation Co.,LTD.and GuangzhouYuebang Personal Care Products Co.Ltd.,wholly owned operating subsidiarie
125、s of the Company(the“Party A”)and Guangzhou Tianwen Jiaoyan Cosmetics Co.,Ltd.,thelargest manufacturer/supplier of the Company(the“Party B”)include:(i)Party B shall produce and supply the OEM products based upon the specific quantity,specificationand quality requirements in the orders confirmed by t
126、he Partes;(ii)Party A shall provide its business license and trademark certification for the products and Party B shallcomplete the inspection and testing application and filing requirement with authorities to ensure the productions of such products meeting the government requirements;(iii)Party B s
127、hall ensure the products meeting the national and industry standards as well as the specification in the order;(iv)the package,label and design provided by the Party Ashall meet the national and industry standards and Party A shall be responsible for the damaged caused by the infringement of the pac
128、kage design provided by the Party A;(v)Party A shall assume the shipping fee and shall inspect the products upon delivery.Party A shall raise the claim for the quantity issue of the delivery within 7 business day andshall raise the claim for the exterior quality issue of the products within 15 busin
129、ess days.For any interior or hidden defects of the products,Party A may raise the claim duringthe shelf life of the product.For the products with quality issues,Party A may return the products for a refund or request for a replacement of the products;(vi)Party A shall pay30%deposit upon the confirma
130、tion of the order and remaining 70%shall be paid monthly.Party B shall provide monthly delivery receipts to Party A before the 5th day eachmonth and Party A shall verify the receipts within 5 business days.Party B shall provide VAT invoices to Party A within 3 business days upon Party As confirmatio
131、n and PartyA shall make the payment during the last week of such month upon reviewing and confirming the invoices;(vii)Party A shall ensure the drawings,designs,formula,process,trademarks,materials and packages that it provides to Party B do not infringe the intellectual property rights of any third
132、 party and shall bear all liabilities if there is anyinfringement and compensate Party Bs damages;(viii)if Party A fails to make its payment on time,it shall pay a penalty of 0.3%for the unpaid amount each day and Party Bhas the right to refuse to deliver the products if the delay is more than 10 da
133、ys.If Party B fails to deliver the products on time,it shall pay a penalty of 0.5%for the undeliveredproducts and party A has the right to terminate the order and refuse to pay as well as any other damages caused to Party A if the delay is more than 10 days;(ix)without PartyAs written consent,Party
134、B shall not subcontract the manufacture to any third party,otherwise,Party A may terminate the agreement immediately and Party B shall refund thedeposit and pay a penalty of RMB 500,000 for each such outsourced order;and(x)any disputes arising from the agreement shall be resolved by friendly negotia
135、tion and if thedisputes cannot be resolved through negotiation,either party may file the lawsuit to the court where this agreement is signed and losing party shall bear all the litigation fees.The term of the OEM agreement between Guangzhou Yuebang Personal Care Products Co.Ltd.and Guangzhou Tianwen
136、 Jiaoyan Cosmetics Co.,Ltd.is for one year fromDecember 15,2023 to December 14,2024.The term of the OEM agreement between Guangzhou Douyue Technology Innovation Co.,LTD.and Guangzhou Tianwen JiaoyanCosmetics Co.,Ltd.is for one year from June 30,2024 to June 29,2025.Our product brands mainly include
137、Softto,Softto Oriental Herbs,i-softto,Dakeshu,Qingyuan and Welltop.Our branded products are sold in 238 cities across China.Wegenerate revenues primarily through:(i)offline wholesale,(ii)online retail and(iii)commission fee,which was no longer the main sales channel since 2022.Offline Wholesale.We s
138、ell our products to third party distributors and wholesalers who then resell to their end customers through cosmetics counters in stores,shopping malls,supermarkets,as well as direct sales to consumers and through self-operated counters and other modes.As of December 31,2022,our products were sold t
139、hrough distributorsto more than 1,000 cosmetics counters in various stores in China,including RT-Mart,CR Vanguard,Yonghui,Superstore,CenturyMart,Carrefour,etc.The wholesalers also sellour products through community buying group buying via an online platform or use social media channels to gather ord
140、ers and collect payments from online communitymembers.Currently,we mainly operate through online platforms such as Meituan Selected,Xingsheng Selected and Duo Duo Grocery for our community buying group sales.We have agreement with an alliance of large distributors which are located in different citi
141、es in China.The alliance signs a special distribution commitment agreement(the“Alliance Agreement”)with Softto and commit to certain annual volume of product purchase from Softto with preferential prices.Internally,the alliance will assign thepurchase amount to its member distributors and each distr
142、ibutor will sign actual product purchase contract with Softto with the preferential price provided through the alliance.Certain key products sold to the distributors of the alliance are customized products to distingue them from the similar products sold through other general sales channels of theCo
143、mpany without preferential prices.Although the gross margins are lower to sell products through the distributors of the alliance,it generates large volume of sales for theCompany as the members of the alliance are large distributors in the nation.In 2023,the member distributors of the alliance accou
144、nted approximately 34.4%of our total sales.The current Alliance Agreement is between Guangzhou Yuebang Personal care products Co.,LTD,a wholly owned subsidiary of the Company(“Party A”)and memberdistributors of the alliance(“Party B”),and has a term from January 1,2024 to December 31,2024.The materi
145、al terms of the current Alliance Agreement include:(i)Party Aauthorizes Party B as its lawful distributors for Softto branded products according to the authorization scope in China;(ii)Party B shall not sell any Softto products outside ofthe approved scope of this agreement and shall not transfer or
146、 provide authorization to any third party without Party As approval and Party A may terminate the agreement ifParty B breaches this term;(iii)Party A shall supply Softto products to Party B with the alliance price to ensure that Party B will enjoy low price and gross margin,howeverParty B shall not
147、sell such products below agreed prices;(iv)the alliance members shall at least purchase total RMB 40 million products(each of the first and fourth quartersRMB 7.2 million and each of the third and fourth quarter RMB12.8 million)during the term of this agreement in 2024;(v)if the alliance fails to me
148、et any purchase amounttarget in any quarter,Party A may refuse to provide additional products;(vi)if the alliance fails to meet its purchase target for two consecutive quarters,Party A may cancel thedistribution authorization;(vii)Party B is responsible for the promotion and marketing of Softto prod
149、ucts during its sales and such promotion shall be approved by Party A inadvance;(viii)no matter whether Party A has approved the promotion,Party B shall be responsible for any false advertisement or exaggeration or any breach of laws by PartyB and shall compensation Party A for its damages;(ix)if Pa
150、rty B sells products not in compliance with the price requirement,sells counterfeit products,exceeds itsauthorization scope or transfers its authorization or fails to timely pay for its purchase prices and fails to cure such breaches after the notification from Party A,Party A mayterminate this agre
151、ement and Party B shall pay for the damages of Party A;and(x)any dispute relating to this agreement,parties shall resolve it through friendly negotiations;if parties fails to reach an agreement,the dispute shall be submitted to the peoples court of where Party A is located.We expand our brand partne
152、rship through brand image and channel agent recommendation.We regularly organize promotion conferences to expand distributors and effectivelyexpand channels.We also regularly participate in expos to show Softtos brand image and export brand value,such as Shanghai Beauty Expo and Guangzhou Beauty Exp
153、o.Atthe same time,we authorize our distribution alliance to manage the promotion and sales activities for our branded products.Online retail.Our online retail generally include four sales channels:(i)traditional e-commerce,similar to Tmall,JD.COM,and Pinduoduo,our operational staffs andemployees mai
154、ntain and manage online stores daily,including visual effects of the store and products as wellas customers placing orders for products through our online stores;(ii)promotional&advertising sales,which refers to the income generated by advertising on major websites and short video platforms to attra
155、ct consumers to make purchases;(iii)recommendations by celebrities and influencers on social media,through which,we collaborate with internet celebrities,livestream hosts,or influencers to promote andsell products live,offering the influencers commissions based on sales,sometimes with additional upf
156、ront fees for top influencers;and(iv)online product distribution,whichrefers to certain customers requesting large purchases for its offline store needs,with parties signing contracts for the transactions.Commission fee.During 2021 and prior years,we purchased and sold most of products to and from r
157、elated parties,acting as an agent between the end consumers and suppliersto manage the Softto brand.The related parties were responsible for determining sales strategy and distributing the products through their own sales channels.We did nothandle the delivery of the goods,bear any inventory risk,or
158、 have discretion in setting sale prices.Our commission was calculated as the difference between the purchase priceand the selling price of products.This commission was recognized upon delivery of the products to customers and was reported net under“Revenues from related parties,net”in the consolidat
159、ed statements of operations for the years ended December 31,2023 and 2022.This sales channel was no longer the main channel since 2022.1 We generate revenues primarily through sales of our products.During the fiscal years ended December 31,2023 and 2022,our revenues were approximately$15.0 million a
160、nd$19.5 million,respectively,and net loss was approximately$2.3 million and$0.4 million,respectively.Our total revenue decreased approximately$4.5 million,or 23.4%,from approximately$19.5 million for the year ended December 31,2022 to approximately$15.0 million forthe year ended December 31,2023.Our
161、 net loss increased by approximately$1.9 million,or 408.4%,from approximately$0.4 million for the year ended December 31,2022to approximately$2.3 million for the year ended December 31,2023.Our operating subsidiaries are incorporated and operating in mainland China,and they have received all requisi
162、te permissions from Chinese authorities to operate its currentbusiness in China,including a Business license,Import and export license,bank account open permit and no permissions or approvals have been denied.However,none of ourproducts have been approved by any regulatory body as safe and effective
163、.If we or our subsidiaries do not receive or maintain such permissions or approvals,inadvertentlyconclude that such permissions or approvals are not required,or applicable laws,regulations,or interpretations change and we are required to obtain such permissions orapprovals in the future,it could sig
164、nificantly limit or completely hinder our ability to offer or continue to offer our securities to investors,cause the value of our securities tosignificantly decline or become worthless and could result in a material and negative impact on our business operations,including fines or penalties imposed
165、 by the relevantPRC regulatory authority,revocation our subsidiaries business licenses and suspension of their respective business operations.As a developer and seller of personal care products,based on the advice of Beijing Dacheng Law Offices,LLP(Shanghai),our PRC counsel,we do not believe that we
166、 and oursubsidiaries are Critical Information Infrastructure Operators(“CIIO”)or Online Platform Operators as defined in Cybersecurity Review Measures published by CyberspaceAdministration of China,National Development and Reform Commission,Ministry of Industry and Information Technology,Ministry of
167、 Public Security,Ministry of StateSecurity,Ministry of Finance,Ministry of Commerce,Peoples Bank of China,State Administration of Radio and Television,China Securities Regulatory Commission,StateSecrecy Administration and State Cryptography Administration on December 28,2021 and became effective on
168、February 15,2022.As of the date of this prospectus,we andour subsidiaries(1)are not required to obtain permissions from any PRC authorities to issue our securities being registered for sale to foreign investors other than the filingrequirement with CSRC within three business days after we make any o
169、versea securities offering under New Overseas Listing Rules,(2)are not subject to permissionrequirements from China Securities Regulatory Commission(the“CSRC”),Cyberspace Administration of China(“CAC”)or any other authority that is required to approve ofour business operations in China,and(3)have no
170、t received or were denied such permissions by any PRC authorities.Nevertheless,the General Office of the CentralCommittee of the Communist Party of China and the General Office of the State Council jointly issued the“Opinions on Severely Cracking Down on Illegal SecuritiesActivities According to Law
171、,”or the Opinions,which were made available to the public on July 6,2021.The Opinions emphasized the need to strengthen the administrationover illegal securities activities,and the need to strengthen the supervision over overseas listings by Chinese companies.On February 17,2023,the CSRC released th
172、e NewOverseas Listing Rules with five interpretive guidelines,which took effect on March 31,2023.The New Overseas Listing Rules require Chinese domestic enterprises tocomplete filings with relevant governmental authorities and report related information under certain circumstances,such as:a)an issue
173、r 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 overseas market;c)a domestic company seeking anoverseas direct or indirect listing of its assets through single or multiple acquisiti
174、on(s),share swap,transfer of shares or other means.Pursuant to the New Overseas ListingRules,domestic companies that seek initial public offering or listing securities overseas,both directly and indirectly,shall file with the CSRC within three working days afterthe submission of overseas offering/li
175、sting application.We have submitted initial documents in connection with this offering and our listing on the Nasdaq Capital Market to theCSRC.However,we cannot assure you that we will be able to complete the review process by CSRC for such filings.Any failure by us to comply with such filing requir
176、ementsunder the Trial Measures may result in an order to rectify,warnings and fines against us and could materially hinder our ability to offer or to continue to offer our securities.Furthermore,upon the occurrence of any of the material events specified below after an issuer has completed its offer
177、ing and listed its securities on an overseas stock exchange,the issuer shall submit a report thereof to the CSRC within three working days after the occurrence and public disclosure of the event:(i)change of control;(ii)investigationsor sanctions imposed by overseas securities regulatory agencies or
178、 other competent authorities;(iii)change of listing status or transfer of listing segment;or(iv)voluntary ormandatory delisting.The New Overseas Listing Rules stipulate the legal consequences to the companies for breaches,including failure to fulfil filing obligations or filingdocuments having false
179、 statement or misleading information or material omissions,which may result in a fine ranging from RMB 1 million to RMB 10 million,and in cases ofsevere violations,the relevant responsible persons may also be barred from entering the securities market.We are subject to the relevant filing procedures
180、 of the CSRC inconnection with our overseas offerings under the New Overseas Listing Rules,including the public offering pursuant to this registration statement.On February 24,2023,theCSRC,the Ministry of Finance,the National Administration of State Secretes Protection and the National Archives Admi
181、nistration released the Provisions on Strengthening theConfidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Companies,or the Confidentiality and ArchivesAdministration Provisions,which took effect on March 31,2023.PRC domestic enterprises se
182、eking to offer securities and list in overseas markets,either directly or indirectly,shall establish and improve the system of confidentiality and archives work,and shall complete approval and filing procedures with competent authorities,if such PRCdomestic enterprises or their overseas listing enti
183、ties provide or publicly disclose documents or materials involving state secrets and work secrets of state organs to relevantsecurities companies,securities service institutions,overseas regulatory agencies and other entities and individuals.It further stipulates that(i)providing or publicly disclos
184、ingdocuments and materials which may adversely affect national security or public interests,and accounting records or photocopies thereof to relevant securities companies,securities service institutions,overseas regulatory agencies and other entities and individuals shall be subject to corresponding
185、 procedures in accordance with relevant laws andregulations;and(ii)any working papers formed in the territory of the PRC by securities companies and securities service agencies that provide domestic enterprises withsecurities services relating to overseas securities issuance and listing shall be sto
186、red in the territory of the PRC,the outbound transfer of which shall be subject to correspondingprocedures in accordance with relevant laws and regulations.Our operating subsidiaries develop and sell personal care products in China and they are not cyberspace operatorswith personal information of mo
187、re than 1 million users or activities that affect or may affect national security and they dont have documents and materials which mayadversely affect national security or public interests.However,given the current PRC regulatory environment,it is uncertain whether we,our PRC subsidiaries,will be ab
188、le toobtain such permission or be required to obtain other permission from the PRC government to list on U.S.exchanges or offer its securities overseas,and even when suchpermission is obtained,whether it will be denied or rescinded.Although we currently have no operations in Hong Kong and Macau,lega
189、l and operational risks associated withoperating in China also apply to operations in Hong Kong and Macau.If we or our subsidiaries do not receive or maintain such permissions or approvals,inadvertentlyconclude that such permissions or approvals are not required,or applicable laws,regulations,or int
190、erpretations change and we are required to obtain such permissions orapprovals in the future,it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors,cause the value of our securities tosignificantly decline or become worthless and could
191、 result in a material and negative impact on our business operations,including fines or penalties imposed by the relevantPRC regulatory authority,revocation our subsidiaries business licenses and suspension of their respective business operations.2 Our independent registered public accounting firm t
192、hat issues the audit report included elsewhere in this prospectus,as an auditor of companies that are traded publicly in theUnited States and a firm registered with the PCAOB,is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliancewith
193、 the applicable professional standards.Our auditor is headquartered in the U.S.and has been inspected by the PCAOB on a regular basis with the last inspection in April2023 and is not subject to the determinations announced by the PCAOB on December 16,2021,which determinations were vacated on Decembe
194、r 15,2022.The HoldingForeign Companies Accountable Act and related regulations currently does not affect the Company as the Companys auditor is subject to PCAOBs inspection andinvestigation.However,should PRC authorities obstruct or otherwise fail to facilitate the PCAOBs access in the future,the PC
195、AOB Board will consider the need to issue anew determination,and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering theeffectiveness of our auditors audit procedures and quality control procedures,adequacy of perso
196、nnel and training,or sufficiency of resources,geographic reach,or experienceas it relates to our audit.If it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in aforeign jurisdiction or any other reasons,the lac
197、k of inspection could cause the trading in our securities to be prohibited under the Holding Foreign Companies Accountable Act,and as a result Nasdaq may delist our securities.If our securities are unable to be listed on another securities exchange,such a delisting would substantially impair your ab
198、ilityto sell or purchase our securities when you wish to do so,and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of ourOrdinary Shares.Further,new laws and regulations or changes in laws and regulations in both the United States and China co
199、uld affect our ability to list our Ordinary Shares onNasdaq,which could materially impair the market for and market price for our securities.Dividend Distribution Our PRC operating entity receives substantially all of our revenue in RMB.Under our current corporate structure,to fund any cash and fina
200、ncing requirements,we may rely ondividend payments from WFOE.WFOE receives dividend payments from our operating subsidiaries in China.WFOE may make distribution of such payments to Softto HK asdividends.Under existing PRC foreign exchange regulations,payments of current account items,such as profit
201、distributions and trade and service-related foreign exchange transactions,can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements.Therefore,WFOE is able to pay dividends in foreigncurrencies to us without prior approval from SAFE,subject t
202、o the condition that the remittance of such dividends outside of the PRC complies with certain procedures underPRC foreign exchange regulations,such as the overseas investment registrations by our shareholders who are PRC residents.Approval from or registration with appropriategovernment authorities
203、 is,however,required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repaymentof loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current
204、account transactions.Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of its accumulated profits,if any,determined in accordance with Chineseaccounting standards and regulations.In addition,our subsidiary in China is required to set aside at least 10%of it
205、s after-tax profits each year,if any,to fund a statutory reserveuntil such reserve reaches 50%of its registered capital.Each such entity in China is also required to further set aside a portion of its after-tax profits to fund the employeewelfare fund,although the amount to be set aside,if any,is de
206、termined at the discretion of its board of directors.Although the statutory reserves can be used,among other ways,to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies,the reserve funds are not distributable as cash dividendsexcept
207、in the event of liquidation.Under the existing laws of Hong Kong,funds from capital accounts can be repatriated and remitted overseas without restrictions,and there isno foreign exchange control imposed.According to the current tax practice of the Hong Kong Inland Revenue Department,dividends paid o
208、n the Ordinary Shares would not besubject to any Hong Kong tax.As of the date of this prospectus,WFOE has not made any dividends or distributions to Softto HK,Softto HK and Softto BVI are both holding companies without actualoperations and they have not made any dividends or distribution to Softto I
209、nc,and no dividends or distributions have been made by the Company to its shareholders.We intendto keep any future earnings to re-invest in and finance the expansion of our business,and we do not anticipate that any cash dividends will be paid in the foreseeable future.Under the Cayman Islands law,a
210、 Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount,provided that in no circumstancesmay a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business.3 Cash dividends,if any,on our Ordina
211、ry Shares will be paid in U.S.dollars.If we are considered a PRC tax resident enterprise for tax purposes,any dividends we pay to ouroverseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.Pursuant to the Arrangemen
212、tbetween the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Tax Evasion WithRespect to Taxes On Income,or the Double Tax Avoidance Arrangement,the 10%withholding tax rate may be lowered to 5%,if the recipient of the
213、 relevant dividendsqualifies certain necessary requirements,including without limitation that(a)the Hong Kong project must be the beneficial owner of the relevant dividends;and(b)the HongKong project must directly hold no less than 25%share ownership in the PRC project during the 12 consecutive mont
214、hs preceding its receipt of the dividends.The 5%withholding tax rate,however,does not automatically apply and in current practice,a Hong Kong project must obtain a tax resident certificate from the Hong Kong taxauthority to apply for the 5%lower PRC withholding tax rate.As the Hong Kong tax authorit
215、y will issue such a tax resident certificate on a case-by-case basis,we cannotassure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5%under theDouble Taxation Arrangement with respect to any
216、 dividends paid by WFOE to its immediate holding company,Softto HK.As of the date of this prospectus,we have notapplied for the tax resident certificate from the relevant Hong Kong tax authority.Softto HK intends to apply for the tax resident certificate if and when WFOE plans to declareand pay divi
217、dends to Softto HK.Our Competitive Strengths We believe the following strengths differentiate us from our competitors and are key drivers of our success:Comprehensive Sales and Marketing Management System.We have built an omni-channel sales for our products and manage an extensive distribution netwo
218、rk covering avariety of online and offline channels across China to achieve consumer coverage and market penetration effectively.The comprehensive sales and distribution managementsystem help us communicate and manage massive distributors and build the Company credibility and good reputation with cu
219、stomers.Strong R&D Capability.We have market-driven research and development team with the capacities and ability of innovations to constantly empower the development of newproducts and upgrading of existing products.The company currently have a R&D team consisting of 9 people who have an average of
220、 10 years of experience in personal careproduct and beauty industry.We have eight R&D laboratories,including:1)three research laboratories of a Cosmetic Research Laboratory,a Skin Care Research Laboratoryand a Hair Products Research Laboratory;2)five testing laboratories of a Semi-finished products
221、testing laboratory,a raw materials testing laboratory,a micro-biologicaltesting laboratory,a packaging testing laboratory and a central control laboratory.The eight R&D laboratories are located in Guangzhou Tianwen Jiaoyan Cosmetics Co.,Ltd.,our OEM manufacturer as we dont manufacture products and d
222、ont own manufacturing facilities.Our OEM manufacturer that is a related party of the Company has agreed usto set up laboratories in its factory rent free as it is close to the production staffs to provide them with new test results,samples and specifications.As of the date of thisprospectus,we own 7
223、 design patents and 1 invention patent in China.Attractive Product Pricing.The prices of our products are economical and competitive,which are attractive to mass price-sensitive consumers and general public.4 Comprehensive Management System and Experienced Management Team.The Company has built an om
224、ni-channel sales and an extensive distribution network covering avariety of online and offline channels across the PRC to achieve consumer coverage and market penetration effectively.The Company has a comprehensive managementsystem to help communicate and manage its large amount of distributors.Addi
225、tionally,the Company has introduced the Amoeba management system to build an adaptiveworkforce,and has established an information management system centered on ERP(Enterprise Resource Planning),enhancing the Companys competitiveness in operationalmanagement capabilities.Amoeba management system has
226、been introduced into the Company in 2018.Each online and offline sales departments of the Company formulate itsown sales strategy,goal and reward system according to its respective business model and performance.Compared to traditional management models,this model can increasethe efficiency,stimulat
227、e each department and its employees sense of responsibility and creativity to quickly respond to the market needs as well as to promote the cooperationand feedback from other departments when such cooperations are needed.When finished products from the suppliers entering to our inventory,a“purchase
228、receipt”isgenerated and entered into the ERP system.During this process,the warehouse turnover and allocation of products can be reflected in the ERP system.Orders fromdownstream distributors are also placed in the ERP system,which then automatically generates a“sales delivery note”based on the cust
229、omer orders and sends the orders to thewarehouse manager to initiate the packing and shipping process.This process helps reduce communication costs and labor costs within the Company and reduce human errors.The ERP system accelerates the entire process from purchase receipt to order delivery,while a
230、llowing real-time monitoring of inventory turnover and tracking of productsnearing expiration dates.Its a well-organized system that optimizes efficiency and visibility throughout the supply and demand process in the Company.Moreover,theCompany has a professional and experienced management team,all
231、equipped with rich experience in the personal care products industry.The solid technical and industrialexperience and comprehensive management system have guided the Company to respond to market dynamics swiftly,ensuring continuous and effective operations,and moveforward.Yuhao Liang,our Chief Execu
232、tive Officer and Chairman of the Board,received his bachelors degree in economics at Portland State University in 2018 and has a deepunderstanding of industry development trends,possesses a wide network of resources.Mr.Yuhao Liang is the son of our founder Mr.Guojian Liang who created Softto brandin
233、 1988 in China.Ms.Min Wang,who is in charge of our e-commerce business has 12 years of experience in the internet e-commerce field,familiar with various channelmarkets,skilled in formulating comprehensive strategies and implementing target strategies.Mr.Xiusong Tu,who is in charge our offline sales
234、business,has 25 years ofexperience in cosmetics and personal care products,equipped with rich experience in multi-channel sales.Mr.Gaowei Liang,our Chief R&D officer,has more than 20 years ofexperience in the research and development of personal care products.Mr.Gaowei Liang has rich experience in p
235、roduct development and led the team to successfully develop aseries of personal care products,including hair loss treatment shampoo,skin brightening cream and sunscreen cream products,etc.He has participated in the research anddevelopment of multiple invention patents of the Company.Reliable Product
236、 Quality and Continuous Product Iteration.The Company has a strict quality control system,to evaluate the quality of the products by our contractmanufacturers every month.If a contract manufacturer fails to meet our requirements,we will terminate its qualification to continue to supply us products.e
237、very newlydeveloped product of the Company is required to pass a range of tests,including third-party quality inspections,to ensure the quality of such new product.With years ofdevelopment,the Company has built a R&D team with the capabilities and ability to develop new products and upgrade existing
238、 products to respond to the changing of themarket and trends in the market.Our Growth Strategy In order to enhance our competitive position and expand our market,we intend to pursue the following strategies and leverage our strengths to further grow our business:Upgrade and expand product supply thr
239、ough technological innovation.We plan to increase investment in R&D to upgrade our product innovation capability.We will increaseresearch and development to upgrade the existing product series and the peripheral products.With the feedback from the market and consumers,we will continue to innovate in
240、product mix,such as the development of different use,size and packaging for the products in the same series.We will also cooperate with our contract manufacturers with theadvanced production technologies and processes to continuously improve the production efficiency and quality of our products.In a
241、ddition,we will expand our product line toprovide consumers with more novel and practical product choices,whether it is personalized products for specific skin types or innovative products that follow the latest markettrends.Expand our own sales network.We plan to invest more resources in sales chan
242、nels and build a diversified sales network.Through cooperation with stars,network celebrities,Kols to use their influence on the internet,we can jointly create online explosive products.We will leverage influence by such celebrities and KOLs on popular platforms forproduct endorsements and utilize l
243、ive commerce on short video platforms to help create buzz around our products.We also plan to participate in industry exhibitions like theShanghai and Guangzhou beauty expos to enhance brand visibility and attract potential partners.We will introduce online explosive products into offline physical s
244、toresthrough cooperation with offline channels,so that more consumers can personally experience and buy our products.In this way,online traffic will provide effective support forthe growth of offline sales.We will integrate online explosive products into the platforms such as Meituan Group Buying an
245、d other offline Beauty Specialty stores which couldprovide consumers with actual experiences on our products and drive our growth.By leveraging the collaborations with private group-buying platforms,we can also testdifferent product categories and improve our products and marketing tactics.In additi
246、on,we will continue to enter the new retail platforms and strengthen cooperation with theexisting retail platforms to further expand the sales network.We will strengthen partnerships with platforms such as Meituan and explore collaborations with other communityplatforms to expand our sales network f
247、urther.With the large customer base and good marketing capabilities on such platforms,we could reach a wider group of potentialcustomers and drive sales growth through this channel.Enhance our ability to attract,incentivize and retain talented professionals.As a well-established company,we have a re
248、putable brand history and unique corporate culture.Wefocus to create a positive,harmonious and passionate work environment where talented people can find a sense of belonging and development opportunities.We will continueto strengthen the training of internal talents,focus on creating a learning org
249、anization,and encourage employees to continuously improve their abilities with the growth of thecompany.We will actively pursue and attract more talents with rich industry experience and innovative consciousness to our company.Through the combination of internal andexternal talents,we will build a w
250、orkforce that pursues efficient management and diversity.Seek strategic partnerships and acquisitions.We will actively seek strategic partners around the world to achieve diversified development,both upstream and downstream,aswell as research institutions.Our company is seeking opportunities to acqu
251、ire and merge with suppliers,competitors,and contract manufacturers.The company will alsoexplore the opportunities to develop the U.S.market through online platform.In addition,we plan to acquire potential emerging companies in related industries,strengthen ourproduct innovation and market expansion
252、 capabilities,and increase market share.We also plan to acquire certain research institutions to strengthen our R&D capabilities andtechnological innovation abilities to add new competitive advantages to our products and services.However,there are no specific projects in the pipeline yet.Our Challen
253、ges We believe that we are currently facing the following challenges to grow and expand our business:Our ability to comply with broad and changing regulatory requirements.Our business faces changing regulatory requirements,including the ever-increasing product safety andquality requirements in China
254、.At the same time,with the growth of online live broadcast and promotion in our industry,the compliance of online advertising and marketingpromotion regulatory requirements will affect our sales and business.Our ability to manage business growth and expansion plans.We started new sales channels in 2
255、023 that have brought us new growth points:offline sales through Meituancommunity group purchase and online sales through platform advertising,KOL and live streaming.We understand how to manage business growth and make expansion plansand determines along with development trends of the general societ
256、y.We adjust our business strategy and internal management to ensure that we respond to the changingmarket demands.Our ability to respond adequately and promptly to the rapid changes in consumer preferences.Consumers buying preferences may vary with market conditions,personalincome levels,lifestyle,c
257、ompetitors advertising,brand attractiveness and other factors.We need to constantly adjust and revise our business and marketing strategies,brandimages and product portfolio to adapt to the change of consumers preferences and tastes.Risk of rising raw material prices.The raw materials for our produc
258、ts mainly include chemicals and packaging materials.Fluctuations in raw material prices will directlyimpact the costs of manufacturers producing our products,potentially affecting the purchase price and thereby adversely affect our gross profit and profit margin.Corporate History and Structure Softt
259、o,Inc.is a holding company incorporated in the Cayman Islands on November 27,2023.Softto Inc.established its directly wholly owned subsidiary Softto HoldingsLimited,a company incorporated in BVI on December 4,2023.Softto Holdings Limited established its directly wholly owned subsidiary Softto Co.,Li
260、mited,a Hong Kongcompany,on December 11,2023.Softto Co.,Limited established a wholly foreign-owned subsidiary Guangzhou Softto Investment Holdings Co.,Ltd.in China,on January 8,2024.Guangzhou Softto Brand Management and Operation Co.,Ltd.was incorporated in China on October 13,2023 and became a whol
261、ly owned subsidiary of GuangzhouSoftto Investment Holdings Co.,Ltd.on February 2,2024.Softto,Inc.,Softto Holdings Limited,Softto Co.,Limited and Gangzhou Softto Investment Holdings Co.,Ltd.areholding companies with no operations.In anticipation of this offering,we completed a reorganization of the C
262、ompany in March 2024.After the Reorganization,GuangzhouSoftto Investment Holdings Co.,Ltd.becomes the 100%shareholder of our operating entity Softto Smart and its subsidiaries.5 The Ordinary Shares offered in this offering are shares of Softto Inc.,the Cayman Islands holding company.As a holding com
263、pany with no material operations of our own,weconduct a substantial majority of our operations through our subsidiaries based in China.Since Softto Inc.and its subsidiaries are effectively controlled by the same controlling shareholders before and after the Reorganization,they are considered under c
264、ommoncontrol.The above-mentioned transactions were accounted for as a recapitalization.The consolidation of the Company and its subsidiaries has been accounted for at historicalcost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first
265、period presented in the accompanying consolidatedfinancial statements.Upon the Reorganization,the Company has subsidiaries in countries and jurisdictions including PRC,Hong Kong.Details of the subsidiaries of the Company are set out below:Name of Entity Date ofIncorporation Place ofIncorporation%ofO
266、wnership Principal ActivitiesSoftto BVI 12/4/2023 British Virgin Island 100 Holding CompanySoftto HK 12/11/2023 Hong Kong 100 Holding CompanySoftto US 06/11/2024 United States 100 Currently no operationSoftto Investment 01/08/2024 Guangzhou,China 100 Holding CompanyGuangzhou Softto 10/13/2023 Guangz
267、hou,China 100 Currently no operationSoftto E-Commerce 10/29/2024 Guangzhou,China 100 Currently no operationSoftto Retail Trading 11/18/2024 Guangzhou,China 100 Currently no operationSoftto Trading(Guangzhou)11/18/2024 Guangzhou,China 100 distribute and sell personal care productsSoftto Smart 12/28/2
268、017 Guangzhou,China 100 distribute and sell beauty and personal careproductsGuangzhou Douyue 03/01/2022 Guangzhou,China 100 distribute and sell beauty and personal careproductsGuangzhou Haoyuan 03/24/2022 Guangzhou,China 100 distribute and sell beauty and personal careproductsTikas(Guangzhou)09/26/2
269、022 Guangzhou,China 100 distribute and sell beauty and personal careproductsGuangzhou Yuebang 01/06/2022 Guangzhou,China 100 distribute and sell beauty and personal careproducts The following diagram illustrates our corporate structure,including our subsidiaries,as of the date of this prospectus and
270、 immediately upon the completion of this offering,assuming no exercise of the over-allotment by the Underwriter:As a result of our corporate structure,Softto Inc.s ability to pay dividends may depend upon dividends paid by our subsidiaries.If our existing subsidiaries or any newlyformed ones incur d
271、ebt on their own behalf in the future,the instruments governing their debt may restrict their ability to pay dividends to us.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“Exchang
272、e Act”).As such,we are exempt fromcertain provisions applicable to United 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;6 for interim reporting,we are permitted to comply solely with our home cou
273、ntry requirements,which are less rigorous than the rules that apply to domestic publiccompanies;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 selectiv
274、e disclosures of material information;we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies,consents or authorizations in respect of a security registeredunder the Exchange Act;and our insiders are not required to comply with Section 16 of the Exc
275、hange Act requiring such individuals and entities to file public reports of their share ownership andtrading activities and establishing insider liability for profits realized from any“short-swing”trading transaction.Implications of Being an“Emerging Growth Company”We are an“emerging growth company,
276、”as defined in the Jumpstart Our Business Startups Act(the“JOBS Act”),and we are eligible to take advantage of certain exemptionsfrom various reporting and financial disclosure requirements that are applicable to other public companies that are not emerging growth companies,including but not limited
277、 to(1)presenting only two years of audited financial statements and only two years of related managements discussion and analysis of financial condition and results ofoperations in this prospectus,(2)not being required to comply with the auditor attestation requirements of Section 404 of the Sarbane
278、s-Oxley Act of 2002(the“Sarbanes-OxleyAct”),(3)reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,and(4)exemptions from the requirements of holdinga non-binding advisory vote on executive compensation and shareholder approval of any golden pa
279、rachute payments not previously approved.We intend to take advantage ofthese exemptions.As a result,investors may 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 transition
280、period provided in Section 7(a)(2)(B)ofthe Securities Act of 1933,as amended(the“Securities Act”),for complying with new or revised accounting standards.As a result,an emerging growth company can delay theadoption of certain accounting standards until those standards would otherwise apply to private
281、 companies.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 earliest of(1)the last day of the first fiscal year in which our annual gross revenues exceed$1.235 billion,(2)the date that we become a“large accele
282、rated filer”as defined in Rule 12b-2 under the Exchange Act,which would occur if the market value of our OrdinaryShares that is held by non-affiliates exceeds$700 million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reportingfor at least
283、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.Implications of Being a“Controlled Company”Under the Nasdaq rules,a“controlled company”is a company with more than 50%of its voting power held by a single person,entity
284、or group.Public Companies that qualifyas a“Controlled Company”with securities listed on the Nasdaq Stock Market(Nasdaq),must comply with the exchanges continued listing standards to maintain their listings.Nasdaq has adopted qualitative listing standards.Companies that do not comply with these corpo
285、rate governance requirements may lose their listing status.Under Nasdaqrules,a controlled company is exempt from certain corporate governance requirements including:the requirement that a majority of the board of directors consist of independent directors;the requirement that a listed company have a
286、 nominating and governance committee that is composed entirely of independent directors with a written charteraddressing the committees purpose and responsibilities;the requirement that a listed company have a compensation committee that is composed entirely of independent directors with a written c
287、harter addressing thecommittees purpose and responsibilities;and the requirement for an annual performance evaluation of the nominating and governance committee and compensation committee.Controlled companies must still comply with the exchanges other corporate governance standards.These include hav
288、ing an audit committee and the special meetings ofindependent or non-management directors.Upon the completion of this offering,Mr.Yuhao Liang,the Chairman of our board of directors and our Chief Executive Officer and his spouse Luhan Wang,a director of theBoard,through Liangs Family Limited,will ben
289、eficially own 58.4%of the voting power for election of directors assuming the Underwriter does not exercise its over-allotmentoption,or 56.4%of the voting power for election of directors if the Underwriter exercises its over-allotment option in full.As a result,upon completion of this offering,we wi
290、llbe a“controlled company”as defined under the Nasdaq Stock Market Rules.As a“controlled company,”we will be permitted to elect not to comply with certain corporategovernance requirements.See“Risk FactorsRisks related to our Ordinary Shares and this offering We will be a“controlled company”as define
291、d under the Nasdaq StockMarket Rules.As a result,we may rely on exemptions from certain corporate governance requirements and holders of our Ordinary Shares may not have the same protectionsgenerally available to shareholders of other companies listed on stock exchanges in the United States.”7 Selec
292、ted Condensed Consolidated Financial Schedule of the Company and Its Subsidiaries Condensed Consolidating Schedule Statement of Operations For the six months endedJune 30,For the years endedDecember 31,2024 2023 2023 2022 (Unaudited)(Unaudited)Revenue$5,510,970$6,859,609$14,952,412$19,521,678 Cost o
293、f revenue (3,772,631)(5,089,530)(11,101,150)(15,052,546)Operating expenses (2,367,614)(2,510,163)(5,595,428)(4,575,461)Operating loss (629,275)(740,084)(1,744,166)(106,329)Other expenses,net (233,182)(256,226)(489,183)(51,356)Loss before income taxes (862,457)(996,310)(2,233,349)(157,685)Income tax
294、benefits(expenses)21,105 (105,862)(52,095)(291,819)Net loss (841,352)(1,102,172)(2,285,444)(449,504)Other comprehensive income(loss),net of tax Foreign currency translation(loss)gain (31,462)(147,373)(108,746)29,332 Comprehensive loss$(872,814)$(1,249,545)$(2,394,190)$(420,172)Condensed Consolidatin
295、g Schedule Balance Sheet As of June 30,As of December 31,2024 2023 2022 Cash and cash equivalents$203,741$1,803,497$2,935,924 Accounts receivable 1,235,071 1,382,535 914,011 Accounts receivable-related parties 767,138 807,335 3,222,732 Advance to suppliers related parties 9,853,471 10,707,827 2,195,
296、483 Amounts due from related parties 463,253 77,325 385,971 Loan to related party 2,797,695 1,240,796 4,096,611 Inventories,net 1,179,285 1,217,765 2,047,865 Other current assets 525,549 436,403 2,026,601 Total current assets 17,025,203 17,673,483 17,825,198 Property,equipment and intangible assets,
297、net 112,593 86,682 86,383 Right-of-use assets 291,649 350,694 464,631 Deferred tax assets 134,678 52,026 10,352 Other non-current assets 142,700 346,548 83,016 Total non-current assets 681,620 835,950 644,382 Total assets$17,706,823$18,509,433$18,469,580 Short-term loans$12,109,203$12,338,202$11,598
298、,910 Accounts payable 238,749 207,934 331,807 Accounts payable-related parties 243,841 283,450 -Contract liabilities 352,376 380,855 391,929 Taxes payable 1,437,112 1,413,236 1,435,841 Amounts due to related parties 523,688 831,909 32,622 Loan from related parties 335,121 390,027 -Operating lease li
299、abilities-current 106,658 106,614 104,666 Other current liabilities 1,416,144 680,807 186,202 Total current liabilities 16,762,892 16,633,034 14,081,977 Operating lease liabilities,non-current 187,597 247,250 364,264 Total non-current liabilities 187,597 247,250 364,264 Total liabilities 16,950,489
300、16,880,284 14,446,241 Total equity 756,334 1,629,149 4,023,339 Total liabilities and equity$17,706,823$18,509,433$18,469,580 Condensed Consolidating Schedule Statement of Cash Flows For the six months endedJune 30,For the years endedDecember 31,2024 2023 2023 2022 (Unaudited)(Unaudited)Net cash prov
301、ided by(used in)operating activities$77,151 6,411,547$(6,026,732)$(9,082,171)Net cash provided by(used in)investing activities (1,655,842)(10,490,482)2,708,563 (4,184,201)Net cash provided by financing activities 9,181 1,958,620 2,266,749 16,002,420 Effect of exchange rate changes on cash (30,246)(4
302、8,921)(81,007)(88,672)Net change in cash and cash equivalents (1,599,756)(2,169,236)(1,132,427)2,647,376 Cash and cash equivalents,beginning of year 1,803,497 2,935,924 2,935,924 288,548 Cash and cash equivalents,end of year$203,741$766,688$1,803,497$2,935,924 8 Corporate Information Our principal e
303、xecutive offices are located at 501,Block B,Huijin Plaza,Baiyun Avenue North,Baiyun District,Guangzhou City,Guangdong Province,China.Our telephonenumber at this address is+86-20-31232634.Our registered office in the Cayman Islands is located at Suite#4-210,Governors Square,23 Lime Tree Bay Avenue,PO
304、 Box32311,Grand Cayman KY1-1209,Cayman Islands.Our agent for service of process in the United States is Cogency Global Inc.located at 122 East 42nd Street,18th Floor,New York,NY 10168.Investors should contact us for any inquiries through the address and telephone number of our principal executive of
305、fices.Our website is www.The information 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 our revenues were generated by our PRCoperating su
306、bsidiary.You should carefully consider all of the information in this prospectus before making an investment in our Ordinary Shares.We are subject to a number ofrisks,including risks that may prevent us from achieving our business objectives or may adversely affect our business,financial condition,r
307、esults of operations,cash flows andprospects.Risks Related to Our Business The Company is subject to risks related to public health crises such as the global pandemic associated with the coronavirus(COVID-19).(see page 12 of thisprospectus)Uncertain economic or social conditions may adversely impact
308、 demand for our products or cause our customers and other business partners to suffer financialhardship,which could adversely impact our business.(see page 13 of this prospectus)A significant change in customer relationships or in customer demand for our products could have a significant impact on o
309、ur business(see page 13 of this prospectus)If the reputation of the Company or one or more of our brands erodes significantly,it could have a material impact on our financial results.(see page 14 of thisprospectus)We may not be able to prevent others from unauthorized use of our intellectual propert
310、y,which could harm our business and competitive position.(see page 21 of thisprospectus)We may be subject to intellectual property infringement claims,which may be expensive to defend and may disrupt our business and operations.(see page 21 of thisprospectus)9 Risks Relating to Doing Business in Chi
311、na Changes in Chinas economic,political or social conditions or government policies could have a material adverse effect on our business and results of operations.(seepage 24 of this prospectus)We may rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and
312、 financing requirements we may have.Any limitation onthe ability of our PRC subsidiary to pay dividends to us could have a material adverse effect on our ability to conduct our business.(see page 27 of this prospectus)PRC regulation of loans to,and direct investment in,PRC entities by offshore holdi
313、ng companies and governmental control of currency conversion may restrict orprevent us from using the proceeds of this offering to make loans to our PRC subsidiaries or to make additional capital contributions to our PRC subsidiaries,whichmay materially and adversely affect our liquidity and our abi
314、lity to fund and expand our business.(see page 27 of this prospectus)Change of laws in PRC could result in a material and negative impact our business operations,decrease the value of our Ordinary Shares and limit the legal protectionsavailable to you and us.(see page 26 of this prospectus)The Chine
315、se government exerts substantial influence over the manner in which we must conduct our business,and may intervene or influence our operations at anytime,which could result in a material change in our operations,significantly limit or completely hinder our ability to offer or continue to offer secur
316、ities to investorsand,and cause the value of our Ordinary Shares to significantly decline or be worthless.(see page 30 of this prospectus)Because we are a Cayman Islands exempted company and all of our business is conducted in the PRC,you may be unable to bring an action against us or our officersan
317、d directors or to enforce any judgment you may obtain.It may also be difficult for you or overseas regulators to conduct investigations or collect evidence withinChina.(see page 30 of this prospectus)The Holding Foreign Companies Accountable Act,or the HFCA Act,and the related regulations are evolvi
318、ng quickly.Further implementations and interpretations ofor amendments to the HFCA Act or the related regulations,or a PCOABs determination of its lack of sufficient access to inspect our auditor,might pose regulatoryrisks to and impose restrictions on us because of our operations in mainland China.
319、A potential consequence is that our ordinary shares may be delisted by theexchange.The delisting of our ordinary shares,or the threat of our ordinary shares being delisted,may materially and adversely affect the value of your investment.Additionally,the inability of the PCAOB to conduct full inspect
320、ions of our auditor deprives our investors of the benefits of such inspections.(see page 31 of thisprospectus)The filing with the China Securities Regulatory Commission(“CSRC”)is required in connection with this public offering,any other future offerings and certain eventsof the Company under New Ov
321、erseas Listing Rules,and we cannot assure you that we will be able to timely make such filing,in which case we may face sanctions bythe CSRC or other PRC regulatory agencies for failure to timely file with the CSRC.(see page 34 of this prospectus)Regulatory bodies of the United States may be limited
322、 in their ability to conduct investigations or inspections of our operations in China.(see page 37 of thisprospectus)Risks Related to Our Ordinary Shares and This Offering There has been no public market for our shares prior to this offering,and if an active trading market does not develop you may n
323、ot be able to resell our shares at orabove the price you paid,or at all.(see page 39 of this prospectus)We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.(see page 41 of this prospectus)We are not likely to pay cash dividends in the foreseeab
324、le future.(see page 41 of this prospectus)These risks are discussed more fully in the section titled“Risk Factors”beginning on page 12 of this prospectus,and other information included in this prospectus,for adiscussion of these and other risks and uncertainties that we face.10 The Offering Below is
325、 a summary of the terms of the offering:Issuer Softto,Inc.Securities being offered:3,000,000 Ordinary Shares.Initial offering price:We currently estimate that the initial public offering price will be in the range of$4 to$6 per Ordinary Share.Number of Ordinary Shares outstanding before the offering
326、:10,000,000 of our Ordinary Shares are outstanding as of the date of this prospectus.Over-allotment option We have granted the Underwriter an option for a period of 45 days to purchase up to an aggregate of 450,000additional Ordinary Shares.Number of Ordinary Shares Outstanding After the Offering 1:
327、13,000,000 Ordinary Shares assuming no exercise of the Underwriters over-allotment option.13,450,000 Ordinary Shares assuming full exercise of the Underwriters over-allotment option.Gross proceeds to us,net of underwriting discounts butbefore expenses:$.Use of proceeds:We intend to use the net proce
328、eds of this offering:(1)approximately 30%for business operations and othergeneral corporate purposes;(2)approximately 30%for potential strategic investments and acquisitions;(3)approximately 20%for product development,data analysis and technology development,and formulationR&D;and(4)approximately 20
329、%for expansion of the online store network,see“Use of Proceeds”on page49.Lock-up All of our directors and officers and certain shareholders have agreed with the Underwriter,subject to certainexceptions,not to sell,transfer or dispose of,directly or indirectly,any of our Ordinary Shares or securities
330、convertible into or exercisable or exchangeable for our Ordinary Shares for a period of six months after theeffectiveness of the registration statement,of which this prospectus forms a part.See“Shares Eligible forFuture Sale”and“Underwriting”for more information.Transfer Agent Proposed Nasdaq Symbol
331、:SFTO Risk factors:Investing in our Ordinary Shares involves a high degree of risk.As an investor,you should be able to bear acomplete loss of your investment.You should carefully consider the information set forth in the“Risk Factors”section beginning on page 12.1Excludes Ordinary Shares pursuant t
332、o the Underwriters over-allotment option.11 RISK FACTORS An investment in our Ordinary Shares involves significant risks.You should carefully consider all of the information in this prospectus,including the risks and uncertaintiesdescribed below,before making an investment in our Ordinary Shares.Any
333、 of the following risks could have a material adverse effect on our business,financial condition andresults of operations.In any such case,the market price of our Ordinary Shares could decline,and you may lose all or part of your investment.Risks Related to Our Business The Company is subject to risks related to public health crises such as the global pandemic associated with the coronavirus(COVID
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