F-1: Lotus Technology Inc. Files Deposit Agreement for American Depositary Shares

Lotus Technology Inc. establishes an ADR facility with Deutsche Bank Trust Company Americas for its ordinary shares to trade on NASDAQ.

Summary

• Lotus Technology Inc. has entered into a deposit agreement with Deutsche Bank Trust Company Americas to establish an American Depositary Receipt (ADR) facility.
• The agreement, dated January 29, 2024, allows for the deposit of Lotus Technology's ordinary shares and the issuance of American Depositary Shares (ADSs) representing those shares.
• Each ADS will initially represent one ordinary share.
• The ADSs are accepted for trading on NASDAQ.
• Deutsche Bank AG, Hong Kong Branch will act as custodian for the deposited securities.
• The deposit agreement outlines the rights and responsibilities of Lotus Technology, the depositary, and the holders and beneficial owners of ADSs.
• It covers key aspects such as dividend distribution, voting rights, and procedures for deposit and withdrawal of shares.
• The agreement also addresses fees, indemnification, amendment procedures, and termination conditions.
• The document includes exhibits detailing the form of the American Depositary Receipt.

Sentiment

Score: 7

Explanation: The document is a standard legal agreement, so the sentiment is neutral. However, the establishment of an ADR program is generally a positive step for a company, suggesting a desire to attract international investment.

Positives

• The establishment of an ADR facility will allow Lotus Technology Inc. to broaden its investor base by making its shares more accessible to U.S. investors.
• Listing on NASDAQ will increase the visibility and liquidity of Lotus Technology's shares.

Risks

• The deposit agreement includes provisions that limit the liability of the depositary and the company.
• ADS holders may face difficulties in exercising voting rights or receiving distributions.
• The company may amend or terminate the deposit agreement, potentially impacting ADS holders' rights.

Future Outlook

The company plans to launch a well-balanced portfolio of new models with exceptional performance in the coming years to broaden our customer base, in particular high net worth individuals and the tech savvy younger generations, and expand our product breadth. We plan to launch two additional fully electric vehicles over the next two years, including a D segment SUV in 2025 and a BEV lifestyle sports car in 2026. We also intend to upgrade our models to equip our vehicles with innovative technology and design.

Management Comments

• The Board of Directors of the Company (or an authorized committee thereof) has duly approved the establishment of an ADR facility upon the terms set forth in this Deposit Agreement, the execution and delivery of this Deposit Agreement on behalf of the Company, and the actions of the Company and the transactions contemplated herein.

Industry Context

The document reflects a growing trend of international companies seeking access to the U.S. capital markets through ADR programs.

Comparison to Industry Standards

• The deposit agreement follows standard terms and conditions commonly used by depositary banks like Deutsche Bank, similar to those found in agreements for companies like NIO, Xpeng, and Li Auto.
• The initial ADS to ordinary share ratio of 1:1 is a common structure, but can be adjusted over time to manage the ADS price.
• The fee structure outlined in Article (9) of the Receipt is consistent with industry norms for ADR programs.

Stakeholder Impact

• Shareholders will benefit from increased access to U.S. investors and potentially higher trading volumes.
• Employees may see increased stability and growth opportunities as the company expands its investor base.

Next Steps

• The depositary will begin issuing ADSs representing Lotus Technology's ordinary shares.
• The company will work to maintain the listing of the ADSs on NASDAQ.

Key Dates

Keywords

American Depositary Shares, ADR facility, Deposit Agreement, Lotus Technology Inc., Deutsche Bank Trust Company Americas, NASDAQ, ordinary shares, Deposited Securities, Custodian, Shareholders