As filed with the Securities and Exchange Commission on January 23, 2024

Registration No. 333-271221

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

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POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM F-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933

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YS Biopharma Co., Ltd.
(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant’s name into English)

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Cayman Islands

 

2834

 

Not Applicable

(State or Other Jurisdiction of
Incorporation or Organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

Building No. 2, 38 Yongda Road
Daxing Biomedical Industry Park
Daxing District, Beijing, PRC, 102629
Tel: +86-10 8920-2086
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

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Cogency Global Inc.
122 East 42
nd Street, 18th Floor,
New York, NY 10168
Tel: (212) 947-7200
(Name, address, including zip code, and telephone number, including area code, of agent for service)

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Copies to:

Will H. Cai, Esq.

Cooley LLP
c/o Suites 3501-3505, 35/F
Two Exchange Square
8 Connaught Place
Central, Hong Kong
+852 3758-1200

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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.

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 (as amended, the “Securities Act”), check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act 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 the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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†          The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

   

 

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EXPLANATORY NOTE

On May 12, 2023, YS Biopharma Co., Ltd filed Amendment No.1 to a Registration Statement on Form F-1 (Registration No. 333-271221), which was subsequently declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on June 5, 2023 (the “Registration Statement”).

On August 8, 2023, YS Biopharma Co., Ltd. filed Post-effective Amendment No. 1 to the Registration Statement to update the Registration Statement to (i) include information contained in the registrant’s annual report on Form 20-F for the fiscal year ended March 31, 2023, initially filed with the SEC on July 26, 2023, and (ii) to update certain other information contained in the Registration Statement.

This Post-effective Amendment No. 2 is being filed to further update the Registration Statement to (i) include unaudited condensed consolidated financial information for the six months ended September 30, 2023 and (ii) update certain other information contained in the Post-effective Amendment No. 1 and the Registration Statement.

No additional securities are being registered under this Post-effective Amendment No. 2. All applicable registration fees were paid at the time of the original filing of the Registration Statement.

 

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission, or “SEC,” is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 23, 2024

PRELIMINARY PROSPECTUS

YS Biopharma Co., Ltd.

UP TO 24,130,762 ORDINARY SHARES

This prospectus relates to the offer and sale from time to time by the selling securityholders named herein or their pledgees, donees, transferees, or other successors in interest that receive any of the securities as a gift, distribution, or other non-sale related transfer (collectively, the “Selling Securityholders”) of up to 24,130,762 ordinary shares, par value $0.00002 per share (“Ordinary Shares”), of YS Biopharma Co., Ltd. (“YS Biopharma,” “we” or “us”).

We are registering the offer and sale of these securities, in part, to satisfy certain registration rights we have granted. The Selling Securityholders may offer all or part of the securities for resale from time to time through public or private transactions, at either prevailing market prices or at privately negotiated prices. These securities are being registered to permit the Selling Securityholders to sell securities from time to time, in amounts, at prices and on terms determined at the time of offering. The Selling Securityholders may sell these securities through ordinary brokerage transactions, in underwritten offerings, directly to market makers of our securities or through any other means described in “Plan of Distribution” herein. In connection with any sales of securities offered hereunder, the Selling Securityholders, any underwriters, agents, brokers or dealers participating in such sales may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended.

Despite a potential decline in the public trading price of the Ordinary Shares, certain Selling Securityholders may still experience a positive rate of return on the securities that they sell pursuant to this prospectus as they have acquired the securities registered hereunder at prices substantially below current market prices, and may therefore have an incentive to sell their securities. However, the public holders of YS Biopharma’s securities may not experience a similar rate of return on the securities they purchase due to differences in the applicable purchase price and trading price.

Specifically, (1) Hui Shao acquired 2,002,780 Ordinary Shares at an average price of approximately $0.00002 per share (including 1,802,780 Ordinary Shares held by Mountainview Investment Holdings LLC, a limited liability company incorporated under the laws of the State of Delaware and wholly-controlled by Mr. Hui Shao, and 200,000 Ordinary Shares directly held by Mr. Hui Shao), (2) Chunyuan Wu acquired 97,500 Ordinary Shares at an average price of approximately $0.00002 per share, (3) Sunangal Ajit Shetty & Christine Maria M. Clerinx acquired 27,500 Ordinary Shares at an average price of approximately $3.6 per share, (4) Viren T MEHTA & Amita RODMAN (as Trustees of V Mehta RLT & A Rodman RLT) acquired 35,000 Ordinary Shares at an average price of approximately $3.6 per share, (5) Stanley Yi Chang acquired 82,111 Ordinary Shares at an average price of approximately $0.12 per share, (6) Viren T Mehta acquired 72,500 Ordinary Shares at an average price of approximately $0.00002 per share, (7) Sunangal Ajit Shetty acquired 72,500 Ordinary Shares at an average price of approximately $0.00002 per share, (8) Asia Ventures II L.P. acquired 2,718,499 Ordinary Shares at an average price of approximately $3.71 per share, (9) F-Prime Capital Partners Healthcare Fund III LP acquired 1,165,071 Ordinary Shares at an average price of approximately $3.71 per share, (10) HH SUM XXXVI Holdings Limited acquired 751,790 Ordinary Shares at an average price of approximately $6.65 per share, (11) Entities affiliated with OrbiMed acquired 4,298,465 Ordinary Shares at an average price of approximately $6.27 per share, (12) Haitong Xu Yu International Limited acquired 187,948 Ordinary Shares at an average price of approximately $6.65 per share, (13) Epiphron Capital (Hong Kong) Limited acquired 187,948 Ordinary Shares at an average price of approximately $8.91 per share, (14) 3W Global Investment Limited acquired 187,948 Ordinary Shares at an average price of approximately $6.65 per share, (15) Oceanpine Investment Fund II LP acquired 4,105,596 Ordinary Shares at an average price of approximately $9.74 per share, (16) AIHC Master Fund acquired 718,480 Ordinary Shares at an average price of approximately $9.74 per share, (17) 3W Global Fund acquired 2,052,798 Ordinary Shares at an average price of approximately $9.74 per share, (18) MSA China Growth Fund II L.P. acquired 1,129,039 Ordinary Shares at an average price of approximately $9.74 per share, (19) Superstring Capital Master Fund LP acquired 307,920 Ordinary Shares at an average price of approximately $9.74 per share, (20) Wudaokou Capital Limited acquired 307,920 Ordinary Shares at an average price of approximately $9.74 per share, (21) Gennex China Growth Fund acquired 205,280 Ordinary Shares at an average price of approximately $9.74 per share, (22) Adjuvant Global Health Technology Fund, L.P. acquired 2,436,298 Ordinary Shares at an average price of approximately $5.06 per share, and (23) Adjuvant Global Health Technology Fund DE, L.P. acquired 466,671 Ordinary Shares at an average price of approximately $5.06 per share.

Given the substantial number of securities being registered for potential resale by the Selling Securityholders pursuant to this prospectus, the sale of such securities by the Selling Securityholders, or the perception in the market that the Selling Securityholders may or intend to sell all or a significant portion of such securities, could increase the volatility of the market price of our Ordinary Shares or result in a significant decline in the public trading price of our Ordinary Shares.

 

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We will not receive any proceeds from the sale of the securities by the Selling Securityholders.

Our Ordinary Shares and warrants to purchase our Ordinary Shares (“Warrants”) are listed on the Nasdaq Stock Market LLC (“NASDAQ”), under the trading symbols “YS” and “YSBPW,” respectively. On January 22, 2024, the closing price for our Ordinary Shares on Nasdaq was $0.489599, and the closing price for our Warrants on Nasdaq was $0.0353.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.

Throughout this prospectus, unless the context indicates otherwise, references to “YS Biopharma” refer to YS Biopharma Co., Ltd., formerly known as YishengBio Co., Ltd, a Cayman Islands holding company, references to “HK Yisheng” refer to YishengBio (Hong Kong) Holdings Limited, a wholly owned subsidiary of YS Biopharma, references to “US Yisheng” refer to Yisheng US Biopharma Inc., a wholly owned subsidiary of YS Biopharma, references to “Singapore Yisheng” refer to Yisheng Biopharma (Singapore) Pte. Ltd., a wholly owned subsidiary of YS Biopharma, references to “Liaoning Yisheng” refer to Liaoning Yisheng Biopharma Co., Ltd., a wholly owned subsidiary of YS Biopharma, references to “Beijing Yisheng” refer to Beijing Yisheng Biotechnology Co., Ltd., a wholly owned subsidiary of YS Biopharma, and references to “YS Group” refer to YS Biopharma, together as a group with its subsidiaries.

YS Biopharma is a Cayman Islands holding company that conducts operations in multiple countries, including China, Singapore and the Philippines through its subsidiaries, including Beijing Yisheng, Liaoning Yisheng, Singapore Yisheng, US Yisheng and Philippines Yisheng. Holders of YS Biopharma’s Ordinary Shares are not holding equity securities of its subsidiaries that have substantive business operations in China, Singapore and the Philippines, but instead are holding equity securities of a Cayman Islands holding company.

YS Group has substantial business and operations in China and thus are exposed to legal and operational risks associated with its operations in China. The PRC government has significant authority to exert influence on the ability of a company with operations in China, including YS Group, to conduct business. Changes in China’s economic, political or social conditions or government policies could materially and adversely affect its business and results of operations. Recent policy statements and regulatory actions by the PRC government, such as those related to human genetic data and biopharmaceutical and vaccine business, may adversely affect YS Group’s ability to conduct its business and research and development (“R&D”) activities, accept foreign investments, or list on a U.S. or other foreign stock exchange, which may cause the securities of YS Biopharma to be prohibited from trading or to be delisted from the Nasdaq or any other U.S. stock exchange. Furthermore, the PRC government recently instituted more regulations to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies. Any such action, once taken by the PRC government, could significantly limit or completely hinder YS Biopharma’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. For details, see “Risk Factors — Risks Related to Doing Business in China.”

YS Biopharma is subject to a number of prohibitions, restrictions and potential delisting risk under the Holding Foreign Companies Accountable Act (the “HFCAA”). Pursuant to the HFCAA and related regulations, if YS Biopharma has filed an audit report issued by a registered public accounting firm that the Public Company Accounting Oversight Board (the “PCAOB”) has determined that it is unable to inspect and investigate completely, the SEC will identify YS Biopharma as a “Commission-identified Issuer,” and the trading of YS Biopharma’s securities on any U.S. national securities exchanges, as well as any over-the-counter trading in the United States, will be prohibited if it is identified as a Commission-identified Issuer for two consecutive years. On December 16, 2021, the PCAOB issued a report to notify the Securities and Exchange Commission (the “SEC”) of its determination that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong without the approval of the Chinese authorities. While YS Biopharma’s auditor, Wei, Wei & Co., LLP, is headquartered in the United States and not subject to such determinations, there is no guarantee that the audit work carried out by Wei, Wei & Co., LLP in collaboration of its China-based offices can be inspected or investigated completely by the PCAOB without such approval. On August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission (“CSRC”) and the Ministry of Finance of the People’s Republic of China, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. On December 15, 2022, the

 

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PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our auditor’s control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. YS Biopharma could still face the risk of delisting and cease of trading of its securities from a stock exchange or an over-the-counter market in the United States under the HFCAA and the securities regulations promulgated thereunder if the PCAOB is unable to inspect and investigate completely registered public accounting firms located in China in 2023 or beyond, or if YS Biopharma otherwise fails to meet the PCAOB’s requirements. See the section entitled “Risk Factors — Risks Related to Doing Business in China — YS Biopharma’s securities may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors with presence in China in 2023 or beyond, and the delisting of its securities, or the threat of their being delisted, may materially and adversely affect the value of your investment.”

Cash is transferred among YS Biopharma, its offshore subsidiaries and its PRC subsidiaries, in the following manner: (1) funds are transferred to its PRC subsidiaries from YS Biopharma as needed through YS Biopharma’s subsidiaries outside China as capital contributions or shareholder loans, as the case may be; and (2) dividends or other distributions may be paid by its PRC subsidiaries to the Company through its subsidiaries outside China. YS Biopharma’s subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in its business. None of its subsidiaries outside China made distributions to shareholders. In the future, YS Biopharma’s ability to pay dividends, if any, to its shareholders and warrant holders and to service any debt it may incur will depend upon dividends paid by its subsidiaries. In the fiscal years ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, YS Group did not transfer any cash proceeds to any of its PRC subsidiaries except for the cash transfers within its Group in connection with the paid-in capital in its PRC subsidiaries. $59,900,000 of the registered capital was paid up by HK Yisheng to Liaoning Yisheng during the fiscal year ended March 31, 2021 and $45,099,071.49 of the registered capital was paid up by HK Yisheng to Liaoning Yisheng during the fiscal year ended March 31, 2022. No registered capital was paid up by HK Yisheng to Liaoning Yisheng during the fiscal year ended March 31, 2023. $1,008,767.58 of the registered capital was paid up by HK Yisheng to Beijing Yisheng during the six months ended September 30, 2023. In the future, cash proceeds raised from overseas financing activities may be transferred by YS Biopharma through its subsidiaries outside China to its PRC subsidiaries via capital contribution and shareholder loans, as the case may be. YS Biopharma’s PRC subsidiaries will pay dividends to their offshore shareholder to meet the capital needs of YS Biopharma’s business operations out of the PRC. For details about the applicable PRC regulations and rules relating to such cash transfers through YS Group and the associated risks, see “Risk Factors — Risks Related to Doing Business in China.”

YS Biopharma is an “emerging growth company” as that term is used in the Jumpstart YS Biopharma’s Business Startups Act of 2012, as amended (the “JOBS Act”), and, as such, may elect to comply with certain reduced public company reporting requirements in future reports.

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

YS Biopharma is a “controlled company” as defined under the Nasdaq corporate governance rules, because Mr. Yi Zhang, Founder and Director of YS Biopharma, beneficially controls over 50% of the total voting power of all issued and outstanding Ordinary Shares through the acting-in-concert arrangement under a certain concert party agreement. See “Major Shareholders and Related Party Transactions — Concert Party Agreement” for details. As a result, Mr. Yi Zhang has the ability to exercise significant influence over matters requiring approval by shareholders such

 

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as decisions regarding election of directors and other significant corporate actions. YS Biopharma does not currently plan to utilize the exemptions available for controlled companies, but instead, it intends to rely on the exemption available for foreign private issuers to follow its home country governance practices. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. For details, see “Risk Factors — Risks Related to Ownership of the Ordinary Shares — As an exempted company incorporated in the Cayman Islands, YS Biopharma is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq’s corporate governance requirements; these practices may afford less protection to shareholders. If YS Biopharma opts to rely on such exemptions in the future, such decision might afford less protection to holders of YS Biopharma’s ordinary shares” and “Risk Factors — Risks Related to Ownership of the Ordinary Shares — YS Biopharma is a “controlled company” within the meaning of the Nasdaq Stock Market listing rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.”

Investing in YS Biopharma’s securities involves a high degree of risk. See “Risk Factors” beginning on page 17 of this prospectus and other risk factors contained in the documents incorporated by reference herein for a discussion of information that should be considered in connection with an investment in YS Biopharma’s securities.

Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

PROSPECTUS DATED JANUARY 23, 2024

 

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TABLE OF CONTENTS

 

PAGES

ABOUT THIS PROSPECTUS

 

1

FINANCIAL STATEMENT PRESENTATION

 

2

INDUSTRY AND MARKET DATA

 

3

FREQUENTLY USED TERMS

 

4

FORWARD-LOOKING STATEMENTS

 

6

SUMMARY OF THE PROSPECTUS

 

8

THE OFFERING

 

16

RISK FACTORS

 

17

CAPITALIZATION

 

85

SELECTED HISTORICAL FINANCIAL DATA OF YS BIOPHARMA

 

86

USE OF PROCEEDS

 

90

DIVIDEND POLICY

 

91

MARKET OPPORTUNITIES

 

92

BUSINESS

 

107

MANAGEMENT’S DISCUSSION AND FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

192

MANAGEMENT

 

220

BENEFICIAL OWNERSHIP OF SECURITIES

 

229

SELLING SECURITYHOLDERS

 

231

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

 

234

DESCRIPTION OF YS BIOPHARMA’S SECURITIES

 

235

SHARES ELIGIBLE FOR FUTURE SALE

 

241

TAXATION

 

243

PLAN OF DISTRIBUTION

 

251

EXPENSES RELATED TO THE OFFERING

 

255

LEGAL MATTERS

 

255

EXPERTS

 

255

WHERE YOU CAN FIND MORE INFORMATION

 

258

INDEX TO FINANCIAL STATEMENTS

 

F-1

You should rely only on the information contained or incorporated by reference in this prospectus or any supplement. Neither we nor the Selling Securityholders have authorized anyone else to provide you with different information. The securities offered by this prospectus are being offered only in jurisdictions where the offer is permitted. You should not assume that the information in this prospectus or any supplement is accurate as of any date other than the date on the front of each document. Our business, financial condition, results of operations and prospects may have changed since that date.

Except as otherwise set forth in this prospectus, neither we nor the Selling Securityholders have taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States.

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form F-1 filed with the SEC by YS Biopharma. The Selling Securityholders named in this prospectus may, from time to time, sell the securities described in this prospectus in one or more offerings. This prospectus includes important information about us, the securities being offered by the Selling Securityholders and other information you should know before investing. Any prospectus supplement may also add, update, or change information in this prospectus. If there is any inconsistency between the information contained in this prospectus and any prospectus supplement, you should rely on the information contained in that particular prospectus supplement. This prospectus does not contain all of the information provided in the registration statement that we filed with the SEC. You should read this prospectus together with the additional information about us described in the section below entitled “Where You Can Find More Information.” You should rely only on information contained in this prospectus. We have not, and the Selling Securityholders have not, authorized anyone to provide you with information different from that contained in this prospectus. The information contained in or incorporated by reference into this prospectus is accurate only as of the date on the front cover of the prospectus. You should not assume that the information contained in this prospectus is accurate as of any other date.

The Selling Securityholders may offer and sell the securities directly to purchasers, through agents selected by the Selling Securityholders, or to or through underwriters or dealers. A prospectus supplement, if required, may describe the terms of the plan of distribution and set forth the names of any agents, underwriters or dealers involved in the sale of securities. See “Plan of Distribution.”

Discrepancies in any table between totals and sums of the amounts listed are due to rounding. Certain amounts and percentages have been rounded; consequently, certain figures may add up to be more or less than the total amount and certain percentages may add up to be more or less than 100% due to rounding. In particular and without limitation, amounts expressed in millions contained in this prospectus have been rounded to a single decimal place for the convenience of readers.

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FINANCIAL STATEMENT PRESENTATION

YS Biopharma

The consolidated statements of operations and other comprehensive loss data for the fiscal years ended March 31, 2021, 2022 and 2023 and consolidated statements of financial position data of YS Biopharma as of March 31, 2022 and 2023 as well as the unaudited financial statements as of September 30, 2023 and for the six months ended September 30, 2023 have been prepared and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and are denominated in U.S. Dollars.

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INDUSTRY AND MARKET DATA

The industry and market position information that appears in this prospectus is from independent market research carried out by Frost & Sullivan, which was commissioned by YS Biopharma. We refer to this research report as the F&S report.

Such information is supplemented where necessary with YS Biopharma’s own internal estimates and information obtained from discussions with its customers, taking into account publicly available information about other industry participants and YS Biopharma’s management’s judgment where information is not publicly available. This information appears in “Summary of the Prospectus,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this prospectus.

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FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires in this document:

“Amended YS Biopharma Articles” means YS Biopharma’s amended and restated memorandum and articles adopted by special resolution passed on September 23, 2022, which became effective on March 16, 2023;

“Beijing Yisheng” means Beijing Yisheng Biotechnology Co., Ltd., a company incorporated under the laws of the PRC with limited liability and a wholly-owned subsidiary of YS Biopharma;

“Board” means YS Biopharma’s board of directors;

“Business Combination” or “Transactions” means the Mergers and the other transactions contemplated by the Business Combination Agreement which was consummated on March 16, 2023;

“Business Combination Agreement” means the business combination agreement, dated September 29, 2022 (as may be amended, supplemented, or otherwise modified from time to time), by and among Summit, Merger Sub I, Hudson Biomedical Group and YS Biopharma;

“Cayman Islands Companies Act” means the Companies Act (As Revised) of the Cayman Islands;

“CDC(s)” means Chinese Center(s) for Disease Control and Prevention;

“China” or “PRC” means the People’s Republic of China (and, only in the context of describing the industry matters, and the PRC laws, rules, regulations, regulatory authorities, and any PRC entities or citizens under such rules, laws and regulations and other legal, regulatory or tax matters and advices in this prospectus, excludes Hong Kong, Macau and Taiwan). The term “Chinese” has a correlative meaning for the purpose of this prospectus;

“Code” means the Internal Revenue Code of the 1986, as amended;

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;

“HK Yisheng” means YishengBio (Hong Kong) Holdings Limited, a company incorporated under the laws of Hong Kong with limited liability and a wholly-owned subsidiary of YS Biopharma;

“Hudson Biomedical Group” means Hudson Biomedical Group Co., Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands and a direct wholly-owned subsidiary of YS Biopharma;

“KOL(s)” means key opinion leader(s);

“Liaoning Yisheng” means Liaoning Yisheng Biopharma Co., Ltd., a company with limited liability under the laws of the PRC with limited liability and a wholly-owned subsidiary of YS Biopharma;

“Mergers” means collectively, the First Merger and the Second Merger;

“Merger Subs” means collectively Merger Sub I and Hudson Biomedical Group;

“Merger Sub I” means Oceanview Bioscience Acquisition Co., Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands which was struck off as part of the First Merger;

“Nasdaq” means the Nasdaq Stock Market;

“PCAOB” means the Public Company Accounting Oversight Board;

“PFIC” means a “passive foreign investment company” for U.S. federal income tax purposes;

“Philippines Yisheng” means YS BIOPHARMA (PHILIPPINES) INC., a company incorporated under the laws of the Philippines with limited liability and YS Biopharma’s wholly-owned subsidiary;

“PRC” means the People’s Republic of China;

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“Resale by the Selling Securityholders” means the transactions constituting the offer and sale, from time to time, by any of the Selling Securityholders or their pledgees, donees, transferees, or other successors in interest that receive any of the securities as a gift, distribution, or other non-sale related transfer of up to 24,130,762 Ordinary Shares, par value $0.00002 per share, as described in this prospectus;

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended;

“SEC” means the U.S. Securities and Exchange Commission;

“Securities Act” means the U.S. Securities Act of 1933, as amended;

“Singapore Yisheng” means Yisheng Biopharma (Singapore) Pte. Ltd., (formerly known as Newbiomed Pika Pte. Ltd.), a company incorporated under the laws of Singapore and a wholly-owned subsidiary of YS Biopharma;

“Sponsor” means Summit Healthcare Acquisition Sponsor LLC, a limited liability company registered under the laws of the Cayman Islands;

“Summit” means Summit Healthcare Acquisition Corp., an exempted company limited by shares incorporated under the laws of the Cayman Islands;

“U.S. dollars”, “US$” or “$” means United States dollars, the legal currency of the United States;

“U.S. GAAP” means generally accepted accounting principles in the United States as in effect from time to time;

“US Yisheng” means Yisheng US Biopharma Inc., a company incorporated under the laws of U.S. and a wholly-owned subsidiary of YS Biopharma;

“YS Biopharma” means YS Biopharma Co. Ltd., formerly known as YishengBio Co., Ltd, an exempted company with limited liability incorporated under the laws of the Cayman Islands;

“YS Biopharma Capital Restructuring” means (1) the conversion of each preferred share of YS Biopharma into one Ordinary Share before YS Biopharma Share Consolidation and (2) YS Biopharma Share Consolidation;

“Ordinary Share” means ordinary shares of YS Biopharma, par value $0.00002 per share, the rights, preferences, privileges and restrictions of which are as set out in the Amended YS Biopharma Articles;

“YS Biopharma Share Consolidation” means the consolidation of every four pre-consolidation Ordinary Shares and options of YS Biopharma into one Ordinary Share and one option of YS Biopharma, respectively, subject to rounding up to the nearest whole number of shares;

“Warrant” means warrant to purchase Ordinary Share, with each whole warrant entitling the holder to purchase one Ordinary Share; and

“YS Group” means YS Biopharma, together as a group with its subsidiaries, including Merger Sub I, Hudson Biomedical Group, US Yisheng, Singapore Yisheng and HK Yisheng, Liaoning Yisheng and Beijing Yisheng.

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FORWARD-LOOKING STATEMENTS

This prospectus includes statements that express YS Biopharma’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results of operations or financial condition and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this prospectus and include statements regarding YS Biopharma’s intentions, beliefs or current expectations concerning, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, the markets in which YS Group operates as well as any information concerning possible or assumed future results of operations of YS Group. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting YS Group and YS Biopharma. Factors that may impact such forward-looking statements include:

        the regulatory environment and changes in laws, regulations or policies in the jurisdictions in which YS Group operates;

        YS Group’s ability to successfully compete in highly competitive industries and markets;

        YS Group’s ability to continue to adjust its offerings to meet market demand, attract customers to choose its products and services and grow its ecosystem;

        political instability in the jurisdictions in which YS Group operates;

        the overall economic environment and general market and economic conditions in the jurisdictions in which YS Group operates;

        YS Group’s ability to execute its strategies, manage growth and maintain its corporate culture as it grows;

        YS Group’s anticipated investments in new products, services, collaboration arrangements, technologies and strategic acquisitions, and the effect of these investments on its results of operations;

        YS Group’s ability to develop and protect intellectual property;

        changes in the need for capital and the availability of financing and capital to fund these needs;

        anticipated technology trends and developments and YS Group’s ability to address those trends and developments with its products and services;

        the safety, affordability, convenience and breadth of YS Group’s products and services;

        man-made or natural disasters, health epidemics, and other outbreaks including war, acts of international or domestic terrorism, civil disturbances, occurrences of catastrophic events and acts of God such as floods, earthquakes, wildfires, typhoons and other adverse weather and natural conditions that affect YS Group’s business or assets;

        the loss of key personnel and the inability to replace such personnel on a timely basis or on acceptable terms;

        exchange rate fluctuations;

        changes in interest rates or rates of inflation;

        legal, regulatory and other proceedings; and

        YS Biopharma’s ability to maintain the listing of its securities on Nasdaq; and the results of future financing efforts.

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The forward-looking statements contained in this prospectus are based on YS Biopharma’s current expectations and beliefs concerning future developments and their potential effects on YS Biopharma. There can be no assurance that future developments affecting YS Biopharma will be those that YS Biopharma has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond YS Biopharma’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. YS Biopharma will not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before an investor makes an investment decision in YS Biopharma’s securities, it should be aware that the occurrence of the events described in “Risk Factors” and elsewhere in this prospectus may adversely affect YS Biopharma.

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SUMMARY OF THE PROSPECTUS

This summary highlights selected information from this prospectus and does not contain all of the information that is important to you in making an investment decision. This summary is qualified in its entirety by more detailed information included in this prospectus. Before making your investment decision with respect to YS Biopharma’s securities, you should read this entire document carefully, including the information under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements included elsewhere in this prospectus. Each item in this summary refers to the page of this prospectus on which that subject is discussed in more detail.

Overview

YS Group is a global biopharmaceutical company dedicated to discovering, developing, manufacturing and commercializing new generations of vaccines and therapeutic biologics for infectious diseases and cancer. YS Group commercializes vaccines with significant revenue and growth potential. YS Group takes pride in its marketed vaccine product, YSJA rabies vaccine, which was the first aluminum-free lyophilized rabies vaccine launched in China. Since YS Group launched its production at its current GMP-compliant facilities in February 2020 and as of September 30, 2023, YS Group had sold more than 23.5 million doses of YSJA rabies vaccines to 1,718 county-level CDCs in China. YS Group has also developed its proprietary PIKA immunomodulating technology platform, empowering a robust pipeline of innovative vaccines and therapeutic biologics. As of September 30, 2023, YS Group had four product candidates at various clinical trial stages, including PIKA rabies vaccine, PIKA recombinant COVID-19 vaccine, PIKA YS-ON-001 and PIKA YS-HBV-001, and four preclinical stage product candidates, targeting HBV, influenza, rabies and cancer with significant unmet medical needs. In addition, YS Group is working on a series of therapeutic targets and products at the discovery stage.

YS Biopharma was incorporated under the laws of Cayman Islands as an exempted company with limited liability in November 2020. The history of YS Group can be traced back to 2002 when Mr. Yi Zhang, its founder and controlling shareholder started the vaccine business in the PRC, and has expanded its international business operation in the United States and Singapore since 2009.

The following diagram illustrates the corporate structure of YS Group as of the date of this prospectus.

____________

(1)      (i) Mr. Yi Zhang and the entities he controls, including An Diang Group Holdings Limited, YXRT Company Limited and All Brilliance Investments Limited; (ii) Ms. Rui Mi and the entities controlled by Ms. Rui Mi, including Honeydrew Flower Field Ltd., ZM Home Limited and Hopeful World Company Limited; (iii) Ms. Xu Zhang and the entities controlled by Ms. Xu Zhang, including Apex Pride Global Limited, Prosperous Sunrise Company Limited and Much Galaxy Company Limited; and (iv) Ms. Nan Zhang and the entities controlled by Ms. Nan Zhang, including Spring Nanmu Islands Ltd., NNZF Company Limited and Acton Town International Limited (the “Concert Parties”) entered into a concert party agreement

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dated March 3, 2021 (the “Concert Party Agreement”), pursuant to which, the concert parties agree and acknowledge that they have voted since commencement of YS Group’s business, and will continue to vote, themselves or through any entity directly or indirectly controlled by them that own YS Biopharma’s equity interest, unanimously for any resolutions proposed at the board meetings and/or shareholders meeting of YS Biopharma, where applicable. According to the Concert Party Agreement, if the Concert Parties are unable to reach unanimous consensus, Yi Zhang is entitled to determine how to vote for and on behalf of himself and the Concert Parties. The Concert Agreement remains effective unless otherwise terminated by mutual consent of the Concert Parties.

On September 29, 2022, YS Biopharma entered into the Business Combination Agreement with Summit, Merger Sub I and Hudson Biomedical Group. The Business Combination Agreement provides for (1) the merger of Merger Sub I with and into Summit (the “First Merger”), with Summit surviving the First Merger as the surviving entity (the “Surviving Entity”) and becoming a wholly-owned subsidiary of YS Biopharma, and (2) the merger of the Surviving Entity with and into Hudson Biomedical Group (the “Second Merger,” and together with the First Merger, the “Mergers,” together with other transactions contemplated by the Business Combination Agreement, the “Business Combination”), with Hudson Biomedical Group surviving the Second Merger as the surviving company (the “Surviving Company”) and remaining as a wholly-owned subsidiary of YS Biopharma. As a result of and upon consummation of the Business Combination, the holders of shares and/or warrants of Summit has become the holders of shares and/or warrants of YS Biopharma.

Subject to, and in accordance with the terms and conditions set forth in the Business Combination Agreement, 19,388,769 shares of Summit were redeemed by Summit’s public holders. As a result, an aggregate of 1,708,497 Ordinary Shares, including 1,446,525 Ordinary Shares contributed by the Sponsor through a share surrender immediately prior to the First Merger Effective Time and 261,972 newly issued Ordinary Shares, were provided to non-redeeming Summit Shareholders and the Forward Purchase Investors (as defined below).

Prior to Summit’s initial public offering (the “Summit IPO”), Summit had entered into forward purchase agreements (collectively, the “Forward Purchase Agreements”) with each of Snow Lake Capital (HK) Limited and the Valliance Fund (collectively, the “Forward Purchase Investors”). The Forward Purchase Agreements provide for (1) the transfer of an aggregate of 375,000 Founder Shares from the Sponsor to the Forward Purchase Investors for nil cash consideration prior to the Summit IPO and (2) the purchase by the Forward Purchase Investors of an aggregate of 3,000,000 Summit Class A Ordinary Shares, plus an aggregate of 750,000 redeemable warrants to purchase Summit Class A Ordinary Shares at $11.50 per share, for an aggregate purchase price of $30,000,000 in a private placement to close concurrently with the closing of Summit’s initial business combination, which was the consummation of the Business Combination. Forward Purchase Investors had fully delivered their respective portion of the Forward Purchase Investment Amount as required under the applicable Forward Purchase Agreements.

The Business Combination was consummated on March 16, 2023. The transaction was unanimously approved by Summit’s board of directors and was approved at the extraordinary general meeting of Summit’s shareholders held on March 14, 2023. Summit’s shareholders also voted to approve all other proposals presented at the extraordinary general meeting. On March 17, 2023, the Ordinary Shares and Warrants commenced trading on The Nasdaq Stock Market LLC, or “Nasdaq” under the symbols “YS” and “YSBPW,” respectively.

The mailing address of YS Biopharma’s principal executive office is Building No. 2, 38 Yongda Road Daxing Biomedical Industry Park, Daxing District, Beijing, PRC, and its phone number is +86-10-89202086. YS Biopharma’s corporate website address is https://www.ysbiopharm.com. YS Biopharma’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus.

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Risk Factor Summary

Shareholders should carefully read this prospectus and especially consider the factors discussed in “Risk Factors,” a summary of which is set forth below. The occurrence of one or more of the events or circumstances described below, alone or in combination with other events or circumstances, may have an adverse effect on YS Group’s business, cash flows, financial condition and results of operations.

Risks Related to YS Group’s Business and Products

There are various risks related to YS Group’s business and operations, which include, but are not limited to:

        YS Group depends on its current marketed rabies vaccine product to generate substantially all of its revenue in the near term. YS Group’s previous operating history of manufacturing and commercializing vaccines may not provide an adequate basis to judge the viability of its business, the effectiveness of its management and its future profitability and prospects in respect of its marketed product.

        YS Group faces substantial competition. Its competitors may discover, develop or commercialize products before, or more successfully than, YS Group do, or develop therapies that are more advanced or effective than that developed by YS Group, which may adversely affect YS Group’s financial condition and its ability to successfully market or commercialize its marketed product and product candidates.

        YS Group’s product candidates, once commercialized, may compete with its existing marketed product.

        If the rabies vaccine industry in China does not grow as expected or declines, YS Group’s ability to expand its business and results of operations could be materially and adversely affected.

        The commercial success of any of YS Group’s marketed product and product candidates depends on its degree of market acceptance by end-users, CDCs, KOLs and others related to the vaccine or disease prevention industry.

        The biopharmaceutical industry is highly regulated. The relevant regulations and policies are complex and regional and subject to changes from time to time. YS Group’s ability to obtain and maintain these regulatory approvals is uncertain. Any change in government regulation and policy may place additional burdens on YS Group’s business and have a material adverse effect on YS Group’s financial condition and results of operations.

        YS Group’s marketed product and product candidates may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which could harm YS Group’s business.

        YS Group currently relies on the manufacturing facilities for the marketed product and are still developing additional facilities at other sites. Any disruption of YS Group’s current and new facilities or their failure to meet GMP regulatory compliance or other regulatory requirements may have a material adverse effect on YS Group’s business, financial condition and results of operations.

        Failure to manage the normal manufacturing capacity properly may materially and adversely affect YS Group’s revenues and profitability.

        YS Group has incurred significant losses since its inception. YS Group might incur losses or fail to generate sufficient revenue to achieve satisfactory profitability in the future.

        YS Group’s financial prospects depend on the sale of its marketed product, and the successful development and approval of its clinical-stage and preclinical stage product candidates.

        YS Group may need to obtain substantial additional financing to fund its operations, and a failure to obtain necessary capital when needed would force YS Group to delay, limit, reduce or terminate its product development or commercialization efforts.

        The issuance, scope, validity, enforceability and commercial value of YS Group’s patent rights are highly uncertain, and there can be no assurance that any of YS Group’s technology, marketed product or product candidates will be protectable or remain protected by valid and enforceable patents. If YS Group is unable

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to obtain and maintain patent protection for its marketed product and product candidates, or if the scope of such patent protection obtained is not sufficiently broad, third parties may compete directly against YS Group.

        YS Group could be adversely affected by the ongoing global impacts and uncertainties of the COVID-19 pandemic or similar pandemics in the future.

For additional detail on these and other risks, see “Risk Factors — Risks Related to YS Group’s Business and Products” beginning on page 17 of this prospectus.

Risks Related to Doing Business in China

YS Group faces various legal and operational risks associated with doing business in China, which could cause the value of YS Biopharma’s securities to decline or become worthless, and significantly limit or completely hinder its ability to accept foreign investments and offer or continue to offer securities to foreign investors. These risks include, but are not limited to:

        YS Group has a substantial business and operation in China and thus is exposed to legal and operational risks associated with its operations in China. The PRC government has significant authority to exert influence on the ability of a company with operations in China, including YS Group, to conduct its business. Changes in China’s economic, political or social conditions or government policies could materially and adversely affect its business and results of operations. For example, YS Group faces risks associated with regulatory approvals of offshore offerings, anti-monopoly regulatory actions, oversight on cybersecurity and data privacy, as well as the lack of PCAOB inspection on its auditors. On December 16, 2021, the PCAOB issued a report to the SEC of its determination that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong without the approval of the Chinese authorities. While YS Biopharma’s auditor, Wei, Wei & Co., LLP, is headquartered in the United States and not subject to such determinations, there is no guarantee that the audit work by Wei, Wei & Co., LLP in collaboration with its China-based offices can be inspected or investigated completely by the PCAOB without such approval. On August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission (the “CSRC”) and the Ministry of Finance of the PRC, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. On December 15, 2022, the PCAOB announced it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of YS Biopharma’s and its auditor’s control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated it will act immediately to consider the need to issue new determinations with the HFCAA if needed. YS Biopharma could still face the risk of delisting and cease of trading of its securities from a stock exchange or an over-the-counter market in the United States under the HFCAA and the securities regulations promulgated thereunder if the PCAOB is unable to inspect and investigate completely registered public accounting firms located in China in 2023 or beyond, or if YS Biopharma otherwise fails to meet the PCAOB’s requirements. These China-related risks could result in a material change in its operations and/or the value of YS Biopharma’s securities, or could significantly limit or completely hinder the ability of YS Biopharma to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. See “Risk Factors — Risks Related to Doing Business in China.”

        The PRC government has significant oversight and discretion over the conduct of YS Group’s business and operations and may intervene with or influence its operations as the government deems appropriate to further regulatory, political and societal goals. Recent policy statements and regulatory actions by the PRC government, such as those related to human genetic data and biopharmaceutical and vaccine

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business, may adversely impact YS Group’s ability to conduct its business and R&D activities, accept foreign investments, or list on a U.S. or other foreign stock exchange, which may cause the securities of YS Biopharma to be prohibited from trading or to be delisted from the Nasdaq or any other U.S. stock exchange. Furthermore, the PRC government recently instituted new regulations to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies. Any such action, once taken by the PRC government, could significantly limit or completely hinder YS Group’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless.

        The M&A Rules purport to require offshore special purpose vehicles that are controlled by PRC companies or individuals and that have been formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies or assets to obtain CSRC approval prior to publicly listing their securities on an overseas stock exchange. The interpretation and application of the M&A Rules remain unclear.

There is no assurance, however, that regulators in China will not subsequently require YS Biopharma to undergo the approval or clearance procedures in relation to the Nasdaq listing through a de-SPAC transaction or the Resale by the Selling Securityholders and subject YS Biopharma to penalties for non-compliance. See “Risk Factors — Risks Related to Doing Business in China — Recent regulatory development in China may exert more oversight and control over listing and offerings that are conducted overseas. The approval, filing and/or other requirements of PRC governmental authorities may be required under PRC laws, regulations or policies.”

        On February 17, 2023, the CSRC issued the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures for Overseas Listing”) and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Administrative Measures for Overseas Listing and the CSRC press release regarding the Trial Administrative Measures for Overseas Listing published on its official website on February 17, 2023, an indirect overseas offering and listing by domestic companies, which refers to the offering and listing by a company by way of an overseas incorporated entity the major business operations of which are located domestically and such offering and listing is based on the underlying equity, assets, earnings or other similar rights of a domestic company, is subject to filing procedures with the CSRC. A company having been listed overseas before the effectiveness of the Trial Administrative Measures for Overseas Listing would only be subject to the filing requirements when conducting a follow-on offering of securities. As YS Biopharma would not additionally issue any new Ordinary Shares or other equity securities from the Resale by the Selling Securityholders, YS Biopharma believes that, as advised by its PRC legal advisor, the Resale by the Selling Securityholders is not subject to the filing requirements prescribed in the Trial Administrative Measures for Overseas Listing. However, given that the Trial Administrative Measures for Overseas Listing were recently promulgated, there remains substantial uncertainties as to their interpretation, application, and enforcement. See “Risk Factors — Risks Related to Doing Business in China — Recent regulatory development in China may exert more oversight and control over listing and offerings that are conducted overseas. The approval, filing and/or other requirements of PRC governmental authorities may be required under PRC laws, regulations or policies” and “Business — Regulations — Laws and Regulations in China — Regulations relating to overseas listing.”

For additional detail on these and other risks, see “Risk Factors — Risks Related to Doing Business in China” beginning on page 59 of this prospectus.

Risks Related to Ownership of the Ordinary Shares

In addition to the risks described above, holders of Ordinary Shares are also subject to general risks relating to such shares, including, but not limited to, the following:

        The price of the Ordinary Shares may be volatile, and the value of the Ordinary Shares may continue to decline.

        YS Biopharma is an emerging growth company and may take advantage of certain reduced reporting requirements.

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        YS Biopharma is a foreign private issuer within the meaning of the rules under the Exchange Act, and as such YS Biopharma is exempt from certain provisions applicable to U.S. domestic public companies.

        If YS Group fails to remediate its material weakness and implement and maintain an effective system of internal control over financial reporting, YS Group may be unable to accurately report its results of operations, meet its reporting obligations or prevent fraud.

        Sales of the Ordinary Shares, or the perception of such sales, by YS Biopharma or the Selling Securityholders pursuant to this prospectus in the public market or otherwise could cause the market price for the Ordinary Shares to decline.

For additional details on these and other risks, see “Risk Factors — Risks Related to Ownership of the Ordinary Shares” beginning on page 73 of this prospectus.

Holding Company Structure

YS Biopharma is a holding company with no business operations of its own. YS Biopharma conducts a substantial portion of its business and operations through its PRC subsidiaries, in particular, Liaoning Yisheng and Beijing Yisheng, and a substantial portion of its assets are located in China. As a result, its ability to pay dividends and to service any debt it may incur overseas largely depends upon dividends paid by its subsidiaries. If its subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to YS Biopharma.

In addition, YS Biopharma’s subsidiaries in China are permitted to pay dividends to their shareholder only out of their after-tax profit, if any, as determined in accordance with the Accounting Standards for Business Enterprise as promulgated by the Ministry of Finance of the PRC (the “PRC GAAP”). The aggregate Accumulated Deficit for YS Biopharma’s PRC subsidiaries as determined under the Accounting Standards for Business Enterprise were RMB582.0 million, RMB515.7 million ($75.1 million) and RMB581.3 million ($81.0 million) as of March 31, 2022 and 2023 and September 30, 2023, respectively. In addition, pursuant to the relevant PRC laws, enterprises in the PRC have to make appropriation from their after-tax profit, as determined under PRC GAAP, to statutory common reserve funds. The appropriation to the statutory common reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of such PRC enterprise. See “Business — Regulations” for a detailed discussion of the PRC legal restrictions on dividends and its ability to transfer cash within its group. In addition, holders of YS Biopharma’s securities may potentially be subject to PRC taxes on dividends paid by it in the event YS Biopharma is deemed as a PRC resident enterprise for PRC tax purposes. See “Material Taxation Consideration — Material PRC Tax Considerations” for more details.

None of YS Biopharma’s PRC subsidiaries have issued any dividends or distributions to respective holding companies, including YS Biopharma, or any investors as of the date of this prospectus. YS Biopharma’s subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in its business. Historically, YS Biopharma has also received equity financing from its shareholders to fund business operations of YS Biopharma’s PRC subsidiaries. In the fiscal year ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, YS Biopharma transferred cash proceeds to Liaoning Yisheng in the amount of RMB428.5 million, RMB291.1 million, nil and nil, respectively. In the six months ended September 30, 2023, YS Biopharma transfered cash proceeds of RMB7.2 million to Beljing Yisheng. In the future, cash proceeds raised from overseas financing activities may be transferred by YS Biopharma through its subsidiaries outside China to its PRC subsidiaries via capital contribution and shareholder loans, as the case may be. YS Biopharma’s PRC subsidiaries will pay dividends to their offshore shareholder to meet the capital needs of YS Biopharma’s business operations out of the PRC. For details about the applicable PRC regulations and rules relating to such cash transfers through YS Group and the associated risks, see “Risk Factors — Risks Related to Doing Business in China.”

Cash is transferred among YS Biopharma, its offshore subsidiaries and its PRC subsidiaries, in the following manner: (1) funds are transferred to its PRC subsidiaries from YS Biopharma as needed through YS Biopharma’s subsidiaries outside China as capital contributions or shareholder loans, as the case may be; and (2) dividends or other distributions may be paid by its PRC subsidiaries to the Company through its subsidiaries outside China. YS Biopharma’s subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in its business. None of its subsidiaries outside China made distributions to shareholders. In the future, YS Biopharma’s ability to pay dividends,

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if any, to its shareholders and warrant holders and to service any debt it may incur will depend upon dividends paid By its subsidiaries. In the fiscal year ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, YS Group did not transfer any cash proceeds to any of its PRC subsidiaries except for the cash transfers within its Group in connection with the paid-in capital in its PRC subsidiaries. $59,900,000 of the registered capital was paid up by HK Yisheng to Liaoning Yisheng during the fiscal year ended March 31, 2021 and $45,099,071.49 of the registered capital was paid up by HK Yisheng to Liaoning Yisheng during the fiscal year ended March 31, 2022. In the fiscal year ended March 31, 2023, no registered capital was paid up by HK Yisheng to Liaoning Yisheng. In the six months ended September 30, 2023, $1,008,767.58 of the registered capital was paid up by HK Yisheng to Beijing Yisheng.

Emerging Growth Company

YS Biopharma is an “emerging growth company” as defined in the JOBS Act. YS Biopharma will remain an “emerging growth company” until the earliest to occur of (1) the last day of the fiscal year (i) following the fifth anniversary of the closing of the Business Combination, (ii) in which YS Biopharma has total annual gross revenue of at least $1.235 billion or (iii) in which YS Biopharma is deemed to be a large accelerated filer, which means the market value of the shares of YS Biopharma held by non-affiliates exceeds $700 million as of the last business day of YS Biopharma’s prior second fiscal quarter, YS Biopharma has been subject to Exchange Act reporting requirements for at least 12 calendar months; and filed at least one annual report, and (2) the date on which YS Biopharma issued more than $1.0 billion in non-convertible debt during the prior three-year period. YS Biopharma intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that YS Biopharma’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation.

In addition, YS Biopharma has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, YS Biopharma, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of YS Biopharma’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

Foreign Private Issuer

YS Biopharma is a foreign private issuer within the meaning of the rules under the Exchange Act and, as such, YS Biopharma is permitted to follow the corporate governance practices of its home country, the Cayman Islands, in lieu of the corporate governance standards of Nasdaq applicable to U.S. domestic companies. For example, YS Biopharma is not required to have a majority of the board consisting of independent directors nor have a compensation committee or a nominating and corporate governance committee consisting entirely of independent directors. YS Biopharma intends to follow its home country’s corporate governance practices as long as it remains a foreign private issuer. As a result, YS Biopharma’s shareholders may not have the same protection afforded to shareholders of U.S. domestic companies that are subject to Nasdaq corporate governance requirements. As a foreign private issuer, YS Biopharma is also subject to reduced disclosure requirements and are exempt from certain provisions of the U.S. securities rules and regulations applicable to U.S. domestic issuers such as the rules regulating solicitation of proxies and certain insider reporting and short-swing profit rules.

Controlled Company

YS Biopharma is a “controlled company” within the meaning of the Nasdaq corporate governance rules because Mr. Yi Zhang beneficially controls more than 50% of the total voting power of all issued and outstanding Ordinary Shares through the acting-in-concert arrangement under the Concert Party Agreement. See “Major Shareholders and Related Party Transactions — Concert Party Agreement” for details. As a result, Mr. Yi Zhang has the ability to exercise significant influence over matters requiring approval by shareholders such as election of directors and other significant corporate actions. Under the Nasdaq corporate governance rules, YS Biopharma may elect not to comply with certain corporate governance rules, including the requirements: (1) that a majority of YS Biopharma’s board of directors must consist of independent directors, (2) YS Biopharma’s director nominees must be selected or recommended to the board of directors solely by independent directors or by a nominations committee that is comprised entirely of independent directors and (3) that YS Biopharma’s Board must have a compensation committee

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that is comprised entirely of independent directors. YS Biopharma does not currently plan to utilize the exemptions available for controlled companies, but instead, it intends to rely on the exemption available for foreign private issuers to follow its home country governance practices. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. For details, see the sections entitled “Risk Factors — Risks Related to Ownership of the Ordinary Shares — As an exempted company incorporated in the Cayman Islands, YS Biopharma is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq’s corporate governance requirements; these practices may afford less protection to shareholders. If YS Biopharma opts to rely on such exemptions in the future, such decision might afford less protection to holders of YS Biopharma’s ordinary shares” and “Risk Factors — Risks Related to Ownership of the Ordinary Shares — YS Biopharma is a ‘controlled company’ within the meaning of the Nasdaq Stock Market listing rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.”

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THE OFFERING

The summary below describes the principal terms of the offering. The “Description of Share Capital” section of this prospectus contains a more detailed description of the Ordinary Shares.

Securities being registered for resale by the Selling Securityholders named in the prospectus

 

Up to 24,130,762 Ordinary Shares;

Offering prices

 

The securities offered by this prospectus may be offered and sold at prevailing market prices, privately negotiated prices or such other prices as the Selling Securityholders may determine. See “Plan of Distribution.”

Ordinary shares issued and outstanding prior to any exercise of Warrants

 

93,058,197 Ordinary Shares

Warrants issued and outstanding

 

16,750,000 Warrants

Use of proceeds

 

All of the securities offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts. We will not receive any of the proceeds from such sales.

Dividend Policy

 

We have never declared or paid any cash dividend on our Ordinary Shares. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any further determination to pay dividends on our ordinary shares would be at the discretion of our board of directors, subject to applicable laws, and would depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.

Lock-up arrangement

 

The securities being registered for resale by the Selling Securityholders named in the prospectus are subject to 180 days lock-up period from March 16, 2023. The lock-up requirements will cease to apply after the date on which the closing price of the Ordinary Shares equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period commencing at least 150 days after March 16, 2023.

Market for our Ordinary Shares and
Warrants

 

Our Ordinary Shares and Warrants are listed on Nasdaq under the trading symbols “YS” and “YSBPW,” respectively.

Risk factors

 

Prospective investors should carefully consider the “Risk Factors” for a discussion of certain factors that should be considered before buying the securities offered hereby.

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RISK FACTORS

An investment in YS Biopharma’s securities involves a high degree of risk. You should carefully consider the following risk factors, together with all of the other information included in this prospectus, before making an investment decision. Certain of the following risk factors apply to the business and operations of YS Group and will also apply to the business and operations of YS Group. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on the business, financial condition, results of operations, prospects and trading price of YS Biopharma. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by YS Biopharma and YS Group, which later may prove to be incorrect or incomplete. YS Biopharma and YS Group may face additional risks and uncertainties that are not presently known to them, or that are currently deemed immaterial, but which may also ultimately have an adverse effect on any such party.

Risks Related to YS Group’s Business and Products

Risks Related to YS Group’s Marketed Product

YS Group depends on its current marketed rabies vaccine product to generate substantially all of its revenue in the near term. YS Group’s previous operating history of manufacturing and commercializing vaccines may not provide an adequate basis to judge the viability of its business, the effectiveness of its management and its future profitability and prospects in respect of its marketed product.

YS Group currently owns one marketed product in China, its YSJATM rabies vaccine, sales of which have generated and are expected to continue to generate substantially all of YS Group’s revenue in the near term. In the fiscal years ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, revenues from sales of rabies vaccine accounted for approximately 100% of the total revenues of YS Group. Its ability to continuously commercialize YSJATM rabies vaccine and expand its sales will depend on various factors, including, among other things, its ability to maintain proper manufacturing facilities, achieve effective sales and marketing, maintain competitive attractiveness, secure widespread acceptance of this product, maintain compliance with ongoing regulatory requirement, properly price and obtain coverage and adequate reimbursement of this product by governmental authorities, private health insurers and other third-party payors. If YSJATM rabies vaccine fails to achieve successful sales and further sales expansion, it could have a material adverse effect on the business, financial condition and results of operations of YS Group.

The vaccine’s manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling, recordkeeping, and post-marketing studies for its products are subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, and continued compliance with the Good Manufacturing Practice and the Good Clinical Practice. As of the date of this prospectus, YS Group manufactures YSJATM rabies vaccine in its GMP-compliant plant in Shenyang, China. If YS Group intends to build up new plants, or if the existing license for its current plant expires or is withdrawn, YS Group will be required to apply for new license or renew its current license for future production, which may disrupt the production and commercialization plan of YSJATM rabies vaccine. In addition, each lot release of the rabies vaccine produced by YS Group is subject to the inspection and pre-approval by relevant regulatory authorities before it enters into the market for sale. Any regulatory approvals YS Group receives for its products are also subject to certain market limitations, approval conditions or post-market testing requirements. Any government investigation of alleged violations of relevant laws and regulations could generate negative publicity and subject YS Group to additional compliance costs. Moreover, regulatory policies may change or additional government regulations may be enacted that could prevent, limit or delay regulatory approval. If YS Group is not able to maintain regulatory compliance, regulatory approval that has been obtained may be lost and it may not achieve or sustain profitability, which may significantly harm YS Group’s business, financial condition, results of operations and prospects.

In addition, YS Group’s previous operating history may not be indicative of its growth in business and revenue in the future. There may also be a decrease in demand, pricing or supply for its marketed product. Factors that could lead to such decline include, among others, increased competition, new product introductions, government-imposed pricing constraints, intellectual property issues, disruptions in manufacturing or distribution, and newly discovered safety issues. Any difference between YS Group’s expected sales and the actual sales for its marketed product could materially and adversely affect YS Group’s business, financial condition, results of operations and prospects.

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YS Group faces substantial competition. Its competitors may discover, develop or commercialize products before, or more successfully than, YS Group do, or develop therapies that are more advanced or effective than YS Biopharma’s, which may adversely affect YS Group’s financial condition and its ability to successfully market or commercialize its marketed product and product candidates.

YS Group faces substantial competition with its marketed product, YSJA™ rabies vaccine, and product candidates, including PIKA rabies vaccine. Moreover, the development and commercialization of new products is also highly competitive. YS Group faces competition with respect to its existing product candidates, and will face competition with respect to any product candidates that YS Group may seek to develop or commercialize, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Competitors of YS Group’s product and product candidates include vaccines, cell-based immuno-oncology therapies, checkpoint inhibitors and other immunological biologics. Potential competitors also include academic institutions, government agencies and other public and private research organizations and companies that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacture and commercialization. Specifically, there are a large number of companies, including many major pharmaceutical and biotechnology companies, that develop or market treatments for infectious diseases and immuno-oncology drugs.

Many of the companies against which YS Group is competing or may compete in the future have significantly greater financial resources and expertise in R&D, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than YS Group does. These competitors also compete with YS Group in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, YS Group’s marketed product and product candidates. New competitors, domestic or foreign, may also enter into the markets in which YS Group currently operates. Accordingly, YS Group may not be able to outperform a competing product for any number of reasons, including:

        the competing product may be, or may be perceived to be, more effective, safer or otherwise superior in quality or brand recognition;

        the competing product was introduced to the market earlier or gained wide market acceptance;

        the competing product incorporates more recent technological innovations or research findings;

        the competitor may have greater access to certain raw materials;

        the competitor may have more efficient manufacturing processes, greater manufacturing capacity or lower manufacturing costs;

        the competitors may develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more user-friendly or are less expensive;

        the competitors may have stronger relationships or a more established history with regulatory bodies, and may obtain regulatory approval for their products more rapidly;

        the competitor may have more aggressive marketing strategies, greater marketing capabilities or pricing flexibility;

        the competing product might be protected by robust patent protections or enjoy market exclusivity;

        the competitor might have more extensive distribution networks or strategic partnerships; or

        the competitor may have established a stronger reputation and a higher degree of trust with customers, and may provide a more superior customer service and support.

The technologies used in YS Group’s industry are evolving rapidly, and new developments frequently result in price competition and product obsolescence. Additionally, technologies developed by competitors may render YS Group’s marketed product and product candidates uneconomical or obsolete, and YS Group may not be successful in marketing its marketed product and product candidates against competitors. In addition, YS Group may be impacted by competition from substitute products. If YS Group is unable to compete effectively, it may lose market share

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and its financial performance may deteriorate. The availability of YS Group’s competitors’ products could limit the demand, the market share, the price YS Group is able to charge, and the strategic opportunities for partnerships and collaborations for any products that YS Group may develop and commercialize.

YS Group’s product candidates, once commercialized, may compete with its existing marketed product.

YS Group is producing and selling YSJA™ rabies vaccine, which is a conventional rabies vaccine product. YS Group is also developing PIKA rabies vaccine, which is a rabies vaccine featuring an accelerated regimen. Given the potential advantages of PIKA rabies vaccine over conventional products, YS Group intends to formulate a premium pricing strategy to differentiate it from conventional products, including YSJA™ rabies vaccine. Nevertheless, once PIKA rabies vaccine enters into the market, it may compete with YSJA™ rabies vaccine in, among others, customer acquisition, market position and commercialization resources, which may hinder the sales performance and growth of YSJA™ rabies vaccine. In addition, the growth potential and market position of PIKA rabies vaccines may also be affected by the presence and growth of YSJA™ rabies vaccine. The competition between YS Group’s marketed product and any product candidate may also impose a burden on its internal resources, disrupt its cost structure and reduce its operating efficiency. As a result, YS Group’s prospects and results of operations may be materially and adversely affected.

If the rabies vaccine industry in China does not grow as expected or declines, YS Group’s ability to expand its business and results of operations could be materially and adversely affected.

The rabies vaccine industry in China has developed rapidly in the past decade, driven by favorable government policies, GDP growth, increase awareness on public health, affordability of vaccination and the emergence of new virus and pandemics, according to the F&S report. However, the continued growth of the rabies vaccine industry will depend on numerous factors, many of which are beyond YS Group’s control, including but not limited to:

        development, safety and efficacy, availability and affordability of alternative therapeutics;

        perception, recognition and acceptance of vaccines by end-users, CDCs, KOLs and others related to the vaccine or disease prevention industry;

        technological and scientific advancements, as well as manufacturing, storage and transportation techniques related to vaccines;

        general awareness on public health;

        changes in demographic composition and structure;

        changes in the regulatory environment, government policy and utilization of resources on public health matters;

        changes in insurance coverage of insurance companies and government programs;

        the occurrence of global health crises; and

        the general economic condition in China and globally.

Any decline or slowdown in the growth of the vaccine industry could materially and adversely affect YS Group’s ability to expand its business and generate positive operating results.

The commercial success of any of YS Group’s marketed product and product candidates depends on its degree of market acceptance by end-users, CDCs, KOLs and others related to the vaccine or disease prevention industry.

If end-users, CDCs, KOLs and others related to the vaccine or disease prevention industry do not accept YS Group’s marketed product or product candidates, YS Group may be unable to generate significant revenue and may suffer losses. For example, in China, substantially all vaccine products are sold to CDCs, which comprise substantially YS Group’s entire customer base for YSJA™ rabies vaccine. YS Group cannot assure you that its vaccine or vaccine candidates will gain market acceptance among CDCs in China. CDCs may reduce or cease the purchases if the patients do not accept these products or KOLs do not recommend YS Group’s products. Failure to gain market acceptance would limit YS Group’s ability to generate revenue as well as materially reduce its profitability.

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In particular, CDCs and their physicians may elect not to recommend YS Group’s products to patients for a variety of reasons, including the reimbursement policies of government and third-party payers, as well as the willingness of patients to pay out-of-pocket in the absence of such coverage reimbursement. There are other vaccines for the medical conditions that YS Group’s marketed product and product candidates target. In order to successfully launch a product, CDCs’ physicians and patients must be educated about the relative benefits and advantages of YS Group’s products over alternative products. If YS Group’s products (including product candidates once commercialized) are not perceived to be user-friendly, present a lesser risk of side effects, or be more efficient or otherwise significantly better than other available products, YS Group’s products may not be recommended or adopted by customers and end-users. A failure of YS Group’s products to gain sufficient commercial acceptance would have a material adverse effect on its business, financial condition and results of operations. Even if YS Group’s products achieve market acceptance, YS Group may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than its products, are more cost effective or render its products obsolete.

If YS Group’s marketed product and product candidates as well as the related manufacturing, storage, testing, delivery and other procedures do not meet the required quality standards, YS Group’s business and reputation could be harmed, and its revenue and profitability could be materially and adversely affected.

YS Group’s marketed product and product candidates as well as the related manufacturing, storage, testing, delivery and other procedures are required to meet certain quality standards to ensure product safety and efficacy. YS Group cannot assure you that its quality control and assurance system can provide adequate and comprehensive protection against the associated risks at all times. YS Group’s quality control and assurance policies and procedures may suffer from design deficiencies or fail to account for all risks in the manufacturing, storage, testing, delivery and other procedures. In addition, YS Group’s quality control and assurance personnel may fail to comprehend the related policies and procedures, or implement such in a stringent and consistent manner at all times. For example, YS Group halted production of its marketed product for certain months in 2013 to address contamination issues. Moreover, YS Group cannot eliminate the risk of all errors, defects or failure, whether they are attributable to YS Group or third parties. Quality defects may be attributable to a number of reasons, including:

        manmade or naturally occurring errors and imprecision in the manufacturing, storage, testing, delivery and other procedures;

        technical or mechanical malfunctions in the manufacturing, storage, testing, delivery and other procedures;

        human error or malfeasance by YS Group’s quality control, quality assurance, manufacturing, experiment and other personnel, as well as other responsible personnel of third parties;

        tampering or interference by external entities or third parties;

        use of outdated or poorly maintained equipment or technology;

        insufficient or ineffective quality control systems;

        non-compliance or negligence of regulatory guidelines by third-party collaborators, suppliers or vendors;

        exposure to suboptimal manufacturing, storage, testing and delivery conditions or environment; and

        quality issues with the raw materials and consumables YS Group purchases or produce.

Failure to detect and cure quality defects in YS Group’s vaccine products or to prevent such defective products from being delivered to end-users could result in patient injury or death, product recalls or withdrawals, license suspension or revocation, government investigations, legal actions, regulatory fines, increased cost, potential difficulties in future approvals, or negative media coverage that could damage YS Group’s reputation and business, expose YS Group to liability, and materially and adversely affect its revenue and profitability.

YS Group’s business may be materially and adversely affected by product recalls or defects in the biopharmaceutical industry, and any other scandals and incidents that negatively affect the reputation and public perception of the vaccine industry as a whole.

Both the manufacturing and distribution processes of biopharmaceutical products are complex. In addition, biopharmaceutical products must be stored properly to remain safe and effective. In the past, major biopharmaceutical

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companies had instances of product recalls due to product defects. Such recalls have in the past been subject to widespread media attention. Such recalls could damage both the reputation of major biopharmaceutical manufacturers, as well as the biopharmaceutical industry as a whole. In addition, there have been scandals of poor handling of production of biopharmaceutical products by certain companies. For example, in 2018, the Changchun Changsheng vaccine scandal in China caused widespread outrage where China’s second largest rabies vaccine manufacturer allegedly violated GMP manufacturing protocols and regulations, which resulted in the production of defective vaccines.

Such incidents have caused, and any future similar incidents and any negative publicity regarding the biopharmaceutical industry could cause, reputational damage to the biopharmaceutical industry and could reduce demand for biopharmaceutical products by creating negative public perception of vaccines. In addition, the government may promulgate new regulations and rules to reform, strengthen or change the existing supervision over the vaccine industry. If any of such event occurs, YS Group’s business, financial condition and results of operations could be materially and adversely affected.

YS Group’s marketed product and product candidates may cause undesirable adverse events or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in disputes, claims, litigations or other significant negative consequences following any regulatory approval.

Undesirable adverse events caused by YS Group’s product candidates could cause YS Group or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the National Medical Products Administration (the “NMPA”) in China, Health Sciences Authority (the “HSA”) in Singapore, U.S. Food and Drug Administration (the “FDA”) or other comparable regulatory authorities. Results of YS Group’s trials could reveal a high and unacceptable severity or prevalence of adverse events, which could cause the suspension or termination of such trials, or the cessation of development and the denial of approval from relevant regulatory authorities. Undesirable adverse events caused by its products or product candidates may include but are not limited to, inflammatory response of certain organs. As most of YS Group’s product candidates have not been testified in large-scale clinical trials, the adverse effect of such, especially that of long-term use, are uncertain. Certain types of disease may also not respond to YS Group’s product candidates. In addition, combination therapy with other marketed products may cause uncertain adverse effect. Product-related adverse events could affect patient recruitment and the ability of enrolled subjects to complete the trial, and could result in potential product liability claims. Additionally, undesirable side effects or adverse events caused by or relating to YS Group’s marketed product or product candidates may be discovered after they receive regulatory approval. Potential product liability is also a significant risk for biopharmaceutical companies, given that liability claims common in YS Group’s industry are hard to foresee by nature. Such claims can also lead to product recalls, withdrawals, or declining sales, and/or be accompanied by consumer fraud claims by customers, third-party payers seeking reimbursement of the cost of YS Group could be sued and held liable for the adverse events caused to subjects in clinical trials or patients and the relevant compensation, regardless whether a causal relationship can be proven; regulatory authorities may withdraw approvals of the product; YS Group is subject to regulatory seizure of its products; regulatory authorities may require additional warnings on the label; product and/or other claims, including potential civil or criminal governmental actions. Any of these occurrences may harm YS Group’s reputation, business, financial condition and prospects significantly.

YS Group has become, and may continue to become subject to such negative events and consequences, including but not limited to the following:

        YS Group could be sued and held liable for adverse events to subjects in clinical trials or patients and the relevant compensation, regardless of whether a causal relationship can be proven;

        YS Group may suspend commercialization and marketing of the product;

        regulatory authorities may withdraw approvals of the product;

        YS Group is subject to regulatory seizure of its products;

        regulatory authorities may require additional warnings on the label;

        YS Group may be required to develop risk evaluation and mitigation strategies for the product, to incorporate additional requirements under such strategies, or to develop a similar strategy as required by a comparable regulatory authority;

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        YS Group may propose to or be required to conduct post-market studies; and

        YS Group could be prevented from achieving market acceptance of the particular product.

The recession or eradication of the infectious diseases that YS Group’s vaccines target may adversely affect its sales.

YS Group devoted significant resources to the R&D of vaccines against infectious diseases, and will continue to devote resources to the development of vaccines for novel infectious diseases. However, a pandemic or type of infectious disease may have receded before YS Group realizes any return on its investment in the R&D of its vaccines. Moreover, diseases that YS Group’s vaccines target may be eradicated, which would eliminate the market of YS Group’s vaccines. In addition, outbreaks of infectious diseases may cause CDCs to increase their purchases of vaccines against the pandemic diseases and reduce purchases of other vaccines in a short period. Changes of the procurement plans of CDCs could adversely affect sales of YS Group’s vaccine products.

Risks Related to the Development of YS Group’s Product Candidates

YS Group’s success depends substantially on the success of its product candidates in preclinical or clinical trial stages. Preclinical or clinical trials involve a lengthy and expensive process with uncertain outcomes. YS Group may not be able to achieve its projected development goal of its product candidates in a timely manner or at all, which may materially and adversely affect YS Group’s business, financial condition, results of operations and prospects.

YS Group’s business success will substantially depend on the successful development, regulatory approval and commercialization of its product candidates, particularly its lead product candidates, such as PIKA rabies vaccine, PIKA recombinant COVID-19 vaccine and PIKA YS-ON-001. These product candidates are still in preclinical or clinical studies. Before YS Group can generate revenue from sales of these product candidates, each of them will undergo the process of preclinical and/or clinical studies, regulatory approval in multiple jurisdictions, development of manufacturing supply and capacity, substantial investment and significant marketing efforts. YS Group invested a significant portion of its efforts and financial resources in the development of its existing lead product candidates, and will continue to evaluate the progress and prioritization of its product candidates and relying on third parties to manage and conduct high-quality clinical trials safely and efficiently; make further investment based on its evaluation, aligning with its financial condition, global health needs and market dynamics. The success of YS Group’s product candidates will depend on several factors, including:

        successfully enrolling and/or completing preclinical studies and clinical trials, as well as other studies required to obtain regulatory approval;

        obtaining regulatory approvals from applicable regulatory authorities for planned clinical trials, future clinical trials or product registrations, manufacturing and commercialization;

        establishing commercial manufacturing capabilities, either by building facilities itself or making arrangements with third-party manufacturers;

        adequate fiscal support, technical proficiency and the ability to consistently obtain high-quality raw materials crucial to the implementation of preclinical studies, clinical trials, manufacturing processes, and commercialization;

        relying on third parties to manage and conduct high-quality clinical trials safely and efficiently;

        obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity;

        ensuring that YS Group does not infringe, misappropriate or otherwise violate the patent, trade secret or other intellectual property rights of third parties;

        commercializing YS Group’s product candidates;

        obtaining reimbursement from third-party payers for product candidates;

        obtaining and maintaining healthcare coverage and adequate reimbursement;

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        competing with other products and product candidates in the market;

        successfully enforcing and defending intellectual property rights and claims; and

        achieving continued acceptable safety profile for YS Group’s product candidates following regulatory approval.

As a publicly listed company, YS Group may continue to make such disclosures of its expectations in this respect. Notably, the progression of each product candidate is not only subject to its individual performance, but also YS Group’s prioritization assessment and the relative advancement and potential of YS Group’s entire portfolio. Thus, priority may be shifted between product candidates based on their comparative outlooks, which might impact the achievement of development milestones for individual candidates. The actual timing for achieving product development milestones could vary significantly from YS Group’s expectations due to a number of factors, many of which are outside its control. There can be no assurance that YS Group’s preclinical studies or clinical trials will be completed as planned or at all, or that YS Group will make regulatory submissions or receive regulatory approvals as planned, or that YS Group will be able to adhere to its current schedule for the launch of any of its products candidates. If YS Group fails to achieve one or more of these milestones as planned, it could adversely affect the price of its Shares and its business prospects.

Preclinical and clinical studies involve a lengthy and expensive process with an uncertain outcome. YS Group may incur additional costs or experience delays, halts or failures in completing preclinical or clinical studies, or ultimately be unable to complete the development and commercialization of YS Group’s product candidates.

Before obtaining regulatory approval for the sale of YS Group’s product candidates, YS Group must conduct extensive preclinical and clinical studies to demonstrate the safety and efficacy of its product candidates in non-human and human subjects. Clinical testing is expensive, difficult to implement, can take many years to complete, and is uncertain as to the outcome. A failure of one or more of YS Group’s clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and successful interim results of a clinical trial do not necessarily predict successful final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses. YS Group may nonetheless fail to obtain regulatory approval of its product candidates dependent solely on the discretion of each regulatory body.

YS Group may experience delays, halts or failures in completing its preclinical or clinical studies and numerous unforeseen events could arise during, or as a result of, future clinical trials, which could delay or prevent YS Group from receiving regulatory approval of its product candidates. These factors include:

        regulators, institutional review boards (“IRBs”), or ethics committees may not authorize YS Group or its investigators to commence or conduct a clinical trial at a prospective trial site;

        regulatory authorities may disagree with or change their position on the acceptability of YS Group’s trial designs or clinical endpoints;

        clinical trials may produce negative or inconclusive results, which could cause YS Group to conduct additional clinical trials or abandon product development programs;

        the number of patients required for clinical trials of YS Group’s product candidates may be larger than it anticipates, enrollment in these clinical trials may be slower than it anticipates or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than it anticipates;

        third-party contractors used in YS Group’s clinical trials may fail to comply with regulatory requirements or meet their contractual obligations in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that YS Group adds new clinical trial sites or investigators;

        clinical trial sites may withdraw from YS Group’s clinical trials as a result of changing standards of care or the ineligibility of a site to participate in YS Group’s clinical trials;

        YS Group may fail to identify and maintain a sufficient number of trial sites;

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        the ability to conduct a companion diagnostic test to identify patients who are likely to benefit from YS Group’s product candidates;

        YS Group may elect, or be required to, suspend or terminate clinical research for various reasons, including non-compliance with regulatory requirements or a finding that participants are being exposed to unacceptable health risks;

        the cost of clinical trials of YS Group’s product candidates may be greater than YS Group anticipates, and YS Group cannot obtain sufficient funds;

        the supply or quality of YS Group’s product candidates or other materials necessary to conduct clinical trials of its product candidates may be insufficient or inadequate;

        YS Group’s product candidates may have undesirable side effects or unexpected characteristics, causing the termination of such trials, or reports may arise from preclinical or clinical testing of other therapies that raise safety or efficacy concerns about YS Group’s product candidates;

        YS Group may not complete preclinical or clinical trials as its originally scheduled;

        YS Group may encounter regulatory delays if a clinical trial is suspended or terminated due to various factors, including but not limited to a failure to conduct the clinical trial in accordance with regulatory requirements or the applicable clinical protocols, inspection of the clinical trial operations or trial site by regulatory authorities that results in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial; and

        YS Group’s preclinical and clinical studies may be hindered, delayed or prevented by the occurrence or influence of other incidents or negative events, such as the long-term effects of COVID-19 and the ongoing global health situation, as well as political conflicts between China and other countries.

Many of these factors that cause a delay, halt or failure in the commencement or completion of clinical trials may also ultimately lead to delay or denial of regulatory approval of YS Group’s product candidates and increases in product development costs. Significant preclinical study or clinical trial delays also could allow YS Group’s competitors to acquire more market shares, which may harm YS Group’s ability to commercialize its product candidates and adversely affect YS Group’s business and results of operations.

Results of earlier clinical trials may not be predictive of results of later-stage clinical trials.

The results of preclinical studies and early clinical trials of YS Group’s product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Future clinical trial results may not be favorable for a variety of reasons. For example, there can be significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the subject populations, including genetic and biological differences and other trial protocols. Various aspects of the development program, such as manufacturing and formulation, may be altered along the way in an effort to optimize processes and results. Such changes may not achieve these intended objectives or more compliance expenses. In the case of any trials YS Group conducts, results may differ from earlier trials due to the larger number of participants and resulting complexity due to the involvement of diversified demographics, as well as the large number of clinical trial sites and additional countries and languages involved in such trials. Any of these changes could make the results of planned clinical trials or other future clinical trials YS Group may initiate less predictable and could cause YS Group’s product candidates to perform differently, which could require additional governmental communications and procedures for the altered clinical trial plan, delay the completion of clinical trials, delay approval of YS Group’s product candidates and/or jeopardize YS Group’s ability to commence commercialization of its product candidates.

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If the targeted market for YS Group’s product candidates does not grow as expected or declines, YS Group’s ability to expand its business and results of operations could be materially and adversely affected.

The targeted markets for YS Group’s product candidates, including, among others, the vaccine and infectious drug market in Southeast Asia and China are evolving, the continued growth of which will depend on numerous factors, many of which are beyond YS Group’s control, including but not limited to:

        development, safety and efficacy, availability and affordability of alternative therapeutics;

        perception, recognition and acceptance of vaccines by end-users, CDCs, KOLs and others related to the vaccine or disease prevention industry;

        technological and scientific advancements, as well as manufacturing, storage and transportation techniques related to vaccines;

        general awareness on public health;

        changes in demographic composition and structure;

        changes in regulatory environment, government policy and utilization of resources on public health matters;

        changes in insurance coverage of insurance companies and government programs;

        the occurrence of global health crises;

        the general economic condition in China and globally.

Any decline or slowdown in the growth of the vaccine industry could materially and adversely affect YS Group’s ability to expand its business and generate positive operating results.

YS Group may not be successful in its efforts to identify or discover additional product candidates. Due to YS Group’s limited resources and access to capital, YS Group must, and have in the past decided to, prioritize the development of certain product candidates. These decisions may prove to have been wrong and may adversely affect YS Group’s business.

YS Group intends to explore other biopharmaceutical opportunities in addition to YS Group’s existing product candidates. However, YS Group may fail to identify other product candidates for clinical trials for a number of reasons, such as research methodology challenges, harmful side effects, changes in market trends, lack of access to necessary raw materials, the emergence of competitive products or certain regulatory requirement. There can be no assurance that YS Group will ever be able to identify additional biopharmaceutical opportunities for its product candidates or develop suitable potential product candidates.

If YS Group does not accurately evaluate the commercial potential or target market for a particular product candidate, YS Group may derive less value from that product candidate through collaboration, licensing or other royalty arrangements, as compared to retaining sole development and commercialization rights to such product candidate.

Because YS Group has limited financial and managerial resources, it must limit its licensing, R&D programs to specific product candidates that it identifies for specific indications. For example, YS Group has focused on developing its PIKA immunomodulating technology platform, which it believes has great potential to create a wide variety of innovative immunological biologics to address underserved medical needs in treating and preventing infectious diseases and cancer. However, YS Group may focus its efforts and resources on product candidates or other potential programs that ultimately prove to be unsuccessful or generate less return than expected, which may cause YS Group to forego or delay pursuit of more successfully product development opportunities. YS Group’s resource allocation decisions may cause YS Group to fail to capitalize on viable products or profitable market opportunities.

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YS Group may rely on third parties to monitor, support and/or conduct preclinical or clinical trials of its product candidates. If the preclinical and clinical trial organizations do not perform in an acceptable manner, YS Group may be unable to develop and commercialize its candidates as anticipated.

YS Group may rely on academic institutions, CROs, hospitals, clinics and other organizations and institutions, who are beyond YS Group’s control, to monitor, support and conduct preclinical and/or clinical studies of its product candidates. As a result, YS Group has less control over the quality, timing and cost of these studies and the ability to recruit trial subjects than if it conducts these trials wholly by itself. If YS Group is unable to maintain or enter into agreements with these third parties on acceptable terms, or if any such engagement is terminated, YS Group may be unable to enroll subjects on a timely basis or otherwise conduct its trials in the manner it anticipates. In addition, there is no guarantee that these third parties will devote adequate time and resources to YS Group’s studies or perform as required by a contract or in accordance with regulatory requirements, including maintenance of clinical trial information regarding YS Group’s future product candidates. If these third parties fail to meet expected deadlines, timely transfer to YS Group any regulatory information, adhere to protocols or act in accordance with regulatory requirements or YS Group’s agreements with them, or if they fail to comply with the confidentiality agreement, subcontract their obligations without YS Group’s consent, or otherwise perform in a substandard manner or in a way that compromises the quality and/or accuracy of their activities and/or the data they obtain, then clinical trials of YS Group’s future product candidates may be extended, delayed or terminated, or YS Group’s data may be rejected by the NMPA, the HSA or other regulatory agencies.

Restrictions imposed by YS Group’s outstanding indebtedness and any future indebtedness may limit YS Group’s ability to operate its business and to finance its future operations or capital needs.

In March 2022, YS Group completed a $40 million royalty-based 4.5-year long-term debt transaction with R-Bridge Investment Holdings Pte. Ltd. The terms of the loan facility limit YS Group’s ability to, among other things, incur additional indebtedness, incur liens on YS Group’s assets, engage in consolidations, mergers, liquidations, dissolutions, sell or otherwise dispose of YS Group’s assets, acquire other businesses, make loans, capital contributions, or other investments, or enter into any other transactions outside of the ordinary course of business. In addition, YS Group is obliged to pay royalties based upon YS Group’s annual Net Sales (as defined in the royalty deed dated March 16, 2022 entered into between HK Yisheng and R-Bridge Healthcare Fund, LP) by multiplying the applicable royalty rate by the corresponding amount incremental Net Sales for that financial year. The terms of YS Group’s loan facilities and royalty obligations restrict YS Group’s current and future operations and could adversely affect YS Group’s ability to finance its future operations or capital needs or take advantage of financing opportunities, mergers, acquisitions, investments, and other corporate opportunities that may be beneficial to YS Group’s business. In addition, complying with these covenants may make it more difficult for YS Group to successfully execute its business strategy and compete against companies which are not subject to such restrictions.

Risks Related to Extensive Government Regulations

The biopharmaceutical industry is highly regulated. The relevant regulations and policies are complex and regional and subject to changes from time to time. YS Group’s ability to obtain and maintain these regulatory approvals is uncertain. Any change in government regulation and policy may place additional burdens on YS Group’s business and have a material adverse effect on YS Group’s financial condition and results of operations.

The biopharmaceutical industry is subject to extensive government regulation and supervision, which addresses all aspects of operations in the biopharmaceutical industry, including but not limited to approval, production, distribution, packaging, labeling, storage and shipment, advertising, licensing and certification requirements and procedures, periodic renewal and reassessment processes, registration of new drugs and environmental protection. For example, in order to manufacture and market any immunological biologics in China, a pharmaceutical company is required to obtain permits and certificates from the NMPA, including but not limited to the drug registration certificate (where applicable), the drug manufacturing license, and to pass the initial GMP inspections and continued compliance with the GMP, as well as other manufacturing requirements for its manufacturing facilities. The drug registration certificate and the drug manufacturing license are subject to renewal periodically. In addition, a vaccine manufacturer is also required to obtain lot release for each lot of vaccine products before they can be released to the market.

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The lot release step involves the supervisory and administrative system by which the NMPA designates a drug inspection institution to conduct document review, on-site verification and sample inspection in connection with vaccine products, blood products, in vitro diagnostics for blood screening, or any other biological products as described by the NMPA, before any batch of such products can be marketed or exported. The NMPA updated certain standards in the National Pharmacopoeia for human rabies vaccines in late 2020. In order to comply with such new standards, YS Group expects to spend more time to communicate with the competent authorities on the relevant testing methods and procedures before lot release approval.

Violation of applicable laws, rules and regulations by YS Group may lead to its failure to obtain or renew permits, licenses or approvals required for operation in a timely manner or on commercially reasonable terms. As a result, YS Group will not be able to engage in or have to suspend or cease the manufacture or sale of any products, which may have a material adverse effect on YS Group’s business, financial condition, results of operations and prospects.

YS Group’s ability to manufacture its marketed product and its future approved product candidates depends on its ability to develop, validate and maintain commercially viable manufacturing processes that are compliant with GMP regulations. For example, YS Group halted its production of marketed product for certain months in 2013 to address contamination issues. YS Group cannot assure you it will be able to maintain required certificates or continue to meet the GMP requirements by the drug regulatory authority, which may cause YS Group to suspend or terminate the manufacturing and commercialization of its marketed products, and materially and adversely affect its business, financial condition and results of operations.

The NMPA may also withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after YS Group’s products reach the market. In addition, later discovery of previously unknown problems with YS Group’s marketed product, including adverse events of unanticipated severity or frequency, or with YS Group’s manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies (including but not limited to clinical studies) to assess new safety risks, or imposition of distribution restrictions or other restrictions under a risk evaluation and mitigation program. YS Group cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action. If YS Group is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if YS Group is not able to maintain regulatory compliance, YS Group may lose any regulatory approval that it may have obtained and it may not achieve or sustain profitability.

In addition, regulatory requirements and approval process varies among countries, jurisdictions and regions, which may involve additional product testing and validation and additional administrative review periods. YS Group’s product candidates may need to apply for and obtain approval from multiple jurisdictions where it plans to study or market the products, which may be costly and time-consuming. Even if product candidates successfully complete clinical trials in one country, there is no assurance that clinical trials of the same product conducted with patients in other countries will be successful. Moreover, any safety issues, product recalls or other incidents related to products approved and marketed in one jurisdiction may impact approval of those products in another jurisdiction. If YS Group is unable to obtain regulatory approval for its product candidates in one or more jurisdictions, or any approval contains significant limitations, or are imposed on certain product candidates, YS Group may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of its product candidates or any other product candidate that it may in-license, acquire or develop in the future. The regulatory framework governing the biopharmaceutical industry is also subject to change and amendment from time to time. Any regulatory changes or amendment may materially and adversely impact YS Group’s business, financial condition, results of operations and prospects.

YS Group’s marketed product and product candidates may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which could harm YS Group’s business.

The regulations that govern regulatory approvals, pricing and reimbursement for new immunological biologics vary widely from country to country. YS Group might obtain regulatory approval for a drug in a particular country, but then be subject to price regulations that delay YS Group’s commercial launch of the drug and negatively impact the revenues it is able to generate from the sale of the drug in that country. Adverse pricing limitations may hinder YS Group’s ability to recoup its investment in its marketed product and/or one or more product candidates, even if they obtain regulatory approval. For example, according to Opinions on Reforming the Review and Approval System for Pharmaceutical Products and Medical Devices, issued by the State Council in August 2015, the enterprises applying

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for drug approval in China will be required to undertake that the selling price of new drugs on the PRC market shall not be higher than the price of the product in its country of origin or the comparable market prices of the products in China’s neighboring markets, as applicable.

YS Group’s ability to commercialize any product successfully also depends in part on the extent to which reimbursement for such product and related treatments will be available from government health administration authorities, private health insurers and other organizations. Patients who are provided medical treatment for their conditions generally rely on third-party payers to reimburse all or part of the costs associated with their treatment. Government authorities and third-party payers, such as private health insurers and health maintenance organizations, decide which products and treatments they will cover and the amount of reimbursement, which is critical to the market acceptance of new products. There may be significant delays in obtaining reimbursement for approved product candidates, and coverage may be more limited than the purposes for which the product is approved by regulatory authorities. Moreover, eligibility for reimbursement does not imply that any product will be paid for in all cases or at a rate that covers YS Group’s costs. Interim payments for new products, if applicable, may also not be sufficient to cover YS Group’s costs and may not be made permanent. Payment rates and third-party payer coverage may be reduced for a number of commercial and regulatory reasons, all of which may adversely affect the commercialization of YS Group’s marketed product or any product candidate.

As YS Group intends to seek approval to market its marketed product and product candidates in multiple jurisdictions, it will be subject to various rules and regulations regarding coverage and reimbursement. Moreover, eligibility for reimbursement in China, Singapore or other jurisdictions does not imply that any product will be paid for in all cases or at a rate that covers YS Group’s costs, including licensing fees, research, development, manufacture, sale and distribution. Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services. Moreover, in many jurisdictions, the pricing of products and biologics is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining regulatory approval of a product candidate. As a result, net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs, or private payers in the case of third-party reimbursement.

YS Group’s marketed product or product candidates may not be included in the list of products that can be reimbursed by mandatory medical insurance in China. YS Group cannot be sure that reimbursement will be available for any product that it commercializes and, if reimbursement is available, what the level of reimbursement will be. The price of rabies vaccine in China also increases significantly. Patients may be unlikely to use certain of YS Group’s marketed product and product candidates if coverage is not provided and reimbursement is inadequate to cover a significant portion of the cost of such marketed product and product candidates. Because some of YS Group’s marketed product and product candidates have a higher cost of goods than conventional therapies, and may require long-term follow-up evaluations, the risk that coverage and reimbursement rates may be inadequate for YS Group to achieve profitability may be greater. In addition, YS Group’s inability to promptly obtain coverage and profitable payment rates from both government-funded and private payers for any approved products could have a material adverse effect on its results of operations, its ability to raise capital needed to commercialize product candidates and its overall financial condition. Obtaining reimbursement for YS Group’s marketed product may be particularly difficult because of the higher prices often associated with products administered under the supervision of a physician. Therefore, the availability of third-party reimbursement may significantly impact the demand for, or the price of, any product for which YS Group obtains regulatory approval. If reimbursement is not available or is available only to limited levels, YS Group may not be able to successfully commercialize its marketed product or any product candidate that it successfully develops, which could have a material adverse effect on YS Group’s results of operations, its ability to raise capital needed to commercialize product candidates and its financial condition.

YS Group may not be able to be successfully prequalified by province-level CDCs of its target provinces or secure subsequent product orders.

YS Group expects the county-level CDCs, to be its primary customers in China. YS Group is focused on China’s private vaccine market, and substantially all of its marketed product and product candidates are required to be prequalified by province-level CDCs of YS Group’s target provinces through a bidding process before undertaking any sales.

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The province-level CDCs usually select one or more suppliers for the same type of vaccine, taking into consideration, among other things, the quality and price of the products and the service and reputation of the suppliers. YS Group may be unsuccessful in winning bids in the tender process to prequalify its products at the provincial level. If YS Group fails to obtain the required prequalification, it will lose market share to its competitors, and YS Group’s revenue and profitability will be adversely affected. Even if YS Group’s vaccines are prequalified, YS Group cannot guarantee that it can maintain the standards and make continuous improvements to keep up with evolving market demands and regulations to achieve sustainability of the prequalification status, and neither can YS Group guarantee its ability to secure purchase orders from county-level CDCs. If CDCs do not purchase YS Group’s products, or the purchase volume is lower than expected, its business, financial conditions and results of operations would be adversely affected.

YS Group’s sales to CDCs subject YS Group to certain risks related to doing business with public authorities.

YS Group sells its vaccine products in China to CDCs and participate in public tenders hosted by them, which exposes YS Group to certain risks related to doing business with public authorities. For example, although YS Group signs contracts with them for sales of its vaccine products, and such contracts generally stipulate the payment time and method as well as dispute resolution, YS Group has little or no control over their procurement decisions or payment cycles, and the CDCs that contract to purchase YS Group’s products may reduce or cancel orders, or demand price adjustments or other changes to their contracts with YS Group without its consent. Furthermore, YS Group may experience delays in payments from these CDCs due to bureaucratic processes, changes in governmental policies or budget constraints, which could impact its cash flow and financial condition. YS Group’s participation and reliance on public tenders may also expose it to political changes and policy fluctuations, as the public health budget, regulatory guidelines, and the overall health care landscape may be influenced. For example, changes in the personnel of CDCs that purchase YS Group’s products may result in changes or delays to, or cancellations of, their purchase commitments due to, among others, differing policy and budgetary agendas of the personnel involved. Furthermore, public tenders are typically highly competitive and governed by strict procurement regulations, which might lead to unpredictable outcomes and increased bidding costs. Any of the foregoing actions taken by the authorities could have a material adverse effect on YS Group’s results of operations and expected earnings, or result in its failure to meet, or having to adjust downwards, its sales estimates.

In addition, many of the remedies that are available to YS Group when dealing with private parties, such as making claims for breach of contract or taking other legal actions, may not be practicable in YS Group’s dealings with CDCs. YS Group’s ability to seek legal remedies in instances of disputes with CDCs may be more limited than when interacting with private entities. For example, in the event of any dispute with a CDC, YS Group may find pursuing formal legal action against a CDC might not be the most viable or beneficial strategy due to potential reputational harm or the risk of straining future relationships. It may be in its best interest to, instead, resolve such disputes through other means, such as negotiations or third-party mediation. However, it should be noted that the outcomes of these alternatives may not be as or more advantageous and favorable to YS Group than those YS Group would have obtained from traditional formal legal proceedings.

YS Group has been involved, and may continue to be involved, in claims, disputes, litigation, arbitration or other legal and administrative proceedings in the ordinary course of business.

YS Group has been involved, and may continue to be involved, in claims, disputes, litigation, arbitration or other legal and administrative proceedings in its ordinary course of business. These may concern issues relating to, among others, quality issues relating to YS Group’s marketed product and product candidates, the manufacturing, storage, logistics and commercialization processes relating to its marketed product and product candidates, administrative actions, authority, procedures and decisions, product liability, environmental matters, breach of contract, construction projects, employment or labor disputes, and infringement of intellectual property rights.

YS Group is not involved in any ongoing litigation or legal proceedings that could materially and adversely affect the commercialization and R&D of YS Group’s product and product candidates, or its business and results of operations. However, YS Group cannot assure you that there will be no future disputes, litigation, arbitration, administrative investigation or other legal and administrative proceedings initiated by YS Group or brought against YS Group, with or without merit. YS Group may involve additional administrative proceedings against it or initiated by YS Group against the competent regulatory authorities to protect its legal rights and interests in the future. Any such claims, disputes or legal proceedings may result in substantial costs, disruption of YS Group’s business operations, diversion of resources

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and material harm to YS Group’s reputation. Furthermore, claims, disputes or legal proceedings against YS Group may be due to defective supplies sold to YS Group by YS Group’s suppliers, who may not be able to indemnify YS Group in a timely manner, or at all, for any costs that YS Group incurs as a result of such claims, disputes and legal proceedings.

YS Group may not be able to manage its sales and marketing personnel effectively, and may consequently be subject to penalties pursuant to anti-corruption laws. YS Group’s reputation, business, prospects and brand may be materially and adversely affected by actions taken by them.

YS Group is subject to anti-bribery laws in China that generally prohibit companies and their intermediaries from making payments, offering property or other illegal benefits to government officials for the purpose of obtaining or retaining business or securing any other improper advantage. Although YS Group has policies and procedures designed to ensure that its employees and its agents comply with anti-bribery laws, there is no assurance that such policies or procedures will prevent YS Group’s agents, employees and intermediaries from engaging in bribery. For example, although YS Group’s company policies prohibit employees from making improper payments to CDCs or otherwise engaging in improper activities to influence the procurement decisions of drug products by CDCs, YS Group may not be able to manage its sales and marketing employees effectively, as their compensation is primarily linked to their performance. Historically, certain former employees engaged in related misconduct and these former employees have been prosecuted. YS Group has taken enhanced internal control measures, including setting up a supervision group, reinforcing internal auditing efforts, and enhancing training and education on a regular basis in respect of anti-corruption laws to its employees. YS Group cannot assure you that these enhanced internal control measures will avoid the occurrence of similar events in the future or that its employees will not violate the anti-bribery laws of China, the United States and other jurisdictions. Such violations could have a material adverse effect on YS Group’s reputation, business, prospects and brand. Moreover, YS Group could be liable for actions taken by these employees, including any violation of applicable laws in connection with the marketing or sales of products, such as China’s anti-corruption laws and the Foreign Corrupt Practices Act of the United States, or the FCPA. In particular, if employees make any payments that are forbidden under the FCPA, YS Group could be subject to civil and criminal penalties imposed by the U.S. government. In addition, PRC laws regarding what types of payments to promote or sell products are impermissible in the pharmaceutical industry are not always clear. As a result, YS Group, its employees or affiliates could make certain payments in connection with the promotion or sales of YS Group’s products or other activities involving YS Group’s products which at the time are considered by YS Group to be legal but are later deemed impermissible by the PRC government. Any of the circumstances may materially and adversely affect YS Group’s business, results of operations and financial condition.

Failure to comply with anti-bribery laws could disrupt YS Group’s business and lead to criminal and civil penalties, including imprisonment, criminal and civil fines, loss of export licenses, and suspension of YS Group’s qualification to do business with government authorities and CDCs. Other remedial measures may include further changes or enhancements to YS Group’s procedures, policies, and controls and potential personnel changes and/or disciplinary actions, any of which could have a material adverse effect on YS Group’s business, financial condition, results of operations and liquidity. YS Group’s reputation could be tarnished by any allegation or impropriety that YS Group violated or may have violated such laws.

Product liability claims or lawsuits could cause YS Group to incur substantial liabilities.

YS Group faces an inherent risk of product liability exposure related to the use of its marketed product and the use of its product candidates in clinical trials or any product candidates. YS Group has been and may in the future continue to be involved in product liability claims. Historically, YS Group encountered certain civil and administrative proceedings in respect of its products. If YS Group cannot successfully defend against claims that the use of such product or product candidates, including any of its product candidates that have received regulatory approval, caused injuries, YS Group could incur substantial liabilities. YS Group may be held liable and/or suffer reputation damage even if YS Group is not at fault. Regardless of merit or eventual outcome, liability claims may result in:

        decreased demand for YS Group’s marketed product and product candidates;

        product recalls, withdrawals or labeling, marketing or promotional restrictions;

        significant negative media attention and reputational damage;

        withdrawal of clinical trial participants and inability to continue clinical trials;

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        hindered relationships with strategic partners, third party service providers, or regulatory authorities;

        loss of existing or potential collaborations or contracts;

        a negative impact on YS Group’s ability to recruit and retain key personnel;

        increased insurance premiums or inability to obtain insurance coverage;

        significant costs to defend the related litigation;

        substantial monetary awards to trial participants or patients;

        inability to commercialize any product candidates that YS Group may develop;

        initiation of scrutiny investigations by regulators and authorities, leading to more stringent regulatory requirements;

        a diversion of management’s time and YS Group’s resources; and

        a decline in YS Group’s share price.

The Vaccine Administration Law of the PRC (the “VAL”), which was promulgated on June 29, 2019 and came into effect on December 1, 2019, requires YS Group to have compulsory liability insurance to cover vaccine product liability claims. The specific measures for implementing the compulsory liability insurance system for vaccines shall be formulated by the drug administrative department of the State Council in conjunction with the competent health department of the State Council and the insurance regulatory authority. To be implemented, the NMPA published a draft of the Administrative Measures on Vaccines Liability Compulsory Insurance for public comments in October 2020. To date, the draft has not become effective. Once passed, it will function jointly with the VAL to regulate the purchase of vaccines liability compulsory insurance, among others, including the liability limitation and methods for covering insurance. As these laws and regulations are relatively new and evolving, it is uncertain and in flux how the insurance companies and the governmental authorities will implement and carry out them in practice. YS Group cannot assure you it will be fully compliant with these requirements, or that it will be able to enter into insurance agreements on commercially reasonable terms or at all, or that available insurance policies will fully cover YS Group’s potential liabilities arising from its approved vaccines. As of the date of this prospectus, YS Group has maintained compulsory liability insurance for YSJA™ rabies vaccine in China. In addition, YS Group maintains liability insurance for its ongoing clinical trials (which covers the patient human clinical trial liabilities including, among others, bodily injury) in accordance with the relevant local laws and regulations where they are conducted. However, YS Group’s insurance coverage may not fully cover its potential liabilities. Inability to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims could prevent or inhibit the commercialization of products YS Group develops, alone or with its collaborators.

YS Group may be restricted from transferring its scientific data abroad and subject to regulations on human genetic resources.

On March 17, 2018, the General Office of the State Council promulgated the Measures for the Management of Scientific Data (the “Scientific Data Measures”), which provides a broad definition of scientific data and relevant rules for the management of scientific data. According to the Scientific Data Measures, enterprises in China must seek governmental approval before any scientific data involving a “state secret” may be transferred abroad or to foreign parties. Further, any researcher conducting research funded at least in part by the Chinese government is required to submit relevant scientific data for management by the entity to which such researcher is affiliated before such data may be published in any foreign academic journal. Although vast majority of the R&D projects have been funded by YS Group since the inception of the company, certain R&D projects were partially benefited from grants provided by Chinese governments. As of the date of this prospectus, YS Group has not provided any scientific data involving “state secret” in the course of foreign communication and cooperation, and therefore YS Group believes that it does not need to obtain relevant permission and approvals pursuant to the Scientific Data Measures. Given the term “state secret” is not clearly defined in the Scientific Data Measures, YS Group cannot assure you that it can always identify if there is any “state secret” in its scientific data and obtain relevant approvals for sending scientific data (such as the results of YS Group’s preclinical studies or clinical trials conducted within China) abroad or to its foreign partners. If YS Group is unable to obtain necessary approvals in a timely manner, or at all, its R&D of product candidates may be hindered,

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which could materially adversely affect YS Group’s business, financial condition, results of operations and prospects. If the relevant government authorities consider the transmission of YS Group’s scientific data to be in violation of the requirements under the Scientific Data Measures, YS Group may be subject to rectification and other administrative penalties imposed by those government authorities.

According to the Regulation on the Management of Human Genetic Resources, as promulgated by the State Council on May 28, 2019, which became effective on July 1, 2019, in case foreign organizations and institutions established or actually controlled by foreign organizations or individuals intend to use PRC human genetic resources to carry out scientific research activities, such activities shall abide by PRC laws and regulations and be carried out in cooperation with scientific research institutions, higher education institutions, medical institutions and enterprises in China. Where clinical institutions, to obtain marketing licenses of relevant drugs and medical devices in China, make use of PRC human genetic resources to carry out international cooperation in clinical trials in clinical institutions not involving the exit of PRC human genetic resource materials, approval is not needed. Instead, the cooperating parties shall, before conducting clinical trials, submit the types, quantities and uses of the human genetic resources involved to the administrative department of science and technology for filing. The Implementation Measures of Administrative Regulations of the PRC on Human Genetic Resources, which further specify the definition of foreign entities, filing of international cooperation and relevant administrative penalties, was promulgated by the Ministry of Science and Technology on May 26, 2023, and came into effect on July 1, 2023. As of the date of this prospectus, YS Group’s current clinical trials in China, which involve PRC human genetic resources, are conducted in an international cooperation manner between YS Group and PRC institutions and enterprises, and such cooperation has been approved by or filed with the competent authority. However, as uncertainties exist regarding the interpretation and implementation of these regulations, YS Group cannot assure you it has been and will be fully in compliance with these regulations, including obtaining the filings or approvals in a timely manner or at all. Any failure to be compliant with these regulations may result in various penalties or other regulatory actions being imposed on YS Group, such as confiscation of the revenues that were generated through the unauthorized activities, the imposition of fines, which could have an adverse effect on YS Group’s business and results of operations.

YS Group and its CROs are subject to stringent privacy laws, information security policies and contractual obligations related to data privacy and security, and YS Group may be exposed to risks related to its management of the medical data of subjects enrolled in YS Group’s clinical trials and other personal or sensitive information.

YS Group’s CROs, on behalf of YS Group, routinely receive, collect, generate, store, process, transmit and maintain medical data treatment records and other personal details of subjects enrolled in YS Group’s clinical trials, along with other personal or sensitive information. As such, YS Group and its CROs are subject to the relevant data protection and privacy laws, directives, regulations and standards that apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data in the jurisdictions in which YS Group operates and conduct its clinical trials, as well as contractual obligations. These data protection and privacy law regimes continue to evolve and may result in ever-increasing public scrutiny and escalating levels of enforcement and sanctions and increased costs of compliance. Failure to comply with any of these laws could result in enforcement action against YS Group, including fines, imprisonment of company officials and public censure, claims for damages by customers and other affected individuals, damage to YS Group’s reputation and loss of goodwill, any of which could have a material adverse effect on YS Group’s business, financial condition, and results of operations or prospects.

Such data protection and privacy laws and regulations generally require clinical trial sponsors and operators and their personnel to protect the privacy of their enrolled subjects and prohibit unauthorized disclosure of personal information. If such institutions or personnel divulge the patients’ private or medical records without their consent, they will be held liable for damage caused thereby. While YS Group has taken measures to maintain the confidentiality of the medical records and personal data of patients enrolled in its clinical trials, these measures may not be always effective. YS Group’s information technology systems could be breached through hacking activities, and personal information could be leaked due to theft or misuse of personal information arising from misconduct or negligence. In addition, YS Group’s clinical trials also involve professionals from third-party institutions. YS Group cannot ensure that such persons will always comply with its confidentiality agreements and data privacy measures. Furthermore, any change in such laws and regulations could affect YS Group’s ability to use medical data and subject YS Group to liability for the use of such data for previously permitted purposes. Any failure to protect the confidentiality of patients’ medical records and personal data, or any restriction on or liability as a result of, YS Group’s use of medical data, could have a material adverse effect on its business, financial condition, reputation and results of operations.

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Moreover, regulatory authorities in China have implemented and are considering implementing a number of additional legislative and regulatory proposals concerning data protection. For instance, the PRC Cyber Security Law, which became effective in June 2017, created China’s first national-level information security classified protection system for “network operators,” which may include all entities in China that own, manage provide services or use over the internet or other information networks. Drafts of some department regulations for such protection have been published, including the Data Security Management Measures (Draft for Comments) published in May 2019, which may, upon issuance, require security review before transferring human health-related data out of China. On July 7, 2022, the Cyberspace Administration of China published Outbound Data Transfer Security Assessment Measures, which became effective on September 1, 2022 and outlined the security assessment process for outbound data transfer. In addition, certain industry-specific laws and regulations may affect the collection and transfer of personal data in China, such as the Regulation on the Management of Human Genetic Resources. It is possible that these laws, regulations and guidelines may be interpreted and applied in a manner that is inconsistent with YS Group’s practices, which could potentially result in confiscation of YS Group’s human genetic resource samples and associated data and subject YS Group to administrative fines, penalties and negative publicity.

YS Group’s business operations are subject to the regulatory, economic, environmental, and competitive conditions and changes within the Southeast Asia region.

YS Group intends to expand its business and operations to overseas markets such as Southeast Asian countries, and thus may be governed by the laws, regulations and government policies in relevant Southeast Asia jurisdictions, and its business and future growth is dependent on the political, economic, regulatory and social conditions in these countries. There may also be political and social factors influencing government policy-making that will lead to a major shift towards a higher degree of governmental control over the biopharmaceutical industry in the relevant jurisdictions. Such a shift may reduce YS Group’s profitability in the long run and hence have an adverse effect on its financial condition, results of operations and prospects. In particular, potential changes in import/export regulations, issues related to intellectual property protection, and potential barriers to entry in these new markets could impact YS Group’s operations. In addition, competition laws and regulations of certain Southeast Asia countries may limit its growth and subject YS Group to antitrust and merger control investigations. YS Group may be subject to financial or other penalties or be prohibited from engaging in certain types of businesses or practices as a result of such investigations. YS Biopharma and its subsidiaries are governed by the laws, regulations and government policies in relevant Southeast Asia jurisdictions, and its business and future growth is dependent on the political, economic, regulatory and social conditions in these countries. Any material changes in the regulatory, economic, environmental or competitive conditions in those countries may also have a material adverse effect on its business, financial condition, results of operations, cash flows and prospects.

If YS Group fails to comply with environmental, health and safety laws and regulations of the PRC, it could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of its business.

YS Group is subject to numerous environmental, health and safety laws and regulations, including those governing laboratory and manufacturing procedures and the handling, use, storage, discharge, treatment and disposal of hazardous materials, sewage and wastes. Its operations primarily occur in China and involve the use of hazardous materials, including chemical materials. Its operations also produce hazardous products and waste. Therefore, YS Group is subject to PRC laws and regulations concerning the discharge of hazardous materials, wastewater, gaseous waste and solid waste during its R&D of products. YS Group has engaged competent third-party contractors for the transfer and disposal of these materials and wastes. However, it may not guarantee you that it, at all times, has complied or would comply fully with relevant regulations. Any violation of these regulations may result in substantial fines, criminal sanctions, revocations of operating permits, shutdown of YS Group’s facilities and obligation to take corrective measures.

YS Group cannot assure you of the elimination of the risk of contamination or injury from these materials. In the event of contamination or injury resulting from its use of hazardous materials or its or third parties’ disposal of hazardous materials, it could be held liable for any resulting damages, and any liability could exceed its resources.

Although YS Group maintains workers’ compensation insurance to cover costs and expenses incurred from on-the-job injuries to its employees and third-party liability insurance for injuries caused by unexpected seepage, pollution or contamination, such insurance may not provide adequate coverage against potential liabilities. Furthermore, the PRC government may take steps towards the adoption of more stringent environmental regulations. Due to the possibility

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of unanticipated regulatory or other developments, the amount and timing of future environmental expenditures may vary substantially from those currently anticipated. If there is any unanticipated change in the environmental regulations, YS Group may need to incur substantial capital expenditures to install, replace, upgrade or supplement its manufacturing facilities and equipment or make operational changes to limit any adverse impact or potential adverse impact on the environment in order to comply with new environmental protection laws and regulations. If such costs become prohibitively expensive, YS Group may be forced to cease certain aspects of its business operations.

The pharmaceutical industry in China is highly regulated and such regulations are subject to change which may affect approval and commercialization of YS Group’s marketed product and product candidates.

The pharmaceutical industry in China is subject to comprehensive government regulation and supervision, encompassing the approval, registration, manufacturing, packaging, licensing and marketing of new drugs and vaccines and their development. In recent years, the regulatory framework in China regarding the pharmaceutical industry has undergone significant changes, and YS Group expects that it will continue to undergo significant changes. Any such changes or amendments may result in increased compliance costs on YS Group’s business or cause delays in or prevent the successful development or commercialization of its product and product candidates in China and reduce the current benefits it believes are available to YS Group from development and manufacturing in China. In addition, the interpretation and enforcement of these laws and regulations involve significant uncertainty and the possible introduction of new laws or changes to existing laws pose potential risks. Chinese authorities have become increasingly vigilant in enforcing laws in the pharmaceutical industry and any failure by YS Group or its partners to maintain compliance with applicable laws and regulations or obtain and maintain required licenses, permits and filings may result in the suspension or termination of YS Group’s business activities in China. YS Group believes its strategy and approach is aligned with the Chinese government’s policies in all material respects, but it cannot ensure that its strategy and approach will continue to be aligned.

Risks Related to Manufacturing and Commercialization

YS Group currently relies on the manufacturing facilities for the marketed product and are still in the process of developing additional facilities at other sites. Any disruption of YS Group’s current and new facilities or their failure to meet GMP regulatory compliance or other regulatory requirements may have a material adverse effect on YS Group’s business, financial condition and results of operations.

There are multiple manufacturing plants in Shenyang which are currently producing its marketed product and clinical samples. YS Group plans to expand or upgrade productivity based on its current manufacture site in Shenyang and Singapore for manufacturing its marketed product and product candidates in the future. Upon completion of the manufacturing process, YS Group first stores the finished goods of its vaccine products in its Shenyang facilities, which are then shipped to YS Group’s regional facilities for temporary transit storage before subsequent delivery. YS Group does not maintain back-up facilities, and depend on current facilities for the continued operation of its business. Natural disasters or other unanticipated catastrophic events, including power interruptions, water shortage, storms, fires, earthquakes, terrorist attacks and wars, as well as changes in governmental planning for the land underlying these facilities, could significantly impair the ability of YS Group to manufacture products and operate business and destroy any inventory located in those facilities. The occurrence of such an event could significantly disrupt YS Group’s business and materially reduce its revenues and profitability.

In addition, YS Group is required to comply with applicable GMP and other regulatory requirements, including regulatory standards with respect to manufacturing process or product quality and safety, cold-chain logistics during product delivery, and the corresponding maintenance, recordkeeping and documentation standards. YS Group’s manufacturing facilities must be approved by governmental authorities before YS Group may use them to commercially manufacture products and are subject to inspection by regulatory agencies. Moreover, YS Group’s marketed product must pass quality inspection prior to being permitted to hit the market for sale. Any changes in or updates to the GMP standards could impose higher or different regulatory requirements on YS Group’s manufacturing, such as the manufacturing process, standard, technology, personnel and facilities, and YS Group cannot assure you that it will be able to meet the regulatory changes in a timely manner or at all, which could materially and adversely affect YS Group’s business operations, results of operations, reputation and prospects. YS Group is also responsible for maintaining effective cold-chain logistics during the vaccine transportation process to the county-level CDCs. If YS Group fails to comply

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with applicable regulatory requirements at any stage during the manufacturing and transportation process, such as, regulatory standards with respect to manufacturing and transportation processes or product quality, safety and potency, YS Group may be subject to sanctions which could be severe, including but not limited to:

        monetary penalties;

        product recalls or seizure;

        injunctions;

        refusal of regulatory agencies to review pending manufacturing approval applications or supplements to approval applications;

        total or partial suspension of production;

        confiscation of products;

        withdrawals, revocation or non-renewal of approvals, license or permits previously issued; and

        criminal prosecution.

Any disruptions or delays at YS Group’s facilities or their failure to meet GMP regulatory compliance or other regulatory requirements would also impair YS Group’s ability to develop and commercialize its product and product candidates, which would adversely affect YS Group’s business and results of operations.

Real or perceived incidents of product contamination caused by YS Group’s marketed product could materially and adversely affect its reputation, results of operations and financial conditions, and subject YS Group to regulatory actions and contractual liabilities.

Product safety and quality are critical to YS Group’s business. For example, YS Group’s production was halted for certain months in 2013 to address contamination issues. YS Group cannot assure you it will not encounter similar incidents in the future. YS Group’s reputation, results of operations and financial condition could be materially and adversely affected by product contamination and its association with any contamination incidents. In addition, the mere publication of information or speculation asserting that YS Group’s marketed product contains or has contained any contaminants, over which YS Group has no control, could damage YS Group’s reputation and have a material adverse effect on YS Group, regardless of whether such information or speculation have any factual basis. YS Group may be exposed to a number of harmful consequences due to product contamination, including:

        injury or death of patients;

        severe decrease in the demand for, and sales of, the relevant products;

        recall or withdrawal of the relevant products;

        revocation of regulatory approvals for the relevant products or the relevant production facilities;

        damage to the brand name of YS Group’s marketed product and its reputation;

        stricter and more frequent regulatory inspections of YS Group’s manufacturing facilities and products;

        inability to participate in the centralized tender process;

        delays or disruptions in YS Group’s ability to develop new products or expand into new markets;

        exposure to lawsuits and regulatory investigation relating to the relevant products that result in liabilities, fines or penalties; and

        breach of contract with YS Group’s major customers and business partners.

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Failure to manage the normal manufacturing capacity properly may materially and adversely affect YS Group’s revenues and profitability.

The normal manufacturing capacity is calculated based on the designed capacity of YS Group’s manufacturing facilities, after taking into account any reduction in capacity caused by, among other factors, suspension of manufacturing for renewal of GMP certification, if required, maintenance or expansion. The normal manufacturing capacity for a product directly determines the maximum amount of immunological biologics that could be produced in a given period and the volume of finished products that will be available for sale in subsequent periods.

Proper management of the normal manufacturing capacity, and in particular, minimizing the time for renewing GMP certification, if required, and maintaining GMP-compliant conditions and sufficient GMP-compliant back-up capacity in preparation for suspension of manufacturing caused by planned or unexpected events, is critical to maintaining a steady supply of products and a stable growth in YS Group’s revenues. In addition, if the normal manufacturing capacity is substantially lower than the designed capacity, idle production costs, a major component of YS Group’s cost of sales, may increase significantly.

Given the uncertainties inherent in the biopharmaceutical industry, YS Group has been actively taking measures to improve the management of the normal manufacturing capacity, including building new manufacturing capacity, including building new manufacturing facilities. YS Group’s contingency planning also includes measures to mitigate the impact of reduced manufacturing capacity, such as adoption of production process and installation of instruments or equipment which are common and versatile for multiple product uses in the future. However, YS Group cannot assure you that such measures will be successful. The failure of such measures may significantly reduce products available for sale in subsequent periods and/or increase the idle costs, materially and adversely affecting YS Group’s revenues and profitability.

If YS Group is unable to conduct effective sales and marketing, its business, financial condition, results of operations and prospects could be adversely affected.

Successful sales and marketing are crucial for YS Group to increase the market penetration and sales of its marketed product and expand its market coverage. If YS Group fails to attract, motivate and retain qualified commercialization team members and maintain an effective system to manage YS Group’s commercialization team, or if its commercialization team underperforms, YS Group may experience disruptions to its business, declines in sales volume and less favorable market penetration, and fail to compete effectively. If YS Group is unable to increase or maintain the effectiveness and efficiency of its sales and marketing activities, its sales volumes, geographic coverage and business prospects could also be adversely affected. In addition, YS Group’s sales and marketing efforts depend in part on the functions of its external service providers. While YS Group implements systematic measures to manage its external service providers, such engagement may expose YS Group to certain risks, including: (1) failure to collect receivables on a timely basis or effectively; (2) failure to possess, maintain or develop the resources and capabilities required as a service provider; (3) failure to maintain or renew relevant qualifications; (4) engaging in non-compliant conducts, especially in those areas out of YS Group’s direct supervision; (5) failure to protect YS Group’s proprietary information and intellectual properties despite of the contractual obligation; and (6) failure to report adverse events or side effects, or process potential recalls in a timely manner. Any of these incidents may have an adverse impact on YS Group’s business and results of operations.

Failure to establish a complete and effective network of cold-chain logistics providers or otherwise maintain effective and comprehensive cold-chain logistics during transportation of YS Group’s vaccine products may cause great risk of damage to YS Group’s vaccine products and YS Group’s reputation and business would suffer.

Vaccines are sensitive biological products. Some vaccines are sensitive to freezing, some to heat and others to light. Vaccine manufacturers are required to sell directly to county-level CDCs and take charge of quality control during transportation until the products are delivered to the county-level CDCs. Furthermore, the vaccines must be transported through a cold-chain within the temperature range provided by relevant requirements. To ensure YS Group’s compliance with relevant laws and regulations and maintain product quality and potency, YS Group’s vaccines must be stored in good conditions through cold-chain logistics providers. In order to maintain a reliable vaccine cold chain at manufacture level before delivery to its customers, YS Group is required to, among others, establish a complete and effective network of cold-chain logistics providers to store vaccines and diluents within the approved temperature range at all sites, pack and transport vaccines to and from outreach sites according to recommended procedures, and

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perform regular oversight and monitor on the delivery process to YS Group’s customers, or other safety, efficacy and quality issues. YS Group was involved and may in the future be involved in certain administrative proceedings concerning the temperature conditions during the testing and transportation by third parties for YS Group’s marketed product, which might have had affected the testing results and resulted in negative implications for YS Group’s product quality and reputation. If YS Group or third parties YS Group cooperated with fail to comply with cold-chain logistics during transportation, such as during the delivery process to customers and the inspection process, YS Group’s vaccine products may be exposed to inappropriate temperatures or other improper storage conditions and subject to potency diminishment or even potency loss. In this case, all the vaccine products are subject to quality damage and may need to be destroyed. As a result, YS Group’s reputation and business would suffer. YS Group may also be exposed to third-party risks with respect to the cold-chain logistics concerning its entire commercialization process, some of which are beyond YS Group’s control.

Counterfeits of YS Group’s products and illegal vaccines could negatively affect its sales and its reputation and expose YS Group to liability claims.

Certain vaccines distributed or sold may be manufactured without proper licenses or approvals, or are fraudulently mislabeled with respect to their content or manufacturers. These products are generally referred to as counterfeit vaccine products. The counterfeit vaccine product control and enforcement system, particularly in developing markets might be inadequate to discourage or eliminate the manufacturing and sale of counterfeit vaccine products imitating YS Group’s products. Since counterfeit vaccine products in many cases have very similar appearances with the authentic vaccine products but are generally sold at lower prices, counterfeits of YS Group’s products can quickly erode YS Group’s sales volume of the relevant products. Moreover, counterfeit products may or may not have the same chemical composition as YS Group’s products do, which may make them less effective than YS Group’s products, entirely ineffective or more likely to cause severe adverse side effects. Despite its best efforts, YS Group may not be able to entirely prevent or address such issues due to limitations in regulation enforcement or tracking technologies. This could expose YS Group to negative publicity, reputational damage, fines and other administrative penalties, and may even result in litigation against YS Group. The existence and prevalence of counterfeit vaccine products, products of inferior quality and other unqualified products in recent years from time to time may reinforce the negative image in general of all pharmaceutical products manufactured in China among consumers, and may harm the reputation of companies like YS Group.

Failure to maintain and predict inventory levels in line with demand for YS Group’s marketed product could cause YS Group to lose sales or face excess inventory risks and holding costs, which could have a material adverse effect on YS Group’s business, financial condition and results of operations.

YS Group maintains an inventory level based on anticipated product demand and production schedule. However, YS Group cannot guarantee that it will be able to maintain proper inventory levels for marketed product and raw materials. Inventory levels in excess of product demand may result in inventory write-downs, expiration of products and increase in inventory holding costs. Conversely, YS Group may experience inventory shortages if YS Group underestimates demand for its products, which may result in unfilled orders and have a negative impact on its relationship with its customers. To manage its inventory level, YS Group has implemented certain measures. See “Business — Inventory Management.” However, YS Group cannot assure you that these measures will be effective and its inventory level will decrease in the future. If YS Group’s inventory level increases further in the future, its financial condition and cash flow could be materially and adversely affected.

YS Group’s business depends on the use of raw materials, and a decrease in the supply or an increase in the cost of these raw materials could materially and adversely affect its business, financial condition and results of operations.

To manufacture its products, YS Group must obtain sufficient quantities of high-quality raw materials at commercially acceptable prices and in a timely manner. Any disruption in production or inability of YS Group’s suppliers to produce and provide adequate quantities to meet its needs could impair YS Group’s ability to operate its business on a day-to-day basis and to continue its R&D of YS Group’s future product candidates. Moreover, YS Group expects its demand for such materials to increase as YS Group expands its business scale and commercialize its products, and YS Group cannot guarantee that current suppliers have the capacity to meet its demand. YS Group is also exposed to the possibility of increased costs, which YS Group may not be able to pass on to customers and as a result, lower its profitability. In addition, YS Group might need to import certain raw materials from overseas suppliers, which might subject YS Group and its overseas suppliers to compliance cost with respect to import and export regulations and

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relevant inspection and quarantine requirements. In addition, although YS Group has implemented quality inspection procedures on such materials before they are used in its manufacturing processes and required its suppliers to maintain high quality standards, YS Group cannot guarantee that it will be able to secure sufficient quantities of raw materials at high quality standards, nor detect all quality issues in the supplies YS Group use. YS Group cannot assure you that these third parties or itself will be able to maintain and renew all filings, licenses, permits and approvals necessary for their operations, supply of raw materials or comply with all applicable laws and regulations. Failure to do so by them may lead to interruption in their business operations, which in turn may result in shortage of the supplies to YS Group. If YS Group is unable to do so and the quality of its products suffer as a result, YS Group may have to delay market supply, clinical trials and regulatory filings, recall its products, be subject to product liability claims, fail to comply with continuing regulatory requirements and incur significant costs to rectify such issue, which may have a material and adverse effect on YS Group’s business, financial condition and results of operations.

YS Group deals with potentially harmful biological materials and other hazardous materials that may cause environmental contamination or injury to others.

YS Group’s R&D programs, clinical trials and manufacturing operations involve the controlled use of potentially harmful biological materials and other hazardous materials, such as pathogenic microbe. YS Group is required to obtain and timely renew relevant approvals, permits and filings in the course of its development and manufacturing activities while it might face challenges or delays or failures in obtaining or renewing these approvals, permits and filings due to unforeseen circumstances or changes in regulatory environments. In particular, the risk of accidental contamination to the environment or injury to YS Group’s employees or others from the use, manufacture, storage, handling or disposal of these materials may not be completely eliminated. In the event of contamination or injury, YS Group could be held liable for any resulting damages, which could exceed its resources or any applicable insurance coverage they may have. Furthermore, governmental agencies could initiate investigations against YS Group, which may result in fines, sanctions, revocations of operating permits, suspension of their operations, closure of YS Group’s facilities or other penalties. YS Group’s reputation may be harmed as well. Furthermore, laws, rules or regulations regarding handling of harmful biological materials and other hazardous materials, or more stringent environmental regulations that may be adopted in the future, may mandate additional protective and other measures against potential contamination or injury caused by these materials, compliance with which could be costly, and YS Group’s profitability could be materially reduced as a result.

Risks Related to YS Group’s Financial Position and Working Capital Need

YS Group has incurred significant losses since its inception. YS Group might incur losses or fail to generate sufficient revenue to achieve satisfactory profitability in the future.

YS Group has incurred and expect to continue to incur significant expenses related to clinical trials and preclinical studies in the future. As of the date of this prospectus, YS Group has one marketed product, YSJA™ rabies vaccine, and YS Group has begun to recognize revenue from sales of YSJA™ rabies vaccine since October 2020. YS Group had net loss of RMB191.8 million, RMB106.0 million and RMB145.5 million ($21.2 million) and RMB174.5 million ($24.3 million) for the fiscal year ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, respectively. YS Group’s future financial position will depend, in part, on the sale of its marketed product, the rate of its future expenditures and its ability to obtain funding through equity or debt financings, strategic collaborations or additional grants. YS Group’s future revenue and profitability will also depend upon the size of any markets in which its product and product candidates have received approval, the commercialization of its product candidates, its manufacturing capabilities, its ability to achieve sufficient market acceptance, secure procurement from CDCs in China and other factors.

YS Group expects to continue to incur significant expenses and operating losses in the foreseeable future. YS Group anticipates that its expenses will increase if and as it:

        experiences the sales growth of YSJA™ rabies vaccine;

        continues to advance the clinical trials and preclinical studies of YS Group’s current pipelines;

        initiates preclinical, clinical or other studies for new product candidates;

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        manufactures materials for clinical trials and for commercial sale;

        seeks regulatory approvals for YS Group’s product candidates that successfully complete clinical trials;

        develops and expands YS Group’s commercialization team to promote the sale of its marketed product and commercialize any products for which YS Group may obtain marketing approval;

        acquires or in-licenses other product candidates and technologies;

        maintains, protects and expands YS Group’s intellectual property portfolio and compliance system;

        attracts and retains skilled personnel; and

        creates or adopts additional infrastructure to support YS Group’s operations as a public company and its product development and planned future commercialization efforts.

YS Group’s ability to become and remain profitable depends on its ability to generate sufficient revenue. Even if YS Group is able to generate revenue from the sale of its products, YS Group may not become profitable and may need to obtain additional funding to continue operations. If YS Group fails to become profitable or are unable to sustain profitability on a continuing basis, YS Group may be unable to continue its operations at planned levels and be forced to reduce its operations. YS Group’s failure to become and remain profitable would decrease the value of YS Group and could impair its ability to raise capital, expand its business or continue its operations. Failure to become and remain profitable may adversely affect the market price of YS Group’s Shares. A decline in the value of YS Group could also cause you to lose all or part of your investment.

YS Group’s financial prospects depend on the sale of its marketed product, and the successful development and approval of its clinical-stage and preclinical stage product candidates.

YS Group’s ability to generate revenue and become profitable depends upon its ability to achieve sales growth of YSJA™ rabies vaccine and to successfully complete the development of, obtain the necessary regulatory approvals for, and commercialize its product candidates. YS Group expects sales of YSJA™ rabies vaccine to generate substantially all of its revenue in the near term. YS Group’s ability to successfully commercialize YSJA™ rabies vaccine and expand its sales will depend on, among other things, YS Group’s ability to maintain proper manufacturing facilities, achieve effective sales and marketing, maintain competitive attractiveness, secure widespread acceptance of this product, maintain compliance with ongoing regulatory requirement, properly price and obtain coverage and adequate reimbursement of this product by governmental authorities, private health insurers and other third-party payors. If YSJA™ rabies vaccine fails to achieve successful sales and further sales expansion, it could have a material adverse effect on YS Group’s business, financial condition and results of operations.

YS Group is also developing multiple product candidates for infectious diseases and cancer. YS Group has invested a significant portion of its efforts and financial resources in the development of its product candidates, and YS Group expects to continue to incur substantial and increasing expenditures through the projected commercialization of these product candidates. None of these product candidates has been approved for marketing in China or any other jurisdiction and may never receive such approval. YS Group’s ability to achieve revenue and profitability is dependent on its ability to expand the sales of YSJA™ rabies vaccine and complete the development of product candidates, obtain necessary regulatory approvals, and have its products manufactured and successfully marketed.

Moreover, because YS Group has limited financial and managerial resources, YS Group focus its product pipelines on R&D programs and product candidates that YS Group identifies for specific indications. As a result, YS Group may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. YS Group’s resource allocation decisions may cause YS Group to fail to capitalize on viable commercial productor profitable market opportunities. YS Group’s spending on current and future R&D programs and product candidates for specific indications may not yield any commercially viable products. If YS Group does not accurately evaluate the commercial potential or target market for a particular product candidate, YS Group may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for YS Group to retain sole development and commercialization rights.

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YS Group may need to obtain substantial additional financing to fund its operations, and a failure to obtain necessary capital when needed would force YS Group to delay, limit, reduce or terminate its product development or commercialization efforts.

In the three fiscal years ended March 31, 2023 and the six months ended September 30, 2023, YS Group primarily funded its operations through investments from investors, bank borrowings, proceeds from the Business Combination and cash from sales of its marketed rabies vaccines and new product launches for the next five years. YS Group believes it will need to spend substantial resources for the commercialization and sales of its marketed product and the R&D and commercialization of its product candidates. YS Group’s future capital requirements depend on many factors, including:

        the commercialization and sale of YS Group’s marketed product and the cost and timing of future commercialization activities for its marketed product and its product candidates, if any of YS Group’s product candidates are approved for marketing, including product manufacturing, marketing, sales and distribution costs;

        the commercialization and sales of YS Group’s product candidates at discovery and clinical stage;

        the progress, results and costs of the clinical, preclinical and other studies of YS Group’s product candidates;

        the timing, receipt and amount of sales of, or royalties or milestone payments on, YS Group’s future products, if any;

        discovery of new product candidates;

        the timing of, and the costs involved in, obtaining regulatory approvals for YS Group’s product candidates;

        the costs involved in preparing, filing, prosecuting patent applications, maintaining, defending and enforcing YS Group’s intellectual property rights, including litigation costs and the outcome of such litigation; and

        the extent to which YS Group acquires or in-license other products or technologies.

YS Group plans to use the outstanding cash, together with bank borrowings and cash from operating activities, to primarily fund YS Group’s future operations. However, if the commercialization of YS Group’s marketed product and product candidates is delayed or terminated, or if expenses increase, YS Group may need additional financing to fund its operations. Additional funds may not be available when YS Group needs them, on terms that are acceptable to YS Group, or at all. YS Group’s ability to raise funds will depend on financial, economic and market conditions and other factors, many of which are beyond its control.

YS Group’s ability to obtain additional financing from exercise of Warrants may be limited. There is no assurance the holders of the Warrants will elect to exercise any of the Warrants, which could impact YS Group’s liquidity position. Whether holders of Warrants will exercise their Warrants, and therefore the amount of cash proceeds YS Group would receive upon exercise, is dependent upon the trading price of the Ordinary Shares. Each Warrant is exercisable for one Ordinary Share at $11.50. Therefore, if and when the trading price of the Ordinary Shares is less than $11.50 per share, YS Group expects that holders of Warrants would not have the financial incentive to exercise their Warrants. YS Group could receive up to approximately $192.6 million if all of the Warrants are exercised for cash, but YS Group would only receive such proceeds if and when the holders of Warrants exercise the Warrants. The Warrants may not be or remain in the money during the period they are exercisable and prior to their expiration and, therefore, it is possible that the Warrants may not be exercised prior to their maturity on March 15, 2028, even if they are in the money, and as such, may expire worthless with minimal proceeds received by YS Group, if any, from the exercise of Warrants. To the extent that any of the Warrants are exercised on a “cashless basis,” YS Group will not receive any proceeds upon such exercise. As a result of the above and coupled with the level of Redemption Rate, YS Group does not expect to rely on the cash exercise of Warrants to fund YS Group’s operations. Instead, YS Group intends to rely on other sources of cash discussed elsewhere in this registration statement to continue to fund YS Group’s operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.” If adequate funds are not available to YS Group on a timely basis, YS Group may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other R&D activities or commercialization for one or more of its product candidates, and in turn will adversely affect YS Group’s business prospects.

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YS Group had net cash outflow from operating activities in the three fiscal years ended March 31, 2023 and the six months ended September 30, 2023 and may continue to experience such cash outflow for the foreseeable future.

YS Group had net cash used in operating activities of RMB246.6 million, RMB173.5 million, RMB182.5 million ($26.6 million) and RMB145.8 million and ($20.3 million) for the fiscal year ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, respectively, and YS Group may not be able to achieve or sustain operating cash inflows for the foreseeable future. Although YS Group believes it has sufficient working capital to fund its operations, if in any case YS Group is unable to maintain adequate liquidity for operating activities, YS Group may not be able to fund its R&D and commercialization activities and to meet its capital expenditure requirements, which may have a material adverse effect on YS Group’s business prospects, financial condition and results of operations.

YS Group incurred net liabilities in the past fiscal years, and may continue to have net liabilities in the foreseeable future, which can expose YS Group to liquidity risk.

YS Group had net liabilities (or total deficit) of RMB699.0 million as of March 31, 2022, primarily attributable to the fair value of its convertible redeemable preferred shares and convertible notes which YS Group recognized as liabilities.

While YS Group achieved a positive shift in the financial position with an equity balance of RMB728.5 million ($106 million) as of March 31, 2023 and RMB557.1 million ($77.6 million) as of September 30, 2023, the historical presence of net liabilities (total deficit) in prior years can expose YS Group to the risk of shortfalls in liquidity. Such liquidity risk could necessitate seeking financing from external sources such as external debt, which may not be available on terms favorable or commercially reasonable to YS Group or at all. Any difficulty or failure to meet YS Group’s liquidity needs as and when needed can have a material adverse effect on its business and prospects.

Historically, YS Group had to allocate significant financial resources to serve its large balance of indebtedness, rather than to fund its operating activities and investments in R&D. This allocation constraint may continue to limit YS Group’s R&D capital flexibility and, in turn, adversely affect the development timetable of its product candidates. Moreover, timely interest and principal repayments posed challenges, possibly triggering cross-defaults with other debt, as applicable, as well as limiting YS Group’s ability to obtain further debt financing. While the net liabilities position has been improved with the conversion of the convertible redeemable preferred shares upon the consummation of the Business Combination, it is essential to acknowledge that risks stemming from YS Group’s historical financial structure remain. Given YS Group’s historical reliance on external equity and debt financing, the recurrence of such issues could have a material adverse effect on its business, financial condition and results of operations. The possibility of incurring net liabilities in the future still exists, and should that happen, YS Group’s liquidity and its liquidity and its ability to raise funds, obtain bank loans, meet debt obligations and pay debts when they become due and declare and pay dividends will be materially and adversely affected.

If YS Group determines its intangible assets to be impaired, YS Group’s results of operations and financial condition may be adversely affected.

As of March 31, 2022 and 2023 and September 30, 2023, YS Group had intangible assets of RMB80.7 million, RMB78.1 million ($11.4 million) and RMB74.6 million ($10.4 million), respectively, which primarily consisted of patents relating to YS Group’s PIKA adjuvant technology and other licenses, certificates and intellectual properties relating to YS Group’s business operations. YS Group’s determination on whether intangible assets are impaired requires an estimation of the recoverable amount of the intangible assets, which is based on a number of assumptions made by YS Group’s management. If any of these assumptions does not materialize, or if the performance of YS Group’s business is not consistent with such assumptions, the carrying amount of the intangible assets may exceed its recoverable amount, and YS Group’s intangible assets may be impaired. As a result, YS Group may be required to significantly write off its intangible assets and record a significant impairment loss, which would have a material adverse effect on YS Group’s business, results of operations and financial condition.

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YS Group is subject to credit risks arising from some customers. If YS Group experiences delays in collecting or if YS Group is unable to collect trade receivables from customers, its results of operations and financial condition could be adversely affected.

YS Group commenced the sale of YSJA™ rabies vaccine in October 2020. In line with market practice, YS Group typically grants its customers a credit period of four months. As of March 31, 2022 and 2023 and September 30, 2023, YS Group had trade receivables, net of RMB308.6 million and RMB463.1 million ($67.4 million) and RMB429.4 million ($59.8 million), respectively. As of September 30, 2023, YS Group’s the trade receivables primarily represented amounts due from county-level CDCs attributable to the sales of YSJATM rabies vaccines. As a result, YS Group may be exposed to credit risks. YS Group recorded allowance for impairment of trade receivables of RMB13.6 million and RMB24.4 million ($3.5 million) and RMB29.7 million ($4.1 million) as of March 31, 2022 and 2023 and September 30, 2023, respectively.

YS Group cannot assure you that its customers could settle trade receivables in a timely manner, or at all, or that YS Group can properly assess and respond in a timely manner to changes in their credit profile. If YS Group’s customers’ cash flows, working capital, financial condition or results of operations deteriorate, they may be unable, or they may otherwise be unwilling, to pay trade receivables owed to YS Group promptly or at all. YS Group may also be involved in litigations and disputes with its customers related to such credit risks. Any substantial defaults or delays could materially and adversely affect YS Group’s cash flows, and YS Group could be required to terminate its relationships with its customers in a manner that may adversely affect YS Group’s business, results of operations and financial condition.

YS Group has incurred and may continue to incur substantial share-based payment expenses, which may have a material and adverse effect on YS Group’s results of operations and financial condition.

YS Group adopted the 2020 Share Incentive Plan and granted certain awards to its directors, employees and consultants. YS Group believes the grant of share-based compensation is important to its ability to attract, retain and motivate its management team and qualified employees. Upon consummation of the Business Combination, YS Biopharma has assumed such share incentive plan and the outstanding awards granted by YS Group then. As of the date of this prospectus, there are 6,656,582 shares of YS Biopharma reserved for its share incentive plans.

YS Group recorded share-based payment expenses of RMB76.8 million, RMB7.8 million, RMB3.5 million ($0.5 million) and nil for the fiscal year ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, respectively. YS Group expects to further incur share-based payment expenses in the future as a result of any further grant, which will also dilute existing shareholders’ shareholding.

Restrictions imposed by YS Group’s outstanding indebtedness and any future indebtedness may limit YS Group’s ability to operate its business and to finance its future operations or capital needs.

In March 2022, YS Group completed a $40 million royalty-based 4.5-year long-term debt transaction with R-Bridge Investment Holdings Pte. Ltd. The terms of the loan facility limit YS Group’s ability to, among other things, incur additional indebtedness, incur liens on YS Group’s assets, engage in consolidations, mergers, liquidations, dissolutions, sell or otherwise dispose of YS Group’s assets, acquire other businesses, make loans, capital contributions, or other investments, or enter into any other transactions outside of the ordinary course of business. In addition, YS Group is obliged to pay shall pay royalties based upon YS Group’s annual Net Sales (as defined in the royalty deed dated March 16, 2022 entered into between HK Yisheng and R-Bridge Healthcare Fund, LP) by multiplying the applicable royalty rate by the corresponding amount incremental Net Sales for that financial year. The terms of YS Group’s loan facilities and royalty obligations restrict YS Group’s current and future operations and could adversely affect YS Group’s ability to finance its future operations or capital needs or take advantage of financing opportunities, mergers, acquisitions, investments, and other corporate opportunities that may be beneficial to YS Group’s business. In addition, complying with these covenants may make it more difficult for YS Group to successfully execute its business strategy and compete against companies which are not subject to such restrictions.

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Risks Related to YS Group’s Intellectual Property

The issuance, scope, validity, enforceability and commercial value of YS Group’s patent rights are uncertain, and there can be no assurance that any of YS Group’s technology, marketed product or product candidates will be protectable or remain protected by valid and enforceable patents. If YS Group is unable to obtain and maintain patent protection for its marketed product and product candidates, or if the scope of such patent protection obtained is not sufficiently broad, third parties may compete directly against YS Group.

YS Group’s success depends, in part, on its ability to protect its marketed product and product candidates from competition by obtaining, maintaining and enforcing its intellectual property rights, including patent rights. YS Group seeks to protect its marketed product and product candidates and technology that YS Group considers commercially important by filing PRC and international patent applications. YS Group does not currently own a valid composition of matter patent for its marketed product, YSJA™ rabies vaccine, and rely on YS Group’s know-how, proprietary techniques and patents in relation to its manufacturing process, together with established safety and efficacy profile as well as reputation, to protect its marketed product. If YS Group is unable to obtain or maintain patent or other statutory protection with respect to any of its marketed product and product candidates and the technology YS Group develops, or if the scope of such patent or other statutory protection obtained is not sufficiently broad, third parties may compete directly against YS Group, and YS Group’s business, financial condition, results of operations, and prospects could be materially and adversely affected.

The patent prosecution process is expensive, time-consuming and complex, and YS Group may not be able to file, prosecute, maintain or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. YS Group cannot assure you that its patent applications will result in the issuance of any patents that effectively protect its product candidates. The scope of a patent application can be significantly reduced before the patent is issued, and it can be reinterpreted after issuance. The scope of protection for issued patents may also vary across different jurisdictions. Changes in either the patent laws or interpretation of the patent laws in various jurisdictions may diminish the value of YS Group’s patents or narrow the scope of its patent protection. Patent may not be issued in a form that will provide YS Group with any meaningful protection, prevent competitors or other third parties from competing with YS Group, or otherwise provide YS Group with any competitive advantage. In addition, the patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of considerable litigation in recent years. Third parties may dispute that YS Group’s product candidates are not validly protected by the underlying patents relating to PIKA adjuvant due to the uncertainties as to the interpretation of the scope and other parameters relating to such patents, and as such, they may attempt to manufacture and commercialize products similar to YS Group’s product candidates without infringing upon any valid patents YS Group holds in the relevant jurisdictions. YS Group cannot assure you it will successfully defend the merits and scope of its patent protection and YS Group may be forced to tolerate and compete with such similar products. Consequently, the issuance, scope, validity, enforceability and commercial value of YS Group’s patent rights are highly uncertain, and YS Group cannot assure you that any of its technology, marketed product or product candidates will be protectable or remain protected by valid and enforceable patents.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and YS Group’s patents may be challenged in the courts or patent offices in China, Singapore, the United States and other countries or jurisdictions. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, YS Group’s owned patent rights, allow third parties to commercialize its technology, marketed product or product candidates and compete directly with YS Group without payment to YS Group. Such proceedings also may result in substantial costs and require significant time from YS Group’s scientists and management. YS Group’s competitors or other third parties may be able to circumvent YS Group’s owned patents by developing similar or alternative technologies or products in a non-infringing manner. Furthermore, the terms of patents are finite. See “— If YS Group does not obtain patent term extension and data exclusivity for any of its product candidates it may develop, YS Group’s business may be materially harmed.”

As a result, the patents and patent applications owned by YS Group may not provide it with adequate protection to prevent others from commercializing products similar or identical to those developed by YS Group. Moreover, some of YS Group’s patents and patent applications may in the future be co-owned with third parties. If YS Group is unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including YS Group’s competitors, and YS Group’s competitors could market competing products and technology. In addition, YS Group may need the cooperation of any

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such co-owners of its patents in order to enforce such patents against third parties, and such cooperation may not be provided to YS Group. Any of the foregoing could have a material adverse effect on YS Group’s competitive position, business, financial condition, results of operations and prospects.

Obtaining and maintaining YS Group’s patent protection depend on compliance with various procedures, document submission, fee payment, and other requirements imposed by governmental patent agencies, and YS Group’s patent protection could be reduced or eliminated for noncompliance with these requirements.

Many government patent agencies require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application and transfer process. YS Group is also dependent on its agents to take the necessary action to comply with these requirements. YS Group cannot assure you that it or its agents will comply with these requirements in a timely manner. YS Group did not experience any material failure to comply with these requirements in the three fiscal years ended March 31, 2023 and the six months ended September 30, 2023 that resulted in any material adverse effect on the scope or validity of YS Group’s owned patents. If YS Group fails to comply with these requirements, it may be subject to additional late payment fines or injunctions. There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on YS Group’s business, financial condition, results of operations, and prospects.

If YS Group does not obtain patent term extension and data exclusivity for any of its product candidates it may develop, YS Group’s business may be materially harmed.

The Patent Law of China, amended in October 2020 and effective on June 1, 2021, provides that, upon the requests of the patentee, the patent administrative authorities shall grant a limited patent term extension to the patent relating to a new drug that was approved in China, as compensation for patent term lost during the NMPA regulatory review process of such new drug. The compensation period shall not exceed five years, and the total validity period of patent rights for such approved new drug shall not exceed 14 years after the market approval of such drug. During the regulatory review process of a new drug, should any disputes arise due to the patent relating to the new drug, for which approval is being sought, whether the patent will be infringed by the proposed drug may be answered by a people’s court upon the requests of the relevant parties before the final approval is provided. The NMPA may decide whether to suspend the approval review process of the proposed drug based on the judgment of the people’s court. On July 4, 2021, the NMPA and the China National Intellectual Property Administration issued Implementing Measures for the Early Settlement Mechanism for Drug Patent Disputes (for Trial Implementation). On the same day, the Supreme People’s Court of the PRC issued Provisions of Supreme People’s Court on Several Issues Concerning the Application of Law in the Hearing of Civil Cases Involving Disputes over Patent Rights Relating to Drugs under Application for Registration, which became effective on July 5, 2021. However, relevant regulations are implemented for a relatively short period of time and therefore the enforcement of laws and regulations regarding the patent linkage system remain uncertain in China. In addition, Chinese regulators set forth a framework for integrating data exclusivity into the Chinese regulatory regime, but no specific regulations were issued. These factors result in weaker protection for YS Group against generic competition in China than could be available to YS Group in the United States. If YS Group is unable to obtain patent term extension or term of any such extension is less than it requests, YS Group’s competitors may obtain approval of competing products following YS Group’s patent expiration, and YS Group’s business, financial condition, results of operations, and prospects could be materially harmed.

Developments in patent law could have a negative impact on YS Group’s business.

Changes in either the patent laws or interpretation of the patent laws in China, the United States and other government authorities could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Such changes could potentially diminish the value of YS Group’s patents or narrow the scope of its patent protection. Court rulings could also impact how patents are interpreted and enforced. For example, Leahy-Smith America Invents Act (the “America Invents Act”), which was signed into law in September 2011, includes a number of significant changes to U.S. patent law. These changes include a transition from a “first-to-invent” system to a “first investor-to-file” system as of March 2013, changes to the way issued patents are challenged, and changes to the way patent applications are disputed during the examination process. These include allowing third party submission of prior art to the United States Patent and Trademark Office (the “USPTO”) during patent prosecution and additional procedures to attack the validity of a patent by the USPTO administered post grant proceedings, including

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post grant review, inter parties review, and derivation proceedings. The PRC laws on the protection of intellectual property rights of drugs are also evolving. The Patent Law of the PRC and the Implementation Rules of the Patent Law of the PRC are applicable to drugs protected by patents. On October 17, 2020, the Standing Committee of the National People’s Congress of the PRC passed the decision to amend the Patent Law of the PRC. The amended patent law came into effect on June 1, 2021. The amended Patent Law provides, among other things, that (1) in case an invention patent is only granted after four years or more from its filing date and three years or more after a request for substantive examination was filed, the patentee can request for an extension of patent term for any unreasonable delay; and (2) the patent term extension will also be available for pharmaceutical-related patents, similar to a supplementary protection certificate in other jurisdictions, to compensate the time spent in obtaining marketing authorization for a drug. The maximum extension for drug-related patents shall be five years with a total effective patent term not exceeding 14 years after the marketing authorization of such drug is obtained. However, it is not entirely clear what procedures must be followed in order to apply for such extension.

Changes to patent law may affect YS Group’s ability to obtain patents, and if obtained, to enforce or defend them. Accordingly, it is not entirely clear what, if any, impact the changes to patent law will have on the cost of prosecuting YS Group’s patent applications and its ability to obtain patents based on its discoveries and to enforce or defend any patents that may issue from its patent applications, all of which could have a material adverse effect on YS Group’s business, financial condition, results of operations and prospects.

If YS Group is unable to maintain the confidentiality of YS Group’s trade secrets, its business and competitive position may be harmed.

In addition to the protection afforded by issued patents and pending patent applications, YS Group relies upon unpatented trade secret protection, unpatented know-how and continuing technological innovation to develop and maintain YS Group’s competitive position. However, trade secrets and know-how can be difficult to protect. YS Group also seeks to protect its proprietary technology and processes, in part, by entering into confidentiality agreements with parties that have access to them, such as its partners, collaborators, scientific advisors, employees, consultants and other third parties, and invention assignment agreements with its consultants and employees. YS Group cannot guarantee that it has entered into such agreements with each party that may have or have had access to its trade secrets or proprietary technology and processes. YS Group may not be able to prevent the unauthorized disclosure or use of its technical know-how or other trade secrets by the parties to these agreements, however, despite the existence of confidentiality agreements and other contractual restrictions. If any of the partners, collaborators, scientific advisors, employees and consultants who are parties to these agreements breaches or violates the terms of any of these agreements or otherwise discloses YS Group’s proprietary information, YS Group may not have adequate remedies for any such breach or violation, and YS Group could lose its trade secrets as a result. If a third party illegally disclosed or misappropriated YS Group’s trade secrets, it could be difficult, expensive and time-consuming to enforce a claim, including through intellectual property litigations or other proceedings, and the outcome is unpredictable. In addition, courts in China and other jurisdictions inside and outside the United States may be less prepared, less willing or unwilling to protect trade secrets. YS Group’s trade secrets could otherwise become known or be independently discovered by its competitors or other third parties.

For example, competitors could purchase YS Group’s marketed product and product candidates, attempt to replicate some or all of the competitive advantages YS Group derives from its development efforts, and design around YS Group’s intellectual property protecting such technology or develop their own competitive technologies that fall outside of YS Group’s intellectual property rights. If any of YS Group’s trade secrets were to be disclosed or independently developed by a competitor, YS Group would have no right to prevent them, or others to whom they communicate it, from using that technology or information to compete against YS Group, which may have a material adverse effect on YS Group’s business, prospects, financial condition and results of operations.

YS Group may be subject to claims challenging the inventorship of its patents and ownership of other intellectual property.

Although YS Group is not currently experiencing any claims challenging the inventorship of its patents or ownership of its other intellectual property, YS Group may be subject to claims that former employees, collaborators or other third parties have an interest in YS Group’s patents or other intellectual property as inventors or co-inventors. Litigation may be necessary to defend against these and other claims challenging inventorship. If YS Group fails to defend any such claims, in addition to paying monetary damages, it may lose rights such as exclusive ownership of, or right to

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use, YS Group’s patent rights or other intellectual property. Such an outcome could have a material adverse effect on YS Group’s business. Even if YS Group is successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

YS Group may be subject to claims that it or its employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of competitors or their current or former employers or are in breach of non-competition or non-solicitation agreements with competitors or other third parties.

YS Group could in the future be subject to claims that it or its employees, consultants or advisors have inadvertently or otherwise used or disclosed alleged trade secrets or other proprietary information of current or former employers, competitors or other third parties. Many of YS Group’s employees, consultants and advisors are currently or were previously employed at universities or other biotechnology or pharmaceutical companies, including YS Group’s competitors or potential competitors. Although YS Group tries to ensure that its employees and consultants do not improperly use the intellectual property, proprietary information, know-how or trade secrets of others in their work for YS Group, YS Group may be subject to claims that YS Group or these individuals have breached the terms of his or her non-competition or non-solicitation agreement, or that YS Group or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a current or former employer, competitor or other third parties.

Litigation may be necessary to defend against the above-described claims. Even if YS Group is successful in defending against these claims, litigation could result in substantial costs and could be a distraction to management and research personnel. If YS Group’s defenses to these claims fail, in addition to requiring YS Group to pay monetary damages, a court could prohibit YS Group from using technologies or features that are essential to its product candidates, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers or competitors. An inability to incorporate such technologies or features would have a material adverse effect on YS Group’s business and may prevent YS Group from successfully commercializing its product candidates. In addition, YS Group may lose valuable intellectual property rights or personnel as a result of such claims. Moreover, any such litigation or threat of such litigation may adversely affect YS Group’s ability to hire employees or contract with independent sales representatives. A loss of key personnel or their work product could hamper or prevent YS Group’s ability to commercialize its product and product candidates, which would have a material adverse effect on its business, results of operations and financial condition.

In addition, while it is YS Group’s policy to require its employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to YS Group, YS Group may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that YS Group regards as its own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and YS Group may be forced to bring claims against third parties, or defend claims that they may bring against YS Group, to determine the ownership of what YS Group regards as its intellectual property. Such claims could have a material adverse effect on YS Group’s business, financial condition, results of operations and prospects.

YS Group may not be able to protect and effectively enforce its intellectual property rights including patents.

YS Group may not be able to identify the infringement of its intellectual property rights including patents at an early stage and may forfeit the best opportunity to enforce the protection of such intellectual property rights. Even if YS Group is able to enforce intellectual property rights in a timely manner, the legal system in certain jurisdictions including China may have generally provided less protection for intellectual property rights than certain other legal systems, such as in the United States. Policing unauthorized use of proprietary technology is difficult and expensive, and YS Group might need to resort to litigation to enforce or defend patents issued to them or to determine the enforceability, scope and validity of its proprietary rights or those of others. The experience and capabilities of courts in different and other jurisdictions in handling intellectual property litigation varies, and outcomes are unpredictable. This variation and unpredictability could make it more difficult for YS Group to prevent competitors from using its patented technology in certain countries. Furthermore, such litigation may be time-consuming, require significant expenditures of cash, resources and management efforts and could harm YS Group’s business, financial condition and results of operations. As a result, YS Group may not be able to enforce its intellectual property right and effectively stop infringe, and an adverse determination in any such litigation could materially impair its intellectual property

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rights and may harm its business, prospects and reputation. Furthermore, technological advances could potentially make YS Group’s patents obsolete, reducing their protective value and possibly rendering YS Group’s products less competitive.

YS Group may not be able to protect its intellectual property rights throughout the world.

YS Group owns, or have filed application for, patents for its product candidates in over 30 countries and regions. Filing, prosecuting, maintaining and defending patents on YS Group’s product candidates in all countries and regions throughout the world could be prohibitively expensive for YS Group. Competitors may use YS Group’s technologies in jurisdictions where YS Group has not obtained patent protection to develop their own product candidates and may also export otherwise infringing products to jurisdictions where YS Group has patent protection, but where enforcement rights are not strong. These products may compete with YS Group’s marketed product and product candidates and YS Group’s patent rights or other intellectual property rights may not be effective or adequate to prevent them from competing.

The legal systems of some countries do not favor the enforcement of patents, trade secrets and other intellectual property, particularly those relating to biopharmaceutical products, which could make it difficult in those jurisdictions for YS Group to stop the infringement or misappropriation of its patents or other intellectual property rights, or the marketing of competing products in violation of its proprietary rights. Proceedings to enforce YS Group’s intellectual property and proprietary rights in foreign jurisdictions could result in substantial costs and divert YS Group’s efforts and attention from other aspects of its business, could put YS Group’s patents at risk of being invalidated or interpreted narrowly, could put YS Group’s patent applications at risk of not issuing, and could provoke third parties to assert claims against YS Group. YS Group may not prevail in any lawsuits that YS Group initiates, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, YS Group’s efforts to enforce its intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that YS Group develops or licenses.

Furthermore, many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If YS Group is forced to grant a license to third parties with respect to any patents relevant to its business, its competitive position may be impaired, and its business, financial condition, results of operations and prospects may be adversely affected.

YS Group may become involved in lawsuits to protect or enforce its intellectual property, which could be expensive, time-consuming and unsuccessful. YS Group’s patent rights relating to its product candidates could be found invalid or unenforceable if challenged in court or before other authorities.

Competitors may infringe YS Group’s patent rights or misappropriate or otherwise violate YS Group’s intellectual property rights. To counter infringement or unauthorized use, litigation may be necessary in the future to enforce or defend YS Group’s intellectual property rights, to protect YS Group’s trade secrets or to determine the validity and scope of YS Group’s own intellectual property rights or the proprietary rights of others. Such litigations can be expensive and time-consuming, with results varying significantly across different jurisdictions. Any claims that YS Group asserts against perceived infringers could also provoke these parties to assert counterclaims against YS Group alleging that YS Group infringes their intellectual property rights. Many of YS Group’s current and potential competitors have the ability to dedicate substantially greater resources to enforce and/or defend their intellectual property rights than YS Group can. YS Group cannot assure you it will be able to prevent third parties from infringing upon or misappropriating its intellectual property in the future. Litigation could result in substantial costs and diversion of management resources, which could harm YS Group’s business operations and financial results.

In addition, in an infringement proceeding, a court may refuse to stop the other party from using the technology at issue on the grounds that YS Group’s owned patents do not cover such third-party technology. An adverse result in any litigation proceeding could put YS Group’s patent, as well as any patents that may issue in the future from YS Group’s pending patent applications, at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of YS Group’s confidential information could be compromised by disclosure during this type of litigation. Moreover, such third parties could counterclaim that YS Group infringes, misappropriate or otherwise

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violate their intellectual property or that a patent YS Group has asserted against them is invalid or unenforceable. In patent litigation, defendant counterclaims challenging the validity, enforceability or scope of asserted patents are commonplace and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent.

Furthermore, third parties may initiate legal proceedings before administrative bodies in China and/or other jurisdictions, even outside the context of litigation, against YS Group with respect to its owned intellectual property to assert challenges to such intellectual property rights. Such mechanisms include re-examination, inter parties review, post-grant review, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation, cancellation or amendment to YS Group’s patents in such a way that they no longer cover and protect its product candidates. YS Group is not involved in any pending proceeding where a third party attempted to challenge the validity, enforceability or scope of its intellectual property rights as of the date of this prospectus. YS Group cannot assure you that it will always prevail in any such proceeding as its outcome is generally unpredictable. The cost to YS Group of any patent litigation or similar proceeding could be substantial, and it may consume significant management and other personnel time. YS Group does not maintain insurance to cover intellectual property infringement, misappropriation or violation.

An adverse result in any litigation or other intellectual property proceeding could put one or more of YS Group’s patents at risk of being invalidated, rendered unenforceable or interpreted narrowly. If a defendant were to prevail on a legal assertion of invalidity or unenforceability of YS Group’s patents covering one or more of its product candidates, YS Group would lose at least part, and perhaps all, of the patent protection covering such product candidates. Competing products may also be sold in other countries in which YS Group’s patent coverage might not exist or be as strong. If YS Group loses a foreign patent lawsuit, alleging its infringement of a competitor’s patents, YS Group could be prevented from marketing its products in one or more foreign countries. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of YS Group’s confidential information could be compromised by disclosure during this type of litigation.

Any of these outcomes would have a materially adverse effect on YS Group’s business, financial condition, results of operations and prospects.

Intellectual property litigation and proceedings could cause YS Group to spend substantial resources and distract YS Group’s personnel from its normal responsibilities.

Third parties who bring successful claims against YS Group for infringement of their intellectual property rights may obtain injunctive or other equitable relief, which could prevent YS Group from developing and commercializing one or more of its marketed product and product candidates. Defense of these claims, regardless of their merits, would involve substantial litigation expense and would be a substantial diversion of employee resources from YS Group’s business. In the event of a successful claim of infringement or misappropriation against YS Group, YS Group may have to pay substantial damages, including treble damages and attorneys’ fees in the case of willful infringement, obtain one or more licenses from third parties, pay royalties or redesign its infringing marketed product and product candidates, which may be impossible or require substantial time and monetary expenditure. In the event of an adverse result in any such litigation, or even in the absence of litigation, YS Group may need to obtain licenses from third parties to advance its research or allow commercialization of its marketed product and product candidates. YS Group cannot predict whether any required license would be available at all or whether it would be available on commercially reasonable terms, and YS Group may fail to obtain any of these licenses on commercially reasonable terms, if at all. In the event YS Group is unable to obtain such a license, YS Group would be unable to further develop and commercialize one or more of its marketed product and product candidates, which could harm YS Group’s business significantly. YS Group may also elect to enter into license agreements in order to settle patent infringement claims or to resolve disputes prior to litigation, and any such license agreements may require YS Group to pay royalties and other fees that could significantly harm YS Group’s business.

Even if resolved in YS Group’s favor, litigation or other legal proceedings relating to YS Group’s other third parties’ intellectual property claims may cause YS Group to incur significant expenses and could distract YS Group’s personnel from its normal responsibilities. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of YS Group’s common stock. Such litigation or proceedings could substantially increase YS Group’s operating losses and reduce the resources available for development activities

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or any future sales and marketing activities. YS Group may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of YS Group’s competitors may be able to sustain the costs of such litigation or proceedings more effectively than YS Group can because of their greater financial resources and more mature and developed intellectual property portfolios.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on YS Group’s ability to compete in the marketplace.

The success of YS Group’s business may depend on licensing, collaboration and other strategic arrangements with third parties, and YS Group cannot assure you that its licensing, collaboration or other strategic efforts will succeed or that YS Group will derive any benefits from these arrangements.

YS Group has entered into collaboration agreements with third parties from time to time to jointly develop vaccines and other biologics. See “Business — YS Group’s Strategic Collaborations” for details. The success of YS Group’s business strategy depends, in part, on its ability to enter into licensing, collaboration and other strategic arrangements and to manage effectively the resulting relationships. YS Group cannot assure you that the organizations or institutes it collaborates with will not terminate such cooperation’s or enter into collaborative relationships with its competitors in the future.

YS Group’s ability to enter into agreements with commercial partners depends in part on its ability to convince them of the value of YS Group’s technology, expertise, know-how or distribution channel. This may require substantial time and effort on YS Group’s part. While YS Group anticipates expending substantial funds and management efforts, YS Group cannot assure you that collaborative relationships will result or that YS Group will be able to negotiate additional collaborative agreements in the future on acceptable terms, if at all. Furthermore, YS Group may incur significant financial commitments to partners in connection with potential licenses, collaboration or other agreements. In addition, YS Group may not be able to control the areas of responsibility undertaken by its commercial partners and its business may suffer greatly should these partners prove unable to carry a product candidate forward to full commercialization, lose interest in dedicating the necessary resources toward developing any such product quickly, fail to implement the appropriate quality control measures in their manufacture of the products licensed to them by YS Group or decline to expend the necessary effort or resources to market and sell such products.

Moreover, third parties may terminate YS Group’s licensing, collaboration and other strategic arrangements if YS Group does not perform as required under these arrangements. In addition, these third parties may also breach or terminate their agreements with YS Group or otherwise fail to conduct their activities in connection with its relationships in a timely manner. If YS Group or its partners terminate or breach any of YS Group’s licenses or relationships, YS Group may:

        lose the rights to manufacture, market or sell certain products;

        experience significant delays in the development or commercialization of product candidates;

        not be able to obtain any other licenses on acceptable terms, if at all;

        need to allocate resources for damage control and remediation which would otherwise have been used for commercialization and business activities;

        initiate legal proceedings against YS Group’s former partners or have such proceedings initiated against it and

        incur liability for damages.

Licensing arrangements and collaborative relationships in YS Group’s industry can be very complex, particularly with respect to intellectual property rights. Disputes may arise in the future regarding ownership rights to technology developed by or with other parties. These and other possible disagreements between YS Group and third parties with respect to YS Group’s licenses or their collaborative relationships could lead to delays in the research, development, manufacture and commercialization of current product or product candidates. These disputes could also result in litigation or arbitration, both of which are time-consuming and expensive. These third parties also may pursue alternative technologies or product candidates either on their own or in collaborative relationships with others in direct competition with YS Group.

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Intellectual property rights do not necessarily address all potential threats.

The degree of future protection afforded by YS Group’s intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect its business or permit YS Group to maintain its competitive advantage. For example:

        others may be able to make vaccines and other biologics that are similar to any marketed product or product candidates YS Group may develop or utilize similar technology but that are not covered by the claims of the patents that YS Group may own or in-license in the future;

        YS Group, patent owners of patent rights that YS Group may in-license, or current or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that YS Group licenses or may own in the future;

        YS Group, patent owners of patent rights that YS Group may in-license, or current or future collaborators might not have been the first to file patent applications covering certain of YS Group’s or their inventions;

        others may independently develop similar or alternative technologies or duplicate any of YS Group’s technologies without infringing, misappropriating or otherwise violating YS Group’s owned or licensed intellectual property rights;

        it is possible that YS Group’s pending patent applications or those that YS Group may own in the future will not lead to issued patents;

        issued patents that YS Group holds rights to may be held invalid or unenforceable, including as a result of legal challenges by its competitors;

        YS Group’s competitors might conduct R&D activities in countries where YS Group does not have patent rights and then use the information learned from such activities to develop competitive products for sale in YS Group’s major commercial markets;

        YS Group may not develop additional proprietary technologies that are patentable;

        the patents of others may harm YS Group’s business; and

        YS Group may choose not to file a patent in order to maintain certain trade secrets or know how, and a third party may discover certain technologies containing such trade secrets or know how through independent R&D and/or subsequently file a patent covering such intellectual property.

Should any of these events occur, it could have a material adverse effect on YS Group’s business, financial condition, results of operations and prospects.

Risks related to YS Group’s General Operations

YS Group could be adversely affected by the ongoing global impacts and uncertainties of the COVID-19 pandemic or similar pandemics in the future.

Beginning in early 2020, there was an outbreak of a novel strain of coronavirus, COVID-19. Governments across the world took a number of actions, including imposing restrictive policies which were designed to limit intercity or cross-border travels, request to remain at home and avoid public gatherings and encourage work-from-home arrangements, among other actions.

Many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread of the COVID-19 virus were revoked or replaced with more flexible measures since December 2022. While the revocation or replacement of the restrictive measures to contain the COVID-19 pandemic could have a positive impact on YS Group’s normal operations, it may also shift the public’s interest in COVID-19 vaccines. Moreover, there has recently been and may continue to be an increase in COVID-19 cases in China, and as a result, YS Group experienced temporary disruption to YS Group’s operations, including constraints and disruptions in the supplier chain, a significant number of employees being infected with COVID-19, and a decrease in output. The extent to which the COVID-19 pandemic impacts YS Group’s business, prospects and results of operations will depend on future developments, which

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are highly uncertain and cannot be predicted, including, but not limited to, the pace of the global economic recovery, shifts in supply chains, changes in market behavior, and adaptations to new norms in the post-pandemic world. The lingering impact of COVID-19 pandemic could limit the ability of customers, suppliers, vendors and business partners to perform their obligations. Even though the COVID-19 pandemic has subsided, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment or a decline in consumer confidence as a result of the COVID-19 pandemic, as well as reduced spending by businesses, could each have a material adverse effect on the demand for YS Group’s products. YS Group cannot accurately forecast the potential impact of additional outbreaks, further shelter-in-place or other government restrictions implemented in response to such outbreaks, or the impact on the ability of YS Group’s suppliers and other business partners to remain in business as a result of the lingering impact of the pandemic or any additional outbreaks.

YS Group has limited operating experience and management teams in the international market. YS Group’s international expansion plan may expose YS Group to risks associated with international manufacturing, sales and operations.

YS Group has established R&D bases in China, the United States, Singapore and the Philippines, and may further expand its manufacturing, customer bases and operations globally. However, YS Group has limited operating experience and management teams in the international market. As of the date of this prospectus, YS Group is still at early stage in setting up its international operation for the sales, marketing and distribution of its immunological biologics. Managing an international organization is difficult, time-consuming and expensive. YS Group’s lack of a track record in operating a business internationally increases the risk that any current or potential future international expansion efforts may not be successful. In addition, conducting international operations subjects YS Group to new risks that it has not generally faced. These risks that may materially adversely affect YS Group’s ability to attain or sustain profitable operations include:

        localization of YS Group’s products, including adaptation to local practices and regulatory requirements;

        production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

        efforts to enter into collaboration with third parties in connection with YS Group’s international sales and operations that may increase its expenses or divert its management’s attention from the acquisition or development of product candidates;

        changes in the political and cultural climate or economic condition of a specific country or region;

        lack of familiarity with and unexpected changes in applicable foreign regulatory regimes;

        difficulty of effective enforcement of contractual provisions in local jurisdictions;

        more extended accounts receivable payment cycles and difficulties in collecting payments;

        difficulties in managing and staffing overseas operations;

        compliance with tax, employment, immigration and labor laws for employees traveling abroad;

        workforce uncertainty and labor unrest;

        fluctuations in foreign currency exchange rates, which could result in increased operating expenses and reduced revenue, and other obligations incidental to doing business in another country or region;

        potentially adverse tax consequences, including the complexities of transfer pricing, foreign value-added tax systems and restrictions on the repatriation of earnings;

        unexpected changes in tariffs, trade barriers and regulatory requirements;

        dependence on certain third parties, such as local distributors or joint venture partners, with whom YS Group does not have extensive experience;

        potential third-party patent rights infringement and difficulties to enforce intellectual property rights;

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        increased financial accounting and reporting burdens and complexities;

        political, social, and economic instability abroad, including war and terrorism, and security concerns in general such as natural disasters; and

        reduced or varied protection for intellectual property rights in certain jurisdictions.

Operating in international markets also requires significant management attention and financial resources. YS Group cannot assure you that the investment and additional resources required to establish operations and manage growth in other countries would produce anticipated levels of revenue or profitability, and that any international expansion would be successful and would not have a material adverse effect on YS Group’s business, financial condition and results of operations.

YS Group faces certain risks related to its real properties.

YS Group leases multiple real properties in several countries from third parties. Should disputes arise due to YS Group’s use of or title encumbrances on such property or government action, YS Group may encounter difficulties in continuing to lease such property and may be required to relocate. As of the date of this prospectus, YS Group is not aware of any claim or challenge brought by any third party or governmental authority concerning the use of such leased property. YS Group cannot assure you that in the future, it may not encounter such challenges. In addition, in the event of relocation, YS Group may incur additional costs and face logistical complexities, reestablishment of business relationships, and operational disruption, which could adversely affect its daily operation and cause an impact on YS Group’s financial condition.

In addition, as a vaccine manufacturing enterprise, YS Group currently holds certain parcel of lands to expand its manufacturing or R&D capacities. Under current PRC laws and regulations, if YS Group fails to commence the construction for more than one year from the commencement date stipulated in the land use right grant contracts, the relevant PRC land bureau may serve an investigation notice and impose an idle land fee of up to 20% of the land use right premium on YS Group unless the delay is caused by government actions or force majeure. If YS Group fails to commence the construction for more than two years, the land may be subject to forfeiture by the PRC government unless the delay is caused by government actions or force majeure. In addition to the administrative penalties, YS Group may be subject to civil liability as stipulated under the contracts. YS Group cannot assure you that it is and will be fully in compliance with the obligations under the land use right grant contract or listing-for-sale letters in the future due to factors which are beyond YS Group’s control. If YS Group fails to comply with the terms of any land grant contract or listing-for-sale confirmation letter as a result of delays in any reasons other than government actions or force majeure, YS Group may have financial loss or lose its previous investments in the land, which may have a material adverse effect on its business, results of operations and financial condition.

Moreover, YS Group is required to obtain a series of approval, filing, permit or license before YS Group commences the construction under PRC laws and regulations. As of the date of this prospectus, YS Group has commenced construction or improvement of certain facilities and their use before obtaining the relevant approvals, permits and filings or going through the requisite procedures regarding, among others, construction, environmental protection, fire prevention and safety conditions. YS Group cannot assure you that it has obtained and fully complied with, or will be able to obtain and fully comply with, such approvals, filings, permits, licenses or other requisite procedures. If YS Group is found to be non-compliant with relevant laws and regulations, the relevant authorities may suspend or halt YS Group’s construction or production as well as impose fines and penalties. For example, in case YS Group failed to obtain the relevant approval from environmental authorities, if necessary, for its construction projects before its construction activities, a fine up to 5% of the total investment amount of such construction project might be imposed on YS Group. Any non-compliance of relevant requirements on, including but not limited to construction, environmental protection, fire prevention and safety conditions, may adversely affect YS Group’s results of operations and financial condition.

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YS Group may be subject to fines and penalties under applicable PRC laws and regulations for failure to make adequate contributions to social insurance and housing reserve fund for its employees.

Pursuant to relevant PRC laws and regulations, employers are obligated to directly and duly make social insurances and housing reserve fund contributions for their employees. YS Group cannot assure you that its employment practice has been and will at all times be deemed to be in full compliance with labor-related laws and regulations in China, which may subject YS Group to labor disputes or government investigations and administrative penalties. If YS Group is deemed to have violated relevant labor laws and regulations, YS Group could be required to provide additional compensation to its employees or pay penalties, and YS Group’s reputation, business, financial condition and results of operations could be materially and adversely affected. Historically, YS Group did not make adequate social insurance and housing provident fund contributions for its employees as required by the relevant PRC laws and regulations.

YS Group rectified the issue and made adequate social insurances and housing reserve fund contributions for all of its eligible employees. YS Group paid all the overdue principal and late charges in relation to its social insurances and housing reserve fund contributions for all current employees and certain former employees, and YS Group is communicating with the remaining former employees to complete the administrative procedure as the prerequisite for making such payments as of the date of this prospectus. YS Group also made provision for the historical inadequate contributions in its financial statements. As of the date of this prospectus, YS Group is not aware of any pending orders or demands from the relevant PRC government authorities requesting YS Group to pay these unpaid contributions, complete the registration or pay any penalties. If the relevant PRC government authorities order YS Group to make the outstanding contributions or impose penalties on it, or if YS Group’s provision in its financial statements turns out to be insufficient, YS Group’s business, financial condition and results of operations could be adversely affected. As the interpretation and implementation of labor-related laws and regulations are still evolving, YS Group cannot assure you that its current employment practices do not and will not violate labor-related laws and regulations in China, which may subject it to labor disputes or government investigations. In addition, it may incur additional expenses in order to comply with such laws and regulations, which may adversely affect its business and profitability.

Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions YS Group may pursue in the future.

Pursuant to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises (“SAT Circular 698”), issued by the PRC’s State Taxation Administration, or the SAT, on December 10, 2009, where a foreign investor transfers the equity interests of a resident enterprise indirectly via disposition of the equity interests of an overseas holding company, or an “indirect transfer,” and such overseas holding company is located in a tax jurisdiction that (1) has an effective tax rate less than 12.5% or (2) does not tax foreign income of its residents, the foreign investor shall report the indirect transfer to the competent PRC tax authority. The PRC tax authority will examine the true nature of the indirect transfer, and if the tax authority considers that the foreign investor has adopted an “abusive arrangement” in order to avoid PRC tax, it may disregard the existence of the overseas holding company and re-characterize the indirect transfer and as a result, gains derived by the non-PRC tax resident enterprises from such indirect transfer may be subject to PRC withholding tax at a rate of up to 10%.

On February 3, 2015, the SAT issued the Announcement of the State Administration of Taxation on Several Issues Concerning the Enterprise Income Tax on Indirect Property Transfer by Non-Resident Enterprises (“SAT Bulletin 7”) to supersede existing provisions in relation to the “indirect transfer” as set forth in SAT Circular 698, while the other provisions of SAT Circular 698 remained in force. Pursuant to SAT Bulletin 7, where a non-resident enterprise indirectly transfers properties such as equity in PRC resident enterprises without any justifiable business purposes and aiming to avoid the payment of enterprise income tax, such indirect transfer must be reclassified as a direct transfer of equity in PRC resident enterprise. To assess whether an indirect transfer of PRC taxable properties has reasonable commercial purposes, all arrangements related to the indirect transfer must be considered comprehensively and factors set forth in SAT Bulletin 7 must be comprehensively analyzed in light of the actual circumstances.

On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Matters Concerning Withholding of Income Tax of Non-resident Enterprises as Source (“SAT Bulletin 37”), which repealed the entire SAT Circular 698 and the provision in relation to the time limit for the withholding agent to declare to the competent tax authority for payment of such tax of SAT Bulletin 7. Pursuant to SAT Bulletin 37, the income from a property transfer, as stipulated in the second item under Article 19 of the Enterprise Income Tax Law, shall include the income derived from transferring such equity investment assets as stock equity. The balance of deducting the equity’s net value from the total income from equity transfer shall be taxable income from equity transfer. Where a withholding agent enters

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into a business contract, involving the income specified in the third paragraph of Article 3 in the Enterprise Income Tax Law, with a non-resident enterprise, the tax-excluding income of the non-resident enterprise will be treated as the tax-including income, based on which the tax payment will be calculated and remitted, if it is agreed in the contract that the withholding agent shall assume the tax payable.

During the effective period of SAT Circular 698 and by the application of SAT Bulletin 7 and SAT Bulletin 37, some intermediary holding companies were actually looked through by the PRC tax authorities, and consequently the non-PRC resident investors were deemed to have transferred the PRC subsidiary and PRC corporate taxes were assessed accordingly. It is possible that YS Group or its non-PRC resident investors may at some point be at risk of being taxed under SAT Bulletin 7 and SAT Bulletin 37 and may be required to expend valuable resources to comply with SAT Bulletin 7 and SAT Bulletin 37 or to establish that YS Group or its non-PRC resident investors should not be taxed under SAT Bulletin 7 and SAT Bulletin 37, which may have an adverse effect on YS Group’s financial condition and results of operations or such non-PRC resident investors’ investment in YS Group.

YS Group depends substantially on the continuing efforts of its senior executives, key R&D personnel and commercialization personnel, and YS Group’s business and prospects may be severely disrupted if YS Group loses their services or if the relationship between YS Group and any of them deteriorates.

YS Group’s future success depends heavily upon the continued service of its senior management and key R&D and commercialization personnel. For example, YS Group relies on the expertise and experience of Mr. Yi Zhang, YS Group’s founder and director in YS Group’s business operations, and on his positive relationships with the regulatory authorities, YS Group’s customers, suppliers and employees. Any disagreement between Mr. Yi Zhang and YS Group’s management team on major issues may divert Mr. Zhang and our management’s attention and may have negative impact on YS Group’s results of operations. For example, on December 22, 2023, the Grand Court of the Cayman Islands (the “Cayman Court”) granted the Company an injunction order (the “Injunction Order”) against Mr. Yi Zhang, ordering that Mr. Zhang is restrained from the following activities: (i) taking any steps to convene an extraordinary general meeting of the Company, either pursuant to the Notices for Removal of Director dated December 17, 2023 or any purported notice of an extraordinary general meeting scheduled to be held on December 28, 2023 at 9:00 a.m. Beijing time or at all; (ii) taking any steps to exercise any powers of, or hold himself out to be, chairperson of the Board; (iii) exercising any voting or other rights attaching to any shares in the Company that he owns or controls (whether directly or indirectly, through one or more intermediate entities or otherwise) or otherwise arising by virtue of his status as a member of the Company (whether directly or indirectly, through one or more intermediate entities or otherwise) to cause any of the Company’s directors to be removed; and (iv) exercising any voting or other rights attaching to any shares in the Company that he owns or controls (whether directly or indirectly, through one or more intermediate entities or otherwise) or otherwise arising by virtue of his status as a member of the Company (whether directly or indirectly, through one or more intermediate entities or otherwise) to take other steps to stifle any investigations into his alleged wrongdoing. The Injunction Order will remain in force until the earlier of: (a) any further order of the Cayman Court varying or discharging the Injunction Order (including at the return date of the injunction summons); or (b) 5:00 a.m. Beijing time on February 10, 2024. In December 2023, the Board has established a special committee comprised of Dr. Ajit Shetty, Dr. Viren Mehta and Dr. Hui, with powers and authorities to, among other things, commence legal proceedings in the Cayman Islands regarding invalid actions to convene an extraordinary general meeting of the Company. While Mr. Zhang has been a key figure in the Company, his recent actions and the resulting legal constraints highlight underlying vulnerabilities within YS Group’s governance and operational structures. His attempts to unilaterally influence Company decisions and disrupt normal operations demonstrate a risk to the Company’s adherence to sound governance principles. The Company must now navigate the challenges of continuing operations while managing the fallout from Mr. Zhang’s actions. While the situation poses challenges to the Company’s reputation, it also offers a chance to demonstrate YS Group’s commitment to ethical standards and corporate responsibility. The Company must be prepared for the potential legal and financial implications arising from Mr. Zhang’s actions. This includes the need for increased legal vigilance and potentially allocating resources to address any legal challenges or reputational damages caused by his conduct.

YS Group also relies on the healthcare industry-related experience and professional knowledge of its other senior officers. YS Group’s R&D team is critical to the development and commercialization of product candidates and realization of the potential benefits of its intellectual property, including YS Group’s proprietary PIKA immunomodulatory technology platform. YS Group’s ability to attract and retain key personnel, in particular, senior management, key R&D personnel and commercialization personnel, is a critical aspect of its competitiveness. Competition for these individuals could require YS Group to offer higher compensation and other benefits in order to attract and retain them,

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which would increase its operating expenses and, in turn, could materially and adversely affect its results of operations and financial condition. YS Group may be unable to attract or retain the personnel required to achieve its business objectives, and failure to do so could severely disrupt its business and prospects. The loss of any of YS Group’s key employees, including senior executives, key R&D personnel or commercialization personnel, could materially harm its business and prospects.

YS Group does not maintain key-person insurance for members of its management team. If YS Group loses the services of any senior management member, YS Group may not be able to locate suitable or qualified replacements, and may incur additional expenses to recruit and train new personnel, which could severely disrupt YS Group’s business and prospects. Furthermore, if any of YS Group’s executive officers joins a competitor or forms a competing company, YS Group may lose a significant number of its existing customers, which could have a material adverse effect on YS Group’s business and revenues. Although each of YS Group’s executive officers has entered into an agreement with YS Group that contains confidentiality and non-competition undertakings regarding their employment, disputes may arise between YS Group’s executive officers and YS Group, and these agreements may not be enforced in accordance with their terms.

YS Group may pursue collaborations, in-licensing arrangements, joint ventures, strategic alliances, partnerships or other strategic investment or arrangements, which may fail to produce anticipated benefits and adversely affect YS Group’s business.

YS Group collaborates with research organizations and government agencies to supplement its in-house efforts and advance the development of its product candidates. YS Group may pursue other opportunities for collaboration, in-licensing, joint ventures, acquisitions of products, assets or technology, strategic alliances, or partnerships that YS Group believes would be complementary to or promote its existing business. However, initiating, negotiating, and finalizing these potential transactions can be a long-drawn, complex process filled with uncertainties. Other companies, including those with substantially greater financial capacity, marketing networks, technological capabilities, business expertise, or other business or governmental resources, may compete with YS Group for these opportunities or arrangements. Consequently, these organizations may be in a stronger position to pursue and secure the same opportunities YS Group is interested in, putting YS Group at a competitive disadvantage. Moreover, identifying suitable opportunities or arrangements that align with YS Group’s strategic objectives can be challenging and may require a significant amount of time and resources. Even after identifying a potential opportunity, YS Group may not be able to identify, secure, or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms, or at all.

YS Group has limited experience with respect to these business development activities. Management and integration of a licensing arrangement, collaboration, joint venture or other strategic arrangement may disrupt YS Group’s current operations, decrease YS Group’s profitability, result in significant expenses, or divert management resources that otherwise would be available for its existing business. YS Group may not realize the anticipated benefits of any such transaction or arrangement.

Furthermore, partners, collaborators or other parties to such transactions or arrangements may fail to fully, or at all, perform their obligations or meet YS Group’s expectations or cooperate with YS Group satisfactorily for various reasons, including risks or uncertainties related to their business and operations. There may be conflicts or other collaboration failures and inefficiencies between YS Group and the other parties.

Such transactions or arrangements may also require actions, consents, approvals, waivers, participation or involvement of various degrees from third parties, such as regulators, government authorities, creditors, licensors or licensees, related individuals, suppliers, distributors, shareholders or other stakeholders or interested parties. There is no assurance that such third parties will be cooperative as YS Group desires, or at all, in which case YS Group may be unable to carry out the relevant transactions or arrangements.

Any transaction YS Group undertakes would need to be integrated with YS Group’s current operations. Integration issues, including business limitations, culture clashes, unanticipated costs, undisclosed liabilities, and loss of key employees, can impede YS Group’s operational efficiency and productivity, thereby adversely affecting its business, results of operations and financial condition.

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YS Group may not be able to complete new acquisitions successfully. Even if YS Group successfully acquires companies, products or technologies, YS Group may face integration risks and costs associated with those acquisitions that could negatively impact its business, financial condition and results from operations.

Acquisitions have been, and are expected to continue to be, an important part of YS Group’s growth strategies. For example, YS Group has established its proprietary PIKA immunomodulatory technology platform through the acquisition of NewBiomed in June 2010. If YS Group is presented with appropriate opportunities, YS Group may make additional acquisitions of complementary businesses, products, product candidates or technologies. Any such acquisitions will be dependent upon the continued availability of suitable acquisition targets at favorable prices and upon advantageous terms and conditions. Even if such opportunities are present, YS Group may not be able to successfully identify such acquisition targets. Moreover, other companies, many of which may have substantially greater financial, marketing, governmental and sales resources, are competing with YS Group for the right to acquire such businesses, products, product candidates, qualifications or technologies. If an acquisition target is identified, the management and shareholders of the acquisition target may not select YS Group as a potential partner or YS Group may not be able to enter into agreements on commercially reasonable terms or at all. Furthermore, the negotiation and completion of potential acquisitions could cause significant diversion of YS Group’s management’s time and resources and potential disruption of its ongoing business.

In addition, YS Group cannot assure you it will realize the anticipated benefit of any acquisition or investment. If YS Group acquires companies or technologies, YS Group will face risks, uncertainties and disruptions associated with the integration process, including difficulties in the integration of the operations of an acquired company, integration of acquired technology with its products, diversion of its management’s attention from other business concerns, the potential loss of key employees or customers of the acquired business, the potential involvement in any litigation related to the acquired company, and impairment charges if acquisitions are not as successful as YS Group originally anticipate. In addition, YS Group’s results of operations may suffer because of acquisition-related costs or amortization expenses or charges relating to acquired intangible assets. As of March 31, 2022 and 2023 and September 30, 2023, YS  Group had RMB80.7 million, RMB78.1 million ($11.4 million) and RMB74.6 million ($10.4 million) in intangible assets, respectively. Any failure to successfully integrate other companies, products, qualifications or technologies that YS Group may acquire may have a material adverse effect on its business, financial condition and results of operations.

YS Group will likely need substantial additional funding for its new and existing product development programs and commercialization efforts, which may not be available on acceptable terms, or at all. If YS Group is unable to raise capital on acceptable terms when needed, YS Group could incur losses or be forced to delay, reduce or terminate such efforts.

YS Group’s operations have consumed substantial amounts of cash since inception. The net cash used in YS Group’s operating activities was RMB246.6 million, RMB173.5 million, RMB182.5 million ($26.6 million) and RMB145.8 million ($20.3 million) for the fiscal year ended March 31, 2021, 2022 and 2023 and the six months ended September 30, 2023, respectively. YS Group expects its expenses to increase in connection with YS Group’s ongoing activities, particularly as YS Group launch and expand the sale of YSJA™ rabies vaccine, advance the clinical trial of its product candidates and continue R&D of its preclinical stage product candidates, and initiate additional clinical trials of, and seek regulatory approval for, these and other future product candidates. In addition, if YS Group obtain regulatory approval for any of its product candidates, it expects to incur significant commercialization expenses related to product manufacturing, marketing and sales. In particular, the costs that may be required for the manufacture of any product candidate that receives regulatory approval may be substantial as YS Group may have to modify or increase the production capacity at its current manufacturing facilities or contract with third-party manufacturers or suppliers, increase labor capacity and insurance coverage, acquire and maintain new equipment and upgrade YS Group’s budget on other manufacture-associated procedures such as waste management and product storage. YS Group may also incur expenses as it creates additional infrastructure to support its operations as a public company. Accordingly, YS Group will likely need to obtain substantial additional funding in connection with its continuing operations through public or private equity offerings, debt financing, collaborations or licensing arrangements or other sources.

YS Group’s ability to obtain additional capital in the future is subject to a variety of uncertainties, including:

        YS Group’s future financial condition, results of operations, outcomes of ongoing R&D, and cash flows;

        the condition of U.S. and other capital markets in which YS Group may seek to raise funds;

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        investors’ perception of, and demand for, securities of biopharmaceutical companies;

        economic, political and other conditions or crises in China and elsewhere;

        regulatory changes;

        availability of government grants and incentives; and

        considerations of tax, interest rates, competition, potential or ongoing litigations.

If YS Group is unable to raise capital when needed or on acceptable terms, it could incur losses and be forced to delay, reduce or terminate its R&D programs or any future commercialization efforts. If YS Group raises additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights. The incurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on YS Group’s ability to incur additional debt or issue additional equity, limitations on YS Group’s ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact YS Group’s ability to conduct its business. In addition, issuance of additional equity securities, or the possibility of such issuance, may cause the market price of YS Group’s Shares to decline.

Any catastrophe, including outbreaks of health pandemics and other extraordinary events, could have a negative impact on YS Group’s business operations.

YS Group is vulnerable to natural disasters and other calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins war, riots, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system failures or Internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect YS Group’s ability to provide its services. YS Group’s vulnerability to such natural disasters and other calamities also extends to YS Group’s physical facilities, equipment and other properties, resulting significant disruptions to its operations, delay or halt the production of its products, hinder the progress of its R&D, and cause loss of critical data. Moreover, such events could also affect its supply chain, leading to shortages of necessary materials or components. Inadequate insurance coverage or lack of resources to repair or replace the damaged facilities, equipment or other properties could exacerbate these challenges, significantly impacting its business financial condition and results of operations.

YS Group’s business could also be adversely affected by the effects of Ebola virus diseases, H1N1 flu, H7N9 flu, avian flu, Severe Acute Respiratory Syndrome (SARS), COVID-19, or other existing or emerging epidemics in China and globally. YS Group’s operations could be disrupted if any of its employees is suspected of having any of the aforementioned epidemics or another contagious disease or condition, since it could require YS Group’s employees to be quarantined and/or YS Group’s offices to be disinfected. In addition, YS Group’s business, results of operations and financial condition could be adversely affected to the extent that any of these epidemics harms the Chinese economy in general. For example, the outbreak, rapid spread, as well as the exacerbation, continuance or reoccurrence of COVID-19 throughout China and many other parts of the world since 2019 have already caused and may continue to cause an adverse and prolonged impact on the economy and social conditions in China and other affected countries. The existing clinical trials and the commencement of new clinical trials could be substantially disrupted, delayed or prevented by any delay or failure in patient recruitment or enrollment in YS Group’s or YS Group’s collaborators’ trials as a result. The existing clinical trials and the commencement of new clinical trials could be substantially disrupted, delayed or prevented by any delay or failure in patient recruitment or enrollment in YS Group’s or YS Group’s collaborators’ trials as a result. The quality of YS Group’s clinical trials can also be substantially and negatively affected or be subject to uncertainties due to the ongoing impact of COVID-19. These factors could cause delay of clinical trials, regulatory submissions, and required approvals of YS Group’s product candidates, and could cause YS Group to incur additional costs. If YS Group’s employees or employees of YS Group’s business partners are suspected of being infected with an epidemic disease, YS Group’s operations may be disrupted because YS Group or YS Group’s business partners must quarantine some or all of the affected employees or disinfect the operating facilities. If YS Group is not able to effectively develop and commercialize its product candidates as a result of protracted clinical trials of enrolled patients, elevated public health safety measures, and/or failure to recruit and conduct patient follow-up, YS Group may not be able to generate revenue from sales of its product candidates or licensing YS Group’s technologies as planned. All of the foregoing could have a material adverse effect on YS Group’s results of operations and financial condition in the near term.

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A severe or prolonged downturn in Chinese or global economy could materially and adversely affect YS Group’s business, results of operations, financial condition and prospects.

While the global situation concerning COVID-19 has improved considerably due to widespread vaccination efforts and implementation of public health measures, there could still be potential repercussions from new variants of the virus, as well as uncertainties about the effectiveness and duration of existing marketed vaccines, which could influence future economic stability. Overall, its long-term effects on the global economy and specific sectors remain unclear. Even before the outbreak of COVID-19, the global macroeconomic environment was facing numerous challenges. The growth rate of the Chinese economy has been slowing since 2010, and the impact of COVID-19 on the Chinese economy in 2020 is likely to be severe. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies which had been adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China, even before 2020. Unrest, terrorist threats and the potential for war in the Middle East, Ukraine, Russia and elsewhere may increase market volatility across the globe. There have also been concerns about the relationship between China and other countries, including the surrounding Asian countries, which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect YS Group’s business, results of operations and financial condition.

YS Group may seek orphan drug exclusivity for some of its product candidates, which may not be successful.

Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the U.S. FDA may designate a drug as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a disease with a patient population of fewer than 200,000 individuals in the United States. Generally, if a drug with an orphan-drug designation (“ODD”) subsequently receives the first regulatory approval for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the U.S. FDA, from approving another marketing application for the same drug for the same indication during the period of exclusivity. The applicable period varies in different jurisdictions, which is seven years in the United States. Orphan drug exclusivity may be lost if the U.S. FDA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

YS Group obtained ODD for certain of its product candidates, including PIKA rabies vaccine and PIKA YS-ON-001. However, such designation cannot completely protect this product from future competition. The exclusivity may not effectively protect YS Group’s product candidates from competition because different drugs can be approved for the same condition and the same drugs can be approved for a different condition but used off-label for any orphan indication YS Group may obtain. Even after an orphan drug is approved, the U.S. FDA can subsequently approve a different drug for the same condition if the U.S. FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

The incidence and prevalence for target patient populations of YS Group’s product candidates are based on estimates and third-party sources. If the market opportunities for YS Group’s product candidates are smaller than it estimates or if any approval that YS Group obtains is based on a narrower definition of the patient population, YS Group’s revenue and ability to achieve profitability might be materially and adversely affected.

YS Group makes periodical estimates regarding the incidence and prevalence of target patient populations for particular diseases based on various third-party sources and internally generated analysis and use such estimates in making decisions regarding YS Group’s products development strategy, including acquiring or in-licensing products candidates and determining indications on which to focus in preclinical or clinical trials.

These estimates may be inaccurate or based on imprecise data. For example, the total addressable market opportunity will depend on, among other things, their acceptance by the medical community and patient access, pricing and reimbursement. The number of patients in the addressable markets may turn out to be lower than expected, patients may not be otherwise amenable to treatment with YS Group’s products, or new patients may become increasingly difficult to identify or gain access to, all of which may significantly harm YS Group’s business, financial condition, results of operations and prospects.

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Risks Related to Doing Business in China

Recent regulatory development in China may exert more oversight and control over listing and offerings that are conducted overseas. The approval, filing, and/or other requirements of PRC governmental authorities may be required under PRC laws, regulations or policies.

YS Group conducts a substantial portion of its business in China, including manufacturing and sales of YSJATM rabies vaccines and certain R&D activities. As such, YS Biopharma and its subsidiaries are subject to PRC laws relating to, among others, restrictions over overseas listing, foreign investments and data security.

Under the current Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors adopted by six PRC regulatory agencies, including the Ministry of Commerce of the PRC (“MOFCOM”), the State-Owned Assets Supervision and Administration Commission, the SAT, the State Administration for Industry and Commerce, currently known as the SAMR, the CSRC, and the SAFE in 2006 and amended in 2009 (the “M&A Rules”) include provisions that purport to require that an offshore special purpose vehicle that is controlled by PRC domestic companies or individuals and that has been formed for the purpose of an overseas listing of securities through acquisitions of PRC domestic companies or assets to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published its approval procedures for overseas listings by special purpose vehicles. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles.

The Chinese government has recently sought to exert more control and impose more restrictions on China-based companies raising capital offshore and such efforts may continue or intensify in the future. On August 1, 2021, the CSRC stated in a statement that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory development in China, and that both countries should strengthen communications on regulating China-related issuers.

On February 17, 2023, the CSRC issued the Trial Administrative Measures for Overseas Listing and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Administrative Measures for Overseas Listing, a filing-based regulatory regime is adopted to regulate both direct and indirect overseas securities offering and listing by the domestic companies. The Trial Administrative Measures for Overseas Listing provide the criteria of indirect overseas offering and listing by domestic companies that are subject to regulation. If the issuer meets both the following criteria, it will be deemed as indirect overseas offering and listing by domestic companies: (1) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (2) the main parts of the issuer’s business activities are conducted in mainland China, or its principal place(s) of business are located in China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or domiciled in China. The determination as to whether or not an overseas offering and listing by domestic companies is indirect, shall be made on a substance-over-form basis. The Trial Administrative Measures for Overseas Listing require that, subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed securities shall be filed with the CSRC within three working days after the offering is completed and issuer that conducts its offering and subsequent securities offering and listing in other overseas markets shall be filed as an initial public offering, under which filing application with the CSRC shall be submitted within three working days after the application documents for offering and listing being submitted overseas. Further, a domestic company that seeks to directly or indirectly list its domestic assets in overseas markets through single or multiple acquisitions, share swaps, transfers of shares or other means, shall fulfil the filing procedure as an initial public offering. Where overseas application documents are not required, the filing shall be made within three working days after the first public disclosure of the specifics of the transaction is made by the listed company. In addition, pursuant to the CSRC press release regarding the Trial Administrative Measures for Overseas Listing published on its official website on February 17, 2023, a company having listed overseas before the effectiveness of the Trial Administrative Measures for Overseas Listing would only be subject to the filing requirements when conducting a follow-on offering of securities.

Given that YS Group had completed the Business Combinations and the listing of its Ordinary Shares on Nasdaq before the Trial Administrative Measures for Overseas Listing went into effect, YS Group is not required to undergo the filing procedures with the CSRC in connection with these transactions. Additionally, YS Biopharma would not additionally issue any new share or other equity securities from the Resale by the Selling Securityholders, YS Biopharma believes that, as advised by its PRC legal advisor, the Resale by the Selling Securityholders is not subject to the filing

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requirements prescribed in the Trial Administrative Measures for Overseas Listing. However, given that the Trial Administrative Measures for Overseas Listing were recently promulgated, there remains substantial uncertainties as to their interpretation, application, and enforcement, and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as YS Biopharma and its PRC legal advisor. For YS Group’s future capital-raising activities, if YS Biopharma fails to receive or maintain any requisite approval or filing from the CSRC, or the waiver for such approval or filing, in a timely manner, or at all, or inadvertently conclude that such approval or filing is not required, or if applicable laws, regulations or interpretations change and obligate YS Biopharma to obtain such approval or filing in the future, or YS Biopharma conceals any material fact or falsifies any major content in the filing documents, YS Biopharma may be subject to rectifications, warnings, fines and penalties, limitations on YS Group’s business activities in China, delay or restrictions on the contribution of the proceeds from further offerings into the PRC, or other sanctions that could have a material adverse effect on YS Group’s business, financial condition, results of operations, reputation and prospects. The CSRC may also take actions requiring or YS Group or making it advisable for YS Group to terminate future offerings. Such uncertainties and/or negative publicity regarding such requirements could cause YS Biopharma’s securities to decline significantly in value or become worthless.

Moreover, on November 14, 2021, the CAC released the Regulations for the Administration of Network Data Security (Draft for Comment) (the “Draft Administrative Regulation”). Under the Draft Administrative Regulation, (1) data processors, i.e., individuals and organizations who can decide on the purpose and method of their data processing activities at their own discretion, that process personal information of more than one million individuals shall apply for cybersecurity review before listing in a foreign country; (2) foreign-listed data processors shall carry out annual data security evaluation and submit the evaluation report to the municipal cyberspace administration authority; and (3) where the data processor undergoes merger, reorganization and subdivision that involves important data and personal information of more than one million individuals, the recipient of the data shall report the transaction to the in-charge authority at the municipal level. The public comment period for the Draft Administrative Regulation ended on December 13, 2021, and the Draft Administrative Regulation has not come into effect as of the date of this prospectus. On December 28, 2021, the PRC government promulgated the 2022 Cybersecurity Review Measures, which came into effect on February 15, 2022. According to the 2022 Cybersecurity Review Measures, (i) critical information infrastructure operators that purchase network products and services and internet platform operators that conduct data processing activities shall be subject to cybersecurity review in accordance with the 2022 Cybersecurity Review Measures if such activities affect or may affect national security; and (ii) internet platform operators holding personal information of more than one million users and seeking to have their securities list on a stock exchange in a foreign country shall file for cybersecurity review with the Cybersecurity Review Office. As of the date of this prospectus, neither YS Group/YS Biopharma nor any of its subsidiaries has been required by any PRC governmental authority to apply for cybersecurity review, nor received any inquiry, notice, warning, sanction in such respect or been denied permission from any PRC regulatory authority to list on U.S. exchanges. Based on the opinion of YS Biopharma’s PRC counsel, Jingtian & Gongcheng, according to its interpretation of the currently in-effect PRC laws and regulations, YS Group believes it is not subject to the cybersecurity review, reporting or other permission requirements by the CAC under the applicable PRC cybersecurity laws and regulations with respect to the offering of YS Biopharma’s securities for the Business Combination or the business operations of YS Group’s PRC subsidiaries, because YS Group/YS Biopharma or its PRC subsidiaries does not qualify as a critical information infrastructure operator or internet platform operator, or has conducted any data processing activities that affect or may affect national security or holds personal information of more than one million users. However, as PRC governmental authorities have significant discretion in interpreting and implementing statutory provisions and there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, YS Group cannot assure you that the Business Combination and business operation of YS Group/YS Biopharma or any of its PRC Subsidiaries will not be deemed to be subject to PRC cybersecurity review requirements under the 2022 Cybersecurity Review Measures or the Draft Administrative Regulations as a critical information infrastructure operator, data processor or an internet platform operator that is engaged in data processing activities that affect or may affect national security or hold personal information of more than one million users, nor can YS Group assure you that YS Group/YS Biopharma or its PRC Subsidiaries would be able to pass such review. If YS Group/YS Biopharma or its PRC subsidiaries fail to receive any requisite permission or approval from the CAC for the Business Combination or the business operations of YS Group, or the waiver for such permission or approval, in a timely manner, or at all, or inadvertently conclude that such permission or approval is not required, or if applicable laws, regulations or interpretations change and obligate YS Group to obtain such permission or approvals, YS Group may be subject to increased compliance costs, fines, disruption or even suspension of business, revocation of business licenses or other penalties, as well as reputational

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damage or legal proceedings or actions against YS Group, which may have a material adverse effect on the business, financial condition or results of operations of YS Group. Any of the foregoing events may also significantly limit or completely hinder YS Biopharma’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. In addition, YS Group could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future pursuant to new laws, regulations or policies, which may increase YS Group’s costs for compliance and divert its management’s attention. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with applicable laws and regulations may result in fines, disruption or even suspension of business, revocation of business licenses or other penalties, as well as reputational damage or legal proceedings or actions against YS Group, which may have a material adverse effect on the business, financial condition or results of operations of YS Group.

YS Biopharma’s securities may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors with presence in China in 2023 and beyond, and the delisting of its securities, or the threat of their being delisted, may materially and adversely affect the value of your investment.

The Holding Foreign Companies Accountable Act (“HFCAA”) was enacted on December 18, 2020 and has been subsequently amended. The HFCAA states if the SEC determines that a U.S. listed company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC shall prohibit its securities from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

YS Biopharma’s consolidated financial statements contained in this registration statement on Form F-1, of which this prospectus forms a part, have been audited by WWC, an independent registered public accounting firm that is headquartered in the United States. WWC is a firm registered with the PCAOB, and is required by the United States laws to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and professional standards. While WWC has been inspected by the PCAOB on a regular basis, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities in China according to Article 177 of the PRC Securities Law. Accordingly, without the consent of the competent PRC securities regulators and relevant authorities, no organization or individual may provide the documents and materials relating to securities business activities in China to the PCAOB, an overseas securities regulator under the PRC Securities Law. As a result, the audit working papers of the financial statements in this prospectus may not be inspected by the PCAOB, since the audit work was carried out by WWC with the collaboration of their China-based offices and the PCAOB has not obtained such requisite approval. The trading of YS Biopharma’s securities may be prohibited and such securities may be delisted from Nasdaq or any other U.S. stock exchange under the HFCAA if the PCAOB is unable to inspect auditors with presence in China. The prohibition of trading of YS Biopharma’s securities and the delisting of the securities, or the threat of their being prohibited or delisted, may cause the value of such securities to significantly decline or, in extreme cases, become worthless.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. On December 2, 2021, the SEC adopted amendments to finalize such rules, which include requirements to disclose information, including the auditor name and location, the percentage of shares of the issuer owned by governmental entities, whether governmental entities in the applicable foreign jurisdiction with respect to the auditor has a controlling financial interest with respect to the issuer, the name of each official of the Chinese Communist Party who is a member of the board of the issuer, and whether the articles of incorporation of the issuer contains any charter of the Chinese Communist Party. These amendments also establish procedures the SEC will follow in identifying issuers and prohibiting trading by certain issuers under the HFCAA, including that the SEC will identify an issuer as a “Commission-identified Issuer” if the issuer has filed an annual report containing an audit report issued by a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely, and will then impose a trading prohibition on an issuer after it is identified as a Commission-Identified Issuer for two consecutive years.

On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong without the approval of the Chinese authorities. While YS Biopharma’s auditor, Wei, Wei & Co., LLP, is headquartered in the United States and not subject to such determinations, there is no guarantee that the audit work carried out by Wei, Wei & Co., LLP in collaboration with its China-based offices can be inspected or investigated completely by the PCAOB without such approval. YS Biopharma is required to comply with these rules if the SEC identifies

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YS Biopharma as having a “non-inspection” year by evaluating the annual report it files, in which it will identify the auditor who provide opinions related to the financial statements presented in its annual report, the location where the auditor’s report has been issued and the PCAOB ID number of such audit firm or branch. If YS Biopharma has two consecutive non-inspection years, the SEC will implement the trading prohibition of YS Biopharma’s securities through stop orders, and the exact timeline for when the SEC will delist an issuer after two consecutive non-inspection years remains imprecise. YS Biopharma’s securities could be prohibited from trading in the United States if it is identified as a Commission-identified Issuer for two consecutive years.

In March 2022, the SEC issued its first “conclusive list of issuers identified under the HFCAA” indicating that those companies are now formally subject to the delisting provisions if they remain on the list for two consecutive years.

In August 2022, the PCAOB, the CSRC and the Ministry of Finance of the PRC signed the Statement of Protocol, which establishes a specific and accountable framework for the PCAOB to conduct inspections and investigations of PCAOB-governed accounting firms in mainland China and Hong Kong. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of YS Biopharma’s and YS Biopharma’s auditor’s control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed.

The HFCAA or other efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including YS Biopharma, and the market price of YS Biopharma’s securities could be adversely affected. If its auditor is unable to be inspected or it is unable to meet the PCAOB inspection requirement in time in 2023 and beyond, including retain a registered public accounting firm that the PCAOB is able to inspect, YS Biopharma would be identified as a “Commission-identified Issuer” and be delisted from the Nasdaq Stock Market upon the expiration of the applicable years of non-inspection under the HFCAA and YS Biopharma’s securities will not be permitted for trading “over-the-counter” either. If YS Biopharma’s securities are prohibited from trading in the United States, there is no certainty that YS Group will be able to list on a non-U.S. exchange or that a market for its shares will develop outside of the United States. The delisting would substantially impair your ability to sell or purchase YS Biopharma’s securities when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of YS Biopharma’s securities. In addition, the delisting would significantly affect YS Biopharma’s ability to raise capital on terms acceptable to it, or at all, which would have a material adverse impact on its business, financial condition, and prospects. If YS Biopharma’s securities are delisted from the Nasdaq Stock Market and are prohibited from trading in the over-the-counter market in the United States, there is no certainty that YS Biopharma will be able to list on a non-U.S. exchange or that a market for YS Biopharma’s securities will develop outside of the United States.

PRC governmental authorities’ significant oversight and discretion over YS Group’s business operation could result in a material adverse change in its operations following the Business Combination and the value of YS Biopharma’s securities and YS Biopharma’s securities following the Business Combination.

PRC governmental authorities have significant oversight and discretion over YS Group’s business operations in China and may seek to intervene or influence such operations at any time the government deems appropriate to further its regulatory, political and societal goals, which could result in a material adverse change in its operations and/or the value of YS Biopharma’s securities. In addition, the PRC governmental authorities may also exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Any such action could result in a material change in YS Group’s operations, significantly limit or completely hinder the value of YS Biopharma’s securities and the ability of YS Biopharma to offer or continue to offer securities to investors, and cause the value of such securities to significantly decline or be worthless. Furthermore, occurrences of incidents or scandals within other companies in the same or similar industries that attract government scrutiny or national-level attention and the implementation of industry-wide regulations directly targeting the operations of YS Group could cause the value of YS Biopharma’s securities to decline significantly.

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Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on YS Group’s business and operations.

YS Group conducts a substantial portion of its business in China, including, manufacturing and sales of YSJATM rabies vaccines and certain R&D activities. As such, YS Group’s business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic, social and other conditions in China, including, among others, regulatory environment, overall economic growth, level of urbanization and level of per capita disposable income. The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented various changes, a significant portion of the productive assets in China are owned by the government, and the Chinese government continues to play a significant role in regulating industry development by setting industrial policies. The Chinese government also exercises significant control over China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing different treatment to particular industries or companies.

While the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in China, the policies of the Chinese government or the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments may lead to a reduction in demand for YS Group’s marketed product or product candidates in the future and materially and adversely affect its business, financial condition and results of operations. In addition, stimulus measures designed to boost the Chinese economy may contribute to higher inflation, which could adversely affect YS Group’s results of operations and financial condition.

A severe or prolonged downturn in the PRC or global economy and political tensions between the United States and China could materially and adversely affect YS Group’s business and financial condition.

The global macroeconomic environment is facing challenges, including the end of quantitative easing by the U.S. Federal Reserve, the economic slowdown in the Eurozone since 2014 and uncertainties over the impact of Brexit. The Chinese economy has shown slower growth compared to the previous decade since 2012 and the trend may continue. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, such as wars and conflicts in Ukraine and Russia, which have resulted in market volatility.

If YS Group plans to expand its business internationally and does cross-border business in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for its products and product candidates, impact its competitive position, or prevent it from being able to conduct business in certain countries. If any new tariffs, legislation, or regulations are implemented, or if existing trade agreements are renegotiated, such changes could adversely affect YS Group’s business, financial condition, and results of operations. In particular, there have been heightened tensions in international economic relations between the United States and China. The U.S. government has recently imposed, and has recently proposed to impose additional, new, or higher tariffs on certain products imported from China to penalize China for what the U.S. government characterizes as unfair trade practices. China has responded by imposing, and proposing to impose additional, new, or higher tariffs on certain products imported from the United States. Following mutual retaliatory actions for months, on January 15, 2020, the United States and China entered into the Economic and Trade Agreement Between the United States of America and the PRC as a phase one trade deal, effective on February 14, 2020. Although the direct impact of the current international trade tension, and any escalation of such tension, on the holographic technology industry in China is uncertain, the negative impact on general, economic, political and social conditions may adversely impact YS Group’s business, financial condition and results of operations.

YS Group’s business operations are subject to various PRC laws and regulations, the interpretation and enforcement of which involve significant uncertainties as the PRC legal system is evolving rapidly.

The PRC legal system is a civil-law system based on written statutes. Unlike the common-law system, prior court decisions under the civil-law system may be cited for reference but have limited precedential value, which has led to uncertainty and inconsistency in the interpretation and enforcement of many laws. Uncertainties also exist with respect to new legislation or proposed changes in the PRC regulatory requirements as the PRC legal system is evolving

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rapidly. The interpretations of many laws and regulations may contain inconsistencies, and the enforcement of these laws, regulations and rules involves uncertainties. In addition, laws and regulations can change quickly with limited advance notice. From time to time, YS Group may have to resort to administrative and court proceedings to enforce its legal rights. Because PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection YS Group enjoys. Such uncertainty towards the contractual, property and procedural rights and legal obligations could adversely affect its business and impede its ability to grow their business. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from YS Group.

PRC regulations relating to offshore investment activities by PRC residents may subject YS Biopharma’s PRC resident shareholders, beneficial owners and PRC subsidiaries to liability or penalties, limit their ability to inject capital into its PRC subsidiaries, limit its PRC subsidiaries’ ability to increase their registered capital or distribute profits to YS Group or otherwise adversely affect it.

In July 2014, the SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles (“SAFE Circular 37”). SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities, as well as foreign individuals that are deemed PRC residents for foreign exchange administration purposes) to register with the SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 further requires the SAFE registrations be updated in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as a change in its name, operation term and PRC resident shareholder, an increase or decrease of capital contribution, share transfer or exchange by PRC resident individuals, or mergers or divisions.

In September 2014, MOFCOM promulgated the Measures for the Administration of Overseas Investment. In December 2017, the NDRC further promulgated the Administrative Measures of Overseas Investment of Enterprises, which became effective in March 2018. Pursuant to these regulations, any outbound investment of PRC enterprises in a non-sensitive area or industry is required to be filed with MOFCOM and the NDRC or their local branches.

YS Biopharma requested that all of its current shareholders and beneficial owners who, to their and YS Biopharma’s knowledge, are PRC residents complete the foreign exchange registrations and that those who, to their and YS Biopharma’s knowledge, are PRC enterprises comply with outbound investment related regulations. However, YS Biopharma may not be informed of the identities of all the PRC residents and PRC enterprises holding direct or indirect interest in YS Biopharma, and they and YS Biopharma cannot provide any assurance that these PRC residents and PRC enterprises will comply with their and YS Biopharma’s request to make or obtain the applicable registrations or continuously comply with all the requirements under SAFE Circular 37 or other related rules and the outbound investment related regulations. Failure by such shareholders or beneficial owners to comply with SAFE and outbound investment related regulations, or failure by YS Biopharma to amend the foreign exchange registrations of its PRC subsidiaries, could subject YS Biopharma to fines or legal sanctions, restrict its overseas or cross-border investment activities, limit YS Biopharma’s PRC subsidiaries’ ability to make distributions or pay dividends to YS Biopharma or affect its ownership structure, which could adversely affect its business and prospects.

Furthermore, as these foreign exchange and outbound investment related regulations are relatively new and their interpretation and implementation are evolving, it is uncertain how these regulations, and any future regulations concerning offshore or cross-border investments and transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, YS Biopharma may be subject to a more stringent review and approval process with respect to its foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect YS Biopharma’s financial condition and results of operations. Due to the complexity and constantly changing nature of the regulations related to foreign exchange and outbound investment, as well as the uncertainties involved, YS Biopharma cannot assure you that it has complied or will be able to comply with all applicable foreign exchange and outbound investment related regulations. In addition, if YS Group decides to acquire a PRC domestic company, YS Group cannot assure you that it or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict YS Biopharma’s ability to implement YS Group’s acquisition strategy and could adversely affect its business and prospects.

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YS Group’s PRC subsidiaries are subject to restrictions on paying dividends or making other payments to its offshore holding companies, including YS Biopharma, which may restrict their ability to satisfy liquidity requirements.

YS Biopharma is a holding company incorporated in the Cayman Islands. Payment of dividends by YS Group’s PRC subsidiaries is an important source of support for YS Biopharma to meet their financing needs, and such payment is subject to various restrictions. Current PRC regulations permit the PRC subsidiaries to pay dividends to their offshore holding companies only out of their accumulated after-tax profits upon satisfaction of relevant statutory condition and procedures, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of YS Group’s PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that withholding tax at the rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises, unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. Furthermore, if YS Group’s PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to YS Group which may restrict their offshore holding companies’ ability to satisfy YS Group’s liquidity requirements.

Fluctuations in exchange rates could have a material and adverse effect on the value of your investment and YS Biopharma’s results of operations.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the political and economic conditions in China and China’s foreign exchange policies. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar. On November 30, 2015, the Executive Board of the International Monetary Fund completed the regular five-year review of the basket of currencies that make up the Special Drawing Right (the “SDR”) and decided that, from October 1, 2016, Renminbi would be determined to be a freely usable currency and will be included in the SDR basket. Since June 2010, the Renminbi has fluctuated significantly against the U.S. dollar. It is difficult to predict how market forces or policies by the PRC or U.S. government may impact the exchange rate between the Renminbi and the U.S. dollar in the future. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and YS Group cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future.

Significant revaluation of the Renminbi may materially and adversely affect the revenues, earnings and financial position of YS Group, and the value and trading price of, and any dividends payable on, YS Biopharma’s securities in U.S. dollars. The appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount that would be received from the conversion to the extent that needs to be converted U.S. dollars into Renminbi for capital expenditures and working capital and other business purposes. Conversely, a significant depreciation of the Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of the earnings, which in turn could adversely affect the price of YS Biopharma’s securities and have a negative effect on the U.S. dollar amount available to YS Group for the purpose of making payments for dividends on YS Biopharma’s securities, royalties, strategic acquisitions or investments or for other business purposes.

Very limited hedging options are available in China to reduce YS Group’s exposure to exchange rate fluctuations. To date, no hedging transactions in an effort to reduce the exposure of YS Group or YS Biopharma to foreign currency exchange risk were contracted. While YS Group may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and YS Group may not be able to adequately hedge the exposure, or at all. In addition, YS Group’s currency exchange losses may be magnified by PRC exchange control regulations that restrict its ability to convert Renminbi into foreign currency.

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may restrict or delay YS Biopharma from using the offshore proceeds to make loans or additional capital contributions to its PRC subsidiaries, which could adversely affect its liquidity and ability to fund and expand its business.

Under PRC laws and regulations, loans by YS Biopharma to its PRC subsidiaries to finance their operations shall not exceed certain statutory limits and must be registered with the local counterpart of the SAFE, and any capital contribution from YS Biopharma or YS Biopharma to its PRC subsidiaries is required to be registered, filed with or

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reported to the competent PRC governmental authorities. Currently, there is no statutory limit to the amount of funding that it can provide to YS Group’s PRC subsidiaries through capital contributions, because there is no statutory limit on the amount of registered capital for its PRC subsidiaries and it is allowed to make capital contributions to its PRC subsidiaries by subscribing for their registered capital, provided that the PRC subsidiaries complete the relevant filing, registration and reporting procedures. According to relevant PRC regulations on foreign-invested enterprises, capital contributions to the relevant PRC subsidiaries are required to be registered with the SAMR or its local counterpart and a local bank authorized by SAFE, and reported to MOFCOM’s local counterpart.

Foreign exchange controls may limit YS Group’s ability to effectively utilize its revenues and proceeds generated or financed outside China and adversely affect the value of your investment.

The PRC government imposes foreign exchange controls on the convertibility of the Renminbi and, in certain cases, the remittance of currency out of China. YS Group receives substantially all of its revenues in Renminbi. Under the corporate structure following the Business Combination, YS Biopharma, which is YS Group’s Cayman Islands holding company primarily relies on dividend payments from its PRC subsidiaries to fund any cash and financing requirements it may have. Under the existing exchange restrictions, without prior approval of the SAFE, cash generated from the operations of PRC subsidiaries in China may be used to pay dividends to YS Biopharma. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses, such as the repayment of loans denominated in foreign currencies. As a result, YS Biopharma needs to obtain requisite approval or registration to use cash generated from the operations of its PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. The PRC government may also at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents YS Group from obtaining sufficient foreign currencies to satisfy its foreign currency demands, YS Biopharma may not be able to pay dividends to you or fulfill other payment obligations in foreign currencies or fund any future operations that it may have outside of mainland China with foreign currencies.

In addition, under the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises (“FIEs”) and the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, FIEs are prohibited from using Renminbi funds converted from their foreign exchange capital for expenditures beyond their business scopes or using such Renminbi funds to provide loans to persons other than their affiliates, unless within their business scope.

Any foreign loan procured by YS Group’s PRC subsidiaries is also required to be registered with the SAFE or its local branches or be filed with the SAFE in its information system, and each of YS Group’s PRC subsidiaries may not procure loans which exceed either (1) the amount of the difference between their respective registered total investment amount and registered capital or (2) two and a half times, or the then-applicable statutory multiple, the amount of their respective audited net assets, calculated in accordance with PRC GAAP (the “Net Assets Limit”), at YS Group’s election. Increasing the amount of the difference between their respective registered total investment amount and registered capital of the PRC subsidiaries might be subject to governmental approval and may require a PRC subsidiary to increase its registered capital at the same time. If YS Group makes a loan to a PRC entity based on its Net Assets Limit, the maximum amount that the offshore companies would be able to loan to the relevant PRC entity would depend on the relevant entity’s net assets and the applicable statutory multiple at the time of the calculation. As of the date of this prospectus, all of YS Group’s PRC subsidiaries have negative or very limited net assets, which prevents them from providing loans to them using the Net Assets Limit. Any medium- or long-term loan to be provided by YS Group or a foreign third party to the PRC subsidiaries must also be registered by and filed with the NDRC.

On October 23, 2019, SAFE further issued the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-Border Trade and Investment (“Circular 28”), which took effect on the same day and was revised on December 4, 2023. Circular 28 allows non-investment FIEs to use their capital funds to make equity investments in China as long as such investments do not violate the then effective negative list for foreign investments and the target investment projects are genuine and in compliance with laws. In addition, Circular 28 stipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt and overseas listing, for the purpose of domestic payments without providing authenticity certifications to the relevant banks in advance for those domestic payments. As this circular is relatively new, there remains uncertainty as to its interpretation and application and any other future foreign exchange-related rules. Violations of these circulars could result in severe monetary or other penalties.

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These PRC laws and regulations may significantly limit YS Biopharma’s ability to use Renminbi converted from the proceeds received outside China to fund the establishment of new entities in China by its PRC subsidiaries, and to invest in or acquire any other PRC companies through its PRC subsidiaries. Moreover, YS Group cannot assure you that it will be able to complete the necessary registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to its PRC subsidiaries, or future capital contributions by YS Group to its PRC subsidiaries. If it fails to complete such registrations or obtain such approvals or if it is found to be in violation of any applicable laws with respect to foreign currency exchange, its ability to use the proceeds it received or expect to receive from YS Group’s offshore offerings may be negatively affected and it may be subject to penalties, which could materially and adversely affect its liquidity and its ability to fund and expand its business.

The M&A Rules and certain other PRC regulations could make it more difficult for YS Group to pursue growth through acquisitions in China.

In China, the M&A Rules, established additional procedures and requirements that could make merger and acquisition activities involving the PRC by foreign investors more time-consuming and complex, including requirements in some instances that the in-charge government authority be notified and relevant approval shall be obtained in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. Moreover, the Anti-monopoly Law of the PRC requires that the in-charge government authority be notified in advance of any concentration of undertaking if certain thresholds are triggered. In light of the uncertainties relating to the interpretation, implementation and enforcement of the Anti-monopoly Law, YS Group cannot assure you that the in-charge Anti-monopoly Law enforcement agency will not deem YS Group’s past acquisition or investments to have triggered the filing requirement for anti-trust review. If YS Group is found to have violated the Anti-monopoly Law for failing to file the notification of concentration and request for review, it could be, among others, subject to a fine of up to RMB5,000,000 if the concentration has no effect of eliminating the restricting competition, or a fine of not more than 10% of its sales amount in the previous year if the concentration has or may have the effect of eliminating or restricting competition, and the parts of the transaction causing the prohibited concentration could be ordered to be unwound, which may materially and adversely affect its business, financial condition and results of operations. In addition, under applicable laws, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by MOFCOM, and any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement, are prohibited.

In the future, YS Group or YS Biopharma may grow its business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from MOFCOM or its local counterparts, may delay or inhibit its ability to complete such transactions, which could affect its ability to expand its business or maintain YS Group’s market share.

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

YS Biopharma has assumed the share incentive plan of YS Group and the outstanding awards. Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, promulgated by the SAFE in 2012, grantees of YS Biopharma’s incentive share awards who are PRC citizens or who are non-PRC residents continuously residing in the PRC for a continuous period of no less than a year (excluding the foreign diplomatic personnel and representatives of international organizations) are required to register with the SAFE and complete certain other procedures through a domestic qualified agent and collectively retain an overseas entrusted institution to handle matters related to the exercise of stock options and the purchase and disposition of related equity interests after YS Biopharma has become an overseas listed company. Failure to comply with these SAFE requirements may subject these individuals to fines and legal sanctions and may also limit the ability of YS Biopharma to contribute additional capital into its PRC subsidiaries and limit its PRC subsidiaries’ ability to distribute dividends to YS Biopharma.

The SAT has also issued certain circulars concerning equity incentive awards. Under these circulars, YS Group’s employees in China who exercise share options or are granted restricted share units will be subject to PRC individual income tax. If YS Group’s employees fail to pay or if YS Group fails to withhold their income taxes according to relevant laws and regulations, YS Group may face sanctions imposed by the tax or other PRC governmental authorities.

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Your ability to effect service of legal process, enforce judgments or bring actions against YS Biopharma or certain of their officers and directors outside the U.S. will be limited and addition costs may be required.

YS Biopharma is a Cayman Islands holding company that conducts its substantial operations outside the United States. A majority of YS Biopharma’s officers and a minority of YS Biopharma’s directors reside outside the United States, and a substantial portion of the assets of those persons are located outside of the United States. For example, certain YS Biopharma’s directors and officers reside in mainland China and one independent director resides in Hong Kong. Therefore, it may be difficult or costly for you to effect service of process against YS Biopharma or its officers and directors within the U.S. In addition, as advised by YS Biopharma’s PRC legal counsel, it is uncertain (1) whether and on what basis a PRC court would enforce judgment rendered by a court in the U.S. based upon the civil liability provisions of U.S. federal securities laws; and (2) whether an investor will be able to bring an original action in a PRC court based on U.S. federal securities laws. China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions. As such, you may not be able to or may experience difficulties or incur additional costs to enforce judgments obtained in U.S. courts based upon the civil liability provisions of U.S. federal securities laws in China or bring original actions in China based on U.S. federal securities laws even if you are successful in bringing an action of this kind. Furthermore, any judgment obtained in the U.S. against YS Group and these individuals may not be collectible within the United States.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because YS Biopharma is incorporated under the law of the Cayman Islands, YS Biopharma conducts substantially all of its operations and a majority of their respective directors and executive officers reside outside of the United States.

YS Biopharma is an exempted company limited by shares incorporated under the laws of the Cayman Islands, and YS Biopharma will continue to conduct a majority of its operations through its subsidiaries, namely Philippines Yisheng, Singapore Yisheng, Liaoning Yisheng and Beijing Yisheng, outside the United States. Substantially all of YS Biopharma’s assets are located outside of the United States. A majority of YS Biopharma’s officers and a minority of YS Biopharma’s directors reside outside the United States and a substantial portion of the assets of those persons are located outside of the United States, including, among others, certain YS Biopharma’s directors and officers reside in mainland China and one independent director of YS Biopharma resides in Hong Kong. As a result, it could be difficult or impossible for you to bring an action against YS Biopharma or against these individuals outside of the United States in the event that you believe that your rights have been infringed upon under the applicable securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC could render you unable to enforce a judgment against the relevant assets or the assets of the relevant directors and officers.

In addition, YS Biopharma’s corporate affairs are governed by the Amended YS Biopharma Articles, the Cayman Islands Companies Act and the common law of the Cayman Islands. The rights of investors to take action against the directors, actions by minority shareholders and the fiduciary duties of YS Biopharma’s directors to YS Biopharma under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of YS Biopharma’s shareholders and the fiduciary duties of YS Biopharma’s directors under Cayman Islands law may not be as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws than the United States. Some U.S. states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have a standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like YS Biopharma have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies (save for the memorandum and articles of association, the register of mortgages and charges, and special resolutions of YS Biopharma’s shareholders). YS Biopharma’s directors will have discretion under the Amended YS Biopharma Articles to determine whether or not, and under what conditions, YS Biopharma’s corporate records may be inspected by its shareholders, but YS Biopharma is not obliged to make them available to the shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder’s motion or to solicit proxies from other shareholders in connection with a proxy contest. See “Description of YS Biopharma’s Securities — Ordinary Shares — Inspection of Books and Records.”

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Certain corporate governance practices in the Cayman Islands, which is YS Biopharma’s home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent that YS Biopharma chooses to follow home country practice with respect to corporate governance matters, its shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, YS Biopharma’s shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

Inflation in China and increase in labor costs could negatively affect the profitability and growth of YS Group.

Economic growth in China has been accompanied by periods of high inflation, and the PRC government implemented various policies from time to time to control inflation, including imposing various corrective measures designed to restrict the availability of credit or regulate growth. High inflation in the future may cause the PRC government to once again impose controls on credit and/or price of commodities, or to take other actions, which could inhibit economic activities in China. Any action on the part of the PRC government that seeks to control credit and/or price of commodities may adversely affect the business operations of YS Group, causing negative impact on its profitability and growth.

Moreover, the significant economic growth in China has resulted in a general increase in labor costs and shortage of low-cost labor. Inflation may cause its production cost to continue to increase. If YS Group is unable to pass on the increase in production cost to its customers, it may suffer a decrease in profitability and a loss of customers, and YS Group’s results of operations could be materially and adversely affected. In addition, PRC entities are subject to stricter regulatory requirements in entering into labor contracts with their employees and paying various statutory employee benefits, including pensions, housing funds, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of their employees. Pursuant to the PRC Labor Contract Law and its implementation rules, employers are subject to stricter requirements in signing labor contracts, minimum wages, overtime work, labor dispatch, paying remuneration, determining the term of employee’s probation and unilaterally terminating labor contracts. In the event YS Group decides to terminate some of its employees or otherwise change their employment or labor practices, the PRC Labor Contract Law and its implementation rules may limit its ability to effect those changes in a desirable or cost-effective manner, which could adversely affect its business and results of operations. In addition, YS Group needs to apply for flexible working hours arrangement and comprehensive working hours scheme with relevant PRC authorities and comply with the requirements contained in the relevant approvals, or pay employees overtime work compensations in case YS Group intends to ask its employees to work overtime. YS Group might not be able to, in a timely manner or at all, obtain relevant approvals and fully comply with requirements therein, or pay the overtime work compensation according to relevant regulations.

Pursuant to the PRC laws and regulations, companies registered and operating in China are required to apply for social insurance registration and housing fund deposit registration within 30 days of their establishment and to pay different social insurance and housing provident funds for their employees. YS Group engaged third-party human resources agencies to pay social insurance and housing funds for certain employees for their actual needs to participate in local social insurance and housing fund schemes in their place of residency where YS Group did not have subsidiaries. The contributions of social insurance premium and housing provident funds made through third-party accounts may not be recognized as contributions made by YS Group, and as a result, YS Group may be required by competent authorities to pay the outstanding amount, and could be subject to late payment fines and other penalties or enforcement application made to the court. See “— YS Group may be subject to fines and penalties under applicable PRC laws and regulations for failure to make adequate contributions to social insurance and housing provident fund for its employees.” Recently, as the PRC government enhanced its enforcement measures relating to social insurance collection, it may be required to make up the contributions for YS Group’s employees, and may be further subjected to late fees payment and administrative fines, which may adversely affect its financial condition and results of operations.

As the interpretation and implementation of labor-related laws and regulations are still evolving, YS Group cannot assure you that YS Group’s employment practices have been and will be in compliance with labor-related laws and regulations in China in all material respects, which may subject it to labor disputes or government investigations and penalties. In addition, it may incur additional expenses in order to comply with such laws and regulations, which may adversely affect its business and profitability.

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YS Biopharma may be deemed to be a PRC tax resident under the EIT Law following the consummation of the Business Combination, and as a result, their global income could be subject to PRC withholding tax and enterprise income tax.

YS Biopharma is a holding company incorporated under the laws of the Cayman Islands and indirectly hold interests in a Hong Kong-incorporated subsidiary, which in turn hold interests in certain PRC subsidiaries following the consummation of the Business Combination. Pursuant to the EIT Law, effective in January 2008, as amended on lately December 29, 2018, and its implementation rules, dividends payable by a foreign-invested enterprise to its foreign corporate investors who are not deemed a PRC resident enterprise are subject to a 10% withholding tax, unless such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding tax arrangement. Under the Arrangement between the Mainland of China and Hong Kong Special Administration Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Tax on Income (the “Tax Treaty”) which was promulgated by SAT and the Hong Kong government on August 21, 2006, such dividend withholding tax rate is reduced to 5% for dividends paid by a PRC resident enterprise to a Hong Kong-resident enterprise if such Hong Kong entity is a “beneficial owner” and such entity directly owns at least 25% of the equity interest of the PRC company. The Announcement on Issues Relating to “Beneficial Owner” in Tax Treaties, effective in April 2018, provides certain factors for the determination of “beneficial owner” status of a company under the Tax Treaty. If the PRC tax authorities determine that YS Group’s Hong Kong subsidiary is not a “beneficial owner,” YS Group may not be able to enjoy a preferential withholding tax rate of 5% and dividend payable by its PRC subsidiaries to its Hong Kong subsidiary will be subject to withholding tax at the rate of 10%.

The EIT Law and its implementation rules also provide that if an enterprise incorporated outside China has its “de facto management bodies” within China, such enterprise may be deemed a “PRC resident enterprise” for tax purposes and be subject to an enterprise income tax rate of 25% on its global incomes. “De facto management body” is defined as the body that has the significant and overall management and control over the business, personnel, accounts and properties of an enterprise. In April 2009, SAT promulgated a circular, known as Circular 82, and partially amended by Circular 9 promulgated in January 2014, to clarify the certain criteria for the determination of the “de facto management bodies” for foreign enterprises controlled by PRC enterprises or PRC enterprise groups. Further to Circular 82, the SAT issued a bulletin, known as Bulletin 45, effective in September 2011 and lately amended on June 15, 2018, respectively to provide more guidance on the implementation of Circular 82 and clarify the reporting and filing obligations of such “Chinese-controlled offshore incorporated resident enterprises.” Although Circular 82 and Bulletin 45 explicitly provide that the above standards apply to enterprises that are registered outside China and controlled by PRC enterprises or PRC enterprise groups, these regulations may reflect SAT’s criteria for determining the tax residence of foreign enterprises in general.

However, there are no official implementation rules regarding the determination of the “de facto management bodies” for foreign enterprises not controlled by PRC enterprises (including companies like YS Biopharma). Therefore, it remains unclear how the tax authorities will treat a case such as YS Biopharma and its subsidiaries following the consummation of the Business Combination. However, if the PRC authorities were to subsequently determine, or any future regulation provides, that it should be treated as a PRC resident enterprise, it will be subject to the uniform 25% enterprise income tax on its global incomes. In addition, although the EIT Law provides that dividend payments between qualified PRC-resident enterprises are exempt from enterprise income tax, there is uncertainty to the detailed qualification requirements for this exemption and whether dividend payments by PRC subsidiaries of YS Biopharma to YS Biopharma will meet such qualification requirements even if it is considered a PRC resident enterprise for tax purposes.

There remains significant uncertainty as to the interpretation and application of applicable PRC tax laws and rules by the PRC tax authorities, and the PRC tax laws, rules and regulations may also change. If there is any change to applicable tax laws and rules and interpretation or application with respect to such laws and rules, the value of your investment in YS Group’s shares may be materially affected.

YS Group and YS Biopharma’s Shareholders face uncertainties with respect to the Business Combination and other indirect transfers of equity interests in PRC resident enterprises.

Under the SAT Bulletin 7, an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of reducing,

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deferring or avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to SAT Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, immovable properties in China, and equity investments in PRC resident enterprises. In respect of an indirect offshore transfer of assets of a PRC establishment, the relevant gain is to be regarded as effectively connected with the PRC establishment and therefore included in its enterprise income tax filing, and would consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates to the immovable properties in China or to equity investments in a PRC resident enterprise, which is not effectively connected to a PRC establishment of a non-resident enterprise or otherwise provided in the SAT Bulletin 7, a PRC enterprise income tax of 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation. There is uncertainty as to the implementation details of SSAT Bulletin 7. If SAT Bulletin 7 was determined by the tax authorities to be applicable to some of YS Group’s transactions involving PRC taxable assets, including the Business Combination, the offshore subsidiaries of YS Group and YS Biopharma conducting the relevant transactions might be required to spend valuable resources to comply with SAT Bulletin 7 or to establish that the relevant transactions should not be taxed under SAT Bulletin 7.

On October 17, 2017, the SAT issued the Bulletin on Issues Concerning the Source-based Withholding of Enterprise Income Tax on Non-resident Enterprises, or Bulletin 37, which became effective on December 1, 2017. According to Bulletin 37, if the withholding agent fails to or is unable to withhold the income tax in accordance with the law, the tax authority may order the payment within a time limit, and non-resident enterprises shall declare and make the payment within such time limit required by the tax authority, and the non-resident enterprise will be deemed to have cleared its tax payment on time if it voluntarily declares and pays the tax before or within the time limit the tax authority orders it to do so. If the taxable income before withholding on a source-basis falls within the form of dividends or any equity investment gains, the date of triggering obligations to settle such tax payments is the date of actual payment of the dividends or other equity investment gains. In addition, on December 1, 2017, Bulletin 37 repealed the Notice of the SAT on Strengthening the Administration over Enterprise Income Tax on Income of Non-resident Enterprises from Equity Transfer and Notice of the SAT on Issuing the Interim Measures for the Administration of Source-based Withholding of the Enterprise Income Tax of Non-resident Enterprises issued by the SAT on December 10, 2009 and January 1, 2009, respectively.

As a result, SAT Bulletin 7 could apply if the Business Combination did not have a reasonable business purpose and was carried out to evade PRC corporate income tax obligations. Although YS Biopharma believes SAT Bulletin 7 does not apply to the Business Combination, it is possible that PRC tax authorities would make an assessment that the Business Combination is subject to SAT Bulletin 7. If SAT Bulletin 7 were to apply to the Business Combination, there would be PRC 10% withholding tax imposed on any gain deemed, from a PRC tax perspective, to have been realized from the Business Combination. In addition, YS Group, YS Biopharma and their respective non-PRC Shareholders may have the risk of being taxed for the disposition of YS Group’s Shares and may be required to spend valuable resources to comply with SAT Bulletin 7 and SAT Bulletin 37 or to establish that YS Group, YS Biopharma and their respective non-PRC Shareholders should not be taxed as an indirect transfer, which may have a material adverse effect on their results of operations and financial condition or the investment by non-PRC investors in YS Biopharma’s securities.

In addition, since YS Biopharma may pursue acquisitions, and may conduct acquisitions involving complex corporate structures, the PRC tax authorities may, at their discretion, adjust the capital gains or request that it submit additional documentation for their review in connection with any potential acquisitions, which may cause it to incur additional acquisition costs or delay YS Group’s acquisition timetable.

Dividends payable to YS Biopharma’s foreign investors and gains on the sale of YS Biopharma’s securities by foreign investors may become subject to PRC tax.

Under the EIT Law and its implementation regulations issued by the State Council, a 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises, which do not have an establishment or place of business in China or which have such establishment or place of business but the dividends are not effectively connected with such establishment or place of business, to the extent such dividends are derived from sources within China. Similarly, any gain realized on the transfer of the ADSs by such investors is also subject to a PRC tax rate of 10%, subject to any reduction or exemption set forth in applicable tax treaties or under applicable tax arrangements between jurisdictions, if such gain is regarded as income derived from sources within China. If YS Biopharma is

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deemed a PRC resident enterprise, dividends paid on YS Biopharma’s securities, and any gain realized from the transfer of YS Biopharma’s securities, would be treated as income derived from sources within China and would as a result be subject to PRC taxation. Furthermore, if YS Biopharma is deemed a PRC resident enterprise, dividends payable to individual investors who are non-PRC residents and any gain realized on the transfer of YS Biopharma’s securities by such investors may be subject to a PRC tax rate of 20%, subject to any reduction or exemption set forth in applicable tax treaties or under applicable tax arrangements between jurisdictions. If YS Biopharma or any of its subsidiaries established outside China are considered a PRC resident enterprise, it is unclear whether holders of the ADSs would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. If dividends payable to its non-PRC investors, or gains from the transfer of YS Biopharma’s securities by such investors, are deemed as income derived from sources within China and thus are subject to PRC tax, the value of your investment in YS Biopharma’s securities may decline significantly.

YS Biopharma faces regulatory uncertainties in China that could restrict its ability to grant share incentive awards to its employees or consultants who are PRC citizens.

Pursuant to the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in a Stock Incentive Plan of an Overseas Publicly-Listed Company issued by SAFE on February 15, 2012, or Circular 7, a qualified PRC agent (which could be the PRC subsidiary of the overseas-listed company) is required to file, on behalf of “domestic individuals” (both PRC residents and non-PRC residents who reside in China for a continuous period of not less than one year, excluding the foreign diplomatic personnel and representatives of international organizations) who are granted shares or share options by the overseas-listed company according to its share incentive plan, an application with SAFE to conduct SAFE registration with respect to such share incentive plan, and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with the share purchase or share option exercise. Such PRC individuals’ foreign exchange income received from the sale of shares and dividends distributed by the overseas listed company and any other income shall be fully remitted into a collective foreign currency account in China, which is opened and managed by the PRC domestic agent before distribution to such individuals. In addition, such domestic individuals must also retain an overseas entrusted institution to handle matters in connection with their exercise of share options and their purchase and sale of shares. The PRC domestic agent also needs to update registration with SAFE within three months after, among others, the overseas-listed company materially changes its share incentive plan, including making any new share incentive plans.

YS Biopharma has adopted a share incentive plan to assume the outstanding share incentive awards granted by YS Group and may grant options in the future. As such, YS Biopharma, from time to time, needs to apply for or update YS Group’s registration with SAFE or its local branches on behalf of its PRC domestic employees or consultants who receive options or other equity-based incentive grants under its share incentive plan or material changes in its share incentive plan. However, it may not always be able to make applications or update its registration on behalf of its PRC domestic employees or consultants who hold any type of share incentive awards in compliance with Circular 7, nor can it ensure you that such applications or update of registration will be successful. If YS Biopharma or the participants of its share incentive plan who are PRC domestic individuals fail to comply with Circular 7, YS Biopharma and/or such participants of its share incentive plan may be subject to fines and legal sanctions, there may be additional restrictions on the ability of such participants to exercise their share options or remit proceeds gained from sale of their shares into China, and YS Biopharma may be prevented from further granting share incentive awards under its share incentive plan to its employees or consultants who are PRC domestic individuals.

It may be difficult for overseas regulators to conduct investigation or collect evidence within China.

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigations initiated outside China.

Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the PRC territory. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence

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collection activities within China may further increase the difficulties you face in protecting your interests. See also “— Your ability to effect service of legal process, enforce judgments or bring actions against, YS Biopharma or certain of their officers and directors outside the U.S. will be limited and addition costs may be required.”

If the custodians or authorized users of YS Group’s controlling non-tangible assets, including chops and seals, fail to fulfill their responsibilities, or misappropriate or misuse these assets, its business and operations may be materially and adversely affected.

Under PRC law, legal documents for corporate transactions, including agreements and contracts such as the leases and sales contracts that YS Group’s business relies on, are executed using the chop or seal of the signing entity or with the signature of a legal representative whose designation is registered and filed with the relevant local branch of the market supervision administration.

To maintain the physical security of its chops and the chops of its PRC entities, YS Group generally stores them in secured locations accessible only by the authorized personnel of each of its PRC subsidiaries. Although YS Group monitors such authorized personnel, there is no assurance such procedures will prevent all instances of abuse or negligence. Accordingly, if any of YS Group’s authorized personnel misuse or misappropriate its corporate chops or seals, YS Group could encounter difficulties in maintaining control over the relevant entities and experience significant disruption to its operations. If a designated legal representative obtains control of the chops in an effort to obtain control over any of its PRC subsidiaries, YS Group would need to pass a new shareholder or board resolution to designate a new legal representative and it would need to take legal action to seek the return of the chops, apply for new chops with the relevant authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to it, which could involve significant time and resources and divert management attention away from its regular business. In addition, the affected entity may not be able to recover corporate assets that are sold or transferred out of YS Group’s control in the event of such a misappropriation if a transferee relies on the apparent authority of the representative and acts in good faith.

YS Biopharma’s Hong Kong subsidiary or any future operations in Hong Kong or Macau could become subject to more influence and/or control of the PRC government if the Hong Kong or Macau legal system becomes more integrated into the PRC legal system.

Most national laws and regulations of the PRC are not directly applicable in Hong Kong or Macau, except for those listed in the Basic Law of the Hong Kong Special Administrative Region of the PRC or the Basic Law of the Macau Special Administrative Region of the PRC (the “Basic Laws”). However, such list of national laws and regulations that are applicable in Hong Kong or Macau can be expanded by amendment to the Basic Laws. There is no assurance that the Basic Laws will not be further amended to apply more PRC laws and regulations in Hong Kong, or that the PRC and/or Hong Kong or Macau government will not take other actions to promote the further integration of Hong Kong or Macau legal system into the PRC legal system. Although YS Group does not have substantive business operations in Hong Kong and Macau and do not currently expect to have any substantive operations in these regions in the foreseeable future, YS Group cannot assure you that YS Biopharma’s Hong Kong subsidiary or any future operations in Hong Kong or Macau will not be subject to more influence and/or control of the PRC government or even direct oversight or intervention from them if the Hong Kong or Macau legal system becomes more integrated into the PRC legal system, or if the regulators in Hong Kong or Macau adopt similar rules or policies through affirmative legislation or rulemaking within the scope of the authority conferred by the Basic Laws. As a result, YS Group cannot assure you that YS Biopharma’s Hong Kong subsidiary or any future operations in Hong Kong or Macau will not be exposed to the similar regulatory and/or policy risks and uncertainties faced by YS Biopharma’s subsidiaries in China in the future.

Risks Related to Ownership of the Ordinary Shares

The price of the Ordinary Shares may be volatile, and the value of the Ordinary Shares may continue to decline.

YS Biopharma cannot predict the prices at which the Ordinary Shares will trade. The price of the Ordinary Shares may not bear any relationship to the market price at which the Ordinary Shares trade or to any other established criteria of the value of YS Group’s business and prospects, and the market price of the Ordinary Shares may fluctuate substantially. In addition, the trading price of the Ordinary Shares is likely to be volatile and could be subject to fluctuations in response

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to various factors, some of which are beyond YS Biopharma’s control. These fluctuations could cause you to lose all or part of your investment in the Ordinary Shares as you might be unable to sell your shares at or above the price you paid. Factors that could cause fluctuations in the trading price of the Ordinary Shares include the following:

        actual or anticipated fluctuations in YS Group’s financial condition or results of operations;

        variance in YS Group’s financial performance from expectations of securities analysts;

        changes in the pricing of YS Group’s products;

        changes in YS Group’s projected operating and financial results;

        changes in laws or regulations applicable to YS Group’s products and industry;

        announcements by YS Group or its competitors of significant business developments, acquisitions, strategic partnerships or new offerings;

        sales of the Ordinary Shares by YS Biopharma or its shareholders as well as the exercise of options;

        significant product recalls, regulatory investigations, disruptions to or other incidents involving YS Biopharma’s products;

        YS Biopharma’s involvement in litigation;

        conditions, advancements, breakthroughs or developments affecting the vaccine industries;

        future sales of the Ordinary Shares by YS Biopharma or its shareholders, as well as the anticipation of lock-up releases;

        changes in senior management or key personnel;

        the trading volume of the Ordinary Shares;

        changes in the anticipated future size and growth rate of YS Group’s markets;

        changes in market sentiment towards the healthcare or biopharmaceutical sector, or shifts in investment trends;

        publication of research reports or news stories about YS Group, its competitors or its industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;

        Changes in general economic, political, regulatory and market conditions; and

        other events or factors, including those resulting from wars including the conflict between Russia and Ukraine, incidents of terrorism, global pandemics or responses to these events.

Any of these factors may result in large and sudden changes in the volume and price at which the Ordinary Shares will trade. The securities of some China-based companies listed in the United States have experienced significant volatility since their initial public offerings, including, in some cases, substantial declines in the trading prices of their securities. The trading performances of these companies’ securities after their offerings may affect the attitudes of investors towards Chinese companies listed in the United States in general, which consequently may impact the trading performance of the Ordinary Shares, regardless of YS Group’s actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or other matters of other Chinese companies may also negatively affect the attitudes of investors towards Chinese companies in general, including YS Group, regardless of whether YS Group has engaged in any inappropriate activities. In particular, the global financial crisis, the ensuing economic recessions and deterioration in the credit market in many countries have contributed and may continue to contribute to extreme volatility in the global stock markets.

Moreover, there have been recent instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, particularly among companies with relatively smaller public floats. As YS Biopharma has a relatively small public float after the completion of this offering,

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YS Biopharma may experience greater stock price volatility, including aggressive price run-ups and declines, lower trading volume and less liquidity, compared with companies with larger public floats. In particular, the Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock run-up, may be unrelated to YS Group’s actual or expected operating performance, financial condition or prospects, and industry, market or economic factors, which makes it difficult for prospective investors to assess such rapidly changing value of the Ordinary Shares. In addition, if the trading volumes of the Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence prices of the Ordinary Shares. This low volume of trades could also cause the price of the Ordinary Shares to fluctuate significantly, with large percentage changes in price occurring in any trading day session. Holders of the Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to such low-volume trading. As a result of such volatility, investors may experience losses on their investment in the Ordinary Shares. Such volatility also could adversely affect YS Biopharma’s ability to issue additional Ordinary Shares or other securities and YS Biopharma’s ability to obtain additional financing in the future, as well as YS Biopharma’s ability to retain key employees, many of whom have been granted equity incentives. Furthermore, the extreme volatility may confuse the public investors of the value of the Ordinary Shares, distort the market perception of the price of the Ordinary Shares, and YS Group’s financial performance and public image, and negatively affect the long-term liquidity of the Ordinary Shares, regardless of YS Group’s actual or expected operating performance.

In the past, shareholders of public companies have brought securities class action suits against companies following periods of instability in the market price of their securities. If YS Biopharma were involved in a class action suit, it could divert a significant amount of the attention of YS Group’s management and other resources from YS Group’s business and require YS Group to incur significant expenses to defend the suit, which could harm its results of operations. Any such class action suit, whether or not successful, could harm YS Group’s reputation and restrict its ability to raise capital in the future. Furthermore, the announcement or perception of such litigation could potentially harm YS Group’s reputation and the market price of its ordinary shares. If a claim is successfully made against it, YS Biopharma may be required to pay significant damages or settlements if YS Group does not have enough insurance coverage to satisfy such judgments or settlements, which could have a material adverse effect on YS Group’s results of operations and financial condition.

A market for YS Biopharma’s securities may not develop or be sustained, which would adversely affect the liquidity and price of its securities.

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

Provisions in the Amended YS Biopharma Articles could discourage, delay or prevent a change of control of YS Biopharma and may affect the trading price of the Ordinary Shares.

Some provisions of the Amended YS Biopharma Articles may discourage, delay or prevent a change in control of YS Biopharma or management that shareholders may consider favorable. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of YS Biopharma to first negotiate with YS Biopharma’s Board. However, these provisions could also have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of the Ordinary Shares

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and/or YS Biopharma Preference Shares that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the management of YS Biopharma. It is possible that these provisions could make it more difficult to accomplish transactions that shareholders may otherwise deem to be in their best interests.

        The Amended YS Biopharma Articles only permit YS Biopharma’s shareholders together holding at least 10% of the voting power of all the then issued and outstanding ordinary shares which carry the right to vote to requisition a general meeting.

        The Amended YS Biopharma Articles require the affirmative vote of the holders of at least two-thirds in voting power of all the then outstanding ordinary shares as being entitled to do so to pass any special resolution, which special resolution is required to, among others, amend the memorandum and articles of association or approve a merger.

        Under the Amended YS Biopharma Articles, the number of directors shall be not less than three directors (or such greater number as may be approved by special resolution upon an amendment and/or restatement of the Amended YS Biopharma Articles). The directors shall be appointed and removed by ordinary resolution of the shareholders (except with regard to the removal of the Chairperson, who may be removed from office only by a special resolution).

In addition, these provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by YS Biopharma’s management or YS Biopharma’s Board. Shareholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is favorable to shareholders. These anti-takeover provisions could substantially impede the ability of shareholders to benefit from a change in control or change YS Biopharma’s management and YS Biopharma’s Board and, as a result, may adversely affect the market price of the Ordinary Shares and your ability to realize any potential change of control premium.

The warrant agreement relating to the Warrants provides YS Biopharma agrees that any action, proceeding or claim against YS Biopharma arising out of or relating in any way to such agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and that it irrevocably submits to such jurisdiction, which will be the exclusive forum for any such action, proceeding or claim. This exclusive forum provision could limit the ability of holders of the Warrants to obtain what they believe to be a favorable judicial forum for disputes related to such agreement.

In connection with the Business Combination, YS Biopharma entered into a Warrant Assignment Agreement pursuant to which Summit assigned to YS Biopharma all of its rights, title, interests, and liabilities and obligations in and under the Warrant Agreement, dated June 8, 2021, by and between Summit and Continental Stock Transfer & Trust Company. The Warrant Assignment Agreement provides that any action, proceeding or claim against YS Biopharma arising out of or relating in any way to such agreement, except for claims for which the federal courts have exclusive jurisdiction, such as lawsuits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, which will be the exclusive forum for any such action, proceeding or claim.

The exclusive forum provision in the Warrant Assignment Agreement may limit the ability of holders of the Warrants to bring a claim in a judicial forum that it finds favorable for disputes related to the Warrant Assignment Agreement, which may discourage such lawsuits against YS Biopharma and its directors or officers. Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, YS Biopharma may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition and results of operations and result in a diversion of the time and resources of its management and board of directors.

If YS Group does not meet the expectations of equity research analysts, if they do not publish research or reports about YS Group’s business or if they issue unfavorable commentary or downgrade the Ordinary Shares, the price of the Ordinary Shares could decline.

The trading market for the Ordinary Shares will rely in part on the research and reports that equity research analysts publish about YS Group and its business. The analysts’ estimates are based upon their own opinions and are often different from YS Biopharma’s estimates or expectations. These analysts make projections based on their independent

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opinions, which may differ from YS Group’s internal estimates or expectations. If YS Group’s actual results of operations do not meet these projections, or if analysts revise their estimates downwards, the price of the Ordinary Shares could decline significantly. Moreover, YS Group’s reputation and the price of the Ordinary Shares could decline if one or more securities analysts downgrade the Ordinary Shares or if those analysts issue other unfavorable commentary or cease publishing reports about YS Biopharma or its business.

Furthermore, in some instances, equity research analysts may publish opinions or estimates about YS Biopharma’s business that YS Biopharma believes are incorrect or misleading. Rectifying these misperceptions could require significant time and resources, which may distract its management from other strategic initiatives. Despite its efforts, YS Biopharma may not be able to correct these misperceptions effectively, which could negatively impact the perception of its company and harm its stock price.

YS Biopharma’s issuance of additional share capital in connection with financings, acquisitions, investments, YS Biopharma’s equity incentive plans or otherwise will dilute all other shareholders.

YS Biopharma expects to issue additional share capital in the future that will result in dilution to all other shareholders. YS Biopharma expects to grant equity awards to employees and directors under its equity incentive plans. YS Biopharma may also raise capital through equity financings in the future. As part of YS Biopharma’s business strategy, YS Biopharma may acquire, make investments in or engage in strategic partnerships with companies, solutions or technologies and issue equity securities to pay for any such acquisition, investment or partnership. Any such issuances of additional share capital may cause shareholders to experience significant dilution of their ownership interests and the per share value of the Ordinary Shares to decline.

YS Biopharma is an emerging growth company and may take advantage of certain reduced reporting requirements.

YS Biopharma is an “emerging growth company,” as defined in the JOBS Act, and YS Biopharma may take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley Act of 2002 for so long as YS Biopharma is an emerging growth company. As a result, if YS Biopharma elects not to comply with such auditor attestation requirements, YS Biopharma’s investors may not have access to certain information they may deem important.

YS Biopharma is a foreign private issuer within the meaning of the rules under the Exchange Act, and as such YS Biopharma is exempt from certain provisions applicable to U.S. domestic public companies.

Because YS Biopharma qualifies as a foreign private issuer under the Exchange Act, YS Biopharma is exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

        the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current re-ports on Form 8-K;

        the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

        the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

        the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

YS Biopharma is required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, YS Biopharma intends to publish its results on a quarterly basis as press releases, distributed pursuant to the rules and regulations of Nasdaq. However, the information YS Biopharma is required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

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YS Biopharma may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

As a foreign private issuer, YS Biopharma is not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. In the future, YS Biopharma would lose its foreign private issuer status if (1) more than 50% of YS Biopharma’s outstanding voting securities are owned by U.S. residents and (2) a majority of YS Biopharma’s directors or executive officers are U.S. citizens or residents, or YS Biopharma fails to meet additional requirements necessary to avoid loss of foreign private issuer status. If YS Biopharma loses its foreign private issuer status, YS Biopharma will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. YS Biopharma will also have to mandatorily comply with U.S. federal proxy requirements, and YS Biopharma’s officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, YS Biopharma will lose its ability to rely upon exemptions from certain corporate governance requirements under the listing rules of Nasdaq. As a U.S. listed public company that is not a foreign private issuer, YS Biopharma will incur significant additional legal, accounting and other expenses that YS Biopharma will not incur as a foreign private issuer.

As an exempted company incorporated in the Cayman Islands, YS Biopharma is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq’s corporate governance requirements; these practices may afford less protection to shareholders. If YS Biopharma opts to rely on such exemptions in the future, such decision might afford less protection to holders of YS Biopharma’s ordinary shares.

As a Cayman Islands exempted company that will be listed on the Nasdaq Stock Market LLC, YS Biopharma will be subject to the Nasdaq listing standards. Section 5605(b)(1), Section 5605(c)(2) and Section 5635(c) of the Nasdaq Listing Rules require listed companies to have, among other things, a majority of its board members to be independent, an audit committee of at least three members and shareholders’ approval on adoption of equity incentive awards plans. However, the Nasdaq rules permit a foreign private issuer like YS Biopharma to follow the corporate governance practices of its home country. The corporate governance practice in YS Biopharma’s home country, the Cayman Islands, does not require a majority of YS Biopharma’s board of directors to consist of independent directors or the implementation of a nominating and corporate governance committee. Since a majority of YS Biopharma’s board of directors would not consist of independent directors if YS Biopharma relied on the foreign private issuer exemption, fewer board members would be exercising independent judgment and the level of board oversight on the management of YS Biopharma might decrease as a result. In addition, YS Biopharma could opt to follow Cayman Islands law instead of the Nasdaq requirements that mandate that YS Biopharma obtain shareholder approval for certain dilutive events, such as an issuance that will result in a change of control, certain transactions other than a public offering involving issuances of 20% or greater interests in the company and certain acquisitions of the shares or assets of another company. While YS Biopharma does not currently intend to follow home country practice in lieu of the above requirements, YS Biopharma could decide in the future to follow home country practice and its board of directors could make such a decision to depart from such requirements by ordinary resolution.

YS Biopharma is a “controlled company” within the meaning of the Nasdaq Stock Market listing rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

YS Biopharma is a “controlled company” as defined under the Nasdaq Stock Market listing rules because Mr. Yi Zhang beneficially controls more than 50% of the total voting power of all issued and outstanding Ordinary Shares through the acting-in-concert arrangement under the Concert Party Agreement. As a result, Mr. Yi Zhang has the ability to control or significantly influence the outcome of matters requiring approval by shareholders. For the details of the Concert Party Agreement, see ‘‘Major Shareholders and Related Party Transactions — Concert Party Agreement’’ and “Summary of the Prospectus — Overview.” In addition, for so long as YS Biopharma remains a controlled company under that definition, it is permitted to elect to rely on, and may rely on, certain exemptions from corporate governance rules, including an exemption from the rule that a majority of its board of directors must be independent directors. YS Biopharma does not currently plan to utilize the exemptions available for controlled companies, but instead, it plans to rely on the exemption available for foreign private issuers to follow its home country governance practices. See “— Risks Related to Ownership of the Ordinary Shares — As an exempted company incorporated in the Cayman Islands, YS Biopharma is permitted to adopt certain home country practices in relation to corporate governance

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matters that differ significantly from Nasdaq’s corporate governance requirements; these practices may afford less protection to shareholders. If YS Biopharma opts to rely on such exemptions in the future, such decision might afford less protection to holders of YS Biopharma’s ordinary shares.” If it ceases to be a foreign private issuer or if it cannot rely on the home country governance practice exemptions for any reason, it may decide to invoke the exemptions available for a controlled company as long as its remain a controlled company. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

If YS Group fails to remediate its material weakness and implement and maintain an effective system of internal control over financial reporting, YS Group may be unable to accurately report its results of operations, meet its reporting obligations or prevent fraud.

YS Biopharma is a company with limited accounting personnel and other resources to address its internal control over financial reporting. As a company with less than $1.235 billion in revenue for the last fiscal year, YS Group qualifies as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting (“ICFR”). YS Group’s management has not completed an assessment of the effectiveness of its internal control and procedures over financial reporting and its independent registered public accounting firm has not conducted an audit of its ICFR. In connection with the audit of its consolidated financial statements as of and for the three fiscal years ended March 31, 2023, YS Group and its independent registered public accounting firm identified a material weakness in its ICFR as of March 31, 2023. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in the ICFR, such that there is a reasonable possibility that a material misstatement of its annual or interim consolidate financial statements will not be prevented or detected on a timely basis.

The material weakness identified relates to lack of sufficient competent financial reporting and accounting personnel with appropriate understanding of U.S. GAAP to design and implement formal period-end financial reporting policies and procedures to address complex U.S. GAAP technical accounting issues, and to prepare and review YS Group’s consolidated financial statements and related disclosures in accordance with U.S. GAAP and financial reporting requirements set forth by the SEC. Neither YS Group nor its independent registered public accounting firm had undertaken a comprehensive assessment of its internal control under the Sarbanes-Oxley Act for purposes of identifying and reporting material weaknesses and other control deficiencies in its ICFR. Had YS Group performed a formal assessment of its ICFR or had its independent registered public accounting firm performed an audit of its ICFR, additional deficiencies may have been identified.

To remediate YS Group’s material identified material weakness, YS Group adopted measures to improve its ICFR, including, among others: (i) hiring additional qualified accounting and financial personnel with appropriate knowledge and experience in U.S. GAAP accounting and SEC reporting, and (ii) organizing regular training for its accounting staffs, especially training related to U.S. GAAP and SEC reporting requirements. YS Group also plan to adopt additional measures to improve YS Group’s ICFR, including among others creating U.S. GAAP accounting policies and procedures manual, which will be maintained, reviewed and updated, on a regular basis, to the latest U.S. GAAP accounting standards, and further hiring executive accounting personnel with strong knowledge and experience in U.S. GAAP accounting and SEC reporting.

The implementation of these measures, however, may not fully address the material weakness identified in YS Group’s ICFR, and YS Group cannot conclude that it has been fully remedied. YS Group’s failure to correct the material weakness or its failure to discover and address any other material weaknesses or deficiencies could result in inaccuracies in its financial statements and impair its ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. Moreover, ineffective ICFR could significantly hinder its ability to prevent fraud.

As a result of being a public company, YS Biopharma is obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in YS Biopharma and, as a result, the value of the Ordinary Shares.

YS Biopharma is required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of its ICFR as of the end of the fiscal year that coincides with the filing of YS Biopharma’s second annual report on Form 20-F. This assessment will need to include disclosure of any material

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weaknesses identified by YS Biopharma’s management in its ICFR. In addition, YS Biopharma’s independent registered public accounting firm will be required to attest to the effectiveness of its ICFR in YS Biopharma’s first annual report required to be filed with the SEC following the date YS Biopharma is no longer an “emerging growth company.”

YS Biopharma’s current controls and any new controls that it develops may become inadequate because of changes in conditions in YS Biopharma’s business. In addition, changes in accounting principles or interpretations could also challenge YS Biopharma’s internal controls and require that YS Biopharma establishes new business processes, systems and controls to accommodate such changes. Additionally, if these new systems, controls or standards and the associated process changes do not give rise to the benefits that YS Biopharma expects or do not operate as intended, it could materially and adversely affect YS Biopharma’s financial reporting systems and processes, YS Biopharma’s ability to produce timely and accurate financial reports or the effectiveness of ICFR. Moreover, YS Biopharma’s business may be harmed if YS Biopharma experiences problems with any new systems and controls that result in delays in their implementation or increased costs to correct any post- implementation issues that may arise.

During the evaluation and testing process of YS Biopharma’s internal controls, if YS Biopharma identifies one or more material weaknesses in its ICFR, YS Biopharma will be unable to certify that its ICFR is effective. YS Biopharma cannot assure you that there will not be material weaknesses or significant deficiencies in its ICFR in the future. Any failure to maintain effective ICFR could severely inhibit YS Biopharma’s ability to accurately report its financial condition or results of operations. If YS Biopharma is unable to conclude that its ICFR is effective, or if YS Biopharma’s independent registered public accounting firm determines YS Biopharma has a material weakness or significant deficiency in its ICFR, YS Biopharma could lose investor confidence in the accuracy and completeness of its financial reports, the market price of the Ordinary Shares could decline, and YS Biopharma could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in YS Biopharma’s ICFR, or to implement or maintain other effective control systems required of public companies, could also restrict YS Biopharma’s future access to the capital markets.

The growth and expansion of YS Biopharma’s business places a continuous, significant strain on its operational and financial resources. Further growth of YS Biopharma’s operations to support its customer base, its platform, solutions and its internal controls and procedures may not be adequate to support YS Biopharma’s operations. As YS Biopharma continues to grow, YS Biopharma may not be able to successfully implement requisite improvements to these systems, controls and processes, such as system access and change management controls, in a timely or efficient manner. Moreover, YS Biopharma’s rapid expansion may necessitate a significant increase in the workforce and require YS Biopharma to manage multiple relationships with various partners, customers, and vendors. This could place additional stress on YS Biopharma’s infrastructure and increase its management challenges, potentially disrupting its current operations. YS Biopharma’s failure to improve its systems and processes, or its failure to operate in the intended manner, whether as a result of the growth of its business or otherwise, may result in its inability to accurately forecast its revenue and expenses, or to prevent certain losses. Moreover, the failure of YS Biopharma’s systems and processes could undermine YS Biopharma’s ability to provide accurate, timely and reliable reports on its financial and operating results and could impact the effectiveness of its ICFR. In addition, YS Biopharma’s systems and processes may not prevent or detect all errors, omissions or fraud.

As a result of YS Biopharma’s plans to expand operations, including to jurisdictions in which the tax laws may not be favorable, YS Biopharma’s tax rate may fluctuate, its tax obligations may become significantly more complex and subject to greater risk of examination by taxing authorities or it may be subject to future changes in tax law, the impact of which could adversely affect YS Biopharma’s after-tax profitability and financial results.

Because YS Biopharma does not have a long history of operating at its present scale and has significant expansion plans, YS Biopharma’s effective tax rate may fluctuate in the future. Future effective tax rates could be affected by YS Biopharma’s operating results before taxes, changes in the composition of operating income and earnings in countries or jurisdictions with differing tax rates, including as YS Biopharma expands into additional jurisdictions, changes in the amount of YS Biopharma’s deferred tax assets and liabilities, changes in accounting and tax standards or practices, changes in tax laws, changes in the tax treatment of share-based compensation, and YS Biopharma’s ability to structure its operations in an efficient and competitive manner.

Due to the complexity of multinational tax obligations and filings, YS Biopharma may have a heightened risk related to audits, examinations or administrative appeals by taxing authorities. Outcomes from current and future tax audits, examinations or administrative appeals could have an adverse effect on YS Biopharma’s after-tax profitability and

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financial condition. Additionally, several tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Tax authorities could disagree with YS Biopharma’s intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If YS Biopharma does not prevail in any such disagreements, its profitability may be affected.

YS Biopharma’s after-tax profitability and financial results may also be adversely impacted by changes in the relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect. For example, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting entered into force in 2018 among the jurisdictions that have ratified it. Additionally, many countries and organizations, such as the Organization for Economic Cooperation and Development, are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase YS Biopharma’s tax obligations in countries in which it does business or cause YS Biopharma to change the way it operates its business. These recent changes and proposals could negatively impact YS Biopharma’s taxation, especially as YS Biopharma expands its relationships and operations internationally.

If YS Biopharma or any of its subsidiaries is treated as a “controlled foreign corporation” for U.S. federal income tax purposes, certain U.S. Holders may be subject to adverse U.S. federal income tax consequences.

If a “United States person” (as defined in Section 7701(a)(30) of the Code) is treated as owning (directly, indirectly, or constructively) at least 10% of the total combined voting power of all classes of YS Biopharma’s shares entitled to vote or at least 10% of the total value of shares of all classes of YS Biopharma’s shares, such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” (“CFC”) within the meaning of Section 957(a) of the Code in YS Group (if any), which may subject such person to adverse U.S. federal income tax consequences. Specifically, a United States shareholder of a CFC may be required to annually report and include in its U.S. taxable income its pro rata share of such CFC’s “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property, whether or not YS Biopharma makes any distributions of profits or income of such CFC to such United States shareholder. If a U.S. Holder is treated as a United States shareholder of a CFC, failure to comply with applicable reporting obligations may subject such holder to significant monetary penalties and may extend the statute of limitations with respect to such holder’s U.S. federal income tax return for the taxable year for which reporting was due. Additionally, an individual United States shareholder of a CFC generally would be denied certain tax deductions or foreign tax credits in respect of its income that may otherwise be allowable to a United States shareholder that is a U.S. corporation.

In light of YS Biopharma’s structure, certain of its non-U.S. subsidiaries may be CFCs. YS Biopharma cannot provide any assurances that it will assist U.S. Holders in determining whether YS Biopharma or any of its non-U.S. subsidiaries is treated as a CFC or whether any U.S. Holder is treated as a United States shareholder with respect to any such CFC, nor does YS Biopharma expect to furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. U.S. Holders should consult their tax advisors regarding the potential application of the CFC rules to an investment in Ordinary Shares.

If YS Biopharma is or becomes a “passive foreign investment company” for U.S. federal income tax purposes, U.S. Holders may be subject to adverse U.S. federal income tax consequences.

Based on the income, assets, and operations of YS Biopharma and its subsidiaries, YS Biopharma does not believe that it was PFIC in the taxable year ended March 31, 2023, although there can be no assurance that the IRS or a court will not challenge its position in this regard. The determination of whether YS Biopharma is a PFIC is made on an annual basis and will depend on the composition of income and assets of YS Biopharma and its subsidiaries, and the value of the assets of YS Biopharma and its subsidiaries, from time to time. Specifically, for any taxable year, a non-U.S. corporation will be classified as a PFIC for U.S. federal income tax purposes if either: (1) 75% or more of its gross income in such taxable year is passive income, or (2) 50% or more of the value of its assets (generally based on an average of the quarterly values of the assets) during such taxable year is attributable to assets that produce or are held for the production of passive income. The calculation of the value of the assets of YS Biopharma and its subsidiaries will be based, in part, on the quarterly market value of Ordinary Shares, which is subject to change and may be volatile.

The determination of whether YS Biopharma is a PFIC also will depend, in part, on how, and how quickly, it uses its liquid assets and cash, including the cash acquired from Summit in the Business Combination. If YS Biopharma were to retain significant amounts of liquid assets, including cash, the risk of YS Biopharma being classified as a PFIC

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may substantially increase. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that YS Biopharma will not be a PFIC for any future taxable year, and no opinion of counsel has or will be provided regarding the classification of YS Biopharma as a PFIC. If YS Biopharma were classified as a PFIC for any taxable year during which a U.S. Holder held Ordinary Shares, YS Biopharma generally would continue to be treated as a PFIC for all succeeding taxable years during which such U.S. Holder held Ordinary Shares.

If YS Biopharma were classified as a PFIC, such characterization could result in adverse U.S. federal income tax consequences to U.S. Holders, including increased tax liabilities under U.S. federal income tax laws and regulations and burdensome reporting requirements. YS Biopharma cannot assure any U.S. Holder that YS Biopharma will not be a PFIC for the current taxable year or any future taxable year. U.S. Holders should consult their tax advisors regarding the circumstances that may cause YS Biopharma to be classified as a PFIC and the consequences if YS Biopharma is classified as a PFIC.

YS Biopharma may not be able to satisfy listing requirements of the Nasdaq Stock Market or obtain or maintain a listing of the Ordinary Shares on the Nasdaq Stock Market.

As the Ordinary Shares are listed on the Nasdaq Stock Market, YS Biopharma must meet certain financial and liquidity criteria to maintain such listing. If YS Biopharma violates the Nasdaq Stock Market’s listing requirements, or if YS Biopharma fails to meet any of the Nasdaq Stock Market’s listing standards, the Ordinary Shares may be delisted. In addition, YS Biopharma’s board of directors may determine that the cost of maintaining YS Biopharma’s listing on a national securities exchange outweighs the benefits of such listing. The delisting of the Ordinary Shares from the Nasdaq Stock Market could significantly impair YS Biopharma’s ability to raise capital and the value of your investment.

Because YS Biopharma does not expect to pay dividends in the foreseeable future, you must rely on price appreciation of the Ordinary Shares for return on your investment.

YS Biopharma currently intends to retain most, if not all, of its available funds and any future earnings after this offering to fund the development and growth of its business. As a result, YS Biopharma does not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the Ordinary Shares as a source for any future dividend income.

YS Biopharma’s board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, YS Biopharma’s shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by YS Biopharma’s directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if YS Biopharma’s board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on its future results of operations and cash flow, its capital requirements and surplus, the amount of distributions, if any, received by it from its subsidiaries, its financial condition, contractual restrictions and other factors deemed relevant by its board of directors. Accordingly, the return on your investment in the Ordinary Shares will likely depend entirely upon any future price appreciation of the Ordinary Shares. There is no guarantee that the Ordinary Shares will appreciate in value in the future or even maintain the price at which you purchased the Ordinary Shares. You may not realize a return on your investment in the Ordinary Shares and you may even lose your entire investment in the Ordinary Shares.

YS Biopharma’s founder, Mr. Yi Zhang, will have considerable influence over YS Biopharma and its corporate matters.

YS Biopharma’s founder, Mr. Yi Zhang beneficially controls more than 50% of the total voting power of all issued and outstanding Ordinary Shares through the acting-in-concert arrangement under the Concert Party Agreement. As a result, Mr. Yi Zhang has considerable power to control actions that require shareholder approval under Cayman Islands law, such as approving any statutory merger pursuant to the Cayman Companies Act and amending YS Biopharma’s memorandum and articles of association. This control will limit your ability to influence corporate matters and may prevent transactions that would be beneficial to you, including discouraging others from pursuing any potential merger, takeover or other change of control transactions, which could have the effect of depriving the holders of the Ordinary Shares of the opportunity to sell their shares at a premium over the prevailing market price.

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Techniques employed by short sellers may drive down the market price of the Ordinary Shares.

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

Public companies listed in the United States that have a substantial majority of their operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective ICFR resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

YS Biopharma may be the subject of unfavorable allegations made by short sellers in the future. Any such allegations may be followed by periods of instability in the market price of the Ordinary Shares and negative publicity. If and when YS Biopharma becomes the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, YS Biopharma could have to expend a significant amount of resources to investigate such allegations and/or defend itself. While YS Biopharma would strongly defend against any such short seller attacks, YS Biopharma may be constrained in the manner in which YS Biopharma can proceed against the relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming and could distract YS Biopharma’s management from growing its business. Even if such allegations are ultimately proven to be groundless, allegations against YS Biopharma could severely impact its business and shareholders’ equity, and the value of any investment in the Ordinary Shares could be greatly reduced or rendered worthless.

Sales of the Ordinary Shares, or the perception of such sales, by YS Biopharma or the Selling Securityholders pursuant to this prospectus in the public market or otherwise could cause the market price for the Ordinary Shares to decline.

The sale of the Ordinary Shares in the public market or otherwise, including sales pursuant to this prospectus, or the perception that such sales could occur, could increase the volatility of the market price of the Ordinary Shares or result in a significant decline in the public trading price of the Ordinary Shares. These sales, or the possibility that these sales may occur, also might make it more difficult for YS Biopharma to sell equity securities in the future at a time and at a price that YS Biopharma deems appropriate. Resales of the Ordinary Shares may cause the market price of YS Biopharma’s securities to drop significantly, even if YS Biopharma’s business is doing well.

The securities registered for resale by the Selling Securityholders named in the prospectus are subject to 180 days lock-up period from March 16, 2023. The lock-up requirements will cease to apply after the date on which the closing price of the Ordinary Shares equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period commencing at least 150 days after March 16, 2023. These shares will, upon expiration of such lock-up period, become eligible for resale without contractual restrictions. See “Shares Eligible for Future Sale” for details. Following the expiration of the applicable lock-up described in this prospectus and as restrictions on resale end and registration statements are available for use, the market price of the Ordinary Shares could continue to decline if the holders of restricted or locked up shares sell them or are perceived by the market as intending to sell them. As such, sales of a substantial number of the Ordinary Shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell such shares, could reduce the market price of the Ordinary Shares.

This prospectus registers the Ordinary Shares being offered for resale pursuant to this prospectus by the Selling Securityholders, which represent approximately 25.9% of the outstanding Ordinary Shares as of the date of this prospectus. Despite a potential decline in the public trading price of the Ordinary Shares, certain securityholders, including certain Selling Securityholders may still experience a positive rate of return on the securities that they sell pursuant to this prospectus as they have acquired the securities registered hereunder at prices substantially below current market prices, and may therefore have an incentive to sell their securities.

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Specifically, (1) Hui Shao purchased 2,002,780 Ordinary Shares at an average price of approximately $0.00002 per share (including 1,802,780 Ordinary Shares held by Mountainview Investment Holdings LLC, a limited liability company incorporated under the laws of the State of Delaware and wholly-controlled by Mr. Hui Shao, and 200,000 Ordinary Shares directly held by Mr. Hui Shao), (2) Chunyuan Wu purchased 97,500 Ordinary Shares at an average price of approximately $0.00002 per share, (3) Sunangal Ajit Shetty & Christine Maria M. Clerinx purchased 27,500 Ordinary Shares at an average price of approximately $3.6 per share, (4) Viren T MEHTA & Amita RODMAN (as Trustees of V Mehta RLT & A Rodman RLT) purchased 35,000 Ordinary Shares at an average price of approximately $3.6 per share, (5) Stanley Yi Chang purchased 82,111 Ordinary Shares at an average price of approximately $0.12 per share, (6) Viren T Mehta purchased 72,500 Ordinary Shares at an average price of approximately $0.00002 per share, (7) Sunangal Ajit Shetty purchased 72,500 Ordinary Shares at an average price of approximately $0.00002 per share, (8) Asia Ventures II L.P. purchased 2,718,499 Ordinary Shares at an average price of approximately $3.71 per share, (9) F-Prime Capital Partners Healthcare Fund III LP purchased 1,165,071 Ordinary Shares at an average price of approximately $3.71 per share, (10) HHSUM XXXVI Holdings Limited purchased 751,790 Ordinary Shares at an average price of approximately $6.65 per share, (11) Entities affiliated with OrbiMed purchased 4,298,465 Ordinary Shares at an average price of approximately $6.27 per share, (12) Haitong Xu Yu International Limited purchased 187,948 Ordinary Shares at an average price of approximately $6.65 per share, (13) Epiphron Capital (Hong Kong) Limited purchased 187,948 Ordinary Shares at an average price of approximately $8.91 per share, (14) 3W Global Investment Limited purchased 187,948 Ordinary Shares at an average price of approximately $6.65 per share, (15) Oceanpine Investment Fund II LP purchased 4,105,596 Ordinary Shares at an average price of approximately $9.74 per share, (16) AIHC Master Fund purchased 718,480 Ordinary Shares at an average price of approximately $9.74 per share, (17) 3W Global Fund purchased 2,052,798 Ordinary Shares at an average price of approximately $9.74 per share, (18) MSA China Growth Fund II L.P. purchased 1,129,039 Ordinary Shares at an average price of approximately $9.74 per share, (19) Superstring Capital Master Fund LP purchased 307,920 Ordinary Shares at an average price of approximately $9.74 per share, (20) Wudaokou Capital Limited purchased 307,920 Ordinary Shares at an average price of approximately $9.74 per share, (21) Gennex China Growth Fund purchased 205,280 Ordinary Shares at an average price of approximately $9.74 per share, (22) Adjuvant Global Health Technology Fund, L.P. purchased 2,436,298 Ordinary Shares at an average price of approximately $5.06 per share, and (23) Adjuvant Global Health Technology Fund DE, L.P. purchased 466,671 Ordinary Shares at an average price of approximately $5.06 per share.

As such, based on the closing price of Ordinary Shares at $0.489599 on January 22, 2024 and assuming all the eligible Ordinary Shares were to be sold, (1) Hui Shao would experience a potential profit of up to $0.489579 per share, or approximately $980,519 in aggregate, (2) Chunyuan Wu would experience a potential profit of up to $0.489579 per share, or approximately $47,734 in aggregate, (3) Stanley Yi Chang would experience a potential profit of up to $0.369599 per share, or approximately $30,348 in aggregate, (4) Viren T Mehta would experience a potential profit of up to $0.489579 per share, or approximately $35,494 in aggregate, and (5) Sunangal Ajit Shetty would experience a potential profit of up to $0.489579 per share, or approximately $35,494 in aggregate. The other Selling Securityholders would not recognize profit based on the current trading price of Ordinary Shares as of January 22, 2024.

Public securityholders who purchased their YS Biopharma’s securities at higher prices than the Selling Securityholders may experience lower rates of return (if any) than the Selling Securityholders, due to differences in purchase price and the potential trading price at which they may be able to sell.

In addition, YS Biopharma adopted an amended and restated share incentive plan in 2022 to resume all the terms and conditions of a share incentive plan previously adopted in 2020 to continue to incentivize YS Group’s directors, employees and consultants for future development of business and R&D activities. YS Biopharma may grant additional options or share-based awards to employees, directors and consultants in the future. To the extent that any of these awards are vested and exercised, and any of such shares are sold in the market, it could have an adverse effect on the market price of the Ordinary Shares.

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CAPITALIZATION

The following table sets forth our total capitalization as of September 30, 2023.

As we will not receive any proceeds from the sale of Ordinary Shares sold by the Selling Securityholders, no further change is disclosed on a pro forma basis to reflect sales of shares pursuant to this prospectus.

The information in the following table should be read in conjunction with the financial statements and notes thereto and other financial information included in this prospectus, any prospectus supplement or incorporated by reference in this prospectus. Our historical results do not necessarily indicate our expected results for any future periods.

 

As of September 30, 2023

   

Actual

   

RMB

 

US$

Cash and cash equivalents

 

259,905,532

 

 

36,199,550

 

Total liabilities

 

1,054,186,774