tm233428-1_defm14a - none

PROXY STATEMENT/PROSPECTUS

PROXY STATEMENT FOR SPECIAL MEETING OF
MOUNTAIN CREST ACQUISITION CORP. III
AND PROSPECTUS FOR ORDINARY SHARES OF
ETAO INTERNATIONAL CO., LTD.

Mountain Crest Acquisition Corp. III
311 West 43rd Street
12th Floor
New York, NY 10036
(646) 493-6558

ETAO International Co., Ltd.
1460 Broadway, 14th Floor
New York, NY 10036
(347) 306-5134

Proxy Statement/Prospectus dated January 18, 2023 and first mailed to the shareholders of Mountain Crest Acquisition Corp III. on or about January 18, 2023.

To the Shareholders of Mountain Crest Acquisition Corp. III:

You are cordially invited to attend the Special Meeting of Shareholders (the “Special Meeting”) of Mountain Crest Acquisition Corp. III, which is referred to as “MCAE.” The Special Meeting will be held on February 7, 2023, at 10:30 AM local time, via a virtual meeting, via live webcast at the following address: https://www.cstproxy.com/mcacquisitioniii/2023. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. MCAE recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. Please note that you will not be able to attend the Special Meeting in person.

MCAE is Delaware corporation incorporated as a blank check company for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities, which we refer to as a “target business.” The business combination will be completed through a two-step process consisting of the Reincorporation Merger (as defined below) and the Acquisition Merger (as defined below). The Reincorporation Merger and the Acquisition Merger are collectively referred to herein as the “Business Combination.”

On January 27, 2022, MCAE entered into the Merger Agreement, by and among MCAE, ETAO International Group, a Cayman Islands exempted company (the “Company” or “ETAO”), and Wensheng Liu, in his capacity as the Company’s Shareholders’ Representative (the “Shareholders’ Representative”) which was subsequently amended on June 7, 2022 and October 17, 2022. On July 26, 2022, ETAO International Co., Ltd., a Cayman Islands exempted company (“PubCo”) and ETAO Merger Sub, Inc., a Cayman Islands exempted company (“Merger Sub”) joined the Merger Agreement as parties. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement.

The Merger Agreement provides for a business combination between MCAE and the Company in a two-step process as follows: (1) MCAE will merge with and into PubCo, a wholly owned subsidiary of the MCAE, with PubCo being the surviving corporation in such merger (the “Redomestication Merger”) and (2) ETAO will merge with and into Merger Sub, a wholly owned subsidiary of PubCo, with ETAO as the surviving corporation in such merger (the “Acquisition Merger”). After giving effect to both the Redomestication Merger and the Acquisition Merger, ETAO shall be a wholly owned subsidiary of PubCo (collectively referred to herein as the “Business Combination”).

At the Special Meeting, MCAE shareholders will be asked to consider and vote upon the following proposals (the “Proposals”):

Proposal 1. Redomestication Merger — to consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of January 27, 2022, as amended on June 7, 2022 and October 17, 2022 (the “Merger Agreement”), by and among Mountain Crest Acquisition Corp. III, a Delaware corporation (“MCAE”), ETAO International Group, a Cayman Islands corporation (the “Company” or “ETAO”), ETAO International Co., Ltd., a Cayman Islands exempted company (“PubCo”), ETAO Merger Sub, Inc., a Cayman Islands exempted company (“Merger Sub”) and Wensheng Liu, in his capacity as the Company’s Shareholders’ Representative (the “Shareholders’ Representative”), to effect MCAE’s initial business combination pursuant to which, among other things, (1) MCAE will merge with and into PubCo that is a wholly owned subsidiary of MCAE, with PubCo being the surviving corporation in such merger, thereby consummating a change in MCAE’s domicile from a Delaware corporation to a Cayman Islands exempted company (the “Redomestication Merger”). A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A;

TABLE OF CONTENTS

Company being a wholly owned subsidiary of PubCo. The Redomestication Merger, the Acquisition Merger and such other transactions contemplated by the Merger Agreement are hereinafter collectively referred as the “Business Combination” and Proposals 1 and 2, the “Business Combination Proposals”.

Proposal 3. The Governance Proposal — to consider and vote, on a non-binding advisory basis, on four separate governance proposals relating to the following material differences between MCAE’s current amended and restated certificate of incorporation (the “MCAE Charter”) and PubCo’s Amended and Restated Memorandum and Articles of Association (the “PubCo Charter”). These four separate governance proposals are collectively referred to as the “Governance Proposal”:

(A) through the Redomestication Merger, MCAE shall merge with and into PubCo and MCAE, the Delaware corporation, shall cease to exist and PubCo shall be the surviving corporation and the name of the surviving corporation will be “ETAO International Co., Ltd.”;

(B) following the Redomestication Merger the authorized shares of the surviving corporation shall change (i) from 30,000,000 shares of MCAE Common Stock to 500,000,000 PubCo Ordinary Shares;

(C) deleting the forum selection provision providing for concurrent jurisdiction in the Court of Chancery and the federal district court for the District of Delaware for claims arising under the Securities Act; and

(D) deleting the election to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested shareholders.

A copy of PubCo’s Amended and Restated Memorandum and Articles of Association is attached to this proxy statement/prospectus as Annex B;

Proposal 4. Election of Directors of PubCo Proposal — to consider and vote on a proposal to approve PubCo’s Board of Directors (the “PubCo Board”) in regards to the following persons: Wensheng Liu, Biao Dai, Kenneth Liang, Connie Hsu, Andrew MacInnes, and Suying Liu to serve on PubCo’s Board of Directors;

Proposal 5. The 2022 Employee Stock Option Plan Proposal — to consider and vote on a proposal to approve PubCo’s 2022 Employee Stock Option Plan Proposal (the “2022 Plan”), a copy of which is annexed to this proxy statement/prospectus as Annex C, in connection with the Business Combination (the “2022 Plan Proposal”);

Proposal 6. The NTA Requirement Amendment Proposal — to amend (the “NTA Requirement Amendment”) the MCAE Charter to expand the methods that MCAE may employ to not become subject to the “penny stock” rules of the Securities and Exchange Commission; and

Proposal 7. The Adjournment Proposal — to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposals, the Governance Proposal, the 2022 Plan Proposal or the NTA Requirement Amendment (the “Adjournment Proposal”).

If the MCAE shareholders approve the Business Combination Proposals, immediately prior to the consummation of the Business Combination, all outstanding units of MCAE (each of which consists of one share of MCAE Common Stock and one MCAE Right) (the “MCAE Units”) will separate into their individual components of MCAE Common Stock and MCAE Rights and will cease separate existence and trading.

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Redomestication Merger:

(i) Each share of MCAE’s common stock, par value $0.0001 per share (“MCAE Common Stock”), issued and outstanding immediately prior to the effective time of the Reincorporation Merger (other than any redeemed shares), will automatically be cancelled and cease to exist and for each share of such MCAE Common Stock, PubCo shall issue to each MCAE stockholder (other than MCAE shareholders who exercise their redemption rights in connection with the Business Combination) one validly issued PubCo ordinary share, which, unless explicitly stated herein, shall be fully paid;

(ii) The holders of MCAE’s rights (exchangeable into one-tenth of one share of MCAE Common Stock) (collectively, the “MCAE Rights”) issued and outstanding immediately prior to the effective time of the Reincorporation Merger will receive one-tenth (1/10) of one PubCo ordinary share in exchange for the cancellation of each MCAE Right; provided, however, that no fractional shares will be issued and all fractional shares will be rounded to the nearest whole PubCo ordinary share.

TABLE OF CONTENTS

proportion to the shareholding percentage of each shareholder of ETAO. ETAO shall deliver to MCAE, at least three business days prior to the closing of the Merger (the “Closing”), a Closing Statement setting forth, among other things, the Closing Date Merger Consideration which is $1,000,000,000 less the amount of Closing Company Indebtedness, Closing Company Transaction Expenses, plus the amount of Closing Company Cash, in each case, as reflected on the Closing Statement. Any adjustment to the Merger Consideration shall be in whole shares of PubCo ordinary shares and no adjustment shall be made for any divergence that is in an increment of less than $10.00.

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Acquisition Merger:

Each ordinary share of ETAO issued and outstanding immediately prior to the Effective Time shall be canceled and automatically converted into such ETAO Shareholder’s right to receive, without interest, the number of shares of PubCo’s Ordinary Shares equal to the product of (i) the number of shares of ETAO common stock (other than ETAO restricted stock) held by such ETAO Shareholder and (ii) the “Exchange Ratio” determined by dividing (A) the Closing Date Merger Consideration (after giving effect to the required adjustment, if any) by (B) the issued and outstanding number of ordinary shares of ETAO as of the Closing.

Following completion of the Business Combination and assuming no holders of MCAE Common Stock underlying the units (the “Public Shares”) sold in the MCAE IPO (as defined below) elect to redeem their shares, Mountain Crest Holdings III LLC (the “Sponsor”) and certain other shareholders of MCAE (including private rights to be converted), the public shareholders (including public rights to be converted) and holders of ETAO capital stock (the “ETAO Equityholders”) will own approximately 1.6%, 2.0% and 93.6% of the outstanding common stock of PubCo, respectively. These percentages are calculated based on a number of assumptions (described in the accompanying proxy statement/prospectus) and are subject to adjustment in accordance with the terms of the Merger Agreement.

These relative percentages assume that none of MCAE’s existing public shareholders exercise their redemption rights, as discussed herein. If any of MCAE’s existing public shareholders exercise their redemption rights, the anticipated percentage ownership of MCAE’s existing shareholders will be reduced. You should read “Summary of the Proxy Statement/Prospectus — The Business Combination and the Merger Agreement” and “Unaudited Pro Forma Condensed Combined Financial Statements” for further information.

The approval of the Redomestication Merger Proposal, Acquisition Merger Proposal, the Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment and the Adjournment Proposal each requires the affirmative vote of the holders of a majority of the shares of MCAE Common Stock cast by the shareholders represented in person or by proxy and entitled to vote thereon at the Special Meeting. If the Redomestication Merger Proposal and the Acquisition Merger Proposals are not approved, the Governance Proposal, the Election of Directors for PubCo Proposal, 2022 Plan Proposal and the NTA Requirement Amendment will not be presented to the MCAE shareholders for a vote. The approval of Redomestication Merger Proposal and Acquisition Merger Proposal are preconditions to the consummation of the Business Combination.

MCAE Common Stock, Units (as defined below) and Rights (as defined below) are currently listed on the Nasdaq Capital Market under the symbols “MCAE,” “MCAEU” and “MCAER,” respectively. PubCo intends to apply to list the PubCo ordinary shares on the Nasdaq Stock Market under the symbol “ETAO,” in connection with the Business Combination. MCAE cannot assure that PubCo’s Ordinary Shares will be approved for listing on the Nasdaq Stock Market. If the listing condition of listing the PubCo’s ordinary shares on the Nasdaq Stock Market is waived in accordance with the terms of the Merger Agreement, which it may be, and such listing is not approved, there will be lack of liquidity available to the shareholders of the PubCo and an active trading market of PubCo’s ordinary shares may not be developed immediately upon the consummation of the Business Combination.

Investing in PubCo securities involves a high degree of risk. We encourage you to read this proxy statement/ prospectus carefully.

After the Business Combination, the Combined Company (the “Combined Company” or “PubCo”) will be a holding company primarily operating in China through its subsidiaries’ contractual arrangements with twelve variable interest entities (each, a “VIE” and collectively, the “VIEs”) primarily in three industries, healthcare, biotechnology and insurance brokerage, such as Changxing Hospital, Dnurse and Aaliance. Each VIE entity is established under the PRC laws. PRC laws, regulations, and rules restrict and impose conditions on direct foreign investment in certain types of business, and the Combined Company will therefore operate these businesses in China through the VIEs. For a summary of these contractual arrangements, please see “Information about ETAO — Corporate History of ETAO.” After the Business Combination, the Combined Company will not own any equity interest in the VIEs rather the Combined Company will have certain rights to the profits from the VIE entities as provided for in the various VIE contractual arrangements. Shareholders of the Combined Company thus will not directly hold, and may never directly hold, any equity interests in the VIEs.

After the Business Combination, the corporate structure of the Combined Company will be subject to risks relating to its contractual arrangements with the twelve VIEs (including eleven VIEs in which the Combined Company will own a variable

TABLE OF CONTENTS

interest and whose financial statements will consolidated with the financial statements of the Combined Company and one VIE in which the Combined Company will not own a interest and whose financial statements will not consolidated with the financial statements of the Combined Company) and their shareholders. If the PRC government finds these contractual arrangements non-compliant with the restrictions on direct foreign investment in the relevant industries, or if the relevant PRC laws, regulations, and rules or the interpretation thereof change in the future, the Combined Company could be subject to severe penalties or be forced to relinquish its interests in the VIEs or forfeit its rights under the contractual arrangements. As an investor of our ordinary shares, you may never directly hold equity interests in the Chinese operating companies. There is a risk that the PRC government may in the future seek to affect operations of any company with any level of operations in the PRC, including its ability to offer securities to investors, list its securities on a U.S. or other foreign exchange, or conduct its business or accept foreign investment. If the Chinese regulatory authorities disallowed the VIE structure or any or all of the foregoing were to occur, it could, in turn, result in a material change in the Company’s operations and/or the value of its ordinary shares and/or significantly limit or completely hinder its ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.

After the Business Combination, the Combined Company and investors in PubCo Ordinary Shares will face uncertainty about potential future actions by the PRC government, which could affect the enforceability of its contractual arrangements with the twelve VIEs (including eleven VIEs whose financial statements will be consolidated with the financial statements of the Combined Company and one VIE in which the Combined Company will not own an interest and whose financial statements will not consolidated with the financial statements of the Combined Company) and, consequently, significantly affect the Combined Company’s financial condition and results of operations. If the Combined Company is unable to claim its right to control the assets of the VIEs, PubCo ordinary shares may decline in value or become worthless. See “Risk Factors — Risks Related to ETAO’s Corporate Structure.”

After the closing of the Business Combination, the Combined Company shall not be a Chinese operating company, but rather it will be a holding company incorporated in the Cayman Islands. As a holding company with no material operations of its own, the Combined Company shall conduct substantially all of its operations through variable interest entities and their subsidiaries, the operating companies established in the PRC of which the Combined Company receives the economic benefits of via the respective series of variable interest entity agreements. Neither the Combined Company nor its subsidiaries post the closing of the Business Combination shall own any share in any of the respective variable interest entities or their subsidiaries, which are hereinafter referred to as the “VIEs.” Instead, after the consummation of the Business Combination, the Combined Company shall receive the economic benefits of the various VIEs’ business operations based on the terms and conditions of the certain contractual arrangements. The contractual arrangements with respect to the VIEs are not equivalent to an equity ownership in the business of the VIEs and the investors of the Combined Company may never hold any equity interests in VIEs unless the VIE Agreements (the “VIE Agreements”) are replaced with the direct ownership of VIEs by the WFOEs.

The VIE Agreements or the contractual control structure is used to provide non-Chinese investors with exposure to foreign investment in China-based companies where Chinese laws impose certain restrictions on foreign ownership over such companies of certain categories. Consequently, the Company consolidates the accounts of the Consolidating VIEs for the periods presented. Any references to control or benefits that accrue to ETAO because of the VIE Agreements are limited to, and subject to conditions we have satisfied for consolidation of the Consolidating VIEs under U.S. GAAP. The Consolidating VIEs are consolidated for accounting purposes but are not entities in which ETAO owns equity. ETAO does not conduct any active operations and is the primary beneficiary of the VIE for accounting purposes only. Consequently, after the Business Combination, the Combined Company shall consolidate the financial statements of eleven out of the twelve VIEs for the periods presented. Any references to control or benefits that shall, after the Business Combination, accrue to the Combined Company because of the VIEs shall be limited to, and subject to conditions the Combined Company shall have satisfied for consolidation of the eleven VIEs under U.S. GAAP. The eleven VIEs shall be consolidated for accounting purposes but not entities in which the Combined Company, after the Business Combination, will own equity. Post Business Combination, the Combined Company shall not conduct any active operations and be the primary beneficiary of the operations and financial performance of the twelve VIEs for accounting purposes.

The contractual agreements with the VIEs have not been tested in court in China and this structure involves unique risks to investors. For example, the PRC government could disallow the VIE Arrangements, which would likely result in a material change in the operations and structure of PubCo. See “Risk Factors — Risks Related to Doing Business in China.”

As ETAO currently conducts substantially all of its operations in China, after the Business Combination, the Combined Company will be subject to legal and operational risks associated with having substantially all of the operations in China, including risks related to the legal, political and economic policies of the Chinese government, the relations between China and the United States, and changes in Chinese laws and regulations, which could result in a material change in the operations and/or cause the value of our ordinary shares to significantly decline or become worthless and affect our ability to offer or continue to offer securities to investors. Recently, the PRC government initiated a series of regulatory actions and made a number of public statements on the regulation of business operations in China with little advance notice, including cracking down on illegal

TABLE OF CONTENTS

activities in the securities market, enhancing supervision over China-based companies listed overseas, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. On December 28, 2021, thirteen governmental departments of the PRC, including the Cyberspace Administration of China (the “CAC”), issued the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provides that an online platform operator, which possesses personal information of at least one million users, must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries. On April 12, 2022, WFOE obtained official confirmation from the Cybersecurity Review Office that WFOE and the respective eleven VIEs controlled by WFOE were not subject to cybersecurity review under the Cybersecurity Review Measures. In addition, as of the date of this prospectus, ETAO, ETAO’s subsidiaries and the VIEs have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority except that one of the VIEs, DNurse, was required to rectify its collection of personal information beyond the necessary scope by the Ministry of Industry and Information Technology (“MIIT”) on April 20, 2022. DNurse confirms that as of the date of this prospectus, (i) it has updated the relevant mobile application pursuant to MIIT’s requirement, and (ii) it has not received any further rectification requirements from the MIIT after such update. Nor have ETAO, ETAO’s subsidiaries and the VIEs received any inquiry, notice, or sanction related to cybersecurity review under the Cybersecurity Review Measures. As of the date of this prospectus, no relevant laws or regulations in the PRC explicitly require ETAO, ETAO’s subsidiaries and the VIEs to seek approval from the China Securities Regulatory Commission (the “CSRC”) or any other PRC governmental authorities for its overseas listing plan, nor has ETAO (including any of its subsidiaries or the VIEs) received any inquiry, notice, warning or sanctions regarding its planned overseas listing from the CSRC or any other PRC governmental authorities. See “Risk Factors — Risks Related to Doing Business In China — Any lack of requisite approvals, licenses or permits applicable to ETAO’s business may have a material and adverse impact on ETAO’s business, financial condition and results of operations”. In summary, the recent statements and regulatory actions by China’s government related to the use of variable interest entities and data security or antimonopoly concerns, have not affected ETAO’s ability to conduct its business, accept foreign investments, or list on a U.S. or other foreign exchange. However, since these statements and regulatory actions by the PRC government are newly published and official guidance and related implementation rules have not been issued, it is highly uncertain what the potential impact such modified or new laws and regulations will have on ETAO’s or, after the Business Combination, on the Combined Company’s, daily business operation, ability to accept foreign investments and list on a U.S. or non-Chinese exchange. The Standing Committee of the National People’s Congress (the “SCNPC”) or other PRC regulatory authorities may in the future promulgate laws, regulations or implementing rules that would require the VIEs, ETAO or any of its subsidiaries to obtain regulatory approval from Chinese authorities before listing in the U.S. See “Risk Factors — Risks Related to Doing Business in China.”

On December 18, 2020, the Holding Foreign Companies Accountable Act (the “HFCAA”), was signed by President Donald Trump and became law. This legislation requires certain issuers to establish that they are not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public accounting firm that is not subject to inspection by the PCAOB. Furthermore, if the PCAOB is unable to inspect the issuer’s public accounting firm for three consecutive years, the issuer’s securities are banned from trading on a national stock exchange. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which became law in December 2020. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), which was signed into law on December 29, 2022, amending the HFCAA and requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. The limited PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors in China. As a result, investors may be deprived of the benefits of such PCAOB inspections and supervision. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these public accounting firms’ audit procedures or quality control procedures, which could cause existing investors and potential investors in our ordinary shares to lose confidence in our audit procedures and audited financial statements. Our auditor, WWC Professional Corporation Limited, an independent registered public accounting firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor has been inspected by the PCAOB on a regular basis. Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021, which found that the PCAOB was unable to inspect or investigate completely certain named registered public accounting firms headquartered in mainland China of the PRC and Hong Kong. Our independent registered public accounting firm has been inspected by the PCAOB on a regular basis and as such it is not subject to the PCAOB Determination Report. On August 26, 2022, the SEC issued a statement announcing that the PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China and Hong Kong, jointly agreeing on the need for a framework. On December 15, 2022, the PCAOB announced that it has secured complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate the previous 2021 Determination Report to the contrary. Notwithstanding the foregoing, in the future, if there is any regulatory change or step taken by PRC regulators that does not permit our auditor to provide audit documentations located in China to the PCAOB for inspection or investigation, you may be deprived of the benefits of such inspection which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities, including trading on the national exchange and trading on “over-the-counter” markets. See “Risk Factors — Risks Related to Doing Business in China.”

TABLE OF CONTENTS

Each of the VIE operating entities, receives substantially all of its revenue in RMB. Under ETAO’s current corporate structure, to fund any cash and financing requirements it may have, ETAO may rely on dividend payments from its subsidiaries. The WFOEs (as defined below) expect to receive payments from each VIE in accordance with the respective sets of the VIE Agreements, and then remit payments to WFOEs in accordance with its registration with the Chinese authority and pursuant to the respective sets of the VIE Agreements. Then the WFOEs may make distribution of such payments directly to ETAO as dividends to the holding company. The WFOEs have completed the registration under Notice 37 to receive funds from outside mainland China, and then the WFOEs can provide funding to the VIEs only through loans subject to satisfaction of applicable government registration and approval requirements.

Under our current corporate structure, to fund any cash and financing requirements ETAO may have, ETAO may rely on dividend payments from the Subsidiaries. See “Summary Consolidated Financial Data”. Furthermore, none of ETAO, the Subsidiaries, or the VIEs has distributed any earnings or settled any amounts owed under the VIE Agreements, and nor does any of them have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable future. Additionally, the transfer of funds and assets between ETAO and the Subsidiaries and VIEs are subject to restrictions. The PRC government imposes controls on the conversion of the RMB into foreign currencies and the remittance of currencies out of the PRC. The VIEs receive substantially all of its revenue in RMB. As such we may convert a portion of the VIE’s revenue into other currencies to meet the foreign currency obligations, such as payments of dividends, if any. Shortages in the availability of foreign currency may restrict the ability of the VIEs to remit sufficient foreign currency to pay dividends or other payments to ETAO. However, there is no assurance that the Chinese government will not, in the future, intervene or impose further restrictions or limitations on the VIE’s ability to transfer cash out of mainland China and Hong Kong. See “Risk Factors — Risks Relating to Doing Business in China.” As of the date of this prospectus, none of the Subsidiaries nor the VIEs have made any dividends or distributions to ETAO and ETAO has not made any dividends or distributions to its shareholders. We intend to keep any future earnings to finance the expansion of the business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. If ETAO determines to pay dividends on any of its shares in the future, as a holding company, it will be dependent on receipt of funds from ETAO Hong Kong. ETAO Hong Kong will rely on payments made from ETAO Healthcare and DILE and the VIEs pursuant to the VIE Agreements. As of the date of this prospectus, no cash transfer or transfer of other assets has occurred between ETAO, any of the Subsidiaries, and the VIEs. As of the date of this prospectus, none of ETAO, the Subsidiaries, or the VIEs has a cash management policy. See “Prospectus Summary — Dividend Distribution.” See the “Consolidated Financial Statements”.

Pursuant to the certificate of incorporation of MCAE as of the date hereof (the “MCAE Charter”), MCAE is providing its public shareholders with the opportunity to redeem, upon the Closing, shares of its Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in the trust account (the “Trust Account”) that holds the proceeds (including interest but less franchise and income taxes payable) of MCAE’s initial public offering (the “MCAE IPO”). For illustrative purposes, based on funds in the Trust Account of approximately $16.4 million on January 12, 2023, the estimated per share redemption price would have been approximately $10.27 after giving effect to owed but unpaid taxes on the funds in the Trust Account. Public shareholders may elect to redeem their shares even if they vote for the Business Combination Proposals. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, 20% or more of the shares of MCAE Common Stock included in the Units sold in MCAE IPO. Holders of MCAE’s outstanding Rights and Units do not have redemption rights with respect to such securities in connection with the Business Combination.

Holders of outstanding Units must separate the underlying MCAE Common Stock and Rights prior to exercising redemption rights with respect to the Public Shares. The Sponsor, officers and directors have agreed to waive their redemption rights with respect to any shares of MCAE’s Common Stock they may hold in connection with the consummation of the Business Combination, and such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the Sponsor owns 45.2% of MCAE’s issued and outstanding shares of MCAE Common Stock. The Sponsor, directors and officers have agreed to vote any shares of MCAE Common Stock owned by them in favor of the Business Combination Proposals.

MCAE is providing this proxy statement/prospectus and accompanying proxy card to MCAE shareholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. Whether or not you plan to attend the Special Meeting, MCAE urges you to read this proxy statement/prospectus (and any documents incorporated into this proxy statement/prospectus by reference) carefully. Please pay particular attention to the section titled “Risk Factors.”

After careful consideration, the board of directors of MCAE has unanimously approved and adopted the Merger Agreement and the transactions contemplated therein and unanimously recommends that MCAE shareholders vote “FOR” adoption and approval of the Redomestication Merger Proposal, “FOR” the Acquisition Merger Proposal, “FOR” the Governance Proposal, “FOR”

TABLE OF CONTENTS

the Election of Directors of PubCo Proposal and “FOR” the 2022 Plan Proposal presented to MCAE shareholders in this proxy statement/prospectus, “FOR” the NTA Requirement Amendment and “FOR” the Adjournment Proposal. When you consider the board of directors’ recommendation of these proposals, you should keep in mind that the directors and officers of MCAE have interests in the Business Combination that may conflict with your interests as a stockholder. See the section titled “Acquisition Merger Proposal — Interests of Certain Persons in the Business Combination.”

Each redemption of shares of MCAE Common Stock by MCAE public shareholders will decrease the amount in the Trust Account, which held total assets of approximately $16.4 million as of January 12, 2023, after giving effect to owed but unpaid taxes on the funds in the Trust Account.

Your vote is very important. If you are a registered stockholder, please vote your shares as soon as possible to ensure that your vote is counted, regardless of whether you expect to attend the Special Meeting in person on line, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Business Combination Proposals, the 2022 Plan Proposal and the NTA Requirement Amendment Proposal are approved and satisfaction of other closing conditions.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” the Redomestication Merger Proposal, “FOR” the Acquisition Merger Proposal, “FOR” for the Governance Proposal, “FOR” the Election of Directors of PubCo Proposal and “FOR” the 2022 Plan Proposal, to be presented at the Special Meeting, “FOR” the NTA Requirement Amendment and “FOR” the Adjournment Proposal, if presented. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting in person on line, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting, and, if a quorum is present, will have no effect on the Proposals. If you are a stockholder of record and you attend the Special Meeting and wish to vote during the Special Meeting, you may withdraw your proxy and vote during the Special Meeting.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST AFFIRMATIVELY VOTE EITHER “FOR” OR “AGAINST” THE BUSINESS COMBINATION PROPOSALS AND DEMAND THAT MCAE REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO MCAE’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN (“DWAC”) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of MCAE’s Board of Directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

Sincerely,

/s/ Suying Liu

Suying Liu
Chief Executive Officer, Chief Financial Officer
and Chairman of the Board of Directors

Mountain Crest Acquisition Corp. III

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the accompanying proxy statement/prospectus or determined that the accompanying proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated January 18, 2023 and is first being mailed to the shareholders of MCAE on or about January 18, 2023.

TABLE OF CONTENTS

Mountain Crest Acquisition Corp. III
311 West 43rd Street
12th Floor
New York, NY 10036

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF MOUNTAIN CREST ACQUISITION CORP. III

To Be Held On February 7, 2023

To the Shareholders of Mountain Crest Acquisition Corp. III:

NOTICE IS HEREBY GIVEN that a special meeting of shareholders (the “Special Meeting”) of Mountain Crest Acquisition Corp. III, a Delaware corporation (“MCAE,” “we,” “our” or “us”), will be held on February 7, 2023, at 10:30 a.m., Eastern time, via live webcast at the following address: https://www.cstproxy.com/mcacquisitioniii/2023. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. MCAE recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. You are cordially invited to attend the Special Meeting for the following purposes:

Proposal 1. Redomestication Merger — to consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of January 27, 2022, as amended on June 7, 2022 and October 17, 2022 (the “Merger Agreement”), by and among Mountain Crest Acquisition Corp. III, a Delaware corporation (“MCAE”), ETAO International Group, a Cayman Islands corporation (the “Company”), ETAO International Co., Ltd., a Cayman Islands exempted company (“PubCo”), ETAO Merger Sub, Inc., a Cayman Islands exempted company (“Merger Sub”) and Wensheng Liu, in his capacity as the Company’s Shareholders’ Representative (the “Shareholders’ Representative”), to effect MCAE’s initial business combination pursuant to which, among other things, (1) MCAE will merge with and into PubCo that is a wholly owned subsidiary of MCAE, with PubCo being the surviving corporation in such merger, thereby consummating a change in MCAE’s domicile from a Delaware corporation to a Cayman Islands exempted company (the “Redomestication Merger”). A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A;

Proposal 2. Acquisition Merger — to consider and vote on a proposal to adopt and approve the subsequent merger set forth in the Merger Agreement, pursuant to which the Company will merge with and into Merger Sub that is a wholly owned subsidiary of PubCo, with the Company as the surviving corporation in such merger, thereby consummating PubCo’s acquisition, through its Merger Sub, of the Company (the “Acquisition Merger”), and, after giving effect to the Acquisition Merger, the Company being a wholly owned subsidiary of PubCo. The Redomestication Merger, the Acquisition Merger and such other transactions contemplated by the Merger Agreement are hereinafter collectively referred as the “Business Combination” and Proposals 1 and 2, the “Business Combination Proposals”;

Proposal 3. The Governance Proposal — to consider and vote, on a non-binding advisory basis, on four separate governance proposals relating to the following material differences between MCAE’s current amended and restated certificate of incorporation (the “MCAE Charter”) and PubCo’s Amended and Restated Memorandum and Articles of Association(the “PubCo Charter”). These four separate governance proposals are collectively referred to as the “Governance Proposal”:

(B) following the Redomestication Merger the authorized shares of the surviving corporation shall change (i) from 30,000,000 shares of MCAE Common Stock to 500,000,000 PubCo Ordinary Shares;

TABLE OF CONTENTS

(D) deleting the election to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested shareholders.

A copy of PubCo’s Amended and Restated Memorandum and Articles of Association is attached to this proxy statement/prospectus as Annex B;

Proposal 4. Election of Directors for PubCo Proposal — to consider and vote on a proposal to approve PubCo’s Board of Directors (the “PubCo Board”) in regards to the following persons: Wensheng Liu, Biao Dai, Kenneth Liang, Connie Hsu, Andrew MacInnes, and Suying Liu to serve on PubCo’s Board of Directors;

Pursuant to MCAE’s Charter, MCAE is providing MCAE public shareholders with the opportunity to redeem, upon the closing of the Business Combination, shares of MCAE Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in the Trust Account that holds the proceeds (including interest but less franchise and income taxes payable) of the MCAE IPO. For illustrative purposes, based on funds in the Trust Account of approximately $16.4 million on January 12, 2023, the estimated per share redemption price would have been approximately $10.27 after giving effect to owed but unpaid taxes on the funds in the Trust Account. Public shareholders may elect to redeem their shares even if they vote for the Business Combination Proposals. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, with respect to 20% or more of the shares of MCAE Common Stock included in the Units sold in the MCAE IPO. Holders of MCAE’s outstanding Rights and Units do not have redemption rights with respect to such securities in connection with the Business Combination. Holders of outstanding Units must separate the underlying Public Shares and Rights prior to exercising redemption rights with respect to the Public Shares. MCAE’s Sponsor, officers and directors have agreed to waive their redemption rights with respect to any shares of MCAE Common Stock they may hold in connection with the consummation of the Business Combination, and such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the Sponsor owns 17.9% of the issued and outstanding shares of MCAE Common Stock. MCAE’s Sponsor, directors and officers have agreed to vote any shares of MCAE Common Stock owned by them in favor of the Business Combination Proposals.

The approval of the Redomestication Merger Proposal, Acquisition Merger Proposal, the Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of MCAE Common Stock cast by the shareholders represented in person or by proxy and entitled to vote thereon at the Special Meeting. If the Redomestication Merger Proposal and the Acquisition Merger Proposals are not approved, the Governance Proposal, the Election of Directors for PubCo Proposal, 2022 Plan Proposal and the NTA Requirement Amendment will not be presented to the MCAE shareholders for a vote. The approval of Redomestication Merger Proposal and Acquisition Merger Proposal are preconditions to the consummation of the Business Combination.

TABLE OF CONTENTS

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the SEC by PubCo (File No. 333-268819) (the “Registration Statement”), constitutes a prospectus of PubCo under Section 5 of the Securities Act, with respect to the shares to be issued if the Business Combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act with respect to the special meeting of MCAE shareholders at which MCAE shareholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Merger Agreement, among other matters.

MCAE files reports, proxy statements/prospectuses and other information with the SEC as required by the Exchange Act. You can read MCAE’s SEC filings, including this proxy statement/prospectus, over the Internet at the SEC’s website at http://www.sec.gov.

If you would like additional copies of this proxy statement/prospectus or if you have questions about the Business Combination or the proposals to be presented at the special meeting, you should contact us by telephone or in writing:

Mountain Crest Acquisition Corp. III
311 West 43rd Street
12th Floor
New York, NY 10036
(646) 493-6558

ETAO International Co., Ltd.
1460 Broadway 14th Floor
New York, NY 10036
(347) 306-5134

You may also obtain these documents by requesting them in writing or by telephone from our proxy solicitor at:

Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: 877-870-8565
Collect: 206-870-8565
Email: KSmith@advantageproxy.com

If you are a stockholder of MCAE and would like to request documents, please do so by January 30, 2023 to receive them before the MCAE special meeting of shareholders. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt means.

TABLE OF CONTENTS

FREQUENTLY USED TERMS

In this document:

“Aaliance” means Aaliance Insurance Brokers Co., Ltd.

“Acquisition Merger” means the merger between ETAO and Merger Sub as provided for in the Merger Agreement.

“Amendment” means the Amendment to the Agreement and Plan of Merger, dated June 7, 2022

“Amendment No. 2” means the Amendment No. 2 to the Agreement and Plan of Merger, dated October 17, 2022

“Biohelix” means Baihui (Beijing) Biotech Co., Ltd.

“Board” means the board of directors of MCAE.

“Business Combination” means the business combination between MCAE and ETAO pursuant to the Merger Agreement, including both the Redomestication Merger and the Acquisition Merger.

“Chainworks” means Chain Workshop (Beijing) Co., Ltd.

“Changsha Zhenghe” means Changsha Zhenghe Orthopedics Hospital Co., Ltd.

“Changxing” means Changxing Zhizhou Hospital Co., Ltd.

“Consolidating VIEs” or “Consoldiated VIEs” refers to Aaliance, Biohelix, Chainworks, Changxing, DNurse, DTalks, Giuyang, Kangning, Mengzhou, Qianhu, and 6D Dental.

“MCAE Charter” means MCAE’s current amended and restated certificate of incorporation as filed with the Secretary of State of the State of Delaware on .

“Closing” means the closing of the Business Combination.

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

“Combined Entity” means PubCo after the consummation of both the Redomestication Merger and the Acquisition Merger.

“DILE” means Beijing Dile Technology Co., Ltd.

“DNurse” means Beijing Dnurse Technology Co., Ltd., a PRC company and one of the eleven Consolidating VIEs.

“DNurse Cayman” means Dnurse Investment Co. Ltd.

“DTalks” means Zhichao Medical Technology (Hunan) Co., Ltd.

“Effective Time” means the time at which the Business Combination became effective pursuant to its terms.

“ETAO,” the “Company,” “we,” “us,” or “our” means ETAO International Group, a Cayman Islands exempted company, prior to the Business Combination, and the Subsidiaries and VIEs;

“ETAO Board” means the board of directors of ETAO prior to the Business Combination.

“ETAO Equityholders” refers to the holders of equity interests in ETAO as of the time immediately before the Business Combination.

“ETAO Global” means ETAO Global Holdings Ltd.

“ETAO Hong Kong” means ETAO International Group Co., Ltd.

“Founder Shares” means the outstanding shares of MCAE Common Stock held by the Sponsor, our directors and affiliates of our management team in the total amount of 1,348,298 shares.

TABLE OF CONTENTS

“Guiyang” means Tianlun (Giuyang) Buyun Buyu Hospital Co., Ltd.

“Kangning” means Kang Ning (Heng Yang) Healthcare Management Co., Ltd.

“MCAE” or “Parent” means Mountain Crest Acquisition Corp. III

“MCAE Charter” means MCAE’s current amended and restated certificate of incorporation as filed with the Secretary of State of Delaware on May 17, 2021

“MCAE Common Stock” or “Common Stock” means the common stock of MCAE, $.0001 par value

“MCAE IPO” means MCAE’s initial public offering.

“Amended and Restated Memorandum and Articles of Association” means the Amended and Restated Memorandum and Articles of Association for ETAO International Co., Ltd., a Cayman Islands exempted company, which is attached to this proxy statement/prospectus as Annex B.

“Mengzhou” means Civil Hospital (Mengzhou City) Co., Ltd.

“Merger Agreement” means the Agreement and Plan of Merger, dated as of January 27, 2022, by and among MCAE, Merger Sub, ETAO, PubCo, Merger Sub and Shareholders’ Representative, as amended on June 7, 2022 and October 17, 2022.

“Merger Consideration Shares” means the 100,000,000 shares of PubCo Ordinary Shares, subject to adjustment in accordance with the Merger Agreement, to be issued as part of the consideration for the Acquisition Merger.

“Merger Sub” means ETAO Merger Sub, Inc. a Cayman Islands exempted company and a wholly owned subsidiary of PubCo.

“Proposals” means the Redomestication Merger Proposal, the Acquisition Merger Proposal, the Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal.

“PubCo” means ETAO International Co., Ltd., a Cayman Islands exempted company that is a wholly owned subsidiary of MCAE.

“PubCo Ordinary Shares” means the ordinary shares of ETAO International Co., Ltd. a Cayman Islands exempted company.

“Public Shares” means MCAE Common Stock underlying the Units sold in the MCAE IPO.

“Qianhu” means Qianhu Medical Management (Jiangxi) Co., Ltd.

“Redomestication Merger” means the merger between MCAE and PubCo as provided for in the Merger Agreement.

“Rights” means the rights issued in the MCAE IPO, each of which entitles the holder thereof to receive one- tenth (1/10) of a share of MCAE Common Stock upon consummation of our initial business combination.

“Redemption” means the right of the holders of MCAE Common Stock to have their shares redeemed in accordance with the procedures set forth in this proxy statement/prospectus.

“Shareholders’ Representative” means Wensheng Liu in his capacity as ETAO’s Shareholders’ Representative pursuant to the Merger Agreement.

“Special Meeting” means the special meeting of the shareholders of MCAE, to be held on February 7, 2023, at 10:30 a.m., Eastern time, via live webcast at the following address
https://www.cstproxy.com/mcacquisitioniii/2023.

“Sponsor” means Mountain Crest Holdings III LLC, a Delaware limited liability company.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the Special Meeting of MCAE shareholders. The following questions and answers do not include all the information that is important to shareholders of MCAE. We urge the shareholders of MCAE to read carefully this entire proxy statement/prospectus, including the annexes and other documents referred to herein.

Why am I receiving this proxy statement/prospectus?

MCAE shareholders are being asked to consider and vote upon a proposal to approve and adopt the Merger Agreement, among other proposals. On January 27, 2022, MCAE entered into the Merger Agreement, by and among MCAE, ETAO, PubCo, Merger Sub and the Shareholders’ Representative. The Merger Agreement provides for a redomestication of MCAE from Delaware to the Cayman Islands and a business combination between MCAE and ETAO consummated through the following two step process: (1) MCAE will merge with and into PubCo, a wholly owned subsidiary of the MCAE, with PubCo being the surviving corporation in such merger (the “Redomestication Merger”) and (2) ETAO will merge with and into Merger Sub, a wholly owned subsidiary of PubCo, with ETAO as the surviving corporation in such merger (the “Acquisition Merger”), and, after giving effect to the Acquisition Merger, ETAO shall be a wholly owned subsidiary of PubCo. We refer to the Redomestication Merger and the Acquisition Merger collectively as the “Business Combination”). On June 7, 2022, MCAE, the Company and the Shareholders’ Representative entered into an Amendment to the Agreement and Plan of Merger (the “Amendment”) and October 17, 2022, MCAE, the Company and the Shareholders’ Representative entered into Amendment No. 2 to the Agreement and Plan of Merger (“Amendment No. 2”) that expressly amended and modified the Merger Agreement. On July 26, 2022 PubCo and Merger Sub executed documents to join and be bound by the Merger Agreement. Subject to the terms of the Merger Agreement, as amended, and customary adjustments set forth therein, the aggregate consideration for the Business Combination and related transactions is expected to be approximately $1.0 billion of equity consideration, as set forth in the Merger Agreement. We refer to such aggregate amount as the “Aggregate Purchase Price.” A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its annexes.

Below are proposals on which MCAE shareholders are being asked to vote.

Proposal 1. Redomestication Merger — to consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of January 27, 2022, as amended on June 7, 2022 and October 17, 2022 (the “Merger Agreement”), by and among Mountain Crest Acquisition Corp. III, a Delaware corporation (“MCAE”), ETAO International Group, a Cayman Islands corporation (the “Company”), ETAO International Co., Ltd., a Cayman Islands exempted company (“PubCo”), ETAO Merger Sub, Inc., a Cayman Islands exempted company (“Merger Sub”) and Wensheng Liu, in his capacity as the Company’s Shareholders’ Representative (the “Shareholders’ Representative”), to effect MCAE’s initial business combination pursuant to which, among other things, (1) MCAE will merge with and into PubCo that is a wholly owned subsidiary of MCAE, with PubCo being the surviving corporation in such merger, thereby consummating a change in MCAE’s domicile from a Delaware corporation to a Cayman Islands exempted company (the “Redomestication Merger”);

TABLE OF CONTENTS

other transactions contemplated by the Merger Agreement are hereinafter collectively referred as the “Business Combination” and Proposals 1 and 2, the “Business Combination Proposals”. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A;

Proposal 3. The Governance Proposal — to consider and vote, on a non-binding advisory basis, on four separate governance proposals relating to the following material differences between MCAE’s current amended and restated certificate of incorporation (the “MCAE Charter”) and PubCo’s Amended and Restated Memorandum and Articles of Association(the “PubCo Charter”). These four separate governance proposals are collectively referred to as the “Governance Proposal”:

(B) following the Redomestication Merger the authorized shares of the surviving corporation shall change (i) from 30,000,000 shares of MCAE Common Stock to 500,000,000 PubCo Ordinary Shares;

(D) deleting the election to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested shareholders.

A copy of PubCo’s Amended and Restated Memorandum and Articles of Association is attached to this proxy statement/prospectus as Annex B;

What vote is required to approve the Proposals?

Proposal No. 1 — The Redomestication Merger Proposal requires the affirmative vote of the majority of the issued and outstanding MCAE Common Stock present by virtual attendance or represented by proxy and entitled to vote at the Meeting. An abstention will have the effect of a vote “AGAINST” Proposal No. 1. Broker non-votes will have no effect on the vote for Proposal No. 1.

Proposal No. 2 — The Acquisition Merger Proposal requires the affirmative vote of the majority of the issued and outstanding MCAE Common Stock present by virtual attendance or represented by proxy and entitled to vote at the Meeting. An abstention will have the effect of a vote “AGAINST” Proposal No. 2. Broker non-votes will have no effect on the vote for Proposal No. 2.

TABLE OF CONTENTS

Proposal No. 3 — The Governance Proposal is a non-binding advisory proposal and only requires the affirmative vote of the majority of the issued and outstanding MCAE Common Stock present by virtual attendance or represented by proxy and entitled to vote at the Meeting. An abstention will have the effect of a vote “AGAINST” Proposal No. 3. Broker non-votes will have no effect on the vote for Proposal No. 3.

Proposal No. 4 — The Election of Directors for PubCo Proposal is a non-binding advisory proposal and only requires the affirmative vote of the majority of the issued and outstanding MCAE Common Stock present by virtual attendance or represented by proxy and entitled to vote at the Meeting. An abstention will have the effect of a vote “AGAINST” Proposal No. 4. Broker non-votes will have no effect on the vote for Proposal No. 4.

Proposal No. 5 — The 2022 Employee Stock Option Plan Proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote Abstentions will have the effect of a vote “AGAINST” Proposal No. 5. Broker non- votes will have no effect on the vote for Proposal No. 5.

Proposal No. 6 — The NTA Requirement Amendment Proposal requires the affirmative vote of a majority of at least a majority of the Company’s outstanding common stock, including the Founder Shares. Abstentions will have the effect of a vote “AGAINST” Proposal No. 6. Broker non-votes will have no effect on the vote for Proposal No. 6.

Proposal No. 7 — The Adjournment Proposal requires the affirmative vote of the majority of the issued and outstanding MCAE Common Stock present in person by virtual attendance or represented by proxy and entitled to vote at the Meeting. Abstentions will have the effect of a vote “AGAINST” Proposal No. 6. Broker-non votes have no effect on the vote for Proposal No. 6.

Are the proposals conditioned on one another?

Unless the Redomestication Merger and Acquisition Merger Proposal are approved, the Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal and the NTA Requirement Amendment Proposal will not be presented to the shareholders of MCAE at the Special Meeting. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that in the event that the Business Combination Proposals do not receive the requisite votes for approval, then we will not consummate the Business Combination. If MCAE does not consummate the Business Combination and fails to complete an initial business combination by February 20, 2023 (or such later date as may be approved by MCAE’s stockholders in an amendment to the MCAE charter), then MCAE will be required to dissolve and liquidate its Trust Account by returning then remaining funds in such account to its public shareholders.

What will happen in the Business Combination?

At the Closing, MCAE will merge with and into PubCo with PubCo being the surviving corporation in such merger and (2) ETAO will merge with and into Merger Sub, a subsidiary of PubCo, with ETAO as the surviving corporation in such merger, and, thereafter ETAO shall be a wholly owned subsidiary of PubCo. In connection with the Business Combination, the cash held in the Trust Account after giving effect to any redemption of shares by MCAE’s public shareholders will be used to pay certain fees and expenses in connection with the Business Combination, and for working capital and general corporate purposes of PubCo. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

What equity stake will current shareholders of the Company and ETAO Equityholders hold in the Combined Entity after the Closing?

Included in the shares outstanding and weighted average shares outstanding as presented in the pro forma combined financial statements are approximately 100,000,000 Ordinary Shares of Purchaser (after rounding adjustment) to be issued to the Sellers, such amount calculated using estimated consideration of $1,000,000,000 paid to the Sellers. Upon the completion of the Business Combination, assuming

TABLE OF CONTENTS

minimum redemption of public shares, Public Shareholders, the Sponsor and other Shareholders, an advisor providing advisory services for Business Combination, and the Sellers will own approximately 2.0%, 1.6%, 2.8% and 93.6% of the outstanding shares of Purchaser, respectively.

If 1,079,358 ordinary shares of MCAE are ultimately redeemed, Public Shareholders, the Sponsor and other Shareholders, an advisor providing advisory services, and the Sellers are expected to own approximately 1.0%, 1.6%, 2.8% and 94.6%, respectively, of the Ordinary Shares and voting power of Purchaser following the closing. As such, MCAE shareholders who do not redeem their ordinary shares of MCAE will experience immediate and material dilution upon closing of the Business Combination.

If 539,679 ordinary shares of MCAE are ultimately redeemed, Public Shareholders, the Sponsor and other Shareholders, an advisor providing advisory services, and the Sellers are expected to own approximately 1.5%, 1.6%, 2.8% and 94.1%, respectively, of the Ordinary Shares and voting power of Purchaser following the closing. As such, MCAE shareholders who do not redeem their ordinary shares of MCAE will experience immediate and material dilution upon closing of the Business Combination.

The following presents the calculation of basic and diluted weighted average shares outstanding assuming three alternative levels of conversion for the six months ended June 30, 2022:

•

Scenario 1 — Assuming minimum redemptions for cash: This presentation assumes that other than the 3,820,487 shares already redeemed by MCAE shareholders as of November 17, 2022, no other MCAE shareholders exercise redemption rights with respect to their ordinary shares upon consummation of the Transactions.

•

Scenario 2 — Assuming redemptions of 1,079,358 ordinary shares of MCAE for cash: This presentation assumes that MCAE shareholders will exercise their redemption rights with respect to a maximum of 1,079,358 ordinary shares, leaving only 517,348 shares held by public investors upon consummation of the Transactions at a redemption price of approximately $10.00 per share as of June 30, 2022. The remaining cash not redeemed will be sufficient to cover the transaction costs at closing.

•

Scenario 3 — Assuming redemptions of 539,679 ordinary shares (average of redeemable shares for minimum and maximum scenarios) of MCAE for cash: This presentation assumes that MCAE shareholders will exercise their redemption rights with respect to of 539,679 ordinary shares, leaving only 1,057,027 shares held by public investors upon consummation of the Transactions at a redemption price of approximately $10.00 per share as of June 30, 2022.

	Scenario 1 Combined (Assuming Minimum Redemptions Into Cash)		Scenario 2 Combined (Assuming Maximum Redemptions Into Cash)		Scenario 3 Combined (Assuming 50% Redemptions Into Cash)
Weighted average shares calculation, basic and diluted
MCAE public shares		1,596,706		517,348		1,057,027
MCAE public rights to be converted		541,719		541,719		541,719
MCAE private rights to be converted		19,334		19,334		19,334
MCAE shares held by Sponsor and other shareholders		1,633,891		1,633,891		1,633,891
MCAE shares issued for advisory fee		3,000,000		3,000,000		3,000,000
Shares issued to ETAO shareholders in Business Combination		100,000,000		100,000,000		100,000,000
Weighted average shares outstanding		106,791,650		105,712,292		106,251,971
Percent of shares owned by existing public holders of MCAE share (including public rights converted)		2.0%		1.0%		1.5%
Percent of shares owned by the Sponsor and other Shareholders (including private rights converted)		1.6%		1.6%		1.6%
Percent of shares owned by an advisor for Business Combination		2.8%		2.8%		2.8%
Percent of shares owned by existing holders of ETAO share		93.6%		94.6%		94.1%
		100%		100%		100%

TABLE OF CONTENTS

The following table illustrates the effective underwriter cash fee on a percentage basis for Public Shares at each redemption level identified below.

(in thousands, except share amounts)	Minimum Redemption			Maximum Redemption			50% Redemption
Unredeemed public shares			1,596,706			517,348			1,057,027
Trust proceeds to Etao		$	15,816,046		$	5,022,462		$	10,419,252
Underwriter Cash Fee		$	2,979,457		$	2,979,457		$	2,979,457
Effective Underwriter Cash Fee (%)			18.5%			56.5%			27.9%

See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

What conditions must be satisfied to complete the Business Combination?

There are a number of closing conditions in the Merger Agreement, including the approval by the shareholders of MCAE of the Redomestication Merger Proposal, the Acquisition Merger Proposal, the Governance Proposal, Election of Directors of PubCo Proposal, the 2022 Plan Proposal and the NTA Requirement Amendment Proposal. The Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal and the NTA Requirement Amendment Proposal is subject to and conditioned on the approval of the Redomestication Merger Proposal and the Acquisition Merger. For a summary of the conditions that must be satisfied or waived prior to the Closing of the Business Combination, see the section titled “The Acquisition Merger Proposal — The Merger Agreement.”

Why is MCAE providing shareholders with the opportunity to vote on the Business Combination?

Under the MCAE Charter, MCAE must provide all holders of its Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of MCAE’s initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, MCAE has elected to provide its shareholders with the opportunity to have their Public Shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, MCAE is seeking to obtain the approval of its shareholders of the Business Combination Proposals in order to allow its public shareholders to effectuate redemptions of their Public Shares in connection with the closing of its Business Combination.

Are there any arrangements to help ensure that MCAE will have sufficient funds, together with the proceeds in its Trust Account, to fund the Aggregate Purchase Price?

No. MCAE entered into a subscription agreement, dated as of January 26, 2022, with the an investor, pursuant to which, among other things, MCAE agreed to issue and sell, in a private placement to close immediately prior to the Closing, an aggregate of 25,000,000 shares of MCAE common stock for $10 per share for a total of $250,000,000 (the “PIPE Subscription Agreement”). On July 25, 2022, MCAE and the investor terminated the PIPE Subscription Agreement by mutual consent. Accordingly, the PIPE Subscription Agreement is void and of no further force and effect, and all rights and obligations of the parties thereunder have terminated. MCAE and ETAO intend to secure a private placement which is expected to close concurrently with the Closing.

To the extent not utilized to consummate the Business Combination, the proceeds from the Trust Account will be used for general corporate purposes, including, but not limited to, working capital for operations, capital expenditures and future acquisitions.

How many votes do I have at the Special Meeting?

MCAE shareholders are entitled to one vote at the Special Meeting for each share of MCAE Common Stock held of record as of December 30, 2022, the record date for the Special Meeting (the “Record Date”). As of the close of business on the Record Date, there were 3,230,597 outstanding shares of MCAE Common Stock.

TABLE OF CONTENTS

What vote is required to approve the proposals presented at the Special Meeting?

The approval of Redomestication Merger Proposal, the Acquisition Merger Proposal, the Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of MCAE Common Stock cast by the shareholders represented in person or by proxy and entitled to vote thereon at the Special Meeting. A MCAE stockholder’s failure to vote by proxy or to vote in person on line at the Special Meeting will not be counted towards the number of shares of MCAE Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of the vote on the Governance Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal.

If the Redomestication Merger Proposal and the Acquisition Merger Proposal are not approved, the Governance Proposal, the Election of Directors of PubCo Proposal the 2022 Plan Proposal and the NTA Requirement Amendment Proposal will not be presented to the MCAE shareholders for a vote.

What constitutes a quorum at the Special Meeting?

Holders of a majority in voting power of MCAE Common Stock issued and outstanding and entitled to vote at the Special Meeting constitute a quorum. In the absence of a quorum, the chairman of the meeting has power to adjourn the Special Meeting. As of the Record Date, 1,615,299 shares of MCAE Common Stock would be required to achieve a quorum.

How will the Sponsor, directors and officers vote?

The Sponsor, as MCAE’s initial stockholder, has agreed to vote its Founder Shares (as well as any Public Shares purchased during or after the MCAE IPO) in favor of the Business Combination. Likewise MCAE’s directors and officers have agreed to vote the shares held by them in favor of the Business Combination. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if the Sponsor agreed to vote their Founder Shares in accordance with the majority of the votes cast by MCAE’s public shareholders.

What interests do MCAE’s current officers and directors have in the Business Combination?

The Sponsor, members of the Board and its executive officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interest. These interests include:

•

unless MCAE consummates an initial business combination, MCAE’s officers, directors and sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds from the MCAE IPO and Private Placement not deposited in the Trust Account;

•

with certain limited exceptions, 50% of MCAE’s founder shares will not be transferred, assigned, sold or released from escrow until the earlier of six months after the date of the consummation of our initial business combination and the date the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and the remaining 50% of the insider shares will not be transferred, assigned, sold or released from escrow until six months after the date of the consummation of our initial business combination or earlier in either case if, subsequent to our initial business combination, we complete a liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their shares of common stock for cash, securities or other property;

•

the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate;

•

based on the difference in the purchase price of $0.018 that the Sponsor paid for the Founder Shares, as compared to the purchase price of $10.00 per Public Unit sold in the IPO, the Sponsor

TABLE OF CONTENTS

may earn a positive rate of return even if the share price of the Combined Company after the Closing falls below the price initially paid for the Units in the MCAE IPO and the Public Shareholders experience a negative rate of return following the Closing of the Business Combination;

•

the fact that Sponsor paid an aggregate of $25,000 (or approximately $0.018 per share) for its 1,348, 298 Founders Shares and such securities may have a value of $13,482,980 at the time of the Business Combination, because the merger consideration is based on a deemed price per share of $10.00 a share, our Sponsor could make a substantial profit after the initial business combination even if public investors experience substantial losses. Further, the Founder Shares have no redemption rights upon MCAE’s liquidation and will be worthless if no business combination is effected;

•

the fact that the Sponsor currently holds 112,086 private units which were purchased at a price of $10 per unit, or an aggregate value of $1,120,860 and which have no redemption rights upon MCAE’s liquidation and will be worthless if no business combination is effected;

•

on June 15, 2022, MCAE issued an unsecured promissory note in the aggregate principal amount up to $100,000 the Sponsor. Pursuant to the Note, the Sponsor agreed to loan to the Company an aggregate amount up to $100,000 that may be drawn down from time to time and In the event that the Company does not consummate a business combination, the Note will be repaid only from amounts remaining outside of the Company’s trust account, if any. In addition, the Note may be converted at the closing of a business combination by the Company into private units of the Company identical to the public units issued in the Company’s initial public offering at a price of $10.00 per unit;

•

on October 3, 2022, MCAE issued an unsecured promissory note in the aggregate principal amount up to $100,000 the Sponsor. Pursuant to the Note, the Sponsor agreed to loan to the Company an aggregate amount up to $100,000 that may be drawn down from time to time and In the event that the Company does not consummate a business combination, the Note will be repaid only from amounts remaining outside of the Company’s trust account, if any. In addition, the Note may be converted at the closing of a business combination by the Company into private units of the Company identical to the public units issued in the Company’s initial public offering at a price of $10.00 per unit; and

•

the fact that Sponsor has agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination.

These interests may influence MCAE’s directors in making their recommendation that you vote in favor of the approval of the Business Combination.

What happens if I sell my shares of Common Stock before the Special Meeting?

The Record Date is earlier than the date of the Special Meeting. If you transfer your shares of Common Stock after the Record Date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your shares of Common Stock prior to the Record Date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.

What happens if I vote against the Business Combination Proposals?

Pursuant to the MCAE Charter, if the Business Combination Proposals are not approved and MCAE does not otherwise consummate an alternative business combination by November 20, 2022, MCAE will be required to dissolve and liquidate its Trust Account by returning then remaining funds in such account to the public shareholders. On November 17, 2022 MCAE’s shareholders approved an amendment to MCAE’s charter extending the date until which MCAE is required to complete a business combination to February 20, 2023. In connection with the stockholders’ vote at the Special Meeting of Stockholders held by MCAE Acquisition Corp. on November 17, 2022, 3,820,487 shares were tendered for redemption. As of December 30, 2022, the Record Date, there are 3,230,597 shares outstanding and eligible to vote in the Special Meeting.

TABLE OF CONTENTS

Do I have redemption rights?

Pursuant to the MCAE Charter, holders of Public Shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with MCAE’s Charter. As of January 12, 2023, based on funds in the Trust Account of approximately $16.4 million, this would have amounted to approximately $10.27 after giving effect to owed but unpaid taxes on the funds in the Trust Account If a holder exercises its redemption rights, then such holder will be exchanging its shares of MCAE Common Stock for cash. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to MCAE’s transfer agent prior to the Special Meeting. See the section titled “Special Meeting of MCAE Shareholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Will how I vote affect my ability to exercise redemption rights?

No. You may exercise your redemption rights whether you vote your shares of MCAE Common Stock “FOR” or “AGAINST” the Business Combination Proposals or any other proposal described by this proxy statement/prospectus. As a result, the Merger Agreement can be approved by shareholders who will redeem their shares and no longer remain shareholders, leaving shareholders who choose not to redeem their shares holding shares in a company with a potentially less liquid trading market, fewer shareholders, potentially less cash and the potential inability to meet the listing standards of Nasdaq.

How do I exercise my redemption rights?

In order to exercise your redemption rights, you must (i) affirmatively vote either “FOR” or “AGAINST” the Business Combination Proposal, (ii) check the box on the enclosed proxy card to elect redemption, and (iii) prior to 5:00 PM, Eastern time, on February 3, 2023 (two (2) business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com

Please check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of Common Stock. Notwithstanding the foregoing, a holder of the Public Shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from seeking redemption rights with respect to an aggregate of 20% or more of the shares of MCAE Common Stock included in the Units sold in the MCAE IPO, which we refer to as the “20% threshold.” Accordingly, all Public Shares in excess of the 20% threshold beneficially owned by a public stockholder or group will not be redeemed for cash.

Shareholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is MCAE’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, MCAE does not have any control over this process and it may take longer than two weeks. Shareholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with MCAE’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to MCAE’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that MCAE’s

TABLE OF CONTENTS

transfer agent return the shares (physically or electronically). You may make such request by contacting MCAE’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

What are the U.S. federal income tax consequences of exercising my redemption rights?

In the event that a U.S. Holder elects to redeem its MCAE Common Stock for cash, the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as sale or exchange of the MCAE Common Stock under Section 302 of the Code or is treated as a distribution under Section 301 of the Code. Whether the redemption qualifies as a sale or exchange or is treated as a distribution will depend on the facts and circumstances of each particular U.S. Holder at the time such U.S. Holder exercises his, her, or its redemption right. If the redemption qualifies as a sale or exchange of the MCAE Common Stock, the U.S. Holder will be treated as recognizing capital gain or loss equal to the difference between the amount realized on the redemption and such U.S. Holder’s adjusted tax basis in the MCAE Common Stock surrendered in such redemption transaction. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for the MCAE Common Stock redeemed exceeds one year. However, it is unclear whether the redemption rights with respect to the MCAE Common Stock may prevent a U.S. Holder from satisfying the applicable holding period requirements. Long-term capital gains recognized by non-corporate U.S. Holders will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations. See “Material U.S. Federal Income Tax Consequences — Certain Material U.S. Federal Income Tax Consequences of Exercising Redemption Rights” for a more detailed discussion of the U.S. federal income tax consequences of a U.S. Holder electing to redeem its MCAE Common Stock for cash.

Will holders of MCAE Common Stock or MCAE Rights be subject to U.S. federal income tax on the PubCo Ordinary Shares received in the Redomestication Merger?

The Redomestication Merger should qualify as a “reorganization” within the meaning of Section 368 of the Code, and, as a result, a U.S. Holder (as defined below) should not recognize gain or loss on the exchange of MCAE Common Stock or MCAE Rights for PubCo Ordinary Shares, as applicable, pursuant to the Redomestication Merger. The provisions of the Code that govern reorganizations, however, are complex, and due to the absence of direct guidance on the application of Section 368 to a redomestication of a corporation holding only investment-type assets such as MCAE, the qualification of the Redomestication Merger as a reorganization is not entirely clear. Accordingly, Loeb & Loeb is unable to provide a “will” opinion regarding the qualification of the Redomestication Merger as a “reorganization” within the meaning of Section 368 of the Code, and is instead providing a “should” opinion.

Although U.S. persons generally do not recognize gain or loss on the receipt of stock pursuant to a reorganization under Section 368 of the Code, Section 367(a) of the Code could require U.S. Holders to recognize gain (but not loss) with respect to the Redomestication Merger. However, Section 367(a) of the Code should not apply to the Redomestication Merger in a manner that causes gain recognition to the U.S. Holders, unless the exchange of MCAE securities for PubCo Ordinary Shares is considered to be an indirect stock transfer under the applicable Treasury Regulations. The rules under Section 367(a) and Section 368 of the Code, however, are complex and there is limited guidance as to their application, particularly with regard to indirect stock transfers in cross-border reorganizations.

If the Redomestication Merger does not qualify as a reorganization for a reason other than the application of Section 367(a) of the Code, then a U.S. Holder that exchanges its MCAE Common Stock or MCAE Rights for PubCo Ordinary Shares under the Redomestication Merger will recognize gain or loss equal to the difference between (i) the fair market value of the PubCo Ordinary Shares received and (ii) the U.S. Holder’s adjusted tax basis in the MCAE Common Stock or MCAE Rights exchanged therefor. For a more detailed discussion of certain U.S. federal income tax consequences of the Redomestication Merger, see the section titled “Material U.S. Federal Income Tax Consequences — Material U.S. Federal Income Tax Consequences of the Redomestication Merger to U.S. Holders” in this proxy statement/prospectus. Holders should consult their own tax advisors to determine the tax

TABLE OF CONTENTS

consequences to them (including the application and effect of any state, local or other income and other tax laws) of the Redomestication Merger.

If I am a holder of Rights, can I exercise redemption rights with respect to my Rights?

No. The holders of Rights have no redemption rights with respect to the Rights.

If I am a Unit holder, can I exercise redemption rights with respect to my Units?

No. Holders of outstanding Units must separate the underlying Public Shares and Rights prior to exercising redemption rights with respect to the Public Shares.

If you hold Units registered in your own name, you must deliver the certificate for such Units to Continental Stock Transfer & Trust Company, our transfer agent, with written instructions to separate such Units into Public Shares and Rights. This must be completed far enough in advance to permit the mailing of the Public Share certificates back to you so that you may then exercise your redemption rights upon the separation of the Public Shares from the Units. See the question “— How do I exercise my redemption rights?” above. The address of Continental Stock Transfer & Trust Company is listed under the question “— Who can help answer my questions?” below.

If a broker, dealer, commercial bank, trust company or other nominee holds your Units, you must instruct such nominee to separate your Units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company, our transfer agent. Such written instructions must include the number of Units to be split and the nominee holding such Units. Your nominee must also initiate electronically, using DTC’s deposit withdrawal at custodian (DWAC) system, a withdrawal of the relevant units and a deposit of an equal number of Public Shares and Rights. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the Public Shares from the Units. While this is typically done electronically the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your Public Shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Do I have dissenter rights if I object to the proposed Business Combination?

No. There are no dissenter rights available to holders of MCAE Common Stock in connection with the Business Combination.

Do I have dissenter rights if I object to the proposed Redomestication Merger?

No. There are no dissenter rights available to holders of MCAE Common Stock in connection with the Redomestication Merger.

Do I have dissenter rights if I object to the proposed Acquisition Merger?

No. There are no dissenter rights available to holders of MCAE Common Stock in connection with the Acquisition Merger.

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

If the Business Combination is consummated, the funds held in the Trust Account will be released to pay:

•

Company shareholders who properly exercise their redemption rights;

•

certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees, and other professional fees) that were incurred by MCAE or ETAO in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement;

•

unpaid franchise and income taxes of MCAE; and

•

for general corporate purposes of the Combined Entity including, but not limited to, working capital for operations, capital expenditures and future potential acquisitions.

TABLE OF CONTENTS

What happens if the Business Combination is not consummated?

There are certain circumstances under which the Merger Agreement may be terminated. See the section titled “The Acquisition Merger Proposal — The Merger Agreement” for information regarding the parties’ specific termination rights.

If, as a result of the termination of the Merger Agreement or otherwise, MCAE is unable to complete the Business Combination or another initial business combination transaction by February 20, 2023, (or such later date as may be approved by MCAE’s stockholders in an amendment to the MCAE charter) the MCAE Charter provides that it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten Business Days thereafter, subject to lawfully available funds therefor, redeem 100% of the Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account, by (B) the total number of then outstanding Public Shares, which redemption will completely extinguish rights of the public shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemptions, subject to the approval of the remaining shareholders and the board of directors in accordance with applicable law, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to its obligations under the Delaware General Corporation Law (“DGCL”) to provide for claims of creditors and other requirements of applicable law.

MCAE expects that the amount of any distribution its public shareholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to MCAE’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Holders of Founder Shares have waived any right to any liquidation distribution with respect to those shares.

When is the Business Combination expected to be completed?

The Closing is expected to take place (a) the second business day following the satisfaction or waiver of the conditions described below under the section titled “The Acquisition Merger Proposal — Structure of the Business Combination — Conditions to Closing of the Business Combination”; or (b) such other date as agreed to by the parties to the Merger Agreement in writing, in each case, subject to the satisfaction or waiver of the Closing conditions. The Merger Agreement may be terminated by either MCAE or ETAO if the Closing has not occurred by February 20, 2023, subject to certain exceptions.

For a description of the conditions to the completion of the Business Combination, see the section titled “The Acquisition Merger Proposal.”

What do I need to do now?

You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

How do I vote?

If you are a stockholder of record, you may vote online at the virtual Meeting or vote by proxy using the enclosed proxy card, the Internet or telephone. Whether or not you plan to participate in the Meeting, we urge you to vote by proxy to ensure your vote is counted. Even if you have already voted by proxy, you may still attend the virtual Meeting and vote online, if you choose.

To vote online at the virtual Meeting, follow the instructions below under “How may I participate in the virtual Meeting?”

TABLE OF CONTENTS

To vote using the proxy card, please complete, sign and date the proxy card and return it in the prepaid envelope. If you return your signed proxy card before the Meeting, we will vote your shares as you direct.

To vote via the telephone, you can vote by calling the telephone number on your proxy card. Please have your proxy card handy when you call. Easy-to-follow voice prompts will allow you to vote your shares and confirm that your instructions have been properly recorded.

To vote via the Internet, please go to https://www.cstproxy.com/mcacquisitioniii/2023 and follow the instructions. Please have your proxy card handy when you go to the website. As with telephone voting, you can confirm that your instructions have been properly recorded.

Telephone and Internet voting facilities for shareholders of record will be available 24 hours a day until 11:59 p.m. Eastern Time on February 6, 2023. After that, telephone and Internet voting will be closed, and if you want to vote your shares, you will either need to ensure that your proxy card is received before the date of the Meeting or attend the virtual Meeting to vote your shares online.

If your shares are registered in the name of your broker, bank or other agent, you are the “beneficial owner” of those shares and those shares are considered as held in “street name.” If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than directly from us. Simply complete and mail the proxy card to ensure that your vote is counted. You may be eligible to vote your shares electronically over the Internet or by telephone. A large number of banks and brokerage firms offer Internet and telephone voting. If your bank or brokerage firm does not offer Internet or telephone voting information, please complete and return your proxy card in the self-addressed, postage-paid envelope provided.

If you plan to vote at the virtual Meeting, you will need to contact Continental at the phone number or email below to receive a control number and you must obtain a legal proxy from your broker, bank or other nominee reflecting the number of shares of Common Stock you held as of the Record Date, your name and email address. You must contact Continental for specific instructions on how to receive the control number. Please allow up to 48 hours prior to the meeting for processing your control number.

After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to Continental. Requests for registration should be directed to 917-262-2373 or email proxy@continentalstock.com. You can pre-register to attend the virtual Meeting starting at 5:00 p.m., Eastern Time, on February 2, 2023.

You will receive a confirmation of your registration by email after we receive your registration materials. We encourage you to access the Meeting prior to the start time leaving ample time for the check in.

How may I participate in the virtual Meeting?

If you are a stockholder of record as of the Record Date for the Meeting, you should receive a proxy card from Continental, containing instructions on how to attend the virtual Meeting including the URL address, along with your control number. You will need your control number for access. If you do not have your control number, contact Continental at 917-262-2373 or email proxy@continentalstock.com.

You can pre-register to attend the virtual Meeting starting at 5:00 p.m., Eastern Time, on February 2, 2023. Go to https://www.cstproxy.com/mcacquisitioniii/2023 enter the control number found on your proxy card you previously received, as well as your name and email address. Once you pre-register you can vote. At the start of the Meeting you will need to re-log into https://www.cstproxy.com/mcacquisitioniii/2023 using your control number.

If your shares are held in street name, and you would like to join and not vote, Continental will issue you a guest control number. Either way, you must contact Continental for specific instructions on how to receive the control number. Please allow up to 48 hours prior to the meeting for processing your control number.

TABLE OF CONTENTS

Who can help answer any other questions I might have about the virtual Meeting?

If you have questions about the Proposals or if you need additional copies of this proxy statement or the enclosed proxy card, you should contact MCAE’s proxy solicitor at:

Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: 877-870-8565
Collect: 206-870-8565
Email: KSmith@advantageproxy.com

You may also obtain additional information about MCAE from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.”

If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

No. If you are a beneficial owner and you do not provide voting instructions to your broker, bank or other holder of record holding shares for you, your shares will not be voted with respect to any Proposal for which your broker does not have discretionary authority to vote. If a proposal is determined to be discretionary, your broker, bank or other holder of record is permitted to vote on the proposal without receiving voting instructions from you. If a proposal is determined to be non-discretionary, your broker, bank or other holder of record is not permitted to vote on the proposal without receiving voting instructions from you. A “broker non-vote” occurs when a bank, broker or other holder of record holding shares for a beneficial owner does not vote on a non-discretionary proposal because the holder of record has not received voting instructions from the beneficial owner.

Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the special meeting. Each of the Proposals to be presented at the Meeting is a non-discretionary proposal. Accordingly, if you are a beneficial owner and you do not provide voting instructions to your broker, bank or other holder of record holding shares for you, your shares will not be voted with respect to any of the Proposals.

Broker non-votes will count as a vote “AGAINST” all of the Proposals.

What will happen if I abstain from voting or fail to vote at the Special Meeting?

At the Special Meeting, MCAE will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. Abstentions will have the same effect as a vote “AGAINST” the Business Combination Proposals, the Governance Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal. Broker non-votes will not be counted as present for the purposes of establishing a quorum and will have no effect on any of the Proposals. Additionally, if you abstain from voting or fail to vote at the Special Meeting, you will not be able to exercise your redemption rights (as described above).

What will happen if I sign and return my proxy card without indicating how I wish to vote?

Signed and dated proxies received by MCAE without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the shareholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting. If you fail to indicate how you vote, you will not be able to exercise your redemption rights.

If I am not going to attend the Special Meeting, should I return my proxy card instead?

Yes. Whether you plan to attend the Special Meeting virtually or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

In order to exercise your redemption rights, you must affirmatively vote either “FOR” or “AGAINST” the Business Combination Proposals. See the question “— How do I exercise my redemption rights” above.

TABLE OF CONTENTS

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. MCAE believes the proposals presented to the shareholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

May I change my vote after I have mailed my signed proxy card?

Yes. You may change your vote by sending a later-dated, signed proxy card to MCAE’s secretary at the address listed below so that it is received by MCAE’s secretary prior to the Special Meeting or attend the Special Meeting in person on line and vote. You also may revoke your proxy by sending a notice of revocation to MCAE’s secretary, which must be received by MCAE’s secretary prior to the Special Meeting.

What should I do if I receive more than one set of voting materials?

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

Who will solicit and pay the cost of soliciting proxies?

MCAE will pay the cost of soliciting proxies for the Special Meeting. MCAE has engaged Advantage Proxy, to assist in the solicitation of proxies for the Special Meeting. MCAE has agreed to pay Advantage Proxy a fee of $7,500, plus disbursements. MCAE will reimburse Advantage Proxy for reasonable out-of-pocket expenses and will indemnify Advantage Proxy and its affiliates against certain claims, liabilities, losses, damages and expenses. MCAE will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of MCAE Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the MCAE Common Stock and in obtaining voting instructions from those owners. MCAE’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Who can help answer my questions?

If you have questions about the proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact:

If you have any questions concerning the virtual Meeting (including accessing the meeting by virtual means) or need help voting your shares of the Company’s Common Stock, please contact Continental at 917-262-2373 or email proxy@continentalstock.com.

The Notice of Special Meeting, Proxy Statement and form of Proxy Card are available at

You may also contact our proxy solicitor at:

Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: 877-870-8565
Collect: 206-870-8565
Email: KSmith@advantageproxy.com

TABLE OF CONTENTS

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary, together with the section entitled, “Questions and Answers About the Proposals” summarizes certain information contained in this proxy statement/prospectus and may not contain all of the information that is important to you. To better understand the Business Combination and the Proposals to be considered at the Special Meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section titled “Where You Can Find More Information.”

Unless otherwise indicated or the context otherwise requires, references in this Summary of the Proxy Statement/Prospectus to the “Combined Entity” refer to PubCo and its consolidated subsidiaries after giving effect to the Business Combination.

Unless otherwise specified, all share calculations assume no exercise of redemption rights by the MCAE’s public shareholders and do not include any shares of MCAE Common Stock issuable upon the exercise of the Rights.

Overview

ETAO is a holding company incorporated in the Cayman Islands with no material operations. As a holding company with no material operations of its own, ETAO conducts substantially all of the operations through the VIEs, which have entered into a series of the VIE Agreements with the WFOEs, indirect subsidiaries of ETAO. For accounting purposes, ETAO is the primary beneficiary of the Consolidating VIEs’ business operations through the VIE Agreements, which enables ETAO to consolidate the financial results in our consolidated financial statements under U.S. GAAP for the Consolidating VIEs and one VIE in which ETAO does not own an interest and whose financial statements will not be consolidated with the financial statements of ETAO. We have evaluated the guidance in Financial Accounting Standards Board Accounting Standards Codification 810 and determined that we are regarded as the primary beneficiary of the VIEs for accounting purposes, as a result of our direct ownership in the WFOEs and the provisions of the VIE Agreements. “Prospectus Summary- The VIE Agreements.” Our shares offered in this prospectus are shares of PubCo our holding company incorporated in Cayman Islands, not the shares of the VIE.

TABLE OF CONTENTS

(5)

Changxing Zhizhou Hospital Co., Ltd.’s shareholders: Hongming Yang holding 100%.

(6)

Beijing Dnurse Technology Co., Ltd.’s shareholders: Chengzhi Li holds 31.78%, Sannuo Health Industry Investment Co., Ltd. holding 20.00%, Xiamen Siyuan Investment Management Co., Ltd. holds 11.63%, Sinocare Inc. holds 10.02%, Zhihua Zheng holding 6.81%, Beijing Innovation Works Investment Center(L.P.) holds 6.81%, Beijing Hengbao Jinyuan Investment Management Co., Ltd. holds 6.14%, and Jiebo Liu holds 4.54%, Xiang Li holding 2.27%.

(7)

Zhichao Medical Technology (Hunan) Co., Ltd.’s shareholders: Changsha Weihong Enterprise Management Enterprise (Limited Partnership) holding 41.91%, Changsha Xinshan Enterprise Management Enterprise (Limited Partnership) holding 33.15%, Changsha Kangnaier Consulting Management Partnership (Limited Partnership) holding 10.06%, Changsha Renzhe Airen Enterprise Management Partnership (Limited Partnership) holding 9.46%, Zhongqi Huashang Nanjing Equity Investment Fund Center (Limited Partnership) holding 3.00%, and Genetalks of Biological Technology (Beijing) Co., Ltd. holding 2.43%.

(8)

Tianlun (Giuyang) Buyun Buyu Hospital Co., Ltd.’s shareholders: Zheqi Chen holding 80% and Xinjiang You holding 20%.

(9)

Kang Ning (Heng Yang) Healthcare Management Co., Ltd.’s shareholders: Tianming Zhao holding 80% and Ziman Yue holding 20%.

(10)

Civil Hospital (Mengzhou City) Co., Ltd.’s shareholders: Mengzhou Yongcheng Health Food Sales Co., Ltd. holding 100%.

(11)

Qianhu Medical Management (Jiangxi) Co., Ltd.’s shareholders: Haibo Hu holding 80%, Xuelei Wang holding 10%, and Guizhen Zuo holding 10%.

(12)

Hangzhou Six Dimension Dental Medical Technology Co. Ltd.’s shareholders: Xiaodong Wang holding 39.80%, Jia You holding 29.00%, Hangzhou Hongyu Enterprise Management Consulting Partnership (Limited Partnership) holding 20%, and Hangzhou Qingshi Enterprise Management Consulting Partnership (limited Partnership) holding 11.20%.

(13)

Changsha Zhenghe Orthopedics Hospital Co., Ltd.’s shareholders: Hunan Zhenghe Hospital Asset Management Co., Ltd. holding 65%, Wei Hu holding 16.1%, Bo Yu holding 13%, Deju Wei holding 4.9%, and Longwu Wen holding 1%.

Contractual Arrangements Between the VIEs And WFOEs

Etao Healthcare and DILE, the two WFOEs of ETAO, have entered into the following contractual arrangements with the eleven Consolidating VIEs and their shareholders, that enable the Company to (i) have power to direct the activities that most significantly affect the performance of these Consolidating VIEs and their subsidiaries, and (ii) receive the benefits of such VIEs and their subsidiaries that could be significant to the Consolidating VIEs and its subsidiaries. The WFOEs are fully and exclusively responsible for the management of the Consolidating VIEs and its subsidiaries, absorbs all risk of losses of such VIEs and their subsidiaries and has the exclusive right to exercise all voting rights of the VIEs’ shareholders. Therefore, Etao is considered as the ultimate primary beneficiary of these eleven Consolidating VIEs and their subsidiaries and has consolidated these Consolidating VIEs and their subsidiaries’ assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements under U.S. GAAP. Upon consummation of the Business Combination, the Combined beneficiary of the Consolidating VIEs for accounting purposes. However, none of the VIE Agreements have been tested in a court of law.

Exclusive Business Cooperation Agreement

Etao Healthcare and DILE have entered into an Exclusive Business Cooperation Agreement with each of the eleven Consolidating VIEs , pursuant to which the WFOEs have the exclusive right to provide the 11 VIEs with technical services, management consulting and operational support in return for certain fees typically calculated to shift from 51% to 100% (the fees between DILE and Dnurse shall be confirmed by both parties)of the Consolidating VIEs’ operating profits to the WFOEs, and the operating profits shall consist of the VIEs’ total consolidated profit, after deduction of any accumulated deficit in the preceding financial year(s), working capital, expenses, taxes and other statutory contributions. Without the WFOE’s prior written consent, VIEs may not accept any services subject to this agreement from any third party. The

TABLE OF CONTENTS

WFOEs will have the exclusive ownership of all intellectual property rights created as a result of the performance of this agreement. This Agreement may be terminated (i) with the corresponding WFOE’s written consent, (ii) or when a consolidating VIE goes bankrupt or is liquidated in accordance with the applicable laws.

Exclusive Option Agreement

The Exclusive Option Agreement is entered into by and among the WFOEs and the VIEs. Pursuant to the Exclusive Option Agreement, certain Registered Shareholders irrevocably granted the WFOEs or any third party designated by the WFOEs an option to purchase all or part of their equity interests as agreed in Exclusive Business Cooperation Agreement (collectively, Granted Equity Interests) in VIEs and their subsidiaries at any time at a price determined at the WFOE’s discretion (the price between DILE and Dnurse is RMB 10 ) or in accordance with the applicable laws.

Without the WFOE’s prior written consent, VIEs and their shareholders agreed not to, among other things: (i) amend the articles of association of the VIES; (ii) increase or decrease the registered capital of the VIEs; (iii) change VIEs’ business activities; (iv) alter VIEs’ capital structure; (v) sell, assign, mortgage or dispose of any legal or beneficial rights to or in any of VIEs’ assets, business, or revenue; (vi) incur, assume or guarantee any debts, except for debts incurred in the ordinary course of business; (vii) enter into any material contract, except for contracts entered in the ordinary course of business; (viii) merge or consolidate with any third party or acquire or invest in any third party. Registered Shareholders have further covenanted, among other things, that not to distribute dividends without the WFOE’s prior written consent. This Agreement will continue with full force and effect until the date when the Granted Equity Interests held by Registered Shareholders have been transferred to the WFOEs or any third party designated by the WFOEs.

Power of Attorney

Certain shareholders of the VIEs, executed Power of Attorney to irrevocably authorize the WFOEs or any person(s) designated by the WFOEs to act as its attorney-in-fact to exercise all of its rights as a shareholder of the VIEs, including, but not limited to, the right to receive all notices regarding the shareholders’ meetings, vote, make decisions and sign relevant documents as a shareholder. This agreement is effective and irrevocable until all shareholder’s equity interest in the VIEs has been transferred to these VIEs or the person(s) designated by the WFOEs.

Equity Pledge Agreement

Under the Equity Interest Pledge Agreement signed by and among the WFOEs and certain shareholders of the VIEs, the particular shareholders of these VIEs have agreed to pledge equity interest in the VIEs as defined in the Exclusive Business Cooperation Agreement to the WFOEs to guarantee the performance obligations of the VIEs under the Exclusive Service Agreement and the Exclusive Option Agreement. If any of VIEs or its Registered Shareholders breach their contractual obligations under these agreements, the WFOE, as pledgee, will have the right to exercise the Pledge. The Registered Shareholders also agreed that, without prior written consent of the WFOEs, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests.

Spousal Consent Letter

The spouses of certain shareholders of the VIEs have each signed Spousal Consent Letters. Under the Spousal Consent Letter, the signing spouse unconditionally and irrevocably has agreed to: (i) the execution by his or her spouse of the above-mentioned Exclusive Business Cooperation Agreement, Exclusive

Option Agreement, Power of Attorney and Equity Pledge Agreement, (ii) waive any right or benefits on Granted Equity Interests and assets in accordance with applicable laws, and confirm that he or she will not have any claim on such equity interests and assets; (iii) and he or she has not and does not intend to participate in the operation and management or other voting matters of the VIEs. In addition, in the event that the spouse obtains any equity interest in the VIEs held by his or her spouse for any reason, he or she agrees to be bound by and sign any legal documents substantially similar to the contractual arrangements entered into by his or her spouse.

TABLE OF CONTENTS

For more detailed information on each contract relating to each VIE, please see the section labeled “Information About ETAO” starting on page 186.

Summary of challenges and risks involved in the VIE Arrangements and enforcing the VIE Agreements

Because the Company does not hold equity interests in the Consolidating VIEs, the Company is subject to risks due to the uncertainty of the interpretation and application of the PRC laws and regulations, including but not limited to regulatory review of oversea listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the contractual arrangement with the Consolidating VIEs. The Company is also subject to the risks of the uncertainty that the PRC government could disallow the VIE structure, which would likely result in a material change in the Company’s operations, or a complete hindrance of the Company’s ability to offer or continue to offer our securities to investors, and the value of the Company’s securities may depreciate significantly. The VIE Arrangements are less effective than direct ownership due to the inherent risks of the VIE structure and that the Company may have difficulty in enforcing any rights the Company may have under the VIE Agreements with any of the Consolidating VIEs, its founders and shareholders in the PRC because all of the VIE Agreements are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, where the legal environment is uncertain and not as developed as in the United States, and where the Chinese government has significant oversight and discretion over the conduct of the Consolidating VIE’s business and may intervene or influence the Consolidating VIE’s operations at any time with little advance notice, which could result in a material change in the Company’s operations and/or the value of the Company’s shares. Furthermore, these VIE Agreements may not be enforceable in China if the PRC authorities or courts take a view that such VIE Agreements contravene with the PRC laws and regulations or are otherwise not enforceable for public policy reasons. None of the VIE Agreements have been tested in a court of law. ETAO may have to incur substantial costs and expend additional resources to enforce such arrangements. Also, in connection with litigation, arbitration or other judicial or dispute resolution proceedings, assets under the name of any record holder of equity interest in VIEs, including such equity interest, may be put under court custody. As a consequence, we cannot be certain that the equity interest will be disposed of pursuant to the contractual arrangement or ownership by the record holder of the equity interest. In the event the Company is unable to enforce these VIE Agreements, or if the Company suffers significant time delays or other obstacles in the process of enforcing these contractual arrangements, the Company may not be able to exert effective control over the Consolidating VIEs and the Company’s ability to conduct its business may be materially and adversely affected. See “Risk Factors — Risks Related to ETAO’s Corporate Structure”, and “Risk Factors — Risks Related to Doing Business in China”. ETAO relies on contractual arrangements with the VIEs and their shareholders for a large portion of ETAO’s business operations. These arrangements may not be as effective as direct ownership in providing operational control. Any failure by the VIEs or their shareholders to perform their obligations under such contractual arrangements would have a material and adverse effect on ETAO’s business. See “Risk Factors — Risks Related to ETAO’s Corporate Structure”.

Permissions and Approvals required from the Chinese Authorities

Jingtian & Gongcheng, ETAO’s PRC counsel, has advised that (i) since the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies issued by CSRC is still in draft form and has not become effective, ETAO, ETAO’s subsidiaries and the VIEs are not required to obtain permissions from CSRC to operate the current business and list overseas, (ii) no explicit provisions under currently effective PRC laws, regulations and rules clearly classifies indirect listing through contractual arrangements like ETAO are required to obtain approvals from PRC authorities, except for the cybersecurity review under the Cybersecurity Review Measures. The eleven Consolidating VIEs and Changsha Zhenghe were not subject to cybersecurity review under the Cybersecurity Review Measures, because ETAO Healthcare has obtained the official confirmation from Cybersecurity Review Office that the Listing is not subject to cybersecurity review. Therefore, ETAO, ETAO’s subsidiaries and the VIEs are not required to submit applications for the approval the CSRC or other equivalent PRC government authorities according to currently effective PRC laws, regulations and rules at this stage, but there is no guarantee that the Chinese authorities will not change their policy in the future. And we cannot assure you that ETAO, ETAO’s subsidiaries and the VIEs can fully or timely comply with such laws. If ETAO’s PRC subsidiaries and the VIEs (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and

TABLE OF CONTENTS

our PRC subsidiaries or the VIEs are required to obtain such permissions or approvals in the future, we could be subject to fines, legal sanctions or an order to suspend the VIEs’ operations, which may materially and adversely affect the business, financial condition and results of operations of us and the VIEs. For risks relating to licenses and approvals required for the operations of us and the VIEs in China, see “Risks Related to our Corporate Structure”. And we cannot assure you that ETAO, ETAO’s subsidiaries and the VIEs can fully or timely comply with such laws. If it is determined that the approval of CSRC or other PRC government authorities is required for this offering, or if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for this offering, we may be unable to obtain a waiver of such approval requirements, and we may face sanctions by the CSRC or other PRC regulatory agencies for failure to obtain or delay in obtaining approvals from the CSRC or other PRC regulatory agencies for this offering. These regulatory authorities may impose fines and penalties on the operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, reputation, financial condition, results of operations, prospects. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt this offering.

Dividend Distribution

The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from SAFE as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders. We currently have not maintained any cash management policies that dictate the purpose, amount and procedure of cash transfers between ETAO, the WFOEs, the VIEs, or investors. Rather, the funds can be transferred in accordance with the applicable PRC laws and regulations. To the extent our cash in the business is in the PRC or a PRC entity, the funds may not be available to distribute dividends to our investors, or for other use outside of the PRC unless by complying with certain procedural requirements. The majority of our and the VIEs’ income is received in Renminbi and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any.

Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of the PRC Subsidiaries, specifically in China, may be used to pay dividends. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, ETAO needs to obtain SAFE approval to use cash generated from the operations of the Subsidiaries and VIEs to pay off their respective debt owed to entities outside China, or to make other capital expenditure payments outside China. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future, and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders. Furthermore, if ETAO determines to pay dividends to its investors out of China in the future, as a holding company, it will be dependent on receipt of funds from its subsidiaries, and ETAO Hong Kong will rely on payments made from the ETAO Healthcare which receives funds from VIEs pursuant to the VIE Agreements. As of the date of this prospectus, no cash transfer or transfer of other assets has occurred between ETAO, any of the PRC Subsidiaries, and the VIEs. If the foreign exchange control system prevents ETAO from obtaining sufficient foreign currencies to satisfy its foreign currency demands, ETAO may not be able to pay dividends in foreign currencies to its shareholders. Our cash dividends, if any, will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax. See “If PubCo is classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to PubCo and its non-PRC shareholders”.

TABLE OF CONTENTS

Relevant PRC laws and regulations permit the PRC companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, the PRC Subsidiaries and the VIEs can only distribute dividends upon approval of the shareholders after they have met the PRC requirements for appropriation to the statutory reserves. As a result of these and other restrictions under the PRC laws and regulations, the PRC Subsidiaries and the VIEs are restricted to transfer a portion of their net assets to ETAO either in the form of dividends, loans or advances. Even though ETAO currently does not require any such dividends, loans or advances from the PRC subsidiaries and the VIEs for working capital and other funding purposes, ETAO may in the future require additional cash resources from the Subsidiaries and the VIEs due to changes in business conditions, to fund future acquisitions and developments, or merely declare and pay dividends to or distributions to the ETAO’s shareholders.

Cash is transferred among the ETAO, ETAO Healthcare, and the VIEs in the following manners: (i) funds are transferred to ETAO Healthcare from ETAO as needed through our BVI and/or Hong Kong subsidiaries in the form of capital contributions or shareholder loans, as the case may be; (ii) funds may be paid by the VIEs to ETAO Healthcare, as service fees according to the VIE agreements; (iii) dividends or other distributions may be paid by ETAO Healthcare to ETAO through ETAO Global and ETAO Hong Kong; and (iv) the ETAO Healthcare and the VIEs, lend to and borrow from each other from time to time for business operation purpose. As of the date of this prospectus, we have no intention to distribute earnings or settle amounts owed under the VIE agreements, and there were no cash flows between ETAO and the ETAO Healthcare, and ETAO has not paid any dividends or made any distributions to its shareholders either. For more details, see “SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ETAO” and “Summary of challenges and risks involved in the VIE Arrangements and enforcing the VIE Agreements”. For further details, see “Risk Factors — Risks Related to Doing Business In China — Governmental control of currency conversion and the ability to transfer cash may limit ETAO’s ability to utilize ETAO’s net revenue effectively and affect the value of your investment”.

Parties to the Business Combination

Mountain Crest Acquisition Corp. III (“MCAE”)

MCAE is a Delaware corporation formed on March 2, 2021, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although there is no restriction or limitation on what industry or geographic region our target operates in, it is our intention to pursue prospective targets that are in North America.

On May 20, 2021, MCAE consummated the initial public offering (“IPO”) of 5,000,000 Units, generating gross proceeds of $50,000,000. Simultaneously with the closing of our IPO, MCAE consummated the sale of 185,000 Private Units in a private placement to our Sponsor, generating gross proceeds of $1,850,000.

After deducting the underwriting discounts, offering expenses, and commissions from the IPO and the sale of the Private Units, a total of $54,171,930 was deposited into the Trust Account, and the remaining $593,730 the net proceeds were outside of the Trust Account and made available to be used for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. As of January 12, 2023, MCAE had cash of $131,140.74 outside of the Trust Account. The net proceeds deposited into the Trust Account remain on deposit in the Trust Account earning interest. As of January 12, 2023, there was $16.4 million held in the Trust Account, after giving effect to owed but unpaid taxes on the funds in the Trust Account.

In accordance with MCAE’s Charter, the amounts held in the Trust Account may only be used by MCAE upon the consummation of a business combination, except that there can be released to MCAE, from time to time, any interest earned on the funds in the Trust Account that it may need to pay its tax obligations. The remaining interest earned on the funds in the Trust Account will not be released until the earlier of the completion of a business combination and MCAE’s liquidation. MCAE executed the Merger Agreement on January 27, 2022 and it must liquidate unless a business combination is consummated by November 20, 2022 (or such later date as may be approved by MCAE’s stockholders in an amendment to the MCAE charter). On November 17, 2022 MCAE’s shareholders approved an amendment to MCAE’s

TABLE OF CONTENTS

charter extending the date until which MCAE is required to complete a business combination to February 20, 2023. In connection with the stockholders’ vote at the Special Meeting of Stockholders held by MCAE Acquisition Corp. on November 17, 2022, 3,820,487 shares were tendered for redemption. As of December 30, 2022, the Record Date, there are 3,230,597 shares outstanding and eligible to vote in the Special Meeting to be held on February 7, 2023.

MCAE’s Common Stock, Rights and Units are currently listed on the Nasdaq Capital Market under the symbols “MCAE,” “MCAER” and “MCAEU,” respectively. The Units commenced trading on the Nasdaq Stock Market on May 20, 2021, and the Common Stock and Rights commenced separate trading from the Units on June 17, 2021.

The Private Units sold in the private placement consist of one share of common stock and one right to receive 1/10th of one ordinary share of the Surviving Company upon the consummation of the business combination. The private rights are identical to the public rights underlying the Units sold to the investors in the IPO. Holders of private rights and public rights cannot retain the private rights or public rights after the Closing of the business combination as they will convert to ordinary shares following the business combination.

The mailing address of our principal executive office is 311 West 43rd Street, 12th Floor, New York, NY 10036. Our telephone number is (646) 493-6558.

PubCo

ETAO International Co., Ltd. (“PubCo”) is a Cayman Islands exempted company that is wholly owned by MCAE. PubCo was formed to facilitate the two-step business combination transaction between MCAE and ETAO. As the first step of the business combination transaction, MCAE will merge with and into PubCo, with PubCo surviving as the surviving corporation in such merger, thereby consummating a change in MCAE’s domicile from a Delaware corporation to a Cayman Islands exempted company (the “Redomestication Merger”).

Merger Sub

ETAO Merger Sub, Inc. (“Merger Sub”) is a Cayman Islands exempted company that is wholly owned by PubCo. Merger Sub was formed to facilitate the two-step business combination transaction between MCAE and ETAO. As the second step of the business combination transaction, ETAO will merge with and into Merger Sub, with ETAO surviving as the surviving corporation in such merger, thereby consummating PubCo’s acquisition, through its Merger Sub subsidiary, of the Company (the “Acquisition Merger”)

ETAO

ETAO International Group (“ETAO”) is a digital healthcare group providing high quality medical care and cutting-edge biomedical technologies to patients in China. ETAO manages and combines the expertise of the twelve VIEs to service their patients’ needs for urgent and elective medical care and health and life insurance products. Eleven VIEs whose financial statements are consolidated with the financial statements of ETAO and one VIE in which ETAO does not own an interest and whose financial statements will not consolidated with the financial statements of ETAO. ETAO is currently developing a healthcare ecosystem trying to leverage a technology platform that would allow it to extend the reach of traditional healthcare services beyond the hospital walls in large cities in China to patients in modern clinical facilities in distant communities and even in their homes all over the world. ETAO aims at constructing its fully integrated online-and-offline ecosystem to deliver quality medical services to Chinese patients via telemedicine and other remote communication technologies and envisions that its ecosystem will be supported by a network of bilingual (English and Chinese) and highly trained international medical specialists. For more information regarding the VIE structure, please see the section labeled “Business”.

ETAO is designing the ecosystem to consist of full-service hospitals, specialized clinics, artificial intelligence/big data diagnosis and medical analysis services, biotechnology companies and an insurance agency company, and possibly much more so that the patient can easily receive medical assistance and healthcare within ETAO’s ecosystem. To integrate the functions of the eleven VIEs under the umbrella of

TABLE OF CONTENTS

ETAO’s ecosystem, the ecosystem is subject to immense processes, communication network establishment, internal controls and procedures, and additional funding in order to undergo a successful initiation in mainland China. ETAO believes this ecosystem will bestow synergistic advantages and allow for opportunistic bolt-on acquisitions strategically positioned in China’s fastest growing healthcare segments.1 (see below for a description of each VIE).

Dental Industry

Hangzhou Six Dimension Dental Medical Technology Co. Ltd.

Hangzhou Six Dimension Dental Medical Technology Co. Ltd. (“6D Dental”) was incorporated on August 30, 2010 in the PRC, with its main location in Hangzhou and other locations of Nanning and Quzhou. Geared towards the dental industry, 6D Dental is a high-tech enterprise that provides digital technical support for dental implant surgery. It includes a digital dental implant technology platform, dental clinics and digital dental implant education and training. 6D Dental’s main goal is to allow digital technology to help dentists achieve safe, accurate and fast implant surgeries. Client fees are the main source of revenue for 6D Dental. ETAO has a 51% VIE contractual interest in 6D Dental.

High-Tech Drug Development/Telemedicine

Baihui (Beijing) Biotech Co., Ltd.

Baihui (Beijing) Biotech Co., Ltd. (“Biohelix”) was established on January 22, 2014 in the PRC, with its main and only location in Beijing. Biohelxix is involved in technology innovation. As part of the biotechnology industry, Biohelix conducts drug development starting at the research stage all through the clinical trial stage of a particular drug. Biohelix’s drugs are geared towards a variety of fields such as lung cancer, breast cancer, leukemia, type 2 diabetes, alopecia (baldness), etc. Biohelix’s main source of revenue is gathered from the sale of raw material compounds utilized for Leukemia research and the commercialization of drugs once approval is provided by the China FDA. ETAO has a 55% VIE contractual interest in Biohelix.

Beijing DNurse Technology Co., Ltd.

Beijing DNurse Technology Co., Ltd. (“DNurse”) was incorporated on July 30, 2013 in the PRC, with its main location in Beijing and a branch office in the Hubei province. DNurse is a mobile Internet company focusing on diabetes management technologies. DNurse holds certain APP, device, service model, an intelligent decision support system based on big data, and is committed to providing professional self-management tools for diabetic patients, helping patients improve their self-management ability and management willingness, improving patient’s blood glucose compliance rate and quality of life. DNurse’s model relies on intelligent medical equipment, application software, health services and IDSS. DNurse is committed to using intelligent medical equipment and mobile Internet technology to help diabetics access simple and convenient blood glucose monitoring, data storage, data analysis sharing and remote consultation, lifestyle habit information, drug reminders, and doctor-patient and patient socialization. DNurse provides the use of mobile internet, social, and entertainment concepts and tools to help diabetics change their life habits.

Simultaneously, through big data technology and massive monitoring data, DNurse is committed to providing a medical database with important medical reference value for the prevention, diagnosis and treatment of diabetes, helping medical institutions and insurance companies reduce the cost of controlling complications and achieving low-cost and efficient increase in medical resources. Users can manually input blood glucose data and other health data, or automatically transmit blood glucose data to the APP through their own connectable blood glucose meter, which is convenient for their self-management of their living habits. All data on the APP are from users with data privacy protections, which complies with Dnurse’s User Agreement and Dnurse Privacy Policy. Dnurse's revenue does not come directly from user data and services generated by user health data. ETAO holds 67.39% in DNurse Investment Co., Ltd. which in turn holds a 100% VIE contractual interest in DNurse via acquiring DNurse’s controller outside the mainland China.

TABLE OF CONTENTS

Zhichao Medical Technology (Hunan) Co., Ltd.

Zhichao Medical Technology (Hunan) Co., Ltd. (“DTalks”) was incorporated on August 17, 2017 in the PRC, with its main and only location in Changsha, Hunan province. DTalks takes artificial intelligence or AI medical technology as its core strength, around medical big data using artificial intelligence to create CDSS clinical medical diagnosis auxiliary decision-making ecological platform system. DTalks was founded by a team of clinical medicine and big data research scientists, who are committed to building an innovative AI medical industry ecological platform that empowers various medical and health institutions, and aim to create a world-leading intelligent hospital and medical big data + AI+ Supercomputing composite industry operating economy. DTalks has outstanding research achievements in the fields of medical big data, supercomputing, and artificial intelligence. DTalks has developed and holds the “Big Superman CDSS Clinical Diagnosis and Decision System.” Such is composed of a special algorithm set developed by super computing power of Tianhe Supercomputing, massive medical big data, an automatic question and answering system based on the two models of symptomatic medicine and empirical medicine, and machine learning optimization system based on user feedback. With the purpose of strengthening medical decision-making and prescription accuracy, and improving the efficiency and quality of medical services, the Big Superman CDSS Clinical Diagnosis and Decision System can support doctors in carrying out a full range of intelligent diagnosis and treatment from three stages: pre-diagnosis, diagnosis and post-diagnosis, provide multi-dimensional big data accurate analysis for health management, provide data support for disease prevention and chronic disease management, and empower various medical and health institutions and thousands of households with AI medical and health solutions, equipment, analysis and diagnosis management cloud computing services. The medical and health data of DTalks mainly come from papers, databases, and data sources that are open and shared internationally in China and other countries including electronic medical records, medical imaging, drugs, health, pension and other data. There is also medical and health data that DTalks uses with authorization from health care facilities, hospitals, physical examination centers, and individuals. The DTalks system applies artificial intelligence technology to the medical and health field, combining three key technologies of big data, supercomputing, and artificial intelligence, and two models of evidence-based medicine and empirical medicine. While doctors see patients, doctors directly input information into the system based on his or her visit with the patient. Subsequently, the system transmits the latest medical and health data back to the artificial intelligence model for machine processing, which significantly improves clinical diagnosis and health management. It effectively solves the three key challenges of "big data, computing power and algorithms" in the field of medical and health care. Moreover, it reduces the time and expense of medical institutions, doctors, and patients, and makes a useful supplement to the national health system. As a further result, fees from such medical diagnoses will drive DTalk’s revenue. DTalk's revenue does not come directly from user data and services generated by user health data. ETAO has a 51% VIE contractual interest in DTalks.

Hospitals/Healthcare Facilities

Chain Workshop (Beijing) Co., Ltd.

Chain Workshop (Beijing) Co., Ltd. (“Chainworks”) was established on August 27, 2003 in the PRC. Chainworks has its main locations in Beijing, and other ancillary locations in Nanjing (Jiangsu — for online hospital) and Zhengzhou (Henan — for clinics serving rural areas).

Chainworks is a leading digital medical service provider in the combined field of the Internet and the medical field (artificial intelligence, big data, cloud computing, blockchain, etc.). Guided by industry applications and customer needs, the company has taken on the responsibility of building future smart medical care, and participates in and promotes the development of digitization and intelligence of information in the medical field. Chainworks current core businesses include: Internet hospitals, cloud pharmacies, AI diagnosis, chronic disease management, and online doctors. In the future, the company will continue to focus on the research and technological innovation of the digital medical internet industry, and is determined to become a well-known brand in the global smart medical field. Chainwork’s medical diagnosis’s, Internet hospitals, and cloud pharmacies are where it drives a large portion of its revenue. ETAO has a 100% VIE contractual interest in Chainworks.

TABLE OF CONTENTS

Changxing Zhizhou Hospital Co., Ltd.

Changxing Zhizhou Hospital Co., Ltd. (“Changxing”) was established on March 5, 2019 in the PRC, with its main and only location in Huzhou. As a general hospital, Changxing conducts a wide array of activities such as the development of cardiovascular medicine, respiratory medicine, gastroenterology, geriatrics, neurology, nephrology (hemodialysis), immuno-rheumatology; trauma surgery, general surgery (minimally invasive), orthopedics, urology, brain surgery, gynecology, ophthalmology, otorhinolaryngology, stomatology, emergency medicine, critical care medicine, and traditional Chinese medicine (TCM). Revenue of Changxing is derived from client fees and government reimbursement for basic insurance. ETAO has a 51% VIE contractual interest in Changxing.

Tianlun (Giuyang) Buyun Buyu Hospital Co., Ltd.

Tianlun (Giuyang) Buyun Buyu Hospital Co., Ltd. (“Guiyang”) was incorporated on March 29, 2021 in the PRC, with its main and only location in Guiyang. As a specialty fertility hospital, Guiyang concentrates, through its main clinical departments, on internal medicine, surgery, obstetrics and gynecology, gynecology, reproductive health and infertility, emergency medicine, anesthesiology, medical laboratory, medical imaging, X-ray diagnosis, ultrasound diagnosis, Chinese medicine, preventive health care, women’s health care, etc. Client fees are the main source of revenue for Guiyang. ETAO has a 51% VIE contractual interest in Guiyang.

Kang Ning (Heng Yang) Healthcare Management Co., Ltd.

Kang Ning (Heng Yang) Healthcare Management Co., Ltd. (“Kangning”) was incorporated on April 28, 2015 in the PRC, with its main and only location in Hengyang. Kangning holds a specialty clinic for physical check-ups. The physical checkups include internal medicine, surgery, ophthalmology, ophthalmology, gastric function, liver function, ECG, ultrasound, transcranial Doppler, liver ultrasound, infrared thermography, DR, CT, MRI, gastroenteroscopy, capsule gastroscopy, body composition, mental stress analysis, arteriosclerosis, and genetic testing. Client fees are the main source of revenue for Kangning. ETAO has a 51% VIE contractual interest in Kangning.

Civil Hospital (Mengzhou City) Co., Ltd.

Civil Hospital (Mengzhou City) Co., Ltd. (“Mengzhou”) was established on May 11, 2018 in the PRC, with its main and only location in Mengzhou City. As a general hospital, Mengzhou is well equipped with various specialties and has more than 30 clinical medical and technical departments, such as orthopedic surgery, general surgery, neurosurgery, neurology, urology, microsurgery, quinturology, obstetrics and gynecology, internal medicine, cardiovascular medicine, pediatrics, oncology, rehabilitation, geriatrics and other disciplines. Revenue of Mengzhou is derived from client fees and government reimbursement for basic insurance. ETAO has a 51% VIE contractual interest in Mengzhou.

Qianhu Medical Management (Jiangxi) Co., Ltd.

Qianhu Medical Management (Jiangxi) Co., Ltd. (“Qianhu”) was incorporated on July 1, 2019 in the PRC, and has its main location in Nanchang. Qianhu manages the clinics that it holds equity interests in. Client fees are the main source of revenue for the clinics Qianhu managed. ETAO has a 51% VIE contractual interest in Qianhu.

Insurance Agency

Aaliance Insurance Brokerage Co., Ltd.

Aaliance Insurance Brokerage Co., Ltd. (“Aaliance”) was established on July 14, 2010 in the PRC. Aaliance’s operations are geared towards insurance brokerage services, particularly in the property, health, and life insurance fields. Aaliance has its headquarters in Shanghai and is located in 23 different cities and provinces, including Shandong, Beijing, Jiangsu, Zhejiang, Anhui, Henan, Fujian, Liaoning, Jilin, Heilongjiang, Yunnan, Qingdao, Suzhou and Ningbo. Based off its insurance brokerage services, Aaliance’s main source of revenue is from its insurance premiums. ETAO has an 85% VIE contractual interest in Aaliance.

TABLE OF CONTENTS

The VIE Agreement with the Non-Consolidated VIE

Changsha Zhenghe Orthopaedics Hospital Co., Ltd.

Changsha Zhenghe Orthopaedics Hospital Co., Ltd. (“Changsha Zhenghe”) was established on February 24, 2010 in the PRC, with its main location in Changsha. As a specialty hospital narrowed in on orthopedics and rehabilitation, Changsha Zhenghe deals with preventive health care, emergency medicine, internal medicine, surgery, orthopedics, pain, rehabilitation medicine, Chinese medicine, and combined Chinese and Western medicine. Revenue of Changsha Zhenghe is derived from client fees and government reimbursement for basic insurance. ETAO has a 41% VIE contractual interest in Changsha Zhenghe.

Changsha Zhenghe is not included in the consolidated financial statements because ETAO does not have a controlling interest.

For more information about ETAO, see “Information About ETAO” and “ETAO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The VIE Structure and Arrangements

ETAO conducts substantial operations in the PRC, primarily in the following areas: tele-medicine platforms, insurance brokerage, biotechnology research and development, and healthcare services. The following sections shall summarize each VIE’s business and the VIE agreements by and among ETAO, each VIE and each VIE’s shareholders.

Neither we nor the Subsidiaries own any equity interest in the VIEs. Instead, we receive the economic benefits of the VIE’s business operation through a series of contractual arrangements. For accounting purposes, ETAO is the primary beneficiary of eleven of the VIE’s business operations through the VIE Agreements, which enables ETAO to consolidate the financial results in our consolidated financial statements under U.S. GAAP for eleven of the VIEs whose financial statements are consolidated with the financial statements of ETAO and one VIE in which ETAO does not own an interest and whose financial statements will not consolidated with the financial statements of ETAO. The VIE Agreements are designed to provide the WFOEs with the power, rights and obligations equivalent in all material respects to those it would possess as a controlling equity holder of the VIEs, including majority rights and the rights to the assets, property and revenue of the VIEs. The contractual agreements with the VIE have not been tested in court in China and this structure involves unique risks to investors. For example, the PRC government could disallow the VIE Arrangements, which would likely result in a material change in the operations of the VIEs and structure and significant change in the value of our securities. Such could cause the value of such securities to significantly decline or become worthless.

Each of the VIE operating entities, receives substantially all of its revenue in RMB. Under ETAO’s current corporate structure, to fund any cash and financing requirements it may have, ETAO may rely on dividend payments from its subsidiaries. The WFOEs receive payments from each VIE, and then remits payments to ETAO International Group Co. Limited in accordance with its registration with the Chinese authority under the “Notice of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange Administration for Domestic Residents to Engage in Financing and in Return Investment via Overseas Special Purpose Companies” (“Article 37”)and pursuant to the VIE Agreements. Then ETAO International Group Co. Limited may make distribution of such payments directly to ETAO as dividends to the holding company. Each VIE has received the Article 37 permit to transfer funds to or receive funds from outside mainland China.

Recent Regulatory Development

As of the date of this prospectus, no relevant laws or regulations in the PRC explicitly require ETAO, the Subsidiaries and the VIEs to seek approval from the CSRC or any other PRC governmental authorities for its overseas listing plan, nor has ETAO (including any of its subsidiaries or the VIEs) received any inquiry, notice, warning or sanctions regarding its planned overseas listing from the CSRC or any other PRC governmental authorities. ETAO’s PRC counsel has advised that (i) since the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies issued by CSRC is still in draft

TABLE OF CONTENTS

form and has not become effective, ETAO, the Subsidiaries and the VIEs are not required to obtain permissions from CSRC to operate the current business and list overseas, (ii) no explicit provisions under currently effective PRC laws, regulations and rules clearly classifies indirect listing through contractual arrangements like ETAO are required to obtain approvals from PRC authorities, except for the cybersecurity review under the Cybersecurity Review Measures. The eleven VIEs controlled by the WFOEs and Changsha Zhenghe were not subject to cybersecurity review under the Cybersecurity Review Measures, because ETAO Healthcare has obtained the official confirmation from Cybersecurity Review Office that the Listing is not subject to cybersecurity review. Therefore, ETAO, the Subsidiaries and the VIEs are not required to submit applications for the approval the CSRC or other equivalent PRC government authorities according to currently effective PRC laws, regulations and rules at this stage, but there is no guarantee that the Chinese authorities will not change their policy in the future. We cannot assure you that ETAO, ETAO’s subsidiaries and the VIEs can fully or timely comply with such laws. If the PRC subsidiaries and the VIEs (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and the PRC subsidiaries or the VIEs are required to obtain such permissions or approvals in the future, we could be subject to fines, legal sanctions or an order to suspend the VIEs’ operations, which may materially and adversely affect the business, financial condition and results of operations of us and the VIEs. For risks relating to licenses and approvals required for the operations of us and the VIEs in China, see “Risk Factors — Risks Related to Doing Business In China — Any lack of requisite approvals, licenses or permits applicable to ETAO’s business may have a material and adverse impact on ETAO’s business, financial condition and results of operations”.

The Proposals

The Business Combination Proposals

Redomestication Merger Proposal — to consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of January 27, 2022 (the “Merger Agreement”), by and among Mountain Crest Acquisition Corp. III, a Delaware corporation (“MCAE”), ETAO International Group, a Cayman Islands exempted company (the “Company”), ETAO International Co., Ltd., a Cayman Islands exempted company (“PubCo”), ETAO Merger Sub, Inc., a Cayman Islands exempted company (“Merger Sub”) and Wensheng Liu, in his capacity as the Company’s Shareholders’ Representative (the “Shareholders’ Representative”), to effect MCAE’s initial business combination pursuant to which, among other things, (1) MCAE will merge with and into PubCo that is a wholly owned subsidiary of MCAE, with PubCo being the surviving corporation in such merger, thereby consummating a change in MCAE’s domicile from a Delaware corporation to a Cayman Islands exempted company (the “Redomestication Merger”);

Acquisition Merger Proposal — to consider and vote on a proposal to adopt and approve the subsequent merger set forth in the Merger Agreement, pursuant to which the Company will merge with and into Merger Sub that is a wholly owned subsidiary of PubCo, with the Company as the surviving corporation in such merger, thereby consummating PubCo’s acquisition, through its Merger Sub, of the Company (the “Acquisition Merger”), and, after giving effect to the Acquisition Merger, the Company being a wholly owned subsidiary of PubCo. The Redomestication Merger, the Acquisition Merger and such other transactions contemplated by the Merger Agreement are hereinafter collectively referred as the “Business Combination” and Proposals 1 and 2, the “Business Combination Proposals”. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A;

The Merger Agreement

As we previously announced, on January 27, 2022, MCAE entered into the Merger Agreement, by and among MCAE, ETAO, PubCo, Merger Sub and the Shareholders’ Representative and the Merger Agreement

TABLE OF CONTENTS

was amended on June 7, 2022 and October 17, 2022. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement. Following the execution of the Merger Agreement, on July 26, 2022, ETAO International Co., Ltd., a Cayman Islands exempted company (“PubCo”) and ETAO Merger Sub, Inc., a Cayman Islands exempted company (“Merger Sub”) joined the Merger Agreement as parties.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement.

The Merger Agreement provides for a redomestication of MCAE from Delaware to the Cayman Islands and a business combination between MCAE and ETAO consummated through a two-step process as follows: (1) MCAE will merge with and into PubCo, a Cayman Islands exempted company that is a wholly owned subsidiary of the MCAE, with PubCo being the surviving corporation in such merger (the “Redomestication Merger”) and (2) the ETAO will merge with and into Merger Sub, a Cayman Islands exempted company that is a wholly owned subsidiary of PubCo, with the ETAO as the surviving corporation in such merger (the “Acquisition Merger”), and, after giving effect to the Acquisition Merger, ETAO shall be a wholly owned subsidiary of PubCo (collectively the “Business Combination”). In the event the NTA Requirement Amendment is approved, then the Company that will not be required to maintain minimum net tangible assets in order to complete a business combination.

Consideration

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Redomestication Merger:

Concurrently with the Redomestication Merger, ETAO will merge with and into Merger Sub and become a wholly owned subsidiary of PubCo and in exchange for all of the outstanding shares of ETAO, PubCo will issue 100,000,000 ordinary shares of PubCo, subject to adjustment as explained below (the “Closing Date Merger Consideration”) to the shareholders of the Company. ETAO shall deliver to MCAE, at least three business days prior to the closing of the Merger (the “Closing”), a Closing Statement setting forth means, among other things, the Closing Date Merger Consideration which is $1,000,000,000 less the amount of Closing Company Indebtedness, Closing Company Transaction Expenses, plus the amount of Closing Company Cash, in each case, as reflected on the Closing Statement. Any adjustment to the Merger Consideration shall be in whole shares of PubCo ordinary shares and no adjustment shall be made for any divergence that is in an increment of less than $10.00.

TABLE OF CONTENTS

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Acquisition Merger:

(i). Each ordinary share of ETAO (other than ETAO restricted stock) issued and outstanding immediately prior to the Effective Time shall be canceled and automatically converted into such ETAO Shareholder’s right to receive, without interest, the number of shares of PubCo’s ordinary shares equal to the product of (i) the number of shares of ETAO common stock (other than ETAO restricted stock) held by such ETAO Shareholder and (ii) the “Exchange Ratio” determined by dividing (A) the Closing Date Merger Consideration (after giving effect to the required adjustment, if any) by (B) the issued and outstanding number of shares of ETAO common stock as of the Closing;

(ii). Each ETAO stock option (whether vested or unvested) that is outstanding and unexercised immediately prior to the Effective Time shall be assumed by PubCo automatically converted into an option to purchase PubCo Ordinary Shares (each an “Assumed Option”). The number of PubCo Ordinary Shares (rounded down to the nearest whole share) that are subject to each Assumed Option shall be equal to the product of (i) the number of shares of ETAO ordinary shares subject to the ETAO stock option and (ii) the Exchange Ratio, and the exercise price per share of the Assumed Option (rounded up to the nearest whole cent) shall be equal to the quotient obtained by dividing (A) the exercise price per share of the ETAO stock option by (B) the Exchange Ratio. Each Assumed Option will continue to be subject to the terms and conditions set forth in the ETAO stock option plan and its applicable grant agreement (except any references therein to ETAO or ordinary shares of ETAO will instead mean the PubCo and ordinary shares of PubCo, respectively). PubCo shall take all corporate action necessary to reserve for future issuance, and shall maintain such reservation for so long as any Assumed Options remain outstanding, a sufficient number of ordinary shares of PubCo for delivery upon the exercise of such Assumed Options; and

The approval of the Redomestication Merger Proposal, the Acquisition Merger Proposal, the Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of MCAE Common Stock cast by the shareholders represented in person or by proxy and entitled to vote thereon at the Special Meeting. If the Redomestication Merger Proposal and the Acquisition Merger Proposal are not approved, the Governance Proposal, the Election of Directors of PubCo. Proposal, 2022 Plan Proposal and the NTA Requirement Amendment Proposal will not be presented to the MCAE shareholders for a vote.

TABLE OF CONTENTS

Investing in PubCo securities involves a high degree of risk. We encourage you to read this proxy statement/ prospectus carefully. In particular, you should review the matters discussed under the caption “Risk Factors” beginning on page 62.

PubCo Post-Closing Board of Directors and Executive Officers

Immediately following the Closing, the Board will consist of no more than seven directors of which MCAE has the right to designate one director and the remaining six directors will be designated by ETAO. At Closing, all of the executive officers of MCAE shall resign and the individuals serving as executive officers of MCAE immediately after the Closing will be the same individuals (in the same offices) as those of ETAO immediately prior to the Closing.

Representations and Warranties; Covenants

MCAE and ETAO have made customary representations, warranties and covenants in the Merger Agreement, including, among other things, covenants with respect to the conduct of MCAE, ETAO, PubCo and Merger Sub prior to the Closing. The parties have also agreed to customary “no shop” obligations, their ability and authority to enter into the Merger Agreement and the capitalization of MCAE, ETAO, PubCo and Merger Sub, respectively. The representations and warranties of MCAE, ETAO, PubCo and Merger Sub will not survive the Closing of the Merger.

Conditions to Closing

General Conditions to Closing

Consummation of the Merger Agreement and the transactions herein is conditioned on, among other things, (i) no provisions of any applicable law and no order prohibiting or preventing the consummation of the closing; (ii) Company shareholder approval; (iii) parent shareholder approval; (iv) regulatory and governmental approvals, including if applicable, the expiration or termination of any waiting periods under the HSR Act; (v) as of the closing date the Parent shall have at least $5,000,001 in net tangible assets provided MCAE is not otherwise exempt from the provisions of Rule 419 promulgated under the Securities Act of 1933, as amended; and the SEC having declared the registration statement with respect to the Business Combination effective.

Company’s Conditions to Closing

The obligations of the Company to consummate the transactions contemplated by the Merger Agreement, in addition to the conditions described above, are conditioned upon each of the following, among other things:

•

the Parent complying with all of obligations under the Merger Agreement in all material respects;

•

the representations and warranties of the Parent being true on and as of the date of the Merger Agreement and the closing date of the transactions except as would not be expected to have a material adverse effect;

•

the covenants of the Parent have been performed or complied with; and

•

approval of Parent’s initial listing application with Nasdaq.

Parent Parties’ Conditions to Closing

The obligations of the Parent Parties to consummate the transactions contemplated by the Merger Agreement, in addition to the conditions described above in the first paragraph of this section, are conditioned upon each of the following, among other things:

•

the representations and warranties of the Company being true on and as of the date of the Merger Agreement and the closing date of the transactions except as would not be expected to have a material adverse effect;

•

the covenants of the Company have been performed or complied with;

TABLE OF CONTENTS

•

there having been no material adverse effect to the Company;

•

the Company shall have received the requisite shareholder approval;

•

the Parent Parties having received copies of all governmental approvals, and no such governmental approval shall have been revoked.

•

the Parent Parties having received a copy of each of the Ancillary Agreements to which the Company is a party, duly executed by the Company and in full force and effect, as well as a copy of each of the Additional Agreements duly executed by all required parties thereto, other than Parent or the Company.

•

the aggregate cash proceeds available to the Parent Parties from a private placement or other financing to be consummated simultaneously with the closing of the Acquisition Merger (the “PIPE Investment”) being not less than $200,000,000.

Termination

The Merger Agreement may be terminated and/or abandoned at any time prior to the closing, whether before or after approval of the proposals being presented to the shareholders of Purchaser, by:

•

by mutual written consent of Parent and the Shareholders’ Representative;

•

by Parent or the Shareholders’ Representative, if the Closing has not occurred on or before the Outside Date unless the absence of such occurrence shall be due to the failure of Parent, on the one hand, or the Company or the Shareholders’ Representative, on the other hand, to materially perform its obligations under this Agreement required to be performed by it on or prior to the Outside Date;

•

by Parent or the Shareholders’ Representative if (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable;

•

by Parent if (i) the Parent Parties are not in material breach of any of its obligations hereunder and (ii) the Company is in material breach of any of its representations, warranties or obligations hereunder that renders or would render the conditions to closing incapable of being satisfied on the Outside Date, and such breach is either (A) not capable of being cured prior to the Outside Date or (B) if curable, is not cured within the earlier of (x) thirty (30) Business Days after the giving of written notice by Parent to the Shareholders’ Representative and (y) two (2) Business Days prior to the Outside Date;

•

by the Shareholders’ Representative if (i) the Company is not in material breach of any of its obligations hereunder and (ii) Parent or Merger Sub is in material breach of any of its representations, warranties or obligations hereunder that renders or would render the conditions to closings incapable of being satisfied on the Outside Date, and such breach is either (A) not capable of being cured prior to the Outside Date or (B) if curable, is not cured within the earlier of (x) thirty (30) Business Days after the giving of written notice by the Shareholders’ Representative to Parent and (y) two (2) Business Days prior to the Outside Date; the Shareholders’

•

by the Parent Parties if the Requisite Company Stockholder Approval shall not have been obtained within five (5) Business Days of the delivery to Purchaser’s shareholders of the Proxy Statement/Prospectus, provided that the termination right shall be of no further force or effect if such Requisite Company Stockholder Approval is delivered to the Parent Parties prior to the termination of the Agreement (even if after the five (5) Business Day period provided above); or

•

by the Parent Parties, in the event that the Company’s Audited 2020/2021 Financial Statements have not been delivered by March 15, 2022.MCAE or ETAO if the Closing has not occurred by May 31, 2022, (iii) by MCAE or ETAO if MCAE has not obtained the required approval by MCAE shareholders or if ETAO has not obtained the required approval of ETAO shareholders.

TABLE OF CONTENTS

The Governance Proposal

The Board is asking the MCAE shareholders to consider and vote, on a non-binding advisory basis, on eight separate governance proposals relating to the following material differences between MCAE’s current amended and restated certificate of incorporation (the “MCAE Charter”) and PubCo’s Amended and Restated Memorandum and Articles of Association (the “PubCo Charter”). These four separate governance proposals are collectively referred to as the “Governance Proposal”:

(B) following the Redomestication Merger the authorized shares of the surviving corporation shall change (i) from 30,000,000 shares of MCAE Common Stock to 500,000,000 PubCo Ordinary Shares;

(D) deleting the election to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested shareholders.

A summary of the eight separate governance proposals are set forth in the “The Governance Proposal” section of this proxy statement/prospectus and a complete copy of PubCo’s Amended and Restated Memorandum and Articles of Association is attached hereto as Annex B.

Election of Directors for PubCo Proposal

MCAE is proposing that its shareholders consider and vote on a proposal to approve PubCo’s Board of Directors (the “PubCo Board”) in regards to the following persons: Wensheng Liu, Biao Dai, Kenneth Liang, Connie Hsu, Andrew MacInnes, and Suying Liu to serve on PubCo’s Board of Directors

The 2022 Plan Proposal

MCAE is proposing that its shareholders approve PubCo’s 2022 Employee Stock Option Plan, which will become effective upon the Closing of the Business Combination and have the following principal features:

A summary of the 2022 Plan is set forth in the “The 2022 Plan Proposal” section of this proxy statement/prospectus and a complete copy of the 2022 Plan is attached hereto as Annex C.

The NTA Requirement Amendment Proposal

MCAE is proposing that its shareholders approve an amendment to the MCAE Charter to expand the methods that MCAE may employ to not become subject to the “penny stock” rules of the Securities and Exchange Commission.

The Adjournment Plan Proposal

MCAE is proposing that its shareholders approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposals, the Governance Proposal or the 2022 Plan Proposal (the “Adjournment Proposal”).

Certain Agreements Related to the Business Combination Agreement

Company Support Agreement

Contemporaneously with the execution of the Merger Agreement, certain holders of ETAO common stock entered into the Company Support Agreement, pursuant to which such holders agreed to approve the Merger Agreement and the proposed Merger.

TABLE OF CONTENTS

PIPE Subscription Agreements and PIPE Registration Rights

In connection with the proposed Merger, MCAE has obtained commitments from interested accredited investors (each a “Subscriber”) to purchase shares of MCAE Common Stock which will be issued in connection with the Closing (the “PIPE Shares”), for an aggregate cash amount of $250,000,000 at a purchase price of $10.00 per share, in a private placement (the “PIPE”). Certain offering related expenses are payable by MCAE, including customary fees payable to the placement agents, Cowen. Such commitments are being made by way of the subscription agreement (the “PIPE Subscription Agreement”), by and among each Subscriber and MCAE. The purpose of the sale of the PIPE Shares is to raise additional capital for use in connection with the Merger and to meet the minimum cash requirements provided in the Merger Agreement. The PIPE Shares are identical to the shares of MCAE Common Stock that will be held by MCAE’s public shareholders at the time of the Closing, except that the PIPE Shares will not be entitled to any redemption rights and will not be registered with the SEC. The closing of the sale of PIPE Shares (the “PIPE Closing”) will be contingent upon the substantially concurrent consummation of the Merger. The PIPE Closing will occur on the date of, and immediately prior to, the consummation of the Merger.

Pursuant to the PIPE Subscription Agreement, MCAE has agreed to file (at MCAE’s sole cost and expense) a registration statement registering the resale of the shares of common stock to be purchased in the private placement (the “PIPE Resale Registration Statement”) with the Securities and Exchange Commission (the “SEC”) no later than thirty (30) calendar days following the Closing. MCAE will use its commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practical but no later than the earlier of (i) the 90th calendar day following the filing date thereof (in the event the SEC notifies MCAE that it will “review” the PIPE Resale Registration Statement) and (ii) the 5th business day after the date MCAE is notified by the SEC that the PIPE Resale Registration Statement will not be “reviewed” or will not be subject to further review. (The rights set forth above granted to the Subscribers pursuant to the PIPE Subscription Agreements are defined as the “PIPE Registration Rights”

On July 25, 2022, MCAE and the PIPE Investment investor terminated the PIPE Subscription Agreement by mutual consent. Accordingly, the PIPE Subscription Agreement is void and of no further force and effect, and all rights and obligations of the parties thereunder have terminated. MCAE and ETAO intend to secure a private placement which is expected to close concurrently with the Closing

Stock Purchase Agreement

In connection with the execution of the Merger Agreement, Mountain Crest Holdings III LLC, a Delaware limited liability company (the “Sponsor”) and ETAO International Group, Inc., a Delaware corporation (“EIG”), entered into a stock purchase agreement, dated December 16, 2021 (the “EIG Stock Purchase Agreement”), pursuant to which EIG purchased 200,000 shares of MCAE common stock (the “EIG Shares”) from the Sponsor for a purchase price of $2,500,000. Subject to the satisfaction of conditions set forth in the EIG Stock Purchase Agreement, the Sponsor shall cause the EIG Shares to be transferred on the books and records of MCAE to EIG upon the Closing of the Business Combination.

Additional Agreements to be Executed at Closing

Lock-Up Agreement

In connection with the Closing, the ETAO shareholders will each agree, subject to certain customary exceptions, not to (i) sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of, directly or indirectly, any shares of PubCo Ordinary Shares held by them (such shares, together with any securities convertible into or exchangeable for or representing the rights to receive shares of PubCo Ordinary Shares if any, acquired during the Lock-Up Period (as defined below), the “Lock-up Shares”), (ii) enter into a transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or otherwise or engage in any short sales or other arrangement with respect to the Lock-Up Shares or publicly announce any intention to effect any transaction specified in clause (i) or (ii) until the date that is 6 months after the Closing (the “Lock-Up Period”).

TABLE OF CONTENTS

PubCo Amended and Restated Registration Rights Agreement

At the closing, PubCo will enter into an amended and restated registration rights agreement (the “PubCo Amended and Restated Registration Rights Agreement”) with certain existing shareholders of MCAE with respect to the shares of PubCo Ordinary Shares they own at the Closing, and the ETAO shareholders of MCAE with respect to the Merger Consideration. The PubCo Amended and Restated Registration Rights Agreement will require PubCo to, among other things, file a resale shelf registration statement on behalf of the shareholders no later than 60 days after the closing of the Business Combination. The PubCo Amended and Restated Registration Rights Agreement will also provide certain demand registration rights and piggyback registration rights to the shareholders, subject to underwriter cutbacks and issuer blackout periods. PubCo will agree to pay certain fees and expenses relating to registrations under the PubCo Amended and Restated Registration Rights Agreement.

Other Agreements

Subject to applicable securities laws (including with respect to material nonpublic information), the Sponsors, the Company’s directors, officers, advisors or any of their respective affiliates may (i) purchase public shares from institutional and other investors (including those who vote, or indicate an intention to vote, against any of the proposals presented at the Special Meeting, or elect to redeem, or indicate an intention to redeem, public shares), (ii) enter into transactions with such investors and others to provide them with incentives to not redeem their public shares, or (iii) execute agreements to purchase such public shares from such investors or enter into non-redemption agreements in the future. In the event that the Sponsors, the Company’s directors, officers, advisors or any of their respective affiliates purchase public shares in situations in which the tender offer rules restrictions on purchases would apply, they (a) would purchase the public shares at a price no higher than the price offered through the Company’s redemption process (i.e., approximately $10.27 per share, based on the amounts held in the Trust Account as of January 12, 2023, after giving effect to any owed but unpaid taxes on the funds in the Trust Account); (b) would represent in writing that such public shares will not be voted in favor of approving the Business Combination; and (c) would waive in writing any redemption rights with respect to the public shares so purchased.

To the extent any such purchases by the Sponsors, the Company’s directors, officers, advisors or any of their respective affiliates are made in situations in which the tender offer rules restrictions on purchases apply, the Company will disclose in a Current Report on Form 8-K prior to the Special Meeting the following: (i) the number of public shares purchased outside of the redemption offer, along with the purchase price(s) for such public shares; (ii) the purpose of any such purchases; (iii) the impact, if any, of the purchases on the likelihood that the Business Combination will be approved; (iv) the identities of the securityholders who sold to the Sponsor, the Company’s directors, officers, advisors or any of their respective affiliates (if not purchased on the open market) or the nature of the securityholders (e.g., 5% security holders) who sold such public shares; and (v) the number of shares of Common Stock for which the Company has received redemption requests pursuant to its redemption offer.

The purpose of such share purchases and other transactions would be to increase the likelihood of (i) otherwise limiting the number of public shares electing to redeem and (ii) increase the Company’s net tangible assets.

If such transactions are effected, the consequence could be to cause the Business Combination to be effectuated in circumstances where such effectuation could not otherwise occur. Consistent with SEC guidance, purchases of shares by the persons described above would not be permitted to be voted for the Business Combination at the Special Meeting and could decrease the chances that the Business Combination would be approved. In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

The Company hereby represents that any Company securities purchased by the Sponsor, the Company’s directors, officers, advisors or any of their respective affiliates in situations in which the tender offer rules apply.

The Board of Directors’ Reasons for the Approval of the Business Combination

•

The Board believes patient-centric, digitally supported telemedicine in China is becoming mainstream;

TABLE OF CONTENTS

•

Potential for early mover advantage in integrated online-and-offline healthcare ecosystem building;

•

Management has experience in founding and leading companies;

•

Well-positioned differentiation from other telemedicine companies through ETAO’s planned comprehensive ecosystem of 12 VIE entities (including 11 consolidating VIEs and one non-consolidating VIE) ranging from biotechnology, online pharmacy, online health insurance and offline general hospitals;

•

Clear growth path both organically and with add on plans;

•

Multiple barriers to entry;

•

Significant market opportunity and unmet medical need; and

•

Near-term milestones provide for potential value inflection points.

ETAO Reasons for the Business Combination

Prior to reaching the decision to approve the Merger Agreement, ETAO’s board of directors reviewed the results of the business and financial due diligence conducted by our management and third party legal and financial advisors, which included:

Review of MCAE’s existing public filings.

Discussions with MCAE’s management on the impact of COVID-19 on the business.

Analysis and review of MCAE’s historical financial statements, including funds in MCAE’s trust account.

Interviews primarily with Suying Liu, the Chief Executive Officer of MCAE.

Legal due diligence review conducted by our legal counsel.

When considering the Business Combination with MCAE, ETAO’s board of directors reviewed the information available, and considered, among other things, the following:

Strong Management Team. The management team is led by Dr. Suying Liu who has over 7 years of working experience in capital markets.

Expected Accounting Treatment

ETAO expects to treat the Business Combination with MCAE as a reverse merger.

Dissenter Rights

Dissenter rights are not available to MCAE or ETAO shareholders in connection with the Business Combination.

Ownership of the Post-Business Combination Company After the Closing

It is anticipated that, upon the Closing of the Business Combination, MCAE’s public shareholders (including public rights to be converted) will retain an ownership interest of approximately 2.0% in the Combined Entity, the Sponsor and certain other MCAE shareholders (including private rights to be converted) will retain an ownership interest of approximately 1.6% in the Combined Entity and the ETAO Equityholders will own approximately 93.6% of the outstanding common stock of the Combined Entity.

The ownership percentage with respect to the Combined Entity following the Business Combination does not take into account (i) the redemption of any shares by MCAE’s public shareholders, or (ii) the exercise of the Rights and Rights outstanding following the Business Combination. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the MCAE’s existing shareholders in the Combined Entity will be different.

TABLE OF CONTENTS

The following tables illustrate varying ownership levels in MCAE assuming the factors mentioned above, and excluding the exercise of the above-mentioned Rights:

	Assumed % of Public Shares Redeemed (or Proceeds Remaining in Trust Account)
	Maximum Redemption		Minimum Redemption
Public Shareholders (including Public Rights to be Converted)		1.0%		2.0%
Sponsor and Certain other MCAE Shareholder (including Private Rights to be Converted)		1.6		1.6
ETAO Equityholders		94.6		93.6
Adviser on Business Combination		2.8		2.8
Total		100.0%		100.0%

Upon consummation of the Business Combination, the Board anticipates having 6 directors, with each director having an initial term that expires at the Combined Entity’s annual meeting of shareholders in 2023, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. See the section titled “Management After the Business Combination” for additional information.

Interests of MCAE Directors and Officers

When you consider the recommendation of the Board in favor of approval of the Business Combination Proposals and the other proposals, you should keep in mind that the Sponsor and MCAE’s directors and officers, have interests in such proposals that are different from, or in addition to, your interests as a stockholder. These interests include, among other things:

•

unless MCAE consummates an initial business combination, MCAE’s officers, directors and Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;

•

MCAE has until February 20, 2023 (or such later date as may be approved by MCAE’s stockholders in an amendment to the MCAE charter) it will have to liquidate;

•

based on the difference in the purchase price of $0.018 that the Sponsor paid for the Founder Shares, as compared to the purchase price of $10.00 per Public Unit sold in the IPO, the Sponsor may earn a positive rate of return even if the share price of the Combined Company after the Closing falls below the price initially paid for the Units in the MCAE IPO and the Public Shareholders experience a negative rate of return following the Closing of the Business Combination;

•

MCAE’s Sponsor has agreed not to transfer, assign or sell any of the Founder Shares (except to certain permitted transferees) until, with respect to 50% of the Founder Shares, the earlier of six months after the date of the consummation of a Business Combination and the date on which the closing price of the Company’s common stock equals or exceeds $12.50 per share for any 20 trading days within a 30-trading day period following the consummation of a Business Combination and, with respect to the remaining 50% of the Founder Shares, six months after the date of the consummation of a Business Combination, or earlier in each case if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders having the right to exchange their shares of common stock for cash, securities or other property;

•

TABLE OF CONTENTS

if public investors experience substantial losses. Further, the Founder Shares have no redemption rights upon MCAE’s liquidation and will be worthless if no business combination is effected;

•

on June 15, 2022, MCAE issued an unsecured promissory note in the aggregate principal amount up to $100,000 the Sponsor. Pursuant to the Note, the Sponsor agreed to loan to the Company an aggregate amount up to $100,000 that may be drawn down from time to time and in the event that the Company does not consummate a business combination, the Note will be repaid only from amounts remaining outside of the Company’s trust account, if any. In addition, the Note may be converted at the closing of a business combination by the Company into private units of the Company identical to the public units issued in the Company’s initial public offering at a price of $10.00 per unit;

•

the fact that Sponsor has agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination.

Date, Time and Place of Special Meeting

The Special Meeting will be held on February 7, 2023, at 10:30 a.m., Eastern time, conducted via live webcast at the following address https://www.cstproxy.com/mcacquisitioniii/2023. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. MCAE recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. Please note that you will not be able to physically attend the Special Meeting in person.

Proxy Solicitation

Proxies may be solicited by mail. We have engaged Advantage Proxy to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares online if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of MCAE Shareholders — Revoking Your Proxy.”

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of MCAE shareholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting of shareholders if a majority of the Common Stock outstanding and entitled to vote at the Special Meeting is represented live or by proxy at the Special Meeting. Abstentions will count as present for the purposes of establishing a quorum. Broker non-votes will not be counted for purposes of establishing a quorum.

The approval of the Redomestication Merger Proposal, the Acquisition Merger Proposal, the Governance Proposal, the Election of Directors of PubCo Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of MCAE Common Stock cast by the shareholders represented in person or by proxy and entitled to vote thereon at the Special Meeting. An MCAE stockholder’s failure to vote by proxy or to vote in person at the Special Meeting will not be counted towards the number of shares of Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of the vote on the Redomestication Merger Proposal, the Acquisition

TABLE OF CONTENTS

Merger Proposal, the Governance Proposal, the 2022 Plan Proposal, the NTA Requirement Amendment Proposal and the Adjournment Proposal.

If MCAE does not consummate the Business Combination and fails to complete an initial business combination by February 20, 2023 (or such later date as may be approved by MCAE’s stockholders in an amendment to the MCAE charter), it will be required to dissolve and liquidate its Trust Account by returning then remaining funds in such account to its public shareholders.

Emerging Growth Company

MCAE is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of MCAE’s initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Smaller Reporting Company

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.

Recommendation to MCAE Shareholders

The Board believes that the Proposals to be presented at the Special Meeting are in the best interests of MCAE and its shareholders and unanimously recommends that MCAE shareholders vote “FOR” the Proposals.

When you consider the recommendation of the Board in favor of approval of these Proposals, you should keep in mind that MCAE directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests as a stockholder. These interests are set forth under “Interests of MCAE Directors and Officers” above:

Risk Factors

In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.”

Summary of Risks Related to ETAO

This discussion includes forward-looking information regarding our business, results of operations and cash flows and contractual obligations and arrangements that involves risks, uncertainties and assumptions. Our actual results may differ materially from any future results expressed or implied by such forward-looking

TABLE OF CONTENTS

statements as a result of various factors, including, but not limited to, those discussed in the sections of this proxy statement/prospectus entitled “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to ETAO’s Business and Industry

ETAO’s limited operating history makes it difficult to predict ETAO’s future prospects, business and financial performance. For further detail, please see page 62.

ETAO may not be able to retain existing registered users and customers or continue to attract new users and/or customers at a level necessary to sustain or grow ETAO’s business. For further detail, please see page 62.

ETAO has incurred losses historically, and ETAO may continue to experience significant losses in the future. For further detail, please see page 63.

ETAO has recorded negative cash flows from operating activities historically and may experience significant cash outflows or has net current liabilities in the future. For further detail please see page 63.

ETAO’s key operational metrics and other estimates may not accurately measure ETAO’s operating performance. For further detail, please see page 63.

ETAO requires a significant amount of capital to fund its operations and growth. If ETAO cannot obtain sufficient capital on acceptable terms, its business, financial condition and prospects may be materially and adversely affected. For further detail, please see page 64.

ETAO’s expansion into new regions, markets and business areas may pose increased risks. For further detail, please see page 64.

ETAO faces vigorous competition. If ETAO is not able to compete effectively with others, ETAO’s business, financial condition and results of operations may be materially and adversely affected. For further detail, please see page 64.

ETAO’s success depends on the continuing efforts of its key management and capable personnel as well as its ability to recruit new talent. If ETAO fails to hire, retain or motivate ETAO’s staff, ETAO’s business may suffer. For further detail, please see page 65.

ETAO has engaged in transactions with related parties, and such transactions present potential conflicts of interest that could have an adverse effect on our business and results of operations. For further detail, please see page 65.

Growth of ETAO’s business will partially depend on the recognition of ETAO’s brand. Failure to maintain, protect and enhance ETAO’s brand would limit ETAO’s ability to expand or retain ETAO’s user base, which would materially and adversely affect ETAO’s business, financial condition and results of operations. For further detail, please see page 65.

If ETAO’s promotional and marketing plans are not effective, ETAO’s business and prospects may be negatively affected. For further detail, please see page 66.

ETAO faces risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt its operations. For further detail, please see page 66.

ETAO may not effectively identify, pursue and consummate strategic alliances, investments or acquisitions. For further detail, please see page 66.

Certain industry data and information in this proxy statement/prospectus were obtained from third-party sources and were not independently verified by ETAO. For further detail, please see page 67.

ETAO may not be able to adequately protect its intellectual property from unauthorized use by others. For further detail, please see page 67.

The proper functioning of ETAO’s technology is essential to ETAO’s business, and any difficulty experienced by such system would materially and adversely affect ETAO. For further detail, please see page 67.

TABLE OF CONTENTS

ETAO’s business generates, processes and stores a large amount of data; the improper use or disclosure of such data by unauthorized persons could subject ETAO to significant reputational, financial, legal and operational consequences. For further detail, please see page 68.

The wide variety of payment methods that ETAO accepts subject ETAO to third-party payment processing-related risks. For further detail, please see page 69.

A severe or prolonged downturn in the PRC or global economy could materially and adversely affect ETAO’s business and ETAO’s financial condition. For further detail, please see page 69.

ETAO has limited insurance coverage for its operations. For further detail, please see page 69.

Risk Related to ETAO’s Corporate Structure

The laws of the Cayman Islands may not provide ETAO’s shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States. For further detail, please see page 70.

You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders. For further detail, please see page 0.

ETAO relies on contractual arrangements with the VIEs and their shareholders for a large portion of ETAO’s business operations. These arrangements may not be as effective as direct ownership in providing operational control. Any failure by the VIEs or their shareholders to perform their obligations under such contractual arrangements would have a material and adverse effect on ETAO’s business. For further detail, please see page 70.

The shareholders of the VIEs may have actual or potential conflicts of interest with ETAO, which may materially and adversely affect ETAO’s business and financial condition. For further detail, please see page 71.

ETAO’s contractual arrangements are governed by PRC law. Accordingly, these contracts would be interpreted in accordance with PRC law, and any disputes would be resolved in accordance with PRC legal procedures. For further detail, please see page 71.

Substantial uncertainties existing with the PRC foreign investment legal regime may have a significant impact on ETAO’s corporate structure and business operations. For further detail, please see page 72.

Contractual arrangements in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that ETAO or the VIEs owe additional taxes, which could negatively affect ETAO’s financial condition and the value of your investment. For further detail, please see page 72.

ETAO may lose the ability to use, or otherwise benefit from, the licenses, approvals and assets held by the VIEs, which could severely disrupt its business, render us unable to conduct some or all of its business operations and constrain its growth. For further detail, please see page 73.

ETAO is subject to significant challenges and risks involved in the VIE Arrangements and enforcing the VIE Agreements. For further detail, please see page 73.

Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of the operations and financial condition. For further detail, please see page 74.

Draft rules for China-based companies seeking for securities offerings in foreign stock markets was released by the CSRC for public consultation. While such rules have not yet come into effect, the Chinese government may exert more oversight and control over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer our Common Shares to investors and could cause the value of our common stock to significantly decline or become worthless. For further detail, please see page 74.

Certain of ETAO’s existing shareholders have substantial influence over ETAO, and their interests may not be aligned with the interests of ETAO’s other stockholders. For further detail, please see page 75.

TABLE OF CONTENTS

Because our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all. For further detail, please see page 76.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably. Changes and uncertainty in PRC laws and interpretation may materially and adversely affect our business performance and impede the operations in China. For further detail, please see page 76.

Risks Related to PubCo’s Business and to ETAO’s Business Following the Business Combination

We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, results of operations, and financial condition. For further detail, please see page 77.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. For further detail, please see page 77.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.” For further detail, please see page 78.

Our business could be disrupted by catastrophic events and man-made problems, such as power disruptions, data security breaches, and terrorism. For further detail, please see page 79.

Risks Related to our Intellectual Property and Potential Litigation

If we are unable to obtain, maintain and enforce intellectual property protection for our technology or if the scope of our intellectual property protection is not sufficiently broad, others may be able to develop and commercialize technology substantially similar to ours, and our ability to successfully commercialize our technology may be adversely affected. For further detail, please see page 79.

Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on our business, financial condition and results of operations. For further detail, please see page 80.

We have been and may in the future become subject to litigation or regulatory investigation, which could harm our business. For further detail, please see page 81.

Risks Related to Doing Business In China

Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on ETAO’s business and operations. For further detail, please see page 82.

Uncertainties with respect to the PRC legal system could adversely affect us, the rules and regulations in China can change quickly with little advance notice, the Chinese government may intervene or influence ETAO’s operations at any time, and such uncertainties materially and adversely affect our business and impede our ability to continue our operations in China and the value of your shares. For further detail, please see page 82.

Regulation and censorship of information disseminated over the internet in China may adversely affect ETAO’s business and reputation and subject MCAE to liability for information displayed on ETAO’s website. For further detail, please see page 83.

Fluctuations in exchange rates could have a material and adverse effect on ETAO’s results of operations and the value of your investment. For further detail, please see page 83.

Any lack of requisite approvals, licenses or permits applicable to ETAO’s business may have a material and adverse impact on ETAO’s business, financial condition and results of operations. For further detail, please see page 84.

TABLE OF CONTENTS

ETAO’s operations depend on the performance of the mobile based systems, telecommunications networks and digital infrastructure in China. For further detail, please see page 84.

Governmental control of currency conversion and the ability to transfer cash may limit ETAO’s ability to utilize ETAO’s net revenue effectively and affect the value of your investment. For further detail, please see page 85.

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject ETAO’s PRC resident beneficial owners or ETAO’s PRC subsidiaries to liability or penalties, limit ETAO’s ability to inject capital into ETAO’s PRC subsidiaries, limit ETAO’s PRC subsidiaries’ ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us. For further detail, please see page 86.

ETAO faces uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. For further detail, please see page 87.

Certain PRC regulations may make it more difficult for ETAO to pursue growth through acquisitions. For further detail, please see page 88.

Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or PubCo to fines and other legal or administrative sanctions. For further detail, please see page 89.

ETAO may be subject to liability for placing advertisements with content that is deemed inappropriate or misleading under PRC laws. For further detail, please see page 89.

ETAO’s employment practices may be adversely impacted under the labor contract law of the PRC. For further detail, please see page 90.

ETAO may be subject to additional contributions of social insurance and housing fund and late payments and fines imposed by relevant governmental authorities. For further detail, please see page 90.

If PubCo is classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to PubCo and its non-PRC shareholders. For further detail, please see page 91.

The newly enacted “Holding Foreign Companies Accountable Act” and proposed “Accelerating Holding Foreign Companies Accountable Act” both call for additional and more stringent criteria to be applied to restrictive market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our common stock and if our auditors fail to permit the Public Company Accounting Oversight Board (“PCAOB”) to inspect the auditing firm, our common stock may be subject to delisting. For further detail, please see page 91.

Risks Related to Government Regulations

Recent Regulatory Developments. For further detail, please see page 93.

Our business is subject to complex and evolving Chinese and international laws and regulations, including those regarding data privacy and cybersecurity. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, penalties, changes to our business practices, increased cost of operations, damages to our reputation and brand, or declines in user growth or engagement, or otherwise harm our business. For further detail, please see page 95.

The approval of the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval. For further detail, please see page 99.

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from any Chinese authority to list our ordinary shares on a US stock exchange. However, if we were required to obtain any type of securities listing approval from the PRC government in the future and were denied such permission, we would not be able to

TABLE OF CONTENTS

continue listing on Nasdaq or offering securities to investors, and therefore our share price would significantly depreciate. For further detail, please see page 100.

In light of recent events indicating greater oversight by the CAC over data security, we may be subject to a variety of PRC laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material adverse effect on our business, our listing on a US stock exchange, financial condition, results of operations, and the offering. For further detail, please see page 100.

The Holding Foreign Companies Accountable Act. For further detail, please see page 101.

Risks related to Healthcare Laws and Regulation

We depend substantially on the success of the clinical development of our medicines and drug candidates. If we are unable to successfully complete clinical development, obtain regulatory approvals and commercialize our medicines and drug candidates, or experience significant delays in doing so, our business will be materially harmed. For further detail, please see page 102.

Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. For further detail, please see page 103.

We have limited experience in launching and marketing our internally developed and in-licensed medicines. If we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our medicines, we may not be able to generate substantial product sales revenue. For further detail, please see page 103.

Risks Factors Relating to the Insurance Industry

Because Aaliance Insurance’s industry is heavily regulated, any material changes in the regulatory environment could change the competitive landscape of our industry or require Aaliance Insurance to change the way it does business. The administration, interpretation and enforcement of the laws and regulations currently applicable to Insurance Law of the People’s Republic of China” “Regulations on the Supervision of Insurance Brokers” could change rapidly. If we fail to comply with applicable laws and regulations, we may be subject to civil and criminal penalties or lose our privilege to conduct insurance business, which could materially and adversely affect our business and results of operations. For further detail, please see page 103.

If Aaliance Insurance’s largest insurance company partners terminate or change the material terms of their contracts, it would be difficult for Aaliance Insurance to replace the lost commissions, which could adversely affect its business and operating results. For further detail, please see page 104.

Because the commission revenue Aaliance Insurance earns on the sale of insurance products is based on premiums and commissions and fee rates set by insurance companies, any decrease in these premiums, commission or fee rates may have an adverse effect on the results of operation. For further detail, please see page 104.

Competition in the insurance industry is intense and, if Aaliance Insurance is unable to compete effectively, it may lose customers and its financial results may be negatively affected. For further detail, please see page 105.

Quarterly and annual variations in Aaliance Insurance’s commission and fee revenue may have unexpected impacts on its results of operations. For further detail, please see page 105.

If Aaliance Insurance’s contracts with insurance companies are terminated or changed, its business and operating results could be adversely affected. For further detail, please see page 105.

Risks Related to MCAE and the Business Combination

MCAE has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. If MCAE is unable to consummate a business combination, including the Business Combination, its public shareholders may be forced to wait more than months before receiving distributions from the Trust Account. For further detail, please see page 105.

TABLE OF CONTENTS

We do not have a specified maximum redemption threshold in the MCAE Charter. The absence of such a redemption threshold may make it possible for us to complete a Business Combination with which a substantial majority of our public shareholders may redeem their public shares. For further detail, please see page 106.

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position. For further detail, please see page 107.

You must tender your shares of Common Stock in order to validly seek redemption at the Meeting of shareholders. For further detail, please see page 107.

The Sponsor has agreed to vote in favor of such initial business combination, regardless of how MCAE’s public shareholders vote. For further detail, please see page 107.

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what MCAE’s actual financial position or results of operations would have been. For further detail, please see page 107.

If third parties bring claims against MCAE, the proceeds held in trust could be reduced and the per-share redemption price received by shareholders may be less than $10.00. For further detail, please see page 108.

MCAE’s shareholders may be held liable for claims by third parties against MCAE to the extent of distributions received by them. For further detail, please see page 108.

If MCAE’s due diligence investigation of ETAO was inadequate, then shareholders of MCAE following the Business Combination could lose some or all of their investment. For further detail, please see page 109.

Stockholder litigation and regulatory inquiries and investigations are expensive and could harm MCAE’s business, financial condition and operating results and could divert management attention. For further detail, please see page 109.

MCAE’s ability to successfully effect the Business Combination and to be successful thereafter will be totally dependent upon the efforts of its key personnel, including ETAO’s key personnel, all of whom are expected to remain with the Combined Entity following the Business Combination. While MCAE intends to closely scrutinize any individuals it engages after the Business Combination, it cannot assure you that its assessment of these individuals will prove to be correct. For further detail, please see page 109.

MCAE is requiring shareholders who wish to redeem their public shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights. For further detail, please see page 109.

MCAE will require its public shareholders who wish to redeem their public shares in connection with the Business Combination to comply with specific requirements for redemption described above, such redeeming shareholders may be unable to sell their securities when they wish to in the event that the Business Combination is not consummated. For further detail, please see page 109.

If MCAE’s security holders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of MCAE’s securities. For further detail, please see page 110.

MCAE will not obtain an opinion from an unaffiliated third party as to the fairness of the Business Combination to its shareholders. For further detail, please see page 110.

MCAE’s Sponsor, directors and officers have interests in the Business Combination which may be different from or in addition to (and which may conflict with) the interests of its shareholders. For further detail, please see page 110.

There can be no assurance that MCAE will be able to comply with the continued listing standards of Nasdaq. For further detail, please see page 111.

If the Business Combination’s benefits do not meet the expectations of investors, shareholders or financial analysts, the market price of MCAE’s securities may decline. For further detail, please see page 111.

TABLE OF CONTENTS

Volatility in the Combined Entity’s share price could subject the Combined Entity to securities class action litigation. For further detail, please see page 112.

Following the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about the Combined Entity, its business, or its market, or if they change their recommendations regarding the Combined Entity’s securities adversely, the price and trading volume of the Combined Entity’s securities could decline. For further detail, please see page 113.

The future sales of shares by existing shareholders and future exercise of registration rights may adversely affect the market price of the Combined Entity’s common stock. For further detail, please see page 113.

MCAE’s public shareholders may experience dilution as a consequence of, among other transactions, the issuance of Common Stock as consideration in the Business Combination. Having a minority share position may reduce the influence that MCAE’s current shareholders have on the management of the Combined Entity. For further detail, please see page 113.

Anti-takeover provisions contained in the Proposed Certificate of Incorporation and proposed amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt. For further detail, please see page 113.

Activities taken by MCAE’s affiliates to purchase, directly or indirectly, Public Shares will increase the likelihood of approval of the Business Combination Proposals and the other Proposals and may affect the market price of the MCAE’s securities. For further detail, please see page 114.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect MCAE’s business, investments and results of operations. For further detail, please see page 114.

Because the Combined Entity does not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain. For further detail, please see page 114.

Future sales of shares of the Combined Entity’s Common Stock may depress its stock price. For further detail, please see page 114.

The Combined Entity is an emerging growth company, and the Combined Entity cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make its shares less attractive to investors. For further detail, please see page 115.

The Business Combination may be a taxable event for U.S. Holders of MCAE Common Stock and MCAE Rights. For further detail, please see page 115.

We cannot assure you that our diligence review has identified all material risks associated with the Business Combination, and you may be less protected as an investor from any material issues with respect to ETAO’s business, including any material omissions or misstatements contained in the Registration Statement or this proxy statement/prospectus than an investor in an initial public offering.

Risks Related to PubCo

Currently, there is no public market for the PubCo Ordinary Shares. MCAE stockholders cannot be sure that an active trading market will develop for or of the market price of the ordinary shares of PubCo they will receive or that PubCo will successfully obtain authorization for listing on Nasdaq. For further detail, please see page 117.

PubCo’s share price may be volatile and could decline substantially. For further detail, please see page 117.

The sale or availability for sale of substantial amounts of PubCo Ordinary Shares could adversely affect their market price. For further detail, please see page 118.

PubCo will issue ordinary shares as consideration for the Business Combination, and PubCo may issue additional ordinary shares or other equity or convertible debt securities without approval of the holders of PubCo Ordinary Shares which would dilute existing ownership interests and may depress the market price of PubCo Ordinary Shares. For further detail, please see page 118.

TABLE OF CONTENTS

Volatility in PubCo’s share price could subject PubCo to securities class action litigation. For further detail, please see page 119.

The requirements of being a public company may strain PubCo’s resources, divert PubCo management’s attention and affect PubCo’s ability to attract and retain qualified board members. For further detail, please see page 119.

Recent market volatility could impact the share price and trading volume of the PubCo’s securities. For further detail, please see page 120.

It is not expected that PubCo will pay dividends in the foreseeable future after the Proposed Business Combination. For further detail, please see page 120.

If securities and industry analysts do not publish research or publish inaccurate or unfavorable research or cease publishing research about PubCo, the price and trading volume of PubCo Ordinary Shares could decline significantly. For further detail, please see page 120.

PubCo will be a foreign private issuer within the meaning of the rules under the Exchange Act, and as such it is exempt from certain provisions applicable to domestic public companies in the United States. For further detail, please see page 120.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because PubCo is incorporated under the law of the Cayman Islands, PubCo conducts substantially all of its operations outside of the United States and a one of its directors resides outside of the United States. For further detail, please see page 121.

PubCo will be an “emerging growth company,” as defined under the federal securities laws, and PubCo cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the PubCo’s securities less attractive to investors. For further detail, please see page 122.

PubCo may be or become a passive foreign investment company (“PFIC”), which could result in adverse U.S. federal income tax consequences to U.S. Holders. For further detail, please see page 123.

Because under certain attribution rules PubCo’s non-U.S. subsidiaries may be treated as controlled foreign corporations for U.S. federal income tax purposes, there could be adverse U.S. federal income tax consequences to certain U.S. holders of PubCo ordinary shares who own, directly or indirectly, ten percent or more of ordinary shares. For further detail, please see page 123.

Future changes to tax laws could materially and adversely affect PubCo and reduce net returns to PubCo’s shareholders. For further detail, please see page 123.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities. For further detail, please see page 124.

Upon the consummation of the Business Combination, we will be a public company, and be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the listing standards of The Nasdaq Stock Market, and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, results of operations and financial condition. Although we have already hired additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses.

TABLE OF CONTENTS

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ETAO

The following selected historical consolidated financial information for ETAO set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of ETAO” and ETAO’s historical consolidated financial statements and the related notes thereto contained elsewhere in this proxy statement/prospectus.

The selected historical consolidated financial information and other data presented below for the years ended December 31, 2021 and 2020 and six months ended June 30, 2022, and the selected consolidated balance sheet and other data as of June 30, 2022, December 31, 2021 and 2020 have been derived from ETAO’s unaudited and audited consolidated financial statements included in this proxy statement/prospectus.

Etao International Group Summarized Financial Position As of	June 30, 2022			December 31, 2021			December 31, 2020
Current Assets		$	26,547,418		$	26,531,563		$	—
Non-current Assets			191,611,420			195,360,048			—
Total Assets .			218,158,838			221,891,611			—
Current Liabilities			38,251,085			38,524,216			—
Non-current Liabilities .			26,565,846			29,103,961			—
Total Liabilities .			64,816,931			67,628,177			—
Etao Shareholders’ Equity			144,855,122			145,932,888			—
Non-controlling interest			8,486,785			8,330,546			—
Total Equity			153,341,907			154,263,434			—
Total Liabilities and Equity		$	218,158,838		$	221,891,611		$	—

Etao International Group Summarized Results of Operations for the	Six months ended June 30, 2022		Year ended December 31, 2021		Year ended December 31, 2020
Revenues .		33,836,335		59,793,421		—
Gross profit		12,112,969		18,832,095		—
Operating expenses		(12,128,147)		(24,883,102)		—
Other income (loss) .		(217,822)		(4,028,775)		(318,182)
Loss before taxes		(233,000)		(10,079,782)		(318,182)
Taxes .		(390,181)		(504,187)		—
Net loss		(623,181)		(10,583,969)		(318,182)
Non-controlling interest income .		(168,697)		40,606		—
Net loss attributable to Etao .		(791,878)		(10,543,363)		(318,182)
Basic and Diluted EPS
Class B Shares		(0.03)		(0.48)		(0.03)
Class A Shares		(0.03)		(0.48)		(0.03)
Weighted Shares Outstanding
Class B Shares		3,300,000		3,300,000		3,300,000
Class A Shares .		23,100,500		18,480,435		7,478,154

TABLE OF CONTENTS

The following condensed consolidating schedule for the years ended December 31, 2021 and 2020 have been derived from ETAO’s audited consolidated financial statements included in this proxy statement/prospectus.

Consolidated Statements of Operations Information

	For the year ended December 31, 2021
	Parent			Non-VIE subsidiaries			VIE			Elimination			Consolidated
Revenues		$	—		$	—		$	59,793,421		$	—		$	59,793,421
Cost of revenues		$	—		$	—		$	(40,961,326)		$	—		$	(40,961,326)
Share of loss from non-VIE subsidiaries		$	—		$	—		$	—		$	—		$	—
Share of income/(loss) from VIEs		$	—		$	—		$	—		$	—		$	—
Net Loss		$	(8,861,172)		$	—		$	(1,682,191)		$	—		$	(10,543,363)
Comprehensive loss		$	(8,861,172)		$	—		$	(1,329,999)		$	—		$	(10,191,171)

	For the year ended December 31, 2020
	Parent			Non-VIE subsidiaries			VIE			Elimination			Consolidated
Revenues		$	—		$	—		$	—		$	—		$	—
Cost of revenues		$	—		$	—		$	—		$	—		$	—
Share of loss from non-VIE subsidiaries		$	—			—		$	—		$	—		$	—
Share of income/(loss) from VIEs		$	—			—		$	—		$	—		$	—
Net Income		$	(318,182)			—		$	—		$	—		$	(318,182)
Comprehensive income		$	(318,182)		$	—		$	—		$	—		$	(318,182)

Consolidated Balance Sheets Information

	As of December 31, 2021
	Parent			Non-VIE subsidiaries			VIE			Elimination			Consolidated
Current assets		$	—		$	—		$	26,531,562		$	—		$	26,531,562
Investments in non-VIE subsidiaries		$	—		$	—		$	—		$	—		$	—
Equity in VIEs through VIE agreements		$	169,874,463		$	—		$			$	(169,874,463)		$	—
Non-current assets		$	—		$	—		$	39,097,803		$	156,262,246		$	195,360,049
Total liabilities		$	22,831,753		$	—		$	48,662,345		$	(3,865,921)		$	67,628,176
Shareholders’ equity		$	147,042,710		$	—		$	16,967,020		$	(9,746,296)		$	154,263,434

As of December 31, 2020

Parent

Non-VIE
subsidiaries

VIE

Elimination

Consolidated

Current assets

—

Investments in non-VIE subsidiaries

—

Equity in VIEs through VIE agreements

—

Non-current assets

—

Total liabilities

—

Shareholders’ equity

—

TABLE OF CONTENTS

Consolidated Cash Flows Information

	For the years ended December 31, 2021
	Parent			Non-VIE subsidiaries			VIE			Elimination			Consolidated
Net cash provided by (used in) operating activities		$	(315,349)		$	—		$	23,641		$	—		$	(291,708)
Net cash provided by investing activities		$	—		$	—		$	5,959,517			—		$	5,959,517
Net cash provided by (used in) financing activities		$	315,349		$	—		$	(1,089,664)		$	—		$	(774,315)

For the years ended December 31, 2020

Parent

Non-VIE
subsidiaries

VIE

Elimination

Consolidated

Net cash used in operating activities

—

Net cash used in investing activities

—

Net cash provided by financing activities

—

The following condensed consolidating schedule for the six months ended June 30, 2022 has been derived from ETAO’s unaudited consolidated financial statements included in this proxy statement/ prospectus.

Consolidated Statements of Operations Information

	For the six months ended June 30, 2022
	Parent			Non-VIE subsidiaries			VIE			Elimination			Consolidated
Revenues		$	—		$	—		$	33,836,335		$	—		$	33,836,335
Cost of revenues		$	—		$	—		$	(21,723,366)		$	—		$	(21,723,366)
Share of loss from non- VIE subsidiaries		$	—		$	—		$	—		$	—		$	—
Share of income/(loss) from VIEs		$	—		$	—		$	—		$	—		$	—
Net income/(loss) attribute to Etao’s shareholders		$	(1,070,417)		$	—		$	278,539		$	—		$	(791,878)
Comprehensive loss		$	(1,070,417)		$	—		$	(623,817)		$	—		$	(1,694,235)

Consolidated Balance Sheets Information

	As of June 30, 2022
	Parent			Non-VIE subsidiaries			VIE			Elimination			Consolidated
Current assets		$	—		$	—		$	26,547,419		$	—		$	26,547,419
Investments in non-VIE subsidiaries		$	—		$	—		$	—		$	—		$	—
Equity in VIEs through VIE agreements		$	169,874,463		$	—		$	—		$	(169,874,463)		$	—
Non-current assets		$	—		$	—		$	36,076,155		$	155,535,265		$	191,611,420
Total liabilities		$	22,939,362		$	—		$	46,470,471		$	(4,592,902)		$	64,816,931
Shareholders’ equity		$	146,935,101		$	—		$	16,153,103		$	(9,746,296)		$	153,341,907

TABLE OF CONTENTS

SUMMARY HISTORICAL FINANCIAL INFORMATION OF MCAE

MCAE’s balance sheet data as of September 30, 2022 and statement of operations data for the nine months ended September 30, 2022 are derived from MCAE’s unaudited financial statements included elsewhere in this proxy statement/prospectus. MCAE’s balance sheet data as of December 31, 2021 and statement of operations data for the period from March 2, 2021 (inception) through December 31, 2021 are derived from MCAE’s audited financial statements included elsewhere in this proxy statement.

The historical results of MCAE included below and elsewhere in this proxy statement/prospectus are not necessarily indicative of the future performance of MCAE. You should read the following selected financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of MCAE” and the financial statements and the related notes appearing elsewhere in this proxy statement.

	For the Nine Months Ended September 30, 2022 (Unaudited)			For the Period from March 2, 2021 (inception) through December 31, 2021 (Audited)
General and administrative expenses		$	494,293		$	275,867
Loss from operations			(494,293)			(334,474)
Net loss		$	(212,770)		$	(332,241)
Weighted average shares outstanding of redeemable common stock – basic and diluted			5,417,193			3,975,127
Basic and diluted net loss per share common share		$	(0.02)		$	0.51
Weighted average shares outstanding of non-redeemable common stock – basic and diluted			1,633,891			1,524,867
Basic and diluted net loss per share common share		$	(0.05)		$	(1.55)

	As of September 30, 2022 (Unaudited)			As of December 31, 2021
Balance Sheet Data:
Cash		$	284		$	341,429
Prepaid expenses		$	35,506			28,750
Marketable securities held in Trust Account		$	54,438,427			54,174,163
Total assets		$	54,474,217		$	54,544,342
Total liabilities		$	2,149,595		$	2,006,950
Common Stock subject to possible redemption		$	54,327,479		$	54,171,930
Total Stockholders’ Deficit		$	(2,002,857)		$	(1,634,538)

TABLE OF CONTENTS

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma combined financial data gives effect to the Business Combination and the other transactions contemplated by the Merger Agreement described in the section titled “Unaudited Pro Forma Combined Financial Information”.

The following summary unaudited pro forma condensed combined financial information has been derived from the unaudited pro forma condensed combined balance sheet as June 30, 2022, included in “Unaudited Pro Forma Condensed Combined Financial Information.”

The summary unaudited pro forma condensed combined financial information should be read in conjunction with the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statement of operations, and the accompanying notes. In addition, the unaudited condensed combined pro forma financial information was based on and should be read in conjunction with the historical financial statements of MCAE and ETAO, including the accompanying notes, which are included elsewhere in this prospectus.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. MCAE and ETAO have not had any historical relationship prior to the Business Combination. Accordingly, no transaction accounting adjustments were required to eliminate activities between the companies.

The Business Combination will be accounted for as a reverse merger in accordance with U.S. GAAP. Under this method of accounting, MCAE will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on ETAO shareholders expecting to have a majority of the voting power of the combined company, ETAO comprising the ongoing operations of the combined entity, ETAO comprising a majority of the governing body of the combined company, and ETAO’s senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of ETAO issuing share for the net assets of MCAE, accompanied by a recapitalization. The net assets of MCAE will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Transactions will be those of Etao.

The unaudited pro forma condensed combined financial information has been prepared assuming three alternative levels of redemption into cash of MCAE’s public shares:

•

Assuming minimum redemptions for cash: This presentation assumes that other than the 3,820,487 shares already redeemed by MCAE shareholders as of November 17,2022, no other MCAE shareholders exercise redemption rights with respect to their ordinary shares upon consummation of the Transactions.

•

Assuming maximum redemptions for cash: Assuming redemptions of 1,079,358 ordinary shares of MCAE for cash as of June 30, 2022: This presentation assumes that MCAE shareholders will exercise their redemption rights with respect to a maximum of 1,079,358 shares, leaving only 517,348 shares held by public investors upon consummation of the Transactions at a redemption price of approximately $10.00 per share as of June 30, 2022.

•

Assuming 50% redemptions for cash: Assuming redemptions of 539,679 ordinary shares (average of redeemable shares for minimum and maximum scenarios) of MCAE for cash: This presentation assumes that MCAE shareholders will exercise their redemption rights with respect to of 539,679 ordinary shares, leaving only 1,057,027 shares held by public investors upon consummation of the Transactions at a redemption price of approximately $10.00 per share as of June 30, 2022.

The historical financial information has been adjusted to give pro forma effect to events that are related and/or directly attributable to the Business Combination, and other related events, and are factually supportable. The adjustments presented to the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the Business Combination.

	Page
ABOUT THIS PROXY STATEMENT/PROSPECTUS		1
FREQUENTLY USED TERMS		2
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS		5
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS		20
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ETAO		52
SUMMARY HISTORICAL FINANCIAL INFORMATION OF MCAE		56
SUMMARY UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION		57
UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMBINED PER SHARE DATA OF MCAE AND ETAO		61
RISK FACTORS		62
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		125
SPECIAL MEETING OF MCAE SHAREHOLDERS		127
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS		133
THE ACQUISITION MERGER PROPOSAL		146
THE GOVERNANCE PROPOSAL		176
THE 2022 STOCK OPTION AND INCENTIVE PLAN PROPOSAL		178
THE ADJOURNMENT PROPOSAL		181
INFORMATION ABOUT MCAE		182
EXECUTIVE OFFICERS AND DIRECTORS OF MCAE		185
SELECTED FINANCIAL AND OTHER DATA OF MCAE		193
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF MCAE		194
INFORMATION ABOUT ETAO		202
INDUSTRY OVERVIEW OF ETAO		251
EXECUTIVE OFFICERS AND DIRECTORS OF ETAO		263
EXECUTIVE COMPENSATION OF ETAO		265
MANAGEMENT AFTER THE BUSINESS COMBINATION		268
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF ETAO		275
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ETAO		276
DESCRIPTION OF SECURITIES OF MCAE		304
DESCRIPTION OF SECURITIES AFTER THE BUSINESS COMBINATION		309
SHARES ELIGIBLE FOR FUTURE SALE		311
COMPARISON OF SHAREHOLDERS’ RIGHTS		313
TICKER SYMBOL, MARKET PRICE AND DIVIDEND POLICY		326
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		327
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS		331
ADDITIONAL INFORMATION		337
WHERE YOU CAN FIND MORE INFORMATION		338
INDEX TO FINANCIAL STATEMENTS		F-1

	By Order of the Board of Directors
	/s/ Suying Liu Suying Liu Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors

	MCAE		ETAO		Adjustments		Combined
Current Assets .		54,390,042		26,547,418		(43,534,254)		37,403,206
Non-current Assets .		—		191,611,420		—		191,611,420
Total Assets .		54,390,042		218,158,838		(43,534,254)		229,014,626
Current Liabilities		2,058,222		38,251,085		(1,996,018)		38,313,289
Non-current Liabilities .		—		26,565,846		—		26,565,846
Total Liabilities .		2,058,222		64,816,931		(1,996,018)		64,879,135
Commitment and contingencies – redeemable shares		54,171,930		—		(54,171,930)		—
Shareholders’ Equity		(1,840,110)		144,855,122		12,633,694		155,648,706
Non-controlling interest .		—		8,486,785		—		8,486,785
Total Equity .		(1,840,110)		153,341,907		12,633,694		164,135,491
Total Liabilities and Shareholders’ Equity .		54,390,042		218,158,838		(43,534,254)		229,014,626