{"url_path":"/sec/aixn/10-k/2026/item-1a","section_key":"item-1a","section_title":"Item 1A **","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/835662/0001493152-26-023606-index.html","accession_number":"0001493152-26-023606","cik":"0000835662","ticker":"AIXN","issuer_name":"AiXin Life International, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/835662/0001493152-26-023606-index.html","primary_entity_key":"0000835662","primary_entity_name":"AiXin Life International, Inc."},"word_count":17860,"has_tables":true,"body_markdown":"**Item\n1A.**\n**Risk\nFactors**\n\n \n\n*An\ninvestment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with\nall of the other information included in this report, before making an investment decision. If any of the following risks actually occurs,\nour business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline,\nand you may lose all or part of your investment.*\n\n \n\n**Risks\nAssociated with Our Company**\n\n** **\n\n**We incurred net losses\nin 2025 and 2024 and may not be able to continue to operate as a going concern.**\n\n \n\nWe incurred a net loss of\n$2,042,463 and $2,768,341 for the years ended December 31, 2025 and 2024, respectively, and used net cash in operating activities of $2,034,331\nand $1,628,834 for the years ended December 31, 2025 and 2024, respectively. We had a working capital deficit of $7,476,418 as of December\n31, 2025. These facts and conditions raise substantial doubt about our ability to continue as a going concern. From January 1, 2025 through\nDecember 31, 2025, our cash and cash equivalents decreased from $62,310 to $20,751 mainly due to cash outflows from operating activities.\n\n \n\nUnless we are able to consistently\nincrease our revenues and generate positive cash flows from operations, we will continue to depend upon further issuances of debt, equity\nor other financings to fund ongoing operations. We may continue to incur additional operating losses and we cannot assure you that we\nwill continue as a going concern.\n\n \n\n**We\noperate in a highly competitive industry and our failure to compete effectively could adversely affect our market share, revenues and\ngrowth prospects.**\n\n \n\nThe\nmarket for health and wellness products is large, highly fragmented and intensely competitive. Current and prospective participants include\nspecialty retailers, supermarkets, drugstores, mass merchants, multi-level marketing organizations, online merchants, mail-order companies\nand a variety of other smaller participants. The market is also highly sensitive to the introduction of new products, which may rapidly\ngain consumer acceptance. We compete for sales with heavily advertised brands manufactured by large pharmaceutical and food companies,\nas well as other brands, some of which have greater market presence, name recognition and financial, marketing and other resources, including\nsome competitors that may spend more aggressively on advertising and promotional activities than we do. Further, the ability of consumers\nto compare prices on a real-time basis through the use of smartphones and digital technology puts additional pressure on us to maintain\ncompetitive pricing. We compete in multiple product categories and sales channels, including pharmaceutical stores, wholesale to specialty\nstore formats, direct marketing and increasingly internet-based and direct-sell retailers and vendors. Many factors affect the extent\nto which competition could affect our results, including as it relates to pricing, quality, assortment, marketing, promotions and advertising,\nservice, locations, capital expenditures, category share and reputation, any of which could have a material effect on our results of\noperations. If we fail to compete effectively, we may lose business to other retailers.\n\n \n\n**We\nhave a limited operating history on which to judge our performance and assess our prospects for future success.**\n\n \n\nWe\nfirst entered the health and wellness business in December 2017 when we acquired AiXin BVI, which at that time owned all of the equity\nof AiXin Zhonghong, then engaged in the distribution of health and wellness foods. Consequently, we have a limited operating history\non which to evaluate our prospects in the health and wellness industry. We may fail to continue our growth. You should not consider our\nhistorical growth and expansion of our business through acquisitions as indicative of our ability to grow in the future.\n\n \n\n**Our\nacquisition of Yunnan Runcangsheng is subject to uncertainties and risks.**\n\n \n\nThere\nis no assurance that we will realize the benefits anticipated from our acquisition of Yunnan Runcangsheng. The process of combining the\noperations of Yunnan Runcangsheng with our existing operations could have a material adverse effect on us and our financial condition.\n\n \n\n9\n\n \n\n \n\n**Our\nfuture expansion plans are subject to uncertainties and risks.**\n\n \n\nWe\nintend to seek to expand our operations through acquisitions. The implementation of such plan requires us to integrate any newly acquired\nbusiness and its management teams. If we fail to effectively and efficiently implement our plan for acquisitions, we may not be successful\nin achieving profitable results. Even if we effectively and efficiently implement our future plans, there may be other unexpected events\nor factors that prevent us from achieving success. Our management has limited experience in effecting a rapid expansion and in managing\nlarger operations. Our business, financial condition, results of operations and growth prospects may be materially and adversely affected\nif our future expansion plans fail to achieve positive results.\n\n \n\n**Failure\nto effectively anticipate consumer preferences could negatively impact the demand for our products and our ability to generate revenues\nand the market price of our common stock.**\n\n \n\nOur\nsuccess depends on our ability to anticipate and respond in a timely manner to changing consumer demand, consumer preferences, and shopping\npatterns regarding health and wellness products. Consumer preferences cannot be predicted with certainty and are subject to continual\nchange and evolution. Additionally, our customers may have expectations about how they shop in stores or through online activities or\nmore generally engage with businesses across different channels or media (through online and other digital or mobile channels or particular\nforms of social media), which may change over time which may make it more difficult for us to adapt to rapid changes in consumer preferences.\n\n \n\nOur\nsales may decline significantly if we misjudge the market for our new products, which may result in significant inventory markdowns and\nlower margins, missed opportunities for other products, or inventory write-downs, and could have a negative impact on our reputation\nand profitability.\n\n \n\n**Resources\ndevoted to product innovation may not yield new products that achieve commercial success.**\n\n \n\nOur\nability to develop new and innovative products or identify and acquire new and innovative products from third-party vendors, depends\non, among other factors, our ability to understand evolving market trends and translate our insights into identifying, and then designing\nand manufacturing or otherwise obtaining, commercially successful new products. If we are unable to do so, our customer relationships\nand product sales could be harmed significantly. The health and wellness industry is characterized by rapid and frequent changes in demand\nfor products. Our failure to accurately predict these trends could harm our customer relationships and cause us to fail to grow our revenues.\nThe development of new and innovative products requires significant investment in research and development and testing of new ingredients,\nformulas and possibly new production processes. The research and development process entails considerable uncertainty. Products may appear\npromising in development but fail to reach market within the expected time frame, or at all. Further, products also may fail to achieve\ncommercial success. There is no guarantee that our development teams will be able to successfully respond to competitive products that\ncould render some of our offerings obsolete.\n\n \n\n10\n\n \n\n \n\n**If\nwe do not successfully develop and maintain a robust omni-channel experience for our customers, our business and results of operations\ncould be materially and adversely affected.**\n\n \n\nOmni-channel\nretailing where customers are accessed through various coordinated channels, is rapidly evolving, and we must keep pace with changing\ncustomer expectations and new developments by our competitors. The growing middle class in China is increasingly seeking relevant information\nregarding healthy lifestyles and products that promote a healthy life. In addition, customers are increasingly shopping for products\nonline instead of in traditional brick-and-mortar shopping centers and retail locations. As part of our omni-channel strategy, we anticipate\nthe need to continue making investments in technology and to provide ready means for our customers to access the information and products\nthey want in a comfortable environment. If we are unable to make, improve, or develop relevant channels to interact with customers in\na timely manner, our ability to compete and our business and results of operations could be materially and adversely affected. In addition,\nif our online activities or our other customer-facing technology systems do not function as designed or we are unable to effectively\nblend our digital, online and in-store platforms, we may experience a loss of customer confidence, lost sales, or data security breaches,\nany of which could materially and adversely affect our business and results of operations.\n\n \n\n**The\noperation of our hotel is subject to the business, financial and operating risks inherent to the hospitality industry, any of which could\nreduce the revenues derived at our hotel.**\n\n \n\nThe\noperation of a hotel is subject to a number of business, financial and operating risks inherent to the hospitality industry. These include\nsignificant competition from multiple hospitality providers in which compete for the business of our guests; the financial condition\nof the owner of the property on which our hotel is situated; decreases in business and leisure travel; changes in operating costs, including\nemployee compensation and benefits, energy, insurance, food and beverage and other supplies; increases in costs due to inflation or other\nfactors that may not be fully offset by increases in revenues in our business, as well as increases in overall prices and the prices\nof our offerings due to inflation, which could weaken consumer demand for travel and the products and services we offer and adversely\naffect our revenues; changes in taxes and governmental regulations that influence or increase our operating costs; the costs and administrative\nburdens associated with complying with applicable laws and regulations; significant increases in cost for health care coverage for employees\nand potential government regulation with respect to health care coverage; shortages of labor or labor disruptions; changes in the desirability\nof the region in which our hotel is located; changes in the supply and demand for hotel services, including rooms, food and beverage\nand other products and services; and the costs required for climate change initiatives, including those resulting from regulatory changes\nor stakeholder or customer expectations.\n\n \n\nAny\nof these factors could increase our costs or limit or reduce the prices we are able to charge hotel customers for hospitality products\nand services or otherwise affect our ability to maintain our hotel. As a result, any of these factors can reduce our revenues and limit\nopportunities for growth.\n\n \n\n11\n\n \n\n \n\n**We\nmay incur material product liability claims, or experience product recalls, which could increase our costs and adversely affect our sales\nand margin, reputation, revenues and operating income.**\n\n \n\nAs\na retailer, distributor and manufacturer of products for human consumption, we are subject to product liability claims if the use of\nour products is alleged to result in injury. The products that we sell consist of minerals, herbs, supplements and other ingredients\nthat are classified as foods or dietary supplements. The products that we sell could contain contaminated substances, and some of the\nproducts we sell contain ingredients that do not have long histories of human consumption. Previously unknown adverse reactions resulting\nfrom human consumption of these ingredients could occur.\n\n \n\nIn\naddition, third-party manufacturers produce many of the products we sell. We rely on these manufacturers to ensure the integrity of their\ningredients and formulations. As a distributor of products manufactured by third parties, we may also be liable for various product liability\nclaims for products we do not manufacture. Our ultimate liability for these products that are manufactured by third parties depends on\na number of factors, including our contractual relationship with the vendor, the creditworthiness of the vendor and any insurance that\nwe have. Therefore, we may be unable to adequately protect ourselves against claims with respect to products manufactured by a third-party.\n\n \n\nWe\nmay be subject to product liability claims, including, among others, that our products include inadequate instructions for use or inadequate\nwarnings concerning possible side effects and interactions with other substances. Product liability claims could significantly damage\nour reputation and consumer confidence in our products, regardless of the merits or outcomes of such claims. Our litigation expenses\ncould increase as well, which also could have a material adverse effect on our results of operations even if a product liability claim\nis unsuccessful or is not fully pursued.\n\n \n\nWe\nmay be subject to product recalls, withdrawals or seizures if any of the products we manufacture or sell are believed to be adulterated,\ncause injury or illness or if we are alleged to have violated governmental regulations in the manufacturing, labeling, promotion, sale\nor distribution of such products. A significant recall, withdrawal or seizure of any of the products may require significant management\nattention, would likely result in substantial and unexpected costs and may materially and adversely affect our business, financial condition\nor results of operations. Furthermore, a recall, withdrawal or seizure of any of the products that we sell may adversely affect consumer\nconfidence in our brands and thus decrease consumer demand for such products.\n\n \n\n**If\nwe fail to develop and protect our brand names and reputation, we may not attract and retain new customers, which could adversely affect\nour revenues and financial performance.**\n\n \n\nWe\nwill invest significant resources to promote our brand names to obtain favourable public recognition for us and our products. If we do\nnot achieve the reputation we envision, we may not be able to attract and retain a significant customer base, which could in turn, adversely\naffect our revenues, profitability and the market price of our common stock.\n\n \n\n**Our\nability to adequately protect our trade names and trademarks could have an impact on our brand images and ability to penetrate new markets.**\n\n \n\nWe\nbelieve that trade names and trademarks will be an important aspect of our business and an essential element of our strategy. We have\napplied for the registration of many of our trade names, trademarks and patents in China. Some of these applications have been granted\nand some of these registrations are currently pending approval from the corresponding departments. There can be no assurance that we\nwill obtain such registrations or that the registrations we obtain will prevent the imitation of our products or infringement of our\nintellectual property rights by others. In particular, the laws of the PRC may not protect proprietary rights to the same extent as the\nlaws of the U.S. Claims that others are infringing our intellectual property would be costly and would divert the attention of management\nand key personnel. Our failure to successfully protect our trademarks could diminish the value and effectiveness of our past and future\nmarketing efforts and could cause customer confusion. This could in turn adversely affect our revenues, profitability and the market\nprice of our common stock.\n\n \n\n12\n\n \n\n \n\n**Unfavourable\npublicity about us or consumer perception of our products, , including the nutritional supplements we distribute, the ingredients they\ncontain and any similar products distributed by other companies could cause fluctuations in our operating results and could have a material\nadverse effect on our reputation, the demand for our products and our ability to generate revenues and the market price of our common\nstock.**\n\n \n\nWe\nare highly dependent upon consumer perception of the safety and quality of our products, including our nutritional supplements, and the\ningredients they contain, as well as that of similar products distributed by other companies. Consumer perception of products and the\ningredients they contain can be significantly influenced by scientific research, national media attention and other publicity, including\nthat generated via social media. A research report or publicity related to our products and the ingredients they contain that is perceived\nby our consumers as less favourable or that questions earlier favourable research or publicity could have a material adverse effect on\nour ability to generate revenues. Adverse publicity, in the form of published scientific research or otherwise, whether or not accurate,\nthat associates consumption of our products or the ingredients they contain or similar products distributed by other companies with illness\nor other adverse effects, that questions the benefits of our or similar products, or that claims that such products are ineffective could\nhave a material adverse effect on our reputation, the demand for our products, our ability to generate revenues and the market price\nof our common stock.\n\n \n\n**We\nmay be subject to health or advertising claims related to our customers.**\n\n \n\nOur\nproducts do are not medical treatments and we do not provide or medical advice, and we do not engage physicians or nurses to monitor\nthe progress of our customers. A customer who uses our products and experiences health problems could allege or bring a lawsuit against\nus on the basis that those problems were caused or worsened by using our products. Further, customers who allege that they were deceived\nby any statements that we made in advertising or labeling could bring a lawsuit against us under consumer protection laws. We may ultimately\nbe unsuccessful in defending ourselves against such claims. Also, defending ourselves against such claims, regardless of their merit\nand ultimate outcome, may be lengthy and costly, and could adversely affect our brand image, customer loyalty and results of operations.\n\n \n\n**We\nrely on third parties to provide us with nutritional supplements, fulfillment, customer service and Internet and networking services,\nthe loss of any of which could cause our revenue, earnings or reputation to suffer.**\n\n \n\nIn\naddition to the nutritional supplements we manufacture, we rely on third parties to supply us with additional nutritional supplements\nwe sell. We do not know if our vendors sell the same products under different brands or provides their supplements to other parties under\nprivate label brands. In each of these instances, sales of the same product under different brands could cause us to lose revenues and\nadversely impact our abilities to market our products. While we believe we could locate replacement suppliers for all supplements we\nacquire from third parties, it would likely take time to engage replacement suppliers which could adversely impact our revenues and there\nare no assurances our costs would not increase to a level which makes the product unattractive to our customers.\n\n \n\n**We\ndepend on the services of key executives and other skilled professionals and our ability to attract, train and retain highly qualified\nassociates. Any failure to attract or retain such individuals could affect our business strategy and adversely impact our performance\nand results of operations.**\n\n \n\nOur\nsenior executives are instrumental in setting our strategic direction, operating our business, identifying, recruiting and training personnel,\nidentifying opportunities, designing new products and arranging necessary financing. In addition, other key employees below the executive\nlevel, with deep knowledge of our business, are critical to the execution and success of our strategy. We must attract, train and retain\na growing number of qualified individuals.\n\n \n\n13\n\n \n\n \n\nLosing\nthe services of any of these groups of individuals could adversely affect our business and we may be unable to identify candidates of\nsufficient experience and capabilities in a timely fashion or at all, which could negatively impact our business and operations. Further,\nour ability to control labor and benefit costs is subject to numerous external factors, including regulatory changes, prevailing wage\nrates, and healthcare and other insurance costs. We compete with other retail and non-retail businesses for these store and field associates\nand invest significant resources in training and motivating them. There is no assurance that we will be able to attract or retain qualified\nstore and field associates in the future, which could have a material adverse effect on our business, financial condition and results\nof operations.\n\n \n\n**Compliance\nwith new and existing laws and governmental regulations could increase our costs significantly and adversely affect our results of operations.**\n\n \n\nThe\nprocessing, formulation, safety, manufacturing, packaging, labeling, advertising and distribution of our products and the operation\nof our hotel are subject to numerous Chinese laws and regulations as well as laws and regulations imposed by provincial and local\ngovernments and agencies and require that we maintain certain licenses and permits. Government regulations may prevent or delay the\nintroduction, or require the reformulation, of our products, which could result in lost revenues and increased costs to us. The\nfailure to maintain appropriate licenses for the operation of our hotel, including those related to the distribution of food and\nbeverages could have a material effect on our results of operations. Manufacturers and distributors of health and wellness products\nand dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded, and the\ngoverning agencies may take enforcement action against any adulterated or misbranded health and wellness product or dietary\nsupplement on the market. If we violate applicable regulatory requirements, we may be subject to enforcement actions against us,\nwhich could have a material adverse effect on our business, prospects, financial condition, and results of operations. The\ngovernment may not accept the evidence of safety for any new product or ingredient we may wish to market, may determine that a\nparticular product or ingredient presents an unacceptable health risk based on reported serious adverse events or other information,\nand may determine that a particular claim or statement of efficacy or nutritional value that we use to support the marketing of a\nproduct is not substantiated, or is an unauthorized version of a “health claim.” Any of these actions could prevent us\nfrom marketing particular products or making certain claims or statements with respect to those products. We could also be required\nto remove a particular product from the market. Any future recall or removal would result in costs to us, including lost revenues\nfrom any products that we are required to remove from the market, any of which could be material. Any product recalls or removals\ncould also lead to an increased risk of litigation and liability, substantial costs, and reduced growth prospects.\n\n \n\nAdditional\nor more stringent laws and regulations of health and wellness products have been considered from time to time. These developments could\nrequire reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated,\nadditional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling,\nadditional scientific substantiation, or other new requirements. Any of these developments could increase our costs significantly. In\naddition, regulators’ evolving interpretation of existing laws could have similar effects.\n\n \n\n**We\ndepend upon a limited number of suppliers for certain raw materials and any disruption to our timely receipt of raw materials and inventory\ncould adversely impact sales and operations or increase our transportation costs, which would decrease our profits.**\n\n \n\nWe\ndepend upon a limited number of suppliers for the raw materials necessary to produce certain of our products. Unexpected delays in the\ndeliveries of raw materials from our vendors or inventories or increases in transportation costs (including through increased fuel costs)\ncould significantly decrease our ability to make sales and earn profits. We must maintain sufficient levels of raw materials and inventories\nto operate our business successfully. However, we also must guard against accumulating excess inventory. If we fail to anticipate accurately\neither the market for the merchandise we offer or our customers’ purchasing habits, we may be forced to rely on markdowns or promotional\nsales to dispose of excess or slow moving inventory, which could have a material adverse effect on our business, financial condition,\nand results of operations.\n\n \n\nIn\naddition, sales of adulterated products received from third parties could result in a product liability judgment or a widespread product\nrecall that may negatively impact our sales and profitability for a period of time depending on product availability, competition reaction\nand consumer attitudes. Even if the product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding\nany assertions could adversely impact our reputation with existing and potential customers and our brand image.\n\n \n\n**Natural\ndisasters (whether or not caused by climate change), unusually adverse weather conditions, pandemic outbreaks and terrorist acts in China\nand the response of the Chinese governments to such occurrences, could impair our ability to purchase, receive or replenish inventory\nor raw materials or cause customer traffic to decline, all of which could result in lost sales and otherwise adversely affect our financial\nperformance.**\n\n \n\nThe\noccurrence of one or more natural disasters, such as hurricanes, fires, floods and earthquakes (whether or not caused by climate change),\nunusually adverse weather conditions, pandemic outbreaks or terrorist acts in China and the response of the Chinese government to such\noccurrences, could adversely affect our operations and financial performance. To the extent these events result in the closure of one\nor more of our pharmacies, manufacturing facility or our corporate headquarters, or impact one or more of our key suppliers, our operations\nand financial performance could be materially adversely affected through lost sales. Such events could also cause a disruption in travel\nmaking it difficult for consumers to order our products. In addition, these events could result in increases in fuel (or other energy)\nprices or a fuel shortage, the temporary lack of an adequate work force in a market, the temporary or long-term disruption in the supply\nof products from some suppliers, the temporary disruption in the transport of goods, the temporary reduction in the availability of products\nin our stores, expiration of inventory and disruption to our information systems.\n\n \n\n14\n\n \n\n \n\n**We\nrely on third parties for the vast majority of our computing, storage, and other services related to our business. Any disruption of\nor interference with our use of the services of these third parties would negatively affect our operations and could seriously harm our\nbusiness.**\n\n \n\nWe\nrely upon third parties, including cloud based platforms and services, to process and store information and for online interactions with\nour customers. Any transition of the cloud services currently provided by the parties we rely upon to other platforms or to another cloud\nprovider could be difficult to implement and would cause us to incur significant time and expense. Given this, any significant disruption\nof or interference with the cloud based services utilized by us, whether temporary, regular, or prolonged, would negatively impact our\noperations and our business would be seriously harmed.\n\n \n\n**As\nwe increase the amount of personal and user data we store and process, we may become subject to complex and evolving laws, regulations,\nexecutive actions, rules, contractual obligations, policies, and other obligations regarding privacy, data protection, content, and other\nmatters. Many of these obligations are subject to change and uncertain interpretations.**\n\n \n\nCurrently,\nwe collect, store, and use limited amounts of personal data and other sensitive information. As our business grows and we increase the\namount of such data collect, store and use, we will become subject to a variety of laws, regulations, industry standards, policies, contractual\nrequirements, executive actions, and other obligations relating to privacy, security, and data protection which are becoming increasingly\nstringent and subject to rapid change and uncertain interpretation. Preparing for and complying with these obligations could require\nus to devote significant resources. These obligations may necessitate changes to our services, information technologies, systems, and\npractices. In addition, these obligations may require us to change our business model.\n\n \n\n**Cyber\nattacks could have a disruptive effect on our business.**\n\n \n\nFrom\ntime to time we and our third-party service providers experience cyber attacks, attempted and actual breaches of our or their information\ntechnology systems and networks or similar events, which could result in a loss of sensitive business or customer information, systems\ninterruption or the disruption of our operations. The techniques that are used to obtain unauthorized access, disable or degrade service\nor sabotage systems change frequently and may be difficult to detect for long periods of time, we are accordingly unable to anticipate\nand prevent all data security incidents.\n\n \n\nEven\nif we are fully compliant with legal standards and contractual or other requirements, we still may not be able to prevent security breaches\ninvolving sensitive data. The sophistication of efforts by hackers to gain unauthorized access to information systems has continued to\nincrease in recent years and may continue to do so. Breaches, thefts, losses or fraudulent uses of customer, employee or company data\ncould cause consumers to lose confidence in the security of our websites, mobile applications, point of sale systems and other information\ntechnology systems and, as a result of this loss in confidence, choose not to purchase from us. Such security breaches also could expose\nus to risks of data loss, business disruption, litigation, fines, regulatory charges and other costs or liabilities, any of which could\nadversely affect our business.\n\n \n\n**Our\nbusiness and our ability to raise capital may be materially adversely affected by global geopolitical conditions resulting from the ongoing\nRussia-Ukraine conflict, the Israel-Hamas conflict, the conflict in Iran and the disruption in the oil markets, and other recent actions\nundertaken by the United States, such as the imposition of tariffs and the response of China and other nations thereto.**\n\n \n\nGlobal\nmarkets are experiencing volatility and disruption as a result of the geopolitical instability resulting from the ongoing Russia-Ukraine\nconflict, the Israel-Hamas conflict, the conflict in Iran and the disruption to the oil markets and other recent actions undertaken by\nthe United States, such as the imposition of tariffs and the response of China and other nations thereto. The invasion of Ukraine by\nRussia, the Israel-Hamas conflict, the conflict in Iran and the disruption to the oil markets and other recent actions undertaken and\nthreatened by the United States and the resulting measures that have been taken, and could be taken in the future, by China, NATO, the\nUnited States, the United Kingdom, the European Union, Israel and other countries have created global security concerns that could have\na lasting impact on regional and global economies and financial markets. Although the length and impact of the ongoing conflicts are\nhighly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital\nmarkets, as well as supply chain interruptions. Additionally, any resulting sanctions could adversely affect the global economy and financial\nmarkets and lead to instability and lack of liquidity in capital markets.\n\n \n\n15\n\n \n\n \n\nAny\nof the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting\nfrom such actions, could adversely affect our business or disrupt the capital markets, impacting our ability to raise capital. The extent\nand duration of the ongoing conflicts, resulting sanctions and any related market disruptions are impossible to predict, but could be\nsubstantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded\nmilitary operations on a global scale. Any such disruptions may also have the effect of heightening many of the other risks described\nin this section. If these disruptions or other matters of global concern continue for an extensive period of time, our business may be\nmaterially adversely affected.\n\n \n\n**We\nmay be impacted by our ability to attract, develop and retain qualified associates and manage labor-related costs.**\n\n \n\nWe\nbelieve one of our competitive advantages is providing a positive, engaging and satisfying experience for each customer, which requires\nus to have highly trained and engaged associates. Our success depends in part upon our ability to attract, develop and retain a sufficient\nnumber of qualified associates to enable us to grow our customer base. The turnover rate in the health and wellness industry is generally\nhigh, and qualified individuals of the requisite caliber and number needed may be in short supply. Competition for such qualified individuals\nor changes in labor laws could require us to incur higher labor costs. Our inability to recruit a sufficient number of qualified individuals\nmay delay the expansion of our customer base and our growth. Significant increases in associate turnover rates or significant increases\nin labor-related costs could have a material adverse effect on our results of operations, financial condition and cash flows.\n\n \n\n**Our\ninsurance may not be sufficient.**\n\n \n\nWe\ncarry insurance that we consider adequate in regard to the nature of the covered risks and the costs of coverage. We are not fully insured\nagainst all possible risks, nor are all such risks insurable.\n\n \n\n**Our\nbusiness depends on the continued contributions made by Mr. Quanzhong Lin, our key executive officer. The loss of his services may result\nin a severe impediment to our business.**\n\n \n\nOur\nsuccess is dependent upon the continued contributions made by our CEO and President, Mr. Quanzhong Lin. The Company has no “Key\nMan” insurance to cover the resulting losses in the event that any of our officer or directors should die or resign.\n\n \n\nIf\nMr. Lin cannot serve the Company or is no longer willing to do so, the Company may not be able to find alternatives in a timely manner\nor at all. This would likely result in a severe damage to our business operations and would have an adverse material impact on our financial\nposition and operational results. To continue as a viable operation, the Company may have to recruit and train replacement personnel\nat a higher cost.\n\n \n\n**Should\nMr. Lin fail to obtain conclusive written evidence from the local authorities stating that the criminal investigation against him has\nbeen terminated, he may be forced to resign from his positions in the Company.**\n\n \n\nIn\nOctober 2023, a number of individuals accused Quanzhong Lin, our Chairman and Chief Executive Officer, acting through Sichuan Aixin Investment\nCo., Ltd. and Chengdu Aixin E-commerce Co., Ltd., entities controlled by Mr. Lin, of raising funds illegally. Mr. Lin has been orally\nadvised that the investigation against him has been terminated and that no charges will be filed against him. Nevertheless, if Mr. Lin\nis unable to obtain conclusive written evidence from the local authorities stating that the criminal investigation against him has been\nterminated and that no charges will be brought against him, he may be forced to resign from his positions in the Company.\n\n \n\n**Our\nkey executive does not devote his full business time to our operations.**\n\n \n\nOur\nPresident and Chief Executive Officer, Mr. Quanzhong Lin, is involved in a number of businesses and does not devote all of his working\ntime to our business. Our positive reputation in Chengdu is derived from the standing of Mr. Lin in the Chengdu business community. If\nMr. Lin does not devote sufficient time to our business, our operations could suffer which would have an adverse material impact on our\nfinancial position and operational results.\n\n \n\n16\n\n \n\n \n\nSome\nof the other businesses engaged in by Mr. Lin could be deemed competitive with aspects of our business. Should such other businesses\nprove more successful than ours, Mr. Lin could choose to focus his attention on such businesses which could cause him to fail to devote\nsufficient attention to our business and our operations could suffer and our financial conditions and results of operations may be materially\nand adversely affected\n\n \n\n**Our\nprincipal shareholder is not familiar with American business practices.**\n\n \n\nMr.\nQuanzhong Lin, our founder and principal shareholder, is a citizen of the PRC and an active entrepreneur in Chengdu. Mr. Lin is not familiar\nwith American business practices and is heavily influenced by the business culture in the PRC. There is a certain level of respect and\nprestige associated with being the Chinese principal of a company which is publicly traded in the U.S. Mr. Lin’s motivation for\ncausing the business of AiXinZhongdong to become a part of a U.S. publicly-traded company may differ from those of American entrepreneurs\nand his values may cause him to operate the business differently than would an American entrepreneur which could have a material adverse\neffect on our results of operations, financial condition and cash flows\n\n \n\n**We\nmay be adversely impacted by certain compliance or legal matters.**\n\n \n\nWe,\nalong with third parties with which we do business, are subject to complex compliance and litigation risks. The cost of defending against\nclaims that might be brought against us or the ultimate resolution of such claims, whether by settlement or adverse court decision, may\nharm our business. Further, potential claimants may be encouraged to bring lawsuits based on a settlement from us or adverse court decisions\nagainst us. We cannot currently assess the likely outcome of such suits, but if the outcome were negative, it could have a material adverse\neffect on our reputation, results of operations, financial condition and cash flows.\n\n \n\nIn\naddition, we may be impacted by litigation trends, including class action lawsuits involving consumers and shareholders, that could have\na material adverse effect on our reputation, the market price of our common stock, results of operations, financial condition and cash\nflows.\n\n \n\n**Failure\nto make adequate contributions to various employee benefits plans as required by PRC regulations may subject us to penalties.**\n\n \n\nCompanies\noperating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance,\nhousing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentage of salaries,\nincluding bonuses and allowances, of employees up to a maximum amount specified by the local government from time to time at locations\nwhere they operate their businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments\nin China given the different levels of economic development in different locations. Employers that fail to make adequate social insurance\nand housing provident fund contributions may be subject to late payment fees, fines and sanctions. If the relevant PRC authorities determine\nthat we need to make supplemental contributions or that we are subject to late payment fees, fines or other legal sanctions, such as\norder of timely rectification, in relation to our failure to make social insurance and housing fund contributions in full for our employees,\nour business and financial condition may be adversely affected.\n\n \n\n17\n\n \n\n \n\n**Our\ncommon stock may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The\ndelisting of our common stock or the threat of their being delisted, may materially and adversely affect the value of your investment.**\n\n \n\nThe\nHFCAA was enacted on December 18, 2020. The HFCAA, as amended by the Accelerating Holding Foreign Companies Accountable Act, states if\nthe SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to\ninspection by the PCAOB for two consecutive years beginning in 2021, the SEC shall prohibit the securities of such company from being\ntraded on a national securities exchange or in the over the counter trading market in the U.S.\n\n \n\nOn\nMarch 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements\nof the HFCAA. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection”\nyear under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA,\nincluding the listing and trading prohibition requirements described above. On September 22, 2021, the PCAOB adopted a final rule implementing\nthe HFCAA, which provides a framework for the PCAOB to use when determining whether the PCAOB is unable to inspect or investigate completely\nregistered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.\nOn December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.\nThe rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public\naccounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a\nposition taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a Determination Report which found that\nthe PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (i) China, and (ii) Hong\nKong. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC, and the PCAOB signed a Statement of Protocol, or the Protocol,\ngoverning inspections and investigations of audit firms based in China and Hong Kong. Pursuant to the Protocol, the PCAOB shall have\nindependent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information\nto the SEC. Notwithstanding the foregoing, if the PCAOB is not able to inspect and investigate completely our auditor’s work papers\nin China, you may be deprived of the benefits of such inspection which could result in limitation or restriction to our access to the\nU.S. capital markets and trading of our securities may be prohibited under the HFCAA**.**\n\n \n\nOur\nauditor is not headquartered in China or Hong Kong and was not identified in this report as a firm subject to the PCAOB’s determination.\n\n \n\nThe\nSEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on\nAugust 6, 2020, the President’s Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors\nfrom Significant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement five\nrecommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory\nmandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCAA. However, some of the recommendations\nwere more stringent than the HFCAA. For example, if a company’s auditor was not subject to PCAOB inspection, the report recommended\nthat the transition period before a company would be delisted would end on January 1, 2022.\n\n \n\nThe\nSEC has announced that the SEC staff is preparing a consolidated proposal for the rules regarding the implementation of the HFCAA and\nto address the recommendations in the PWG report. The implications of possible additional regulation in addition to the requirements\nof the HFCAA and what was recently adopted on December 2, 2021 are uncertain. While we understand that there has been dialogue among\nthe CSRC, the SEC and the PCAOB regarding the inspection of PCAOB-registered accounting firms in China, there can be no assurance that\nwe will be able to comply with requirements imposed by U.S. regulators. Such uncertainty could cause the market price of our common stock\nto be materially and adversely affected.\n\n \n\n18\n\n \n\n \n\n**A\njoint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the “PCAOB,” the newly enacted\n“Holding Foreign Companies Accountable Act” and the “Accelerating Holding Foreign Companies Accountable Act”\nall call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of\ntheir auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the\nmarket for our common stock.**\n\n \n\nOn\nApril 21, 2020, the SEC and the PCAOB released a joint statement highlighting the risks associated with investing in companies based\nin or having substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack\nof access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.\n\n \n\nOn\nDecember 18, 2020, the HFCAA was signed and became law. This legislation requires certain issuers of securities to establish that they\nare not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the PCAOB is unable to audit\nspecified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the PCAOB. Furthermore,\nif the PCAOB is unable to inspect the issuer’s public accounting firm for three consecutive years, the issuer’s securities\nare banned from trading on a national exchange or through other methods. On December 29, 2022, the AHFCAA was enacted, which amended\nthe HFCAA by decreasing the number of non-inspection years from three years to two, thus reducing the time period before our common stock\nmay be prohibited from trading or delisted if the PCAOB were to determine that it could not inspect our auditor.\n\n \n\nOn\nMarch 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure\nrequirements of the HFCAA. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report\non Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction\nand that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that\njurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required\nto submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction,\nand will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence\non, such a registrant.\n\n \n\nOn\nSeptember 22, 2021, the PCAOB adopted rules to create a framework for the PCAOB to use when determining, as contemplated under the HFCAA,\nwhether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because\nof a position taken by one or more authorities in that jurisdiction.\n\n \n\nOn\nDecember 2, 2021, the SEC issued amendments to finalize the interim final rules previously adopted in March 2021 to implement the submission\nand disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with\nan audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable\nto inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction.\n\n \n\nOn\nDecember 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB was then unable to inspect or investigate completely\nregistered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China, because of a position\ntaken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because\nof a position taken by one or more authorities in Hong Kong. The PCAOB has made such designations as mandated under the HFCAA. Pursuant\nto each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms\nand thus are at risk of such suspensions in the future.\n\n \n\nOn\nAugust 26, 2022, the CSRC, the Ministry of Finance of the PRC, and the PCAOB signed a Statement of Protocol, or the Protocol, governing\ninspections and investigations of audit firms based in China and Hong Kong. Pursuant to the Protocol, the PCAOB shall have independent\ndiscretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the\nSEC. On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered\npublic accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.\nHowever, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB will consider\nthe need to issue a new determination. Notwithstanding the foregoing, if the PCAOB is not able to inspect and investigate completely\nour auditor’s work papers in China, you may be deprived of the benefits of such inspection which could result in limitation or\nrestriction to our access to the U.S. capital markets and trading of our securities may be prohibited under the HFCAA**.**\n\n \n\n19\n\n \n\n \n\nOur\nauditor, YCM CPA INC. (“YCM CPA”), an independent public accounting firm registered with the PCAOB, and an auditor of publicly\ntraded companies in the U.S., is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance\nwith the applicable professional standards. Our auditor is based in the United States and has been inspected by the PCAOB on a regular\nbasis, with the last inspection in 2025. Our auditor is not headquartered in mainland China or Hong Kong and was not identified as a\nfirm subject to the determinations announced by the PCAOB on December 16, 2021. Nevertheless, should the PCAOB be unable to fully conduct\ninspection of our auditor’s work papers in China, it will make it difficult to evaluate the effectiveness of our auditor’s\naudit procedures or equity control procedures. Investors may consequently lose confidence in our reported financial information and procedures\nor quality of the financial statements, which would adversely affect us and our securities. Moreover, if trading in our securities is\nprohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such\nfuture time, if our securities were then traded on an exchange, that exchange may determine to delist our securities.\n\n \n\n**There\nare uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies\nto conduct investigations and collect evidence within the territory of the PRC.**\n\n \n\nOn\nDecember 28, 2019, the newly amended Securities Law of the PRC (the “PRC Securities Law”) was promulgated, which became effective\non March 1, 2020. According to Article 177 of the PRC Securities Law (“Article 177”), the securities regulatory authority\nof the State Council may establish a regulatory cooperation mechanism with securities regulatory authorities of another country or region\nfor the implementation of cross-border supervision and administration. Article 177 further provides that overseas securities regulatory\nauthorities shall not engage in activities pertaining to investigations or evidence collection directly conducted within the territories\nof the PRC, and that no Chinese entities or individuals shall provide documents and information in connection with securities business\nactivities to any organizations and/or persons aboard without the prior consent of the securities regulatory authority of the State Council\nand the competent departments of the State Council.\n\n \n\nArticle\n177 is only applicable where the activities of overseas authorities constitute a direct investigation or evidence collection by such\nauthorities within the territory of the PRC. Our principal business operation is conducted in the PRC. In the event that the U.S. securities\nregulatory agencies carry out an investigation on us such as an enforcement action by the Department of Justice, the SEC or other authorities,\nsuch agencies’ activities will constitute conducting an investigation or collecting evidence directly within the territory of the\nPRC and accordingly fall within the scope of Article 177. In that case, the U.S. securities regulatory agencies may have to consider\nestablishing cross-border cooperation with the securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels\nor establishing a regulatory cooperation mechanism with the securities regulatory authority of the PRC. However, there is no assurance\nthat the U.S. securities regulatory agencies will succeed in establishing such cross-border cooperation in this particular case and/or\nestablish such cooperation in a timely manner.\n\n \n\nThere\nhave not been implementing rules or regulations regarding the application of Article 177, it remains unclear as to how it will be interpreted,\nimplemented or applied by the Chinese Securities Regulatory Commission or other relevant government authorities. As such, there are uncertainties\nas to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence\nwithin the territory of the PRC. If the U.S. securities regulatory agencies are unable to conduct such investigations, there exists a\nrisk that they may determine to suspend or de-register our registration with the SEC and may also delist our securities from the Nasdaq\nCapital Market or other applicable trading market within the US.\n\n \n\n**We\ncould be subject to conflicting demands placed upon us by regulatory authorities in the United States and the PRC which could result\nin disciplinary actions if not resolved.**\n\n \n\nArticle\n26 of the Trial Measures issued by the CSRC on February 17, 2023 came into effect on March 31, 2023. Article 26 provides that if an overseas\nsecurities regulatory agency intends to conduct an investigation and collect evidence regarding an overseas offering or listing activities\nby a domestic company, and request assistance of the CSRC under relevant cross-border securities regulatory cooperation agreements, the\nCSRC may provide necessary assistance in accordance with the laws of the PRC. Any domestic entity or individual intending to provide\ndocuments and materials requested by an overseas securities regulatory agency in connection with an investigation may not provide such\ninformation without prior approval from the CSRC and competent authorities under the State Council. In addition, Article 11 of the Provisions\non Strengthening Confidentiality and Archives Administration in Respect of Overseas Issuance and Listing of Securities by Domestic Enterprises\nwhich was jointly issued by the CSRC, the Ministry of Finance, the State Secrecy Administration and the State Archives Bureau on February\n24, 2023 came into effect on March 31, 2023, and provides that, when an overseas securities regulator and the relevant competent authorities\nintends to conduct inspections or investigations to collect evidence from a domestic enterprise and any domestic securities firms and\nsecurities service agencies providing services regarding the overseas offering and listing activities of the domestic enterprise, the\ninspection or investigation shall be carried out under the appropriate cross-border regulatory cooperation agreement, and the CSRC or\nthe relevant authorities shall provide the requisite assistance pursuant to the bilateral and multilateral cooperation mechanism. Further,\nany domestic company, securities firm and securities service agency shall obtain the consent of the CSRC or the relevant administrative\nauthorities prior to cooperating in an inspection or investigation carried out by an overseas securities regulator or relevant administrative\nauthorities or providing documents and materials for cooperating in the inspection or investigation.\n\n \n\n20\n\n \n\n \n\nAs\nthis regulation has recently been adopted, clarifying regulations have not been issued and companies in China and their counsel generally\nhave little experience in assessing when permission must be obtained before releasing information to a foreign regulatory agency. If\nthe Company were to provide information to any securities regulatory agency in violation of Article 26 or Article 11, it would be subject\nto fines and, if the information were deemed a state secret, government work secret or might jeopardize the national security of China\nor the public interest, as provided in the Confidentiality and Archives Provisions, it could cause the Company or the individuals responsible\nfor the disclosure to be subject to criminal investigation. Likewise, if the Company refuses to provide information requested by any\nU.S. securities regulatory agency in circumstances that the Company believes would have caused it to violate Article 26 or Article 11,\nit will be subject in the United States to fines, penalties. While detailed interpretation of or implementation rules under Article 177,\nof Article 26 and Article 11 have yet to be promulgated, the inability of an overseas securities regulator to directly conduct an investigation\nor evidence collection activities within China may further increase difficulties that you may face in protecting your interests.\n\n \n\n**We\nare exposed to liabilities relating to environmental protection and safety laws and regulations.**\n\n \n\nOur\noperations are subject to comprehensive and frequently changing laws and regulations relating to environmental protection and health\nand safety. The discharge of waste and pollutants from our manufacturing operations into the environment may give rise to liabilities\nthat may require us to incur costs to remedy such discharge. If we violate such laws or regulations, we may be required to implement\ncorrective actions and could be subject to civil or criminal fines or penalties or other sanctions.\n\n \n\nHowever,\nwe cannot assure you that any environmental laws adopted in the future will not materially increase our operating costs and other expenses.\nWe cannot assure you that we will not have to make significant capital or operating expenditures in the future in order to comply with\nexisting or new laws and regulations or that we will comply with applicable environmental laws at all times. Such violations or liability\ncould have a material adverse effect on our business, financial condition and results of operations.\n\n \n\n**We\nrequire additional financing and our operations could be curtailed if we are unable to obtain required additional financing when needed.**\n\n \n\nWe\nneed to obtain additional debt or equity financing to fund the immediate development of Yunnan Runcangsheng and future capital expenditures. The issuance of additional equity securities may\nresult in dilution to the holders of our outstanding shares of capital stock. Additional debt financing may include conditions that would\nrestrict our freedom to operate our business, such as conditions that:\n\n \n\n \n●\nlimit\nour ability to pay dividends or require us to seek consent for the payment of dividends;\n\n \n \n \n\n \n●\nincrease\nour vulnerability to general adverse economic and industry conditions;\n\n \n \n \n\n \n●\nrequire\nus to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash\nflow to fund capital expenditures, working capital and other general corporate purposes; and\n\n \n \n \n\n \n●\nlimit\nour flexibility in planning for, or reacting to, changes in our business and our industry.\n\n \n\n21\n\n \n\n \n\nWe\ncannot guarantee that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.\n\n \n\n**General\nRisks Associated with Business Operations in China**\n\n \n\n**The\nPRC government has significant oversight and discretion over the conduct of a PRC company’s business operations or to exert control\nover any offering of securities conducted overseas and/or foreign investment in China-based issuers, and may intervene with or influence\nour operations, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value\nof such securities to significantly decline or become worthless, as the government deems appropriate to further regulatory, political\nand societal goals.**\n\n \n\nThe\nPRC government may intervene or influence our operations at any time, which could result in a material change in our operations and/or\nthe value of our common stock. For example, the PRC government has recently published new policies that significantly affected certain\nindustries such as the education and internet industries, and we cannot rule out the possibility that the PRC government will release\nregulations or policies regarding any industry that could adversely affect the business, financial condition and results of operations\nof our company. Furthermore, the PRC government has also recently indicated an intent to exert more oversight and control over securities\nofferings and other capital markets activities that are conducted overseas and foreign investment in China-based companies. Any such\naction, once taken by the PRC government, could significantly limit or completely hinder our ability to offer or continue to offer securities\nto investors and cause the value of such securities to significantly decline or in extreme cases, become worthless.\n\n \n\nThe\nPRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice,\nincluding cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas\nusing variable interest entity (“VIE”) structures, adopting new measures to extend the scope of cybersecurity reviews and\nexpanding anti-monopoly enforcement efforts. These statements and regulatory actions have yet to have an impact on our daily business\noperations, the ability to accept foreign investments or list our securities on a U.S. or other foreign exchange. Since these statements\nand regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and\nwhat existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and\nthe potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign\ninvestments and list our securities on an U.S. or other foreign exchange.\n\n \n\n**The\nCSRC has released draft rules for China-based companies seeking to conduct initial public offerings in foreign markets. The Chinese government\nmay exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers, which\ncould significantly limit or completely hinder our ability to offer or continue to offer our common stock to investors and could cause\nthe value of our common stock to significantly decline or become worthless.**\n\n \n\nOn\nDecember 24, 2021, the CSRC released the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of\nSecurities by Domestic Enterprises (Draft for Comments) (the “Administrative Provisions”) and the Measures for the Overseas\nIssuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the “Measures”). The Administrative\nProvisions and Measures lay out the filing regulation arrangement for both direct and indirect overseas listing and clarify the determination\ncriteria for indirect overseas listing in overseas markets. The Administrative Provisions and Measures, if enacted, may subject us to\nadditional compliance requirements in the future. Any failure of us to fully comply with new regulatory requirements may significantly\nlimit or completely hinder our ability to offer or continue to offer our common stock, cause significant disruption to our business operations,\nand severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and\ncause our common stock shares to significantly decline in value or become worthless.\n\n \n\n22\n\n \n\n \n\n**The\nCSRC has released the Trial Measures requiring Chinese domestic companies to complete filings with the CSRC if they complete an overseas\noffering and listing of their securities.**\n\n \n\nThe\nTrial Measures, regulations for the filing-based administration of direct and indirect overseas securities offerings and listings by\ndomestic companies incorporated in Mainland China went into effect on March 31, 2023. We anticipate that as a domestic Chinese operating\ncompany with securities listed in the U. S., we will be required to make filings pursuant to the Trial Measures. Any filings we make\nin accordance with the Trial Measures will provide the Chinese Government with information regarding our operations. Reviewing information\nwe provide may cause the PRC government to exert oversight and control over our operations, securities offerings and other capital markets\nactivities. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors\nand cause the value of such securities to significantly decline or in extreme cases, become worthless.\n\n \n\n**The\nCSRC has released Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering\nand Listing by Domestic Enterprises which may limit the activities of or disclosures made by companies in the PRC which, directly or\nindirectly, list their securities overseas.**\n\n \n\nThe\nConfidentiality and Archives Provisions, which went into effect March 31, 2023, require, among other items, that PRC domestic enterprises\nseeking to offer and list securities in overseas markets, establish an archival system which will maintain the confidentiality of information\nin accordance with applicable laws and regulations. Further, if a PRC domestic enterprise plans, directly or indirectly, to release documents\nor provide material that contain state secrets or government work secrets, or that will jeopardize national security or the public interest,\nit must strictly comply with all relevant governmental procedures and obtain approval of the appropriate regulatory before doing so.\nAlthough we are subject to the Confidentiality and Archives Provisions, we believe that none of the documents or materials we intend\nto provide to parties outside of the PRC contains materials that would require us to make any filing or obtain any approval of a Chinese\nregulatory authority. Nevertheless, the determination of whether information contains state secrets, government work secrets or jeopardizes\nnational security or the public interest is subjective and any failure or perceived failure by us or our subsidiaries to comply with\nthe confidentiality and archive administration requirements under the Confidentiality and Archives Provisions could cause us to be referred\nfor criminal investigation and held liable for such violations by the authorities in China. Further, PRC regulatory authorities could\nuse these regulations to limit our disclosures or interfere with our operations. Any determination that we have violated the Confidentiality\nand Archives Provisions or use of these provisions to limit our disclosures could cause the value of our common stock to significantly\ndecline in value or become worthless.\n\n \n\n**You\nmay have difficulty in effecting service of legal process or bringing actions in China against us or our management based on foreign\nlaws.**\n\n \n\nWe\nare a Colorado holding company which conducts our operations in China through wholly owned subsidiaries with direct equity ownership\nand most of our assets are and will be located outside the United States. Almost all of our operations will be conducted in China.\nIn addition, nearly all of our officers and directors, including Quanzhong Lin, Qiyu Jiang, Huiliang Jiao and Xiaowen Zheng are PRC nationals and residents of China and all of their assets are located outside the United States. Christopher Lee, our\nremaining director, resides outside of the United States for a significant portion of time. As a result, it may be difficult for you\nto effect service of process upon us or our directors and officers inside China or to bring actions against us or our management in\nChina.\n\n \n\nShareholder\nclaims that are common in the United States, including securities law class actions and fraud claims, generally are difficult to pursue\nas a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to obtaining information\nneeded for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities\nin China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to\nimplement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the\nUnities States have not been efficient in the absence of mutual and practical cooperation mechanism. According to Article 177 of the\nPRC Securities Law which became effective in March 2020, no overseas securities regulator is allowed to directly conduct an investigation\nor evidence collection activities within the territory of the PRC. Accordingly, without the consent of the competent PRC securities regulators\nand relevant authorities, no organization or individual may provide the documents and materials relating to securities business activities\nto overseas parties outside of the PRC.\n\n \n\n23\n\n \n\n \n\n**You\nmay have difficulty in enforcing foreign judgements in China against us or our management.**\n\n \n\nChina\ndoes not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States and many\nother countries and regions. Even judgements from countries that have an enforcement treaty with China are often not enforceable in China.\nTherefore, recognition and enforcement in China of judgments of a court in any non-PRC jurisdiction in relation to any matter not subject\nto a binding arbitration provision may be difficult or impossible. It may also be difficult for you to enforce U.S. courts judgments\nbased on violations of the civil liability provisions of the U.S. federal securities laws against us and our officers and directors,\nsince most of them are residents of the PRC and those who are not residents of the PRC reside outside of the United States for all or\na significant portion of time. In addition, there is uncertainty as to whether the courts of China would recognize or enforce judgments\nof U.S. courts.\n\n \n\n**Foreign\nexchange fluctuations may affect our business.**\n\n \n\nThe\nfunctional currency utilized by our PRC Subsidiaries is the RMB and we accept payment for our products in RMB. Therefore, foreign exchange\nfluctuations may influence our business in unpredictable ways.\n\n \n\nThe\nvalue of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political\nand economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how market forces or PRC or U.S. government policy, including the imposition\nof tariffs, any interest rate increases or decreases by the Federal Reserve or the PRC equivalent, may impact the exchange rate between\nthe Renminbi and the U.S. dollar in the future. There remains significant international pressure on the PRC government to adopt a more\nflexible currency policy, including from the U.S. government, which has threatened to label China as a “currency manipulator,”\nwhich could result in greater fluctuation of the Renminbi against the U.S. dollar.\n\n \n\nA\nsubstantial percentage of our revenues and costs are denominated in Renminbi, and a significant portion of our assets are also denominated\nin Renminbi. We are a holding company and we rely on dividends, loans and other distributions on equity paid by our operating subsidiaries\nin China. Any significant fluctuations in the value of the Renminbi may materially and adversely affect our liquidity and cash flows.\nAppreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount we would receive. Conversely,\nto the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar\nwould have an adverse effect on the Renminbi amount we would receive.\n\n \n\n**Inflation\ncould pose a risk to our business.**\n\n \n\nInflation\nis an important factor that must be considered as we move forward. A change in the rate of inflation could influence the profits that\nwe generate from our business. When the rate of inflation rises, the operational costs of running our company would increase, such as\nlabor costs, raw materials and public utilities, affecting our ability to provide our services at competitive prices. An increase in\nthe rate of inflation would force our clients to search for other service providers, causing us to lose business and revenue.\n\n \n\n**Changes\nin the policies, regulations, rules and the enforcement of laws of the PRC government may be quick with little advance notice and could\nhave a significant impact upon the business we may be able to conduct in the PRC and the profitability of such business.**\n\n \n\nThe\nPRC’s economy is in a transition from a planned economy to a market-oriented economy subject to five-year and annual plans adopted\nby the central government that set national economic development goals. Policies of the PRC government can have significant effects on\nthe economic conditions of the PRC. The PRC government has confirmed that economic development will follow the model of a market economy.\nUnder this direction, we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries\nand business development in the PRC will follow market forces. While we believe that this trend will continue, we cannot assure you that\nthis will be the case. Changes in policies, regulations, rules and the enforcement of laws by the PRC government, which changes may be\nquick with little advance notice, could adversely affect our interests by. Although the PRC government has been pursuing economic reform\npolicies for more than two decades, we cannot assure you that the government will continue to pursue such policies or that such policies\nmay not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances\naffecting the PRC’s political, economic and social environment.\n\n \n\n24\n\n \n\n \n\n**There\nare uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.**\n\n \n\nMost\nof our operations are conducted in the PRC and are governed by PRC laws, rules and regulations. Our PRC Subsidiaries are subject to laws,\nrules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes.\nUnlike the common law system, prior court decisions may be cited for reference but have limited precedential value.\n\n \n\nIn\n1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general.\nHowever, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently\ncover all aspects of economic activities in China or may be subject to significant degree of interpretation by PRC regulatory agencies\nand courts. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published\ndecisions and the non-precedential nature of these decisions, and because the laws, rules and regulations often give the relevant regulator\nsignificant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties\nand can be inconsistent and unpredictable. Therefore, it is possible that our existing operations may be found not to be in full compliance\nwith relevant laws and regulations. In addition, the PRC legal system is based in part on government policies and internal rules, some\nof which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of\nour violation of these policies and rules until after the occurrence of the violation.\n\n \n\nAny\nadministrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management\nattention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and\ncontractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection\nwe enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into\nand could materially and adversely affect our business, financial condition and results of operations.\n\n \n\n**PRC\nregulations regarding acquisitions impose significant regulatory approval and review requirements, which could make it more difficult\nfor us to pursue growth through acquisitions.**\n\n \n\nUnder\nthe PRC Anti-Monopoly Law, companies undertaking acquisitions relating to businesses in China must notify the anti-monopoly enforcement\nagency in advance of any transaction where the parties’ revenues in the China market exceed certain thresholds and the buyer would\nobtain control of, or decisive influence over, the other party. In addition, on August 8, 2006, six PRC regulatory agencies, including\nthe MOFCOM, the State-Owned Assets Supervision and Administration Commission, the State Administration of Taxation, the SAIC, the China\nSecurities Regulatory Commission, or the CSRC, and the State Administration of Foreign Exchange, or SAFE, jointly adopted Regulations\non Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8,\n2006 and was amended on June 22, 2009. Under the M&A Rules, the approval of MOFCOM must be obtained in circumstances where overseas\ncompanies established or controlled by PRC enterprises or residents acquire domestic companies affiliated with such PRC enterprises or\nresidents. Applicable PRC laws, rules and regulations also require certain merger and acquisition transactions to be subject to security\nreview.\n\n \n\n**Our\nbusiness may be subject to a variety of PRC laws and other obligations regarding cybersecurity and data protection.**\n\n \n\nOur\nbusiness may be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private\ninformation, such as personal information and other data. These laws continue to develop, and the PRC government may adopt other rules\nand regulations in the future. Non-compliance could result in penalties or other significant legal liabilities.\n\n \n\n25\n\n \n\n \n\nPursuant\nto the PRC Cybersecurity Law, which was promulgated by the Standing Committee of the National People’s Congress on November 7,\n2016 and took effect on June 1, 2017, personal information and important data collected and generated by a critical information infrastructure\noperator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases\ninternet products and services that affects or may affect national security, it should be subject to cybersecurity review by the Cyberspace\nAdministration of China (“CAC”). Due to the lack of further interpretations, the exact scope of “critical information\ninfrastructure operator” remains unclear.\n\n \n\nOn\nDecember 28, 2021, twelve Chinese government agencies jointly promulgated the Measures for Cybersecurity Review, which became effective\nFebruary 15, 2022, set forth the cybersecurity review mechanism for critical information infrastructure operators, and provided that\ncritical information infrastructure operators who intend to purchase internet products and services that affect or may affect national\nsecurity shall be subject to a cybersecurity review. On June 10, 2021, the Standing Committee of the National People’s Congress\npromulgated the PRC Data Security Law, which took effect in September 2021. The Data Security Law provides for a security review procedure\nfor data activities that may affect national security. Moreover, the State Internet Information Office issued the Measures of Cybersecurity\nReview (Revised Draft for Comments, not yet effective) on July 10, 2021, which requires operators with personal information of more than\n1 million users who want to list abroad to file a cybersecurity review with the CAC. Furthermore, the General Office of the Central Committee\nof the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown\non Illegal Securities Activities, which was available to the public on July 6, 2021. These opinions emphasized the need to strengthen\nthe administration over illegal securities activities and the supervision of overseas listings by China-based companies. These opinions\nproposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents\nfacing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. As these laws, opinions and\nthe draft measures were recently issued, official guidance and interpretation of these remain unclear in several respects at this time,\nand the PRC government authorities have wide discretion in the interpretation and enforcement of these laws, opinions and draft measures.\nTherefore, it is uncertain whether the future regulatory changes would impose additional restrictions on our business\n\n \n\nThe\nData Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including\nthat no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should\nnot exceed the necessary limits. The costs of compliance with, and other burdens imposed by, PRC Cybersecurity Law and any other cybersecurity\nand related laws may limit the utility of our internet sales channel of distribution and could have an adverse impact on our business.\nFurther, if the enacted version of the Measures for Cybersecurity Review mandates clearance of cybersecurity review and other specific\nactions to be completed by companies like us, we face uncertainties as to whether such clearance can be timely obtained, or at all.\n\n \n\nThere\nremains uncertainty as to how the Draft Measures will be interpreted or implemented and whether the PRC regulatory agencies, including\nthe CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Draft Measures. If any\nsuch new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions\nto comply and to minimize the adverse effect of such laws on us.\n\n \n\nWe\ncannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that\nwe can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific\nactions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at\nall. Given such uncertainty, we may be further required to shut down our website, or face other penalties, which could materially and\nadversely affect our business, financial condition, and results of operations.\n\n \n\n**PRC\nregulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC\nSubsidiaries to liability or penalties, limit our ability to inject capital into our PRC Subsidiaries or limit our PRC Subsidiaries’\nability to increase their registered capital or distribute profits.**\n\n \n\nSAFE\npromulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and\nFinancing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014. SAFE Circular 37 requires PRC residents to register with local branches of\nSAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment\nand financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or\ninterests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to\nthe registration in the event of any significant changes with respect to the special purpose vehicle, such as changes in capital contributed\nby PRC individuals, share transfers or exchanges, mergers, divisions or other material events. In the event that a PRC shareholder holding\ninterests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC Subsidiaries of that special purpose\nvehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign\nexchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC Subsidiaries.\nMoreover, failure to comply with the various SAFE registration requirements could result in liability under PRC law for evasion of foreign\nexchange controls.\n\n \n\n26\n\n \n\n \n\nAs\nwe have little control over the registration procedures, we cannot assure you of the outcome of such registration, and we cannot assure\nyou that any of our shareholders who are PRC residents will submit the required registration or amend or update their registration as\nrequired under Circular 37 and the Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Foreign\nExchange Administration Policies for Direct Investment [Hui Fa (2015) No.13] issued by SAFE with effect from June 1, 2015, or SAFE Notice\n13, in a timely manner or at all. In addition, we may not be aware of the identities of all of our beneficial owners who are PRC residents.\nWe do not have control over our beneficial owners and cannot assure you that all of our PRC-resident beneficial owners will comply with\nSAFE Circular 37 and subsequent implementation rules. The failure of our current and future beneficial owners who are PRC residents to\nregister or amend their SAFE registrations in a timely manner pursuant to SAFE Circular 37 and subsequent implementation rules, may subject\nthe beneficial owners or our PRC Subsidiaries to fines and legal sanctions. On February 13, 2015, SAFE promulgated a Notice on Further\nSimplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June\n1, 2015. Pursuant to SAFE Notice 13, entities and individuals are required to apply for foreign exchange registration of foreign direct\ninvestment and overseas direct investment, including those required under the SAFE Circular 37, with designated domestic banks, instead\nof SAFE. The designated domestic banks will directly review the applications and conduct the registration.\n\n \n\nFurthermore,\nsince it is unclear how the new SAFE regulations, and any future regulation concerning offshore or cross-border transactions, will be\ninterpreted, amended and implemented by the relevant PRC government authorities, we cannot predict how these regulations will affect\nour business operations or future strategy. Failure to register or comply with relevant requirements may also limit our ability to contribute\nadditional capital to our PRC Subsidiaries and limit our PRC Subsidiaries’ ability to distribute dividends to our company. These\nrisks may have a material adverse effect on our business, financial condition and results of operations.\n\n \n\n**We\nmay be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject\nto PRC income tax on our global income.**\n\n \n\nUnder\nthe PRC Enterprise Income Tax Law and its implementing rules, both of which came into effect on January 1, 2008, enterprises established\nunder the laws of jurisdictions outside of China with “de facto management bodies” located in China may be considered PRC\ntax resident enterprises for tax purposes and may be subject to the PRC enterprise income tax at the rate of 25% on their global income.\n“De facto management body” refers to a managing body that exercises substantive and overall management and control over the\nproduction and business, personnel, accounting books and assets of an enterprise. The State Administration of Taxation issued the Notice\nRegarding the Determination of Chinese-Controlled Offshore-Incorporated Enterprises as PRC Tax Resident Enterprises on the basis of de\nfacto management bodies, or Circular 82, on April 22, 2009. Circular 82 provides certain specific criteria for determining whether the\n“de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China. Although Circular\n82 only applies to offshore enterprises controlled by PRC enterprises, not those controlled by foreign enterprises or individuals, the\ndetermining criteria set forth in Circular 82 may reflect the State Administration of Taxation’s general position on how the “de\nfacto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether\nthey are controlled by PRC enterprises. If we, AiXin Colorado and AiXin BVI, were to be considered a PRC resident enterprise, we would\nbe subject to PRC enterprise income tax at the rate of 25% on our global income. In such case, our profitability and cash flow may be\nmaterially reduced as a result of our global income being taxed under the Enterprise Income Tax Law. We believe that none of our entities\noutside of China is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination\nby the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”\n\n \n\n**Restrictions\non currency exchange may limit our ability to utilize our PRC revenue effectively.**\n\n \n\nWe\nare a holding company with no material operations of our own. We conduct substantially all of our operations through the operating companies\nestablished in the PRC. Substantially all of our revenue is denominated in Renminbi. The Renminbi is currently convertible under the\n“current account,” which includes dividends, trade and service-related foreign exchange transactions, but requires approval\nfrom or registration with appropriate government authorities or designated banks under the “capital account,” which includes\nforeign direct investment and loans, including loans we may secure from our onshore subsidiaries. The relevant PRC governmental authorities\nor the local bank may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions.\n\n \n\n27\n\n \n\n \n\nSince\n2016, PRC governmental authorities have imposed more stringent restrictions on outbound capital flows, including heightened scrutiny\nover “irrational” overseas investments for certain industries, as well as over four kinds of “abnormal” offshore\ninvestments, which are:\n\n \n\n●\ninvestments through enterprises established for only a few months without substantive operation;\n\n \n\n●\ninvestments with amounts far exceeding the registered capital of the onshore parent and not supported by its business performance shown\non financial statements;\n\n \n\n●\ninvestments in targets which are unrelated to an onshore parent’s main business; and\n\n \n\n●\ninvestments with abnormal sources of Renminbi funding suspected to be involved in illegal transfer of assets or illegal operation of\nunderground banking.\n\n \n\nOn\nJanuary 26, 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness\nand Compliance Verification, which tightened the authenticity and compliance verification of cross-border transactions and cross-border\ncapital flow, including requiring banks to verify board resolutions, tax filing forms and audited financial statements before wiring\nforeign invested enterprises’ foreign exchange dividend distribution of over US$50,000. In addition, the Outbound Investment Sensitive\nIndustry Catalogue (2018) lists certain sensitive industries that are subject to NDRC pre-approval requirements prior to remitting investment\nfunds offshore, which subjects us to increased approval requirements and restrictions should we have overseas investments. Since a significant\namount of our PRC revenue is denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability\nto utilize revenue generated in Renminbi to fund our business activities outside of the PRC, make investments, service any debt we may\nincur outside of China or pay dividends in foreign currencies to our shareholders.\n\n \n\n**Fluctuations\nin foreign exchange rates will impact our reported results.**\n\n \n\nThe\nfunctional currency utilized by our PRC Subsidiaries is the RMB. Our financial results are reported in U.S. Dollars. Therefore, foreign\nexchange fluctuations will impact the reporting of our financial results and significant fluctuations in the value of the RMB relative\nto the U.S. Dollar may materially and adversely affect our financial results as reported in our filings with the SEC. Such variations\nin our perceived operating results may increase the volatility in the market for our common stock.\n\n \n\n**The\ndisclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any\nregulatory bodies in the PRC.**\n\n \n\nWe\nare subject to the regulations of the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with\nthe rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosure\nand public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our\nSEC reports and other filings are not subject to the review by China Securities Regulatory Commission, a PRC regulator that is responsible\nfor oversight of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements\nwith the understanding that no local regulator has done any review of us, our SEC reports, other filings or any of our other public pronouncements.\n\n \n\n**Introduction\nof new laws or changes to existing laws by the PRC government may adversely affect our business.**\n\n \n\nThe\nPRC legal system is a codified legal system made up of written laws, regulations, circulars, administrative directives and internal guidelines.\nUnlike common law jurisdictions like the U.S., decided cases (which may be taken as reference) do not form part of the legal structure\nof the PRC and thus have no binding effect on subsequent cases with similar issues and fact patterns. Furthermore, in line with its transformation\nfrom a centrally-planned economy to a more free market-oriented economy, the PRC government is still in the process of developing a comprehensive\nset of laws and regulations. As the legal system in the PRC is still evolving, laws and regulations or the interpretation of the same\nmay be subject to further changes. For example, the PRC government may impose more stringent environmental regulations which would affect\nour ability to comply with, or our costs to comply with, such regulations. Such changes, if implemented, may adversely affect our business\noperations and may reduce our profitability.\n\n \n\n**Risks\nRelating to Our Holding Company Structure**\n\n \n\n**Substantial\nuncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and how it may\nimpact the viability of our current corporate structure, corporate governance and business operations.**\n\n \n\nOn\nMarch 15, 2019, the PRC National People’s Congress approved the Foreign Investment Law, which came into effect on January 1, 2020\nand replaced existing laws regulating foreign investment in the PRC and become the legal foundation for foreign investment in the PRC.\nMeanwhile, the *Implementation Regulation of the Foreign Investment Law and the Measures for Reporting of Information on Foreign Investment*came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the *Foreign Investment Law*.\nThe Foreign Investment Law sets out the basic regulatory framework for foreign investments and proposes to implement a system of pre-entry\nnational treatment with a restricted list for foreign investments, pursuant to which (i) foreign entities and individuals are prohibited\nfrom investing in the areas that are not open to foreign investments, (ii) foreign investments in the restricted industries must satisfy\ncertain requirements under the law, and (iii) foreign investments in business sectors outside of the restricted list will be treated\nequally with domestic investments. The Foreign Investment Law also sets forth necessary mechanisms to facilitate, protect and manage\nforeign investments and proposes to establish a foreign investment information reporting system, through which foreign investors or foreign-invested\nenterprises are required to submit initial report, report of changes, report of deregistration and annual report relating to their investments\nto the Ministry of Commerce, or MOFCOM, or its local branches.\n\n \n\nAlthough\nour operating structure is legal and permissible under the current Chinese law and regulations, including the Foreign Investment Law,\nChinese regulatory authorities could disallow our operating structure, which would likely result in a material change in our operations\nand/or could cause the value of our common stock to significantly decline or become worthless.\n\n \n\n28\n\n \n\n \n\n**We\nmay rely on dividends and other distributions on equity paid by our PRC Subsidiaries to fund any cash and financing requirements we may\nhave, and any limitation on the ability of our PRC Subsidiaries to make payments to us could have a material and adverse effect on our\nability to conduct our business.**\n\n \n\nWe\nare a Colorado holding company and we rely on dividends and other distributions on equity paid by our PRC Subsidiaries and loans between\nus and our PRC Subsidiaries to fund any cash and financing requirements we or any of our PRC Subsidiaries may have, including for the\npayment of dividends to our investors, the shareholders of AiXin Colorado. Any limitation on the ability of our PRC Subsidiaries to make\npayments to or transfer funds to us or our other PRC Subsidiaries could have a material and adverse effect on our ability to conduct\nour business and the ability of our PRC Subsidiaries to conduct their respective businesses. If our PRC Subsidiaries incur debt, the\ninstruments governing the debt may restrict their ability to pay dividends or make other distributions to us. Under PRC laws and regulations,\nour PRC Subsidiaries may pay dividends only out of their respective accumulated profits as determined in accordance with PRC accounting\nstandards and regulations. In addition each of our PRC Subsidiaries is required to set aside at least 10% of its accumulated after-tax\nprofits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered\ncapital. Such reserve funds cannot be distributed to us as dividends. At its discretion, each of our PRC Subsidiaries may allocate a\nportion of its after-tax profits based on PRC accounting standards to an enterprise expansion fund, or a staff welfare and bonus fund.\n\n \n\nWe\nhave had no transactions that involved the transfer of cash or assets throughout our corporate structure. None of our Chinese Operating\nCompanies has distributed any cash or other assets to AiXin HK, including by way of dividends or interest payments and AiXin Colorado\nhas not transferred any cash or other assets to any of our PRC Subsidiaries. No transfers, dividends or distributions have been made\nto our investors. To the extent our cash or other assets is in one of our Chinese Operating Companies or AiXin HK, the funds or assets\nmay not be available to fund operations or for use outside of mainland China or Hong Kong including for the payment of dividends to the\nshareholders of AiXin Life, due to interventions by the governments of PRC or Hong Kong, or the imposition of restrictions and limitations\non the ability of the PRC Subsidiaries to use such cash or assets imposed by the government of mainland China or Hong Kong.\n\n \n\nThe\nPRC government may continue to strengthen its capital controls, and more restrictions and substantial vetting processes may be put forward\nby SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of\nour PRC Subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow,\nmake investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.\n\n \n\nExcept\nfor such limitations on our Company’s ability to transfer cash and other assets among our entities currently or hereafter imposed\nby the governments of the PRC and Hong Kong, there are no limitations on our Company’s ability to transfer cash and other assets\nthrough our corporate structure. Our Company does not have any cash management policies with respect to the transfer of cash among our\nentities other than requirements for the approval of management for transfers in excess of specified amounts and none of our entities\nis currently party to any debenture, loan or other agreement which imposes restrictions or otherwise limits our Company’s ability\nto transfer our cash and other assets and we have not adopted any policies that dictate how funds are transferred other than as necessary\nto comply with applicable laws.\n\n \n\nIn\naddition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable\nto dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties\nor arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises\nare incorporated.\n\n \n\n**PRC\nregulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion\nmay delay or prevent us from making loans or additional capital contributions to our PRC Subsidiaries, which could materially and adversely\naffect our liquidity and our ability to fund and expand our business.**\n\n \n\nWe\nare an offshore holding company conducting our operations in China through our PRC Subsidiaries. We may make loans or provide guarantees\nfor the benefit of our PRC Subsidiaries subject to the approval of or registration with governmental authorities and limitations of the\namount, or we may make additional capital contributions to our PRC Subsidiaries. Any loans to our PRC Subsidiaries, which are treated\nas foreign-invested enterprises under PRC law, are subject to foreign exchange loan registrations. In addition, a foreign-invested enterprise,\nor FIE, shall use its capital pursuant to the principle of authenticity and self-use within its business scope. The capital of an FIE\nshall not be used for the following purposes: (i) directly or indirectly for payments beyond the business scope of the enterprise or\npayments prohibited by relevant laws and regulations; (ii) directly or indirectly for investments in securities or investments other\nthan in banks’ principal-secured products unless otherwise provided by relevant laws and regulations; (iii) the granting of loans\nto non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) paying the expenses related to\nthe purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises).\n\n \n\nIn\nlight of the requirements imposed by PRC regulations on loans to and direct investments in PRC entities by offshore holding companies,\nwe cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals\non a timely basis, if at all, with respect to future loans by us to our PRC Subsidiaries or with respect to future capital contributions\nby us to our PRC Subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise\nfund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund\nand expand our business.\n\n \n\n29\n\n \n\n \n\n**Risks\nRelated to our Common Stock**\n\n \n\n**There\nis a limited public market for our common stock and you may not be able to resell our shares at or above the price you paid or at all.**\n\n \n\nThere\nis a limited public market for our common stock in the OTCQB. On many days during the years ended December 31, 2025, and 2024 and to\ndate in 2026, no shares were traded. We cannot assure you that an active public market for our common stock will develop or that you\nwill be able to resell our shares at or above the price you paid or at all.\n\n \n\n**The\nmarket price of our shares is likely to be highly volatile, which could result in substantial losses to investors.**\n\n \n\nThe\ntrading price of our common stock may be volatile and could fluctuate widely due to factors beyond our control. The trading price for\nour common stock varied during the twelve-month period ended December 31, 2025, between a high of $0.68 and a low of $0.02. Our\nstock price is likely to continue to be volatile and subject to significant price and volume fluctuations. This may happen because of\nthe broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations\nlocated mainly in China that have securities publicly traded in the United States. The securities of some companies with operations in\nChina and securities publicly traded in the United States have experienced significant volatility, including price declines in connection\nwith their initial public offerings. The trading performance of these Chinese companies’ securities after their offerings may affect\nthe attitudes of investors toward Chinese companies publicly traded in the United States, including those of investors based in China,\nin general and consequently may impact the trading performance of our common stock, regardless of our actual operating performance. Such\nvolatility in the price of our common stock including any stock-run up, may be unrelated to our actual or expected operating performance\nand financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common\nstock.\n\n \n\nIn\naddition to market and industry factors, the trading price and volume of our common stock may be highly volatile due to factors specific\nto our operations, including the following:\n\n \n\n●\nvariations\nin our actual and perceived operating results;\n\n \n \n\n●\nnews\nregarding gains or losses of customers or partners by us or our competitors;\n\n \n \n\n●\nnews\nregarding gains or losses of key personnel by us or our competitors;\n\n \n \n\n●\nannouncements\nof competitive developments, acquisitions or strategic alliances in our industry by us or our competitors;\n\n \n \n\n●\nchanges\nin earnings estimates or buy/sell recommendations by financial analysts;\n\n \n \n\n●\npotential\nlitigation;\n\n \n \n\n●\nthe\nimposition of fines or penalties related to our activities in the PRC and failure to comply with applicable rules and regulations;\n\n \n \n\n●\ngeneral\nmarket conditions or other developments affecting us or our industry; and\n\n \n \n\n●\nthe\noperating and stock price performance of other companies, other industries and other events or factors beyond our control.\n\n \n\nIn\naddition, the stock market has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to\nthe operating performance of particular companies. Securities class action litigation has often been instituted against companies following\nperiods of volatility in the overall market and in the market price of a company’s securities. This litigation, if instituted against\nus, could result in very substantial costs, divert our management’s attention and resources, and harm our business, operating results\nand financial condition. In addition, recent fluctuations in the financial and capital markets have resulted in volatility in securities\nprices.\n\n \n\n**Military\nor other conflicts in Ukraine, the Middle East, Iran or elsewhere and increased geopolitical tensions may lead to increased volume and price\nvolatility for publicly traded securities which could adversely impact the price of our common stock.**\n\n \n\nMilitary\nor other conflicts in Ukraine, the Middle East or elsewhere and increased geopolitical tensions may lead to increased volume and price\nvolatility for publicly traded securities, or affect the operations or financial condition of companies, and lead to national, regional\nor international economic disruptions and economic uncertainty, any of which could adversely impact the price of our common stock.\n\n \n\n**The\nsale or availability for sale of substantial amounts of our common stock could adversely affect its market price.**\n\n \n\nSales\nof substantial amounts of our common stock in the public market or the perception that these sales could occur, could adversely affect\nthe market price of our common stock and could materially impair our ability to raise capital through equity offerings in the future.\nShares held by our existing shareholders may be sold in the public market in the future subject to the restrictions in Rule 144 under\nthe Securities Act. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other\nshareholder or the availability of these securities for future sale will have on the market price of our common stock.\n\n \n\n**If\nsecurities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations\nregarding our common stock, the market price for our common stock and trading volume could decline.**\n\n \n\nThe\ntrading market for our common stock will be influenced by research or reports that industry or securities analysts publish about our\nbusiness. If one or more analysts who cover us downgrade our common stock, the market price for our common stock would likely decline.\nIf one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial\nmarkets, which in turn could cause the market price or trading volume for our common stock to decline.\n\n  \n\n30\n\n \n\n \n\n**Because\nwe do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our common stock for return on your\ninvestment.**\n\n \n\nTo\ndate, we have not paid dividends on our common stock. We currently intend to retain all of our available funds and any future earnings\nto fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future.\nTherefore, you should not rely on an investment in our common stock as a source for dividend income.\n\n \n\nOur\nboard of directors has complete discretion as to whether to distribute dividends. The timing, amount and form of future dividends, if\nany, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount\nof distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed\nrelevant by our board of directors. Accordingly, the return on your investment in our common stock will likely depend entirely upon any\nfuture price appreciation of our common stock. There is no guarantee that our common stock will appreciate in value or even maintain\nthe price at which you purchased our common stock and you may even lose your entire investment.\n\n \n\n**Our\nCEO has substantial influence over our company. His interests may not be aligned with the interests of our other shareholders, and he\ncould prevent or cause a change of control or other transactions.**\n\n \n\nQuanzhong\nLin, our Chairman of the Board of Directors and Chief Executive Officer, beneficially owns an aggregate of approximately 58% of our outstanding\ncommon stock. Accordingly, Mr. Lin could have significant influence in determining the outcome of any corporate transaction or other\nmatter submitted to the shareholders for approval, including mergers, consolidations, the appointment of directors and other significant\ncorporate actions. Mr. Lin will also have the power to prevent or cause a change in control. Without the consent of Mr. Lin, we may be\nprevented from entering into transactions that could be beneficial to us or our minority shareholders. In addition, Mr. Lin could violate\nhis fiduciary duties by diverting business opportunities from us to himself or others. The interests of Mr. Lin may differ from the interests\nof our other shareholders. The concentration in the ownership of our common stock shares may cause a material decline in the value of\nour common stock."}