{"url_path":"/sec/fchl/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 ** **Key Information**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2023796/0001493152-26-023516-index.html","accession_number":"0001493152-26-023516","cik":"0002023796","ticker":"FCHL","issuer_name":"Fitness Champs Holdings Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/2023796/0001493152-26-023516-index.html","primary_entity_key":"0002023796","primary_entity_name":"Fitness Champs Holdings Ltd"},"word_count":9332,"has_tables":true,"body_markdown":"**Item 3.** **Key Information**\n\n** **\n\n**A.\nReserved.**\n\n** **\n\n**B.\nCapitalization and Indebtedness.**\n\n** **\n\nNot\napplicable.\n\n \n\n**C.\nReasons for the Offer and Use of Proceeds.**\n\n** **\n\nNot\napplicable.\n\n \n\n**D.\nRisk Factors.**\n\n \n\n*Investing\nin our Class A Ordinary Shares is highly speculative and involves a significant degree of risk. You should carefully consider the following\nrisks, as well as other information contained in this annual report, before making an investment in our Company. The risks discussed\nbelow could materially and adversely affect our business, prospects, financial condition, results of operations, cash flows, ability\nto pay dividends and the trading price of our shares. Additional risks and uncertainties not currently known to us or that we currently\ndeem to be immaterial may also materially and adversely affect our business, prospects, financial condition, results of operations, cash\nflows and ability to pay dividends, and you may lose all or part of your investment.*\n\n \n\n*This\nannual report also contains forward-looking statements having direct and/or indirect implications on our future performance. Our actual\nresults may differ materially from those anticipated by these forward-looking statements due to certain factors, including the risks\nand uncertainties faced by us, as described below and elsewhere in this annual report.*\n\n \n\n**Risks\nRelated to Our Business and Industry**\n\n \n\n**Our\noperation is subject to certain regulatory requirements of the Sport Singapore, Singapore Aquatics and the National Registry of Coaches.**\n\n \n\nIf\nwe are unable to obtain or renew the relevant registrations, certifications, or such registration or certifications are suspended or\nrevoked by the relevant regulatory authorities in Singapore, our operation will have to be suspended and our business, operating and\nfinancial results may be materially and adversely affected. As at the date of this annual report, the Group is in compliance with all\napplicable regulatory requirements in Singapore.\n\n \n\n5\n\n \n\n \n\n**We\nmay be unable to enforce the restrictive covenants of the services agreements against our coaches to prevent them from directly competing\nwith us.**\n\n \n\nOur\nservices contracts with our coaches contain restrictive covenants that prevent them from poaching or directly competing with us during\nan agreed period. If any dispute arises between any of the coaches and our Group, we may be unable to enforce the restrictive covenants\nin the services agreements which are governed by Singapore law against the coaches and the enforceability of the restrictive covenants\nmay only be determined by the courts on a case-by-case basis. It is thus difficult to predict the outcome of the proceedings or gauge\nthe level of legal protection that such awards or proceedings may provide. If we cannot enforce the restrictive covenants with our coaches,\nthose who leave our Group may join a competitor or form a competing company immediately after leaving our Group, which may disrupt our\nbusiness and materially and adversely affect our financial condition, results of operations and profits.\n\n \n\n**Our\nintellectual property as to the development and preparation of course materials, swimming or training methodology and techniques may\nbe infringed or we may inadvertently infringe on another entity’s intellectual property.**\n\n \n\nWe,\nin conjunction with our coaching team, are responsible for the development and preparation of course materials, swimming and training\nmethodology and techniques for use in our classes. Our course materials, methodology and techniques may contain content or structure\nsimilar to third party sources. There is no assurance that our course materials, lessons, methodology and techniques will not infringe\nthird party intellectual property rights. If we were subject to third party litigation for infringement of third-party intellectual property\nrights, defending these can be expensive and time consuming, and their outcome is uncertain. Furthermore, any intellectual property infringement\nclaims against us, or any publication containing such events could materially and adversely affect our image and reputation which could\nmaterially affect our business and operating results.\n\n \n\n**We\ndepend on the supply of students from primary schools in Singapore under the SwimSafer program.**\n\n \n\nFor\neach of the two years ended December 31, 2024 and 2025, we derived approximately 40.3% and 41.0% respectively, of our total revenue from\nstudents from primary schools that engage us to provide our services under the SwimSafer program. As we are one of five schools/institutions\nregistered with Sport Singapore and the MOE that can provide courses under the MOE’s SwimSafer program, we expect such services\nto continue to be a significant and important source of our revenue in the near future, subject to renewal of our Company by the MOE\nas a certified provider, which renewal is not assured. Revenue generated from new sources may not increase to a level that would significantly\nreduce our reliance on students that we engage through the SwimSafer program offering through primary schools. Our contract with the\nMOE was renewed in October 2024 for a term through December 2026. If our contract with the MOE is not renewed beyond 2026, or we experience\nany event that negatively affects our relationship with the primary schools or our Sport Singapore and MOE certification, our overall\nbusiness and results of operations could be materially and adversely affected.\n\n \n\nIn\naddition, part of our revenue growth after COVID-19 was due to a back-log of students who were unable to take SwimSafer classes during\nshut downs that limited access to swimming pools. We expect that government sector revenues will go back to levels that they were prior\nto the pandemic.\n\n \n\n**We\nrely on our coaching team, in particular our contracted coaches, to develop and provide courses, a failure of which could affect our\nbrand, results of operations and profitability.**\n\n \n\nFor\neach of the three years ended December 31, 2023, 2024 and 2025, we had a coaching team of 238, 240 and 252 individuals, respectively.\nWe rely on our team, in particular our coaches, to develop and provide classes and structured programs to our students. As such, we believe\nthat the ability of our coaching team to provide support to our students in their pursuit of the ability to swim and swim well remains\ncritical to the trust in which students and their parents place in our brand and our teaching style, methodology and technique.\n\n \n\n6\n\n \n\n \n\n**We\nrely on our “Fitness Champs” brand and our reputation as a leading provider of comprehensive swimming lessons services and\nour inability to maintain this brand strength and reputation could affect our operating results and business.**\n\n \n\nThe\n“Fitness Champs” brand is instrumental to the success of our business. As of December 2025, we have certified a total of\nover 190,000 students through the SwimSafer Program. We rely on the strength of our brand to enhance our reputation as a trustworthy\nswimming services provider/educator for our students in their extra-curricular and leisure endeavors. If the value of our brand or image\nand reputation is diminished or tarnished, we may fail to continue to attract students and our business, financial condition and results\nof operations could be materially and adversely affected.\n\n \n\n**We\nmay be unable to continue to attract students to enroll in our courses.**\n\n \n\nOur\nrevenue is primarily generated from tuition fees we receive from students who have enrolled in our swimming courses. Our ability to continue\nto maintain and attract students to enroll in our courses is critical to the continued success and growth of our business. This in turn\ndepends on several factors, including our ability to develop safe and effective courses and techniques that are successful, pique our\nstudents’ interest and are compliant with relevant licensing, safety and regulatory requirements. Inefficiency or failure to maintain\nor achieve the aforesaid could materially and adversely affect our revenue and profitability.\n\n \n\n**Our\ncoaching team’s actions or inaction could subject us to claims, either regulatory or through litigation, regarding conduct or services\nthat we deliver.**\n\n \n\nWe\nrely on our coaching team and in particular our coaches to provide courses and services in accordance with the terms of their engagements.\nOur coaches are responsible for the safety and well-being of children, many of whom are just learning to swim, which is an inherently\ndangerous activity. As our coaches are granted extensive contact with children, the MOE conducts background checks on our coaches to\nhelp ensure that all of our instructors have the credentials to be working with children and are adequately trained to supervise and\nhandle emergency situations that may arise. Any negative, harmful or negligent actions on the part of our coaches and other staff, or\nany failure by us to properly manage our coaching team and swimming activities may result in undesirable or unexpected outcomes such\nas serious injury or even death, which could result in regulatory impacts or litigation exposure, all of which would negatively impact\nour brand.\n\n** **\n\n**Our\nunauthorized disclosure of student and staff information and other sensitive data could expose us to costly litigation or could materially\nand adversely affect our reputation.**\n\n \n\nIn\nconnection with our business operations, we come into contact and store proprietary and confidential information on our students,\ncoaches and staff, such as names, addresses, age, gender and other personal information. This information is primarily stored in our\ncomputer database located in our headquarters and in cloud servers. We have taken measures to address data security, including\nhaving a dedicated Data Protection Officer who oversees compliance of the collection, use and protection of personal data, as well\nas the management and response to any data protection incidents or breachers. Notwithstanding these measures, our information\ntechnology system and computer networks may be vulnerable to unauthorized access, hacking, computer viruses and other security\nproblems. A user who circumvents security measures could misappropriate proprietary information or cause interruptions to or\nmalfunctions in our operations. Any leakage or misappropriation of information from our system could have a material and adverse\neffect on our reputation and business operations. Moreover, if our security measures are breached as a result of actions by third\nparties, employee error, malfeasance or otherwise, third parties may receive or be able to access student records and personal\ndetails which could subject us to litigation, liabilities, interrupt our business and materially and adversely impact our\nreputation. We also run the risk that our staff or third parties could misappropriate or illegally disclose confidential information\nin our Group’s possession, although we have sought to mitigate this risk by requiring all of our employees to agree to\nconfidentiality and to data protection measures as part of their employment. Notwithstanding these measures, we may be subject to\ndata breaches and we may be required to expend significant resources to alleviate problems caused by these\nbreaches.\n\n \n\n7\n\n \n\n \n\n**Our\nadvertising and marketing campaigns may not lead to higher course or student enrollments nor increased revenue.**\n\n \n\nFrom\ntime to time, we launch various advertising and marketing campaigns to further increase public awareness of our business and enhance\nour brand recognition. We advertise on social media platforms such as Facebook, Instagram, Tik Tok and Xiao Hong Shu as well as on our\nown websites. Despite our efforts and the costs incurred in promoting our brand and business, such efforts and costs may not necessarily\nlead to higher course or student enrollments, which in turn may not lead to increased revenue for us.\n\n \n\n**The\nswim coaches we engage may be unable to maintain qualifications and/or certifications.**\n\n \n\nOur\ncoaches need to be trained, certified and competent in coaching. If a significant number of our coaches are unable to maintain appropriate\ncertifications and upkeep training, we may not have enough qualified staff to meet demand, which may result in us losing students, and\nour business, operating and financial results may be materially and adversely affected.\n\n \n\n**Our\nbusiness operations are subject to adverse weather conditions.**\n\n \n\nAs\na majority of our swimming classes are held outdoors, our ability to conduct swimming classes is susceptible to extreme weather conditions\nsuch as heavy rains, lightning, extreme or prolonged heat waves and high winds. Lightning and heavy rainstorms are prevalent in Singapore\nand some of our classes cannot be held outdoors during periods of lightning and extreme weather conditions as we utilize some outdoor\npools. Heavy rainfall can dilute the chemicals in the pools we use to hold our classes and create a pH imbalance that may be harmful\nto our students. Rain also washes bacteria, dirt, algae spores, and other debris into the pools we use, which can attack the active chlorine\nand mitigate its effects. Singapore is generally hot all year round, as such, the heat also poses risks to water quality by breaking\ndown the chlorine content in the water faster as well as the pools being more susceptible to algae growth causing a risk for our students.\nIf we cannot effectively contain any such risks such as moving all of our lessons indoors, our ability to hold our swimming classes could\nbe restricted and our revenues reduced, causing material adverse impact on our business and results of operations.\n\n** **\n\n**Natural\ndisasters and other catastrophic events beyond our control, including but not limited to the COVID-19 pandemic, have and could continue\nin the future to adversely affect our business operations and financial performance.**\n\n \n\nThe\noccurrence of the global COVID-19 pandemic negatively affected our business between 2020 and 2022 due to the inability to hold classes\nand/or gathering of students. The occurrence of one or more other natural disasters, such as fires, hurricanes, tornados, tsunamis, floods\nand earthquakes; geo-political events or military activities disrupting transportation, communication or utility systems; or other highly\ndisruptive events, such as nuclear accidents, pandemics, unusual weather conditions or cyberattacks, could adversely affect our operations\nand financial performance. The occurrence of these events or another global pandemic could result in, among other things, operational\ndisruptions, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions, which\nin turn could also cause consumer confidence and spending to decrease or result in increased volatility in Singapore, the United States\nand global financial markets and economy.\n\n \n\n**We\noperate in a competitive market.**\n\n \n\nThe\nleading swimming training providers generally engage in two business lines including (i) provision of training services to students under\ndifferent training programs funded by the Singapore Government and (ii) provision of customized swimming training services to customers\nof all ages. We are in constant competition with other swimming services providers to provide quality and the same or better scope of\nservices with well-trained and effective swimming staff. Further, the pricing and demand for our services are affected by the intensity\nof competition we face. Some of our competitors may be able to foresee the upcoming market trends more accurately or may be more responsive\nthan we are. If we are unable to compete successfully with our competitors, we may experience a reduction in market share, which may\nhave a material adverse effect on our business performance, results operations and financial conditions.\n\n \n\n8\n\n \n\n \n\n**Changes\nin existing laws, regulations and government policies may cause us to incur additional costs.**\n\n \n\nOur\nbusiness operations are governed by various laws, regulations and government policies in Singapore and we operate in a highly-regulated\nindustry. The licensing, membership, registration and certification requirements for us may change from time to time. We may be unable\nto comply with all these requirements in time or at all or we may need to incur substantial costs to be compliant, which may adversely\naffect our business operations and financial condition.\n\n \n\n**We\nare exposed to risk of accidents and injuries in the course of our business.**\n\n \n\nWe\nare in the business of providing swimming lessons to children, as well as aquatic swim classes, and there is an inherent risk that accidents\nand injuries may occur during our swimming lessons and aquatic sports classes, even where there are lifeguards and/or trained on-site\npersonnel on duty. Claims may be made against us for such accidents and/or fatalities on grounds such as negligence or any failure by\nus to properly manage our coaching team or swimming activities. If we cannot successfully defend ourselves against such claims, we could\nincur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:\n\n \n\n \n■\nloss of revenue;\n\n \n■\nsubstantial monetary awards;\n\n \n■\nsignificant time and costs to defend the related litigation;\n\n \n■\nincreased insurance costs; and\n\n \n■\nloss of reputation and significant negative publicity\nand media attention.\n\n \n\nAny\nsuch outcomes could materially and adversely affect our business, financial condition, results of operations and growth prospects.\n\n \n\n**We\nmay implement business strategies and future plans that may not be successful**\n\n \n\nThe\nsuccessful implementation of our business strategies and future plans depends on a number of factors including general market conditions,\ngovernment policies, the availability of funds, competition and our ability to retain and recruit competent coaches. There is no assurance\nthat our business strategies and future plans can be implemented effectively and successfully as some of these factors are beyond our\ncontrol. If any implementation of these strategies and plans fails or is delayed, we may be adversely affected by investment expenses\nthat have not led to the anticipated results, by the distraction of management from our core business or by damage to our brand or reputation.\nAdditionally, if we fail to secure adequate funds in a timely manner, we may also be unable to pursue opportunities to expand our business.\n\n** **\n\n**Our\ncurrent insurance coverage may not sufficiently protect us against all the risks we are exposed to and our insurance premiums may increase.**\n\n \n\nThere\ncan be no assurance that our current insurance will cover all our risks or adequately protect us against all liabilities arising from\nclaims and litigation against us. We will have to bear any losses, damages or liabilities in the course of our operations arising from\nevents for which we do not have adequate insurance coverage. Further, our insurance premiums depend on various factors, including the\nscope and estimated contract sum set out in the service contracts with our customers and our insurance claim track record. There is no\nassurance that our insurance premiums will not increase or that our insurance coverage will not be reduced in the future. If we were\nheld liable for uninsured losses, the amounts of claims for insured losses exceed the limits of our insurance coverage or the insurance\npremium payable by us increases significantly, our business, results of operations and financial condition may be materially and adversely\naffected.\n\n \n\n9\n\n \n\n \n\n**Our\nExecutive Officers have no prior experience in operating a U.S. public company, and their inability to operate the public company aspects\nof our business could harm us. Further, planned increases to our Executive Officer compensation will raise our operating costs and our\nfailure to generate commensurately higher revenue could result in negative impacts to our financial results.**\n\n \n\nOur\nExecutive Officers have no experience in operating a U.S. public company, which makes our ability to comply with applicable laws, rules\nand regulations uncertain. Our failure to comply with all laws, rules and regulations applicable to U.S. public companies could subject\nus or our management to regulatory scrutiny or sanction, which could harm our reputation and share price.\n\n \n\nWe\nrecently raised the compensation of our Executive Officers and need to make commensurately higher revenue in order to maintain profitability.\nOur failure to perform at levels to generate enough revenue to pay these higher operating costs could negatively impact our financial\nresults.\n\n** **\n\n**If\nwe fail to maintain an effective system of internal controls, we may be unable to accurately or timely report our results\nof operations or prevent fraud, and investor confidence and the market price of our Class A Ordinary Shares may be materially and adversely\naffected.**\n\n \n\nWe\nare a smaller company with limited accounting personnel. Our management has performed an assessment of the effectiveness of our\ninternal control over financial reporting and we conduct regular management reviews of financial performance and variances, and our independent registered public accounting firm has not conducted an audit of our\ninternal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide\nreliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud.\n\n \n\nWhile we believe that we have the systems in place to ensure timely preparation\nand review of our consolidated financial statements in accordance with U.S. GAAP and SEC reporting requirements, our\nfailure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements\nthat could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors\nto lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of our\nClass A Ordinary Shares.\n\n \n\nWe\nare a public company in the United States subject to the Sarbanes- Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002,\nor Section 404, which requires that we include a report of management on our internal control over financial reporting in our annual\nreport on Form 20-F. In addition, if we cease to be an “emerging growth company” as such term is defined in the JOBS Act,\nour independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial\nreporting on an annual basis. Our management may conclude that our internal control over financial reporting is ineffective. Moreover,\neven if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting\nfirm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls\nor the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently\nfrom us.\n\n \n\nDuring\nthe course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify\nmaterial weaknesses and deficiencies in our internal control over financial reporting. The Public Company Accounting Oversight Board,\nor PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial\nreporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented\nor detected on a timely basis.”\n\n \n\n10\n\n \n\n \n\nIn\naddition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented\nor amended from time to time, we may be unable to conclude on an ongoing basis that we have effective internal control over financial\nreporting in accordance with Section 404. Generally speaking, if we fail to achieve and maintain an effective internal control environment,\nwe could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause\ninvestors to lose confidence in our reported financial information. This could, in turn, limit our access to capital markets, harm our\nresults of operations and lead to a decline in the trading price of our Class A Ordinary Shares. Additionally, ineffective internal control\nover financial reporting could exposes us to increased risk of fraud, misuse of corporate assets and legal actions under the United States\nsecurities laws and subject us to potential delisting from Nasdaq, to regulatory investigations and to civil or criminal sanctions.\n\n \n\nWe\nbelieve that we have personnel adequately trained in and have appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly\naddress complex U.S. GAAP accounting issues and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements. However, our failure to do so\ncould result in (i) our failure to maintain effective internal control over financial reporting, (ii) errors in our financial statements;\n(iii) failure to meet our reporting obligations; and (iv) loss of confidence by the investors in our financial information. We are implementing\na number of measures to address this issue, such as(i) engaging an external consulting firm to assist us with our financial in U.S. GAAP;\n(ii) allocating resources to improve financial oversight function; (iii) introducing formal business performance review process, and\npreparing and reviewing the consolidated financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting\nrequirements; and (iv) providing our relevant finance staff with appropriate training in connection with the requirements of U.S.GAAP.\n\n** **\n\n**We\nwill be subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure\nthat will increase both our costs and the risks associated with non-compliance.**\n\n \n\nAs\na publicly traded company, we are subject to rules and regulations by various governing bodies and self-regulatory organizations, including,\nfor example, the SEC and the Nasdaq Capital Market, which are charged with the protection of investors and the oversight of companies\nwhose securities are publicly traded, and to new and evolving regulatory measures under applicable law. While we are seeking to build on our experience as a U.S. public company\nsubject to U.S. GAAP, SEC and Nasdaq reporting and compliance requirements, with guidance from our independent directors and management\nteam, our efforts to comply with new\nand changing laws and regulations have resulted in and are likely to continue to result in increased general and administrative expenses\nand a diversion of management time and attention from revenue-generating activities to compliance activities.\n\n \n\nMoreover,\nas these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as\nnew guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs\nnecessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations\nand any subsequent changes, we may be subject to penalty and our business may be harmed.\n\n \n\n**Risks\nRelated to Our Securities and This Annual Report**\n\n \n\n**We\nhave received a notice from Nasdaq that we no longer meet the listing requirements of the Nasdaq Capital Market and our failure to\nregain compliance would mean there is no active market for investors to make transactions in our Class A Ordinary\nShares.**\n\n \n\nOn\nNovember 6, 2025, we received a letter from the Listing Qualifications staff of The Nasdaq Stock Market (“Nasdaq”) notifying\nus that based on the closing bid price of the Company for the period from September 24, 2025 to November 5, 2025, we no longer meet the\ncontinued listing requirement of Nasdaq under Nasdaq Listing Rules 5550(a)(2), to maintain a minimum bid price of $1 per share. We effected a share consolidation of 15 to 1 on March 23, 2026, thereby\nraising our share price above $1. On March 20, 2026, at an extraordinary general meeting, our shareholders approved a share consolidation\nin a range of 2 to 1 to not more than 250 to 1, with the exact ratio set at 30 to 1 by our board of directors, which share consolidation\nwent into effect on May 4, 2026. The purpose of the 30 to 1 share consolidation to keep us in compliance with Nasdaq Listing Rules 5550(a)(2).\n\n** **\n\n11\n\n \n\n** **\n\nThere are no assurances\nthat the price of our Ordinary Shares will not fall below the listing requirement again, particularly in light of the fact that this\nannual report may result in significant dilution. In addition to the minimum bid price, Nasdaq has specific continued listing requirements\nrelated to public float and market value of publicly held shares that could be negatively impacted by this annual report.\n\n \n\nIf\nwe are unable to meet all of Nasdaq’s continued listing requirements, and the Nasdaq Capital Market delists our Ordinary Shares\nand we are unable to list our Ordinary Shares on another national securities exchange, we expect our Ordinary Shares could be quoted\non an over-the-counter market in the United States. If this were to occur, we could face significant material adverse consequences, including:\n\n \n\n \n●\na limited availability\nof market quotations for our Ordinary Shares;\n\n \n \n \n\n \n●\nreduced liquidity for our\nOrdinary Shares;\n\n \n \n \n\n \n●\na determination that our\nOrdinary Shares are “penny stock,” which will require brokers trading in our Shares to adhere to more stringent rules\nand possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares;\n\n \n \n \n\n \n●\na limited amount of news\nand analyst coverage; and\n\n \n \n \n\n \n●\na decreased ability to\nissue additional securities or obtain additional financing in the future.\n\n** **\n\n**The\ntrading price of our Ordinary Share has been volatile, which could result in substantial losses to investors, and has resulted in legal claims being raised against us.**\n\n \n\nThe\ntrading price of our Class A Ordinary Shares has been subject to rapid and substantial volatility, which could make it difficult for\nprospective investors to assess the rapidly changing value of our Class A Ordinary Shares and result in substantial losses to investors.\n\n \n\nThere\nhave been instances of extreme share price run-ups followed by rapid price declines and strong share price volatility with recent initial\npublic offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with relatively\nsmall public float, we have experienced greater share price volatility, extreme price run-ups, lower trading volume and less liquidity\nthan large-capitalization companies. In particular, our Class A Ordinary Shares have been, and may continue to be subject to rapid and\nsubstantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock-run\nup, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective\ninvestors to assess the rapidly changing value of our Class A Ordinary Shares.\n\n \n\nThe\ntrading price of our Class A Ordinary Shares may continue to be volatile and could fluctuate widely due to factors beyond our control\nand for reasons that are unrelated to our actual or expected performance. In addition, if the trading volumes of our Class A Ordinary\nShares are low, persons buying or selling in relatively small quantities may easily influence prices of our Class A Ordinary Shares.\nThis low volume of trades could also cause the price of our Class A Ordinary Shares to fluctuate greatly. Holders of our Class A Ordinary\nShares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading.\nBroad market fluctuations and general economic and political conditions may also adversely affect the market price of our Class A Ordinary\nShares.\n\n \n\n12\n\n \n\n \n\nIn\naddition to market and industry factors, the price and trading volume for our Class A Ordinary Shares may be highly volatile for factors\nspecific to our own operations, including the following:\n\n \n\n \n●\nfluctuations in our revenues,\nearnings and cash flow;\n\n \n●\nchanges in financial estimates\nby securities analysts;\n\n \n●\nadditions or departures\nof key personnel;\n\n \n●\nrelease of lock-up or other\ntransfer restrictions on our issued and outstanding equity securities or sales of additional equity securities; and\n\n \n●\nActual or potential\nadditional litigation or regulatory investigations.\n\n \n\nShareholders\nof public companies have often brought securities class action suits against those companies following periods of instability in the market\nprice of their securities. We have been named as a defendant in a class action lawsuit that could divert a significant amount of our management’s\nattention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which\ncould harm our results of operations. See “Legal Proceedings” for description of the class action lawsuit. Any such class\naction suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition,\nif a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect\non our financial condition and results of operations.\n\n****\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 Class A Ordinary Shares, the market price for our Class A Ordinary Shares and trading volume could decline.**\n\n \n\nThe\ntrading market for our Class A Ordinary Shares will be influenced by research or reports that industry or securities analysts publish\nabout our business. If one or more analysts downgrade our Class A Ordinary Shares, the market price for our Class A Ordinary Shares would\nlikely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility\nin the financial markets, which in turn could cause the market price or trading volume for our Class A Ordinary Shares to decline.\n\n \n\n**Short\nselling may drive down the market price of our Class A Ordinary Shares.**\n\n \n\nShort\nselling is the practice of selling shares that the seller does not own but rather has borrowed from a third party with the intention\nof buying identical shares back at a later date to return to the lender. The short seller hopes to profit from a decline in the value\nof the shares between the sale of the borrowed shares and the purchase of the replacement shares, as the short seller expects to pay\nless in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the shares to decline,\nmany short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its\nbusiness prospects in order to create negative market momentum and generate profits for themselves after selling the shares short. These\nshort attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable publicity,\nwhether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such\nallegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the\nmanner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of\ncommercial confidentiality.\n\n \n\n**If\nwe are classified as a passive foreign investment company, United States taxpayers who own our securities may have adverse United States\nfederal income tax consequences.**\n\n \n\nWe\nare a non-U.S. corporation and, as such, we will be classified as a passive foreign investment company, which is known as a PFIC, for\nany taxable year if, for such year, either\n\n \n\n \n●\nAt least 75% of our gross\nincome for the year is passive income; or\n\n \n \n \n\n \n●\nThe average percentage\nof our assets (determined at the end of each quarter) during the taxable year that produce passive income or that are held for the\nproduction of passive income is at least 50%.\n\n \n\nPassive\nincome generally includes dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade\nor business) and gains from the disposition of passive assets.\n\n \n\nIf\nwe are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who\nholds our securities, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional\nreporting requirements.\n\n \n\n13\n\n \n\n \n\nIt\nis possible that, for our current taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive\nincome. We will make this determination following the end of any particular tax year. For purposes of the PFIC analysis, in general,\na non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to\nown at least 25% of the equity by value.\n\n \n\nFor\na more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to\nbe a PFIC, see “Material Tax Considerations — Passive Foreign Investment Company Considerations.”\n\n \n\n**As\na “controlled company” within the meaning of the Nasdaq Capital Market or another national securities exchange Rules, we\nmay rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.**\n\n \n\nWe\nare and, will continue to be a “controlled company” as defined under the Nasdaq Capital Market or another national securities\nexchange Rules, because one of our shareholders, Big Treasure, holds more than 50% of our voting power. As a result, for so long as we\nremain a controlled company as defined under that rule, we are permitted to elect to rely, and in the future may rely, on certain exemptions\nfrom corporate governance rules of the Nasdaq Capital Market or another national securities exchange Rules including:\n\n \n\n \n●\nan exemption from the rule\nthat a majority of our Board must be independent directors;\n\n \n \n \n\n \n●\nan exemption from the rule\nthat the compensation of our chief executive officer must be determined or recommended solely by independent directors; and\n\n \n \n \n\n \n●\nan exemption from the rule\nthat our director nominees must be selected or recommended solely by independent directors.\n\n \n\nThe\nexemption we intend to rely on is that our director nominees need not be selected or recommended solely by independent directors. As\na result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.\n\n \n\n**Ms.\nLee, our Executive Director and an indirect controlling shareholder, will continue to have significant influence over us, including control\nover decisions that require the approval of shareholders, which will limit your ability to influence the outcome of matters submitted\nto shareholders for a vote.**\n\n \n\nWe\nare currently controlled, will continue to be controlled, indirectly by Ms. Lee. Ms. Lee, through Big Treasure, currently controls 51.22%\nof the voting power of our Ordinary Shares. We expect that she will continue to retain voting control as she holds shares of Class B\nOrdinary Shares given the super voting powers of our Class B Ordinary Shares. As long as Ms. Lee directly or indirectly owns or controls\nat least a majority of our outstanding voting power, she will have the ability to exercise substantial control over all corporate actions\nrequiring shareholder approval, irrespective of how our other shareholders may vote, including the election and removal of Directors\nand the size of our Board of Directors, any amendment of our charter documents, or the approval of any merger or other significant corporate\ntransaction, including a sale of substantially all of our assets. Even if Ms. Lee’s indirect ownership falls below 50%, she will\ncontinue to be able to strongly influence or effectively control our decisions. Additionally, Ms. Lee’s interests, or the interests\nof our Executive Officers and Directors as a whole, may not align with the interests of our other shareholders.\n\n \n\n14\n\n \n\n \n\n**As\na company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance\nmatters that differ significantly from Nasdaq Capital Market corporate governance listing standards. If we chose to rely on these exemptions\nin the future, these practices may afford less protection to shareholders.**\n\n \n\nAs\na foreign private issuer listed on the Nasdaq Capital Market, we are permitted to rely on a provision in the Nasdaq Capital Market or\nanother national securities exchange corporate governance listing standards that allows us to follow Cayman Islands law with regard to\ncertain aspects of corporate governance. This would allow us to follow certain corporate governance practices that differ in significant\nrespects from the corporate governance requirements applicable to U.S. companies listed on the Nasdaq Capital Market or another national\nsecurities exchange.\n\n \n\nFor\nexample, we are exempt from Nasdaq Capital Market or another national securities exchange regulations that require a listed U.S. company\nto:\n\n \n\n \n●\nrequire non-management\ndirectors to meet on a regular basis without management present; and\n\n \n \n \n\n \n●\nseek shareholder approval\nfor the implementation of certain equity compensation plans and dilutive issuances of Ordinary Shares, such as transactions, other\nthan a public offering, involving the sale of 20% or more of our Ordinary Shares for less than the greater of book or market value\nof the Shares.\n\n \n\nAlthough\nwe are permitted to follow certain corporate governance rules that conform to Cayman Islands requirements in lieu of many of the Nasdaq\nCapital Market or another national securities exchange corporate governance rules, we intend to comply with the Nasdaq Capital Market\nor another national securities exchange corporate governance rules applicable to private issuers.\n\n \n\n**You\nmay face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because\nwe are incorporated under Cayman Islands law.**\n\n \n\nWe\nare an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed\nby our Amended and Restated Memorandum and Articles of Association, the Companies Act and the common law of the Cayman Islands. We will\nalso be subject to the U.S. securities laws. The rights of shareholders to take action against our Directors and us, actions by minority\nshareholders and the fiduciary duties of our Directors to us under Cayman Islands law are governed by our Amended and Restated Memorandum\nand Articles of Association, the Companies Act and the common law of the Cayman Islands. The common law of the Cayman Islands is derived\nin part from comparatively limited judicial precedent in the Cayman Islands (as compared to the U.S. law) as well as from English common\nlaw. The decisions of the English courts are of highly persuasive authority but are not binding on Cayman Islands courts (except for\nthose decisions handed down from the Judicial Committee of the Privy Council to the extent that these have been appealed from the Cayman\nIslands courts). The rights of our shareholders and the fiduciary duties of our Directors under Cayman Islands law are broadly similar\nto those in other common law jurisdictions, but there may be differences in the statutes or judicial precedent in some jurisdictions\nin the United States. In particular, the Cayman Islands have a different body of securities laws than the United States and provide significantly\nless protection to investors. In addition, if shareholders want to proceed against the Company outside of the Cayman Islands, they will\nneed to demonstrate that they have the standing to initiate a shareholder derivative action in a federal court of the United States.\n\n \n\nShareholders\nof Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than\nthe Amended and Restated Memorandum and Articles of Association, the register of mortgages and charges and any special resolutions passed\nby shareholders) or to obtain copies of lists of shareholders of these companies. Our Directors are not required under our Amended and\nRestated Memorandum and Articles of Association to make our corporate records available for inspection by our shareholders. This may\nmake it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit\nproxies from other shareholders in connection with a proxy contest.\n\n \n\n15\n\n \n\n \n\nCertain\ncorporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies\nincorporated in other jurisdictions such as U.S. states. Currently, we do not plan to rely on home country practice with respect to corporate\ngovernance matters. In the event we choose to do so in the future, our shareholders may be afforded less protection than they otherwise\nwould under rules and regulations applicable to U.S. domestic issuers.\n\n \n\nAs\na result, shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members\nof the Board or controlling shareholders than they would as shareholders of a company incorporated in a U.S. state. For a discussion\nof significant differences between the provisions of the Companies Act and the laws applicable to companies incorporated in a U.S. state\nand their shareholders, see “Certain Cayman Islands Company Considerations — Differences in Corporate Law.”\n\n** **\n\n**Recently\nintroduced economic substance legislation of the Cayman Islands may impact us or our operations.**\n\n \n\nThe\nCayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing\nconcerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without\nreal economic activity. Effective January 1, 2019, the International Tax Co-operation (Economic Substance) Act (as amended) (the “Substance\nLaw”) and issued Regulations and Guidance Notes came into force in the Cayman Islands introducing certain economic substance requirements\nfor “relevant entities” which are engaged in certain “relevant activities,” which in the case of exempted companies\nincorporated before January 1, 2019, will apply in respect of fiscal years commencing July 1, 2019, onwards. A “relevant entity”\nincludes an exempted company incorporated in the Cayman Islands; however, it does not include an entity that is tax resident outside\nthe Cayman Islands. Accordingly, for so long as we are a tax resident outside the Cayman Islands, we are not required to satisfy the\neconomic substance test under the Substance Law. Although it is presently anticipated that the Substance Law will have little material\nimpact on us or our operations, as the legislation is new and remains subject to further clarification and interpretation it is not currently\npossible to ascertain the precise impact of these legislative changes on us.\n\n \n\n**Certain\njudgments obtained against us by our shareholders may not be enforceable.**\n\n \n\nWe\nare a Cayman Islands exempted company with limited liability and substantially all of our assets are located outside of the United States.\nIn addition, all of our current Directors and Executive Officers are nationals and residents of countries other than the United States\nand substantially all of the assets of these persons are located outside the United States. Service of court documents on a Cayman Islands\ncompany can be effected by serving the documents at the company’s registered office and it may be is possible to enforce foreign\njudgments in the Cayman Islands against a Cayman Islands company, subject to some exceptions. However, if investors wish to serve documents\non and/or enforce foreign judgments against our Directors and Executive Officers, they will need to ensure that they comply with the\nrules of the jurisdiction where our Directors and Executive Officers are located. As a result, it may be difficult for a shareholder\nto effect service of process within the United States upon these persons or to enforce against us or them judgments obtained in United\nStates courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any\nstate in the United States. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and Singapore\nmay render you unable to enforce a judgment against our assets or the assets of our Directors and Executive Officers. For more information\nregarding the relevant laws of the Cayman Islands, see “Enforcement of Civil Liabilities.” As a result of all of the above,\nour shareholders may have more difficulties in protecting their interests through actions against us or our Executive Officers, Directors\nor major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States, depending on where\nour Directors and Executive Officers are located.\n\n \n\n16\n\n \n\n \n\n**We\nare an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.**\n\n \n\nWe\nare an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various\nrequirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required\nto comply with the auditor attestation requirements of Section 404 for so long as we are an emerging growth company. As a result, if\nwe elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may\ndeem important.\n\n \n\nThe\nJOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards\nuntil such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words,\nan “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise\napply to private companies. We have elected to take advantage of the extended transition period. As a result of this election, our future\nfinancial statements may not be comparable to other public companies that comply with the public company effective dates for these new\nor revised accounting standards.\n\n** **\n\n**We\nare a foreign private issuer within the meaning of the Exchange Act, and as such we are exempt from certain provisions applicable to\nUnited States domestic public companies.**\n\n \n\nBecause\nwe are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations\nin the United States that are applicable to U.S. domestic issuers, including:\n\n \n\n \n●\nthe rules under the Exchange\nAct requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;\n\n \n \n \n\n \n●\nthe sections of the Exchange\nAct regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;\n\n \n \n \n\n \n●\nour officers, directors are exempt from the short-swing profit recovery\nprovisions contained in Section 16 of the Exchange Act. and our principal shareholders are exempt from the reporting and short-swing\nprofit recovery provisions contained in Section 16 of the Exchange Act; and\n\n \n \n \n\n \n●\nthe selective disclosure\nrules by issuers of material non-public information under Regulation FD.\n\n \n\nWe\nwill be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish\nour financial results on a semi-annual basis through press releases distributed pursuant to the rules and regulations of the Nasdaq Capital\nMarket or another national securities exchange. Press releases relating to financial results and material events will also be furnished\nto the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely\ncompared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections\nor information that would be made available to you if you were investing in a U.S. domestic issuer.\n\n** **\n\n**We\nmay lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to us.**\n\n \n\nAs\ndiscussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and\ncurrent reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business\nday of an issuer’s most recently completed second financial quarter. In the future, we would lose our foreign private issuer status\nif (i) more than 50% of our outstanding voting securities are owned by U.S. residents; and (ii) a majority of our Directors or Executive\nOfficers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid the loss of foreign private issuer\nstatus. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements\non U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also\nhave to comply with U.S. federal proxy requirements, and our officers, Directors and 10% shareholders will become subject to the short-swing\nprofit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions\nfrom certain corporate governance requirements under the listing rules of the Nasdaq Capital Market or another national securities exchange.\nAs a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other\nexpenses that we will not incur as a foreign private issuer.\n\n \n\n17\n\n \n\n \n\n**We\nincur significant costs and devote substantial management time as a result being a public company listed on the Nasdaq Capital Market.**\n\n \n\nWe\nincur significant legal, accounting and other expenses as a public reporting company, and these costs will go up after we cease to qualify\nas an emerging growth company. For example, we are required to comply with the additional requirements of the rules and regulations of\nthe SEC and the Nasdaq Capital Market, including applicable corporate governance practices. Compliance with these requirements has increased\nour legal and financial compliance costs and makes some activities more time-consuming and costly. In addition, our management and other\npersonnel must divert attention from operational and other business matters to devote substantial time to these public company requirements.\n\n \n\nIn\naddition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for\npublic companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations\nand standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application\nin practice may evolve over time as new guidelines are provided by regulatory and governing bodies. This could result in continuing uncertainty\nregarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to\ninvest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative\nexpenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our\nefforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due\nto ambiguities related to their application and practice, regulatory authorities may also initiate legal proceedings against us and our\nbusiness may be adversely affected.\n\n \n\n**We\nhave been notified by Nasdaq for failure to meet listing qualifications. If we do not cure this failure, or if we fail to meet other\napplicable listing requirements, Nasdaq Capital Market delist our Shares from trading, in which case we expect the liquidity and market\nprice of our Shares would decline.**\n\n \n\nWe\nhave received a notice from the Nasdaq Capital Market on November 6, 2025 that the Company no longer meets the continued listing requirement\nof Nasdaq under Nasdaq Listing Rules 5550(a)(2), to maintain a minimum bid price of $1 per share. While we have the opportunity to regain\ncompliance, we cannot assure you that we will be able to meet the continued listing standards of Nasdaq Capital Market or another national\nsecurities exchange in the future. If we fail to comply with the applicable listing standards and Nasdaq Capital Market delists our Ordinary\nShares, we and our shareholders could face significant material adverse consequences, including:\n\n \n\n \n●\na limited availability\nof market quotations for our Ordinary Shares;\n\n \n \n \n\n \n●\nreduced liquidity for our\nOrdinary Shares;\n\n \n \n \n\n \n●\na determination that our\nOrdinary Shares are “penny stock”, which would require brokers trading in our Ordinary Shares to adhere to more stringent\nrules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares;\n\n \n \n \n\n \n●\na limited amount of news\nabout us and analyst coverage of us; and\n\n \n \n \n\n \n●\na decreased ability for\nus to issue additional equity securities or obtain additional equity or debt financing in the future.\n\n \n\n18\n\n \n\n \n\nThe\nNational Securities Markets Improvement Act of 1996, which is a federal statute, prevents or pre-empts the states from regulating the\nsale of certain securities, which are referred to as “covered securities.” Because we expect that our Ordinary Shares will\nbe listed on Nasdaq Capital Market or another national securities exchange, such securities will be covered securities. Although the\nstates are pre-empted from regulating the sale of our securities, the federal statute does allow the states to investigate companies\nif there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of\ncovered securities in a particular case. Further, if we were no longer listed on Nasdaq Capital Market or another national securities\nexchange, our securities would not be “covered securities” and we would be subject to regulations in each state in which\nwe offer our securities."}