{"url_path":"/sec/jxg/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1546383/0001213900-26-057231-index.html","accession_number":"0001213900-26-057231","cik":"0001546383","ticker":"JXG","issuer_name":"JX Luxventure Group Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1546383/0001213900-26-057231-index.html","primary_entity_key":"0001546383","primary_entity_name":"JX Luxventure Group Inc."},"word_count":10677,"has_tables":true,"body_markdown":"**ITEM 10. ADDITIONAL INFORMATION**\n\n \n\n**A. Share Capital**\n\n \n\nOur Restated Articles of Incorporation, as amended,\nauthorize the Company to issue up to 155,000,000 shares with a par value of $0.0001, consisting of 150,000,000 shares of Common Stock\nand 5,000,000 shares of Preferred stock. As of date of this Annual Report, 9,276,831 shares of Common Stock are issued and outstanding\nand 1,470,000 of Preferred Stock are issued and outstanding, consisting of 1,240,000 shares of Series A Preferred; 150,000 shares of Series\nC Preferred, 80,000 shares of Series D Preferred. All of the shares of Series E Preferred Stock and Series F Preferred Stock were converted\ninto shares of Common Stock, and there are no outstanding shares of Series E Preferred Stock or Series F Preferred Stock.\n\n  \n\n**B. Memorandum and Articles of Association**\n\n \n\n*The following represents a summary of certain\nkey provisions of our articles of incorporation and bylaws. The summary does not purport to be a summary of all of the provisions of our\narticles of incorporation and bylaws. For more complete information you should read our amended and restated articles of incorporation,\nas amended, and bylaws, each listed as an exhibit to this report.*\n\n \n\nWe were incorporated in the Marshall Islands on\nJanuary 26, 2012 under the Marshall Islands Business Corporations Act (“BCA”). The purpose of the Company is to engage in\nany lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our amended and restated articles of\nincorporation, as amended, and bylaws do not impose any limitations on the ownership rights of our stockholders.\n\n \n\n99\n\n \n\n \n\n**Description of Common Stock**\n\n \n\nEach outstanding share of Common Stock entitles\nthe holder to one vote on all matters submitted to a vote of stockholders. Upon our dissolution, liquidation or winding up of the affairs\nof the Company, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation\npreferences, if any, the holders or our Common Stock will be entitled to receive pro rata our remaining assets available for distribution.\nHolders of Common Stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities. \n\n \n\n**Preferred Stock.**\n\n \n\nOur Board of Directors is authorized, without\nany further vote or action by our stockholders, to issue up to 5,000,000 shares of preferred stock in different classes and series and,\nwith respect to each class or series, to determine the designations, powers, preferences, privileges and other rights, including dividend\nrights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers and rights\nassociated with the common stock, at such times and on such other terms as they think proper. Our Board of Directors may issue shares\nof preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.\n\n \n\n**Designations of our Preferred Stock.**\n\n \n\n**Series A Convertible Preferred Stock**\n\n \n\nOn April 8, 2021, our Board of Directors, acting\nby unanimous written consent, in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of preferred\nstock, par value $0.0001 per share (“Preferred Stock”), designated as “Series A Convertible Preferred Stock” and\nadopted the Certificate of Designations of the Series A Convertible Preferred Stock (the “Certificate of Designations of Series\nA”) which authorized for issuance 1,500,000 shares of Series A Convertible Preferred Stock and had the stated initial stated value\nof US$1.00 per share (the “Series A Preferred”). On April 8, 2021, the Company offered and sold 1,500,000 shares of the Series\nA Preferred to a single investor for total subscription proceeds of $1,500,000. On April 20, 2022, our Board adopted resolutions, by unanimous\nwritten consent, pursuant to Section 35 of the BCA, in which it determined that the Certificate of Designation of Series A”) was\nnot filed with the Registrar of Corporations, in accordance with the provisions of sections 35 and 5 of the BCA at the time the Certificate\nof Designation of Series A Preferred was approved by the Board, and that it is in the best interests of the Corporation and its stockholders\nto correct the file the Certificate of Designation of Series A Preferred with the Registrar of Corporations, to correct an administrative\noversight. On April 25, 2022, the Company filed the Certificate of Designations of Series A Preferred with the Registrar of Corporations\nunder the Company’s former name, KBS Fashion Group Limited, and on April 27, 2022, the Company filed with the Registrar of Corporations\nthe First Amended and Restated Certificate of Designations of Series A, reflecting the Company’s name “JX Luxventure Limited”\nand restating all provisions set forth in the Certificate of Designations of Series A Preferred. Pursuant to this unanimous written consent\ndated April 20, 2022, the Board of Directors ratified and confirmed to treat the investor that purported to have been issued 1,500,000\nshares of Series A economically, as if such holder (the “Holder”) has been the holder of 1,500,000 shares of Series A since\nApril 8, 2021, the date of the purported issuance of Series A Preferred, rather than the date of the filing of the Certificate of Series\nA Preferred and the First Amended and Restated Certificate of Series A Preferred with the Registrar of Corporations. On May 10, 2022,\nthe Company filed with the Registrar of Corporations the Second Amended and Restated Certificate of Designation of Series A Preferred.\nAs set forth in the Second Amended and Restated Certificate of Series A Preferred, it features a stated value of $1.00 and is convertible\nto shares of our Common Stock at any time from the date of issue. Conversions are limited, however, such that no conversion may made to\nthe extent that the number of shares of Common Stock to be issued pursuant to such conversion, when aggregated with all other shares of\nCommon Stock owned by the Holder at such time, would result in the Holder beneficially owning (as determined in accordance with Section\n13(d) of the Exchange Act and the rules thereunder) in excess of 9.99% of our then issued and outstanding shares of Common Stock. Series\nA Convertible Preferred Stock votes together with holders of shares of Common Stock on an as-if-converted basis, has no special dividend\nrights, and ranks equally to our common stock with respect to rights upon liquidation. All shares of Common Stock issuable upon conversion\nof the Series A Preferred are subject to a two-year lock-up agreement running from the initial closing of the financing. Our offer and\nsale of the Series A Preferred was exempt under Rule 506(b) under Regulation D, as it did not involve any general solicitation or advertising\nand was made to an accredited investor within the meaning of Rule 501 under Regulation D. On May 10, 2022, the Holder converted 260,000\nshares of Series A Preferred into 26,000 shares of Common Stock. On the date of this Annual Report, there are 1,240,000 shares of Series\nA Preferred issued and outstanding.\n\n \n\n100\n\n \n\n \n\n**Series B Participating Preferred Stock and\nRights Dividend**\n\n \n\nOn March 12, 2021, we announced the authorization\nand declaration of a dividend distribution of one right (a “Right”) for each outstanding share of Common Stock, par value\n$0.0001 per share, of the Company to stockholders of record as of the close of business on March 31, 2021 (the “Record Date”).\nEach Right entitles the registered holder to purchase from the Company one 0.00667 portion of a share of Series B Participating Preferred\nStock, par value $0.0001 per share (the “Preferred Stock”), of the Company at an exercise price of $50.00 (the “Exercise\nPrice”). The complete terms of the Rights are set forth in a Preferred Stock Rights Agreement (the “Rights Agreement”),\ndated as of March 11, 2021, between the Company and American Stock Transfer & Trust Company, LLC, as rights agent.\n\n \n\nOur Board of Directors adopted the Rights Agreement\nto protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty\nupon any person or group that acquires 15% or more of the Company’s Common Stock without the approval of the Board. As a result,\nthe overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult or to discourage a merger, tender\nor exchange offer or other business combination involving the Company that is not approved by the Board. However, neither the Rights Agreement\nnor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by our Board. On April\n20, 2022, our Board adopted resolutions, by unanimous written consent, pursuant to Section 35 of the BCA, in which it determined that\nthe Certificate of Designation of Series B Participating Preferred Stock was not filed with the Registrar of Corporations, in accordance\nwith the provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation of Series B Participating Preferred Stock\nwas approved by the Board, and that it is in the best interests of the Corporation and its stockholders to correct the file the Certificate\nof Designation of Series B Participating Preferred Stock with the Registrar of Corporations, to correct an administrative oversight. On\nApril 25, 2022, the Company filed the Certificate of Designation of Series B Participating Preferred Stock with the Registrar of Corporations\nunder the Company’s former name, and on April 27, 2022, we filed the Amended and Restated Certificate of Designation of Series B\nParticipating Stock with the Registrar of Corporations reflecting the Company’s current name.\n\n \n\n**Series C Convertible Preferred Stock**\n\n \n\nOn September 1, 2021, our Board, acting by unanimous\nwritten consent, in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of Preferred Stock, designated\nas “Series C Convertible Preferred Stock” and adopted the Certificate of Designations of the Series C Convertible Preferred\nStock (the “Certificate of Designations of Series C”) which authorized for issuance 150,000 shares of Series C Convertible\nPreferred Stock and had the stated initial stated value of US$10.00 per share (the “Series C Preferred”). On September 1,\n2021, the Company sold 150,000 shares of the Series C Preferred for total subscription proceeds of $1,500,000 to Sun Lei, our Chief Executive\nOfficer and a member of our Board. Our Series C Convertible Preferred Stock features a stated value of $10.00 and is convertible to shares\nof our Common Stock at any time after 6 months from the date of issue. On April 20, 2022, our Board adopted resolutions, by unanimous\nwritten consent, pursuant to Section 35 of the BCA, in which it determined that the Certificate of Designation of Series C Preferred was\nnot filed with the Registrar of Corporations, in accordance with the provisions of sections 35 and 5 of the BCA at the time the Certificate\nof Designation of Series C Preferred was approved by the Board, and that it is in the best interests of the Corporation and its stockholders\nto correct the file the Certificate of Designation of Series C Preferred with the Registrar of Corporations, to correct an administrative\noversight. Pursuant to this unanimous written consent dated April 20, 2022, the Board of Directors ratified and confirmed to treat the\ninvestor that purported to have been issued 150,000 shares of Series C economically, as if such holder (the “Holder”) has\nbeen the holder of 150,000 shares of Series C Preferred since September 1, 2021, the date of the purported issuance of Series C Preferred,\nrather than the date of the filing of the Certificate of Series C Preferred and the Amended and Restated Certificate of Series C Preferred\nwith the Registrar of Corporations. On April 25, 2022, the Company filed the Certificate of Designation of Series C Preferred with the\nRegistrar of Corporations under the Company’s former name, and on April 27, 2022, we filed the Amended and Restated Certificate\nof Designation of Series C Preferred with the Registrar of Corporations reflecting the Company’s current name.\n\n \n\n101\n\n \n\n \n\nAs stated in our Amended and Restated Certificate of Designation of\nSeries C Preferred, each share of Series C Preferred is convertible into 5 shares of Common Stock, subject to adjustments resulting from\nreverse stock splits. As a result of the Reverse Stock Splits, 120 shares of the Series C Preferred Stock is convertible into 1 share\nof Common Stock. Series C Preferred votes together with holders of Common Stock on an as-if-converted basis, which is not exercisable\nfor one year, has no special dividend rights, and ranks equally to our Common Stock with respect to rights upon liquidation. All shares\nof Common Stock issuable upon conversion of the Series C Preferred are subject to a one-year lock-up agreement running from the initial\nclosing of the financing. Our offer and sale of the Series C Preferred was exempt under Rule 506(b) under Regulation D, as it did not\ninvolve any general solicitation or advertising and was made to an accredited investor within the meaning of Rule 501 under Regulation D.\n\n** **\n\n**Series D Convertible Preferred Stock** \n\n \n\nOn October 18, 2021, our Board acting by unanimous\nwritten consent, in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of Preferred Stock, designated\nas “Series D Convertible Preferred Stock” and adopted the Certificate of Designations of the Series D Convertible Preferred\nStock (the “Certificate of Designations of Series D”) which authorized for issuance 100,000 shares of Series D Convertible\nPreferred Stock and had the stated initial stated value of US$39.00 per share (the “Series D Preferred”). On November 1, 2021,\nthe Company offered and sold 100,000 shares of Series D Preferred to an accredited investor for the total gross proceeds of $3,900,000,\nin reliance upon Section 4(a)(2) of the Securities Act. On April 20, 2022, our Board adopted resolutions, by unanimous written consent,\npursuant to Section 35 of the BCA, in which it determined that the Certificate of Designation of Series D Preferred was not filed with\nthe Registrar of Corporations, in accordance with the provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation\nof Series D Preferred was approved by the Board, and that it is in the best interests of the Corporation and its stockholders to correct\nthe file the Certificate of Designation of Series D Preferred with the Registrar of Corporations, to correct an administrative oversight.\nPursuant to this unanimous written consent dated April 20, 2022, the Board of Directors ratified and confirmed to treat the investor that\npurported to have been issued 100,000 shares of Series D Preferred economically, as if such holder (the “Holder”) has been\nthe holder of 100,000 shares of Series D Preferred since November 1, 2021, the date of the purported issuance of Series D Preferred, rather\nthan the date of the filing of the Certificate of Series D Preferred and the Amended and Restated Certificate of Series D Preferred with\nthe Registrar of Corporations. On April 25, 2022, the Company filed the Certificate of Designation of Series D Preferred with the Registrar\nof Corporations, and on April 27, 2022, we filed the Amended and Restated Certificate of Designation of Series D Preferred with the Registrar\nof Corporations. As stated in the Amended and Restated Certificate of Designation of Series D Preferred, shares of Series D Preferred\nvote together with holders of shares of Common Stock on an as-if-converted basis; have no special dividend right, ranks equal to the Common\nStock with respect to rights upon liquidation and are convertible into shares of Common Stock on a 1 do 13 basis at any time following\nthe issuance, subject to the adjustments with respect to the reverse stock split, as a result of which each share of Series D Preferred\nStock may be currently converted into 1.3 shares of Common Stock. However, the conversion is limited to the extent that no conversion\nmay occur if the number of shares of Common Stock to be issued pursuant to such conversion, when aggregated with all other shares of Common\nStock owned by the holder of such shares at such time, would result in the holder beneficially owning (as determined in accordance with\nSection 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess of 9.99% of the then issued and\noutstanding shares of Common Stock. On May 2, 2022, the Holder converted 20,000 shares of Series D Preferred into 26,000 shares of Common\nStock.\n\n \n\n**Series E Convertible Preferred Stock**\n\n \n\nOn August 26, 2024, our Board acting by unanimous\nwritten consent, in accordance with Section 35 of the BCA, and holders of majority of the voting power of the Company duly adopted the\nresolutions creating a new series of Preferred Stock, designated as “Series E Convertible Preferred Stock” and adopted the\nCertificate of Designation of Series E Convertible Preferred Stock (the “Certificate of Designation of Series E Stock”) which\nauthorized for issuance 1,000,000 shares of Series E Convertible Preferred Stock and had the stated initial stated value of US$3.00 per\nshare (the “Series E Preferred”). On September 23, 2024, the Certificate of Designation of Series E Stock was filed with the\nRegistrar of the Corporation. On September 26, 2024, the Company issued all shares of Series E Stock (125,000 shares of Series E Stock\nwere issued to each shareholder) in exchange for cancellation of the Company’s indebtedness to each holder under the promissory\nnote in the principal amount of $375,000.\n\n \n\n102\n\n \n\n \n\nThe Certificate of Designation of Series E Stock\nfeatures a stated value of $3.00 per share, the conversion rate of 1 for 2.5 (reflecting the 1-for-4 post reverse split ratio on the dates\nwhen all Series F Stock were converted), no additional consideration by the Holder for the conversion of Series E Shares into the shares\nof the Company’s common stock and provided the schedule of conversion, such as, (i) up to 30% of the Series E Shares issued to each\nHolder may be converted by such Holder at any time from the date of the issuance; (ii) up to additional 30% of the Series E Shares counted\non the date of the issuance may be converted by such Holder at any time after 90 days from the date of the issuance; (iii) up to 40% of\nthe Series E Shares counted on the date of the issuance may be converted by such Holder after six (6) months from the date of the issuance.\nPursuant to the Certificate of Designation of Series E Stock, on April 3, 2025, the Company required holders to convert all Series E Shares\nthat remained outstanding on or after March 14, 2025 into shares of common stock. As a result, as of the date of this Annual Report, all\nof 1,000,000 Series E Shares were converted into shares of Common Stock, and the Company does not have any outstanding shares of Series\nE Preferred Stock.\n\n \n\n**Series F Convertible Preferred Stock**\n\n \n\nOn April 22, 2025, our Board acting by unanimous\nwritten consent, in accordance with Section 35 of the BCA, and holders of majority of the voting power of the Company duly adopted the\nresolutions creating a new series of Preferred Stock, designated as “Series F Convertible Preferred Stock” and adopted the\nCertificate of Designation of Series E Convertible Preferred Stock (the “Certificate of Designation of Series F Stock”) which\nauthorized for issuance 69,000 shares of Series F Convertible Preferred Stock and had the stated initial stated value of US$20.00 per\nshare.\n\n \n\nOn May 23, 2025, the Company filed the Certificate\nof Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock (the “Certificate of Designation of\nSeries F Stock”) with the Registrar of the Corporation under the Marshall Island Business Corporations Act, establishing the Series\nF Stock.\n\n \n\nSeries F Shares feature a stated value of $20.00\nper share and are convertible into shares of the Company’s Common Stock at the conversion rate of 1 for 100 (pre-split) or 1 for 6.667\n(following the 1-for-15 reverse stock split, effective November 18, 2025), without payment or any additional consideration by the holder\nthereof. Such conversion is subject to the following schedule: (i) up to 2,000 of the Series F Shares issued to each holder may be converted\nby such holder at any time from the date of the issuance; (ii) up to additional 2,500 of the Series F Shares may be converted by such\nHolder at any time after 90 days from the date of the issuance; (iii) up to 3,000 of Series F Shares counted on the date of the issuance\nmay be converted by such Holder after six (6) months from the date of the issuance; and (iv) the remaining 4,000 of the Series F Shares\nmay be converted by such holder after nine (9) months from the date of the issuance. If any Series F Shares remain outstanding on or after\none (1) year from the date of the issuance, the Company will have the right, but not the obligations, to require the holders of such Series\nF Shares to convert them into the number of fully paid and non-assessable shares of common stock.\n\n \n\nOn May 29, 2025, at the closing of the Exchange\nAgreement, the Company issued to the holders of Series F Shares an aggregate of 69,000 shares of Series F Stock in cancellation of the\nTotal Amount Due (each Holder received 11,550 shares of Series F Stock), in cancellation of $1,380,00 principal amount under the promissory\nnotes issued the noteholders. As of the date of the Annual Report, all shares of Series F Stock were converted into shares of Common Stock.\n\n \n\n**Directors**\n\n \n\nThe business and affairs of the Company are managed\nby or under the direction of our Board of Directors.\n\n \n\nOur directors are elected by the holders of the\nshares representing a majority of the total voting power of the then-outstanding capital stock of the Company entitled to vote generally\nin the election of directors (“Voting Stock”). Our Restated Articles provide that cumulative voting shall not be used to elect\ndirectors. Each director will be elected to serve until the next annual meeting of shareholders and until his/her successor shall have\nbeen duly elected and qualified, except in the event of his/her death, resignation, removal or the earlier termination of his/her term\nof office.\n\n \n\n103\n\n \n\n \n\nAny director or the entire Board of Directors\nmay be removed at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the total voting power\nof the Voting Stock entitled to vote thereon or with cause by directors constituting at least two-thirds of the entire Board.\n\n \n\nVacancies in the Board of Directors occurring\nby death, resignation, the creation of new directorships, the failure of the shareholders to elect the whole board at any annual election\nof directors, or, except as herein provided, for any other reason, including removal of directors for cause, may be filled either by the\naffirmative vote of a majority of the remaining directors then in office, although less than a quorum, at any special meeting called for\nthat purpose or at any regular meeting of the Board. Vacancies occurring by removal of directors without cause may be filled only by vote\nof the shareholders.\n\n  \n\n**Shareholder Meetings**\n\n \n\nAnnual stockholder meetings will be held at a time and place selected\nby our Board. The meetings may be held in or outside of the Marshall Islands. Under our Restated Articles, special meetings may be called\nby the Board, or by the secretary of the Company requested by stockholders representing certain amount of voting power. Our Board shall\ngive not less than 15 days and not more than 60 days prior written notice of a shareholders’ meeting to each shareholder of record\nentitled to vote thereat and to each shareholder of record who, by reason of any action proposed at such meeting would be entitled to\nhave his/her shares appraised if such action were taken, and the notice shall include a statement of that purpose and to that effect.\n\n \n\nOur bylaws provide that a meeting of shareholders\nis duly constituted if, at the commencement of the meeting, there are shareholders present in person or by proxy representing not less\nthan a majority of the votes of the shares issued and outstanding and entitled to vote on resolutions of shareholders to be considered\nat the meeting.\n\n \n\nIf a quorum is present, the affirmative vote of\na majority of the shares of stock represented at the meeting will be the act of the shareholders. At any meeting of shareholders, each\nshareholder entitled to vote any shares on any manner to be voted upon at such meeting shall be entitled to one vote on such matter for\neach such share. Any action required or permitted to be taken at a meeting, may be taken without a meeting if consent in writing setting\nforth the action so taken, is signed by all the shareholders entitled to vote with respect to the subject matter thereof.\n\n \n\n**Dissenters’ Rights of Appraisal and\nPayment.**\n\n \n\nUnder the BCA, our stockholders have the right\nto dissent from various corporate actions, including any merger or sale of all or substantially all of our assets not made in the usual\ncourse of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder to receive\npayment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving\na merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any\nfurther amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares\nif the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in\nthe BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures\ninvolve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which\nour Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference,\nif the court so elects, to the recommendations of a court-appointed appraiser.\n\n  \n\n**Stockholders’ Derivative Actions**\n\n \n\nUnder the BCA, any of our stockholders may bring\nan action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the\naction is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the\naction relates.\n\n \n\n104\n\n \n\n \n\n**Indemnification of Officers and Directors**\n\n \n\nThe BCA authorizes corporations to limit or eliminate\nthe personal liability of directors and officers to corporations and their stockholders for monetary damages for breaches of directors’\nfiduciary duties. Our Restated Articles include a provision that eliminates the personal liability of directors for monetary damages for\nactions taken as a director to the fullest extent permitted by law. We must indemnify our directors and officers to the fullest extent\nauthorized by law. We are also expressly authorized to advance certain expenses (including attorneys’ fees and disbursements and\ncourt costs) to our directors and offices and carry directors’ and officers’ insurance providing indemnification for our directors,\nofficers and certain employees for some liabilities.\n\n \n\nThe limitation of liability and indemnification\nprovisions in our Restated Articles and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their\nfiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers,\neven though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely\naffected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification\nprovisions.\n\n \n\n**C. Material Contracts**\n\n \n\nWe have not entered into any material contracts\nother than in the ordinary course of business and other than those described in Item 4 “Information on the Company,” Item\n5 “Operating and Financial Review and Prospects—F. Tabular Disclosure of Contractual Obligations,” Item 7 “Major\nShareholders and Related Party Transactions,” or filed (or incorporated by reference) as exhibits to this annual report or otherwise\ndescribed or referenced in this Annual Report.\n\n \n\n**D. Exchange Controls**\n\n \n\n**Marshall Islands Exchange Controls**\n\n \n\nUnder Marshall Islands law, there are currently\nno restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of\ndividends, interest or other payments to nonresident holders of our shares.\n\n \n\n**BVI Exchange Controls**\n\n \n\nThere are no material exchange controls restrictions\non payment of dividends, interest or other payments to the holders of our common stock or on the conduct of our operations in the BVI,\nwhere we were incorporated. There are no material BVI laws that impose any material exchange controls on us or that affect the payment\nof dividends, interest or other payments to nonresident holders of our common stock. BVI law and our memorandum and articles of association\ndo not impose any material limitations on the right of non-residents or foreign owners to hold or vote our common stock.\n\n \n\n**PRC Exchange Controls**\n\n \n\nRegulations on Foreign Currency Exchange\n\n \n\nUnder the PRC Foreign Currency Administration\nRules promulgated on January 29, 1996 and last amended on August 5, 2008 and various regulations issued by SAFE and other relevant PRC\ngovernment authorities, payment of current account items in foreign currencies, such as trade and service payments, payment of interest\nand dividends can be made without prior approval from SAFE by following the appropriate procedural requirements. By contrast, the conversion\nof RMB into foreign currencies and remittance of the converted foreign currency outside the PRC for the purpose of capital account items,\nsuch as direct equity investments, loans and repatriation of investment, requires prior approval from SAFE or its local office.\n\n \n\n105\n\n \n\n \n\nOn February 13, 2015, SAFE promulgated the Circular\non Simplifying and Improving the Foreign Currency Management Policy on Direct Investment, effective from June 1, 2015, which cancels the\nrequirement for obtaining approvals of foreign exchange registration of foreign direct investment and overseas direct investment from\nSAFE. The application for the registration of foreign exchange for the purpose of foreign direct investment and overseas direct investment\nmay be filed with qualified banks, which, under the supervision of SAFE, may review the application and process the registration.\n\n \n\nThe Circular of the SAFE on Reforming the Management\nApproach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or SAFE Circular 19, was promulgated on March 30,\n2015 and became effective on June 1, 2015. According to SAFE Circular 19, a foreign-invested enterprise may, according to its actual business\nneeds, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange bureau\nhas confirmed monetary contribution rights and interests (or for which the bank has registered the account-crediting of monetary contribution).\nFor the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange capitals on a discretionary basis;\na foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the scope of business; where an\nordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise\nshall first go through domestic re-investment registration and open a corresponding Account for Foreign Exchange Settlement Pending Payment\nwith the foreign exchange bureau (bank) at the place of registration. The Circular of the SAFE on Reforming and Regulating Policies on\nthe Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, was promulgated and became effective on June 9,\n2016. According to SAFE Circular 16, enterprises registered in PRC may also convert their foreign debts from foreign currency into Renminbi\non self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account\nitems (including but not limited to foreign currency capital and foreign debts) on self—discretionary basis, which applies to all\nenterprises registered in the PRC. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated\ncapital of a company may not be directly or indirectly used for purposes beyond its business scope and may not be used for investments\nin securities or other investment with the exception of bank financial products that can guarantee the principal within the PRC unless\notherwise specifically provided. Besides, the converted Renminbi shall not be used to make loans for related enterprises unless it is\nwithin the business scope or to build or to purchase any real estate that is not for the enterprise’s own use with the exception for the\nreal estate enterprise. \n\n \n\nOn January 26, 2017, SAFE promulgated the Circular\non Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, or SAFE Circular\n3, which stipulates several capital control measures with respect to the outbound remittance of profits from domestic entities to offshore\nentities, including (i) banks must check whether the transaction is genuine by reviewing board resolutions regarding profit distribution,\noriginal copies of tax filing records and audited financial statements, and (ii) domestic entities must retain income to account for previous\nyears’ losses before remitting any profits. Moreover, pursuant to SAFE Circular 3, domestic entities must explain in detail the\nsources of capital and how the capital will be used, and provide board resolutions, contracts and other proof as a part of the registration\nprocedure for outbound investment.\n\n \n\nRegulations on Foreign Exchange Registration\nof Overseas Investment by PRC Residents\n\n \n\nSAFE issued the Circular on Relevant Issues Relating\nto Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37,\nwhich became effective in July 2014, to replace the Circular of the State Administration of Foreign Exchange on Issues Concerning the\nRegulation of Foreign Exchange in Equity Finance and Roundtrip Investments by Domestic Residents through Offshore Special Purpose Vehicles,\nto regulate foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by PRC residents or entities to seek\noffshore investment and financing or conduct round trip investment in China. SAFE Circular 37 defines a SPV as an offshore entity established\nor controlled, directly or indirectly, by PRC residents or entities for the purpose of seeking offshore financing or making offshore investment,\nusing legitimate onshore or offshore assets or interests, while “round trip investment” is defined as direct investment in\nChina by PRC residents or entities through SPVs, namely, establishing foreign-invested enterprises to obtain the ownership, control rights\nand management rights. SAFE Circular 37 stipulates that, prior to making contributions into an SPV, PRC residents or entities be required\nto complete foreign exchange registration with SAFE or its local branch. In addition, SAFE promulgated the Notice on Further Simplifying\nand Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015, which amended SAFE Circular 37\nand became effective on June 1, 2015, requiring PRC residents or entities to register with qualified banks rather than SAFE in connection\nwith their establishment or control of an offshore entity established for the purpose of overseas investment or financing.\n\n \n\n106\n\n \n\n \n\nPRC residents or entities who had contributed\nlegitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of\nthe SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks. An amendment to the registration\nis required if there is a material change with respect to the SPV registered, such as any change of basic information (including change\nof the PRC residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, and mergers\nor divisions. Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation\non or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result\nin restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, including payment of dividends\nand other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate,\nand the capital inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign\nexchange administration regulations. See “Risk Factors—Risks Related to Doing Business in China—PRC regulations relating\nto investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiary to liability\nor penalties, limit our ability to inject capital into our PRC subsidiary or limit our PRC subsidiary’s ability to increase their\nregistered capital or distribute profits.” \n\n \n\nRegulations on Stock Incentive Plans\n\n \n\nSAFE promulgated the Notice on Issues Concerning\nthe Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company,\nor the Stock Incentive Plan Notice, in February 2012, replacing the previous rules issued by SAFE in March 2007. Pursuant to the Stock\nIncentive Plan Notice and other relevant rules and regulations, PRC residents participating in stock incentive plan in an overseas publicly-listed\ncompany are required to register with SAFE or its local branches and follow certain other procedures. Participants of a stock incentive\nplan who are PRC residents must conduct the SAFE registration and other procedures with respect to the stock incentive plan through a\nqualified PRC agent, which could be a PRC subsidiary of the overseas publicly listed company or another qualified institution appointed\nby the PRC subsidiary. In addition, the PRC agent is required to update the relevant SAFE registration should there be any material change\nto the stock incentive plan, the PRC agent or other material changes. The PRC agent must, on behalf of the PRC residents who have the\nright to exercise the employee stock options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies\nin connection with the PRC residents’ exercise of the employee stock options. The foreign exchange proceeds received by the PRC\nresidents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must\nbe remitted into the bank accounts in the PRC opened by the PRC agents prior to distribution to such PRC residents.\n\n \n\nWe initially adopted an equity incentive plan\nin 2018 under which we have the discretion to award incentives and rewards to eligible participants. On January 11, 2022, we terminated\nthe 2018 equity incentive plan and adopted the new equity incentive plan (the “2022 Plan”). On October 26, 2022, we terminated\nthe 2022 Plan and adopted the New 2022 EIP with 66,667 maximum authorized shares of Common Stock for issuance. On May 7, 2025, the Company\namended the New 2022 EIP, pursuant to which, among other things, the number of maximum authorized shares of Common Stock available for\nissuance increased to 1,666,667 shares of Common Stock, and on August 1, 2025, our Board and the holders of 52% of the total issued and\noutstanding capital stock of the Company, approved Amendment #2 to the New 2022 EIP, which reduced the maximum number of shares of Common\nStock authorized for issuance under the New 2022 EIP from 1,666,667 to 666,667 shares of Common Stock. On January 5, 2026, the Board terminated\n2022 EIP, as amended, and approved the adoption of the 2026 Equity Incentive Plan (the “2026 Plan”), effective immediately,\nwhich was approved by the holders of approximately 61% of the total issued and outstanding capital stock of the Company. The 2026 Plan\nauthorized a maximum of 4,500,000 shares of Common Stock for issuance. We have advised the recipients of awards under our equity incentive\nplan to handle relevant foreign exchange matters in accordance with the Stock Incentive Plan Notice. However, we cannot guarantee that\nall employee awarded equity-based incentives can successfully register with SAFE in full compliance with the Stock Incentive Plan Notice.\nSee “*Risk Factors—Risks Related to Doing Business in China.*”\n\n \n\n**E. Taxation**\n\n \n\n*The following is a general summary of the\nmaterial Marshall Islands, Hong Kong, BVI, PRC and U.S. federal income tax consequences relevant to an investment in our shares of common\nstock, sometimes referred to collectively in this summary as our “securities”. The discussion is not intended to be, nor\nshould it be construed as, legal or tax advice to any particular prospective purchaser. The discussion is based on laws and relevant\ninterpretations thereof in effect as of the date of this Annual Report, all of which are subject to change or different interpretations,\npossibly with retroactive effect. The discussion does not address United States state or local tax laws, or tax laws of jurisdictions\nother than the Marshall Islands, Hong Kong, the BVI, the PRC and the United States. We recommend that you consult your own tax advisors\nwith respect to the consequences of acquisition, ownership and disposition of our securities.*  \n\n \n\n107\n\n \n\n \n\n**Marshall Islands Taxation**\n\n \n\nThe following are the material Marshall Islands\ntax consequences of our activities to us and to our stockholders of investing in our Common Stock. Under current Marshall Islands law,\nwe are not subject to tax on income or capital gains, and no Marshall Islands withholding tax or income tax will be imposed upon payments\nof dividends by us to our stockholders or proceeds from the disposition of our Common Stock, provided such stockholders are not residents\nin the Marshall Islands. There is no tax treaty between the United States and the Republic of the Marshall Islands.\n\n \n\n**BVI Taxation**\n\n \n\nThe BVI does not impose a withholding tax on dividends\npaid to us by our BVI subsidiary, nor does the BVI levy any capital gains or income taxes on us or our BVI subsidiary. However, our BVI\nsubsidiary is required to pay the BVI government an annual license fee based on the number of shares it is authorized to issue.\n\n \n\nThere is no income tax treaty or convention currently\nin effect between the United States and the BVI.\n\n \n\n**Hong Kong Taxation**\n\n \n\nOur Hong Kong subsidiaries, under the current\nlaws of Hong Kong, are subject to profits tax of 16.5%. No provision for Hong Kong profits tax has been made as our Hong Kong subsidiaries\nhave no taxable income.\n\n \n\n**PRC Taxation**\n\n \n\nWe are a holding company incorporated in the Marshall\nIslands, which indirectly holds our equity interests in our PRC operating subsidiaries. The EIT Law and its implementation rules, both\nof which became effective as of January 1, 2008, provide that a PRC enterprise is subject to a standard income tax rate of 25% and China-sourced\nincome of foreign enterprises, such as dividends paid by a PRC subsidiary to its overseas parent, will normally be subject to PRC withholding\ntax at a rate of 10%, unless there are applicable treaties between the overseas parent’s jurisdiction of incorporation and China\nto reduce such rate.\n\n  \n\nUnder the Arrangement between the Mainland and\nthe Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to\nTaxes on Income, or the Double Taxation Arrangement, effective as of January 1, 2007, such dividend withholding tax rate is reduced to\n5% if a Hong Kong resident enterprise owns over 25% of the PRC company distributing the dividends. Under the aforesaid arrangement, any\ndividends that our PRC operating subsidiaries pay to their Hong Kong holding companies may be subject to a withholding tax at the rate\nof 5% if they are not considered to be a PRC “resident enterprise” as described below. However, if the Hong Kong holdings\ncompanies are not considered to be the “beneficial owner” of such dividends under the Notice Regarding Interpretation and\nRecognition of Beneficial Owners under Tax Treaties promulgated by the State Administration of Taxation on October 27, 2009 (and not a\nPRC “resident enterprise”), such dividends would be subject to the withholding tax rate of 10%. The withholding tax rate of\n5% or 10% applicable will have a significant impact on the amount of dividends to be received by us and ultimately by shareholders.\n\n \n\nAccording to the Notice Regarding Interpretation\nand Recognition of Beneficial Owners under Tax Treaties, the term “beneficial owner” refers to a person who has the right\nto own and dispose of the income and the rights or properties generated from the said income. The “beneficial owner” may be\nan individual, a company or any other organization which is usually engaged in substantial business operations. A conduit company is not\na “beneficial owner.” The term “conduit company” refers to a company which is usually established for purposes\nof dodging or reducing taxes, and transferring or accumulating profits. Such a company is only registered in the country of domicile to\nsatisfy the organizational form as required by law, but it does not engage in such substantial business operations as manufacturing, distribution\nand management. As our Hong Kong holding companies are controlling companies and are not engaged in substantial business operations, they\ncould be considered as conduit companies by tax authorities and we do not expect them to be a beneficial owner.\n\n \n\n108\n\n \n\n \n\nIn addition to the changes to the current tax\nstructure, under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is\nconsidered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the\nterm “de facto management bodies” as “an establishment that exercises, in substance, overall management and control\nover the production, business, personnel, accounting, etc., of a Chinese enterprise.”\n\n \n\nIt remains unclear whether the PRC tax authorities\nwould require or permit our overseas registered entities to be treated as PRC resident enterprises. We do not currently consider our company\nto be a PRC resident enterprise. However, if the PRC tax authorities determine that we are a “resident enterprise” for PRC\nenterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise\nincome tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this\nwould mean that income such as interest on offering proceeds and non-China source income would be subject to PRC enterprise income tax\nat a rate of 25%. Second, although under the EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify\nas “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign\nexchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound\nremittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that\nfuture guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a\n10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders\nfrom transferring our shares.\n\n \n\n**U.S. Federal Income Taxation**\n\n \n\nThe following is a discussion of certain material\nU.S. federal income tax consequences of the acquisition, ownership and disposition of our securities. It does not purport to be a comprehensive\ndescription of all of the tax considerations that may be relevant to a particular person’s situation. The discussion applies only\nto holders that hold their securities as capital assets (generally property held for investment) within the meaning of Section 1221 of\nthe Internal Revenue Code of 1986, as amended, or the Code. This discussion is based on the Code, income tax regulations promulgated thereunder,\njudicial positions, published positions of the Internal Revenue Service, or the IRS, and other applicable authorities, all as in effect\nas of the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion is general in nature and\nis not exhaustive of all possible tax considerations, nor does the discussion address any state, local or foreign tax considerations or\nany U.S. tax considerations (e.g., estate or gift tax) other than U.S. federal income tax considerations, that may be applicable to particular\nholders.\n\n \n\nThis discussion does not address all aspects of\nU.S. federal income taxation that may be relevant in light of particular circumstances, nor does it address the U.S. federal income tax\nconsequences to persons who are subject to special rules under U.S. federal income tax law, including:\n\n \n\n \n●\nbanks, insurance companies or other financial institutions;\n\n \n\n \n●\npersons subject to the alternative minimum tax;\n\n \n\n \n●\ntax-exempt organizations;\n\n \n\n \n●\ncontrolled foreign corporations, passive foreign investment companies and corporations that accumulate earnings to avoid United States federal income tax;\n\n \n\n \n●\ncertain former citizens or long-term residents of the United States;\n\n \n\n \n●\ndealers in securities or currencies;\n\n \n\n \n●\ntraders in securities that elect to use a mark-to-market method of accounting for their securities holdings;\n\n \n\n \n●\npersons that own, or are deemed to own, more than five percent of our capital stock;\n\n \n\n \n●\nholders who acquired our stock as compensation or pursuant to the exercise of a stock option; or\n\n \n\n \n●\npersons who hold our shares as a position in a hedging transaction, “straddle,” or other risk reduction transaction.\n\n \n\n109\n\n \n\n \n\nFor purposes of this discussion, a U.S. holder\nis (i) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes; (ii) a corporation, or other\nentity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States (or\ntreated as such under applicable U.S. tax laws), any state thereof, or the District of Columbia; (iii) an estate the income of which is\nsubject to U.S. federal income tax regardless of its source; or (iv) a trust if (a) a U.S. court is able to exercise primary supervision\nover the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust,\nor (b) it has a valid election in effect under applicable law and regulations to be treated as a U.S. person for U.S. federal income tax\npurposes. A non-U.S. holder is a holder that is neither a U.S. holder nor a partnership or other entity classified as a partnership for\nU.S. federal income tax purposes.\n\n \n\nIn the case of a partnership or entity classified\nas a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of a partner generally will depend on the\nstatus of the partner and the activities of the partnership. Partners of partnerships should consult their tax advisors regarding the\nU.S. federal income tax consequences to them of the merger or of the ownership and disposition of our shares.\n\n \n\nAs a result of consummation of the Share Exchange,\n(i) we acquired substantially all the properties of KBS International, a U.S. corporation, and (ii) the former shareholders of KBS International\nheld at least 80 percent of our Common Stock by reason of having held stock of KBS International. Accordingly, under Section 7874 of the\nCode, we are treated for U.S. federal tax purposes as a U.S. corporation and, among other consequences, are subject to U.S. federal income\ntax on our worldwide income. This discussion assumes that Section 7874 of the Code continues to apply to treat us as a U.S. corporation\nfor all purposes under the Code. If, for some reason (e.g., future repeal of Section 7874 of the Code), we were no longer treated as a\nU.S. corporation under the Code, the U.S. federal income tax consequences described herein could be materially and adversely affected.\n\n \n\n*U.S. Federal Income Tax Consequences for U.S. Holders*\n\n  \n\n*Distributions*\n\n \n\nIn the event that distributions are paid on our\ncommon stock, the gross amount of such distributions will be included in the gross income of the U.S. holder as dividend income on the\ndate of receipt to the extent that the distribution is paid out of current or accumulated earnings and profits, as determined under U.S.\nfederal income tax principles. Such dividends will be eligible for the dividends-received deduction allowed to corporations in respect\nof dividends received from other U.S. corporations. Dividends received by non-corporate U.S. holders, including individuals, may be subject\nto reduced rates of taxation under current law. A U.S. holder may be eligible to claim a foreign tax credit with respect to any PRC withholding\ntax imposed on dividends paid by us. However, the foreign tax credit rules are complex, and their application in connection with Section\n7874 of the Code and the Agreement Between the Government of the United States of America and the Government of the People’s Republic\nof China for the Avoidance of Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income, or the U.S.-PRC Tax Treaty,\nis not entirely clear at this time. U.S. holders should consult their own tax advisors with respect to any benefits they may be entitled\nto under the foreign tax credit rules and the U.S.-PRC Tax Treaty.\n\n \n\nThe extent that dividends paid on our Common Stock\nexceed current and accumulated earnings and profits, the distributions will be treated first as a tax-free return of tax basis on our\nCommon Stock, and to the extent that the amount of the distribution exceeds tax basis, the excess will be treated as gain from the disposition\nof those common stock. Because Section 7874 of the Code has applied to treat us as a U.S. corporation only since the consummation of the\nShare Exchange in 2014, we may not be able to demonstrate to the IRS the extent to which a distribution on our common stock exceeds our\ncurrent and accumulated earnings and profits (as determined under U.S. federal income tax principles), in which case all of such distribution\nwill be treated as a dividend for U.S. federal income tax purposes.\n\n \n\n*Sale or Other Disposition*\n\n \n\nU.S. holders of our Common Stock will recognize\ntaxable gain or loss on any sale, exchange, or other taxable disposition of common stock equal to the difference between the amount realized\nfor the common stock and the U.S. holder’s tax basis in the common stock. This gain or loss generally will be capital gain or loss.\nUnder current law, non-corporate U.S. holders, including individuals, are eligible for reduced tax rates if the common stock has been\nheld for more than one year. The deductibility of capital losses is subject to limitations. A U.S. holder may be eligible to claim a foreign\ntax credit with respect to any PRC withholding tax imposed on gain from the sale or other disposition of common stock. However, the foreign\ntax credit rules are complex, and their application in connection with Section 7874 of the Code and the U.S.-PRC Tax Treaty is not entirely\nclear at this time. U.S. holders should consult their own tax advisors with respect to any benefits they may be entitled to under the\nforeign tax credit rules and the U.S.-PRC Tax Treaty.\n\n \n\n110\n\n \n\n \n\n*Unearned Income Medicare Contribution*\n\n \n\nCertain U.S. holders who are individuals, trusts\nor estates are required to pay an additional 3.8% Medicare tax on, among other things, dividends on and capital gains from the sale or\nother disposition of shares of stock. U.S. holders should consult their own advisors regarding the effect, if any, of this rule on their\nownership and disposition of our Common Stock.\n\n \n\n*U.S. Federal Income Tax Consequences for\nNon-U.S. Holders*\n\n \n\n*Distributions*\n\n \n\nThe rules applicable to non-U.S. holders for determining\nthe extent to which distributions on our Common Stock, if any, constitute dividends for U.S. federal income tax purposes are the same\nas for U.S. holders. *See “–U.S. Federal Income Tax Consequences for U.S. Holders– Distributions.”*\n\n \n\nAny dividends paid to a non-U.S. holder by us\nare treated as income derived from sources within the United States and generally will be subject to U.S. federal income tax withholding\nat a rate of 30% of the gross amount of the dividends, or at a lower rate provided by an applicable income tax treaty if non-U.S. holders\nprovide proper certification of eligibility for the lower rate (usually on IRS Form W-8BEN or W-8BEN-E). Dividends received by a non-U.S.\nholder that are effectively connected with such holder’s conduct of a U.S. trade or business (and, if an income tax treaty applies,\nare attributable to a permanent establishment maintained by the non-U.S. holder in the U.S.) are exempt from such withholding tax, provided\nthat applicable certification requirements are satisfied. In such case, however, non-U.S. holders will be subject to U.S. federal income\ntax on such dividends, net of certain deductions, at the rates applicable to U.S. persons. In addition, corporate non-U.S. holders may\nbe subject to an additional branch profits tax equal to 30% or such lower rate as may be specified by an applicable tax treaty on dividends\nreceived that are effectively connected with the conduct of a trade or business in the United States.\n\n \n\nIf non-U.S. holders are eligible for a reduced\nrate of U.S. withholding tax pursuant to an applicable income tax treaty, such non-U.S. holders may obtain a refund of any excess amounts\nwithheld by filing an appropriate claim for refund with the IRS.\n\n \n\n*Sale or Other Disposition*\n\n \n\nExcept as described below for a reduced rate of\nU.S. withholding tax pursuant to an applicable income tax treaty, any gain realized by a non-U.S. holder upon the sale or other disposition\nof our Common Stock generally will not be subject to U.S. federal income tax unless:\n\n \n\n \n●\nthe gain is effectively connected with the conduct of a trade or business in the United States by such non- U.S. holder, and, if an income tax treaty applies, is attributable to a permanent establishment maintained by such non-U.S. holder in the U.S.;\n\n \n\n \n●\nthe non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other conditions are met; or\n\n \n\n \n●\nWe are or have been a “U.S. real property holding corporation,” or USRPHC, for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period during which the holder has held our Common Stock.\n\n  \n\nNon-U.S. holders whose gain is described in the\nfirst bullet point above will be subject to U.S. federal income tax on the gain derived from the sale, net of certain deductions, at the\nrates applicable to U.S. persons. Corporate non-U.S. holders whose gain is described in the first bullet point above may also be subject\nto the branch profits tax described above at a 30% rate or lower rate provided by an applicable income tax treaty. Individual non-U.S.\nholders described in the second bullet point above will be subject to a flat 30% U.S. federal income tax rate on the gain derived from\nthe sale, which may be offset by U.S.-source capital losses, even though such non-U.S. holders are not considered to be residents of the\nUnited States.\n\n \n\nA corporation will be a USRPHC if the fair market\nvalue of its U.S. real property interests equals or exceeds 50 percent of the aggregate of its real property interests (U.S. and non-U.S.)\nand its assets used or held for use in a trade or business. Because we do not currently own significant U.S. real property, we believe\nthat we are not currently and will not become a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair\nmarket value of our U.S. real property relative to the fair market value of our other business assets, there can be no assurance that\nwe will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock are regularly traded on an\nestablished securities market, such common stock will be treated as U.S. real property interests only if a non-U.S. holder actually or\nconstructively holds more than 5% of such regularly traded common stock at any time during the applicable period that is specified in\nthe Code.\n\n  \n\n111\n\n \n\n \n\n*Foreign Account Tax Compliance*\n\n \n\nThe Foreign Account Tax Compliance provisions\nof the Hiring Incentives to Restore Employment Act (generally referred to as “FATCA”), when applicable, will impose a U.S.\nfederal withholding tax of 30% on payments of dividends on, and (for dispositions after December 31, 2018) gross proceeds from dispositions\nof, our common stock that are held through “foreign financial institutions” (which is broadly defined for this purpose and\nin general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence\nrequirements (generally relating to ownership by U.S. persons of certain interests in or accounts with those entities) have been satisfied\nor an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements.\nU.S. Holders should consult their tax advisers regarding the effect, if any, of the FATCA provisions on their particular circumstances.\n\n \n\n*Information Reporting and Backup Withholding*\n\n \n\nPayments of dividends or of proceeds on the disposition\nof stock made to a holder of our Common Stock may be subject to information reporting and backup withholding at a current rate of 24%\nunless such holder provides a correct taxpayer identification number on IRS Form W-9 (or other appropriate withholding form) or establishes\nan exemption from backup withholding, for example by properly certifying the holder’s non-U.S. status on a Form W-8BEN, Form W-8BEN-E\nor another appropriate version of IRS Form W-8. Payments of dividends to holders must generally be reported annually to the IRS, along\nwith the name and address of the holder and the amount of tax withheld, if any. A similar report is sent to the holder. Pursuant to applicable\nincome tax treaties or other agreements, the IRS may make these reports available to tax authorities in the holder’s country of\nresidence.\n\n \n\nBackup withholding is not an additional tax; rather,\nthe U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results\nin an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished\nto the IRS in a timely manner\n\n \n\n**F. Dividends and Paying Agents**\n\n \n\nNot applicable.\n\n \n\n**G. Statement by Experts**\n\n \n\nNot applicable.\n\n \n\n**H. Documents on Display**\n\n \n\nWe have filed this annual report on Form 20-F\nwith the SEC under the Exchange Act. Statements made in this report as to the contents of any document referred to are not necessarily\ncomplete. With respect to each such document filed as an exhibit to this report, reference is made to the exhibit for a more complete\ndescription of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.\n\n \n\nWe are subject to the informational requirements\nof the Exchange Act as a foreign private issuer and file reports and other information with the SEC. Reports and other information filed\nby us with the SEC including this report, may be inspected and copied at the public reference room of the SEC at 100 F Street, N.E., Washington\nD.C. 20549. You can also obtain copies of this report by mail from the Public Reference Section of the SEC, 100 F. Street, N.E., Washington\nD.C. 20549, at prescribed rates. Additionally, copies of this material may be obtained from the SEC’s Internet site at http://www.sec.gov.\nThe SEC’s telephone number is 1-800-SEC-0330. In accordance with NASDAQ Stock Market Rule 5250(d), we will also post this annual\nreport on Form 20-F on our website at www.jxluxventure.com/en. \n\n \n\nAs a foreign private issuer, we are exempt from\nthe rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors\nand principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange\nAct.\n\n \n\n**I. Subsidiary Information**\n\n \n\nNot applicable. \n\n \n\n112"}