{"url_path":"/sec/jxg/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/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":32084,"has_tables":true,"body_markdown":"**ITEM 3. KEY INFORMATION**\n\n \n\nOur Holding\nCorporate Structure\n\n \n\nWe are not\nan operating company in China, but a Marshall Islands holding company that conducts almost all of our operations through our subsidiaries\nbased in China and Hong Kong. Holders of shares of our Common Stock do not own equity securities of our subsidiaries that have substantive\nbusiness operations in China, but instead are holders of equity securities of a Marshall Islands holding company. Such a structure involves\nunique risks to investors holding shares of our Common Stock. Although we own and control our PRC operating subsidiaries, investors holding\nshares of our Common Stock may never hold equity interests directly in our PRC operating subsidiaries. Substantial uncertainties exist\nwith respect to the interpretation and implementation of the PRC Foreign Investment Law and its Implementation Regulations and how they\nmay impact the viability of our current corporate structure, corporate governance, business operations and financial results. Chinese\nregulatory authorities could disallow this holding company structure, which would likely result in a material change in our operations\nand/or a material change in the value of our securities, including that it could cause the value of our securities to significantly decline\nor become worthless.\n\n \n\n1\n\n \n\n \n\nThe following diagram illustrates our corporate\nstructure and our subsidiaries as of the date of the Annual Report:\n\n \n\n \n\nFor a detailed description of the risks associated\nwith our corporate structure, please see *“Summary of Risk Factors” –*beginning on page 7 and “*Risk\nFactors* – *Risks Related to Our Corporate Structure*” on page 22 of this Annual Report for more information.\n\n \n\n2\n\n \n\n \n\nOur Business Operations in China\n\n \n\nWe face various legal and operational risks and\nuncertainties related to being based in and having most of our operations in China. Changes and developments in the PRC legal system\nand the interpretation and enforcement of PRC laws, rules and regulations may subject us to uncertainties and may change quickly with\nlittle advance notice. The PRC government has significant authority and may exercise significant oversight and discretion over our ability,\nas offshore holding company that has most of the operations in China, to conduct our business, accept foreign investments or list on\nan U.S. or other foreign exchanges, and may intervene in or influence our operations at any time.\n\n \n\nFor example, we face risks associated with regulatory\napprovals of offshore offerings, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. Such risks could\nresult in a material change in our operations and/or the value of our shares of Common Stock and could significantly limit or completely\nhinder our ability to offer or continue to offer shares of our Common Stock and/or other securities to investors and cause the value\nof such securities to significantly decline or be worthless.\n\n \n\nRecent statements by the Chinese government\nhave indicated its intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments\nin China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer securities to\ninvestors and cause the value of our securities to significantly decline or be worthless. Changes in China’s economic,\npolitical or social conditions, or government policies could materially and adversely affect our business, financial condition, and\nresults of operations. For a detailed description of risks related to doing business in China, see *“Summary of Risk\nFactors”*beginning on page 7 and “*Risk Factors* – *Risks Related to Doing Business in China*”\nbeginning on page 24 for more information.\n\n \n\nHolding Foreign Companies\nAccountable Act\n\n \n\nThe Holding Foreign\nCompanies Accountable Act (“HFCAA”) enacted in December 2020, together with a recent joint statement by the United States\nSecurities and Exchange Commission (“SEC”) and the Public Company Accounting Oversight Board “(PCAOB”) call for\nadditional stringent criteria to be applied to emerging market companies by assessing the qualification of non-U.S. auditors who are\nnot inspected by the PCAOB. Under the HFCAA, the SEC is required to identify public companies that have retained a registered public\naccounting firm to issue an audit report where the firm has a branch or office that: (1) is located in a foreign jurisdiction, and PCAOB”)\nhas determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction. Under\nthe HFCAA, our securities may be prohibited from trading on The Nasdaq Market LLC (“Nasdaq”) or other U.S. stock exchanges\nif our auditor is not subject to inspection by the PCAOB for three consecutive years, and this ultimately could result in our Ordinary\nShares being delisted from trading on any U.S. stock exchange. On December 29, 2022, the Accelerating Holding Foreign Companies Accountable\nAct (“AHFCAA”) was enacted, as part of the omnibus spending bill which amended the HFCAA, reducing the time period under\nthe HFCAA to two consecutive years instead of three consecutive years.\n\n \n\nPursuant to the HFCAA,\nthe PCAOB issued a Determination Report on December 16, 2021 (the “2021 Determination Report”) which found that the PCAOB\nis unable to inspect or investigate completely registered public accounting firms headquartered in mainland China because of a position\ntaken by one or more authorities in mainland China. On August 26, 2022, the China Securities Regulatory Commission (“CSRC”),\nthe Ministry of Finance of China, and the PCAOB signed a protocol governing inspections and investigations of audit firms based in China\nand Hong Kong. On December 15, 2022, the PCAOB issued a new Determination Report (the “2022 Determination Report”) which:\n(1) vacated the 2021 Determination Report and (2) concluded that the PCAOB has been able to conduct inspections and investigations completely\nin the PRC in 2022. Although the 2022 Determination Report reversed the conclusion of the 2021 Determination Report with respect to PCAOB’s\nability to conduct inspections and investigations completely of the registered public accounting firms headquartered in mainland China\nand Hong Kong, the 2022 Determination Report cautions, however, that authorities in the PRC might take positions at any time that would\nprevent the PCAOB from continuing to inspect or investigate completely. As required by the HFCAA, if in the future the PCAOB determines\nit no longer can inspect or investigate completely because of a position taken by an authority in the PRC, the PCAOB will act expeditiously\nto consider whether it should issue a new determination.\n\n \n\n3\n\n \n\n \n\nThe audit report included\nin this Annual Report for the year ended December 31, 2025 was issued by Onestop Assurance PAC (“Onestop”), a Singapore-based\nindependent public accounting firm that is registered with the PCAOB. Onestop is not headquartered in mainland China and was not subject\nto the 2021 Determination Report. We have no intention of dismissing Onestop in the future or of engaging any auditor not subject to regular\ninspection by the PCAOB.\n\n \n\nThe Company’s Cash Flows and Summary\nOf Applicable Regulations\n\n \n\nAs of the date of this\nAnnual Report, the structure of cash flows within the entities in our corporate organization, and the applicable regulations, are as follows:\n\n \n\n1.Our\ncorporate structure is a direct holding structure, that is, the overseas entity listed in the U.S., JX Luxventure Group Inc. incorporated\nin Marshall Islands, currently has no material operations on its own. It wholly owns Flower Crown Holding, a Cayman Islands company,\nalso a holding company, which wholly owns Flower Crown (China) Holding Group Co., Limited, a limited company incorporated in Hong Kong\n(“Flower Crown HK”), which, in turn, wholly owns all of the share capital of the following three PRC subsidiaries (i) JX\nHainan, and its PRC operating entities; (ii) Shenzhen Siquanrun, and (iii) JX Shenzhen. Following the reorganization of the Company’s\ncorporate structure in 2023, resulting in incorporation of new entities, Flower Crown Holding also owns Billion Place Limited (Hong Kong)\nCo., Limited (“Billion Place HK”), a limited company incorporated in Hong Kong and its wholly-owned subsidiaries. See “*Summary\nof Risk Factors*” beginning on page 7 and “*Risk Factors — Risks Related to our Corporate Structure*”\non page 22 for more information**.**\n\n \n\n2.As\nof the date of this Annual Report, the Company has not established or maintained any cash management policies that dictate the purpose,\namount, and procedure of fund transfers among the Company, our subsidiaries, or investors. As of the date of this Annual Report, there\nhave been no cash and asset transfers between the holding company and its PRC subsidiaries.\n\n \n\n3.Within\nour direct holding structure, the cross-border transfer of funds within our corporate group is conducted in compliance with the laws\nand regulations of the PRC. To date, none of our subsidiaries have made any dividends or distributions to JX Luxventure and we have not\nmade any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business,\nand we do not anticipate that any cash dividends will be paid to shareholders in the foreseeable future. If any PRC subsidiaries determine\nto distribute dividends, they will transfer the dividends to JX Hainan,  or Baofu Technology, as applicable, in accordance with\nthe laws and regulations of the PRC, and then JX Hainan or Baofu Technology, as applicable, will transfer the dividends to JX Luxventure,\nand the dividends will be distributed from JX Luxventure to all shareholders respectively in proportion to the shares they hold, regardless\nof whether the shareholders are U.S. investors or investors in other countries.\n\n \n\n4.Under\nMarshall Islands law, the Company may pay dividends on its shares out of either profit or share premium amounts, provided that in no\ncircumstance may a dividend be paid if such payment would result in the Company being unable to pay its debts as they become due in the\nordinary course of business. If we decide to pay dividends in the future, as a holding company, we will depend on receiving dividends\nfrom our PRC subsidiaries.\n\n \n\n4\n\n \n\n \n\n \n5.\n\nAs a holding company, we may rely on dividends\nand other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements. The ability of our PRC subsidiaries\nto distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC operating subsidiaries to pay\ndividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting\nstandards and regulations. Should our PRC subsidiaries incur debt on their own in the future, the instruments governing that debt may\nrestrict the ability to pay dividends or make other payments. To the extent our cash in the business is in the PRC/Hong Kong or PRC/Hong\nKong subsidiaries, the funds or assets may not be available to fund operations distribute dividends to our investors, or for other use\noutside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of us, our subsidiaries\nby the PRC government to transfer cash or assets. Any limitation on the ability of our PRC subsidiaries to distribute dividends to us\nmay restrict our ability to satisfy our liquidity requirements.\n\n \n\nIn addition, each of our PRC subsidiaries, as\na Foreign Invested Enterprise, or FIE, are required to set aside at least 10% of its after-tax profits each year, if any, to fund a common\nreserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50%\nof its registered capital. These reserves are not distributable as cash dividends. For more details regarding our cash flows, see “*Regulations\nRelating to Foreign Exchange and Dividend Distribution”*beginning on page 68 and our consolidated financial statements beginning\non page F-1 of this Annual Report for more information**.**\n\n \n\nThe PRC government may continue to strengthen\nits capital controls which would subject dividends distribution from our PRC subsidiaries to the Company to heightened scrutiny. The PRC\ngovernment imposes controls on the convertibility of Renminbi (“RMB” or “Renminbi,” the official currency of the\nPRC) into foreign currencies and, in certain cases, the remittance of currency out of China. The PRC government also imposes control on\nthe conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Under existing PRC foreign exchange regulations,\npayments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions,\ncan be made in foreign currencies without prior approval from the State Administration of Foreign Exchange (“SAFE”) in the\nPRC, as long as certain procedural requirements are met. Approval from appropriate government authorities is required if RMB is converted\ninto foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.\n\n \n\nThe PRC government may, at its discretion, impose\nrestrictions on access to foreign currencies for current account transactions and, if this occurs in the future, we may not be able to\npay dividends in foreign currencies (i.e., U.S. dollars) to our shareholders and we may experience difficulties in completing the administrative\nprocedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Therefore, we may experience\ndifficulties in completing the processes necessary to obtain and remit foreign currency for the payment of any dividends.\n\n \n\nFor more details, see “*Risk Factors—Risks\nRelated to Doing Business in China –We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements\nwe may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect\non our ability to conduct our business”*on page 23*.*\n\n \n\nIn addition, the Enterprise Income Tax Law and\nits implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies\nto non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and the governments of\nother countries or regions where the non-PRC resident enterprises are tax resident. Pursuant to the tax agreement between Mainland China\nand the Hong Kong Special Administrative Region, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to\na Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant tax authorities determine that our transactions\nor arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable\nwithholding tax in the future. Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received\nby our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our\nPRC subsidiaries.\n\n \n\n5\n\n \n\n \n\nPRC Government Permissions\nand Approvals\n\n \n\nWe relied\non the opinion of our PRC counsel, Beijing Dacheng Law Offices LLP (Haikou) in concluding that we and our PRC subsidiaries have\nobtained all necessary licenses and approvals required for our operations in China, including business licenses and VAT licenses for internet\ndata center services, internet access services, domestic internet protocol virtual private network services, content delivery network\nservices and information services. To date, we have not been denied any such licenses and permits.\n\n \n\nHowever, we cannot assure\nyou that we will always be able to successfully obtain, update or renew all the licenses or permits required for our business in a timely\nmanner or that these licenses or permits are sufficient to conduct all of our present or future business operations.\n\n \n\nWe\nare aware that the Chinese authorities recently initiated a series of regulatory actions and statements to regulate business operations\nin China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over\nChina-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity\nreviews, and expanding the efforts in anti-monopoly enforcement.\n\n \n\nWe\nare also subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that we inadvertently\nconclude that the permission or approvals discussed here are not required, that applicable laws, regulations or interpretations change\nsuch that we are required to obtain approvals in the future, or that the PRC government could disallow our holding company structure,\nwhich would likely result in a material change in our operations, including our ability to continue our existing holding company structure,\ncarry on our current business, accept foreign investments, and continue to offer securities to our investors. These adverse actions could\ncause the value of our shares of common stock to significantly decline or become worthless.\n\n \n\nIf we (i) do not receive\nor maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii)\napplicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, we\ncould be subject to fines, legal sanctions or an order to suspend or business operations, which may materially and adversely affect our\nbusiness, financial condition and results of operations.\n\n \n\nOn February 17, 2023,\nthe China Securities Regulatory Commission (the “CSRC”) promulgated the Trial Administrative Measures of the Overseas Securities\nOffering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”) and relevant five guidelines, which became\neffective on March 31, 2023. According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer securities or\nlist in overseas markets, either directly or indirectly, are required to fulfill the filing procedure with the CSRC. At a press conference\nheld for these new regulations, officials from the CSRC clarified that the domestic companies that have already been listed overseas before\nthe effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as existing issuers, or the Existing Issuers.\nExisting Issuers are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC when\nsubsequent matters such as refinancing are involved.\n\n \n\nAs an Existing Issuer\nunder the Overseas Listing Trial Measures, we were not required to complete the filing procedures with the CSRC for a securities offering\nconducted before March 31, 2023, but would be required to complete the filing procedures with the CSRC in connection with a new securities\noffering. Given that the Overseas Listing Trial Measures were recently promulgated, however, there remain substantial uncertainties as\nto their interpretation, application, and enforcement. We cannot guarantee that new rules or regulations promulgated in the future will\nnot impose any additional requirement on us or otherwise tighten the PRC domestic regulations on companies indirectly listed overseas.\n\n \n\nWe\nmay be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the CSRC, if we fail to comply with such rules\nand regulations, which would likely adversely affect the ability of our securities to be listed on the U.S. exchange, which would likely\ncause the value of our securities to significantly decline or become worthless. To the extent that we are subject to any CSRC approval,\nfiling, other governmental authorization or requirements, whether in connection with future securities offerings or otherwise, we cannot\nassure you that we could obtain such approval, complete such filing, or meet other requirements in a timely manner or at all. If we fail\nto obtain such approval if and when needed or complete such filings or meet other requirements in a timely manner, the Chinese regulatory\nauthorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our\noperations in China, delay or restrict the repatriation of the proceeds from securities offerings into China, force a delisting of our\nordinary shares, or take other actions that could have a material adverse effect on our business, financial condition, results of operations\nand prospects, as well as the trading price of our securities.\n\n \n\n6\n\n \n\n \n\nThe Cybersecurity Review\nMeasures provide that an online platform operator, which possesses personal information of at least one million users, must apply for\na cybersecurity review by the CAC if it intends to be listed in foreign countries. Because we currently do not possess more than one million\nusers’ personal information, we do not believe that we are or will be subject to the cybersecurity review by the CAC. In addition,\nto date, we have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor have we\nreceived any inquiry, notice, or sanction related to cybersecurity review under the Cybersecurity Review Measures.\n\n \n\n**A. [Reserved]**\n\n \n\n**B. Capitalization and Indebtedness**\n\n \n\nNot applicable.\n\n \n\n**C. Reasons for the Offer and Use of Proceeds**\n\n \n\nNot applicable.\n\n \n\n**D. Risk Factors**\n\n \n\n*An investment in our Common Stock involves\na high degree of risk. You should carefully consider the risks described below, together with all of the other information included in\nthis annual report, before making an investment decision.*\n\n* *\n\n*In addition to the other information included\nin this annual report, including the matters addressed in the section of the annual report entitled “Cautionary Note Regarding Forward-Looking\nStatements” and in our financial statements and the related notes, you should consider carefully the risks described below. The\nrisks and uncertainties described below are not the only risks and uncertainties we may face. Additional risks and uncertainties not presently\nknown to us, or that we currently consider immaterial could also negatively affect our business, financial condition, results of operations,\nprospects, profits and stock prices. If any of the risks described below actually occur, our business, financial condition, results of\noperations, prospects, profits and stock prices could be materially adversely affected.*\n\n* *\n\n*If we encounter any of the risks described\nabove or if we are otherwise unable to establish or successfully operate online shops or additional production capacity, we may be unable\nto grow our business and revenues, reduce our operating costs, maintain our competitiveness or improve our profitability and, consequently,\nour business, financial condition, results of operations and prospects will be adversely affected.*\n\n \n\n**Summary of Risk Factors**\n\n \n\nBelow please find a summary\nof the principal risks we face related to our corporate structure and operation and doing business in China.\n\n \n\nRisks Related to Our\nCorporate Structure:\n\n \n\n \n●\nWe previously carried out\nour business operations through the VIE contractual arrangements. If the PRC government determines that these contractual arrangements\ndid not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing\nregulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.  *See\n“Risks Related to our Corporate Structure - We previously carried out our business operations through the VIE contractual arrangements.\nIf the PRC government determines that these contractual arrangements did not comply with PRC regulations relating to the relevant\nindustries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe\npenalties or be forced to relinquish our interests in those operations” on page 22 for more information.*\n\n \n \n \n\n \n●\nOur current corporate structure\nand business operations may be affected by the Foreign Investment Law.  *See - “Risks Related to our Corporate\nStructure – Our current corporate structure and business operations may be affected by the Foreign Investment Law*”\non page 22 for more information.\n\n \n \n \n\n \n●\nWe may rely on dividends\nand other distributions of equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have. Any limitation\non the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct\nour business. To the extent funds or assets in the business are in the PRC or are held by a PRC entity, the funds or assets may not\nbe available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and\nlimitations on the ability of our company or the operating entities by the PRC government to transfer cash or assets outside the\nPRC. See *“Risks Related to our Corporate Structure – We may rely on dividends paid by our PRC subsidiaries to fund\nany cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us\ncould have a material and adverse effect on our ability to conduct our business*” on page 23 for more information.\n\n \n \n \n\n \n●\nHolders of our securities\nmay face difficulties in protecting their interests because we are incorporated under the Republic of the Marshall Islands law.  *See\n**“**Risks Related to our Corporate Structure – Holders of our securities may face difficulties in protecting their\ninterests because we are incorporated under the Republic of the Marshall Islands law”* on page 23 for more information.\n\n \n\n7\n\n \n\n \n\nRisks Relating to Doing Business in China:\n\n \n\n●Changes\nin China’s economic, political or social conditions or government policies could have a material adverse effect on our business\nand operations. *See “Risks Related to Doing Business in China - Changes in China’s economic, political or social conditions\nor government policies could have a material adverse effect on our business and operations”*on page 24 for more information**.**\n\n \n\n \n●\nChanges in international\ntrade policies, trade disputes, barriers to trade, the emergence of a trade war and/or other disruptions to international commerce\ncould harm the global economy and may dampen growth in China, our principal place of business. A severe or prolonged downturn in\nthe Chinese or global economy could materially and adversely affect our business and financial condition**.**See *“Risks\nRelated to Doing Business in China - Changes in international trade policies, trade disputes, barriers to trade, the emergence of\na trade war and/or other disruptions to international commerce could harm the global economy, may dampen growth in China, our principal\nplace of business, and could adversely affect our business operations through our PRC subsidiaries, customers, suppliers, and other\nbusiness partners”*on page 24 for more information.\n\n \n \n \n\n \n●\nOur financial performance\ncould be materially and adversely affected by rising costs associated with inflation and the imposition of U.S. tariffs on imports\nfrom China. *See “Risks Related to Doing Business in China - Our financial performance could be materially and adversely\naffected by rising costs associated with inflation and the imposition of U.S. tariffs on imports from China”*on page 25\nfor more information*.*\n\n \n \n \n\n \n●\nThe Chinese government\nmay exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations\nat any time, which could result in a material change in our operations and/or the value of our securities, could significantly limit\nor completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly\ndecline or be worthless. *See “Risks Related to Doing Business in China - The Chinese government may exercise significant\noversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could\nresult in a material change in our operations and/or the value of our securities, could significantly limit or completely hinder\nour ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline\nor be worthless”*on page 25 for more information.\n\n \n\n \n●\nRecent statements by the\nChinese government have indicated its intent to exert more oversight and control over offerings that are conducted overseas and/or\nforeign investments in China-based issuers, which could significantly limit or completely hinder our ability to offer or continue\nto offer securities to investors and cause the value of our securities to significantly decline or be worthless. See “*Risks\nRelated to Doing Business in China - Recent statements by the Chinese government have indicated its intent to exert more oversight\nand control over offerings that are conducted overseas and/or foreign investments in China-based issuers, which could significantly\nlimit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities\nto significantly decline or be worthless*” on page 26 for more information\n\n \n \n \n\n \n●\nRisks related to a future\ndetermination that the PCAOB is unable to inspect or investigate our auditor completely could result in a material adverse change\nin our operations and the value of our Common Stock. *See “Risks related to a future determination that the PCAOB is unable\nto inspect or investigate our auditor completely could result in a material adverse change in our operations and the value of our\nCommon Stock**”***on page 28 for more information.\n\n \n \n \n\n \n●\nUncertainties with respect\nto the PRC legal system, including that the rules and regulations in China can change quickly with little advance notice, and the\ninterpretation and enforcement of PRC laws and regulations, could limit the legal protections available to you and us. Se*e “Risks\nRelated to Doing Business in China - Uncertainties with respect to the PRC legal system, including that the rules and regulations\nin China can change quickly with little advance notice, and the interpretation and enforcement of PRC laws and regulations, could\nlimit the legal protections available to you and us”*on page 26 for more information*.*\n\n* *\n\n \n●\nWe face challenges from\nthe evolving PRC regulatory environment regarding cybersecurity, information security, privacy and data protection, and user attitude\ntoward data privacy and protection. Any actual or alleged failure to comply with these and related laws and regulations regarding\ncybersecurity, information security, data privacy, and protection could materially and adversely affect our business and results\nof operations. *See “Risks Related to Doing Business in China - We face challenges from the evolving PRC regulatory environment\nregarding cybersecurity, information security, privacy and data protection, and user attitude toward data privacy and protection.\nAny actual or alleged failure to comply with these and related laws and regulations regarding cybersecurity, information security,\ndata privacy, and protection could materially and adversely affect our business and results of operations”* on page 27\nfor more information.\n\n \n \n \n\n \n●\nPRC regulation of loans\nto and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay\nus from using the proceeds of future securities offerings to make loans or additional capital contributions to our PRC subsidiaries,\nwhich could materially and adversely affect our liquidity and our ability to fund and expand our business. *See “Risks Related\nto Doing Business in China - PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental\ncontrol of currency conversion may delay us from using the proceeds of future securities offerings to make loans or additional capital\ncontributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand\nour business”* on page 30 for more information.\n\n \n \n \n\n \n●\nFluctuations in exchange\nrates could have a material and adverse effect on our results of operations and the value of your investment. *See “Risks\nRelated to Doing Business in China - Fluctuations in exchange rates could have a material and adverse effect on our results of operations\nand the value of your investment”* on page 30 for more information.\n\n \n\n8\n\n \n\n \n\n \n●\nGovernmental control of\ncurrency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment. *See “Risks\nRelated to Doing Business in China - Governmental control of currency conversion may limit our ability to utilize our revenues effectively\nand affect the value of your investment”* on page 31 for more information.\n\n \n \n \n\n \n●\nCertain PRC regulations\nmay make it more difficult for us to pursue growth through acquisitions**.***See “Risks Related to Doing Business in\nChina - Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions”* on page 31 for\nmore information.\n\n \n\n \n●\nIncreases in labor costs\nand enforcement of stricter labor laws and regulations in China and our additional payments of statutory employee benefits may adversely\naffect our business and profitability. Non-compliance with labor-related laws and regulations of the PRC may have an adverse impact\non our financial condition and results of operation. *See “Risks Related to Doing Business in China - Increases in labor\ncosts and enforcement of stricter labor laws and regulations in China and our additional payments of statutory employee benefits\nmay adversely affect our business and profitability. Non-compliance with labor-related laws and regulations of the PRC may have an\nadverse impact on our financial condition and results of operation”* on page 33 for more information.\n\n \n \n \n\n \n●\nFailure to make adequate\ncontributions to various employee benefit plans and withhold individual income tax on employees’ salaries as required by PRC\nregulations may subject us to penalties. *See “Risks Related to Doing Business in China - Failure to make adequate contributions\nto various employee benefit plans and withhold individual income tax on employees’ salaries as required by PRC regulations\nmay subject us to penalties”* on page 33 for more information.\n\n \n \n \n\n \n●\nAny failure to comply with\nPRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants\nor us to fines and other legal or administrative sanctions. *See “Risks Related to Doing Business in China - Any failure\nto comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan\nparticipants or us to fines and other legal or administrative sanctions”* on page 33 for more information.\n\n \n \n \n\n \n●\nIf we are classified as\na PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and\nour non-PRC shareholders. *See “Risks Related to Doing Business in China - If we are classified as a PRC resident enterprise\nfor PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders”*on page 34 for more information.\n\n \n \n \n\n \n●\nWe face uncertainty with\nrespect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. *See “Risks\nRelated to Doing Business in China - We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises\nby their non-PRC holding companies”* on page 35 for more information.\n\n \n \n \n\n \n●\nYou may experience difficulties\nin effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management. U.S.\nregulatory bodies also may be limited in their ability to conduct investigations or inspections of our operations in China. *See\n“Risks Related to Doing Business in China - You may experience difficulties in effecting service of legal process, enforcing\nforeign judgments or bringing actions in China against us or our management. U.S. regulatory bodies also may be limited in their\nability to conduct investigations or inspections of our operations in China”* on page 35 for more information.\n\n \n \n \n\n \n●\nWe may be exposed to liabilities\nunder the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could\nhave a material adverse effect on our business*. See “Risks Related to Doing Business in China -We may be exposed to liabilities\nunder the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could\nhave a material adverse effect on our business”* on page 36 for more information.\n\n \n \n \n\n \n●\nIf we become directly subject\nto the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant\nresources to investigate and resolve the matter which could harm our business operations, stock price and reputation, and could result\nin a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably. *See “Risks\nRelated to Doing Business in China - If we become directly subject to the recent scrutiny, criticism and negative publicity involving\nU.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm\nour business operations, stock price and reputation, and could result in a loss of your investment in our stock, especially if such\nmatter cannot be addressed and resolved favorably”* on page 36 for more information.\n\n \n \n \n\n \n●\nThe disclosures in our\nreports and other filings with the SEC and our other public pronouncements will not be subject to the scrutiny of any regulatory\nbodies in the PRC. Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency that is\nin China where all of our operations and business are located have conducted any due diligence on our operations or reviewed or cleared\nany of our disclosure. *See “Risks Related to Doing Business in China -The disclosures in our reports and other filings with\nthe SEC and our other public pronouncements will not be subject to the scrutiny of any regulatory bodies in the PRC. Accordingly,\nour public disclosure should be reviewed in light of the fact that no governmental agency that is in China where all of our operations\nand business are located have conducted any due diligence on our operations or reviewed or cleared any of our disclosure”*\non page 36 for more information.\n\n* *\n\n9\n\n \n\n* *\n\n**RISKS RELATED TO OUR BUSINESS**\n\n** **\n\n**Risks Related to\nour Cross-Border Merchandise and Tourism Industries**\n\n** **\n\n**Our industry is\nhighly competitive and we may not be able to compete successfully against current and future competitors. If we are unable to compete\neffectively, we may lose customers and our financial results may be negatively affected.**\n\n \n\nWe face intense competition in the cross-border merchandise\nand tourism industries in China. We expect greater competition in the future from existing players and new market entrants. Some\nof our current and future competitors may have greater brand recognition and financial and other resources than we do, which may make\nit more difficult for us to maintain or gain market share.\n\n \n\nIf we are not able to effectively compete against\ncurrent or future competitors, our business, financial condition and results of operations could suffer. Increased competition may result\nin higher pricing pressure, reducing our ability to charge competitive prices for our products and services and decreased market share,\nany of which could materially and negatively affect our business, financial condition and results of operation.\n\n** **\n\n**If we fail to effectively\nmanage our growth, our business, financial condition and operating results could be harmed.**\n\n \n\nAs we continue to expand\nour cross-border merchandise and tourism business, our continued growth could strain our existing resources, and we could experience ongoing\nchallenges, including:\n\n \n\n \n●\nmanaging our operational, administrative and financial capabilities and other resources;\n\n \n \n \n\n \n●\nmanaging our brand portfolio, including further expanding our products and services;\n\n \n\n \n●\nexpanding marketing channels and deepening end customer outreaches;\n\n \n\n \n●\nstaying abreast of the evolving industry demands and market developments and catering to end users’ changing tastes of our business customers;\n\n \n\n \n●\ndeveloping and applying technologies necessary to support our expanded operations;\n\n \n\n \n●\neffectively managing our supply chain;\n\n \n\n \n●\nresponding to changes in the regulatory environment;\n\n \n\n \n●\nexploring new market opportunities; and\n\n \n\n \n●\naddressing other challenges resulting from our expansion.\n\n \n\nAll efforts to address\nthe potential challenges on our way to expansion require significant managerial, financial and human resources. We cannot assure you that\nwe will be able to effectively or timely address operating difficulties and challenges to keep up with our growth. If we are unable to\nsuccessfully address these difficulties, risks and uncertainties, our business, financial conditions and results of operations could be\nmaterially and adversely affected.\n\n** **\n\n10\n\n \n\n** **\n\n**Our business depends\non the continued success of our growing brand portfolio and if we fail to maintain and expand our brand portfolio or maintain and enhance\nour brand recognition, our business, results of operations and prospects may be harmed.**\n\n \n\nWe mainly depend on our\nbrand portfolio to scale our business, attract and retain our business customers. Our Luxventure portfolio, which covers cross border\nmerchandise and tourism products, seamlessly connected various brands from our suppliers. Although we have devoted significant resources\nto and incurred large amount of expenses on sourcing, maintaining, promoting and expanding our brands, we cannot assure you that these\nefforts will be successful. In addition, maintaining and enhancing the recognition of our brands are also key to our success, which could\nbe affected by various factors, including the effectiveness of our brand marketing strategy, publicity about our business, quality of\nproducts offered under the brands as well as preference of consumers, certain of which are beyond our control. Any failure to maintain\nand expand our brand portfolio or maintain and enhance our brand recognition could have a material and adverse effect on our business,\nresults of operations and prospects. \n\n \n\n**Negative publicity\nabout our brands, our business model or our products may materially and adversely affect our reputation, our business and the trading\nprice of our shares, regardless of its accuracy. We may also be adversely affected by negative publicity concerning us and our business,\nshareholders, affiliates, directors, officers, employees, agents, other business partners and the industry in which we operate, regardless\nof its accuracy.**\n\n \n\nRegardless of its accuracy,\nnegative publicity about our business model or our products may arise and appear on the internet and other media from time to time, and\nnegative publicity of more serious natures may arise in the future.\n\n \n\nIn addition, our business\nmodel may be alleged to be involved in misconduct, improper activities, rumors, scandals or illegal activities from time to time related\nto a variety of matters, such as misleading advertising practice. These allegations, even if factually incorrect or based on isolated\nevents, would result in negative publicity of our business, and may further have an adverse effect on our brand and reputation.\n\n \n\nOur brands and brands\nof our suppliers may also be subject to negative publicity for various reasons, such as complaints about the quality of the products,\ncustomer services or other public relation incidents of us, which may adversely affect our reputation, brand loyalty and consequently\naffect the operation of our business. Any such negative publicity, regardless of its veracity, could result in the expenditure of funds\nand management time and may have a material and adverse effect on our reputation, our business and the trading price of our shares.\n\n \n\nMoreover, negative publicity\nconcerning us and our business, shareholders, affiliates, directors, officers, employees, agents, other business partners and the industry\nin which we operate can harm our brand and reputation, regardless of its accuracy. Negative publicity concerning these parties could be\nrelated to a wide variety of matters, including, but are not limited to:\n\n \n\n \n●\nalleged misconduct or other improper activities committed by our directors, officers, employees, agents and other business partners;\n\n \n\n \n●\nfalse or malicious allegations or rumors about us or our directors, shareholders, affiliates, officers, employees and other business partners;\n\n \n\n \n●\ncomplaints from our business customers about our products and services;\n\n \n\n \n●\nemployment-related claims relating to employment discrimination, working hours violation, tax, wage or pension matters;\n\n \n\n \n●\ngovernmental and regulatory investigations, penalties or claims resulting from misconduct of our business partners,\n\n \n\n \n●\nor our failure to comply with applicable laws and regulations;\n\n \n\n \n●\nnegative publicity and claims asserted against our brand partners, especially any product quality issues of our\n\n \n\n \n●\nbrand partners’ products; and\n\n \n\n \n●\nnegative publicity of the industry in which we operate, including, but not limited to, bankruptcy and cessation of business operations of any of our major competitors.\n\n** **\n\n11\n\n \n\n** **\n\n**If we fail to anticipate\nand respond to changing business customer preferences and shifts in market trends in a timely manner, our business and operating results\ncould be harmed.**\n\n \n\nOur success largely depends\non our ability to consistently gauge business customers’ tastes and market trends, provide a balanced assortment of merchandise\nand source brands that satisfies business customer demands in a timely manner. Our failure to anticipate, identify or react appropriately\nand timely to changes in business customer preferences, tastes and market trends or economic conditions could lead to, among other things,\nmissed opportunities, excess inventory or inventory shortages, markdowns and write-offs, all of which could negatively impact our profitability.\nIn addition, failure to respond to changing business customer preferences and trends in brand could negatively impact our brand image\nwith our business customers and result in diminished brand loyalty, and thus harm the prospects of our business.\n\n  \n\n**We had a concentration of major customers\nduring the year ended December 31, 2025 and if our existing major customers cease to engage our services, we may be unable to find new\ncustomers with similar attributable revenue within a reasonable time or at all.**\n\n** **\n\nThe percentage of our\nrevenue attributable to our largest customer, Hefei Liantuo Tianji E-commence Corporation Ltd., an online airline tickets agency company,\namounted to $16,111,304, or 19.7%, for the year ended December 31, 2025,$21,003,414, or 42%, for the year ended December 31, 2024 and\n$23,621,588, or 74%, for the year ended December 31, 2023. We depend on this customer and several other major customers, including three\nmajor customers, for each of which our revenue amounted to more than 20% in the fiscal year ended December 31, 2025. Because of the competitive\nnature of our business operations, the contractual arrangements with these major customers are based on short-term projects which may\nbe terminated at will by each party. If our existing major customers cease to engage our services, we may be unable to find new customers\nwith similar attributable revenue within a reasonable time or at all.\n\n \n\n**Our product supply\nchain is essential to our business and is subject to risks associated with demand forecasting, timely supplying and warehousing, as well\nas maintaining relationships with our suppliers.**\n\n \n\nWe largely depend on\nour supply chain management capabilities to minimize our inventory risks, maintain our short turnaround time and improve our operational\nefficiency. However, our demand forecast may not be accurate, which could result in inventory write-offs or inventory shortages. Even\nif we can make accurate demand forecasts, our product supply chain may not be able to meet our demand on a timely basis due to unexpected\nreasons. In addition, warehouses that we operate may not have sufficient capacity to process orders efficiently.\n\n \n\nOur product supply chain\nis also largely dependent on our relationship with our product suppliers. We cannot assure you that our current product suppliers will\ncontinue to sell products or provide services to us on commercially acceptable terms, or at all, after the current term of the agreement\nexpires. If our suppliers cease to transact with us on favorable payment terms or deliver production in a timely manner as agreed under\nthe contract terms, our operations may be materially and adversely affected.\n\n \n\nAlthough we believe our\nsupply chain has the capacity to support our current operation, we cannot guarantee our supply chain will be adequate to support our expanded\nbusiness in the future. Thus, if we fail to manage our supply chain in line with our business expansion, our business, prospects, financial\ncondition and results of operations may suffer. \n\n \n\n**If we fail to develop,\nupgrade and apply our technologies to support and expand our business, our business may be materially and adversely affected.**\n\n \n\nWe rely on our technology\ninfrastructure and operating systems to carry out the key aspects of our business, including identifying market trends in brands, selecting\nand partnering with quality brand partners, forecasting business customers’ demands, supporting our product supply chain, enabling\neffective marketing and distribution, and refining business customer services. Although we did not experience any material failure or\nbreakdown of our operating systems in the past, we cannot guarantee that such risks are always under control. In addition, computer viruses,\nsecurity breaches and information theft may lead to delays or errors in transaction processing, inability to fulfill purchase orders or\nloss of data. Any interruptions of our operating platform, whether caused by computer viruses, hacking or other security breaches, and\nerrors encountered during platform upgrades or other issues resulting in unavailability, or slowdown of our information technologies\nmay, individually or collectively, materially and adversely affect our business and results of operations.\n\n \n\n**Cross-border merchandise\nand tourism business are subject to rapid technological changes and innovations. Our technologies may become obsolete or insufficient.**\n\n** **\n\nThe nature of our business\nis subject to rapid technological changes, and we may have difficulties in following and adapting to technological changes in the industry\nin a timely and cost-effective manner, which could impact every key aspect of our business. New technologies developed and introduced\nby our competitors could render our products and services less attractive or obsolete, thus materially affecting our business and prospects.\nIn addition, our substantial investments in technology may not produce expected results. If we fail to continue to develop, innovate and\nutilize our technologies or if our competitors develop or apply more advanced technologies, our business, financial condition and results\nof operations could be materially and adversely affected.\n\n \n\n12\n\n \n\n \n\n**We conduct our\nbusiness through online third party platforms operated by our business customers. The material disruption of those platforms or any adverse\nchanges on our cooperation with them could harm our business and operation.**\n\n \n\nWe use third party platforms\noperated by our business customers to promote and sell our products. Our growth is subject to aforesaid third party platforms’ traffic\ngrowth, account using terms and conditions and regulations, among other factors. If these platforms’ traffic fails to grow in the\nfuture, our growth may slow down as well. If we breach the using terms of such platforms, the platform operators may decide at any time\nto curtail or inhibit our ability to use such platforms. Meanwhile, these platforms may increase their fees or make changes to their respective\nbusiness models, using terms, policies or systems, and those changes could impair or restrict our ability sell products. In addition,\nthese platforms may be interrupted by regulatory restrictions, cease operations unexpectedly due to a number of events, or even shut down\ndue to their operating problems. Any of the above factors could affect our ability to maintain profitability or have a material adverse\neffect on our business, financial condition or results of operations.\n\n \n\n**Order cancelation\nas well as merchandise return and exchange policies may adversely affect our business and the results of operations.**\n\n \n\nWe allow our business\ncustomers to cancel orders within a fixed amount of time after the payment and to return products, subject to our return policy. Our order\ncancelation rate and product return rate may fluctuate or even increase in the future due to various factors, many of which are beyond\nour control. In addition, as we diversify our marketing efforts and expand to more sales channels, our order cancelation rate and product\nreturn rate may further increase. Moreover, our products might be damaged during transit from time to time, especially during international\ntransportation, which increases the return rate and harms our brands as well. If the rate of order cancelation or product returns increases\nsignificantly, our inventory turnovers and cash flow could be adversely affected, and thus harm our financial condition and operating\nresults.\n\n \n\nMoreover, we may be required\nby law to adopt new or amend existing return and exchange policies from time to time. In addition to regulatory requirements, we may also\nmodify our return policies from time to time, which may result in customers’ dissatisfaction or an increase in order cancelation\nor product returns rates.\n\n \n\n**We rely on third-party\nproduct suppliers, manufacturers, logistics service providers and other vendors to serve our business customers. If they fail to provide\nproducts or services that are consistent with our standards or applicable regulatory requirements, we may have to find alternative vendors,\nand our reputation and operation could suffer.**\n\n \n\nWe do not own or operate\nany manufacturing facilities. Instead, we rely on third-party manufacturers and third-party product suppliers to supply all of the products\noffered on third party platform operated by our business customers. We enter into framework procurement contracts with different third-party\nproduct suppliers and manufacturers. The capacities of our third-party product suppliers and manufacturers are subject to orders placed\nby their other clients, which may include our competitors. If our demands increase significantly, or our existing suppliers run out of\ntheir capacity, we may not be able to find additional or alternative suppliers in a timely manner. We also cannot guarantee that we will\nhave superior bargaining power over third-party product suppliers and manufacturers for our newly launched products. In addition, quality\ncontrol issues, such as the use of unqualified materials, may exist in certain third-party product suppliers and could cause consumer\ndissatisfaction and as a result, harm our business.\n\n \n\nWe rely on third-party\nlogistics service providers to deliver products to our customers. Any delay, damages, loss and inappropriate actions taken by logistics\nservice providers might cause customer complaints. Although we may claim compensation from third-party logistics service providers in\nsome cases, our business, financial condition and results of operations could suffer as well.\n\n \n\n13\n\n \n\n \n\n**We procure inventory\nbased on our forecast on business customer demands, and if we are unable to manage our inventory effectively, our operating results could\nbe adversely affected.**\n\n \n\nOur scale and business\nmodel requires us to manage a large volume of inventory effectively. Our forecast on demands may significantly differ from actual demands.\nDemands may be affected by seasonality, new product launches, rapid changes in product cycles and pricing, product defects, promotions,\nchanges in business consumer spending patterns, changes in business consumer tastes with respect to our products and other factors, and\nour business consumers may not purchase products in the quantities that we expect. We may not be able to return unsold products to our\nsuppliers unless the products are defective or otherwise agreed with our suppliers.\n\n \n\nOn the other hand, if\nwe underestimate demand and thus run short of inventory, our growth may be adversely affected due to lower sales volume and unsatisfied\nshopping experiences.\n\n \n\nFurthermore, if we fail\nto negotiate favorable credit terms with third-party suppliers and manufacturers, we may be subject to a heightened risk of inventory\nobsolescence, a decline in inventory values, and significant inventory write- downs or write-offs. In case that we are required to lower\nsale prices in order to reduce inventory level or to pay higher prices to our suppliers, our profit margins might be negatively affected.\nAny of the above may materially and adversely affect our business, financial condition and operating results.\n\n \n\n**If we fail to obtain requisite approvals or licenses or fail\nto comply with other regulatory requirements applicable to our operations, we may be subject to administrative penalties and our business\nand operating results could be adversely affected.**\n\n \n\nOur business is subject\nto general business regulations governing cross-border and tourism industries. We are also subject to supervision and regulation\nby the State Administration for Market Regulation of the PRC and other relevant PRC government authorities and/or their relevant local\ncounterparts. While we currently hold all licenses and permits required for our operations, we may be required to renew these licenses\nand permits upon their expiration or obtain new licenses or permits in the future as a result of our business expansion, changes of our\noperations, changes in laws and regulations applicable to us, or changes of interpretation from relevant authorities on such laws and\nregulations. \n\n \n\nAfter consulting our PRC legal counsel, Beijing\nDacheng Law Offices LLP (Haikou), we believe we and our PRC subsidiaries have obtained all necessary licenses and approvals required for\nour operations in China, including business licenses and VAT licenses for internet data center services, internet access services, domestic\ninternet protocol virtual private network services, content delivery network services and information services.\n\n \n\nHowever, any failure,\nor perceived failure, by us to comply with any of these requirements could result in damage to our reputation, a loss in business, and\nproceedings or actions against us which could be costly and disrupt our overall operations. We may also be contractually liable to indemnify\nand hold harmless third parties from the costs or consequences of noncompliance with any such laws or regulations. Any of these events\nmay have a material and adverse effect on our business, financial condition and results of operations.\n\n   \n\n**Our results of\noperations may fluctuate due to the seasonality of our business and other events, which could cause our stock price to decline.**\n\n \n\nWe have experienced,\nand expect to continuously experience, seasonal fluctuations in our results of operations, due to seasonal changes in sales volume, as\nwell as seasonality in our advertising services.** **In addition, the business hours of our logistics and fulfillment service\nwill be impacted by the holidays. Moreover, our results of operations may fluctuate due to changes in production cycle and launch of new\nstyles or events.\n\n \n\n**Our product suppliers,\nmanufacturers, independent contractors or commercial partners may engage in misconduct or other improper activities, including unfair\ncompetition and noncompliance with laws and regulations, which may adversely affect our business and results of operations.**\n\n \n\nWe are exposed to the\nrisk that our product suppliers, manufacturers, independent contractors or commercial partners may engage in misconduct. Misconduct by\nthese parties could include intentional, reckless or negligent conduct or improper sales, marketing and business arrangements, in particular,\narrangements that may constitute unfair competition. It is not always possible for us to identify and deter misconduct by our product\nsuppliers, independent contractors or commercial partners, and the precautions we take to detect and prevent this activity may not be\neffective in controlling unknown, unmanaged risks and losses, or in protecting us from negative publicity, governmental investigations,\nactions or lawsuits stemming from such misconducts. No matter whether we can succeed in dealing with negative publicity or defending against\ninvestigations or actions, we could incur substantial costs and divert the attention of management, which could adversely affect our ability\nto operate our business and our results of operations.\n\n \n\n14\n\n \n\n \n\n**If we fail to adapt and respond effectively\nto rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences,\nour products and solutions may become less competitive.**\n\n \n\nWe believe that our technology\nsolution provides solutions for cross-border operations management and is innovative and reliable tool for businesses engaged in international\ncommerce. However, we face uncertainties over the size and rate at which this market will grow, as well as whether our solutions and products\nwill be widely adopted. Moreover, the technology solution industry is subject to rapid technological change, evolving industry standards,\nchanging regulations, as well as changing customer needs, requirements and preferences. The success of our business will depend, in part,\non our ability to adapt and respond effectively to these changes on a timely basis. If we are unable to develop new solutions and products\nthat satisfy our existing customers and provide enhancements and new features for our existing products that keep pace with rapid technological\nand industry change, our business, results of operations and financial condition could be adversely affected. If new technologies emerge\nthat are able to deliver competitive products and services at lower prices, more efficiently, more conveniently or more securely, such\ntechnologies could adversely impact our ability to compete effectively. \n\n \n\n**If we suffer failure or disruption in our\ninformation systems, our ability to effectively manage our business operations could be adversely affected.**\n\n \n\nWe use information systems\nto obtain, process, analyze and manage data crucial to our business. We use these systems to, among other things, monitor the daily operations\nof our business, maintain operating and financial data, manage our distribution network as well as manage our research and development\nactivities, production operations and quality control systems. Any system damage or failure that interrupts data input, retrieval or transmission\nor increases service time could disrupt our normal operations. In particular, our operations could be disrupted if such damage or failure\nincludes any security breach caused by hacking or cybersecurity incidents, involves efforts to gain unauthorized access to our information\nor systems, or causes intentional malfunctions, loss or corruption of data, software or hardware, the intentional or inadvertent transmission\nof computer viruses and similar events or third-party actions. We cannot assure you that we will be able to effectively handle a failure\nof our information systems, or that we will be able to restore our operational capacity in a timely manner to avoid disruption to\nour business. The occurrence of any of these events could adversely affect our ability to effectively manage our business operations and\nnegatively impact our reputation.\n\n \n\nData loss, security incidents\nand other attacks on our platform, products or solutions, or our global network infrastructure could lead to significant costs and disruptions\nthat could harm our business, financial results, and reputation.\n\n \n\nOur technology solution model is dependent on\nproviding our customers with secure, reliable and high-quality services. Maintaining the security and availability of our infrastructure,\nsystems, platform, network, and the security of information and data we hold is a critical issue for us and our customers. Attacks on\nour customers and our own network may be frequent and may happen in a variety of forms, including infrastructure attacks, botnets, malicious\nfile attacks, cross-site scripting, credential abuse, ransomware, viruses, worms, and malicious software programs. Malicious actors can\nattempt to fraudulently induce employees or suppliers to disclose sensitive information through spamming, phishing, or other tactics.\nIn addition, unauthorized parties may attempt to gain physical access to our facilities in order to infiltrate our information systems.\nSince our customers share our multi-tenant architecture, material attacks on any one of our customers could have a negative effect on\nother customers. These attacks may also significantly increase the bandwidth used on our platform and strain our network. If attacks like\nthese were to occur in the future and if we do not have the systems and processes in place to respond to them, our business could be harmed.\nIn addition to Company-owned systems, we also store confidential and proprietary information through cloud-based services hosted by third\nparties, over which we have limited control over security protocols. In recent years, cyber-attacks have increased in size, sophistication,\nand complexity, increasing exposure for our customers and us. We may become an attractive target for attacks on our infrastructure intended\nto destabilize, overwhelm, or shut down our platform. The costs incurred by us to avoid or alleviate cyber or other security problems\nand vulnerabilities will be significant. To address the increasing risks of cyber-attacks as outlined, we utilize advanced security features\nprovided by our cloud partners, including encryption, intrusion detection, and continuous monitoring, to safeguard sensitive information\nand prevent unauthorized access.\n\n \n\nOur cybersecurity team,\nsupervised by our management, enforces strict access controls, such as multi-factor authentication (MFA) and role-based permissions, while\nconducting regular vulnerability scans, penetration testing, and audits to identify and remediate potential weaknesses. We also established\ncomprehensive employee training programs which promote awareness of phishing and other threats, reducing human error risks, and we maintain\na well-defined incident response plan to swiftly contain, investigate, and resolve any security incidents, ensuring minimal disruption\nto our platform and services.\n\n  \n\n15\n\n \n\n \n\nHowever, our efforts\nto address these problems and vulnerabilities may not be sufficient and successful. Any significant breach of our security measures could:\n\n \n\n \n●\nlead to the dissemination of proprietary information or sensitive, personal, or confidential data about us, our employees, or our customers—including personally identifiable information of individuals involved with our customers and their end-users;\n\n \n\n \n●\nlead to interruptions or degradation of performance in our platform, products and solutions;\n\n \n\n \n●\nthreaten our ability to provide our customers with access to our platform, products and solutions, and negatively affect our abilities to retain existing customers;\n\n \n\n \n●\ngenerate negative publicity about us;\n\n \n\n \n●\nresult in litigation and increased legal liability or fines; or\n\n \n\n \n●\nlead to governmental inquiry or oversight.\n\n \n\nTo date, we have not experienced any material\nincidents related to the security of our products. However, strategic customers may require specific security controls, and we may incur\nadditional costs to comply with such customer-specific requirements.\n\n \n\nThe occurrence of any\nof these events could harm our business or damage our brand and reputation, lead to customer credits, loss of customers, higher expenses,\nand possibly impede our present and future success in retaining and attracting new customers. Security incidents or attacks on our infrastructure\nwould be damaging to our reputation and could harm our business.\n\n** **\n\n**Our use of licensed\nthird-party or open-source software could negatively affect our ability to provide consistent online experiences.**\n\n** **\n\nWe use software licensed\nfrom third parties. Any interruptions that result from the unavailability of the software licensed from third parties may affect the quality\nof our services. We may also encounter problems when software licensed from third parties is upgraded, and undetected programming errors\ncould adversely affect the performance of the software we use to provide our services.  We have implemented the following policies\nto regulate the use and incorporation of open-source software into our products and platform to help ensure that our use of open-source\nsoftware is compliant with the required standards, to minimize legal and operational risks:\n\n \n\n \n●\nOpen-Source Software Approval Process: All OSS intended for use in our products or platform must be reviewed and approved by a designated compliance team. This process includes evaluating the OSS license to ensure compatibility with our business model and existing obligations, documenting the software’s purpose, and verifying that it does not impose restrictive requirements, such as mandatory source code disclosure.\n\n \n\n \n●\nLicense Compliance Tracking: We maintain a centralized inventory of all OSS components used in our systems, including their versions, licenses, and associated obligations. Developers are required to log each OSS component in a software bill of materials (SBOM) and ensure that license terms, such as attribution notices or copyleft provisions, are adhered to in our codebase and distributions.\n\n \n\n \n●\nCode Review and Scanning Policy: All codes, including OSS, must undergo automated scanning using tools  to detect unlicensed or non-compliant OSS components before integration. Regular code reviews ensure that OSS is used in accordance with its license terms and that any modifications or derivative works comply with applicable requirements.\n\n \n\n \n●\nDeveloper Training and Guidelines: Employees and contractors receive mandatory training on OSS licensing and compliance. Clear guidelines prohibit the use of high-risk licenses  without explicit approval and outline procedures for incorporating OSS, such as including proper license notices in our products and ensuring no proprietary code is inadvertently mixed with copyleft-licensed OSS.\n\n \n\n \n●\nThird-Party Contribution Policy: Developers are prohibited from contributing to external OSS projects on behalf of the company without prior approval. Any contributions must align with our licensing policies, and we ensure that contributions do not inadvertently incorporate our proprietary code into OSS projects under incompatible licenses.\n\n \n\nHowever, we cannot be\ncertain that open-source software in our products or platform was incorporated in a manner inconsistent with such policies. If we or\nour employees fail to comply with open source licenses, we may be subject to certain requirements, including requirements that we offer\nour products that incorporate the open source software for no cost, that we make available source code for modifications or derivative\nworks we create based upon, incorporating or using the open source software and that we license such modifications or derivative works\nunder the terms of applicable open source licenses. If an author or other third party that distributes such open source software were\nto allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal\nexpenses defending against such allegations and could be subject to significant damages, enjoined from generating revenues from customers\nusing products that contained the open source software and required to comply with onerous conditions or restrictions on these products.\nIn addition, we use open-source software in the applications we have developed to operate our business and will use open source software\nin the future. We could be required to seek licenses from third parties in order to continue using the open source software we are permitted\nto use currently, in which case licenses may not be available on terms that are acceptable to us, or at all. Our inability to use third-party\nsoftware could result in disruptions to our business, or delays in the development of future offerings or difficulties in enhancing our\noperating platforms, which could materially and adversely affect our business and results of operations.\n\n \n\n16\n\n \n\n \n\nMoreover, we use third-party\ntechnology and systems in a variety of technical and operational aspects of our business, including encryption and authentication technology,\nemployee email, content delivery to customers, back-office support, among others. Similar security risks exist with respect to such third-parties.\nAs a result, we are subject to the risk that cyber-attacks on our business partners and third-party suppliers may adversely affect our\nbusiness even if an attack or breach does not directly impact our systems. It is also possible that security breaches sustained by our\ncompetitors could result in negative publicity for our entire industry that indirectly harms our reputation and diminishes demand for\nour platform.\n\n \n\n**Changes in laws\nand regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our products and\nsolutions, and could adversely affect our business, results of operations and financial condition.**\n\n \n\nThe future success of\nour business depends upon the continued use of the internet as a primary medium for commerce, communications and business applications.\nChinese or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting\nthe use of the internet as a commercial medium. Changes in these laws or regulations could require us to modify our products and platform\nin order to comply with these changes. In addition, government agencies or private organizations have imposed and may impose additional\ntaxes, fees or other charges for accessing the internet or commerce conducted via the internet. These laws or charges could limit the\ngrowth of internet-related commerce or communications generally, or result in reductions in the demand for internet-based products and\nservices such as our products and platform. In addition, the use of the internet as a business tool could be adversely affected due to\ndelays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability,\ncost, ease-of-use, accessibility and quality of service. The performance of the internet and its acceptance as a business tool has been\nadversely affected by “viruses,” “worms,” and similar malicious programs. If the use of the internet is reduced\nas a result of these or other issues, then demand for our products could decline, which could adversely affect our business, results of\noperations and financial condition.\n\n** **\n\nMoreover, our business depends on the performance,\nreliability and security of the telecommunications and internet infrastructure in China and other countries in which we operate or locate\nour assets. Substantially all access to the internet in China is maintained through certain telecommunication operators under the administrative\ncontrol and regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT. In addition, the national networks\nin China are connected to the internet through qualified international gateways, which are the only channels through which a domestic\nuser can connect to the internet outside of China. We may face similar or other limitations in other countries in which we operate or\nlocate our assets. We may not have access to alternative networks in the event of disruptions, failures or other problems with the internet\ninfrastructure in China or elsewhere. In addition, the internet infrastructure in the countries in which we operate may not support the\ndemands associated with continued growth in Internet usage. We also have no control over the costs of the services provided by the telecommunications\noperators. If the prices that we pay for telecommunications and internet services rise significantly, our margins could be adversely affected.\n\n** **\n\n**Other Risks Related\nto Our Business**\n\n \n\n**If we cannot successfully\nprotect our intellectual property and exclusive rights, our brand and business would suffer.**\n\n \n\nWe rely on a combination\nof trademark, patent, copyright, domain name and trade secret protection laws in China and other jurisdictions, as well as confidentiality\nprocedures and contractual provisions, to protect our intellectual property rights and other exclusive rights. We also enter into agreements\ncontaining confidentiality obligations with our employees and any third parties who may access our proprietary technology and information,\nand we rigorously control access to our proprietary technology and information.\n\n \n\nNevertheless, we cannot\nguarantee that we can successfully protect our intellectual property and exclusive rights from unauthorized usage by third parties or\nbreach of confidentiality obligations by our counterparties. Furthermore, a third party may take advantage of the “first-to-file” trademark\nregistration system in China to register our brands in bad faith, which will cause us to incur additional costs for legal actions. Moreover,\nconfidentiality obligations may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.\nAccordingly, we may not be able to effectively protect our intellectual property rights and exclusive rights or to enforce our contractual\nrights in China or elsewhere.\n\n \n\nIn addition, policing\nany unauthorized use of our intellectual property and exclusive rights is difficult, time-consuming and costly. The precautionary steps\nwe have taken to protect our rights may be inadequate. In the event that we resort to litigation to enforce our intellectual property\nrights and exclusive rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources.\nWe can provide no assurance that we will prevail in such litigation or that we would be able to halt any unauthorized use of our intellectual\nproperty and exclusive rights. In addition, our trade secrets may be leaked to, or be independently discovered by, our competitors. Any\nfailure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition\nand results of operations.\n\n \n\n17\n\n \n\n \n\n**Pandemics and epidemics,\nnatural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations, which could\nmaterially and adversely affect our business, financial condition, and results of operations.**\n\n** **\n\nGlobal pandemics, epidemics\nin China or elsewhere in the world, other widespread health epidemics or fear of spread of contagious diseases, such as Ebola virus disease\n(EVD), coronavirus disease 2019 (COVID-19), Middle East respiratory syndrome (MERS), severe acute respiratory syndrome (SARS), H1N1 flu,\nH7N9 flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt our business operations,\nreduce or restrict our supply of products and services, incur significant costs to protect our employees and facilities, or result in\nregional or global economic distress, which may materially and adversely affect our business, financial condition, and results of operations.\nActual or threatened war, terrorist activities, political unrest, civil strife, and other geopolitical uncertainty could have a similar\nadverse effect on our business, financial condition, and results of operations. Any one or more of these events may impede our production\nand delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which could materially and adversely\naffect our business, financial condition, and results of operations.\n\n \n\nThe COVID-19 pandemic adversely affected many\nbusinesses in China, including the Company’s business, supply chain and workforce availability\nacross the world, leading to substantial declines in business activities that have negatively impacted and may continue to negatively\nimpact our business, financial condition and results of operations. The global spread of COVID-19 also affected our sales. This\ngrowth in revenue, especially revenues from our tourism business, has been adversely impacted by COVID-19 pandemic at various times during\n2021-2022 because of government-enforced lockdowns.\n\n \n\nIf\na future outbreak occurs, the government may take similar actions which would adversely impact our business. In addition, the broader\nmacro-economic implications the pandemic, including reduced levels of economic growth and possibly a global recession, likely still exist\nand will likely impact our future results of operations.\n\n \n\nOur business is also\nvulnerable to natural disasters, such as snowstorms, earthquakes, fires or floods, and other calamities, such as wars, acts of terrorism,\nenvironmental accidents, power shortages or communication interruptions. The occurrence of such a disaster or a prolonged outbreak of\nan epidemic illness or other adverse public health developments in China or elsewhere in the world could materially disrupt our business\nand operations. We cannot assure you that we are adequately protected from the effects of fire, floods, typhoons, earthquakes, power loss,\ntelecommunications failures, break-ins, war, riots, terrorist attacks, or similar events. Any of the foregoing events may give rise to\ninterruptions, damage to our property, delays in production, breakdowns, system failures, or internet failures, which could adversely\naffect our business, financial condition, and results of operations. Our operations could be disrupted if any of our employees or employees\nof our business partners were suspected of having any contagious disease, since this could require us or our business partners to quarantine\nsome or all of such employees or disinfect the facilities used for our operations. Our operations could also be severely disrupted if\nour buyers, sellers or other participants were affected by such natural disasters, health epidemics or other outbreaks. In addition, our\nrevenues and profitability could be materially reduced to the extent that a natural disaster, health epidemic or other outbreak harms\nthe global or PRC economy in general and our industry as a whole.\n\n** **\n\n**We may be accused\nof infringing intellectual property or proprietary rights of third parties.**\n\n \n\nWe cannot assure you\nthat our content, product design, our offerings or our technologies do not or will not infringe upon copyrights or other intellectual\nproperty rights (including, but not limited to, trademarks, patents and know-how) held by third parties. Nor can we assure you\nthat our use of software or any other intellectual properties in business and operation will not be alleged by any third party as infringement\nresulting from lack of licenses. If any third-party infringement claims are brought against us, we may be forced to divert management’s\ntime and other resources from our business and operations to defend against these claims. We may also be prohibited from using such intellectual\nproperty or relevant content. As a result, we may incur licensing or usage fees, develop alternatives of our own, or even need to pay\ndamages, legal fees and other costs. Even if such assertions against us are unsuccessful, they may cause us to lose existing and future\nbusiness and incur reputational harm and substantial legal fees. As a result, our reputation may be harmed and our business and financial\nperformance may be materially and adversely affected.\n\n \n\nWe have adopted policies\nand procedures to prohibit our members, employees and business partners from infringing upon third-party copyright or other intellectual\nproperty rights.** **However, we cannot assure you that they will not, against our policies, use third-party copyrighted\nmaterials or intellectual property without proper authorization, and therefore result in disputes. In addition, we may incur liability\nfor unauthorized duplication or distribution of materials used in our online store and during our services. Although we have set up rules\nand procedures to enable copyright owners to provide us with notice of alleged infringement, given the volume of content we offer, we\nmay not be able to identify and remove all potentially infringing content that may exist, and thus we may encounter intellectual property\nclaims against us.\n\n \n\n18\n\n \n\n \n\n**The success of\nour business depends on the continuing efforts of our senior management and other key personnel. If we fail to retain, attract and train\nsuch personnel, our business may be materially and adversely affected.**\n\n \n\nThe success of our business\ndepends significantly on our senior management. In particular, we rely on the expertise, experience and vision of Ms. Sun Lei, our Chief\nExecutive Officer, Interim Chief Financial Officer, co-Chairwoman and director. If she becomes unable or unwilling to continue to contribute\nher services to us, we may not be able to replace them easily, or at all. As a result, our business may be severely disrupted, and our\nfinancial condition and results of operations may be materially and adversely affected.\n\n \n\nAdditionally, our future\nsuccess also depends on our ability to attract, recruit and train a large number of qualified employees and retain existing key employees.\nCompetition for discovering and signing talents in cross-border merchandise and tourism industries in China is intense, and the availability\nof suitable and qualified candidates in China is limited. In order to compete for talents, we may need to offer higher compensation, better\ntrainings, more attractive career opportunities and other benefits to our employees, which may be costly and burdensome. There can be\nno assurance that we will be able to retain a qualified workforce necessary to support our future growth. Furthermore, our ability to\ntrain and integrate new employees into our operations may not meet the demands of our growing business. Any of the above issues related\nto our workforce may materially and adversely affect our operations and future growth.\n\n \n\n**We may be subject\nto claims, disputes, litigation, allegations, complaints and investigations and other legal and administrative proceedings from time to\ntime arising out of our operations, some of which may be caused by activities of our customers or the content of their websites and other\ninternet properties, and our reputation and operations may be adversely affected.**\n\n \n\nWe have not been subject\nto any material allegations or complaints in the past, but we may be involved in legal and other disputes in the ordinary courses of our\nbusiness. We and our management may be subject to claims, disputes, lawsuits, investigations and other legal and administrative proceedings\nincidental to the conduct of our business from time to time. We have not been subject to and are currently not party to any legal or arbitration\nproceedings, including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may\nhave, or have had in the recent past, material adverse effects on our financial position or profitability. Any claims against us or our\nmanagement, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention and\nresources or harm our brand equity.\n\n \n\nThrough our network,\nwe provide a wide variety of products that enable our customers to exchange information, conduct business, and engage in various online\nactivities both domestically and internationally. Our customers may use our platform and products in violation of applicable law or in\nviolation of our terms of service or the customer’s own policies. The existing laws relating to the liability of providers of online\nproducts and services for activities of their users are highly unsettled and in flux both within China and internationally. We may be\nsubject to lawsuits and/or liability arising from the conduct of our customers from time to time. Additionally, the conduct of our customers\nmay subject us to regulatory enforcement actions and/or liability. We may be a defendant in a number of lawsuits both in China and abroad,\nalleging copyright infringement based on content that is made available through our customers’ websites. There can be no assurance\nthat we will not face litigation or regulatory enforcement actions in the future or that we will prevail in any litigation we may face.\nAn adverse decision in one or more of these lawsuits or enforcement action could materially and adversely affect our business, results\nof operations, and financial condition.\n\n \n\nClaims arising out of\nactual or alleged violations of law, breach of contract or torts could be asserted against us by customers, business partners, suppliers,\ncompetitors, employees or governmental entities in investigations and legal proceedings. These claims could be asserted under a variety\nof laws, including but not limited to the intellectual property laws, labor and employment laws, securities laws, tort laws, contract\nlaws, property laws, and employee benefit laws. If a lawsuit or governmental proceeding against us is successful, we may be required to\npay substantial damages or fines. We might also be involved in governmental investigations of our business operation in the future. Any\nclaims against us, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention\nand resources or harm our brand equity. If a lawsuit or governmental proceeding against us is successful, we may be required to pay substantial\ndamages or fines. We may also lose, or be limited in, the rights to offer some of our content, products and services or be required to\nmake changes to our content offerings or business model. As a result, the scope of our content, product and service offerings could be\nreduced, which could adversely affect our ability to attract new business customers, harm our reputation and have a material adverse effect\non our business, financial condition and results of operations.\n\n \n\n19\n\n \n\n \n\n**Imposition of trade\nbarriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.**\n\n \n\nWe may experience barriers\nto conducting business in the form of delayed customs clearances, customs duties and tariffs. In addition, we may be subject to repatriation\ntaxes levied upon the exchange of income from local currency into foreign currency, substantial taxes on profits, revenues, assets and\npayroll, as well as value-added tax. The markets in which we plan to operate may impose onerous and unpredictable duties, tariffs and\ntaxes on our business and products, and there can be no assurance that this will not reduce the level of sales that we achieve in such\nmarkets, which would reduce our revenues and profits.\n\n \n\n**We may expand our\nbusiness through acquisitions, investments or strategic alliances in the future, but we might not be able to successfully pursue synergy\nfrom acquisitions or to achieve the benefits we expect from recent and future investments, strategic alliances and acquisitions.**\n\n \n\nWe may form strategic\nalliances or make strategic investments and acquisitions from time to time to complement and enhance our existing business. We may experience\ndifficulties in integrating our operations with the newly invested or acquired businesses, implementing our strategies or achieving expected\nlevels of revenues, profitability, productivity or other benefits. Moreover, if the businesses we acquire or invest in or our strategic\nalliances or partnerships do not subsequently generate the anticipated financial performance or if any goodwill impairment test triggering\nevent occurs, we may need to revalue or write down the value of goodwill and other intangible assets in connection with such transactions,\nwhich would harm our business, financial condition and results of operations.\n\n \n\nIn addition, we may not\nbe able to identify appropriate strategic investment or alliance targets when it is necessary or desirable to make such acquisition or\ninvestment to remain competitive or to expand our business. Even if we identify an appropriate target, we may not be able to negotiate\nthe terms of the transaction successfully. In the event that we do not have control over the companies in which we only have minority\nstake, we cannot ensure that these companies will at all times comply with applicable laws and regulations in their business operations.\n\n \n\n**The expansion of our business may place\nsignificant strain on our personnel, management, financial systems and operational infrastructure and may impede our ability to meet any\nincreased demand for our products.  Any failure by us or our business partners to comply with product safety, labor, tax or other\nlaws, or to provide safe conditions for our or their workers may damage our reputation and brand and harm our business.**\n\n \n\nOur products are subject\nto regulation by various governmental authorities in China. Such products could be subject to potential recalls and other remedial actions\nin the future. Product safety, labeling and licensing concerns, including consumer disclosure and warning regarding chemical exposure,\nmay result in recall or suspended offering of products, which in turn could result in a material adverse effect on our operating results.\n\n \n\nTo accommodate the Company’s\ngrowth, we will need to implement a variety of new and upgraded operational and financial systems, procedures, and controls, including\nimprovements to our accounting and other internal management systems, by dedicating additional resources to our reporting and accounting\nfunction and improvements to our record keeping and contract tracking system. We will also need to recruit more personnel and train and\nmanage our growing employee base. Furthermore, we will need to maintain and expand relationships with our current and future customers,\nsuppliers, distributors and other third parties, and there is no guarantee that we will succeed. \n\n \n\nWe procure products from\na variety of third-party suppliers, manufacturers and other business partners. If they fail to comply with applicable laws and regulations,\nwe may also face or get involved in litigations, which could increase our legal costs. In addition, other misconduct of our business partners\nsuch as failure to provide safe and humane working conditions could harm our reputation and business as well.\n\n \n\n20\n\n \n\n \n\n**The estimates of\nmarket opportunity and forecasts of market growth in this Annual Report may prove to be inaccurate. Even if the market in which we compete\nachieves the forecasted growth, our business could fail to grow at similar rates, if at all.**\n\n \n\nMarket opportunity estimates\nand growth forecasts, including those we have generated ourselves, are subject to significant uncertainty and are based on assumptions\nand estimates that may not prove to be accurate. The variables that go into the calculation of our addressable market size are subject\nto change over time, and there is no assurance that any target business customers covered by our market opportunity estimates will purchase\nour products at all or generate any particular level of revenue for us. Any expansion in our market depends on a number of factors, including\nthe cost, performance, competition and perceived value associated with our products and services. Even if the market in which we compete\nmeets the size estimates and growth forecasted, our business could fail to grow at similar rates, if at all, due to various factors, including\nfailure to execute our growth plan, ineffective management over operations and adverse impact from negative publicity. Accordingly, the\nforecasts of market growth should not be taken as indicators of our future growth.\n\n \n\n**We may be unable\nto establish and maintain an effective system of internal control over financial reporting, and, as a result, we may be unable to accurately\nreport our financial results or prevent fraud.**\n\n \n\nWe are subject to reporting\nobligations under the U.S. securities law. The SEC as required by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”),\nadopted rules requiring every public company to include a management report on such company’s internal control over financial reporting\nin its annual report, which must also contain management’s assessment of the effectiveness of the company’s internal control\nover financial reporting. In addition, the independent registered public accounting firm auditing the financial statements of a company\nthat is not a non-accelerated filer, emerging growth company or smaller reporting company under Rule 12b-2 of the Exchange Act must also\nattest to the operating effectiveness of the company’s internal controls.\n\n \n\nFailure to achieve and\nmaintain an effective internal control environment could result in our inability to accurately report our financial results, prevent or\ndetect fraud or provide timely and reliable financial and other information pursuant to the reporting obligations we have as a public\ncompany, which could have a material adverse effect on our business, financial condition and results of operations. Further, it could\ncause our investors to lose confidence in the information we report, which could adversely affect our stock price.\n\n** **\n\n**We may incur liabilities\nthat are not covered by insurance.**\n\n \n\nWhile we seek to maintain\nappropriate levels of insurance, not all claims are insurable and we may experience major incidents of nature that are not covered by\ninsurance. We provide social security insurance including pension, medical insurance, unemployment insurance, maternity insurance, on-the-job\ninjury insurance and housing fund plans through a PRC government-mandated benefit contribution plan for our employees. We do not carry\nany key-man life insurance, product liability, Directors and Officers Insurance and professional liability insurance. Even if we purchase\nthese kinds of insurance, the insurance may not fully protect us from the financial impact of defending against product liability or professional\nliability claims. We have not purchased any property insurance or business interruption insurance. We have determined that the costs of\ninsuring for related risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical.\nWe consider our insurance coverage to be sufficient for our business operations in China. We maintain an amount of insurance protection\nthat we believe is adequate, but there can be no assurance that such insurance will continue to be available on acceptable terms or that\nour insurance coverage will be sufficient or effective under all circumstances and against all liabilities to which we may be subject.\nIf we were to incur substantial losses or liabilities due to fire, explosions, floods, other natural disasters or accidents or business\ninterruption, our results of operations could be materially and adversely affected. We could, for example, be subject to substantial claims\nfor damages upon the occurrence of several events within one calendar year. In addition, our insurance costs may increase over time in\nresponse to any negative development in our claims history or due to material price increases in the insurance market in general.\n\n** **\n\n21\n\n \n\n** **\n\n**Leakage or misappropriation\nof know-how, confidential information and trade secrets from unauthorized copying, use or disclosure could have an adverse impact on our\nreputation and operations.**\n\n \n\nDuring the course of\nproviding our services, we may have access to and be entrusted with information that is confidential in nature, such as information that\nrelates to our customers’ systems, operations, raw data or affairs. While we have adopted measures to protect confidentiality\nof our customers’ information, including our internal control manual and the nondisclosure arrangements with our employees, there\nis no assurance that the steps taken by us will successfully prevent any leakage or misappropriation of confidential information of our\ncustomers. Any leakage or misappropriation of confidential information of our customers could expose us to complaints or claims, which\nmay materially and adversely affect our reputation and business operations. In addition, we seek to protect our know-how, confidential\ninformation and trade secrets, in part, by entering into non-disclosure and confidentiality agreements or other means to such effect,\nwith parties who have access to them, such as our employees. Despite these efforts, any of these parties may breach such agreements, intentionally\nor unintentionally and disclose our proprietary information and we may not be aware of or able to obtain adequate remedies for such breaches.\nThe unauthorized disclosure and/or misappropriation of trade secrets is difficult to detect and/or to prove. As such, it is difficult,\nexpensive and time-consuming to establish trade secret misappropriation claims, with no guarantee of success or adequate remedies. Such\ndisclosures could also lead to a loss of trade secret protection, which could materially and adversely affect our business, competitive\nposition, financial conditions and results of operations.\n\n \n\n**Risks Related to Our Corporate\nStructure**\n\n \n\n**We previously carried\nout our business operations through the VIE contractual arrangements. If the PRC government determines that these contractual arrangements\ndid not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations\nchange in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.**\n\n \n\nPrior to December 13, 2021, we carried our business\noperations through contractual relationships using a variable interest structure (“VIE”). As of December 13, 2021, we reorganized\nour corporate subsidiary structure in the PRC under Flower Crown Holding (“FLH”). As a result of the FLH’s China subsidiaries\nrestructuring, we terminated the original VIE contractual agreements and we are no longer\noperate those entities through a VIE structure. As part of the restructuring, due to the restriction of foreign ownership by the relevant\nlaws and regulations of the People’s Republic of China, namely Provisions on Administration of Foreign Invested Telecommunications\nEnterprise (外商投资电信企业管理规定), we divested FCEC under\na Shares Transfer Agreement with a third party. FCEC represented less than 5% of our total revenues.\n\n \n\nHowever, even though\nwe terminated the original VIE contractual agreements, there are still substantial uncertainties regarding the interpretation and application\nof current and future PRC laws, regulations and rules in respect of our previous use of the variable interest entity structure; accordingly,\nthe PRC regulatory authorities may impose severe penalties retroactively. If we were subject to severe penalties retroactively, the relevant\nPRC regulatory authorities would have broad discretion to take action in dealing with such violations and failures, including:\n\n \n\n \n●\ndiscontinuing or placing restrictions or onerous conditions on our operations;\n\n \n\n \n●\nimposing fines, confiscating the income from our PRC subsidiaries, or imposing other requirements with which we or our PRC entities may not be able to comply;\n\n \n\n \n●\nrestricting or prohibiting our use of the proceeds from a U.S. public offering to finance our business and operations in China.\n\n \n\nAny of these actions\ncould cause significant disruption to our business operations and severely damage our reputation, which would in turn materially and adversely\naffect our business, financial condition and results of operations.\n\n \n\n**Our current corporate\nstructure and business operations may be affected by the Foreign Investment Law.**\n\n** **\n\nOn March 15, 2019, the\nNational People’s Congress approved the Foreign Investment Law, which came into effect on January 1, 2020. Along with the Foreign\nInvestment Law, the Implementing Rules of Foreign Investment Law promulgated by the State Council and the Interpretation of the Supreme\nPeople’s Court on Several Issues Concerning the Application of the Foreign Investment Law promulgated by the Supreme People’s\nCourt became effective on January 1, 2020. Since the Foreign Investment Law and its current implementation and interpretation rules are\nrelatively new, uncertainties still exist in relation to their further application and improvement.\n\n \n\n22\n\n \n\n \n\nThe Foreign Investment Law grants national treatment to foreign-invested\nentities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited”\nfrom foreign investment in a “negative list”. It is unclear whether the “negative list” to be published pursuant\nto the Foreign Investment Law will differ from the current Special Administrative Measures for Market Access of Foreign Investment (Negative\nList) (2021 Version). The Foreign Investment Law provides that foreign-invested entities operating in “restricted” industries\nwill require market entry clearance and other approvals from relevant PRC government authorities. As of the date hereto, the current business\nactivities of our PRC subsidiaries are not within the “negative list”, and foreign investors are allowed to hold 100% equity\ninterests of our PRC subsidiaries under the Foreign Investment Law. We have no plans at the present to substantially change our PRC subsidiaries’\nbusiness activities in the future. However, it’s uncertain whether we will engage in business activities that are in the “negative\nlist”, as the “negative list” may be amended from time to time.\n\n** **\n\n**We may rely on dividends paid by our PRC\nsubsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make\npayments to us could have a material and adverse effect on our ability to conduct our business. To\nthe extent funds or assets in the business are in the PRC or are held by a PRC entity, the funds or assets may not be available to fund\noperations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability\nof our company or the operating entities by the PRC government to transfer cash or assets outside the PRC.**\n\n \n\nUnder our current corporate structure, we rely\nprincipally on dividends and other distributions of equity from our PRC subsidiaries for our cash requirements, including for services\nof any debt we may incur. We have no direct business operations other than the ownership of our subsidiaries. While we have no current\nintention of paying dividends, should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other\nobligations depend upon the receipts of dividends or other payments from our operating subsidiaries, other holdings, and investments.\n\n \n\nThe PRC rules and regulations impose restrictions\nand limitations on transfer of cash on foreign exchange, our ability to transfer cash between entities, across borders and to U.S. investors,\nand our ability to distribute earnings from our subsidiaries to the Company and holders of the common stock of the Company. Our PRC subsidiaries’\nability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay\ndividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting\nstandards and regulations. In addition, each of our PRC subsidiaries, as a Foreign Invested Enterprise, or FIE, are required to draw 10%\nof its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance\nof the common reserve has already accounted for over 50 percent of its registered capital. These reserves are not distributable as cash\ndividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their\nability to pay dividends or make other payments to us.\n\n \n\nCurrently, our subsidiaries\nin China are the only sources of revenues or investment holdings for the payment of dividends. If they do not accumulate sufficient profits\nunder Chinese accounting standards and regulations to satisfy certain reserve funds as required by the Chinese accounting standards, we\nwill be unable to pay any dividends. Any limitation on the ability of our PRC subsidiaries to distribute dividends or other payments to\ntheir respective shareholders could materially and adversely limit our ability to grow, make investments or acquisitions that could be\nbeneficial to our business, pay dividends or otherwise fund and conduct our business. To the extent cash or assets in the business is\nin the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of\nthe PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of you and your subsidiaries\nby the PRC government to transfer cash or assets.\n\n  \n\nAfter-tax profits/losses with respect to the payment\nof dividends from accumulated profits and the annual appropriation of after-tax profits as calculated pursuant to the Chinese accounting\nstandards and regulations do not result in significant differences as compared to after-tax earnings as presented in our financial statements.\nHowever, there are certain differences between PRC accounting standards and regulations and IFRS, arising from different treatment of\nitems such as amortization of intangible assets and change in fair value of contingent consideration rising from business combinations.\n\n \n\n**Holders of our\nsecurities may face difficulties in protecting their interests because we are incorporated under the Republic of the Marshall Islands\nlaw.**\n\n \n\nWe are a company incorporated\nunder the laws of the Marshall Islands. Holders of shares of our common stock do not own equity securities of our subsidiaries that have\nsubstantive business operations in China, but instead are holders of equity securities of a Marshall Islands holding company. Such a structure\ninvolves unique risks to investors holding shares of our common stock. Although we own and control our PRC operating subsidiaries, investors\nholding shares of our common stock may never hold equity interests directly in our operating entities. Chinese regulatory authorities\ncould disallow this holding company structure, which would likely result in a material change in our operations and/or a material change\nin the value of our securities, including that it could cause the value of our securities to significantly decline or become worthless.\nIn addition, almost all of our assets are located outside the United States, and majority of our directors and officers, and their assets,\nare located outside of the United States. As a result, investors may have difficulty serving legal process within the United States upon\nus or any of these persons. Investors may also have difficulty enforcing, both in and outside the United States, judgments you may obtain\nin U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal\nor state securities laws. They may also have difficulty bringing an original action in the appropriate court of the Marshall Islands to\nenforce liabilities against us or any person based upon the U.S. federal securities laws.** **\n\n \n\n23\n\n \n\n \n\n**RISKS RELATED TO DOING BUSINESS IN CHINA**\n\n \n\n**Changes in China’s economic, political or social conditions\nor government policies could have a material adverse effect on our business and operations.**\n\n \n\nSubstantially all of our assets and operations\nare located in the PRC. Accordingly, our business, financial condition, results of operations, and prospects may be influenced to a significant\ndegree by political, economic and social conditions in the PRC generally. The Chinese economy differs from the economies of most developed\ncountries in many respects, including the level of government involvement, development, growth rate, control of foreign exchange and allocation\nof resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform,\nthe reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises,\na substantial portion of productive assets in the PRC is still owned by the government. In addition, the Chinese government continues\nto play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant\ncontrol over the PRC’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations,\nsetting monetary policy and providing preferential treatment to particular industries or companies. The PRC government also has implemented\nvarious measures to encourage foreign investment and sustainable economic growth and to guide the allocation of financial and other resources.\nHowever, we cannot assure you that the PRC government will not repeal or alter these measures or introduce new measures that will have\na negative effect on us.\n\n \n\nAlthough\nthe Chinese economy has grown steadily in the past decade, the growth has been uneven, both geographically and among various sectors\nof the economy, and the rate of growth has been slowing down in recent years and may materially decline in the future. There\nis considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People’s\nBank of China and financial authorities of some of the world’s leading economies, including the United States and China. Any\nadverse changes in economic conditions in the PRC, in the policies of the Chinese government or in the laws and regulations in the PRC\ncould have a material adverse effect on the overall economic growth of the PRC. Such developments could adversely affect our business\nand operating results, lead to a reduction in demand for our services and adversely affect our competitive position. The Chinese government\nhas implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit\nthe overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may\nbe adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese\ngovernment has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures\nmay cause decreased economic activity in the PRC, which may adversely affect our business and operating results. \n\n \n\n**Changes in international trade policies,\ntrade disputes, barriers to trade, the emergence of a trade war and/or other disruptions to international commerce could harm the global\neconomy and may dampen growth in China, our principal place of business. A severe or prolonged downturn in the Chinese or global economy\ncould materially and adversely affect our business and financial condition.**\n\n \n\nThe global macroeconomic environment is facing\nchallenges. Although our business operations do not include selling products outside of China, political uncertainty surrounding international\ntrade disputes, particularly the ongoing tension between the U.S. and China, could damage consumer confidence and decision-making, leading\nto a material adverse effect on our business. Trade relations between China and other nations, particularly the United States, remain\nuncertain with potential implications for regulatory policies, tariffs, and business operations. The United States recently increased\ntariffs on goods imported from China and other regions, as well as the potential for additional protectionist measures, may impact our\nPRC subsidiaries’ business and operations. China imposed its tariffs on good imported from the United States. It remains unclear\nwhat additional actions, if any, will be taken by the United States or other governments with respect to international trade agreements,\nthe imposition of tariffs on goods imported into the United States, tax policy related to international commerce, or other trade matters.\nWe are closely monitoring potential changes in international trade policy and assessing the potential impact of these and other trade\npolicy changes on our business operations and financial performance. In addition, political instability\nand military hostilities, including current conflicts in the Middle East and Eastern Europe impact global energy markets, which\nmay affect our business. These economic conditions in China respond to both global economic trends and domestic policy changes. Any severe\nor prolonged economic slowdown, either globally or within China, could materially impact our business performance, operational results,\nand financial condition. could lead to significant disruptions in the global economy. The uncertain\nnature, magnitude and duration and the full economic effect of these events cannot be estimated, but this may impact businesses\nacross the globe both in the short term and the long term with rising commodity prices and demand, rising interest costs to counter inflationary\nconditions and loss in value of currencies.\n\n \n\n24\n\n \n\n \n\nSuch uncertainty may also limit the access of\nour PRC subsidiaries to new business opportunities, negatively impacting our PRC subsidiaries’ operations. The current and potential\nfuture actions by the U.S. or the PRC that affect trade relations could contribute to global economic instability, which may harm our\nPRC subsidiaries’ business or financial performance. There have also been concerns on the\nrelationship among China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes.\nEconomic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies\nand the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy\nmay materially and adversely affect our business, results of operations and financial condition. Any severe or prolonged slowdown\nin the global or PRC economy may materially and adversely affect our business, results of operations and financial condition.\n\n \n\n**Our financial performance could be materially\nand adversely affected by rising costs associated with inflation and the imposition of U.S. tariffs on imports from China.**\n\n** **\n\nOur business is susceptible to the effects of\ninflation, which can lead to higher costs of our operations. If the overall price level in the economy increases, our operating expenses\nare expected to increase as well, potentially impacting on our profitability, particularly in the airline reselling business.\n\n \n\nFurthermore, recent trade policies enacted by\nthe U.S. have imposed tariffs on a range of goods imported from China. These tariffs directly increase the cost of our products upon entry\ninto the United States, leading to a rise in our cost of goods sold. This increased cost may necessitate us raising prices for our U.S.\ncustomers, which could negatively impact the competitiveness of our products compared to those manufactured domestically in the U.S. or\nimported from countries not subject to these tariffs.\n\n \n\nThe future of these tariff policies and their\nwider impact on inflation are uncertain. The duration and scope of these measures, as well as potential responses from other countries,\ncould significantly influence our business. We cannot predict the ultimate consequences of these developments, and there is no assurance\nthat we will be able to fully absorb or mitigate the negative financial impacts resulting from increased costs driven by both general\ninflation and these tariffs. We engage in cross border merchandise and tourism business and conduct substantially all of our operations\nin China; therefore, any deterioration of the PRC economy, decrease in disposable income and fear of a recession may lead to reductions\nof customers’ demand and their spending on fashion products with us.\n\n \n\n**The Chinese government may exercise significant\noversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result\nin a material change in our operations and/or the value of our securities, could significantly limit or completely hinder our ability\nto offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.**\n\n \n\nAs a company that conducts substantially of its\nbusiness operations in China, we are subject to the laws and regulations of the PRC, which can be complex and evolve rapidly, and to risks\nassociated with complying with these laws and regulations. The PRC government has the power to exercise significant oversight and\ndiscretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to\nus or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the\nPRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or\nauthorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the\nPRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions\nmay:\n\n \n\n \n●\nDelay or impede our development,\n\n \n\n \n●\nResult in negative publicity or increase our operating costs,\n\n \n\n \n●\nRequire significant management time and attention, and\n\n \n\n \n●\nSubject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices.\n\n \n\n25\n\n \n\n \n\nThe promulgation of new laws or regulations, or\nthe new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably impact the ability or manner\nin which we conduct our business and could require us to change certain aspects of our business to ensure compliance, which could decrease\ndemand for our products, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject\nus to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial\ncondition and results of operations could be adversely affected, and any such action could significantly limit or completely hinder our\nability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.\n\n \n\n**Recent statements by the Chinese government have indicated its\nintent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China-based issuers,\nwhich could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value\nof our securities to significantly decline or be worthless**.\n\n \n\nRecent statements by the Chinese government have\nindicated its intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China\nbased issuers. PRC has recently promulgated new rules that require companies collecting or holding large amounts of data to undergo a\ncybersecurity review prior to listing in foreign countries, a move that will significantly tighten oversight over China-based internet\ngiants. The Measures for Cybersecurity Review (2021 version) was promulgated on December 28, 2021 and became effective on February 15,\n2022. These measures specify that any “online platform operators” controlling the personal information of more than one million\nusers which seek to list on a foreign stock exchange are subject to prior cybersecurity review.\n\n \n\nOur business belongs to the cross-border merchandise\nand tourism industry in China, which does not involve the collection of user data, implicate cybersecurity, or involve any other type\nof restricted industry. We relied on the opinion of our PRC counsel, Beijing Dacheng Law Offices LLP (Haikou) in concluding that we are\nnot subject to the review or prior approval of the CAC or the CSRC. Uncertainties still exist, however, due to the possibility that laws,\nregulations, or policies in the PRC could change rapidly in the future. Any future action by the PRC government expanding the categories\nof industries and companies whose foreign securities offerings are subject to review by the CSRC or the CAC could significantly limit\nor completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to\nsignificantly decline or be worthless.\n\n** **\n\n**Uncertainties with respect to the PRC legal\nsystem, including that the rules and regulations in China can change quickly with little advance notice, and the interpretation and enforcement\nof PRC laws and regulations, could limit the legal protections available to you and us.**\n\n** **\n\nOur operating subsidiaries are incorporated under\nand governed by the laws of the PRC. The PRC legal system is a civil law system based on written statutes. Unlike the common law system,\nprior court decisions under the civil law system may be cited for reference but have limited precedential value. In 1979, the PRC government\nbegan to promulgate a comprehensive system of laws and regulations governing economic matters generally. The overall effect of legislation\nover the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in the PRC. However,\nthe PRC has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects\nof economic activities in the PRC. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties.\nSince PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual\nterms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy.\nThese uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or\ntort claims. In addition, these regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts\nto extract payments or benefits from us. Furthermore, the PRC legal system is based in part on government policies and internal rules,\nsome of which are not published on a timely basis or at all and may have a retroactive effect. As a result, we may not be aware of our\nviolation of any of these policies and rules until some time after the violation. In addition, any administrative and court proceedings\nin the PRC may be protracted, resulting in substantial costs and diversion of resources and management attention.\n\n \n\nFurthermore, intellectual property rights and\nconfidentiality protections in China may not be as effective as in the United States or other countries. In addition, we cannot predict\nthe effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation\nor enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections\navailable to us and other foreign investors, including you. In addition, any litigation in China may be protracted and result in substantial\ncosts and diversion of our resources and management attention.\n\n** **\n\n26\n\n \n\n** **\n\n**We face challenges from the evolving PRC regulatory environment\nregarding cybersecurity, information security, privacy and data protection, and user attitude toward data privacy and protection. Any\nactual or alleged failure to comply with these and related laws and regulations regarding cybersecurity, information security, data privacy,\nand protection could materially and adversely affect our business and results of operations.**\n\n \n\nRecently, the Chinese government initiated a series\nof regulatory actions and made a number of public statements on the regulation of business operations in China. This included, among other\nactions, the adoption of new measures to extend the scope of cybersecurity reviews, and the expansion of efforts in anti-monopoly enforcement.\nBecause these statements and regulatory actions are new, it is highly uncertain (a) how soon legislative or administrative regulation-making\nbodies in China will respond to them, (b) what existing or new laws or regulations will be modified or promulgated, if any, or (c) what\nimpact such modified or new laws and regulations will have on the Company’s daily business operations or our ability to accept foreign\ninvestments and continue listing our Common Stock on an U.S. securities exchange.\n\n \n\nOn August 20, 2021, the Standing Committee of\nthe National People’s Congress of China promulgated the Personal Information Protection Law of the People’s Republic of China,\neffective from November 1, 2021. The Personal Information Protection Law requires, among others, that (i) the processing of personal information\nshould have a clear and reasonable purpose which should be directly related to the processing purpose, in a method that has the least\nimpact on personal rights and interests, and (ii) the collection of personal information should be limited to the minimum scope necessary\nto achieve the processing purpose to avoid the excessive collection of personal information. Different types of personal information and\npersonal information processing will be subject to various rules on consent, transfer, and security. Entities handling personal information\nshall bear responsibility for their personal information handling activities, and adopt necessary measures to safeguard the security of\nthe personal information they handle. Otherwise, the entities handling personal information could be ordered to correct, or suspend or\nterminate the provision of services, and face confiscation of illegal income, fines or other penalties.\n\n \n\nIn the meantime, the PRC regulatory authorities\nhave also enhanced the supervision and regulation on cross-border data transfer. On July 7, 2022, the CAC promulgated the Security Assessment\nMeasures for Cross-border Data Transfers with effect from September 1, 2022. These measures require the data processor providing data\noverseas and falling under any of the following circumstances apply for the security assessment of cross-border data transfer by the national\ncybersecurity authority through its local counterpart: (i) where the data processor intends to provide important data overseas; (ii) where\nthe critical information infrastructure operator and any data processor who has processed personal information of more than 1,000,000\npeople intend to provide personal information overseas; (iii) where any data processor who has provided personal information of 100,000\npeople or sensitive personal information of 10,000 people to overseas recipients accumulatively since January 1 of the last year intends\nto provide personal information overseas; and (iv) other circumstances where the security assessment of data cross-border transfer is\nrequired as prescribed by the CAC.  \n\n \n\nGiven that the above mentioned newly promulgated\nlaws, regulations and policies were recently promulgated or issued, or have not yet been formally promulgated or taken effect (as applicable),\ntheir enactment, interpretation, application and enforcement are subject to substantial uncertainties. As the definitions for terms such\nas network platform operator and national security are broad, and the government will likely retain significant discretion as to the interpretation\nand enforcement of the Cybersecurity Review Measures and any implementation rules, we may be subject to related rules. We cannot preclude\nthe possibility that the Cybersecurity Review Measures will subject us to the cybersecurity review by the CAC in relation to our operations\nor require us to adjust our business practices, in which case our business, financial condition and prospects may be materially and negatively\naffected. We have incurred, and will continue to incur, significant expenses in an effort to comply with cybersecurity, privacy, data\nprotection and information security related laws, regulations, standards and protocols, especially as a result of such newly promulgated\nlaws and regulations. As of the date of this Annual Report, we have not been involved in any investigations, nor have we received any\ninquiry, notice, warning, or sanction by the CAC or related PRC governmental authorities as a result of violation of any currently effective\nPRC laws or regulations with respect to personal information or data requirements issued by the CAC up to date. However, as uncertainties\nremain regarding the interpretation and implementation of these laws and regulations, despite our efforts to comply with applicable laws,\nregulations and policies relating to cybersecurity, privacy, data protection and information security, we cannot assure you that our practices,\nofferings, services will meet all of the requirements imposed on us by such laws, regulations or policies. Any failure or perceived failure\nto comply with applicable laws, regulations or policies may result in inquiries or other proceedings being instituted against, or other\nlawsuits, decisions or sanctions being imposed on us by governmental authorities, users, consumers or other parties, including but not\nlimited to warnings, fines, directions for rectifications, suspension of the related business and termination of our applications, as\nwell as in negative publicity on us and damage to our reputation, any of which could have a material adverse effect on our business, results\nof operations, financial condition and prospects. The above-mentioned newly promulgated laws, regulations, policies or relevant drafts\nmay result in the publication of new laws, regulations and policies to which we may be subject, though the timing, scope and applicability\nof such laws or regulations are currently unclear. Any such laws, regulations or policies could negatively impact on our business, results\nof operations and financial condition, which creates the risk that any such actions could significantly limit or completely hinder our\nability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.\n\n \n\n27\n\n \n\n \n\n**Regulation and censorship of information\ndisseminated over the internet in China may adversely affect our business and reputation and subject us to liability for information displayed\non our website.**\n\n \n\nThe PRC government has adopted regulations governing\ninternet access and the distribution of news and other information over the internet. Under these regulations, internet content providers\nand internet publishers are prohibited from posting or displaying over the internet content that, among other things, violates PRC laws\nand regulations, impairs the national dignity of China, or is reactionary, obscene, superstitious, fraudulent or defamatory. Failure to\ncomply with these requirements may result in the revocation of licenses to provide internet content and other licenses, and the closure\nof the concerned websites. The website operator may also be held liable for such censored information displayed on or linked to the websites.\nIf our self-owned online store or content is found to be in violation of any such requirements, we may be penalized by relevant authorities,\nand our operations or reputation could be adversely affected. \n\n \n\n**Risks related to a future determination that the PCAOB is unable\nto inspect or investigate our auditor completely could result in a material adverse change in our operations and the value of our Common\nStock.**\n\n** **\n\nThe recent\njoint statement by the SEC and the Public Company Accounting Oversight Board (the “PCAOB”), rule changes by Nasdaq, and the\nHolding Foreign Companies Accountable Act and related regulations, all call for additional and more stringent criteria to be applied to\nemerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by\nthe PCAOB. These developments could add uncertainties to our continued listing on Nasdaq Capital Market or future offerings of our securities\nin the U.S. and could result in a material adverse change in our operations and the value of our Common Stock, significantly limit or\ncompletely hinder our ability to offer or continue to offer securities to investors and cause such securities to significantly decline\nin value or become worthless**.**\n\n \n\nOn May 18, 2020, Nasdaq\nfiled three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily operating in a “Restrictive\nMarket,” (ii) adopt a new requirement relating to the qualification of management or the board of directors for Restrictive Market\ncompanies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the\ncompany’s auditor. On October 4, 2021, the SEC approved Nasdaq’s revised proposal for the rule changes.\n\n \n\nOn May 20, 2020, the\nU.S. Senate passed the Holding Foreign Companies Accountable Act (“HFCAA”), and on December 18, 2020, the HFCAA was signed\ninto law. On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation\nrequirements of the HFCAA. The HFCAA, among other things, directs the SEC to prohibit trading on U.S. stock exchanges and in the U.S.\nover-the-counter markets the securities of foreign-based companies if their financial statements are audited by accounting firms that\nthe PCAOB determines it has been unable to inspect or investigate completely for a period of two consecutive audit years (“Non-Inspection\nYears”), because of a position taken by the authorities in a foreign jurisdiction in which the accounting firms are based (each\naccounting firm so determined by the PCAOB, a “PCAOB-Identified Firm”).\n\n \n\nOn September 22, 2021,\nthe PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated\nunder the HFCAA, whether the board of directors of a company is unable to inspect or investigate completely registered public accounting\nfirms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.\n\n \n\n28\n\n \n\n \n\nOn December 2, 2021,\nthe SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. Pursuant to the HFCAA,\nthe PCOAB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely\nregistered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China, because a position taken\nby one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of\na position taken by one or more authorities in Hong Kong. In addition the PCOAB’s report identified the specific registered public\naccounting firms which are subject to these determinations. Our registered public accounting firm, Onestop Assurance PAC (“Onestop”)\nis a Singapore-based independent public accounting firm; it is not headquartered in mainland China or Hong Kong and was not identified\nin this report as a firm subject to the PCAOB’s determination.\n\n \n\nOn August 26, 2022, the\nCSRC, MOF, and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong, taking\nthe first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland\nChina and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion\nto select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.\n\n \n\nOn December 15, 2022,\nthe PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered\nin mainland China and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise\nfail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination.\n\n \n\nOn June 22, 2021, the\nU.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), and on December 29, 2022, the\nConsolidated Appropriations Act 2023 was signed into law, which contained, among other things, an identical provision to the AHFCAA, which\nreduces the number of consecutive non- inspection years required for triggering the prohibitions under the HFCAA from three years to two.\n\n \n\nOur auditor, Onestop, is a Singapore-based independent\npublic accounting firm that is registered with the PCAOB and can be inspected by the PCAOB and is subject to laws pursuant to which the\nPCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The PCAOB currently has access\nto inspect the working papers of our auditor. We have no intention of dismissing Onestop in the future or of engaging any auditor not\nsubject to regular inspection by the PCAOB. However, the recent developments would add uncertainties to our offering and we cannot assure\nyou whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us since we are an emerging growth\ncompany and substantial all of our operations are conducting in China. Furthermore, the HFCAA and related laws, which now require the\nSEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections\nfor two consecutive years, may result in the delisting of our Company or the prohibition of trading in our securities in the future if\nthe PCAOB is unable to inspect our accounting firm at such future time. Delisting may cause a significant decrease in or a total loss\nof the value of our securities. Although a shareholder’s ownership of our Company may not decrease directly from delisting, the\nownership may become worth much less, or, in some cases, lose its entire value. \n\n \n\n**PRC regulations relating to the establishment\nof offshore special purpose 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, limit our PRC subsidiary’ ability to increase their registered\ncapital or distribute profits to us, or may otherwise adversely affect us.**\n\n \n\nIn July 2014, SAFE promulgated the Circular on\nRelevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment\nThrough Special Purpose Vehicles, or SAFE Circular 37, SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate\nentities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE\nCircular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in\nthe future. \n\n \n\n29\n\n \n\n \n\nUnder SAFE Circular 37, PRC residents who make,\nor have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or\nSPVs, will be required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or\nindirect shareholder of an SPV is required to update its filed registration with the local branch of SAFE with respect to that SPV, to\nreflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update\ntheir registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make the required registration or to update\nthe previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds\nfrom any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital\ncontributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign\nExchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015. Under SAFE Notice 13,\napplications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including\nthose required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the\napplications and accept registrations under the supervision of SAFE.\n\n \n\nSome of our shareholders that we are aware of\nare subject to SAFE regulations, but we may not be aware of the identities of all of our beneficial owners who are PRC residents. We do\nnot have control over our beneficial owners and there can be no assurance that all of our PRC-resident beneficial owners will comply with\nSAFE Circular 37 and subsequent implementation rules, and there is no assurance that the registration under SAFE Circular 37 and any amendment\nwill be completed in a timely manner, or will be completed at all. Any failure or inability by such shareholders to comply with SAFE regulations\nmay subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiary’s\nability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions\nor paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely\naffected.\n\n** **\n\n**PRC regulation of loans to and direct investment\nin PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of\nfuture securities offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely\naffect our liquidity and our ability to fund and expand our business.**\n\n \n\nAny transfer of cash to our PRC subsidiaries,\neither as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental\nauthorities in China. According to the relevant PRC regulations on foreign-invested enterprises, or FIEs, in China, capital contributions\nto our PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce, or MOFCOM or its local branches and registration\nwith a local bank authorized by the State Administration of Foreign Exchange, or SAFE. In addition, (i) a foreign loan of less one year\nduration procured by our PRC subsidiaries is required to be registered with SAFE or its local branches and (ii) a foreign loan of one\nyear duration or more procured by our PRC subsidiaries is required to be applied to the NDRC in advance for undergoing recordation registration\nformalities. Any medium or long-term loan to be provided by us to our PRC operating subsidiaries, must be registered with the NDRC and\nthe SAFE or its local branches. We may not be able to complete such registrations on a timely basis, with respect to future capital contributions\nor foreign loans by us to our PRC Subsidiary. If we fail to complete such registrations, our ability to use the proceeds of any future\nsecurities offerings and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our\nability to fund and expand our business.\n\n \n\nOn March 30, 2015, the SAFE promulgated the Circular\non Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular\n19, which took effect as of June 1, 2015. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the\nforeign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion, but continues to prohibit\nFIEs from using the Renminbi fund converted from their foreign exchange capital for expenditure beyond their business scopes, providing\nentrusted loans or repaying loans between nonfinancial enterprises. The SAFE issued the Circular on Reforming and Regulating Policies\non the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, effective in June 2016. Pursuant to SAFE Circular\n16, enterprises registered in China may also convert their foreign debts from foreign currency to Renminbi on a self-discretionary basis.\nSAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited\nto foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in China. SAFE\nCircular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly\nor indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi shall\nnot be provided as loans to its non-affiliated entities. As this circular is relatively new, there remains uncertainty as to its interpretation\nand application and any other future foreign exchange related rules. Violations of these Circulars could result in severe monetary or\nother penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to use Renminbi converted from the net proceeds\nof future securities offerings to fund our PRC operating subsidiary, to invest in or acquire any other PRC companies through our PRC subsidiaries,\nwhich may adversely affect our business, financial condition and results of operations. On October\n23, 2019, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border\nTrade and Investment, or SAFE Circular 28, which permits non-investment FIEs to use their capital funds to make equity investments in\nChina, with genuine investment projects and in compliance with effective foreign investment restrictions and other applicable laws. However,\nuncertainties still exist in relation to its interpretation and implementation.\n\n** **\n\n30\n\n \n\n \n\n**Fluctuations in exchange rates could have a\nmaterial and adverse effect on our results of operations and the value of your investment.**\n\n \n\nThe value of the Renminbi against the U.S. dollar\nand other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign\nexchange policy adopted by the PRC government. It is difficult to predict how long such appreciation of RMB against the U.S. dollar may\nlast and when and how the relationship between the RMB and the U.S. dollar may change again. All of our revenues and substantially all\nof our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries in China for our cash needs. Any significant\nrevaluation of Renminbi may materially and adversely affect our results of operations and financial position reported in Renminbi when\ntranslated into U.S. dollars, and the value of, and any dividends payable on, the common stock in U.S. dollars. To the extent that we\nneed to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse\neffect on the Renminbi amount we would receive. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of\nmaking payments for dividends on our Common Stock or for other business purposes, appreciation of the U.S. dollar against the Renminbi\nwould have a negative effect on the U.S. dollar amount.\n\n \n\n**Governmental control of currency conversion may limit our ability\nto utilize our revenues effectively and affect the value of your investment.**\n\n \n\nThe PRC government imposes controls on the convertibility\nof the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of\nour revenues in Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions,\ninterest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval\nof SAFE by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval\nof SAFE, cash generated from the operations of our PRC subsidiaries in China may be used to pay dividends to our company. However, approval\nfrom or registration with appropriate government authorities is required, in principle, where RMB is to be converted into foreign currency\nand remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need\nto obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries to pay off their respective debt in a currency\nother than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than\nRenminbi. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.\nIf the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands,\nwe may not be able to pay dividends in foreign currencies to our shareholders, including holders of the Common stock.\n\n \n\n**Certain PRC regulations may make it more difficult\nfor us to pursue growth through acquisitions.**\n\n \n\nAmong other things, the Regulations on Mergers\nand Acquisitions of Domestic Enterprises by Foreign Investors (“M&A Rules”) and Anti-Monopoly Law of the People’s\nRepublic of China promulgated by the Standing Committee of the NPC which became effective in 2008 (“Anti-Monopoly Law”), established\nadditional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and\ncomplex. Such regulation requires, among other things, that State Administration for Market Regulation (SAMR) be notified in advance of\nany change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise or a foreign company with\nsubstantial PRC operations, if certain thresholds under the Provisions of the State Council on the Standard for Declaration of Concentration\nof Business Operators, issued by the State Council in 2008, are triggered. Moreover, the Anti-Monopoly Law requires that transactions\nwhich involve the national security, the examination on the national security shall also be conducted according to the relevant provisions\nof the State. In addition, PRC Measures for the Security Review of Foreign Investment which became effective in January 2021 require acquisitions\nby foreign investors of PRC companies engaged in military-related or certain other industries that are crucial to national security be\nsubject to security review before consummation of any such acquisition. We may pursue potential strategic acquisitions that are complementary\nto our business and operations.\n\n \n\nComplying with the requirements of these regulations\nto complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance\nfrom the MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business\nor maintain our market share.\n\n \n\nPRC regulations relating to the establishment\nof offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability\nor penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC ability of subsidiaries to increase their registered\ncapital or distribute profits to us, or may otherwise adversely affect us.\n\n \n\n31\n\n \n\n \n\nIn July 2014, SAFE promulgated the Circular on\nRelevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment\nThrough Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration\nfor Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which\nceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and\nPRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities.\nSAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make\nin the future.\n\n \n\nUnder SAFE Circular 37, PRC residents who make,\nor have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or\nSPVs, will be required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or\nindirect shareholder of an SPV is required to update its filed registration with the local branch of SAFE with respect to that SPV, to\nreflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update\ntheir registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make the required registration or to update\nthe previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds\nfrom any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital\ncontributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign\nExchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015. Under SAFE Notice 13,\napplications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including\nthose required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the\napplications and accept registrations under the supervision of SAFE.\n\n \n\nSome of our shareholders that we are aware of\nare subject to SAFE regulations, and we expect all of these shareholders will have completed all necessary registrations with the local\nSAFE branch or qualified banks as required by SAFE Circular 37. We cannot assure you, however, that all of these shareholders may continue\nto make required filings or updates in a timely manner, or at all. We can provide no assurance that we are or will in the future continue\nto be informed of identities of all PRC residents holding direct or indirect interest in our company. Any failure or inability by such\nshareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment\nactivities or our PRC subsidiaries’ ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company\nor prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions\nto you could be materially and adversely affected.\n\n \n\nFurthermore, as these foreign exchange regulations\nare still relatively new and their interpretation and implementation have been constantly evolving, it is unclear how these regulations,\nand any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant\ngovernment authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange\nactivities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition\nand results of operations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of\nsuch company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required\nby the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our\nbusiness and prospects.\n\n \n\nAs of the date of this disclosure, The PRC residents\nhave applied for foreign exchange registration under the SAFE Circular 37 and other related rules. Although they are in the process of\nmaking foreign exchange registration, they may still face with the above said possible fines in accordance with the PRC Laws.\n\n \n\n32\n\n \n\n \n\n**Increases in labor costs and enforcement\nof stricter labor laws and regulations in China and our additional payments of statutory employee benefits may adversely affect our business\nand profitability. Non-compliance with labor-related laws and regulations of the PRC may have an adverse impact on our financial condition\nand results of operation.**\n\n \n\nThe average wage in China has increased in recent\nyears and is expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that\nour labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor\ncosts to our customers, our profitability and results of operations may be materially and adversely affected. In addition, we e have been\nsubject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory\nemployee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing\ninsurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract\nLaw, that became effective in January 2008 and its implementing rules that became effective in September 2008 and was amended in July\n2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining\nthe term of employees’ probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of\nour employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit our\nability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.\nWe believe our current practice complies with the Labor Contract Law and its amendments. However, the relevant governmental authorities\nmay take a different view and impose fines on us. \n\n \n\nAs the interpretation and implementation of labor-related\nlaws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related\nlaws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed to have violated\nrelevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial\ncondition and results of operations could be materially and adversely affected.\n\n \n\n**Failure to make adequate contributions to various\nemployee benefit plans and withhold individual income tax on employees’ salaries as required by PRC regulations may subject us to\npenalties.**\n\n \n\nCompanies operating in China are required to participate\nin various government-mandated employee benefit contribution plans, including certain social insurance, housing funds and other welfare-oriented\npayment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances,\nof our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.\nThe requirement of employee benefit contribution plans has not been implemented consistently by the local governments in China given the\ndifferent levels of economic development in different locations. Companies operating in China are also required to withhold individual\nincome tax on employees’ salaries based on the actual salary of each employee upon payment. We may be subject to late fees and fines\nin relation to the underpaid employee benefits and under-withheld individual income tax, our financial condition and results of operations\nmay be adversely affected. \n\n \n\n**Any failure to comply with PRC regulations\nregarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other\nlegal or administrative sanctions.**\n\n \n\nPursuant to the Notices on Issues Concerning the\nForeign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, promulgated\nby SAFE in 2012, or SAFE Notices No. 7, PRC citizens and non-PRC citizens who reside in China for a continuous period of no less than\none year who participate in any stock incentive plan of an overseas publicly listed company offered to the director, supervisor, senior\nmanagement and other employees of, and any individual who has labor relationship with its domestic affiliated entities are required to\nregister with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain\nother procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with the exercise or\nsale of stock options and the purchase or sale of shares and interests. We and our directors, executive officers and other employees who\nare PRC citizens or who reside in the PRC for a continuous period of no less than one year and who have been granted stock options became\nsubject to these regulations when our company became an overseas listed company upon the completion of our recent initial public offering.\nFailure to complete the SAFE registrations for our employee incentive plans after our listing may subject them to fines and legal sanctions\nand may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries’ ability\nto distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans\nfor our directors, executive officers and employees under PRC law.\n\n \n\n33\n\n \n\n \n\nIn addition, the State Administration of Taxation,\nor SAT, has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, our employees working\nin China who exercise stock options or are granted restricted shares will be subject to PRC individual income tax. Our PRC subsidiaries\nhave obligations to file documents related to employee stock options or restricted shares with relevant tax authorities and to withhold\nindividual income taxes of those employees who exercise their share options or are granted with restricted shares. If our employees fail\nto pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax\nauthorities or other PRC governmental authorities.\n\n \n\n**If we are classified as a PRC resident enterprise\nfor PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.**\n\n \n\nUnder the PRC Enterprise Income Tax Law and its\nimplementation rules, an enterprise established outside of the PRC with its “de facto management body” within the PRC is considered\na “resident enterprise” and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation\nrules define the term “de facto management body” as the body that exercises full and substantial control and overall management\nover the business, productions, personnel, accounts and properties of an enterprise. In 2009, the State Administration of Taxation, or\nSAT, issued a circular, known as SAT Circular 82, which provides certain specific criteria for determining whether the “de facto\nmanagement body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular applies\nonly to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners,\nthe criteria set forth in the circular may reflect the SAT’s general position on how the “de facto management body”\ntext should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated\nenterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de\nfacto management body” in China, and will be subject to PRC enterprise income tax on its global income only if all of the following\nconditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s\nfinancial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s\nprimary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC;\nand (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.\n\n  \n\nThe tax resident status of an enterprise is subject\nto determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management\nbody.” If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income tax purposes, we\nwould be subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we would be required to withhold a\n10% tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders\n(including the common stockholders) may be subject to PRC tax on gains realized on the sale or other disposition of the common stock,\nif such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our\nnon-PRC individual shareholders (including the common stockholders) and any gain realized on the transfer of the common stock by such\nshareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates\nmay be reduced by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to claim the benefits\nof any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.\nAny such tax may reduce the returns on your investment in our common stock.\n\n \n\n34\n\n \n\n \n\n**We face uncertainty with respect to indirect\ntransfers of equity interests in PRC resident enterprises by their non-PRC holding companies.**\n\n \n\nOn February 3, 2015, the SAT issued the Public\nNotice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Bulletin\n7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a\nforeign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the\npurchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee\n(or other person who is obligated to pay for the transfer) of taxable assets, as such persons need to determine whether their transactions\nare subject to these rules and whether any withholding obligation applies.\n\n \n\nOn October 17, 2017, the SAT issued the Announcement\nof the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin\n37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of\nnon-resident enterprise income tax.\n\n \n\nWhere a non-resident enterprise transfers taxable\nassets indirectly by disposing of the equity interests of an overseas holding company, which is an “Indirect Transfer”, the\nnon-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect\nTransfer to the relevant tax authority. Using a “substance over form” principle, the PRC tax authority may disregard the existence\nof the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding\nor deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee\nor other person who pays for the transfer is obligated to withhold the applicable taxes currently at a rate of 10% for the transfer of\nequity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if\nthe transferee fails to withhold the taxes and the transferor fails to pay the taxes.\n\n \n\nWe face uncertainties as to the reporting and\nother implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale\nof the shares in our offshore subsidiaries and investments. Our company may be subject to filing obligations or taxed if our company is\ntransferor in such transactions and may be subject to withholding obligations if our company is transferee in such transactions, under\nSAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who are non-PRC resident enterprises, our PRC\nsubsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin 37. As a result, we may be required to\nexpend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we purchase\ntaxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have\na material adverse effect on our financial condition and results of operations.\n\n \n\n**You may experience difficulties in effecting\nservice of legal process, enforcing foreign judgments or bringing actions in China against us or our management. U.S. regulatory bodies\nalso may be limited in their ability to conduct investigations or inspections of our operations in China.**\n\n \n\nWe conduct substantially all of our operations\nin China, and substantially all of our assets are located in China In addition, most of our directors and officers are nationals and residents\nof countries other than the United States. A substantial portion of the assets of these persons is located outside the United States.\nThe PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Marshall Islands\nand many other countries and regions. Therefore, recognition and enforcement in the PRC of judgments of a court in any of these non-PRC\njurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. As a result, it\nmay be difficult for you to effect service of process within the United States upon these persons.\n\n \n\nIt may also be difficult for you to enforce in\nU.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors,\nmost of whom are not residents in the United States and the substantial majority of whose assets are located outside of the United States.\nIn addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts. Courts in China\nmay recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based on treaties between\nChina and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other arrangements\nthat provide for the reciprocal recognition and enforcement of foreign judgments with the United States. In addition, according to the\nPRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide\nthat the judgment violates basic principles of PRC law or national sovereignty, security, or the public interest. So, it is uncertain\nwhether a PRC court would enforce a judgment rendered by a court in the United States. \n\n \n\n35\n\n \n\n \n\nAny disclosure of documents or information located\nin China by foreign agencies may be subject to jurisdiction constraints and must comply with China’s state secrecy laws, which broadly\ndefine the scope of “state secrets” to include matters involving economic interests and technologies. There is no guarantee\nthat requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities\nwho provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located\nin China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by any of these regulators may be limited or\nprohibited.\n\n \n\n**We may be exposed to liabilities under the\nForeign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material\nadverse effect on our business.**\n\n \n\nWe are subject to the Foreign Corrupt Practice\nAct, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political\nparties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations,\nagreements with third parties, and make most of our sales in China. The PRC also strictly prohibits bribery of government officials. Our\nactivities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents, or distributors\nof our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these\npractices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the\nemployees, consultants, sales agents, or distributors of our Company may engage in conduct for which we might be held responsible. Violations\nof the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities,\nwhich could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold\nour Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.\n\n \n\n**If we become directly subject to the recent\nscrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate\nand resolve the matter which could harm our business operations, stock price and reputation, and could result in a loss of your investment\nin our stock, especially if such matter cannot be addressed and resolved favorably.**\n\n \n\nIn the past few years, U.S. publicly traded companies\nthat have substantially all of their operations in China, particularly companies like us have been the subject of intense scrutiny, criticism,\nand negative publicity by investors, financial commentators, and regulatory agencies, such as the SEC. Much of the scrutiny, criticism,\nand negative publicity has centered around financial and accounting irregularities and mistakes, lack of effective internal controls over\nfinancial accounting, inadequate corporate governance policies or lack of adherence thereto and, in many cases, allegations of fraud.\nAs a result of the scrutiny, criticism, and negative publicity, the publicly traded stocks of many U.S. listed Chinese companies have\nsharply decreased in value and, in some cases, have become virtually worthless. Many of these companies are now subject to shareholder\nlawsuits and SEC enforcement actions, and are conducting internal and external investigations into the allegations. It is not clear the\neffect of this sector-wide scrutiny, criticism, and negative publicity will have on our Company, our business, and our stock price. If\nwe become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend\nsignificant resources to investigate such allegations defending our Company. This situation will be costly, time consuming, and distract\nour management from growing our company.\n\n \n\n**The disclosures in our reports and other\nfilings with the SEC and our other public pronouncements will not be subject to the scrutiny of any regulatory bodies in the PRC. Accordingly,\nour public disclosure should be reviewed in light of the fact that no governmental agency that is in China where all of our operations\nand business are located have conducted any due diligence on our operations or reviewed or cleared any of our disclosure.**\n\n \n\nUnlike public reporting companies whose operations\nare located primarily in the United States, however, all of our operations are located in China. Since substantially all of our operations\nand business takes place in China, it may be more difficult for the Staff of the SEC to overcome the geographic and cultural obstacles\nthat are present when reviewing our disclosure. These same obstacles are not present for similar companies whose operations or business\ntake place entirely or primarily in the United States. Furthermore, our SEC reports and other disclosure and public pronouncements are\nnot subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings\nare not subject to the review of the CSRC, a PRC regulator that is tasked with oversight of the capital markets in China. Accordingly,\nyou should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done\nany due diligence on our company and with the understanding that none of our SEC reports, other filings or any of our other public pronouncements\nhas been reviewed or otherwise been scrutinized by any local regulator.\n\n \n\n36\n\n \n\n \n\n**RISKS RELATED TO OUR\nSECURITIES**\n\n \n\n**Nasdaq imposes\nlisting standards on our Common Stock, including recent amendments to Nasdaq Listing Rules, that may be difficult to fulfill, thereby\nleading to a potential delisting of our Common Stock.**\n\n \n\nOur Common Stock is traded and listed on the Nasdaq\nCapital Market under the symbol “JXG.” We are required to comply with all continued listing requirements, including among\nother things, a minimum bid price of $1.00 per share of Common Stock (the “Minimum Bid Price Requirement”), minimum shareholder’\nequity. certain major corporate transactions, the composition of our Board of Directors and committees thereof. The failure to meet these\nNasdaq Capital Market continued listing requirements may result in delisting of our Common Stock from the Nasdaq Capital Market,\nwhich could adversely affect the liquidity and market price thereof.\n\n \n\nIn the past, the closing price of our Common Stock\nfelt below the Minimum Bid Price Requirement several times, and in order to maintain compliance with the Minimum Bid Price Requirement\nthe Company effected reverse stock splits within the last two (2) years, including (i) the most recent one-for-fifteen (1-for-15) reverse\nstock split, effected on November 18, 2025 and (ii) one-for-four (1-for-4) reverse stock split, effected on December 27, 2024. Prior to\nthat, we also effected a 1-for-10 reverse stock split on April 26, 2023; however because we failed to regain compliance with the Minimum\nBid Price Requirement by April 24, 2023 (the deadline provided by Nasdaq Staff), we needed to request a hearing. On May 23, 2023, Nasdaq\nStaff notified the Company that it regained compliance with the Minimum Bid Requirement and that the Company is in compliance with all\napplicable listing standards and that its stock will continue to be listed and traded on Nasdaq.\n\n \n\nHowever, we cannot ensure you that we will be able\nto meet all requirements for continued listing on the Nasdaq Capital Market in the future. If we fail to maintain these Nasdaq listing\nrequirements, our Common Stock will be delisted. If our Common Stock is no longer listed on The Nasdaq Capital Market, our shares would\nlikely trade on the over-the-counter market. If our shares were to trade on the over-the-counter market, selling our shares could be more\ndifficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’\ncoverage of us may be reduced. In addition, in the event our shares are delisted, broker-dealers have certain regulatory burdens imposed\nupon them, which may discourage broker-dealers from effecting transactions in our shares, further limiting the liquidity of our shares.\nThese factors could result in lower prices and larger spreads in the bid and ask prices for our shares. Such delisting from the Nasdaq\nCapital Market and continued or further declines in our share price could also greatly impair our ability to raise additional necessary\ncapital through equity or debt financing, and could significantly increase the ownership dilution to shareholders caused by our issuing\nequity in financing or other transactions.\n\n \n\n**If we need to effectuate another reverse\nstock split, the trading price of our Common Stock may not meet the Minimum Bid Price Requirement.**\n\n \n\nIf we do effect a reverse stock split in response\nto, or in order to prevent, a future delisting notice, if received, there can be no assurance that the market price per new share of our\ncommon stock after the reverse stock split will remain unchanged or increase in proportion to the reduction in the number of old shares\nof our common stock outstanding before the reverse stock split. Other factors, such as our financial results, market conditions and the\nmarket perception of our business may adversely affect the market price of our common stock and there can be no assurance that a reverse\nstock split, if completed, will result in the intended benefits, that the market price of our common stock will increase in proportion\nto the reduction in the number of shares of our common stock outstanding before the reverse stock split or that the market price of our\ncommon stock will not decrease in the future. If the market price of our common stock does not increase the price per share of our common\nstock above the Minimum Bid Price Requirement or if the market price of our common stock does not remain above Nasdaq’s minimum\nbid price threshold of $1.00 per share, our common stock may still be delisted from Nasdaq.\n\n** **\n\n37\n\n \n\n** **\n\n**Considering recent amendments to Nasdaq\nListing rules, if a reverse stock split to regain compliance with the Minimum Bid Price Requirement would result in non-compliance with\nother Nasdaq Listing Rules, Nasdaq will not accept it and our Common Stock could be delisted.**\n\n \n\nNasdaq recently amended several of its listing\nrules related to reverse stock splits, implementing stricter requirements on companies to maintain continued listing. Should we effect\nanother reverse stock split in order to regain compliance with the Minimum Bid Price Requirement, we need to ensure that it would not\nresult in noncompliance with other continued Nasdaq requirements. Otherwise, the Company will not be in compliance with the Minimum Bid\nPrice Requirement and a secondary noncompliance and Nasdaq may start the delisting process. This listing rule may significantly reduce\nour ability to determine a maximum ratio of a reverse stock split that would enable us to increase the price per share of our common stock\nwhile complying with other continued listing requirements. We cannot ensure you that our future reverse stock split, if needed, would\nresult in compliance with all other Nasdaq Listing Rules. If we are unable to cure noncompliance with other continued listing requirements,\nour common stock may be delisted from Nasdaq; however, during the hearing process, the delisting will be stayed.\n\n \n\nEven if we are able to regain compliance with\nthe Minimum Bid Price Requirement, the liquidity of the shares of our common stock may be materially and adversely affected by any such\nreverse stock split given the reduced number of shares of common stock that will be outstanding following the reverse stock split, especially\nif the market price of our common stock does not increase as a result of the reverse stock split.\n\n \n\nFollowing any reverse stock split, the resulting\nmarket price of our common stock may not attract new investors and may not satisfy the investing requirements of those investors. Although\nwe believe a higher market price of our common stock may help generate greater or broader investor interest, there can be no assurance\nthat the reverse stock split will result in a share price that will attract new investors, including institutional investors. In addition,\nthere can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors. As a result,\nthe trading liquidity of our common stock may not necessarily improve.\n\n** **\n\n**Since we effectuated a reverse stock split\nwithin the past year, should the trading price of our Common Stock fall again below the Minimum Bid Price Requirement, we will not be\neligible to receive any compliance period and may be issued a delisting decision.**\n\n \n\nNasdaq recently amended its listing rules related\nto excessive reverse stock splits, which further limited the number of times companies can conduct reverse stock splits to regain compliance\nwith the Minimum Bid Price Requirement.\n\n \n\nUnder these rules, if a company has effectuated\none or more reverse stock splits with a cumulative ratio of 1-for-250 within a two-year period or a reverse stock split at any split ratio\nwithin the prior one year and thereafter falls out of compliance with the Minimum Bid Price Requirement, it will not be eligible for any\ncompliance period to address a bid price deficiency, but instead will be issued a delisting decision.\n\n \n\nWe effectuated a 1-for-15 reverse stock split\non November 18, 2025 and another 1-for 4 reverse stock split on December 27, 2024 to prevent a potential non-compliance with the Minimum\nBid Price Requirements. If our Common Stock fails below the Minimum Bid Price Requirement within one year from effecting the last reverse\nstock split, we will not be eligible to receive a compliance period.\n\n \n\n38\n\n \n\n \n\n**If our Common Stock\nis delisted from Nasdaq, we may become subject to the trading complications experienced by “Penny Stocks” in the over-the-counter\nmarket.**\n\n \n\nDelisting from Nasdaq\nmay cause our shares of Common Stock to become the SEC’s “penny stock” rules. The SEC generally defines a penny stock\nas an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject\nto specific exemptions. One such exemption is to be listed on Nasdaq. The market price of our Common Stock is currently higher than $1.00\nper share. However, because the daily trading volume in our Common Stock is very low, significant price movement can be caused by the\ntrading in a relatively small number of shares. Therefore, were we to be delisted from Nasdaq Capital Market, our Common Stock may become\nsubject to the SEC’s “penny stock” rules. These rules require, among other things, that any broker engaging in a purchase\nor sale of our securities provide its customers with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii)\ndisclosure of the compensation of the broker and its salespersons in the transaction and (iv) monthly account statements showing the market\nvalues of our securities held in the customer’s accounts. A broker would be required to provide the bid and offer quotations and\ncompensation information before effecting the transaction. This information must be contained on the customer’s confirmation. Generally,\nbrokers are less willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements may\nmake it more difficult for shareholders to purchase or sell our shares. Because the broker, not us, prepares this information, we would\nnot be able to assure that such information is accurate, complete or current.\n\n \n\n**The market price\nof our Common Stock may be volatile or may decline regardless of our operating performance based on numerous factors, many of which are\nbeyond our control.**\n\n \n\nThere are numerous additional\nfactors, many of which are beyond our control, that may cause the market price of our Common Stock to fluctuate significantly. These factors\ninclude:\n\n \n\n \n●\nour earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors;\n\n \n\n \n●\nthe financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;\n\n \n\n \n●\nactions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our Company, or our failure to meet these estimates or the expectations of investors;\n\n \n\n \n●\nprice and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; speculation about our business in the press or the investment community;\n\n \n\n \n●\nsignificant developments relating to our relationships with our customers or suppliers;\n\n \n\n \n●\ncustomer demand for our products;\n\n \n\n \n●\ninvestor perceptions of our industry in general and our company in particular;\n\n \n\n \n●\nthe operating and stock performance of comparable companies;\n\n \n\n \n●\ngeneral economic conditions and trends;\n\n \n\n \n●\nmajor catastrophic events;\n\n \n\n \n●\nannouncements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;\n\n \n\n \n●\nchanges in accounting standards, policies, guidance, interpretation or principles;\n\n \n\n \n●\nloss of external funding sources;\n\n \n\n \n●\nsales of our shares, including sales by our directors, officers or significant shareholders; and\n\n \n\n \n●\nadditions or departures of key personnel.\n\n \n\nSecurities class action\nlitigation is often instituted against companies following periods of volatility in their share price. This type of litigation could result\nin substantial costs to us and divert our management’s attention and resources. Moreover, securities markets may from time to time\nexperience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies. For example,\nin July 2008, the securities markets in the United States, China and other jurisdictions experienced the largest decline in share prices\nsince September 2001. These market fluctuations may adversely affect the price of our shares and other interests in our company at a time\nwhen you want to sell your interest in us. \n\n \n\n39\n\n \n\n \n\n**If securities or\nindustry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Common Stock,\nthe price of our Common Stock and trading volume could decline.**\n\n \n\nThe trading market for\nour Common Stock may depend in part on the research and reports that industry or securities analysts publish about us or our business.\nWe do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Common Stock\nwould likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could\nlose visibility in the financial markets, which could cause the price of our Common Stock and the trading volume to decline.\n\n** **\n\n**We do not intend\nto pay dividends for the foreseeable future.**\n\n \n\nFor the foreseeable future,\nwe intend to retain any earnings to finance the development and expansion of our business, and do not anticipate paying any cash dividends\non our shares. Accordingly, investors must be prepared to rely on sales of their shares after price appreciation to earn an investment\nreturn, which may never occur. Investors seeking cash dividends should not purchase our shares. Any determination to pay dividends in\nthe future will be made at the discretion of our Board, and will depend on our results of operations, financial condition, contractual\nrestrictions, restrictions imposed by applicable laws, and other factors the Board deems relevant.\n\n \n\n**We have granted,\nand may continue to grant, stock-based awards to Key Employees and Consultants, which will increase our share-based compensation and may\nhave an adverse effect on our results of operations.**\n\n \n\nIn order to compete for\ntalents, we may need to offer higher compensation to our key employees and consultants, including granting awards under our current equity\nincentive plan, which may include the grant of shares of restricted common stocks. We have adopted various equity incentive plans, starting\nfrom the 2018 Equity Incentive Plan, the 2022 Plan, the New 2022 EIP, as amended, and the 2026 Plan. In addition, we granted a performance-based\nstock awards to our Chief Executive Officer, Chief Financial Officer, co-chairwoman and director. We believe the granting of stock-based\nawards is important to our ability to attract and retain key personnel and employees, and we will continue to grant share-based awards\nin the future. As a result, our expenses associated with share-based compensation will increase, which may have an adverse effect on our\nresults of operations.\n\n \n\nWe provided stock-based\ncompensation to our key employees and directors for the fiscal year ended December 31, 2025. The issuance of such shares resulted in a\ndeduction in our profit although there is no cash paid out. However, such deduction in profit makes our financial performance looks less\nattractive to the investors and cause difficulties to raise sufficient capital to support our business.\n\n \n\n**We are a “foreign\nprivate issuer” and have disclosure obligations that are different than those of U.S. domestic reporting companies. Therefore, you\nshould not expect to receive the same information about us as a U.S. domestic reporting company may provide. Furthermore, we are permitted\nto adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate\ngovernance listing standards; these practices may afford less protection to stockholders than they would enjoy if we complied fully with\nthe Nasdaq corporate governance listing standards.**\n\n \n\nWe are a foreign private\nissuer. As a result, we are not subject to certain of the requirements imposed upon U.S. domestic issuers by the SEC. For example, we\nare not required by the SEC or the federal securities laws to issue quarterly reports or file proxy statements with the SEC. We are also\nrequired to file our annual report on Form 20-F with the SEC within four months of our fiscal year end. We are also not required to disclose\ncertain detailed information regarding executive compensation that is required from U.S. domestic issuers. Further, our directors and\nexecutive officers are not required to report equity holdings under Section 16 of the Securities Act. As a foreign private issuer, we\nare also exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors\nare not privy to specific information about an issuer before other investors. We are, however, still subject to the anti-fraud and anti-manipulation\nrules of the SEC, such as Rule 10b-5. Since many of the disclosure obligations required of us as a foreign private issuer are different\nthan those required by U.S. domestic reporting companies, our shareholders should not expect to receive all of the same types of information\nabout us and at the same time as information is received from, or provided by, U.S. domestic reporting companies. We are liable for violations\nof the rules and regulations of the SEC, which do apply to us as a foreign private issuer. Violations of these rules could affect our\nbusiness, results of operations, and financial condition.\n\n \n\n40\n\n \n\n \n\nAs a foreign private\nissuer, we are also permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to domestic U.S. issuers.\nThis may afford less protection to holders of our securities.\n\n \n\nWe are exempted from\ncertain corporate governance requirements of the Nasdaq Stock Market by virtue of being a foreign private issuer. As a foreign private\nissuer, we are permitted, and we elected to follow the governance practices of our home country, the Republic of the Marshall Islands\nin lieu of certain corporate governance requirements of Nasdaq. As result, the standards applicable to us are considerably different than\nthe standards applied to domestic U.S. issuers. For instance, we are not required to:\n\n \n\n \n●\nhave a compensation committee and a nominating committee to be comprised solely of “independent directors; and\n\n \n\n \n●\nhold an annual meeting of shareholders no later than one year after the end of the Company’s fiscal year-end.\n\n \n\nAs a result, you may\nnot have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.\n\n \n\n**Future sales or\nperceived sales of our shares of Common Stock could depress our stock price.**\n\n \n\nAs of the date of this\nAnnual Report, we have 9,276,831  shares of Common Stock outstanding. Many of these shares were either recently registered in the\nregistration statements on Form S-8 pursuant to our equity incentive plans or will become eligible for sale in the public market, subject\nto limitations imposed by Rule 144 under the Securities Act. If the holders of these shares were to attempt to sell a substantial amount\nof their holdings at once, the market price of our Common Stock could decline. Moreover, the perceived risk of this potential dilution\ncould cause shareholders to attempt to sell their shares and investors to short the Common Stock, a practice in which an investor sells\nshares that he or she does not own at prevailing market prices, hoping to purchase shares later at a lower price to cover the sale. As\neach of these events would cause the number of shares of our Common Stock being offered for sale to increase, the market price of our\nCommon Stock would likely further decline. All of these events could combine to make it very difficult for us to sell equity or equity-related\nsecurities in the future at a time and price that we deem appropriate.\n\n \n\n**Provisions of our articles of incorporation\nmay impede a takeover or make it more difficult for shareholders to change the direction or management of the Company, which could reduce\nshareholders’ opportunity to influence management of the Company.**\n\n \n\nOur Amended and Restated Articles of Incorporation,\nas amended (the “Restated Articles”) permit our Board to issue up to five million shares of preferred stock with a par value\nof $0.0001 (the “Preferred Stock”) from time to time, with such rights and preferences as they consider appropriate. These\nterms may include voting rights including the right to vote as a series on particular matters, preferences as to dividends and liquidation,\nconversion rights and redemption rights provisions. The issuance of any preferred stock could reduce the value of our Common Stock. In\naddition, specific rights granted to future holders of preferred stock, including voting rights and conversion rights, could be used to\nrestrict our ability to merge with, or sell assets to, a third party. As of the date of this Annual Report, the Company has created and\ndesignated the following series of Preferred Stock: (i) Series A Convertible Preferred Stock: (ii) Series B Participating Preferred Stock;\n(iii) Series C Convertible Preferred Stock; (iv) Series D Convertible Preferred Stock, (v) Series E Convertible Preferred Stock, and (vi)\nSeries F Convertible Preferred Stock.\n\n \n\nSun Lei, our Chief Executive Officer, Interim\nFinancial Officer, co-chairwoman and director, holds, 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 2,067\nshares of Common Stock, 150,000 shares of Series C Convertible Preferred Stock that are convertible into 1,250 shares of our Common Stock\nand 80,000 shares of Series D Preferred Stock, convertible into 1,733 shares of Common Stock. At the date of this Annua Report, all shares\nof Series E and F Convertible Preferred Stock were converted into shares of Common stock, and no Series E Convertible Preferred Stock\nand no Series F Convertible Preferred Stock are outstanding.\n\n \n\nThe ability of the Board to issue shares of Preferred\nStock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which\nin turn could prevent shareholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively\naffect the market price of shares of our Common Stock.\n\n \n\n41"}