{"url_path":"/sec/mgn/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/1995075/0001213900-26-057595-index.html","accession_number":"0001213900-26-057595","cik":"0001995075","ticker":"MGN","issuer_name":"Megan Holdings Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1995075/0001213900-26-057595-index.html","primary_entity_key":"0001995075","primary_entity_name":"Megan Holdings Ltd."},"word_count":20612,"has_tables":true,"body_markdown":"**Item\n3. Key Information**\n\n** **\n\n**Overview**\n\n \n\nWe are a company principally engaged in the development,\nconstruction and maintenance of aquaculture farms and related works. Our operations are based in Malaysia. Since our inception in 2020,\nwe have strived to establish ourselves as a trusted and experienced provider of shrimp farm related maintenance services in Malaysia.\nAs of the date of this annual report, we have been carrying out a series of upgrading and maintenance works for aquaculture farms, all\nof which are located in Tawau, Sabah, Malaysia. This constitutes 15.5%, 70.5% and 47.7% of our revenue for the financial years ended\nDecember 31, 2023, 2024 and 2025, respectively. Besides that, we also carried out upgrading works for a pineapple plantation farm\nlocated at Kota Tinggi, Johor, Malaysia in 2022 and 2023. This constituted 22.6%, Nil% and Nil% of our revenue for the financial years\nended December 31, 2023, 2024 and 2025, respectively.\n\n \n\nComplementary to our upgrading and maintenance\nservices, we also assist customers with the design and development of new farms. As of the date of this annual report, we completed the\ndevelopment and construction of a shrimp hatchery center in Semporna, Sabah, Malaysia, where we have been engaged to undertake the construction\nof hatchery buildings and related functional facilities. We have also completed the development of a 111-acre shrimp farm at Tawau, Sabah,\nMalaysia. The design and development of new farms comprised 61.7%, 70.5% and Nil% of our revenue for the financial years ended December 31,\n2023, 2024 and 2025. From time to time, we also assist our customers in sourcing for building materials and machineries available for\nrental for use on their farms. This comprised 0.2%, 0.2% and 51.9% of our revenue for the financial years ended December 31,\n2023, 2024 and 2025, respectively.\n\n \n\nWith our wide suite of services and diverse revenue\nstreams, we are well-positioned to serve customers as a one-stop center for their aquaculture and agriculture needs.\n\n** **\n\n**Corporate Structure**\n\n \n\nBelow is a chart illustrating our current corporate\nstructure and reflecting the corporate reorganization that was completed on July 31, 2024:\n\n \n\n \n\n \n\n \n\n(1)Star Sprite Limited, a business company incorporated\nin the BVI on November 30, 2022 and wholly owned by Mr. Darren Hoo.\n\n \n\nThe re-organization enabled MMSB to become a\nwholly owned subsidiary of MHL. Each of SSL, USSB, YHCML, ECGL, KLSB, KBSB, Malama and SJCC, (who were the shareholders of MMSB as of\nthe date of the Share Swap Agreement) transferred their respective shares in MMSB, which represented in aggregate 100% of the issued\nshare capital of MMSB, to MHL. The consideration for the share transfers was satisfied by the allotment and issuance of 14,999,999 Class A\nOrdinary Shares in aggregate to SSL, USSB, YHCML, ECGL, KLSB, KBSB, Malama and SJCC, each credited as fully paid, in proportion to their\nrespective shareholdings in MMSB. Following the completion of the Share Swap Agreement on July 31, 2024, MHL became the holding\ncompany of MMSB, and SSL, USSB, YHCML, ECGL, KLSB, KBSB, Malama and SJCC became shareholders of MHL.\n\n \n\n1\n\n \n\n** **\n\n**Recent Developments**\n\n* *\n\n*Initial Public Offering*\n\n \n\nOn September 29, 2025, the Company completed\nits initial public offering (the“IPO”). In the IPO, the Company issued 1,250,000 shares of a nominal or par value of\nUS$0.0001 each at a price of US$4.00 per share. The Company received gross proceeds in the amount of US$5,000,000 before deducting any\nunderwriting discounts and expenses. The shares of a nominal or par value of US$0.0001 each began trading on September 26, 2025\non the Nasdaq Capital Market under the ticker symbol “MGN.”\n\n* *\n\n*Change of Director*\n\n \n\nOn October 29, 2025, Mr. Long Jia Kwang\nnotified the Company of his resignation as an independent director, chairman of the audit committee and member of the nominating and\ncompensation committees, effective October 31, 2025. On November 21, 2025, approved by the Board of Directors, the Nominating\nCommittee and the Compensation Committee, Mr. Phua Zhi Yong was appointed as independent director and chair of audit committee of\nthe Company, effective November 21, 2025.\n\n* *\n\n*Change of Independent Public Accountant*\n\n \n\nEffective on December 15, 2025, the Company\ndismissed its independent registered public accounting firm, WWC, P.C., which was approved and ratified by the Company’s Board\nof Directors and the Audit Committee on December 15, 2025. On the same day, the Audit Committee and the Board of Directors\nof the Company appointed SFAI MALAYSIA PLT Inc as its new independent registered public accounting firm to audit the Company’s\nfinancial statements.\n\n* *\n\n*Adoption of Dual-Class Share Structure*\n\n \n\nOn January 27, 2026, the Company held its annual\ngeneral meeting of shareholders, at which shareholders approved the adoption of a dual-class share structure. Pursuant to the shareholders\nresolutions, the Company’s share capital was changed from US$50,000 divided into 500,000,000 ordinary shares of a nominal or par\nvalue of US$0.0001 each to US$50,000 divided into 500,000,000 ordinary shares of a par value of US$0.0001 each, comprising (a) 450,000,000\nClass A Ordinary Shares and (b) 50,000,000 Class B Ordinary Shares , with each Class A Ordinary Share entitling the holder thereof to\none (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share entitling the holder\nthereof to fifty (50) votes on all matters subject to vote at general meetings of the Company. In connection with the adoption of the\ndual-class share structure, shareholders approved the redesignation of the Company’s issued and outstanding ordinary shares. As\na result, the 10,845,000 issued ordinary shares held by SSL were redesignated into 5,845,000 Class A Ordinary Shares and 5,000,000 Class\nB Ordinary Shares, and the remaining 5,405,000 issued ordinary shares held by other shareholders were redesignated into 5,405,000 Class A\nOrdinary Shares. Shareholders also approved the redesignation of the Company’s authorized but unissued ordinary shares into Class\nA Ordinary Shares and Class B Ordinary Shares and the adoption of the second amended and restated memorandum and articles of association\nto reflect the dual-class share structure.\n\n* *\n\n*Follow-on Public Offering*\n\n \n\nOn February 27, 2026, the Company closed a follow-on\npublic offering (the “Follow-on Offering”) of 20,750,000 Class A Ordinary Shares at a public offering price of US$0.40 per\nshare. Gross proceeds to the Company, before deducting placement agent fees and other offering expenses, were approximately US$8.3 million.\nD. Boral Capital LLC acted as the exclusive placement agent in connection with the Follow-on Offering. The Class A Ordinary Shares were\noffered pursuant to a registration statement on Form F-1 (File No. 333-292850), as amended, which was declared effective by the U.S.\nSecurities and Exchange Commission on February 23, 2026. The Company intends to use the net proceeds from the Follow-on Offering for\nthe development of its Smart Farming System, working capital and general corporate purposes.\n\n** **\n\n*Nasdaq Minimum Bid Price Deficiency*\n\n \n\nOn May 12, 2026, the Company received a notification\nletter from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company is not in compliance with the minimum bid price\nrequirement set forth in Nasdaq Listing Rule 5550(a)(2), which requires that listed securities maintain a minimum bid price of US$1.00\nper share. The notification letter stated that the closing bid price of the Company’s Class A Ordinary Shares had been below US$1.00\nper share for the 30 consecutive business days from March 30, 2026 to May 11, 2026. The notification has no immediate effect on the listing\nor trading of the Class A Ordinary Shares on the Nasdaq Capital Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company\nhas been granted an initial compliance period of 180 calendar days, until November 9, 2026, to regain compliance. To regain compliance,\nthe closing bid price of the Class A Ordinary Shares must be at least US$1.00 per share for a minimum of ten consecutive business days\nduring the compliance period. If the Company does not regain compliance by November 9, 2026, it may be eligible for an additional 180-day\ncompliance period, subject to meeting the continued listing requirement for market value of publicly held shares and all other initial\nlisting standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and providing written notice of its\nintention to cure the deficiency during the second compliance period, which may include implementing a reverse stock split if necessary.\nThe Company intends to monitor the closing bid price of the Class A Ordinary Shares and is considering all available options to regain\ncompliance, although there can be no assurance that the Company will be able to do so.\n\n** **\n\n2\n\n \n\n** **\n\n**Holding Company Structure**\n\n \n\nMHL is a holding company incorporated in the\nCayman Islands with no material operations of its own. We conduct our operations primarily in Malaysia via MMSB.\n\n** **\n\n**Competitive Strengths**\n\n \n\n●**Cost effective\nsolutions.    **Our company offers shrimp farmers a comprehensive suite\nof services encompassing consultancy, design, construction, maintenance, and repair. This\nall-inclusive approach affords our customers the convenience of a single point of contact\nfor all their shrimp farming requirements, streamlining their operations, and delivering\ntangible cost and time savings.\n\n  \n\n●**Strong relationships.    **We\nhave established strong and stable relationships with key suppliers and customers in Malaysia\nover the last three years.\n\n  \n\n●**We have an\nexperienced management team.    **We have an experienced management\nteam, led by Mr. Darren Hoo, our Chairman and CEO, who has been instrumental in spearheading\nthe growth of our company. He has over 10 years of experience in the aquaculture and\nagriculture industries in Malaysia and is primarily responsible for the planning and execution\nof our Company’s business strategies and managing our Company’s customer relationships.\n\n** **\n\n**Growth Strategy**\n\n \n\n●**Market Development.    **We\nare actively exploring new customers in Malaysia, and international markets, beginning with\nIndonesia, leveraging our reputation and customer base to build new relationships and increase\nmarket share for continued success in the industry.\n\n \n\n●**Strategic growth\ninitiatives.    **As our customer base grows, we aim to identify potential\npartners for equity participation, creating recurring revenue streams and mutually beneficial\nrelationships to drive our industry success.\n\n \n\n●**Product Development.    **We\nbelieve that the Smart Farming System we are developing could serve as a pivotal driver for\nbusiness growth and a transformative tool in aquaculture and agriculture. We are planning\nfor our Smart Farming System to offer several features including (a) water quality monitoring,\n(b) feeding optimization, (c) disease prevention, (d) environmental monitoring\nand (e) data analytics. Overall, the hardware development for our Smart Farming System\nwill require a combination of sensors, actuators, cameras, control systems, connectivity,\nand power supply, all working together to optimize yields, improve resource efficiency, and\npromote sustainable farming practices. Our system could closely monitor the operating parameters\nof each pond and alert customers to any irregularities, enabling them to take corrective\naction and improve yield. In addition, the system could capture data that our customers can\nuse to analyze operational costs, estimate yields, and make informed decisions about their\nfarm’s financial performance.\n\n** **\n\n**Transfers of Cash to and from Our Subsidiaries**\n\n \n\nMHL is permitted under the laws of the Cayman\nIslands to provide funding to our subsidiaries incorporated in Malaysia through loans or capital contributions without restrictions on\nthe amount of the funds. Save for (a) when future financing arrangements between our subsidiaries and its creditors may contain\nnegative covenants that limit the ability of our subsidiaries to declare or pay dividends or make distributions or (b) our subsidiaries\nare restricted from declaring or paying such dividends or making such distributions under the Malaysian Companies Act, 2016, which stipulates\nthat dividends are to be paid out of our subsidiaries’ profits and that the dividends should not be paid if the payment of such\ndividends or making such distributions will cause our subsidiaries to be insolvent (i.e. our subsidiaries being unable to pay its debts\nas and when the debts become due within 12 months immediately after the payment distribution is made), there are no other restrictions\non dividends transfers from Malaysia to the Cayman Islands. As of the date of this annual report, all corporations in Malaysia are required\nto adopt a single-tier dividend. All dividends distributed by Malaysian resident companies under a single tier dividend are not taxable.\nFurther, the Government of Malaysia does not levy withholding tax on dividends payment. Therefore, there is no withholding tax imposed\non dividends paid to non-residents by Malaysian companies. For the transfer of assets from our subsidiaries to the holding company, there\nare no governmental laws, decrees, regulations, or other legislations that may affect such transfer. However, such transfer of assets\nmay be subject to withholding taxes (if any). The same applies to the transfer of cash from our subsidiaries to the holding company upon\nthe presentation of the necessary documentary evidence required by local banks or financial institutions. As of the date of this annual\nreport, there has not been any assets or cash transfer between the holding company and its subsidiaries, and our subsidiaries are not\nrestricted from declaring any dividends as our subsidiaries currently has sufficient profits and the payment of such dividends or making\nsuch distributions will not cause our subsidiaries to be insolvent. We have not installed any cash management policies that dictate the\namount of such funding.\n\n** **\n\n3\n\n \n\n** **\n\n**Implications of Our Being a “Controlled\nCompany”**\n\n \n\nOur controlling shareholder, Mr. Darren Hoo,\nbeneficially owns an aggregate of 5,845,000 Class A Ordinary Shares and 5,000,000 Class B Ordinary Shares. Because each Class B Ordinary\nShare shall entitle the holder thereof to fifty (50) votes on all matters subject to vote at general meetings of the Company, Mr. Darren\nHoo controls 90.73% of the total voting power of our total issued and outstanding share capital. As a result, we are a “controlled\ncompany” within the meaning of the Nasdaq Stock Market Rules and, therefore, will be eligible for certain exemptions from the corporate\ngovernance listing requirements of the Nasdaq Stock Market Rules.\n\n \n\nFor so long as we are a controlled company, we\nare permitted to elect to rely, and may rely, on certain exemptions from the Nasdaq corporate governance rules, including:\n\n \n\n●an exemption from\nthe requirement that certain committees be composed solely of independent directors;\n\n \n\n●an exemption from\nthe requirement that the compensation of our directors and officers be determined or recommended\nsolely by independent directors; and\n\n \n\n●an exemption from\nthe requirement that our directors be selected or recommended solely by independent directors\nor a committee composed solely of independent directors.\n\n \n\nAlthough we do not currently intend to rely on\nthe “controlled company” exemptions under the Nasdaq listing rules, we may elect to rely on some or all of these exemptions\nin the future. If we do, holders of our Class A Ordinary Shares would not have the same protections afforded to shareholders of companies\nthat are subject to all of the Nasdaq corporate governance requirements.\n\n** **\n\n**Implications of Being a Foreign Private Issuer**\n\n \n\nWe are a foreign private issuer within the meaning\nof the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to U.S. domestic public companies.\nFor example:\n\n \n\n●we are not required\nto provide as many Exchange Act reports, or as frequently, as a domestic public company;\n\n \n\n●for interim reporting,\nwe are permitted to comply solely with our home country requirements, which are less rigorous\nthan the rules that apply to domestic public companies;\n\n \n\n●we are not required\nto provide the same level of disclosure on certain issues, such as executive compensation;\n\n \n\n●we are exempt\nfrom the provisions of Regulation FD aimed at preventing issuers from making selective\ndisclosures of material information;\n\n \n\n●we are not required\nto comply with the sections of the Exchange Act regulating the solicitation of proxies,\nconsents, or authorizations in respect of a security registered under the Exchange Act;\nand\n\n** **\n\n4\n\n \n\n** **\n\n**Implications of Being an Emerging Growth Company**\n\n \n\nAs a company with less than US$1.235 billion\nin revenues during our last financial year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business\nStartups Act of 2012, or the JOBS Act. An “emerging growth company” may take advantage of reduced reporting\nrequirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we:\n\n \n\n●may present only\ntwo years of audited financial statements and only two years of related Management’s\nDiscussion and Analysis of Financial Condition and Results of Operations, or “MD&A”;\n\n \n\n●are not required\nto provide a detailed narrative disclosure discussing our compensation principles, objectives\nand elements and analyzing how those elements fit with our principles and objectives, which\nis commonly referred to as “compensation discussion and analysis”;\n\n \n\n●are not required\nto obtain an attestation and report from our auditors on our management’s assessment\nof our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;\n\n \n\n●are not required\nto obtain a non-binding advisory vote from our shareholders on executive compensation or\ngolden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on\nfrequency” and “say-on-golden-parachute” votes);\n\n \n\n●are exempt from\ncertain executive compensation disclosure provisions requiring a pay-for-performance graph\nand chief executive officer pay ratio disclosure;\n\n \n\n●are eligible to\nclaim longer phase-in periods for the adoption of new or revised financial accounting standards\nunder §107 of the JOBS Act; and\n\n \n\n●will not be required\nto conduct an evaluation of our internal control over financial reporting.\n\n \n\nWe intend to take advantage of all of these reduced\nreporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting\nstandards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial\nstatements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods\nunder §107 of the JOBS Act.\n\n \n\n**Enforceability of Civil Liabilities**\n\n \n\nWe are incorporated under the laws of the Cayman\nIslands as an exempted company with limited liability. We incorporated under the laws of the Cayman Islands because of certain benefits\nassociated with being a Cayman Islands exempted company, such as political and economic stability, an effective judicial system, a favorable\ntax system, the absence of foreign exchange control or currency restrictions, and the availability of professional and support services.\nThe Cayman Islands, however, has a less developed body of securities laws as compared to the U.S. and provides significantly less\nprotection for investors than the U.S. Additionally, Cayman Islands companies may not have standing to sue in the federal courts\nof the U.S.\n\n \n\nMost of our operations are conducted in Malaysia\nand a majority of our consolidated assets are located outside of the United States. In addition, all of our directors and officers\nas listed below, are nationals or residents of countries other than the United States, and all or a substantial portion of their\nassets are located outside the U.S.\n\n \n\n**Name**\n \n**Position**\n \n**Nationality**\n \n**Country\nof Residence**\n\nHoo Wei Sern\n \nCEO, Director\n \nMalaysia\n \nMalaysia\n\nNg Kai Tie\n \nCFO\n \nMalaysia\n \nMalaysia\n\nPhua Zhi Yong\n \nIndependent Director\n \nSingapore\n \nSingapore\n\nTse Yin Sum\n \nIndependent Director\n \nHong Kong\n \nHong Kong\n\nLai Yee Yee\n \nIndependent Director\n \nMalaysia\n \nMalaysia\n\n \n\n5\n\n \n\n \n\nAs a result, it may not be possible for you to:\n\n \n\n●effect service\nof process within the United States upon our non-U.S. resident directors or on\nus;\n\n \n\n●enforce in U.S. courts\njudgments obtained against our non-U.S. resident directors or us in the U.S. courts\nin any action, including actions under the civil liability provisions of U.S. securities\nlaws; and\n\n \n\n●enforce in U.S. courts\njudgments obtained against our non-U.S. resident directors or us in courts of jurisdictions\noutside the United States in any action, including actions under the civil liability\nprovisions of U.S. securities laws.\n\n \n\nAlthough we are incorporated outside the United States,\nwe have appointed Cogency Global Inc., 122 E. 42nd Street, 18th Floor, New York, New York 10168 as our\nagent to receive service of process with respect to any action brought against us in the United States District Court for the Southern\nDistrict of New York under the U.S. federal securities laws or securities laws of any U.S. state or any action brought\nagainst us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of\nNew York.\n\n \n\nHarney Westwood & Riegels, our counsel\nas to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would: (i) recognize\nor enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability\nprovisions of the federal securities laws of the United States or the securities laws of any state in the United States, or\n(ii) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the\nfederal securities laws of the United States or the securities laws of any state in the United States.\n\n \n\nWe have been advised by Harney Westwood &\nRiegels that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of\nthe United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such\njudgments), the Grand Court of the Cayman Islands will at common law enforce final and conclusive *in personam* judgments of state\nand/or federal courts of the United States of America (the **Foreign Court**) of a debt or definite sum of money against\nthe Company (other than a sum of money payable in respect of taxes or other charges of a like nature, a fine or other penalty (which\nmay include a multiple damages judgment in an anti-trust action) or where enforcement would be contrary to public policy). The Grand\nCourt of the Cayman Islands will also at common law enforce final and conclusive *in personam* judgments of the Foreign Court that\nare non-monetary against the Company, for example, declaratory judgments ruling upon the true legal owner of shares in a Cayman Islands\ncompany. The Grand Court of the Cayman Islands will exercise its discretion in the enforcement of non-money judgments by having regard\nto the circumstances, such as considering whether the principles of comity apply. To be treated as final and conclusive, any relevant\njudgment must be regarded as *res judicata* by the Foreign Court. A debt claim on a foreign judgment must be brought within six years\nof the date of the judgment, and arrears of interest on a judgment debt cannot be recovered after six years from the date on which\nthe interest was due. The courts of the Cayman Islands are unlikely to enforce a judgment obtained from the Foreign Court under civil\nliability provisions of U.S. federal securities law if such a judgment is found by the courts of the Cayman Islands to give rise\nto obligations to make payments that are penal or punitive in nature. Such a determination has not yet been made by the Grand Court of\nthe Cayman Islands. A court of the Cayman Islands may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.\nA judgment entered in default of appearance by a defendant who has had notice of the Foreign Court’s intention to proceed may be\nfinal and conclusive notwithstanding that the Foreign Court has power to set aside its own judgment and despite the fact that it may\nbe subject to an appeal the time-limit for which has not yet expired. The Grand Court of the Cayman Islands may safeguard the defendant’s\nrights by granting a stay of execution pending any such appeal and may also grant interim injunctive relief as appropriate for the purpose\nof enforcement.\n\n** **\n\n6\n\n \n\n** **\n\n**Hong Kong**\n\n \n\nA judgment from the United States courts\nwill not be directly enforced in Hong Kong. There are currently no treaties or other arrangements providing for reciprocal enforcement\nof foreign judgments between Hong Kong and the United States. However, the common law permits an action to be brought upon\na foreign judgment. That is to say, a foreign judgment itself may form the basis of a cause of action since the judgment may be regarded\nas creating a debt between the parties to it. In a common law action for enforcement of a foreign judgment in Hong Kong, the enforcement\nis subject to various conditions, including but not limited to, that the foreign judgment is a final judgment conclusive upon the merits\nof the claim, the judgment is for a liquidated amount in a civil matter and not in respect of taxes, fines, penalties, or similar charges,\nthe proceedings in which the judgment was obtained were not contrary to natural justice, and the enforcement of the judgment is not contrary\nto public policy of Hong Kong. Such a judgment must be for a fixed sum and must also come from a “competent” court as\ndetermined by the private international law rules applied by the Hong Kong courts. The defenses that are available to a defendant\nin a common law action brought on the basis of a foreign judgment include lack of jurisdiction, breach of natural justice, fraud, and\ncontrary to public policy. However, a separate legal action for debt must be commenced in Hong Kong in order to recover such debt\nfrom the judgment debtor. These constraints may impact both the cost and time associated with legal proceedings in Hong Kong. On\nthe point of cost constraints, investors could face additional legal expenses (including hiring local attorneys and translators), travel\ncosts for attending court proceedings, and other administrative charges. On the point of time constraint, investors may face time constraints\ndue to legal delays, appeals, and the complexity of cases of pursuing such enforcement in Hong Kong.\n\n** **\n\n**Malaysia**\n\n \n\nThere is an element of uncertainty regarding\nthe recognition or enforcement of judgments obtained against us, our directors, or officers by United States courts, based on the\ncivil liability provisions of US securities laws or state laws. There is currently no statutory enforcement or treaty between the US\nand Malaysia providing for reciprocal recognition and enforcement of judgments of U.S. courts.\n\n \n\nBe it as it may, the Reciprocal Enforcement of\nJudgments Act 1958 of Malaysia (“REJA”) allows for the enforcement of judgments from specific Commonwealth countries\nlisted in the First Schedule of REJA. These countries include the United Kingdom, Hong Kong, Singapore, New Zealand, Republic\nof Sri Lanka, India, and Brunei, referred to as “reciprocating countries.” When a foreign judgment from a reciprocating country\nis presented before a Malaysian court for enforcement, it can be registered under section 4(1) of REJA. Once registered, the\nforeign judgment, if it meets certain criteria (such as being a civil judgment for an outstanding monetary sum that is enforceable in\nthe original country’s court), can be enforced in Malaysia. The registered foreign judgment holds the same legal weight and authority\nas a judgment issued by a Malaysian court.\n\n \n\nForeign judgments obtained in countries not listed\nin the First Schedule to REJA may still be recognised and enforced in the courts of Malaysia through principles for the recognition of\nforeign judgments under common law. The common law rules applicable have been adopted into Malaysian jurisprudence by virtue of Section 3\nof the Civil Law Act, 1956. Therefore, a judgment issued in the United States may still be enforced in Malaysia under Malaysian\ncommon law principles. However, there are specific conditions that must be met for these foreign judgments to be enforceable. These conditions\ninclude the following:-\n\n \n\n(a)The judgment is for\na definite sum, and which is final and conclusive;\n\n \n\n(b)The original court\ngranting the judgment had jurisdiction in the action;\n\n \n\n(c)The judgment was not\nobtained by fraud;\n\n \n\n(d)The proceedings in\nwhich the judgment was obtained were not contrary to natural justice; and\n\n \n\n(e)The enforcement of\nthe judgment would not be contrary to public policy in Malaysia.\n\n \n\nThese constraints may impact both the cost and\ntime associated with legal proceedings in Malaysia. On the point of cost constraints, investors could face additional legal expenses\n(including hiring local attorneys and translators), travel costs for attending court proceedings, and other administrative charges. On\nthe point of time constraint, investors may face time constraints due to legal delays, appeals, and the complexity of cases of pursuing\nsuch enforcement in Malaysia.\n\n** **\n\n7\n\n \n\n** **\n\n**Corporate History**\n\n \n\nOur history can be traced back to September 2020\nwhen Mr. Darren Hoo saw an opportunity to develop a company focused on the development, construction and maintenance of aquaculture\nfarms and related works. MMSB was therefore initially established to carry on the provision of these services. Since then, we have grown\ninto a company covering a comprehensive range of services and solutions, which comprises the upgrading and maintenance of aquaculture\nand agriculture farms, design and development of new aquaculture and agriculture farms, and the sourcing of industrial supplies and rental\nof machinery for agriculture and aquaculture purposes.\n\n** **\n\n**Corporate Structure**\n\n \n\nOur Company was incorporated in the Cayman Islands\non December 7, 2022 under the Companies Act as an exempted company with limited liability. Our authorized share capital was fifty\nthousand United States dollars (US$50,000.00) divided into five hundred million (500,000,000) shares of a nominal or par value of US$0.0001\neach upon incorporation.\n\n \n\nOn May 15, 2023, Mr. Darren Hoo completed\nthe transfer of the one share of a nominal or par value of US$0.0001 to SSL for the total consideration of US$0.0001.\n\n \n\nOn July 31, 2024, the Company entered into\na share swap agreement with the shareholders of MMSB, namely, SSL, USSB, YHCML, ECGL, KLSB, KBSB, Malama and SJCC for the purpose of\nacquiring the entire issued share capital of MMSB, as part of the re-organization undertaken by the Company. As part of the terms of\nthe Share Swap Agreement, SSL, USSB, YHCML, ECGL, KLSB, KBSB, Malama and SJCC as the shareholders of MMSB shall dispose their respective\nshares in MMSB, representing in aggregate 100% of the issued share capital of MMSB, to MHL and the Company shall acquire the entire issued\nshares in MMSB. The consideration for the share transfers was based on the net tangible assets value of MMSB as at December 31,\n2023 of approximately USD 6,500,000.00 and was to be satisfied by the allotment and issuance of 14,999,999 ordinary shares\nof a nominal or par value of US$0.0001 each in aggregate to SSL, USSB, YHCML, ECGL, KLSB, KBSB, Malama and SJCC, each credited as fully\npaid, in proportion to their respective shareholdings in MMSB. Following the completion of the Share Swap Agreement on July 31,\n2024, MHL became the holding company of MMSB. Following the completion of the Share Swap Agreement, the issued share capital of\nthe Company was 15,000,000 ordinary shares of a nominal or par value of US$0.0001 each and SSL, USSB, YHCML, ECGL, KLSB, KBSB, Malama\nand SJCC were collectively the shareholders of MHL.\n\n \n\nOn September 29, 2025, the Company completed\nits IPO. In the IPO, the Company issued 1,250,000 shares of a nominal or par value of US$0.0001 each at a price of US$4.00 per share.\nThe Company received gross proceeds in the amount of US$5,000,000 before deducting any underwriting discounts and expenses. The Class\nA Ordinary Shares began trading on September 26, 2025 on the Nasdaq Capital Market under the ticker symbol “MGN.”\n\n** **\n\n**Entities**\n\n \n\nA description of our subsidiaries, both direct\nand indirect, are set out below.\n\n* *\n\n*MMSB*\n\n \n\nOn February 13, 2020, MMSB was incorporated\nin Malaysia with limited liability. MMSB commenced business in September, 2020 and is principally engaged in development, construction\nand maintenance of agriculture and aquaculture farms in Malaysia. As part of a group reorganization completed on July 31, 2024.\nMMSB became a wholly-owned subsidiary of our Company.\n\n* *\n\n8\n\n \n\n* *\n\n*MTSB*\n\n \n\nOn March 18, 2024, MTSB was incorporated\nin Malaysia with limited liability, and is an indirect subsidiary of MHL and an 80% direct subsidiary of MMSB (the remaining 20% shareholding\nin MTSB is held by Ms. Tan Chui Fang). Ms. Tan Chui Fang has been involving in the Semiconductor industry for more than 5 years,\nwhere she has developed significant connections. Her ability to connect with potential clients will be beneficial to the Company. In\nrecognition of her contributions to MTSB, she has been awarded a 20% equity stake. MTSB increased its paid-up capital by 199,900 shares\non July 22, 2024, bringing the total number of issued and paid up shares to 200,000 ordinary shares. MMSB subscribed -to- for the\nentire issuance, resulting in MMSB holding a 99.99% stake in MTSB as of July 22, 2024. As of the date of this annual report, the\nmain business activities of MTSB are consultancy and management of projects for process engineering and industrial systems (such as warehouse\nmanagement system, building management system, etc.), and supply of robotics and automation equipment. As at the date of this annual\nreport, Ms. Tan Chui Fang does not hold any other role in MHL and MMSB.\n\n** **\n\n**Corporate Headquarters**\n\n \n\nOur principal executive offices are located at\nB-01-07, Gateway Corporate Suites, Gateway Kiaramas, No.1, Jalan Desa Kiara, 50480 Mont Kiara, Kuala Lumpur, Malaysia. Our telephone\nnumber is +60 364201071. Our website address is *www.meganmezanin.com*. Information on our website does not constitute part of this\nannual report. Our registered and records office is located at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South\nChurch Street, P.O. Box 10240, Grand Cayman KY1-1002, George Town, Cayman.\n\n \n\n**3.A. [Reserved]**\n\n \n\n**3.B. Capitalization and Indebtedness**\n\n \n\nNot applicable for annual reports on Form 20-F.\n\n \n\n**3.C. Reasons for the Offer and Use of Proceeds**\n\n \n\nNot applicable for annual reports on Form 20-F.\n\n \n\n**3.D. Risk Factors**\n\n** **\n\n**Summary of Risk Factors**\n\n \n\nOur business is subject to multiple risks and\nuncertainties, as more fully described in “Risk Factors” and elsewhere in this annual report. We urge you to read “Risk\nFactors” and this annual report in full. Our principal risks may be summarized as follows:\n\n** **\n\n**Risks Related to Our Business and Industry**\n\n \n\nRisks and uncertainties related to our business\nand industry include, but are not limited to, the following:\n\n \n\n●As we depend on\nsubcontractors significantly in the course of our work, we may bear responsibilities for\nany non-performance, delayed performance, sub-standard performance, or non-compliance of\nour subcontractors.\n\n \n\n●We are dependent\non a small number of key customers for continued sale of our services.\n\n \n\n●The primary substantial\nportion of our revenues will be derived from Malaysia.\n\n \n\n●We are a holding\ncompany, and we are accordingly dependent upon distributions from our subsidiaries, MMSB,\nto service our debt and pay dividends, if any, taxes and other expenses.\n\n \n\n●We depend on a\nsmall number of individuals who constitute our current management.\n\n \n\n●We will need to\ngrow the size and capabilities of our organization, and we may experience difficulties in\nmanaging this growth.\n\n \n\n●Our business is\nsubject to supply chain interruptions.\n\n \n\n9\n\n \n\n \n\n●We may from time\nto time be subject to legal and regulatory proceedings and administrative investigations.\n\n \n\n●Our business may\nbe affected by technological changes and developments.\n\n \n\n●We have a limited\noperating history in an evolving industry, which makes it difficult to evaluate our prospects\nand may increase the risk that we will not be successful.\n\n \n\n●Our historical\ngrowth and performance may not be indicative of our future growth and performance.\n\n \n\n●We may not be\nable to successfully implement our business strategies and future plans.\n\n \n\n●We may not be\nable to successfully complete, commercialize or scale our Smart Farming System.\n\n \n\n●We are exposed\nto risks arising from fluctuations of foreign currency exchange rates.\n\n \n\n●We do not have,\nand may be unable to obtain, sufficient insurance to insure against certain business risks.\nAs a result, we may be exposed to significant costs and business disruption.\n\n \n\n●Global economic\nuncertainty, capital markets volatility and geopolitical instability could materially and\nadversely affect our business.\n\n \n\n●We are exposed\nto risks in respect of acts of war, terrorist attacks, epidemics, political unrest, adverse\nweather conditions and other uncontrollable events.\n\n \n\n●Any adverse changes\nin the political, economic, legal, regulatory, taxation or social conditions in the jurisdictions\nthat we operate in or intend to expand our business may have a material adverse effect on\nour operations, financial performance and future growth.\n\n \n\n●You may face difficulties\nin protecting your interests, and your ability to protect your rights through U.S. courts\nmay be limited, because we are incorporated under Cayman Islands law.\n\n \n\n●Certain judgments\nobtained against us or our auditor by our shareholders may not be enforceable.\n\n \n\n●You may experience\ndifficulties in effecting service of legal process, enforcing foreign judgments or bringing\nactions in Hong Kong against our Independent Director based on Hong Kong laws.\n\n \n\n●We have engaged\nin transactions with related parties, and such transactions present possible conflicts of\ninterest that could have an adverse effect on our business and results of operations.\n\n \n\n●We depend on a\nsmall number of key suppliers for continued provision of our services.\n\n \n\n●We are exposed\nto the credit risks of some our customers.\n\n \n\n●There may be potentially\nadverse impacts on our corporate governance because of the indemnification provisions in\nour Second Amended and Restated Memorandum and Articles of Association pertaining to our\ndirectors and officers liability.\n\n \n\n●Heightened tensions\nin international relations, particularly between the United States and China, may adversely\nimpact our business, financial condition, and results of operations.\n\n** **\n\n10\n\n \n\n** **\n\n**Risks Related to Our Securities**\n\n \n\n●If we fail to\nmaintain an effective system of internal controls, we may be unable to accurately or timely\nreport our results of operations or prevent fraud, and investor confidence and the market\nprice of our Class A Ordinary Shares may be materially and adversely affected.\n\n \n\n●An active trading\nmarket for the Class A Ordinary Shares may not be maintained and the trading price for\nthe Class A Ordinary Shares may fluctuate significantly.\n\n \n\n●We may not maintain\nthe listing of our Class A Ordinary Shares on Nasdaq which could limit investors’\nability to make transactions in our Class A Ordinary Shares and subject us to additional\ntrading restrictions.\n\n \n\n●If securities\nor industry analysts do not publish research or reports about our business, or if they adversely\nchange their recommendations regarding our Class A Ordinary Shares, the market price\nfor our Class A Ordinary Shares and trading volume could decline.\n\n \n\n●Because we do\nnot expect to pay dividends in the foreseeable future, you must rely on price appreciation\nof our Class A Ordinary Shares for a return on your investment.\n\n \n\n●Short selling\nmay drive down the market price of our Class A Ordinary Shares.\n\n \n\n●Our management\nhas broad discretion to determine how to use the funds raised in our initial public offering\nand follow-on offering and may use them in ways that may not enhance our results of operations\nor the price of our Class A Ordinary Shares.\n\n \n\n●If we are classified\nas a passive foreign investment company, United States taxpayers who own our securities may\nhave adverse United States federal income tax consequences.\n\n \n\n●The obligation\nto disclose information publicly may put us at a disadvantage to competitors that are private\ncompanies.\n\n \n\n●As a result of\nthe dual-class share structure of our share capital, SSL has and will continue to have voting\ncontrol over our Company. The interests of SSL may not align with those of our other shareholders,\nlimiting or precluding our shareholders’ ability to influence corporate matters, including\nthe election of directors, amendments to our memorandum and articles of association, and\nany merger, consolidation, or other major corporate transactions requiring shareholder approval.\n\n \n\n●As a “controlled\ncompany” within the meaning of the Nasdaq Stock Market Rules, we may rely on exemptions\nfrom certain corporate governance requirements that provide protection to shareholders of\nother companies.\n\n \n\n●As an exempted\ncompany incorporated in the Cayman Islands, we are permitted to follow certain home country\npractices in relation to corporate governance matters in lieu of certain requirements under\nNasdaq corporate governance listing rules. These practices may afford less protection to\nshareholders than they would enjoy if we complied fully with Nasdaq corporate governance\nlisting standards.\n\n \n\n●We are an emerging\ngrowth company within the meaning of the Securities Act and may take advantage of certain\nreduced reporting requirements.\n\n \n\n11\n\n \n\n \n\n●We are a foreign\nprivate issuer within the meaning of the Exchange Act, and as such we are exempt from certain\nprovisions applicable to U.S. domestic public companies.\n\n \n\n●We may lose our\nforeign private issuer status in the future, which could result in significant additional\ncosts and expenses to us.\n\n \n\n●We have incurred\nand will continue to incur significantly increased costs and have devoted and will continue\nto devote substantial management time as a result of being a public company and the listing\nof our Class A Ordinary Shares on Nasdaq.\n\n \n\n●Nasdaq may apply\nadditional and more stringent criteria for our initial and continued listing since our insiders\nwill hold a large portion of our listed securities.\n\n \n\n●Shares eligible\nfor future sale may adversely affect the market price of our Class A Ordinary Shares,\nas the future sale of a substantial number of issued and outstanding Class A Ordinary\nShares in the public marketplace could reduce the price of our Class A Ordinary Shares.\n\n \n\n●Our Second Amended\nand Restated Memorandum and Articles of Association contain anti-takeover provisions that\ncould discourage a third party from acquiring us, which could limit our shareholders’\nopportunity to sell their shares at a premium.\n\n \n\n●Further issuances\nof Class B Ordinary Shares may result in a dilution of the percentage ownership of the existing\nholders of Class A Ordinary Shares as a total proportion of Ordinary Shares in our company.\n\n \n\n●The trading price\nof our Class A Ordinary Shares has been and may continue to be volatile, which could\nresult in substantial losses for investors.\n\n** **\n\n**An investment in our securities carries\na significant degree of risk. You should carefully consider the following risks before you decide to purchase the shares. Any one of\nthese risks and uncertainties has the potential to cause material adverse effects on our business, prospects, financial condition and\noperating results which could cause actual results to differ materially from any forward-looking statements expressed by us and a significant\ndecrease in the value of our securities.**\n\n** **\n\n**We may not be successful in preventing\nthe material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may\nnot be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently\nunaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could\nlose all or a significant portion of your investment due to any of these risks and uncertainties.**\n\n \n\n12\n\n \n\n** **\n\n**Risks Related to Our Business and Industry**\n\n** **\n\n**As we depend on subcontractors significantly\nin the course of our work, we may bear responsibilities for any non-performance, delayed performance, sub-standard performance, or non-compliance\nof our subcontractors.**\n\n \n\nWe subcontract certain portions of our projects,\nsuch as the construction and maintenance of the aquaculture farms of our customers, to our subcontractors who are independent third parties.\nSubcontracting may expose us to risks associated with non-performance, delayed performance, or sub-standard performance by our subcontractors.\nAs a result, we may experience deterioration in the quality or delivery of our work, incur additional costs due to the delays, suffer\na higher price in sourcing the services, equipment or supplies in default, or be subject to liability under the relevant projects. Such\nevents could impact upon our profitability, financial performance, and reputation, or result in litigation or damage claims.\n\n \n\nThere is no assurance that we would be able to\nmonitor the performance of our subcontractors as directly and efficiently as with our own staff. If our subcontractors fail to meet our\nrequirements, we may experience delay in project completion, quality issues concerning the work done, or non-performance by subcontractors.\nConsequently, we may incur significant time and costs to carry out remedial actions, which would in turn adversely affect the profitability\nand reputation of our business and result in litigation or damage claims against us. If our subcontractors violate any laws, rules, or\nregulations, we may also be held liable for their violations and be subject to claims for losses and damages if such violations result\nin any personal injuries and/or property damages.\n\n \n\nIn addition, our subcontractors may not always\nbe readily available whenever we need to engage them, and there is no assurance that we would be able to maintain good working relationships\nwith our sub-contractors in the future. As at the date of this annual report, we had not entered into any long-term service agreement\nwith our subcontractors. Further, there is no assurance that we would be able to find suitable alternative subcontractors that meet our\nproject needs and requirements to complete the projects, which would in turn adversely affect our operations and financial results.\n\n** **\n\n**We are dependent on a small number of key\ncustomers for continued sale of our services.**\n\n \n\nOur revenue is concentrated among a small number\nof customers. In the financial years ended December 31, 2023, 2024, 2024 and 2025, our top 2 customers accounted for 77.7%,\n99.5% and 69.7% of our revenue, respectively. If any of these customers were to reduce or cease their business with the Company, it could\nhave a material adverse impact on the Company’s financial condition and results of operations.\n\n \n\nThe Company has taken steps to mitigate its customer\nconcentration risk by diversifying its customer base and developing long-term relationships with its key customers. However, the Company\nremains exposed to customer concentration risk, and any significant changes in the business of its key customers could have a material\nadverse impact on its business.\n\n \n\nIn addition, the Company’s business is\ndependent on the continued success of its customers. If any of the Company’s customers were to experience financial difficulties\nor cease operations, it could have a material adverse impact on the Company’s business.\n\n \n\nThe Company is aware of the risks associated\nwith customer concentration and is taking steps to mitigate these risks. However, investors should be aware of the potential for customer\nconcentration to have a material adverse impact on the Company’s business.\n\n** **\n\n**The primary substantial portion of our\nrevenues will be derived from Malaysia.**\n\n \n\nIn the financial years ended December 31,\n2023, 2024 and 2025, all our revenue derived from operations in Malaysia. We anticipate that sales of our services in Malaysia will represent\nthe majority of our revenues in the near future. Any significant decline in the condition of the economy of Malaysia could adversely\naffect consumer demand for our services, among other things, which in turn would have a material adverse effect on our business and financial\ncondition. Such a decline would occur from numerous factors outside of our control including geopolitical disputes, regional and global\neconomic trends and climatic and environmental disasters.\n\n** **\n\n13\n\n \n\n** **\n\n**We are a holding company, and we are accordingly\ndependent upon distributions from our subsidiaries, MMSB, to service our debt and pay dividends, if any, taxes and other expenses.**\n\n \n\nWe are a Cayman Islands holding company and have\nno material assets other than ownership of equity interests in our subsidiaries. We have no independent means of generating revenue.\nWe intend to cause our subsidiaries to make distributions to their shareholders in an amount sufficient to cover all applicable taxes\npayable and dividends, if any, declared by us. Our ability to service our debt, if any, depends on the results of operations of our subsidiaries\nand upon the ability of our subsidiaries to provide us with cash, whether in the form of dividends, loans or other distributions, to\npay amounts due on our obligations. Future financing arrangements may contain negative covenants that limit the ability of our subsidiaries\nto declare or pay dividends or make distributions. Our subsidiaries are a separate and distinct legal entity; to the extent that we need\nfunds, and our subsidiaries are restricted from declaring or paying such dividends or making such distributions under applicable law\nor regulations or are otherwise unable to provide such funds (for example, due to restrictions in future financing arrangements that\nlimit the ability of our subsidiaries to distribute funds), our liquidity and financial condition could be materially harmed.\n\n** **\n\n**We depend on a small number of individuals\nwho constitute our current management.**\n\n \n\nWe highly depend on the services of our senior\nmanagement team including Mr. Darren Hoo and Mr. Ng Kai Tie. The death, disability or other loss of members of our senior management\nteam could result in us being unable to replace such member on reasonable economic terms or in a time period that meets our proposed\nplan of operations, if we are able to do so at all. We do not carry key-employee insurance to compensate us for the loss of any such\nindividuals.\n\n \n\nOur ability to recruit, retain, and motivate\nkey employees may be hampered by market conditions. Competition for such employees can be intense, and the inability to attract and retain\nthe additional qualified employees required to expand our activities, or the loss of current key employees could adversely affect our\noperating efficiency and financial condition. In addition, our growth strategy may place strains on our management who may become distracted\nfrom day-to-day duties.\n\n** **\n\n**We will need to grow the size and capabilities\nof our organization, and we may experience difficulties in managing this growth.**\n\n \n\nAs our business strategies develop, we must add\nadditional managerial, operational, financial, and other personnel. Future growth will impose significant added responsibilities on members\nof management, including:\n\n \n\n●Identifying, recruiting,\nintegrating, maintaining, and motivating additional personnel. We primarily focus on project\nmanagement and outsource the physical groundwork to many sub-contractors. We rely on these\nsub-contractors to minimize our need to tackle issues relating to management of workers which\nallows us to focus on the execution of the projects and their progress. To ensure that the\nprices paid to the related party subcontractors are market prices, all our subcontractors\nundergo a fair tender process for the projects involved before we engage them;\n\n \n\n●Managing our internal\ndevelopment efforts effectively, while complying with our contractual obligations to contractors\nand other third parties; and\n\n \n\n●Improving our\noperational, financial, and management controls, reporting systems, and procedures.\n\n \n\nOur future financial performance will depend,\nin part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount\nof its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.\nThis lack of long-term experience working together may adversely impact our senior management team’s ability to effectively manage\nour business and growth.\n\n \n\n14\n\n \n\n \n\nWe primarily focus on project management. As\na result, we currently rely, and for the foreseeable future will continue to rely, in substantial part on various sub-contractors who\nundertake various on-site groundwork such as earthwork, building structural works, mechanical and electrical works, equipment supply\nand installation works. We rely on sub-contractors in order to minimize our need to tackle issues relating to man-management of workers,\nwhich allows us to focus on the execution of the projects and their progress. To ensure that the prices paid to the related party subcontractors\nare market prices, all our subcontractors undergo a fair tender process for the projects involved before we engage them. The services\nof these subcontractors might not continue to be available to us on a timely basis when needed, and we might not be able to find qualified\nreplacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services\nprovided by consultants is compromised for any reason, we may not be able to advance our business. We might not be able to manage our\nexisting subcontractors or find other competent outside contractors and consultants on economically reasonable terms, if at all. If we\nare not able to effectively expand our organization by hiring new employees and expanding our groups of subcontractors, we may not be\nable to successfully implement the tasks necessary to further develop our business initiatives and, accordingly, may not achieve our\nresearch, development, and commercialization goals. These risks may materially adversely affect our ability to attain or maintain profitable\noperations.\n\n** **\n\n**Our business is subject to supply chain\ninterruptions.**\n\n \n\nWe work with third-party logistic providers for\nthe transportation of our aquaculture and agriculture related equipment and industrial-grade hardware. We rely on such third-party service\nproviders’ abilities to deliver our equipment as part of the supply chain logistics. The factors that can adversely affect our\noperations include, but are not limited to:\n\n \n\n●interruptions\nto our delivery capabilities;\n\n \n\n●failure of third-party\nservice providers to meet our standards or their commitments to us;\n\n \n\n●increasing transportation\ncosts, shipping constraint or other factors that could impact cost, such as having to find\nmore expensive service providers which may or may not be readily available; and\n\n \n\n●public health\nevents, including epidemics or pandemics, and disruptions as a result of efforts to control\nor mitigate them (such as facility closures, governmental orders, outbreaks and/or transportation\ncapacity).\n\n \n\nFurthermore, any increased costs from delays,\ncancellations, and insurance, or disruption to, or inefficiency in, the supply chain network of our third-party service providers, whether\ndue to geopolitical conflicts, public health events, or other factors, could affect our revenue and profitability. If we fail to manage\nthese risks effectively, we could experience a material adverse impact on our reputation, revenue, and profitability.\n\n** **\n\n**We may from time to time be subject to\nlegal and regulatory proceedings and administrative investigations.**\n\n \n\nWe may from time to time be subject to various\nlegal and regulatory proceedings arising in the ordinary course of our business. Claims and complaints arising out of actual or alleged\nviolations of laws and regulations or breach of contract could be asserted against us by contractors, customers, employees, ex-employees\nand other platforms, industry participants or governmental entities in administrative, civil or criminal investigations and proceedings\nor by other entities. These investigations, claims and complaints could be initiated or asserted under or on the basis of a variety of\nlaws in different jurisdictions.\n\n \n\nA substantial portion of our revenue is derived\nfrom services related to shrimp farming, which if done incorrectly can pollute nearby groundwater or coastal estuaries which may result\nin our customer being exposed to environmental claims whereby the customer may suffer claims and actions brought against them by the\nrelevant governmental entities or other third parties. In the event of the above, the customer may be subject to an action by the relevant\ngovernmental entities for the contravention of the Malaysian Environmental Quality Act 1974 (“EQA 1974”) which is the\nprincipal law governing the prevention, abatement, control of pollution and enhancement of the environment in Malaysia, wherein if found\nguilty of such contravention, the customer may be liable to fines and/or imprisonment. The customer may also be subject to claims brought\nby third parties against the customer for damages suffered by such third party due to the customer’s negligence under common law.\nFor clarity, any potential actions by the relevant governmental entities for any alleged violations of the EQA 1974 are primarily made\nagainst the customer as the owner/occupier of the subject premise. Any potential liability we may face is limited to the circumstance\nwhere the customer may commence legal proceedings against us for damages for breach of contract or claim against us for compensation\nif the damages suffered by the customer is a direct result of our action or negligence. As such, we believe that any violations of the\nEQA 1974 by the customer would not have any material impact to our operations. However, if the customer’s business is materially\naffected as a result of any actions by the relevant governmental entities for such violations, our business may be affected due to the\ncustomer concentration risk disclosed above. We are therefore actively taking steps to mitigate our customer concentration risk by diversifying\nour customer base.\n\n \n\n15\n\n \n\n \n\nThere may be additional exposure under including\nintellectual property laws, data protection and privacy laws, labor and employment laws, securities laws, finance services laws, tort\nlaws and contract laws. There is no guarantee that we will be successful in defending ourselves in legal and administrative actions or\nin asserting our rights under various laws. If we fail to defend ourselves in these actions, we may be subject to restrictions, fines\nor penalties that will materially and adversely affect our business, prospects, financial condition and results of operations. Even if\nwe are successful in our defense, the process of communicating with relevant regulators, defending ourselves and enforcing our rights\nagainst the various parties involved may be expensive, time-consuming and ultimately futile. These actions could expose us to negative\npublicity, substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, including\nbut not limited to suspension or revocation of licenses necessary for our business operation. Under such circumstances, our business,\nprospects, financial condition and results of operations would be negatively and adversely impacted.\n\n** **\n\n**Our business may be affected by technological\nchanges and developments.**\n\n \n\nWe may be affected by rapid changes in technology,\nchanging market trends and evolving industry standards across all areas of our business. The risks we may face include but are not limited\nto:\n\n \n\n(a)not being able to\nanticipate and adapt to new technology and developing technology trends in the aquaculture\nand agriculture sector;\n\n \n\n(b)our competitors developing\nmore innovative and efficient solutions as compared to us; and\n\n \n\n(c)not being able to\nexpand our suite of agriculture and aquaculture solutions and resources quickly enough to\nkeep up with demand.\n\n \n\nAccordingly, our success depends on our ability\nto innovate and adapt our solutions to meet evolving industry standards and our customers’ expectations. We have invested, and\nexpect to continue to invest, substantial time, capital, and other resources in understanding the needs of our customers and developing\ntechnologies, tools, features, and service offerings to meet those needs. Our current and future offerings might not be satisfactory\nto or broadly accepted by customers, or competitive with the offerings of our competitors. If our current or future offerings are unable\nto meet industry and customer expectations in a timely and cost-effective manner, our business, prospects, financial condition, and results\nof operations may be adversely affected.\n\n \n\nFurthermore, technological development is inherently\nchallenging, time-consuming, and expensive, and the nature of development cycles may result in delays between the time we incur expenses\nand the time we make available new offerings and generate revenue, if any, from those investments. Anticipated customer demand for an\noffering we are developing could also decrease after the development cycle has commenced, and we would not be able to recoup substantial\ncosts we incurred. In addition, we might not be able to identify, design, develop, implement, and utilize, in a timely and cost-effective\nmanner, technology necessary for us to compete effectively, that such technology will be commercially successful, or that products and\nservices developed by others will not render our offerings non-competitive or obsolete. If we do not achieve the desired outcome from\nour technological investments, our business, prospects, financial condition, and results of operations may be adversely affected.\n\n** **\n\n**We have a limited operating history in\nan evolving industry, which makes it difficult to evaluate our prospects and may increase the risk that we will not be successful.**\n\n \n\nWe have a limited operating history of less than\n6 years since our inception in 2020 on which to base an evaluation of its business and prospects. We are subject to all the risks\ninherent in a small company seeking to develop, market and distribute new services, particularly companies in evolving markets. The likelihood\nof our success must be considered, in light of the problems, expenses, difficulties, complications and delays frequently encountered\nin connection with the development, introduction, marketing and distribution of new products and services in a competitive environment.\n\n \n\n16\n\n \n\n  \n\nSuch risks include, but are not limited to, dependence\non the success and acceptance of our services and the management of growth. In view of our limited operating history, we believe that\nperiod-to-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as an indication of\nfuture performance.\n\n \n\nWe are subject to many of the risks common to\nearly-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other\nresources and lack of revenues.\n\n** **\n\n**Our historical growth and performance may\nnot be indicative of our future growth and performance.**\n\n \n\nWe may fail to continue our growth or maintain\nour historical growth rates. You should not consider our historical growth and profitability as indicative of our future financial performance.\nYou should consider our future operations in light of the challenges and uncertainties that we may encounter, which include our ability\nto, among other things:\n\n \n\n(a)successfully increase\nour market share, brand recognition and reputation;\n\n \n\n(b)adapt our operations\nto new policies, regulations and measures that may come into effect from time to time;\n\n \n\n(c)deliver compelling\nvalue propositions to our customers with our services; and\n\n \n\n(d)expand our service\nofferings and expand into new jurisdictions and/or businesses.\n\n \n\nWe may not be successful in our efforts to do\nany of the foregoing, in which case, our business, prospects, financial condition and results of operations could be materially and adversely\naffected.\n\n** **\n\n**We may not be able to successfully implement\nour business strategies and future plans.**\n\n \n\nAs part of our business strategies and future\nplans, we intend to strengthen our market position in the Southeast Asian region by identifying potential business opportunities or through\njoint ventures or mergers and acquisitions. While we have planned such expansion based on our outlook regarding our business prospects,\nsuch expansion plans might not be commercially successful, and the actual outcome of those expansion plans might not match our expectations.\nThe success and viability of our expansion plans depend upon our ability to obtain the proper financing, favorable market conditions,\nhire and retain skilled employees to carry out our business strategies and future plans and implement strategic business development\nand marketing plans effectively and upon an increase in demand for our services by existing and new customers in the future. While we\nare actively looking to strengthen our market position, we have not as of the date of this annual report identified any specific target\nand therefore do not have any detailed plans for any joint ventures or mergers and acquisitions.\n\n \n\nFurther, the implementation of our business strategies\nand future plans may require substantial capital expenditure and additional financial resources and commitments. There is no assurance\nthat these business strategies and future plans will achieve the expected results or outcome such as an increase in revenue that will\nbe commensurate with our investment costs or the ability to generate any costs savings, increased operational efficiency and/or productivity\nimprovements to our operations. We might not be able to obtain financing on terms that are favorable, if at all. If the results or outcome\nof our future plans do not meet our expectations, if we fail to achieve a sufficient level of revenue or if we fail to manage our costs\nefficiently, we may not be able to recover our investment costs and our business, financial condition, results of operations and prospects\nmay be adversely affected.\n\n** **\n\n17\n\n \n\n** **\n\n**We may not be able to successfully complete,\ncommercialize or scale our Smart Farming System.**\n\n \n\nWe have commenced a pilot-scale project utilizing\nour Smart Farming System in October 2025 and expect the pilot to conclude by the end of the second quarter of 2026. However, the successful\ncompletion of the pilot program does not guarantee that we will be able to complete, commercialize or scale the system on a timely basis,\nat an acceptable cost, or at all. The intricate nature of this technology introduces specific challenges, including the\ncomplexity of integrating real-time monitoring for temperature and pH levels. Technical hurdles such as integration issues, data accuracy\nconcerns, and the need for continuous optimization pose potential obstacles to the successful development and implementation of the Smart\nFarming System. Furthermore, navigating evolving regulatory landscapes and ensuring compliance with industry standards present additional\nchallenges, while the recruitment and retention of skilled personnel to develop such proprietary technology adds another layer of complexity\nto the project. These challenges may impact the timeline and effectiveness of implementing our Smart Farming System initiative, potentially\nadversely influencing our business, financial condition, and results of operations.\n\n** **\n\n**We are exposed to risks arising from fluctuations\nof foreign currency exchange rates.**\n\n \n\nOur reporting currency is the Malaysian Ringgit\nand fees generated from our services is denominated in Malaysian Ringgit. The exchange rates between foreign currencies in recent years\nhave fluctuated significantly and may continue to do so in the future. Therefore, we may be exposed to foreign currency exchange gains\nor losses arising from transactions in currencies other than our reporting currency. Given the volatility of exchange rates, we might\nnot be able to effectively manage our currency transaction risks, and volatility in currency exchange rates might have a material adverse\neffect on our business, financial condition or results of operations.\n\n** **\n\n**We do not have, and may be unable to obtain,\nsufficient insurance to insure against certain business risks. As a result, we may be exposed to significant costs and business disruption.**\n\n \n\nWe do not currently maintain insurance coverage\nfor business interruption, liability, or litigation insurance coverage for our operations in Malaysia. Our lack of insurance coverage\nor reserves with respect to business-related risks may expose us to substantial losses. As to those risks for which we have insurance\ncoverage, the insurance payouts we are entitled to in case of an insured event are subject to deductibles and other customary conditions\nand limitations.\n\n** **\n\n**Global economic uncertainty, capital markets\nvolatility and geopolitical instability could materially and adversely affect our business.**\n\n \n\nWe are operating in an environment of heightened\nglobal economic uncertainty and capital markets volatility, which has been exacerbated by geopolitical tensions and armed conflicts in\nvarious regions, including Eastern Europe and the Middle East. These developments have contributed to disruptions in global financial\nmarkets, increased volatility in commodity prices, supply chain constraints, inflationary pressures and reduced liquidity in the capital\nmarkets. The scope, duration and potential escalation of such geopolitical events are highly unpredictable. Any deterioration in global\neconomic conditions or further instability in financial markets could adversely affect investor confidence, access to capital, pricing\nand availability of financing, and the timing or cost of our projects and operations. In addition, sanctions, trade restrictions or other\ngovernmental actions arising from geopolitical developments could further disrupt global markets and adversely affect our business. We\ncontinue to monitor global economic and geopolitical conditions; however, any prolonged or intensified market disruptions could materially\nand adversely affect our business, prospects, financial condition and results of operations, and may also amplify the impact of other\nrisks described in this annual report.\n\n** **\n\n18\n\n \n\n** **\n\n**We are exposed to risks in respect of acts\nof war, terrorist attacks, epidemics, political unrest, adverse weather conditions and other uncontrollable events.**\n\n \n\nUnforeseeable circumstances and other factors,\nsuch as power outages, labor disputes, adverse weather conditions, natural disasters, epidemics, outbreaks or other catastrophes, may\ndisrupt our operations and cause loss of or damage to our storage facilities and offices. In particular, escalating geopolitical tensions\nand armed conflicts in the Middle East, including those involving Iran, may materially and adversely affect global financial markets,\nsupply chains, energy prices, shipping routes and consumer confidence. Our business may also be affected by macroeconomic factors in\nthe countries in which we operate, including general economic conditions, market sentiment, social and political unrest, and regulatory,\nfiscal and other governmental policies, all of which are beyond our control. Any such events may cause damage or disruption to our business,\nmarkets, customers and suppliers, any of which may materially and adversely affect our business, financial condition, results of operations\nand prospects.\n\n** **\n\n**Any adverse changes in the political, economic,\nlegal, regulatory, taxation or social conditions in the jurisdictions that we operate in or intend to expand our business may have a\nmaterial adverse effect on our operations, financial performance and future growth.**\n\n \n\nOur business, prospects, financial condition\nand results of operations depend on and may be adversely affected by political, economic, social and legal developments that are beyond\nour control in each of the jurisdictions that we operate in or in which we intend to expand our business and operations. Such political\nand economic uncertainties may include risks of war, terrorism, nationalism, expropriation or nullification of contracts, changes in\ninterest rates, economic growth, national fiscal and monetary policies, inflation, deflation, methods of taxation and tax policy. Negative\ndevelopments in the socio-political climate of these regions may also adversely affect our business, prospects, financial condition and\nresults of operations. These developments may include, but are not limited to, changes in political leadership, nationalization, price\nand capital controls, sudden restrictive changes to government policies, introduction of new taxes on goods and services and introduction\nof new laws, as well as demonstrations, riots, coups and war. These may result in the nullification of contracts and/or prohibit us from\ncontinuing our business operations.\n\n \n\nThe jurisdictions that we operate in or in which\nwe intend to expand our business and operations may be in a state of rapid political, economic and social changes, and may also be subject\nto unforeseeable circumstances such as natural disasters and other uncontrollable events, which will entail risks to our business and\noperations if we are to expand in the region in the future. We might not be able to adapt to the local conditions, regulations and business\npractices and customs of the regions in which we operate in the future. Any changes implemented by the government of these regions resulting\nin, amongst others, currency and interest rate fluctuations, capital restrictions and changes in duties and taxes detrimental to our\nbusiness could materially and adversely affect our business, prospects, financial condition and results of operations.\n\n** **\n\n**You may face difficulties in protecting\nyour interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman\nIslands law.**\n\n \n\nWe are an exempted company incorporated under\nthe laws of the Cayman Islands with limited liability. Our corporate affairs are governed by our memorandum and articles of association,\nas amended and restated from time to time, the Companies Act and the common law of the Cayman Islands. The rights of shareholders to\ntake action against our Directors and us, actions by minority shareholders and the fiduciary duties of our Directors to us under Cayman\nIslands law are to a large extent governed by the common law of the Cayman Islands. The common law of Cayman Islands is derived in part\nfrom comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which are generally of persuasive\nauthority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our Directors\nunder Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in\nthe United States. In particular, the Cayman Islands has a different body of securities laws than the United States and provide significantly\nless protection to investors. In addition, Cayman Islands companies may not have the standing to initiate a shareholder derivative action\nin a federal court of the United States.\n\n \n\n19\n\n \n\n \n\nShareholders of Cayman Islands companies like\nus have no general rights under Cayman Islands law to inspect corporate records (save for the register of mortgages and charges, the\nmemorandum and articles of association and special resolutions of the shareholders) or to obtain copies of register of members of these\ncompanies. Under our Second Amended and Restated Memorandum and Articles of Association, our directors may from time to time determine\nwhether and to what extent and at what times and places and under what conditions or regulations our accounts and books or any of them\nshall be open to the inspection of shareholders not being directors, and no shareholder (not being a director) shall have any right to\ninspect any of our account or book or document except as conferred by law or authorized by the directors, provided that the shareholders\nshall receive the annual audited financial statements of our Company. This may make it more difficult for you to obtain the information\nneeded to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with\na proxy contest.\n\n \n\nCertain corporate governance practices in the\nCayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such\nas U.S. states. Currently, we plan to rely on home country practice with respect to any corporate governance matter. Accordingly,\nour shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic\nissuers.\n\n \n\nAs a result of all of the above, shareholders\nmay have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of Directors\nor controlling shareholders than they would as shareholders of a company incorporated in a U.S. state. For a discussion of significant\ndifferences between the provisions of the Companies Act and the laws applicable to companies incorporated in a U.S. state and their\nshareholders.\n\n** **\n\n**Certain judgments obtained against us,\nour directors and officers, or our auditor by our shareholders may not be enforceable.**\n\n \n\nWe are a Cayman Islands exempted company. Our\noperating subsidiaries was incorporated and is located in Malaysia. Substantially all of our assets are located outside of the United States.\nIn addition, all of our current directors and officers are nationals and residents of countries other than the United States and\nsubstantially all of the assets of these persons are located outside the United States. As a result, it may be difficult for a shareholder\nto effect service of process within the United States upon these persons or to enforce against us, our directors and officers, or\nour auditor judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the\nsecurities laws of the United States or any state in the United States. Even if you are successful in bringing an action of\nthis kind, the laws of the Cayman Islands and Malaysia may render you unable to enforce a judgment against our assets or the assets of\nour director and officers. For more information regarding the relevant laws of the Cayman Islands and Malaysia, see “Enforceability\nof Civil Liabilities.” As a result of all of the above, our shareholders may have more difficulties in protecting their interests\nthrough actions against us, our officers, Directors, or major shareholders, than would shareholders of a corporation incorporated in\na jurisdiction in the United States.\n\n** **\n\n**You may experience difficulties in effecting\nservice of legal process, enforcing foreign judgments or bringing actions in Hong Kong against our Independent Director based on\nHong Kong laws.**\n\n \n\nOne of our Independent Directors, Mr. Tse\nYin Sum, is a Hong Kong national. You may experience difficulties in effecting service of legal process, enforcing foreign judgments\nor bringing actions in Hong Kong against Mr. Tse Yin Sum as judgments entered in the United States can be enforced\nin Hong Kong only at common law. If you want to enforce a judgment of the United States in Hong Kong, it must be a final\njudgment conclusive upon the merits of the claim, for a liquidated amount in a civil matter and not in respect of taxes, fines, penalties,\nor similar charges, the proceedings in which the judgment was obtained were not contrary to natural justice, and the enforcement of the\njudgment is not contrary to public policy of Hong Kong. Such a judgment must be for a fixed sum and must also come from a “competent”\ncourt as determined by the private international law rules applied by the Hong Kong courts. In addition, the PRC does not have treaties\nproviding for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and\nregions. Therefore, recognition and enforcement in the PRC of judgments of a court in any of these non-PRC jurisdictions in relation\nto any matter not subject to a binding arbitration provision may be difficult or impossible. For more information regarding the relevant\nlaws of Hong Kong, see “Enforceability of Civil Liabilities.”\n\n \n\n20\n\n \n\n \n\nThese constraints may impact both the cost and\ntime associated with legal proceedings in Hong Kong. On the point of cost constraints, investors could face additional legal expenses\n(including hiring local attorneys and translators), travel costs for attending court proceedings, and other administrative charges. On\nthe point of time constraint, investors may face time constraints due to legal delays, appeals, and the complexity of cases of pursuing\nsuch enforcement in Hong Kong.\n\n** **\n\n**We have engaged in transactions with related\nparties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of\noperations.**\n\n \n\nWe have entered into a number of\ntransactions with companies owned or operated by related parties, including our shareholders, directors, and executive officers. See\n“*Related Party Transactions*”. For example, in order to solve our subcontractor needs with regards to water\nreservoir distribution, and rebuilding of shrimp ponds, we engaged VC Marine Sdn Bhd, an entity directly controlled by\nMr. Darren Hoo, our Chief Executive Officer, Chairman and Executive Director. For the year ended December 31, 2023, for\nthe year ended December 31, 2024, and for the year ended December 31, 2025, we recorded subcontractor fees of\nMYR 15.33 million (approximately US$3.34 million), MYR 49.44 million (approximately US$11.07 million) and\nMYR Nil million (approximately US$Nil million) under this agreement, respectively.\n\n \n\nWe may in the future enter into additional transactions\nwith entities in which members of our board of directors and other related parties hold ownership interests. Transactions with the entities\nin which related parties hold ownership interests present potential for conflicts of interest, as the interests of these entities and\ntheir shareholders may not align with the interests of the Company and our unaffiliated shareholders with respect to the negotiation\nof, and certain other matters related to, our purchases from and other transactions with such entities. Conflicts of interest may also\narise in connection with the exercise of contractual remedies under these transactions, such as default. For prospective transactions\nwith any related parties after listing on Nasdaq, such transactions are subject to our Audit Committee’s review and approval.\n\n** **\n\n**We depend on a small number of key suppliers\nfor continued provision of our services.**\n\n \n\nOur purchases are concentrated among a small\nnumber of suppliers. In the financial years ended December 31, 2023, 2024 and 2025, our top ten suppliers accounted for approximately\n100% of our purchases for these years. If any of these suppliers were to reduce or cease their business with the Company, it could have\na material adverse impact on the Company’s financial condition and results of operations.\n\n \n\nThe Company has taken steps to mitigate its supplier\nconcentration risk by planning to diversifying its pool of suppliers and developing long-term relationships with its key supplier. However,\nin the foreseeable future, the Company remains exposed to supplier concentration risk, and any significant changes in the business of\nits key suppliers could have a material adverse impact on its business.\n\n** **\n\n**We are exposed to the credit risks of some\nour customers.**\n\n \n\nOur business is dependent on the continued success\nof its customers. If any of the Company’s customers were to experience financial difficulties or cease operations, it could have\na material adverse impact on the Company’s business.\n\n \n\nWe extend credit terms to some of our customers.\nOur average accounts receivable turnover days were approximately 80 days, 164 days and 142 days for the financial years\nended December 31, 2023, 2024 and 2025. Our customers may be unable to meet their contractual payment obligations to us, either\nin a timely manner or at all. The reasons for payment delays, cancellations or default by our customers may include insolvency or bankruptcy,\nor insufficient financing or working capital due to late payments by their respective customers. While we did not experience any material\norder cancellations by our customers during the financial years ended December 31, 2023, 2024 and 2025, there is no assurance\nthat our customers will not cancel their orders and/or refuse to make payment in the future in a timely manner or at all. We may not\nbe able to enforce our contractual rights to receive payment through legal proceedings. In the event that we are unable to collect payments\nfrom our customers, we are still obliged to pay our suppliers in a timely manner and thus our business, financial condition and results\nof operations may be adversely affected. The Company is aware of the risks associated with customer concentration and is taking steps\nto mitigate these risks. However, investors should be aware of the potential for customer concentration to have a material adverse impact\non the Company’s business.\n\n** **\n\n21\n\n \n\n** **\n\n**There may be potentially adverse impacts\non our corporate governance because of the indemnification provisions in our Second Amended and Restated Memorandum and Articles of Association\npertaining to our directors’ and officers’ liability.**\n\n \n\nOur Second Amended and Restated Memorandum and\nArticles of Association provide every director (including any alternate director), secretary, assistant secretary, or other officer for\nthe time being and from time to time of our company (but not including our company’s auditors) and the personal representatives\nof the same (each an “Indemnified Person”) shall be indemnified and secured harmless against all actions, proceedings, costs,\ncharges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified\nPerson’s own dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including\nas a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including\nwithout prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person\nin defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in\nthe Cayman Islands or elsewhere. The broad scope of indemnification, covering actions taken in “good faith” and deemed to\nbe in the “best interests” of the Company, may inadvertently diminish the incentive for directors and officers to exercise\nthe highest level of care and diligence in decision-making. The extensive indemnification framework could result in reduced accountability\nand oversight, raising the risk of misconduct or negligence that may not be in the Company’s or shareholders’ best interests.\nThese provisions may create a scenario where directors and officers are less motivated to act with the utmost care, knowing that the\npersonal consequences of their actions are substantially mitigated. This decreased personal risk could impact corporate governance, potentially\nexposing shareholders to heightened risks stemming from lapses in judgment, mismanagement, or other adverse outcomes resulting from the\nactions of directors and officers. Careful consideration of these indemnification provisions is warranted to understand their potential\nimpact on the overall risk profile and governance dynamics of the Company.\n\n** **\n\n**Heightened tensions in international relations,\nparticularly between the United States and China, may adversely impact our business, financial condition, and results of operations.**\n\n \n\nRecently there have been heightened tensions\nin international relations, particularly between the United States and China. These tensions have affected both diplomatic and economic\nties among countries. Heightened tensions could reduce levels of trade, investments, technological exchanges, and other economic activities\nbetween the major economies. The existing tensions and any further deterioration in the relationship between the United States and\nChina may have a negative impact on the general, economic, political, and social conditions in both countries and, given our reliance\non the Chinese market, adversely impact our business, financial condition, and results of operations.\n\n \n\nOn August 9, 2023, the Biden administration\nreleased an executive order “Addressing United States Investments in Certain National Security Technologies and Products in\nCountries of Concern” (the “Outbound Order”), and an advanced notice of proposed rule-making (the “ANPRM”)\nproviding a conceptual framework for outbound investment controls focused on China. Further to this ANPRM, on June 21, 2024, the\nU.S. Department of the Treasury (the “Treasury”) issued a proposed rule on outbound U.S. investments involving\nChina that generally follows the ANPRM. On October 28, 2024, the Treasury issued a Final Rule to implement the Outbound Order\nof August 9, 2023. The Final Rule became effective on January 2, 2025. The Final Rule targets investments involving persons\nand entities associated with “countries of concern,” including China, and it imposes investment prohibition and notification\nrequirements on a wide range of investments in companies engaged in certain types of activities relating to three sectors: (1) advanced\nmicrochips and microelectronics, (2) quantum computing, and (3) artificial intelligence systems (“Covered Activities”),\nwith persons from countries of concern engaged in these Covered Activities included in the definition of “Covered Foreign Persons.”\nA Covered Foreign Person may mean a “person of a country of concern” that engages in a Covered Activity. According to the\nOutbound Order, a “person of a country of concern” includes (a) any individual that: (1) is a citizen or permanent\nresident of a country of concern; (2) is not a U.S. citizen; and (3) is not a permanent resident of the United States;\nor (b) any entity in which one or more persons identified in (a), individually or in the aggregate, directly or indirectly, holds\nat least 50 percent of any of the following interests of such entity: outstanding voting interest, voting power of the board, or equity\ninterest. As of the date of this annual report, only China, along with Macau and Hong Kong, is designated as a “country of\nconcern.” However, the list of countries of concern could be updated in the future.\n\n \n\n22\n\n \n\n \n\nInvestments by U.S. persons subject to the\nFinal Rule, which are defined as “covered transactions,” include acquisitions of equity interests, certain debt financing,\njoint ventures, and certain investments as a limited partner in a non-U.S. person pooled investment fund. The Final Rule excludes\nsome investments from the scope of covered transactions, including those in publicly traded securities listed on a national stock exchange.\nThe Final Rule is aimed at exerting greater U.S. government oversight over U.S. direct and indirect investments involving China\nand may introduce new hurdles and uncertainties for cross-border collaborations, investments, and funding opportunities of China-based\nissuers including us. We do not believe we are a Covered Foreign Person under the Final Rule. However, to the extent that we are deemed\na Covered Foreign Person engaged in the development of Covered Activities, the Final Rule could limit our ability to raise capital from\nU.S. investors generally, in which case our ability to raise such capital may be significantly and negatively affected, which could\nbe detrimental to our capital raising capacity and our business, financial condition and prospects.\n\n \n\nRecent and potential future changes in U.S. trade\npolicy, including the imposition or expansion of tariffs and other trade restrictions on imported goods from certain countries, have\nincreased uncertainty in global trade and supply chains. Although we do not currently export products to the United States, the imposition\nof tariffs or other trade barriers could increase costs for equipment, components or materials used in our operations, disrupt regional\ntrade flows, and contribute to broader economic uncertainty. Any resulting slowdown in global economic activity, increased costs, or\nbarriers to trade could materially and adversely affect our business, financial condition and results of operations.\n\n** **\n\n**Risks Relating to Our Securities**\n\n** **\n\n**If we fail to maintain an effective system\nof internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence\nand the market price of our Class A Ordinary Shares may be materially and adversely affected.**\n\n \n\nAs a public company, we have historically had\nlimited accounting personnel and other resources to address all aspects of our internal controls and procedures, and we continue to enhance\nour internal control over financial reporting. Our management is responsible for establishing and maintaining effective internal control\nover financial reporting, and effective internal control over financial reporting is necessary for us to provide reliable financial reports\nand, together with adequate disclosure controls and procedures, is designed to prevent fraud.\n\n \n\nOur failure to implement or maintain effective\ninternal control over financial reporting could result in errors in our financial statements, which could result in a restatement of\nour financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial\ninformation, which may result in volatility in and a decline in the market price of our Class A Ordinary Shares.\n\n \n\nWe are subject to the requirements of the Sarbanes-Oxley\nAct of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we include a report of management on our internal\ncontrol over financial reporting in our annual report on Form 20-F. As a foreign private issuer and an emerging growth company, we are\nnot currently required to have our independent registered public accounting firm attest to the effectiveness of our internal control\nover financial reporting. However, if we cease to qualify as an emerging growth company, our independent registered public accounting\nfirm will be required to attest to and report on the effectiveness of our internal control over financial reporting on an annual basis.\n\n \n\nOur management may conclude that our internal\ncontrol over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial\nreporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a\nreport that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed,\noperated or reviewed, or if it interprets the relevant requirements differently from us. In addition, our reporting obligations place,\nand will continue to place, a burden on our management, operational and financial resources and systems, and we may be unable to timely\ncomplete our evaluation testing and any required remediation.\n\n \n\n23\n\n \n\n \n\nDuring the course of documenting and testing\nour internal control procedures in order to satisfy the requirements of Section 404, we may identify material weaknesses and deficiencies\nin our internal control over financial reporting. The Public Company Accounting Oversight Board has defined a material weakness as “a\ndeficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility\nthat a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.”\n\n \n\nIn addition, if we fail to maintain the adequacy\nof our internal control over financial reporting as these standards are modified, supplemented or amended from time to time, we may not\nbe able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404.\nIf we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial\nstatements, fail to meet our reporting obligations and be subject to regulatory scrutiny or enforcement actions, which would likely cause\ninvestors to lose confidence in our reported financial information. This could in turn limit our access to the capital markets, harm\nour results of operations and lead to a decline in the trading price of our Class A Ordinary Shares.\n\n** **\n\n**An active trading market for the Class\nA Ordinary Shares may not be maintained and the trading price for the Class A Ordinary Shares may fluctuate significantly.**\n\n \n\nWe cannot assure you that a liquid public market\nfor the Class A Ordinary Shares will be maintained. If an active public market for the Class A Ordinary Shares is not maintained, the\nmarket price and liquidity of the Class A Ordinary Shares may be materially and adversely affected. As a result,\ninvestors in the Class A Ordinary Shares may experience a significant decrease in the value of their Class A Ordinary Shares.\n\n** **\n\n**We may not maintain the listing of our\nClass A Ordinary Shares on Nasdaq which could limit investors’ ability to make transactions in our Class A Ordinary Shares and\nsubject us to additional trading restrictions.**\n\n \n\nOn May 12, 2026, the Company received a written\nnotification from Nasdaq stating that the Class A Ordinary Shares were not in compliance with the minimum bid price requirement of US$1.00\nper share under Nasdaq Listing Rule 5550(a)(2), based on the closing bid price for the 30 consecutive business days from March 30, 2026\nto May 11, 2026. Under Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted an initial compliance period of 180 calendar days,\nuntil November 9, 2026, in which to regain compliance by maintaining a closing bid price of at least US$1.00 per share for a minimum of\nten consecutive business days. If the Company does not regain compliance within the initial period, it may be eligible for a further 180-day\ncompliance period, subject to satisfying certain other Nasdaq Capital Market listing requirements and providing written notice of its\nintention to cure the deficiency, which may include implementing a reverse stock split. There can be no assurance that the Company will\nbe able to regain compliance with the minimum bid price requirement or, if necessary, will be eligible for the second compliance period.\nIf the Company is unable to regain compliance, Nasdaq may delist the Class A Ordinary Shares, which would have a material adverse effect\non the market price and liquidity of the Class A Ordinary Shares and on the Company’s ability to raise capital in the future. For\nadditional information, see “Item 3.A. Key Information—Recent Developments—Nasdaq Minimum Bid Price Deficiency”.\n\n \n\nOur Class A Ordinary Shares are currently listed\non the Nasdaq Stock Market. In order to maintain our listing, we must continue to satisfy Nasdaq’s continued listing requirements,\nincluding requirements relating to minimum bid price, shareholders’ equity, market value of publicly held shares and other financial\nand qualitative standards. We may be unable to meet these continued listing requirements in the future, and Nasdaq may take action to\ndelist our Class A Ordinary Shares if we fail to maintain compliance.\n\n \n\nIf Nasdaq were to delist our Class A Ordinary\nShares and we were unable to list our shares on another national securities exchange, we expect that our Class A Ordinary Shares could\nbe quoted on an over-the-counter market in the United States. If this were to occur, we could face significant material adverse consequences,\nincluding a limited availability of market quotations for our Class A Ordinary Shares, reduced liquidity for our Class A Ordinary Shares,\na determination that our Class A Ordinary Shares are “penny stock,” which would require brokers trading in our shares to\nadhere to more stringent rules and could result in a reduced level of trading activity in the secondary trading market for our Class\nA Ordinary Shares, a limited amount of news and analyst coverage, and a decreased ability to issue additional securities or obtain additional\nfinancing in the future.\n\n \n\n24\n\n \n\n \n\nAs long as our Class A Ordinary Shares remain\nlisted on Nasdaq, U.S. federal law generally pre-empts state securities laws from regulating the offer and sale of our securities. However,\nif our Class A Ordinary Shares were no longer listed on Nasdaq, we would be subject to regulation in each state in which we offer our\nsecurities, which could increase our compliance costs and restrict the ability of investors to trade our Class A Ordinary Shares.\n\n** **\n\n**If securities or industry analysts do not\npublish research or reports about our business, or if they adversely change their recommendations regarding our Class A Ordinary Shares,\nthe market price for our Class A Ordinary Shares and trading volume could decline.**\n\n \n\nThe trading market for our shares may be influenced\nby research or reports that industry or securities analysts publish about our business. If one or more analysts downgrade our shares,\nthe market price for our shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish\nreports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our\nshares to decline.\n\n** **\n\n**Because we do not expect to pay dividends\nin the foreseeable future, you must rely on price appreciation of our Class A Ordinary Shares for a return on your investment.**\n\n \n\nWe currently intend to retain all of our available\nfunds and any future earnings to fund the development and growth of our business. As a result, we do not expect to\npay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our shares as a source for any future\ndividend income. Our Second Amended and Restated Memorandum and Articles of Association provide that subject to any rights and restrictions\nfor the time being attached to any shares, the directors may from time to time declare dividends (including interim dividends) and other\ndistributions on shares in issue and authorize payment of the same out of the funds of the Company lawfully available therefor. Under\nthe laws of the Cayman Islands, our Company may pay a dividend out of profit and/or share premium account; provided that in no circumstances\nmay a dividend be paid out of our share premium if this would result in our Company being unable to pay its debts as they fall due in\nthe ordinary course of business. Even if our board of Directors decides to declare and pay dividends, the timing, amount and form of\nfuture dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements\nand surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions\nand other factors as determined by our board of Directors. Accordingly, the return on your investment in our Class A Ordinary Shares\nwill likely depend entirely upon any future price appreciation of our Class A Ordinary Shares. There is no guarantee that our Class A\nOrdinary Shares will appreciate in value or even maintain the price at which you purchased our shares. You may not\nrealize a return on your investment in our shares and you may even lose your entire investment.\n\n** **\n\n**Short selling may drive down the market\nprice of our Class A Ordinary Shares.**\n\n \n\nShort selling is the practice of selling shares\nthat the seller does not own but rather has borrowed from a third party with the intention of buying identical shares back at a later\ndate to return to the lender. The short seller hopes to profit from a decline in the value of the shares between the sale of the borrowed\nshares and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale.\nAs it is in the short seller’s interest for the price of the shares to decline, many short sellers publish, or arrange for the\npublication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative\nmarket momentum and generate profits for themselves after selling the shares short. These short attacks have, in the past, led to selling\nof shares in the market. If we were to become the subject of any unfavorable publicity, whether such allegations are proven to be true\nor untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we\nwould strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the\nrelevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.\n\n** **\n\n25\n\n \n\n** **\n\n**Our management has broad discretion to\ndetermine how to use the funds raised in our initial public offering and follow-on offering and may use them in ways that may not enhance\nour results of operations or the price of our Class A Ordinary Shares.**\n\n \n\nWe have used and intend to use the net\nproceeds from our initial public offering and follow-on offering as set out in “Use of Proceeds.” However, our\nmanagement will have considerable discretion in the application of the net proceeds received by us in our initial public offering\nand follow-on offering. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being\nused appropriately. The net proceeds may be used for corporate purposes that do not improve our efforts to achieve or maintain\nprofitability or increase our share price. The net proceeds from our initial public offering and follow-on offering may be placed in\ninvestments that do not produce income or that lose value.\n\n** **\n\n**If we are classified as a passive foreign\ninvestment company, United States taxpayers who own our securities may have adverse United States federal income tax consequences.**\n\n \n\nWe are a non-U.S. corporation and, as such,\nwe will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either\n\n \n\n●At least 75% of\nour gross income for the year is passive income; or\n\n \n\n●The average percentage\nof our assets (determined at the end of each quarter) during the taxable year that produce\npassive income or that are held for the production of passive income is at least 50%.\n\n \n\nPassive income generally includes dividends,\ninterest, rents, royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the\ndisposition of passive assets.\n\n \n\nIf we are determined to be a PFIC for any taxable\nyear (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our securities, the U.S. taxpayer\nmay be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.\n\n \n\nWhile we do not expect to become a PFIC, because\nthe value of our assets for purposes of the asset test may be determined by reference to the market price of our Class A Ordinary Shares,\nfluctuations in the market price of our Class A Ordinary Shares may cause us to become a PFIC for the current or subsequent taxable years.\nThe determination of whether we will be or become a PFIC will also depend, in part, on the composition of our income and assets. If we\ndetermine not to deploy significant amounts of cash for active purposes, our risk of being a PFIC may substantially increase. Because\nthere are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close\nof each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.\n\n \n\nFor a more detailed discussion of the application\nof the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Material Income Tax\nConsiderations — Passive Foreign Investment Company.”\n\n** **\n\n26\n\n \n\n** **\n\n**The obligation to disclose information\npublicly may put us at a disadvantage to competitors that are private companies.**\n\n \n\nWe are a publicly listed company in the United\nStates. As a publicly listed company, we are required to file periodic reports with the SEC upon the occurrence of matters that are material\nto us and our shareholders. In some cases, we will need to disclose material agreements or results of financial operations that we would\nnot be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise\nbe confidential. This may give them advantages in competing with us. Similarly, as a U.S.-listed public company, we will be governed\nby U.S. laws that our non-publicly traded competitors are not required to follow. To the extent compliance with U.S. laws increases our\nexpenses or decreases our competitiveness against such companies, our public listing could affect our results of operations.\n\n** **\n\n**As a result of the dual-class share structure\nof our share capital, SSL has and will continue to have voting control over our Company. The interests of SSL may not align with those\nof our other shareholders, limiting or precluding our shareholders’ ability to influence corporate matters, including the election\nof directors, amendments to our memorandum and articles of association, and any merger, consolidation, or other major corporate transactions\nrequiring shareholder approval.**\n\n \n\nSSL beneficially owns 5,845,000 Class A Ordinary\nShares and 5,000,000 Class B Ordinary Shares. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters\nsubject to vote at general meetings of the Company, and each Class B Ordinary Share shall entitle the holder thereof to fifty (50) votes\non all matters subject to vote at general meetings of the Company. As a result of the 50:1 voting ratio between our Class B Ordinary\nShares and Class A Ordinary Shares, SSL controls approximately 90.73% of the total voting power of our issued and outstanding share capital. This concentration of voting power allows SSL to control all matters submitted to our shareholders for approval,\nincluding (i) the election and removal of directors, (ii) mergers, consolidations and other business combinations, (iii) amendments to\nour memorandum and articles of association, (iv) the approval of significant corporate transactions, and (v) other matters requiring\nshareholder approval. Accordingly, SSL will have considerable influence, and effectively control, over the outcome of any corporate action\nrequiring shareholder approval for the foreseeable future. Because the interests of SSL may differ from those of our other shareholders,\nthe dual-class share structure and concentrated voting control may also discourage, delay or prevent a change in control of our Company\nor unsolicited acquisition proposals that other shareholders may believe are in their best interests. Without the consent of SSL, we\nmay be prevented from entering into transactions that could be beneficial to our minority shareholders. The concentration of ownership\nand voting control may adversely affect the market price of our Class A Ordinary Shares.\n\n \n\nIn addition, unless our Class B Ordinary Shares\nare converted or otherwise cease to be outstanding in accordance with our amended and restated memorandum and articles of association,\nour shareholding structure will remain a dual-class structure, which will continue to result in significant voting control being concentrated\nwith SSL.\n\n** **\n\n**As a “controlled company” within\nthe meaning of the Nasdaq Stock Market Rules, we may rely on exemptions from certain corporate governance requirements that provide protection\nto shareholders of other companies.**\n\n \n\nWe are a “controlled company” as\ndefined under the Nasdaq Stock Market Rules because one of our shareholders, SSL, holds more than 50% of the total voting power of our\ntotal issued and outstanding share capital. As a result, for so long as we remain a controlled company, we are permitted to elect to\nrely, and may rely, on certain exemptions from the corporate governance requirements of the Nasdaq Stock Market Rules, including:\n\n \n\n●an exemption from\nthe requirement that a majority of our board of directors be independent directors;\n\n \n\n●an exemption from\nthe requirement that the compensation of our chief executive officer be determined or recommended\nsolely by independent directors; and\n\n \n\n27\n\n \n\n \n\n●an exemption from\nthe requirement that our directors be selected or recommended solely by independent directors\nor a committee composed solely of independent directors.\n\n \n\nAlthough we do not currently intend to rely on\nthe “controlled company” exemptions under the Nasdaq listing rules, we may elect to rely on some or all of these exemptions\nin the future. If we do, holders of our Class A Ordinary Shares would not have the same protections afforded to shareholders of companies\nthat are subject to all of the Nasdaq corporate governance requirements.\n\n** **\n\n**As an exempted company incorporated in\nthe Cayman Islands, we are permitted to follow certain home country practices in relation to corporate governance matters in lieu of\ncertain requirements under Nasdaq corporate governance listing rules. These practices may afford less protection to shareholders than\nthey would enjoy if we complied fully with Nasdaq corporate governance listing standards.**\n\n \n\nAs an exempted company incorporated in the Cayman\nIslands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly\nfrom the corporate governance listing requirements of Nasdaq. These practices may afford less protection to Shareholders than they would\nenjoy if we complied fully with corporate governance listing requirements of Nasdaq. We rely on home country practice to be exempted\nfrom certain of the corporate governance requirements of Nasdaq, namely; (i) there will not be a necessity to have regularly scheduled\nexecutive sessions with independent Directors; and (ii) there will be no requirement for the Company to obtain Shareholder approval\nprior to an issuance of securities in connection with (a) the acquisition of stock or assets of another company; (b) equity-based\ncompensation of officers, directors, employees or consultants: (c) a change of control; and (d) transactions other than public\nofferings.\n\n** **\n\n**We are an emerging growth company within\nthe meaning of the Securities Act and may take advantage of certain reduced reporting requirements.**\n\n \n\nWe are an “emerging growth company,”\nas defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements applicable to other public companies\nthat are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements\nof Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company. As a result, if we elect not to comply\nwith such auditor attestation requirements, our investors may not have access to certain information they may deem important.\n\n \n\nThe JOBS Act also provides that an emerging growth\ncompany does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise\nrequired to comply with such new or revised accounting standards. In other words, an “emerging growth company” can delay\nthe adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take\nadvantage of the extended transition period, although we have adopted certain new and revised accounting standards based on transition\nguidance permitted under such standards earlier. As a result of this election, our future financial statements may not be comparable\nto other public companies that comply with the public company effective dates for these new or revised accounting standards.\n\n** **\n\n**We are a foreign private issuer within\nthe meaning of the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.**\n\n \n\nBecause we are a foreign private issuer under\nthe Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are\napplicable to U.S. domestic issuers, including:\n\n \n\n●the rules under\nthe Exchange Act requiring the filing of quarterly reports on Form 10-Q or current\nreports on Form 8-K with the SEC;\n\n \n\n●the sections of\nthe Exchange Act regulating the solicitation of proxies, consents, or authorizations\nin respect of a security registered under the Exchange Act;\n\n \n\n28\n\n \n\n \n\n●the sections of\nthe Exchange Act requiring insiders to file public reports of their share ownership\nand trading activities and liability for insiders who profit from trades made in a short\nperiod of time; and\n\n \n\n●the selective\ndisclosure rules by issuers of material non-public information under Regulation FD.\n\n \n\nWe are required to file an annual report on Form 20-F\nwithin four months of the end of each financial year. In addition, we intend to publish our financial results on a semi-annual basis\nthrough press releases distributed pursuant to the rules and regulations of the Nasdaq Capital Market. Press releases relating to financial\nresults and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file\nwith or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic\nissuers. As a result, you may not be afforded the same protections or information that would be made available to you if you were investing\nin a U.S. domestic issuer.\n\n** **\n\n**We may lose our foreign private issuer\nstatus in the future, which could result in significant additional costs and expenses to us.**\n\n \n\nAs discussed above, we are a foreign private\nissuer under the Exchange Act, and therefore, we are not required to comply with all of the periodic disclosure and current reporting\nrequirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last Business Day of\nan issuer’s most recently completed second financial quarter, and, accordingly, the next determination will be made with respect\nto us on December 31, 2025. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding\nvoting securities are owned by U.S. residents and (2) a majority of our Directors or executive officers are U.S. citizens\nor residents, or we fail to meet additional requirements necessary to avoid the loss of foreign private issuer status. If we lose our\nforeign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic\nissuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to comply\nwith U.S. federal proxy requirements, and our officers, Directors and 10% shareholders will become subject to the short-swing profit\ndisclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions\nfrom certain corporate governance requirements under the listing rules of Nasdaq. As a U.S. listed public company that is not a\nforeign private issuer, we would incur significant additional legal, accounting, and other expenses that we would not otherwise incur\nas a foreign private issuer.\n\n** **\n\n**We have incurred and will continue to incur\nsignificantly increased costs and have devoted and will continue to devote substantial management time as a result of being a public\ncompany and the listing of our Class A Ordinary Shares on Nasdaq.**\n\n \n\nWe have incurred and will continue to incur additional\nlegal, accounting, and other expenses as a public reporting company, particularly after we cease to qualify as an emerging growth company.\nFor example, we are required to comply with the additional requirements of the rules and regulations of the SEC and the Nasdaq rules,\nincluding applicable corporate governance practices. We expect that compliance with these requirements will increase our legal and financial\ncompliance costs and will make some activities more time-consuming and costly. In addition, we expect that our management and other personnel\nwill need to divert attention from operational and other business matters to devote substantial time to these public company requirements.\nWe cannot predict or estimate the number of additional costs we may incur as a result of becoming a public company or the timing of such\ncosts.\n\n \n\n29\n\n \n\n \n\nIn addition, changing laws, regulations and standards\nrelating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial\ncompliance costs, and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations,\nin many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidelines\nare provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher\ncosts necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving\nlaws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s\ntime and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and\nstandards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice,\nregulatory authorities may also initiate legal proceedings against us, and our business may be adversely affected.\n\n \n\nWe are an “emerging growth\ncompany,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the\nfiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual\ngross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market\nvalue of our Class A Ordinary Shares that is held by non-affiliates exceeds $700 million as of the prior December 31, and (2) the\ndate on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. An emerging growth\ncompany may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public\ncompanies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the\nemerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting\nstandards until such time as those standards apply to private companies.\n\n \n\nAfter we are no longer an “emerging growth\ncompany,” or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur\nsignificant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section\n404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase the number of\nindependent directors and adopt policies regarding internal controls and disclosure controls and procedures.\n\n \n\nWe are currently evaluating and monitoring developments\nwith respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional\ncosts we may incur or the timing of such costs.\n\n** **\n\n**Nasdaq may apply additional and more stringent criteria for\nour continued listing since our insiders hold a large portion of our listed securities.**\n\n \n\nNasdaq Listing Rule 5101 provides Nasdaq\nwith broad discretionary authority over the continued listing of securities on Nasdaq and Nasdaq may use such discretion to deny continued\nlisting, apply additional or more stringent criteria for the continued listing of particular securities, or suspend or\ndelist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the\nsecurities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for\ncontinued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny continued listing or to apply additional and more stringent criteria in\nthe instances, including: (i) where the company engaged an auditor that has not been subject to an inspection by the PCAOB, an auditor\nthat PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately\nperform the company’s audit; (ii) where the company planned a small public offering, which would result in\ninsiders holding a large portion of the company’s listed securities; and (iii) where the company did not demonstrate sufficient\nnexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or\nmanagement. Since our insiders hold a large portion of our listed securities, Nasdaq may apply additional and more stringent criteria for\nour continued listing, which may cause delay or even denial of our listing application.\n\n** **\n\n30\n\n \n\n** **\n\n**Shares eligible for future sale may adversely\naffect the market price of our Class A Ordinary Shares, as the future sale of a substantial number of issued and outstanding Class A\nOrdinary Shares in the public marketplace could reduce the price of our Class A Ordinary Shares.**\n\n \n\nThe market price of our Class A Ordinary Shares\ncould decline as a result of sales of substantial amounts of our shares in the public market, or the perception that these sales could\noccur. In addition, these factors could make it more difficult for us to raise funds through future offerings of our Class A Ordinary\nShares. A portion of our issued and outstanding shares are “restricted securities” as defined in Rule 144. These shares\nmay be sold without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities\nAct.\n\n** **\n\n**Our Second Amended and Restated Memorandum\nand Articles of Association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit\nour shareholders’ opportunity to sell their shares at a premium.**\n\n \n\nOur Second Amended and Restated Memorandum and\nArticles of Association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in\nchange-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their\nshares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender\noffer or similar transaction. For example, our board of directors has the authority, without further action by our shareholders, to issue\npreferred shares in one or more series and to determine the terms and rights of such preferred shares without approval of our shareholders.\n\n** **\n\n**Further issuances of Class B Ordinary Shares\nmay result in a dilution of the percentage ownership of the existing holders of Class A Ordinary Shares as a total proportion of Ordinary\nShares in our company.**\n\n \n\nWe may issue more Class B Ordinary Shares. The\nissuance of additional Class Ordinary B Shares may result in dilution to holders of our Class A Ordinary Shares. Each Class A Ordinary\nShare shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class\nB Ordinary Share shall entitle the holder thereof to fifty (50) votes on all matters subject to vote at general meetings of the Company.\nAs a result, holders of Class B Ordinary Shares have significantly greater voting power than holders of Class A Ordinary Shares. If we\ndecide to issue more Class B Ordinary Shares, it could have the effect of increasing the overall voting power of holders of Class B Ordinary\nShares relative to holders of Class A Ordinary Shares, potentially diminishing the influence and control of holders of Class A Ordinary\nShares over our corporate affairs. This dilution in voting power could impact the ability of holders of Class A Ordinary Shares to influence\nimportant corporate decisions, including those related to corporate governance, mergers, acquisitions, and other significant transactions.\nIt may also result in decisions that are not aligned with the interests of holders of Class A Ordinary Shares.\n\n** **\n\n**The trading price of our Class A Ordinary\nShares has been and may continue to be volatile, which could result in substantial losses for investors.**\n\n \n\nSince our initial public offering, which was\nconsummated on September 29, 2025, our Class A Ordinary Shares have experienced significant price volatility. The trading price\nhas ranged from a low of $0.128 to a high of $8.63 per share as of the date of this annual report. Such volatility may not be related\nto our actual operating performance or financial condition. The market price of our Class A Ordinary Shares may fluctuate significantly\nin response to various factors, many of which are beyond our control, including: actual or anticipated variations in our results of operations;\nchanges in financial estimates by securities research analysts; announcements by us or our competitors of new products, services, strategic\nalliances or significant agreements; changes in accounting standards, policies, guidance, interpretations or principles; the limited\npublic float and trading volume of our Class A Ordinary Shares, which may result in erratic price movements; speculative trading\nactivity in our Class A Ordinary Shares that may not reflect the fundamental value of our business; and general market conditions\nor other factors unrelated to our operating performance. As a result of the foregoing, investors in our Class A Ordinary Shares\nmay not be able to resell their shares at or above their purchase price, and may experience a significant decrease in the value of their\ninvestment.\n\n \n\n31"}