{"url_path":"/sec/sos/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/1346610/0001213900-26-057725-index.html","accession_number":"0001213900-26-057725","cik":"0001346610","ticker":"SOS","issuer_name":"SOS Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1346610/0001213900-26-057725-index.html","primary_entity_key":"0001346610","primary_entity_name":"SOS Ltd"},"word_count":25959,"has_tables":true,"body_markdown":"**ITEM\n3. KEY INFORMATION**\n\n \n\nEnforceability\nof Civil Liability\n\n \n\nWe\nare an exempted company limited by shares incorporated under the laws of Cayman Islands. We conduct substantially all our operations\nin terms of revenue in China and substantially all our assets are located in China. In addition, a majority of our directors and executive\nofficers reside within China, and most of the assets of these persons are located within mainland China. Only one of our directors and\nexecutive officers resides in Hong Kong, and his assets are substantially all located outside Hong Kong. As a result, it may be difficult\nor impossible for you to effect service of process within the United States upon these individuals, or to bring an action against us\nor against these individuals in the United States in the event that you believe your rights have been infringed under the U.S. federal\nsecurities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of Cayman Islands and of the PRC\nmay render you unable to enforce a judgment against our assets or the assets of our directors and officers.\n\n \n\nThere\nis no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the\nCayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), however, the courts\nof the Cayman Islands will, at common law, recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction\nwithout any re-examination of the merits of the underlying dispute based on the principle that a judgment of a competent foreign court\nimposes upon the judgment debtor an obligation to pay the liquidated sum for which such judgment has been given, provided such judgment\n(a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for\nwhich the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, and (e) was not obtained in a manner\nand is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, the\nCayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S. federal\nsecurities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are\npenal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether\nsuch civil liability judgments from U.S. courts would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement\nproceedings if concurrent proceedings are being brought elsewhere.\n\n \n\n3\n\n \n\n \n\nThe\nrecognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce\nforeign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the\ncountry where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms\nof reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition,\naccording to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our director and officers\nif they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security or public interest. As a\nresult, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.\n\n \n\n**A.\n[Reserved]**\n\n \n\n**B.\nCapitalization and Indebtedness**\n\n \n\nNot\napplicable.\n\n \n\n**C. Reasons\nfor the Offer and Use of Proceeds**\n\n \n\nNot\napplicable.\n\n \n\n**D. Risk\nFactors**\n\n \n\n**Summary\nof Risk Factors**\n\n \n\nInvesting\nin our Class A Ordinary Shares involves significant risks. You should carefully consider all of the information in this annual report\nbefore making an investment in our Class A Ordinary Shares. Below please find a summary of the principal risks we face, organized under\nrelevant headings. These risks are discussed more fully in the section titled “Item 3. Key Information—D. Risk Factors”\nin this annual report.\n\n ** **\n\n**Risks\nRelated to Our Commodities Trading Business**\n\n** **\n\n●SOS\nLimited is primarily a commodities trading company, and our revenues are substantially dependent\non the volume and margin of our commodities trading transactions. Adverse commodity price\nmovements could compress or eliminate our margins and materially affect our results of operations.\nSee more detailed discussion of this risk factor on page [  ] of this annual report.\n\n \n\n●We\nare exposed to significant counterparty and credit risk in our commodities trading business.\nOur prepayments to suppliers and receivables from customers are subject to substantial credit\nloss risk, and our allowances for credit losses may be insufficient. See more detailed discussion of this risk factor on page 8 of this annual report.\n\n \n\n●Our\ncommodities trading business requires us to make substantial advance payments to suppliers\nbefore goods are delivered, which we may be unable to recover if suppliers fail to perform.\nSee more detailed discussion of this risk factor on page 8 of this annual report.\n\n \n\n●Our\ncommodities trading revenues are concentrated among a limited number of customers, and the\nloss of any such customer could cause a material decline in our revenues. See more detailed discussion of this risk factor on page 8 of this annual report.\n\n \n\n●We\nmay be required to write down inventory to net realizable value, which could materially affect\nour financial results. See more detailed discussion of this risk factor on page 9 of this annual report.\n\n \n\n●Management\nhas identified material weaknesses in our internal controls over revenue recognition for\nour commodities trading business. If we are unable to remediate these weaknesses, we may\nbe unable to accurately report our financial results. See more detailed discussion of this risk factor on page 9 of this annual report.\n\n \n\n4\n\n \n\n \n\n**Risks\nRelated to Our Hosting Services Business**\n\n** **\n\n●Our hosting services revenues may decline\nif customer demand for third-party cryptocurrency mining decreases, and we may be unable to replace such revenues with alternative\nsources. See more detailed discussion of this risk factor on page 9 of this annual report.\n\n \n\n●The\nprofitability of our hosting services business depends on the economic attractiveness of\ncryptocurrency mining for our customers, which is subject to numerous factors outside our\ncontrol, including cryptocurrency prices, mining difficulty, and regulatory developments.\nSee more detailed discussion of this risk factor on page 9 of this annual report.\n\n \n\n●If\nour hosting services business continues to decline, we may be unable to develop or acquire\nalternative revenue streams to replace those revenues in a timely manner or at all. See more detailed discussion of this risk factor on page 9 of this annual report.\n\n \n\n**Risks\nRelating to the Cryptocurrency Mining, Security and Insurance Business**\n\n** **\n\n●We\nhave temporarily shut down mining operations in 2025, and there can be no assurance\nthat we will successfully resume or expand such operations in the future. See more detailed discussion of this risk factor on page 10 of this annual report.\n\n \n\n●Our\ncryptocurrency mining equipment has been subject to significant impairment charges, and we\nmay be required to recognize additional impairment losses in the future. See more detailed discussion of this risk factor on page 10 of this annual report.\n\n \n\n●Our\nsignificant holdings of Bitcoin and Ethereum expose us to substantial fair value volatility,\nwhich is recognized directly in our earnings each period. See more detailed discussion of this risk factor on page 10 of this annual report.\n\n \n\n●Our\ncryptocurrency mining, security and insurance businesses are still under development, with\nmany uncertainties in research of relevant technologies, which makes it hard for us to evaluate\ntheir ability to generate revenue through operations, and to date, each of them has not generated\nrevenue from any commercially available blockchain-based products or services. See more detailed discussion of this risk factor on page 10 of this annual report.\n\n \n\n●Cryptocurrency\nmining relies on a steady and inexpensive power supply for operating mining farms and running\nmining hardware. Failure to access a large quantity of power at reasonable costs could significantly\nincrease our operating expenses and adversely affect our demand for our mining machines.\nSee more detailed discussion of this risk factor on page 10 of this annual report.\n\n \n\n●Shortages\nin, or rises in the prices of mining machines may adversely affect our business. See more detailed discussion of this risk factor on page 11 of this annual report.\n\n \n\n●We\nmay not be able to develop our cryptocurrency mining capacity, blockchain-based security\nand insurance technologies in the safeguard of digital assets because we may fail to anticipate\nor adapt to technology innovations in a timely manner, or at all. See more detailed discussion of this risk factor on page 11 of this annual report.\n\n \n\n●Adverse\nchanges in the regulatory environment in the PRC market could have a material adverse impact\non our planned cryptocurrency related business. See more detailed discussion of this risk factor on page 11 of this annual report.\n\n \n\n●Because\ncryptocurrencies may be determined to be investment securities, we may inadvertently violate\nthe Investment Company Act and incur large losses as a result and potentially be required\nto register as an investment company or terminate operations and we may incur third party\nliabilities. See more detailed discussion of this risk factor on page 12 of this annual report.\n\n \n\n●Banks\nand financial institutions may not provide banking services, or may cut off services, to\nbusinesses that engage in bitcoin-related activities or that accept cryptocurrencies as payment,\nincluding financial institutions of investors in our securities. See more detailed discussion of this risk factor on page 12 of this annual report.\n\n \n\n5\n\n \n\n \n\n**Risks\nRelated to Our Data Mining and Analysis Business**\n\n** **\n\n●Development\nof data warehouses is capital intensive. We may not be able to generate sufficient capital\nor obtain additional capital to meet our future capital needs, on favorable terms or at all,\nwhich may lead to significant disruption to our business expansion and adversely affect our\nfinancial position. See more detailed discussion of this risk factor on page 13 of this annual report.\n\n \n\n●The\nmarket in which we participate is competitive. Failure to compete effectively may result\nin loss of our market share and a decrease in our revenues and profitability. See more detailed discussion of this risk factor on page 13 of this annual report.\n\n \n\n●Our\nrevenues are highly dependent on a limited number of major clients, and the loss of any such\nclient or any other significant client, or the inability of any such client or any other\nsignificant client to make payments to us as due, could have a material adverse effect on\nour business, results of operations and financial condition. See more detailed discussion of this risk factor on page 14 of this annual report.\n\n \n\n●If\nwe do not succeed in attracting new clients or agents for our services and/or growing revenues\nfrom existing clients or agents, our business and results of operation may be adversely affected.\nSee more detailed discussion of this risk factor on page 14 of this annual report.\n\n \n\n●Factors\nthat adversely affect the industries in which our clients operate or information technology\nspending in these industries, particularly in the Internet and cloud service industries and\ninsurance industries, may adversely affect our business. See more detailed discussion of this risk factor on page 14 of this annual report.\n\n \n\n●We\npurchase a significant portion of our meta data from a small number of data suppliers. A\nsignificant disruption in any of such data suppliers could materially and adversely affect\nour business, results of operations and financial condition. See more detailed discussion of this risk factor on page 15 of this annual report.\n\n \n\n**Risks\nRelated to Doing Business in China**\n\n** **\n\n●The\napproval of the CSRC, may be required in connection with the listing and trading of our securities\nunder PRC rules, regulations, or policies, and, if required, we cannot predict whether or\nhow soon we will be able to obtain such approval. As a result, both you and us face uncertainty\nabout future actions by the PRC government that could significantly affect our business,\nour listing on NYSE, financial condition and results of operations. See more detailed discussion of this risk factor on page 18 of this annual report.\n\n \n\n●In\nlight of recent events indicating greater oversight by the CAC, over data security, we are\nsubject to a variety of laws and other obligations regarding cybersecurity and data protection,\nand any failure to comply with applicable laws and obligations could have a material and\nadverse effect on our business, our listing on NYSE, financial condition and results of operations.\nSee more detailed discussion of this risk factor on page 19 of this annual report.\n\n \n\n●PRC\nlaws and regulations governing our current business operations are sometimes vague and uncertain\nand any changes in such laws and regulations may impair our ability to operate profitably.\nSee more detailed discussion of this risk factor on page 20 of this annual report.\n\n \n\n●Regulations\nrelating to offshore investment activities by PRC residents may limit our ability to acquire\nPRC companies and could adversely affect our business. See more detailed discussion of this risk factor on page 21 of this annual report.\n\n \n\n●Governmental control of currency conversion\nmay limit our ability to utilize our net revenue effectively and our ability to transfer cash between our PRC subsidiaries and us,\nacross borders, and to investors and affect the value of your investment. See more detailed discussion of this risk factor on page\n21 of this annual report.\n\n \n\n●Although\nthe audit report included in this annual report is prepared by an auditor who are currently\ninspected by the Public Company Accounting Oversight Board (the “PCAOB”), there\nis no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB\nand, as such, in the future investors may be deprived of the benefits of such inspection.\nFurthermore, trading in our securities may be prohibited under the Holding Foreign Companies\nAccountable Act (the “HFCA Act”) if the SEC subsequently determines our audit\nwork is performed by auditors that the PCAOB is unable to inspect or investigate completely,\nand as a result, U.S. national securities exchanges, such as Nasdaq, may determine to delist\nour securities. Furthermore, on December 29, 2022, the Consolidated Appropriations Act, was\nsigned into law by President Biden. The Consolidated Appropriations Act contained, among\nother things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection\nyears required for triggering the prohibitions under the HFCA Act from three years to two.\nSee more detailed discussion of this risk factor on page 22 of this annual report.\n\n \n\n6\n\n \n\n \n\n●Failure\nto comply with laws and regulations applicable to our business could subject us to fines\nand penalties and could also cause us to lose customers or otherwise harm our business. See more detailed discussion of this risk factor on page 24 of this annual report.\n\n \n\n●If\nwe cease to qualify as a foreign private issuer, we would be required to comply fully with\nthe reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we\nwould incur significant additional legal, accounting and other expenses that we would not\nincur as a foreign private issuer. See more detailed discussion of this risk factor on page 25 of this annual report.\n\n \n\n●We\nmay fail to obtain, maintain and update licenses and permits necessary to conduct our operations\nin the PRC, and our business may be materially and adversely affected as a result of any\nchanges in the laws and regulations governing the VATS industry in the PRC. See more detailed discussion of this risk factor on page 25 of this annual report.\n\n \n\n●We\nmay rely principally on dividends and other distributions on equity paid by our PRC subsidiaries\nto fund any cash and financing requirements we may have, and any limitation on the ability\nof our PRC subsidiaries to pay dividends to us could have a material adverse effect on our\nability to conduct our business. See more detailed discussion of this risk factor on page 26 of this annual report.\n\n \n\n●Adverse\nchanges in China’s economic, political and social conditions, as well as laws and government\npolicies, may materially and adversely affect our business, financial condition, results\nof operations and growth prospects. See more detailed discussion of this risk factor on page 27 of this annual report.\n\n \n\n●Uncertainties\nin the interpretation and enforcement of PRC laws and regulations could limit the legal protections\navailable to you and us. See more detailed discussion of this risk factor on page 27 of this annual report.\n\n \n\n**Risks\nRelated to Our Class A Ordinary Shares**\n\n** **\n\n●The\ntrading price of our Class A Ordinary Shares may be volatile, which could result in substantial\nlosses to investors. See more detailed discussion of this risk factor on page 31 of this annual report.\n\n \n\n●Techniques\nemployed by short sellers may drive down the market price of our Class A Ordinary Shares.\nSee more detailed discussion of this risk factor on page 32 of this annual report.\n\n \n\n●Substantial future sales or perceived\npotential sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary Shares to decline.\nSee more detailed discussion of this risk factor on page 32 of this annual report.\n\n \n\n●Because\nwe do not expect to pay dividends in the foreseeable future, you must rely on price appreciation\nof our Class A Ordinary Shares for return on your investment. See more detailed discussion of this risk factor on page 33 of this annual report.\n\n \n\n●We\nmay be classified as a passive foreign investment company for U.S. federal income tax purposes,\nwhich could result in adverse U.S. federal income tax consequences to U.S. Holders of our\nordinary shares. See more detailed discussion of this risk factor on page 33 of this annual report.\n\n \n\n●Our memorandum and articles of association\ncontain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A Ordinary Shares.\nSee more detailed discussion of this risk factor on page 34 of this annual report.\n\n \n\n●Our dual-class voting structure limits your\nability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of\nour Class A Ordinary Shares may view as beneficial. See more detailed discussion of this risk factor on page 34 of this annual\nreport.\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 registered under Cayman\nIslands law. See more detailed discussion of this risk factor on page 34 of this annual report.\n\n \n\n●Certain\njudgments obtained against us by our shareholders may not be enforceable. See more detailed discussion of this risk factor on page 35 of this annual report.\n\n \n\n●We\nare a foreign private issuer within the meaning of the rules under the Exchange Act, and\nas such we are exempt from certain provisions applicable to United States domestic public\ncompanies. See more detailed discussion of this risk factor on page 35 of this annual report.\n\n \n\n7\n\n \n\n \n\n●You\nmay experience dilution of your holdings due to inability to participate in rights offerings.\nSee more detailed discussion of this risk factor on page 35 of this annual report.\n\n \n\n●We\nincur significant costs as a result of being a public company. See more detailed discussion of this risk factor on page 35 of this annual report.\n\n ** **\n\n**Risks\nRelated to Our Commodities Trading Business**\n\n** **\n\n**Our\ncommodities trading business is subject to significant commodity price volatility, which could adversely affect our margins and results\nof operations.**\n\n* *\n\nAs\na primarily commodities-driven company, we generate the substantial majority of our revenues from our commodities trading business by\nidentifying suppliers and buyers and earning the price difference between our purchase price and sale price. As a result, our margins\nare directly exposed to fluctuations in the market prices of the commodities we trade, including mineral resin, soy bean, wheat, sesame,\nliquid sulfur and latex. Commodity prices are subject to significant fluctuations due to factors beyond our control, including global\nsupply and demand dynamics, weather events, geopolitical developments, changes in currency exchange rates, and government policies or\nexport controls. A significant decline in commodity prices between the time we commit to purchase and the time we complete a sale could\ncompress or eliminate our margin on affected transactions, or require us to record inventory write-downs to net realizable value. We\nare required to assess our inventory at the lower of cost and net realizable value, and any write-down of inventory could adversely affect\nour financial results. We cannot guarantee that we will be able to manage commodity price risk effectively, and any significant adverse\nprice movement could materially and adversely affect our business, financial condition and results of operations.\n\n \n\n**We\nare exposed to significant counterparty and credit risk in our commodities trading business, and our allowances for credit losses may\nbe insufficient.**\n\n* *\n\nOur\ncommodities trading business, which generates the substantial majority of our revenues, involves extending credit to customers and making\nsignificant advance payments to suppliers. A significant portion of our receivables is generated from our commodities trading operations\nand is concentrated among a limited number of counterparties. As of December 31, 2025, our other receivables included prepayments of\napproximately $427.8 million related to commodity trading transactions, against which we recorded an allowance for credit losses of approximately\n$213.2 million, and we recognized impairment losses of approximately $46.9 million on other receivables during fiscal year 2025. The\ncollectability of our receivables and the recoverability of our supplier advances are subject to significant uncertainty, and future\nevents — including deterioration in the financial condition of our counterparties, market disruptions, or geopolitical events —\nmay require us to record additional credit loss allowances. If our allowances for credit losses are insufficient, our financial condition\nand results of operations could be materially and adversely affected.\n\n \n\n**Our\ncommodities trading business requires us to make substantial advance payments to suppliers, which we may be unable to recover if goods\nare not delivered.**\n\n* *\n\nOur\ncommodities trading operations — which drive the substantial majority of our revenues — require us to make significant advance\npayments and prepayments to suppliers before goods are delivered. If a supplier fails to deliver the contracted goods, delivers goods\nof inferior quality, or becomes insolvent, we may be unable to recover such advance payments. During fiscal year 2025, we recognized\nsubstantial impairment losses on other receivables related to such advances, reflecting the significant credit risk embedded in our business\nmodel. Our ability to assess the creditworthiness of suppliers may be limited, particularly for suppliers with whom we have limited transaction\nhistory. If we are unable to recover advance payments, our financial condition and liquidity could be materially and adversely affected.\n\n \n\n**We\ndepend on a limited number of customers for a significant portion of our commodities trading revenues, and the loss of any such customer\ncould adversely affect our results.**\n\n* *\n\nBecause\ncommodities trading constitutes the substantial majority of our revenues, our business is highly dependent on a small number of customers.\nFor the year ended December 31, 2025, revenues from Qingdao West Travel Trading Co., Ltd were $42.3 million, accounting for 29.6% of\nour commodity trading revenues; revenues from Qingdao Ronghe Energy Trading Co. Ltd were $15.4 million, accounting for 10.8% of our commodity\ntrading revenues; and revenues from Qinghuangdao Wushang Energy Trading Co., Ltd were $13.2 million, accounting for 9.2% of our commodity\ntrading revenues. Our agreements with these customers may not be long-term in nature, and we cannot guarantee their continued patronage.\nThe loss of any major customer, or a significant reduction in orders from such customers, could cause a material decline in our revenues\nand could adversely affect our operating results. We may not be able to replace lost revenues from such customers in a timely manner\nor at all.\n\n \n\nIn\naddition, our reliance on any individual significant customer may give that customer a degree of pricing leverage against us when negotiating\ncontracts and terms of service with us. The loss of any of our major customers, or a significant decrease in the extent of the services\nthat they outsource to us or the level of prices we offer, could materially and adversely affect our financial condition and results\nof operations.\n\n \n\n8\n\n \n\n \n\n**We\nmay be required to write down inventory to net realizable value, which could materially affect our financial results.**\n\n* *\n\nOur\ncommodities trading business requires us to carry inventory of traded commodities, including mineral resin, soy bean, wheat, sesame,\nliquid sulfur and latex. We are required under U.S. GAAP to assess our inventory at the lower of cost and net realizable value at each\nreporting date. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary\nto make the sale. If commodity prices decline between the time inventory is acquired and the time of sale, or if inventory is damaged,\ndeteriorated, or otherwise impaired, we may be required to write down the carrying value of such inventory to its net realizable value.\nSuch write-downs could be material and could adversely affect our gross margin, operating results and financial condition. We cannot\nguarantee that commodity prices will remain at levels sufficient to ensure our inventory retains its carrying value.\n\n \n\n**Material\nweaknesses in our internal controls over revenue recognition for our commodities trading business could adversely affect the accuracy\nof our financial reporting.**\n\n* *\n\nManagement\nhas identified material weaknesses in our internal controls over financial reporting, including controls over revenue recognition for\nour commodities trading business, which generates the substantial majority of our revenues. Specifically, revenue and cost were, in certain\ninstances, initially recorded based on invoicing rather than the transfer of control, and adjustments were required to align accounting\nwith U.S. GAAP. In addition, the Company did not maintain effective controls over the timing of revenue recognition and the reconciliation\nof physical inventory movements to accounting records. If we are unable to remediate these material weaknesses in a timely manner, we\nmay be unable to accurately report our financial results, which could lead to restatements of previously issued financial statements,\nloss of investor confidence, and adverse regulatory consequences. Any failure to maintain effective internal controls could have a material\nadverse effect on our business, financial condition and results of operations.\n\n \n\n**Risks\nRelated to Our Hosting Services Business**\n\n** **\n\n**Our\nhosting services revenues may decline if customer demand for third-party cryptocurrency mining decreases, and we may be unable to replace\nsuch revenues.**\n\n* *\n\nFollowing\nthe discontinuation of our direct cryptocurrency mining operations in 2025, we transitioned to a hosting services model under which we\nearn fees from customers who locate and operate mining equipment on our premises. While commodities trading remains our primary revenue\ndriver, hosting services generated approximately $7.5 million of revenue in fiscal year 2025, representing approximately 4.9% of our\ntotal revenues. Our hosting revenues depend on the continued willingness of third-party miners to utilize our facilities, which in turn\ndepends on the economic attractiveness of cryptocurrency mining. If the price of Bitcoin, Ethereum or other mined cryptocurrencies declines\nsignificantly, if mining difficulty increases materially, or if the cost of electricity or other inputs renders mining uneconomical,\ndemand for our hosting services could decline materially. We may be unable to replace lost hosting revenues with alternative revenue\nstreams in a timely manner or at all, which could have a material adverse effect on our results of operations.\n\n \n\n**The\nprofitability of our hosting services business depends on factors outside our control, including cryptocurrency prices, network difficulty,\nand regulatory developments.**\n\n* *\n\nThe\nprofitability of cryptocurrency mining — and therefore the demand for our hosting services — depends on numerous factors\noutside our control, including the market prices of Bitcoin and Ethereum, the global cryptocurrency network hash rate and mining difficulty,\nthe availability and cost of electricity, and the development of more efficient mining hardware that may render our customers’\nexisting equipment obsolete. Cryptocurrency prices have historically been extremely volatile. If our hosted mining customers find it\nno longer economical to continue their operations, they may terminate or reduce their use of our facilities, and our hosting revenues\nwould be adversely affected. Furthermore, our hosting operations are subject to evolving laws and regulations, and any adverse regulatory\ndevelopments could restrict or prevent the operation of cryptocurrency mining equipment at our facilities, further reducing demand for\nour hosting services.\n\n \n\n**If\nour hosting services business continues to decline, we may be unable to develop or acquire alternative revenue streams to replace those\nrevenues.**\n\n* *\n\nOur\nhosting services business is a secondary component of our overall operations and has grown from a transitional strategy following the\ndiscontinuation of our direct mining operations. We cannot guarantee that our hosting revenues will grow or even be maintained at current\nlevels. Our decision to discontinue direct mining operations was driven by the determination that mining rigs were no longer cost-effective\nto operate, and we may face similar determinations with respect to the underlying economics of hosting services. If we are unable to\ngrow or sustain our hosting revenue base, and if our commodities trading business does not expand sufficiently to compensate, our overall\nfinancial performance could be materially and adversely affected.\n\n \n\n9\n\n \n\n \n\n**Risks\nRelating to the Cryptocurrency Mining, Security and Insurance Business**\n\n** **\n\n**We\nhave temporarily shut down mining operations in 2025, and there can be no assurance we will successfully resume profitable mining\noperations in the future.**\n\n* *\n\nWe\ntemporarily shut down mining operations during 2025 because the mining rigs were no longer cost-effective to operate. We did\nnot generate any revenue from digital asset mining during the fiscal year ended December 31, 2025, and no digital assets were generated\nthrough mining during the year. While we may seek to resume direct mining operations in the future, there can be no assurance that mining\neconomics will improve sufficiently to make direct mining viable or profitable, or that we will have access to the equipment, facilities,\npower supply, and capital required to resume operations at a competitive scale. Any resumption of mining operations will expose us to\nthe same risks that led to the discontinuation of our mining activities.\n\n \n\n**Our\ncryptocurrency mining equipment has been subject to significant impairment charges, and we may be required to recognize additional impairment\nlosses in the future.**\n\n* *\n\nOur\ncryptocurrency mining equipment has been subject to substantial impairment charges due to changes in market conditions, reduced mining\nprofitability, technological obsolescence, reduced expected mining output, and changes in expected future economic benefits. We recognized\nan additional impairment loss of approximately $5.9 million on our mining equipment during fiscal year 2025. The fair value of mining\nequipment is sensitive to cryptocurrency prices, mining difficulty, power costs, and the development of new-generation mining hardware.\nIf any of these factors deteriorates further, we may be required to recognize additional impairment charges, which could adversely affect\nour financial condition and results of operations.\n\n \n\n**Our\nsignificant holdings of Bitcoin and Ethereum expose us to substantial fair value volatility, which is recognized directly in our earnings\neach period.**\n\n* *\n\nAs\nof December 31, 2025, we held approximately 802.77 BTC with a fair value of approximately $70.3 million and 2,949.79 ETH with a fair\nvalue of approximately $8.8 million, and we recognized net unrealized fair value losses on digital assets of approximately $6.7 million\nduring fiscal year 2025. We account for our digital assets at fair value, with changes in fair value recognized in our consolidated statements\nof operations each period. Because cryptocurrency prices are highly volatile, our reported earnings may fluctuate significantly from\nperiod to period due to mark-to-market adjustments on our digital asset holdings, regardless of the performance of our underlying commodities\ntrading and other operating businesses. This volatility may make it difficult for investors to evaluate our financial performance and\nmay adversely affect the market price of our shares.\n\n \n\n**Our\ncryptocurrency mining, security and insurance businesses are still under development, with many uncertainties in research of relevant\ntechnologies, which makes it hard for us to evaluate their ability to generate revenue through operations, and to date, each of them\nhas not generated revenue from any commercially available blockchain-based products or services.**\n\n* *\n\nOur\ncryptocurrency mining, security and insurance businesses were recently initiated in January 2021. Our limited operating history in the\nresearch and development of cryptocurrency mining, protection and insurance and the relative immaturity of the blockchain industry make\nit difficult for us to evaluate future prospects of these sectors. Our new business may encounter and may continue to encounter, risks\nand difficulties frequently experienced by growing companies in rapidly developing and changing industries, including challenges in forecasting\naccuracy, determining appropriate uses of their limited resources, gaining market acceptance, managing a complex and evolving regulatory\nlandscape and developing new products, especially in cryptocurrency industry, a highly volatile industry. Our future operating model\nof cryptocurrency mining, security and insurance is immature and may require many changes in order for them to scale their operations\nefficiently and be successful. Investors in our securities should consider the business and prospects of our new areas in China in light\nof the risks and difficulties they face as early-stage companies focused on developing products in the field of blockchain based technology.\n\n \n\n**Cryptocurrency\nmining relies on a steady and inexpensive power supply for operating mining farms and running mining hardware. Failure to access a large\nquantity of power at reasonable costs could significantly increase our operating expenses and adversely affect our demand for our mining\nmachines.**\n\n* *\n\nCryptocurrency\nmining consumes a significant amount of energy power to process the computations and cool down the mining hardware. Therefore, a steady\nand inexpensive power supply is critical to cryptocurrency mining. There can be no assurance that the operations of our planned cryptocurrency\nmining business will not be affected by power shortages or an increase in energy prices in the future. In addition, as we intend to establish\nand operate mining machines and engage in key mainstream cryptocurrencies mining activities, such as Bitcoin, in the near future, any\nincrease in energy prices or a shortage in power supply in the area of our mining machines may be located will increase our potential\nmining costs and reduce the expected economic returns from our mining operation significantly.\n\n \n\n10\n\n \n\n \n\nIn\nparticular, the power supply could be disrupted by natural disasters, such as floods, mudslides and earthquakes, or other similar events\nbeyond our control. Further, we may experience power shortages due to seasonal variations in the supply of certain types of power such\nas hydroelectricity. Power shortages, power outages or increased power prices could adversely affect our mining businesses. Under such\ncircumstances, our business, results of operations and financial condition could be materially and adversely affected.\n\n \n\n**Shortages\nin, or rises in the prices of mining machines may adversely affect our business.**\n\n* *\n\nGiven\nthe long production period to manufacture and assemble mining machines, there is no assurance that we can acquire enough mining machines\nfor our planned cryptocurrency mining. We may rely on third parties to supply mining machines to us, and shortages of mining machines\nor any delay in delivery of our orders could seriously interrupt our operations. The scale of our cryptocurrency mining capacity depends\non obtaining adequate mining machines on a timely basis and at competitive prices. Shortages of mining machines could result in reduced\nmining capacity, as well as an increase in operation costs, which could materially delay the completion of our mining capacity and commencement\nof our mining. As a result, our business, results of operations and reputation could be materially and adversely affected.\n\n \n\n**We\nmay not be able to develop our cryptocurrency mining capacity, blockchain-based security and insurance technologies in the safeguard\nof digital assets because we may fail to anticipate or adapt to technology innovations in a timely manner, or at all.**\n\n* *\n\nThe\ncryptocurrencies mining, security and insurance markets are experiencing rapid technological changes. Failure to anticipate technology\ninnovations or adapt to such innovations in a timely manner, or at all, may result in our research becoming obsolete at sudden and unpredictable\nintervals and, accordingly, we may not successfully develop our mining capacity and cryptocurrency security products at all. To establish\nour cryptocurrency mining capacity, cryptocurrency protection and insurance products, we will invest heavily in technology research and\ndevelopment. The process of research and developing new technologies in cryptocurrency is inherently complex and involves significant\nuncertainties. There are a number of risks, including the following:\n\n \n\n●our\nresearch and development efforts may fail in resulting in the development or commercialization\nof new technologies or ideas in blockchain or cryptocurrency;\n\n \n\n●our\nresearch and development efforts may fail to translate new product plans into commercially\nfeasible products;\n\n \n\n●our\nnew technologies or new products may not be well received by the markets;\n\n \n\n●we\nmay not have adequate funding and resources necessary for continual investments in research\nand development;\n\n \n\n●even\nassuming our technologies and products become marketable or profitable, they may become obsolete\ndue to rapid advancements in technology and changes in the mainstream markets; and\n\n \n\n●our\nnewly developed technologies may not be protected as proprietary intellectual property rights.\n\n \n\nOur\nresearch and development efforts may not yield the expected results, or may prove to be futile due to the lack of market demand. Further,\nany failure to anticipate the next-generation technology roadmap or changes in the mainstream markets or to timely develop new or enhanced\ntechnologies in response could result in loss of our business.\n\n \n\n**Adverse\nchanges in the regulatory environment in the PRC market could have a material adverse impact on our planned cryptocurrency related business.**\n\n* *\n\nThe\nCompany moved all its production to USA. Our cryptocurrency related products business could therefore be significantly affected by, among\nother things, the regulatory developments in USA. Governmental authorities are likely to continue to issue new laws, rules and regulations\ngoverning the cryptocurrency industry.\n\n \n\nWith\nadvances in technology, cryptocurrencies are likely to undergo significant changes in the future. It remains uncertain whether cryptocurrencies\nwill be able to cope with, or benefit from, those changes. In addition, as cryptocurrency mining employs sophisticated and high computing\npower devices that need to consume large amounts of electricity to operate, future developments in the regulation of energy consumption,\nincluding possible restrictions on energy usage in the jurisdictions where we intend to deploy our mining capacities, may also affect\nthe development of our business plan. There has been negative public reaction to surrounding the environmental impact of Bitcoin mining,\nparticularly the large consumption of electricity, and governments of various jurisdictions have responded.\n\n \n\n11\n\n \n\n \n\nFurther,\nrelevant restrictions from existing and future regulations on mining, holding, using, or transferring of cryptocurrencies may adversely\naffect our future business operations and results of operations. For example, although mining activities have not been explicitly prohibited\nby the PRC government, any further order of the PRC government to limit cryptocurrency mining may result in a crackdown on the cryptocurrency\nmarket and adversely affect our cryptocurrency-related business plans. If any jurisdictions impose limitations on the mining, use, holding\nor transferring of cryptocurrencies or any cryptocurrency-related activity, our business prospects, operations and financial results\nmay be negatively impacted.\n\n \n\nIn\naddition, if cryptocurrencies or the mining of cryptocurrencies are regarded as securities by various governmental authorities, our planned\ncryptocurrency mining is likely to be deemed as issuance of cryptocurrencies to investors for financing purpose and thus prohibited under\nthe PRC laws. Any such regulations, if implemented, will cause us to incur additional compliance costs and have a material adverse effect\non our future business operations.\n\n \n\n**Because\ncryptocurrencies may be determined to be investment securities, we may inadvertently violate the Investment Company Act and incur large\nlosses as a result and potentially be required to register as an investment company or terminate operations and we may incur third party\nliabilities.**\n\n* *\n\nIn\nrecent years, the SEC has ruled that the two most valuable cryptocurrencies — Bitcoin and Ethereum — are not securities.\nWe therefore believe that we are not engaged in the business of investing, reinvesting, or trading in securities, and we do not hold\nourselves out as being engaged in those activities. However, under the Investment Company Act a company may be deemed an investment company\nunder section 3(a)(1)(C) thereof if the value of its investment securities is more than 40% of its total assets (exclusive of government\nsecurities and cash items) on an unconsolidated basis.\n\n \n\nAs\na result of our investments and our mining activities, including investments in which we do not have a controlling interest, the investment\nsecurities we hold could exceed 40% of our total assets, exclusive of cash items and, accordingly, we could determine that we have become\nan inadvertent investment company. The bitcoins we own, acquire or mine may be deemed an investment security by the SEC, although we\ndo not believe any of the cryptocurrencies we own, acquire or mine are securities. An inadvertent investment company can avoid being\nclassified as an investment company if it can rely on one of the exclusions under the Investment Company Act. One such exclusion, Rule\n3a-2 under the Investment Company Act, allows an inadvertent investment company a grace period of one year from the earlier of (a) the\ndate on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated\nor unconsolidated basis and (b) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding\n40% of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis.\nWe may take actions to cause the investment securities held by us to be less than 40% of our total assets, which may include acquiring\nassets with our cash and bitcoin on hand or liquidating our investment securities or bitcoin or seeking a no-action letter from the SEC\nif we are unable to acquire sufficient assets or liquidate sufficient investment securities in a timely manner.\n\n \n\nAs\nthe Rule 3a-2 exception is available to a company no more than once every three years, and assuming no other exclusion were available\nto us, we would have to keep within the 40% limit for at least three years after we cease being an inadvertent investment company. This\nmay limit our ability to make certain investments or enter into joint ventures that could otherwise have a positive impact on our earnings.\nIn any event, we do not intend to become an investment company engaged in the business of investing and trading securities.\n\n \n\nClassification\nas an investment company under the Investment Company Act requires registration with the SEC. If an investment company fails to register,\nit would have to stop doing almost all business, and its contracts would become voidable. Registration is time consuming and restrictive\nand would require a restructuring of our operations, and we would be very constrained in the kind of business we could do as a registered\ninvestment company. Further, we would become subject to substantial regulation concerning management, operations, transactions with affiliated\npersons and portfolio composition, and would need to file reports under the Investment Company Act regime. The cost of such compliance\nwould result in the Company incurring substantial additional expenses, and the failure to register if required would have a materially\nadverse impact to conduct our operations.\n\n \n\n**Banks\nand financial institutions may not provide banking services, or may cut off services, to businesses that engage in bitcoin-related activities\nor that accept cryptocurrencies as payment, including financial institutions of investors in our securities.**\n\n* *\n\nA\nnumber of companies that engage in bitcoin and/or other bitcoin-related activities have been unable to find banks or financial institutions\nthat are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses\nassociated with cryptocurrencies may have had and may continue to have their existing bank accounts closed or services discontinued with\nfinancial institutions in response to government action, particularly in China, where regulatory response to cryptocurrencies has been\nto exclude their use for ordinary consumer transactions within China. We also may be unable to obtain or maintain these services for\nour business. The difficulty that many businesses that provide bitcoin and/or derivatives on other bitcoin-related activities have and\nmay continue to have in finding banks and financial institutions willing to provide them services may be decreasing the usefulness of\ncryptocurrencies as a payment system and harming public perception of cryptocurrencies, and could decrease their usefulness and harm\ntheir public perception in the future.\n\n \n\n12\n\n \n\n \n\nThe\nusefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks or financial\ninstitutions were to close the accounts of businesses engaging in bitcoin and/or other bitcoin-related activities. This could occur as\na result of compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement\nfirms, national stock and derivatives on commodities exchanges, the over-the-counter market, and the Depository Trust Company, which,\nif any of such entities adopts or implements similar policies, rules or regulations, could negatively affect our relationships with financial\ninstitutions and impede our ability to convert cryptocurrencies to fiat currencies. Such factors could have a material adverse effect\non our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our\nbusiness, prospects or operations and harm investors.\n\n \n\n**Risks\nRelated to Our Data Mining and Analysis Business**\n\n \n\n**Development\nof data warehouses is capital intensive. We may not be able to generate sufficient capital or obtain additional capital to meet our future\ncapital needs, on favorable terms or at all, which may lead to significant disruption to our business expansion and adversely affect\nour financial position.**\n\n \n\nExpanding\nand developing data warehouses and data mining capabilities are capital intensive. We are required to fund the costs of expanding and\ndeveloping our data warehouses and data mining capacity with cash deriving from operations. There can be no assurance that our future\nrevenues would be sufficient to offset increases in these costs, or that our business operations will generate capital sufficient to\nmeet our anticipated capital requirements. If increase in our future revenues would not be sufficient to offset the increased costs,\nor we cannot generate sufficient capital to meet our anticipated capital requirements, our financial condition, business expansion and\nfuture prospects could be materially and adversely affected.\n\n \n\nTo\nfund our future growth, we may need to raise additional funds through equity or debt financing in the future in order to meet our operating\nand capital needs, which may not be available on favorable terms, or at all. If we raise additional funds through issuances of equity\nor equity-linked securities, our existing shareholders could suffer significant dilution in their ownership percentage of our company,\nand any new equity securities we issue could have rights, preferences, and privileges senior to those of holders of our ordinary shares.\nIn addition, any debt financing that we may obtain in the future could have restrictive covenants relating to our capital raising activities\nand other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business\nopportunities, including potential acquisitions. Our inability to obtain additional debt and/or equity financing or to generate sufficient\ncash from operations may require us to prioritize projects or curtail capital expenditures and could adversely affect our results of\noperations.\n\n \n\n**The\nmarket in which we participate is competitive. Failure to compete effectively may result in loss of our market share and a decrease in\nour revenues and profitability.**\n\n \n\nWe\ncompete with other wide range of data mining providers in the markets we participate. Some of our current and future competitors may\nhave advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current\nor potential clients, significantly greater financial, marketing, and other resources and more ready access to capital, all of which\nallow them to offer competitive prices and respond more quickly to new or changing opportunities. Many of these competitors’ own\ncapabilities similar to ours in the same markets in which our business targets, or in markets where the cost to operate a data warehouse\nand data mining capacity is less than the costs to our operation. Many of our competitors and new entrants to the data mining market\nare developing additional data warehouses space and data mining capacity in the markets that we serve.\n\n \n\nWe\nface pricing pressure for our services. Prices for our services are affected by a variety of factors, including supply and demand conditions\nand pricing pressures from our competitors. A buildup of new data warehouse and data mining capacity or reduced demand for data warehouse\nservices and data mining capacity could result in an oversupply of data warehouse space and data mining capacity in the markets where\nwe operate. Excess data warehouse or data mining capacity could cause downward pricing pressure and limit the number of economically\nattractive markets that are available to us for expansion, which could negatively impact our business and results of operations. In addition,\nour competitors may offer services that are more competitively priced compared to ours. We may be required to lower our prices to remain\ncompetitive, which may decrease our margins and adversely affect our business prospects, financial condition, and results of operations.\n\n \n\nWe\nwill also face increased competition as we expand our operations, and our competitors in new markets we expand into may have more experience\nthan us in operating in those markets. If we fail to compete effectively, our business, financial performance and prospects will be materially\nand adversely affected.\n\n \n\n13\n\n \n\n \n\n**Our\nrevenues are highly dependent on a limited number of major clients, and the loss of any such client or any other significant client,\nor the inability of any such client or any other significant client to make payments to us as due, could have a material adverse effect\non our business, results of operations and financial condition.**\n\n \n\nFor\nthe year ended December 31, 2025, revenues from Qingdao West Travel Trading Co., Ltd（青岛西旅商贸有限公司）\nwere $42.3 million, accounting for  29.6% of the commodity trading revenues; revenues from Qingdao Ronghe Energy Trading Co. Ltd(青岛融合能源有限公司)\nwere $15.4 million, accounting for 10.8% of the commodity trading revenues; revenues from Qinghuangdao Wushang Engergy Trading Co,\nLtd (秦皇岛武尚能源有限公司) were $13.2 million, accounting for 9.2%\nof the commodity trading revenues.\n\n \n\nThere\nare a number of factors that could cause us to lose major clients. Because many of our contracts involve services that are mission-critical\nto our clients, any failure by us to meet a client’s expectations could result in cancellation or non-renewal of the\ncontract. Our contracts usually allow our clients or agents to terminate their contracts with us before the end of the contract period\nunder certain specified circumstances, including our failure to deliver services as required under such agreements. In addition, our\nclients may decide to reduce spending on our services in response to a challenging economic environment or other factors, both internal\nand external, relating to their business such as corporate restructuring or changing their outsourcing strategy by moving more facilities in-house or\noutsourcing to other service providers. Some of our clients may choose to develop or expand their own data warehouse facilities and data\nmining capacities in the future, which may result in a decline in our existing or potential clients.\n\n \n\nIn\naddition, our reliance on any individual significant client may give that client a degree of pricing leverage against us when negotiating\ncontracts and terms of services with us. The loss of any of our major clients, or a significant decrease in the extent of the services\nthat they outsource to us or the level of prices we offer, could materially and adversely affect our financial condition and results\nof operations.\n\n \n\nAny\nof our clients could experience a downturn in their business, which in turn could result in their inability or failure to make timely\npayments to us pursuant to their contracts with us. In the event of any client default, our liquidity could be adversely impacted and\nwe may experience delays in enforcing our rights and may incur substantial costs in protecting our investment. These risks would be particularly\nsignificant if one of our major clients were to experience adverse effects to its business and defaults under their contracts with us.\nThe inability of any significant client to meet its payment obligations could impact us negatively and significantly.\n\n \n\n**If\nwe do not succeed in attracting new clients or agents for our services and/or growing revenues from existing clients or agents, our business\nand results of operation may be adversely affected.**\n\n \n\nWe\nhave been expanding our client base to cover more insurance companies and different types of insurance category. We are highly reliant\non our agents to dispatch data mining business of insurance company to us. Our ability to attract new clients, as well as our ability\nto grow revenues from our existing clients, depends on a number of factors, including our data warehouse capacity, our ability to offer\nhigh-quality services at competitive prices, the strength of our competitors and the capabilities of our client acquisition team to attract\nnew clients. If we fail to attract new clients, we may not be able to grow our revenue as quickly as we anticipate or at all.\n\n \n\nIn\naddition, as our client base grows and diversifies into other types of insurance category, we may be unable to provide services that\ncater to their changing needs, which could result in client dissatisfaction, decreased overall demand for our services and loss of expected\nrevenues. Moreover, our inability to meet client expectations may damage our reputation and could consequently limit our ability to retain\nexisting clients and attract new clients, which would adversely affect our ability to generate revenues and negatively impact our results\nof operations.\n\n \n\n**Factors\nthat adversely affect the industries in which our clients operate or information technology spending in these industries, particularly\nin the Internet and cloud service industries and insurance industries, may adversely affect our business.**\n\n \n\nOur\nclients are primarily technology companies in the Internet, cloud, software and other technology-based industries. The end-users of our\ndata mining products are primarily large insurance companies in China. Our clients, some of whom have experienced rapid changes in their\nbusiness, substantial price competition and pressures on their profitability, may request price reductions or decrease their demand for\nour data mining analysis, which could harm our financial performance. Furthermore, a decline in the technology industry or the demand\nfor cloud-based services, or the desire of any of these companies, including our client and the end-user insurance companies, to outsource\ntheir data warehouse and data mining needs, could lead to a decrease in the demand for space in our data warehouses and data mining analysis\nbusiness, which would have an adverse effect on our business and financial condition. We also are susceptible to adverse developments\nin the industries in which our clients operate, such as decreases in demand for their products or services, business layoffs or downsizing,\nindustry slowdowns, relocations of businesses, costs of complying with government regulations or increased regulation and other factors.\nWe also may be materially adversely affected by any downturns in the market for data warehouses and data mining due to, among other things,\noversupply of or reduced demand for space or a slowdown in the technology industry. Also, a lack of demand for data warehouse space and\ndata mining by enterprise clients could have a material adverse effect on our business, results of operations and financial condition.\nIf any of these events happen, we may lose clients or have difficulties in selling our services, which would materially and adversely\naffect our business and results of operations.\n\n \n\n14\n\n \n\n \n\n**If\nwe do not succeed in maintaining business relationship with our data suppliers, our business and results of operation may be adversely\naffected.**\n\n \n\nWe\nhave been purchasing a significant portion of our raw data from a small number of data suppliers and termination of business relationship\nwith them could materially and adversely affect our business. We are highly relying on our data suppliers to provide us large amounts\nof data that we need. Our business to conduct data mining analysis, as well as our ability to sell our insurance marketing information\nto our agents, depends on a number of factors, including a consistent and reliable data supply by our data suppliers. If we fail to maintain\nour business relationship with our data suppliers, or the costs of gaining data from our data suppliers increase, we may not be able\nto grow our revenue as quickly as we anticipate or at all.\n\n \n\n**If\nwe are unable to adapt to new technologies or industry standards in a timely and cost-effective manner, our business, financial performance\nand prospects could be materially and adversely affected.**\n\n \n\nThe\nmarkets for the data warehouses and data mining facilities we own and operate, as well as certain of the insurance industry in which\nour end-use clients operate, are characterized by rapidly changing technologies, evolving industry standards, and frequent new service\nintroductions. As a result, the infrastructure at our data warehouses and data mining facilities may become obsolete or unmarketable\ndue to demand for new processes and technologies, including new technology that permits higher levels of critical load and heat removal\nthan our data warehouses are currently designed to provide. In addition, the systems that connect our data warehouses and data mining\nfacilities to the Internet and other external networks may become outdated, including with respect to latency, reliability and diversity\nof connectivity. When clients demand new processes or technologies, we may not be able to upgrade our data warehouse facilities and data\nmining capacities on a cost-effective basis, or at all, due to, among other things, increased expenses to us that cannot be passed on\nto clients or insufficient revenues to fund the necessary capital expenditures. The obsolescence of our power and cooling systems and/or\nour inability to upgrade our data mining capacities, including associated connectivity, could reduce revenues at our data mining and\nanalysis and could have a material adverse effect on us. To be successful, we must adapt to our rapidly changing market by continually\nimproving the performance, features and reliability of our services and modifying our business strategies accordingly, which could cause\nus to incur substantial costs. We may not be able to adapt to changing technologies in a timely and cost-effective manner, if at all,\nwhich would adversely impact our ability to sustain and grow our business. If we are unable to purchase the hardware or obtain a license\nfor the software that our services depend on, our business could be significantly and adversely affected.\n\n \n\nFurthermore,\npotential future regulations that apply to industries we serve may require us, our data suppliers, or our clients to seek specific requirements\nfrom their data operations that we are unable to provide. If such regulations were adopted, we could lose clients or be unable to attract\nnew clients in certain industries, which could have a material adverse effect on us.\n\n \n\nIn\naddition, new technologies or industry standards have the potential to replace or provide lower cost alternatives to our services. We\nfocus primarily on providing data mining services and solutions through data warehouses. We cannot guarantee that we will be able to\nidentify the emergence of all the new service alternatives successfully, modify our services accordingly, or develop and bring new services\nto market in a timely and cost-effective manner to address these changes. If and when we do identify the emergence of new service alternatives\nand introduce new services to market, those new services may need to be made available at lower profit margins than our then-current\nservices. Failure to provide services to compete with new technologies or the obsolescence of our services could lead us to lose current\nand potential clients or could cause us to incur substantial costs, which would harm our operating results and financial condition. Our\nintroduction of new alternative services that have lower price points than our current offerings may also result in our existing clients\nswitching to the lower cost products, which could reduce our revenues and have a material adverse effect on our results of operation.\n\n \n\n**Any\nsignificant or prolonged failure in the data warehouse facilities and data mining facilities we operate or services we provide, including\nevents beyond our control, would lead to significant costs and disruptions and would reduce the attractiveness of our facilities, harm\nour business reputation and have a material adverse effect on our results of operation.**\n\n \n\nThe\ndata warehouse facilities and data mining facilities we operate are subject to failure. Any significant or prolonged failure in any data\nwarehouse and data mining facilities we operate or services that we provide, including a breakdown in critical plant, equipment or services,\nsuch as the generators, backup batteries, routers, switches, or other equipment, power supplies, or network connectivity, whether or\nnot within our control, could result in service interruptions and data losses for our clients as well as equipment damage, which could\nsignificantly disrupt the normal business operations of our clients and harm our reputation and reduce our revenues. Any failure or downtime\nin one of the data warehouse and data mining facilities that we operate could affect many of our clients. The total destruction or severe\nimpairment of any of the data warehouse and data mining facilities we operate could result in significant downtime of our services and\ncatastrophic loss of client data. Since our ability to attract and retain clients depends on our ability to provide highly reliable service,\neven minor interruptions in our service could harm our reputation and cause us to incur financial penalties. The services we provide\nare subject to failures resulting from numerous factors, including, but not limited to, human error or accident, natural disasters and\nsecurity breaches, whether accidental or willful.\n\n \n\n15\n\n \n\n \n\nWe\nmay in the future experience interruptions in service, power outages and other technical failures or be otherwise unable to satisfy the\nrequirements of the agreements we have with clients for reasons outside of our control. As our services are critical to many of our clients’\nbusiness operations, any significant or prolonged disruption in our services could result in lost profits or other indirect or consequential\ndamages to our clients and subject us to lawsuits brought by the clients for potentially substantial damages. Furthermore, these interruptions\nin service, regardless of whether they result in breaches of the agreements we have with clients, may negatively affect our relationships\nwith clients and lead to clients terminating their agreements with us or seeking damages from us or other compensatory actions. We have\ntaken and continue to take steps to improve our infrastructure to prevent service interruptions and satisfy the requirements of the agreements\nwe have with clients, including upgrading our electrical and mechanical infrastructure and sourcing, designing the best facilities possible\nand implementing rigorous operational procedures to maintenance programs to manage risk. Service interruptions continue to be a significant\nrisk for us and could affect our reputation, damage our relationships with clients and materially and adversely affect our business.\nAny breaches of the agreements we have with clients will damage our relationships with clients and materially and adversely affect our\nbusiness.\n\n \n\n**Security\nbreaches or alleged security breaches of our data warehouses could disrupt our operations and have a material adverse effect on our business,\nfinancial condition and results of operation.**\n\n \n\nA\nsecurity breach of our data warehouse facilities could result in the misappropriation of our or our clients’ information, and may\ncause interruptions or malfunctions in our operations or the operations of our clients. As we and our data warehouse service provider\ncommit to implementing effective security measures to safeguard our data warehouses, such a compromise could be particularly harmful\nto our brand and reputation. We may be required to expend significant capital and resources to protect against such threats or to alleviate\nproblems caused by breaches in security. Security risks and deficiencies may also be identified in the course of government inspections,\nwhich could subject us to fines and other sanctions. As techniques used to breach security change frequently and are often not recognized\nuntil launched against a target, we may not be able to implement new security measures in a timely manner or, if and when implemented,\nwe may not be certain whether these measures could be circumvented. Any breaches that may occur could expose us to increased risk of\nlawsuits, regulatory penalties, loss of existing or potential clients, harm to our reputation and increases in our security costs, which\ncould have a material adverse effect on our financial condition and results of operations.\n\n \n\nIn\naddition, any assertions of alleged security breaches or systems failure made against us, whether true or not, could harm our reputation,\ncause us to incur substantial legal fees and have a material adverse effect on our business, reputation, financial condition, and results\nof operations.\n\n \n\n**Our\nsubscription agreements for data warehouses could be terminated early and we may not be able to renew our existing leases on commercially\nacceptable terms or our rent or payment under the agreements could increase substantially in the future, which could materially and adversely\naffect our operations.**\n\n \n\nWe\nentered into certain data warehouse subscription agreements with Tencent Cloud Computing (Beijing) Co., Ltd. for our data warehouses.\nUpon the expiration of such subscription agreements, we may not be able to renew these subscription agreements on commercially reasonable\nterms, if at all. Under certain subscription agreements, the data warehouse service provider may terminate the agreement by giving prior\nnotice and paying default penalties to us. However, such default penalties may not be sufficient to cover our losses. Even though the\ndata warehouse service provider for our data warehouses generally do not have the right of unilateral early termination unless they provide\nthe required notice, the subscription agreements may nonetheless be terminated early if we are in material breach of the subscription\nagreements. We may assert claims for compensation against the data warehouse service provider if they elect to terminate a subscription\nagreement early and without due cause. Although there are no substantial barriers to renew subscription agreements we want to renew,\nand we do not believe that any of our subscription agreements will be terminated early in the future, there can be no assurance that\nthe data warehouse service provider will not terminate any of our subscription agreements prior to its expiration date. If the data warehouse\nsubscription agreements were terminated early prior to their expiration date, notwithstanding any compensation we may receive for early\ntermination of such leases, or if we are not able to renew such subscription agreements, or if we are unable to find suitable alternative\ndata warehouses in a timely manner, we may have to incur significant costs related to relocation of our data. Any relocation could also\naffect our ability to provide continuous uninterrupted services to our customers and harm our reputation. Furthermore, rent or payment\nunder such leases in the future may increase substantially in the future. Any of the foregoing could have an adverse impact on our business\nand results of operations.\n\n \n\n16\n\n \n\n \n\n**We\nmay face claims of privacy infringement and other related claims, which could be time-consuming and costly to defend and may result in\nan adverse impact over our operations.**\n\n \n\nWe\ncannot assure you that our operations or any aspects of our business do not or will not infringe upon or violate privacy rights owned\nor held by third parties. We may also be subject to legal or administrative proceedings and claims relating to privacy rights of third\nparties in the future. If we become liable to third parties for infringing upon their privacy rights, we could be required to pay a substantial\ndamage award. We may also be subject to injunctions that prohibit us from using such data and require us to alter our processes or methodologies,\nwhich may not be technically or commercially feasible and may cause us to expend significant resources. Any claims or litigation in these\nissues, whether we ultimately win or lose, could be time-consuming and costly, could cause the diversion of management’s attention\nand resources away from the operations of our business and could damage our reputation.\n\n \n\nAlthough\nwe purchase data from our data suppliers, we cannot assure you that our use of such data will not be subject to infringement litigation\nor proceeding. A third party who claims the ownership over data we purchase from our data suppliers may impede our ability to use the\ndata. As of the date of this report, we had not encountered any legal claims brought by third parties relating to infringement or violation\nof any privacy rights which may have a material adverse effect on us. However, there can be no assurance that third parties holding ownership\nover the data and privacy would not take actions against us alleging infringement of such rights or otherwise assert their rights.\n\n \n\n**We\nface risks related to natural disasters, health epidemics and other catastrophes, which could significantly disrupt our business, operations,\nliquidity, and financial condition.**\n\n** **\n\nOur\nbusiness could be materially and adversely affected by natural disasters or other catastrophes, such as earthquakes, fire, floods, hail,\nwindstorms, severe weather conditions, environmental accidents, power loss, communications failures, explosions, terrorist attacks and\nsimilar events. Our business could also be materially and adversely affected by public health emergencies, such as the outbreak of avian\ninfluenza, severe acute respiratory syndrome, or SARS, Zika virus, Ebola virus, COVID-19 or other local health epidemics in China and\nworldwide. If any of our employees is suspected of having contracted any contagious disease, we may under certain circumstances be required\nto quarantine such employees and the affected areas of our premises. As a result, we may have to temporarily suspend part of or all our\noperations. Furthermore, authorities may impose restrictions on travel and transportation and implement other preventative measures in\naffected regions to contain a disease outbreak, which may lead to the temporary closure of our facilities and declining economic activity\nat large. A prolonged outbreak of any of illness or other adverse public health developments in China or elsewhere in the world could\nhave a material adverse effect on our business operations.\n\n \n\n**Our\nsuccess depends substantially on the continued retention of certain key personnel and our ability to hire and retain qualified personnel\nin the future to support our growth and execute our business strategy.**\n\n \n\nOur\nsuccess is, to a certain extent, attributable to the management, and research and development expertise and sales and marketing of key\npersonnel. While we depend on the abilities and participation of our current management team generally, we are dependent on the services\nof Mr. Yandai Wang, Chief Executive Officer and Mr. Li Sing Leung, Chief Financial Officer, for the continued growth and operation of\nour Company. Their services are critical to our overall management, as well as the continued development of our strategic direction,\ndue to their experience, personal and business contacts in cryptocurrency mining, security and insurance technologies.\n\n \n\nIf\none or more of our senior executives or other key personnel are unable or unwilling to continue in their present positions, our business\nmay be disrupted and our financial condition and results of operations may be materially and adversely affected. The loss of the services\nof Mr. Wang and Mr. Li for any reason could significantly adversely impact our business and results of operations. Competition for senior\nmanagement and senior technology personnel in the PRC is intense and the pool of qualified candidates is very limited. We cannot assure\nyou that the services of our senior executives and other key personnel will continue to be available to us, or that we will be able to\nfind a suitable replacement for them if they were to leave.\n\n \n\n17\n\n \n\n  \n\n**Risks\nRelated to Doing Business in China** \n\n \n\n**The\napproval of the CSRC, may be required in connection with the listing and trading of our securities under PRC rules, regulations, or policies,\nand, if required, we cannot predict whether or how soon we will be able to obtain such approval. As a result, both you and us face uncertainty\nabout future actions by the PRC government that could significantly affect our business, our listing on NYSE, financial condition and\nresults of operations.** \n\n \n\nOn\nAugust 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State-Owned Assets Supervision and Administration Commission,\nor the SASAC, the SAT, the State Administration for Industry and Commerce, or the SAIC, the CSRC, and the State Administration of Foreign\nExchange, or the SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the\nM&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules include, among other\nthings, provisions that purport to require that an offshore special purpose vehicle that is controlled by PRC domestic companies or individuals\nand that has been formed for the purpose of an overseas listing of securities through acquisitions of PRC domestic companies or assets\nto obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas\nstock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings\nby special purpose vehicles. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore\nspecial purpose vehicles.\n\n \n\nWhile\nthe application of the M&A Rules remains unclear, we believe, based on the advice of our PRC legal counsel, Hebei Changjun Law Firm,\nthat the CSRC approval is not required for the listing and trading our Class A Ordinary Shares on NYSE because each of Qingdao SOS Investment\nManagement Co., Ltd,   Qingdao Zhonghai Venture Capital Management Co., Ltd and Qingdao Yongbao Ronghe International Trading\nCo., Ltd., or our WFOEs, was incorporated as a foreign-invested enterprise by means of foreign direct investments rather than by merger\nwith or acquisition of any PRC domestic companies as defined under the M&A Rules. There can be no assurance that the relevant PRC\ngovernment agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel. If the CSRC or other PRC regulatory\nbody subsequently determines that we need to obtain the CSRC’s approval for our offering or if the CSRC or any other PRC government\nauthorities promulgates any interpretation or implements rules that would require us to obtain CSRC or other governmental approvals for\nthe listing and trading of our Class A Ordinary Shares on NYSE, we may face adverse actions or sanctions by the CSRC or other PRC regulatory\nagencies. In any such event, these regulatory agencies may impose fines and penalties on our operations in China, limit our operating\nprivileges in China, delay or restrict the repatriation of the proceeds from our overseas offerings into the PRC, restrictions on or\nprohibition of the payments or remittance of dividends by our subsidiaries in China, or other actions that could have a material and\nadverse effect on our business, reputation, financial condition, results of operations, prospects, as well as the trading price of the\nClass A Ordinary Shares. In addition, if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring us\nto obtain their approvals for the listing and trading of our Class A Ordinary Shares, we may be unable to obtain waivers of such approval\nrequirements. Any uncertainties or negative publicity regarding such approval requirements could materially and adversely affect the\ntrading price of our Class A Ordinary Shares.\n\n \n\nAs\nof the date of this annual report, as advised by our PRC counsel, Hebei Changjun Law Firm, we and our subsidiaries, (1) currently are\nnot required to obtain permissions from any PRC authorities to list or trade our Class A Ordinary Shares in foreign stock exchanges,\n(2) are not subject to permission requirements from the CSRC, CAC or any other entity that is required to approve of our PRC subsidiaries’\noperations, and (3) have not received or were denied such permissions by any PRC authorities. Nevertheless, the General Office of the\nCentral Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely\nCracking Down on Illegal Securities Activities According to Law,” or the Opinions, which were made available to the public on July\n6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen\nthe supervision over overseas listings by Chinese companies. Given the current PRC regulatory environment, it is uncertain when and whether\nwe or our PRC subsidiaries, will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and\neven when such permission is obtained, whether it will be denied or rescinded. We have been closely monitoring regulatory developments\nin China regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings. As of\nthe date of this annual report, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering\nfrom the CSRC or other PRC governmental authorities.  However, there remains significant uncertainty as to the enactment, interpretation\nand implementation of regulatory requirements related to overseas securities offerings and other capital markets activities.\n\n \n\n18\n\n \n\n \n\nOn\nFebruary 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies\n(the “Trial Measures”), which will take effect on March 31, 2023. The Trial Measures clarified and emphasized several aspects,\nwhich include but are not limited to: (1) comprehensive determination of the “indirect overseas offering and listing by PRC domestic\ncompanies” in compliance with the principle of “substance over form” and particularly, an issuer will be required to\ngo through the filing procedures under the Trial Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s\noperating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most\nrecent accounting year is accounted for by PRC domestic companies, and b) the main parts of the issuer’s business activities are\nconducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business\noperation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements\nfor issuers that a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets,\nprior to the effective date of the Trial Measures, and b) are not required to re-perform the regulatory procedures with the relevant\noverseas regulatory authority or the overseas stock exchange, c) whose such overseas securities offering or listing shall be completed\nbefore September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing\nor are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing\nor offering overseas, such as (a) issuers whose listing or offering overseas have been recognized by the State Council of the PRC as\npossible threats to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers\nunder ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers’ compliance\nwith web security, data security, and other national security laws and regulations; (5) issuers’ filing and reporting obligations,\nsuch as obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and obligation\nafter offering or listing overseas to report to the CSRC material events including change of control or voluntary or forced delisting\nof the issuer; and (6) the CSRC’s authority to fine both issuers and their shareholders between 1 and 10 million RMB for failure\nto comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation.\n\n \n\n**In\nlight of recent events indicating greater oversight by the CAC, over data security, we are subject to a variety of laws and other obligations\nregarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and\nadverse effect on our business, our listing on NYSE, financial condition and results of operations.**\n\n \n\nWe\nare subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information,\nsuch as personal information and other data. Our compliance obligations include those relating to the Data Protection Act (As revised)\nof the Cayman Islands and the relevant PRC laws in this regard. These PRC laws apply not only to third-party transactions, but also to\ntransfers of information between us and our subsidiaries, and among us, our subsidiaries, and other parties with which we have commercial\nrelations. These laws continue to develop, and the PRC government may adopt other rules and restrictions in the future. Non-compliance\ncould result in penalties or other significant legal liabilities.\n\n \n\nPursuant\nto the PRC Cybersecurity Law, which was promulgated by the Standing Committee of the National People’s Congress on November 7,\n2016 and took effect on June 1, 2017, personal information and important data collected and generated by a critical information infrastructure\noperator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases\ninternet products and services that affects or may affect national security, it should be subject to cybersecurity review by the CAC.\nDue to the lack of further interpretations, the exact scope of “critical information infrastructure operator” remains unclear.\nOn December 28, 2021, the CAC and other relevant PRC governmental authorities jointly promulgated the Cybersecurity Review Measures (the\n“new Cybersecurity Review Measures”) to replace the original Cybersecurity Review Measures. The new Cybersecurity Review\nMeasures took effect on February 15, 2022. Pursuant to the new Cybersecurity Review Measures, if critical information infrastructure\noperators purchase network products and services, or network platform operators conduct data processing activities that affect or may\naffect national security, they will be subject to cybersecurity review. A network platform operator holding more than one million users/users’\nindividual information also shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate, among\nothers, the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced,\ncontrolled or maliciously used by foreign governments and network information security risk in connection with the overseas listing.\nAs of the date of this annual report, we have not received any inquiry, notice, warning, or sanctions regarding our corporate structure\nfrom the CSRC, CAC or any other PRC governmental agency. As advised by our PRC counsel, Hebei Changjun Law Firm, we are unlikely to be\nsubject to cybersecurity review, because: (i) we have not received any notice from governmental agency to treat us as an operator of\ncritical information infrastructure, and (ii) we have not received any notice from governmental agency to treat us as an online platform\noperator who possesses personal information of more than one million users. In addition, we currently do not have over one million users’\npersonal information and do not anticipate to collect over one million users’ personal information in the foreseeable future. \nIf we ever became subject to the cybersecurity review of CAC in the future as the applicable rules, regulations, policies or the interpretation\nthereof change, during such review, we may be required to suspend our operation or experience other disruptions to our operations. Cybersecurity\nreview could also result in negative publicity with respect to our company and diversion of our managerial and financial resources.\n\n \n\n19\n\n \n\n \n\nFurthermore,\nif we were found to be in violation of applicable laws and regulations in China during such review, we could be subject to administrative\npenalties, such as warnings, fines, or service suspension. Therefore, cybersecurity review could materially and adversely affect our\nbusiness, financial condition, and results of operations.\n\n \n\nIn\naddition, the PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June\n10, 2021 and took effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates\nthat, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical\nprotection system for data security. As the Data Security Law was recently promulgated, we may be required to make further adjustments\nto our business practices to comply with this law. If our data processing activities were found to be not in compliance with this law,\nwe could be ordered to make corrections, and under certain serious circumstances, such as severe data divulgence, we could be subject\nto penalties, including the revocation of our business licenses or other permits. Furthermore, the recently issued Opinions on Strictly\nCracking Down Illegal Securities Activities in Accordance with the Law require (i) speeding up the revision of the provisions on strengthening\nthe confidentiality and archives management relating to overseas issuance and listing of securities and (ii) improving the laws and regulations\nrelating to data security, cross-border data flow, and management of confidential information. As there remain uncertainties regarding\nthe further interpretation and implementation of those laws and regulations, we cannot assure you that we will be compliant such new\nregulations in all respects, and we may be ordered to rectify and terminate any actions that are deemed illegal by the regulatory authorities\nand become subject to fines and other sanctions. As a result, we may be required to suspend our relevant businesses, or face other penalties,\nwhich may materially and adversely affect our business, financial condition, and results of operations.\n\n \n\nOn\nAugust 20, 2021, the Standing Committee of the National People’s Congress of China promulgated the Personal Information Protection\nLaw of the PRC, or the PIPL, which took effect in November 2021. As the first systematic and comprehensive law specifically for the protection\nof personal information in the PRC, the PIPL provides, among others, that (i) an individual’s consent shall be obtained to use\nsensitive personal information, such as biometric characteristics and individual location tracking, (ii) personal information operators\nusing sensitive personal information shall notify individuals of the necessity of such use and impact on the individual’s rights,\nand (iii) where personal information operators reject an individual’s request to exercise his or her rights, the individual may\nfile a lawsuit with a People’s Court. As uncertainties remain regarding the interpretation and implementation of the PIPL, we cannot\nassure you that we will comply with the PIPL in all respects, we may become subject to fines and/or other penalties which may have material\nadverse effect on our business, operations and financial condition.\n\n \n\nWhile\nwe take measures to comply with all applicable data privacy and protection laws and regulations, we cannot guarantee the effectiveness\nof the measures undertaken by us and our business partners. However, compliance with any additional laws could be expensive, and may\nplace restrictions on our business operations and the manner in which we interact with our users. In addition, any failure to comply\nwith applicable cybersecurity, privacy, and data protection laws and regulations could result in proceedings against us by government\nauthorities or others, including notification for rectification, confiscation of illegal earnings, fines, or other penalties and legal\nliabilities against us, which could materially and adversely affect our business, financial condition, and results of operations, and\nthe value of our ordinary shares. In addition, any negative publicity on our website or platform’s safety or privacy protection\nmechanism and policy could harm our public image and reputation and materially and adversely affect our business, financial condition,\nand results of operations.\n\n \n\n**PRC\nlaws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations\nmay impair our ability to operate profitable.**\n\n \n\nThere\nare substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to,\nthe laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances.\nThe laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement\nmay involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments\nto existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently\nadopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect\nexisting and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing\nor new PRC laws or regulations may have on our business.\n\n \n\n20\n\n \n\n \n\nOn\nJuly 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly\nissued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital\nmarket, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement\nand judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system\nof extraterritorial application of the PRC securities laws. Since this document is relatively new, uncertainties still exist in relation\nto how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed\nimplementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations\nwill have on companies like us.\n\n \n\n**Regulations\nrelating to offshore investment activities by PRC residents may limit our ability to acquire PRC companies and could adversely affect\nour business.**\n\n \n\nIn\nJuly 2014, State Administration of Foreign Exchange, or SAFE, promulgated the Circular on Issues Concerning Foreign Exchange Administration\nOver the Overseas Investment and Financing and Roundtrip Investment by Domestic Residents Via Special Purpose Vehicles, or Circular 37,\nwhich replaced Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Corporate Financing and Roundtrip Investment\nthrough Offshore Special Purpose Vehicles, or Circular 75. Circular 37 requires PRC residents to register with local branches of SAFE\nin connection with their direct establishment or indirect control of an offshore entity, referred to in Circular 37 as a “special\npurpose vehicle” for the purpose of holding domestic or offshore assets or interests. Circular 37 further requires amendment to\na PRC resident’s registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase\nor decrease in the capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. Under\nthese regulations, PRC residents’ failure to comply with specified registration procedures may result in restrictions being imposed\non the foreign exchange activities of the relevant PRC entity, including the payment of dividends and other distributions to its offshore\nparent, as well as restrictions on capital inflows from the offshore entity to the PRC entity, including restrictions on its ability\nto contribute additional capital to its PRC subsidiaries. Further, failure to comply with the SAFE registration requirements could result\nin penalties under PRC law for evasion of foreign exchange regulations.\n\n \n\nAlthough\nwe believe that our agreements relating to our structure are in compliance with current PRC regulations, we cannot assure you that the\nPRC government would agree that these VIE Agreements comply with PRC licensing, registration or other regulatory requirements, with existing\npolicies or with requirements or policies that may be adopted in the future.\n\n \n\n**Governmental\ncontrol of currency conversion may limit our ability to utilize our net revenue effectively and our ability to transfer cash between\nour PRC subsidiaries and us, across borders, and to investors and affect the value of your investment.**\n\n** **\n\nWe\nare subject to the PRC’s rules and regulations on currency conversion. In the PRC, the SAFE regulates the conversion of the Renminbi,\nthe Chinese currency, into foreign currencies. The PRC government imposes controls on the convertibility of the Renminbi into foreign\ncurrencies and, in certain cases, the remittance of currency out of China.\n\n \n\nUnder\nPRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and\nservice-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain\nprocedural requirements. Under existing exchange restrictions, without prior approval of SAFE, cash generated from PRC subsidiaries in\nChina may be used to pay dividends.\n\n \n\nHowever,\napproval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency\nand remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government\nmay at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control\nsystem prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not pay dividends in\nforeign currencies to our investors.\n\n \n\nPRC\nregulatory authorities could impose further restrictions on the convertibility of the Renminbi. Any future restrictions on currency exchanges\nmay limit our ability to use the proceeds of such offerings in a business combination with a PRC target company and the use our cash\nflow for the distribution of dividends to our shareholders or to fund operations we may have outside of the PRC.\n\n \n\n21\n\n \n\n \n\n**Although\nthe audit report included in this annual report is prepared by an auditor who are currently inspected by the Public Company Accounting\nOversight Board (the “PCAOB”), there is no guarantee that future audit reports will be prepared by auditors inspected by\nthe PCAOB and, as such, in the future investors may be deprived of the benefits of such inspection. Furthermore, trading in our securities\nmay be prohibited under the Holding Foreign Companies Accountable Act (the “HFCA Act”) if the SEC subsequently determines\nour audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national\nsecurities exchanges, such as Nasdaq, may determine to delist our securities. Furthermore, on December 29, 2022, the Consolidated Appropriations\nAct, was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision\nto AHFCAA, which reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from\nthree years to two.** \n\n \n\nAs\nan auditor of companies that are registered with the SEC and publicly traded in the United States and a firm registered with the PCAOB,\nour auditor is required under the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with\nthe laws of the United States and professional standards.\n\n \n\nAlthough\nwe conduct part of our operations in mainland China, a jurisdiction where the PCAOB is currently unable to conduct inspections without\nthe approval of the Chinese government authorities, our auditor, Assentsure PAC, the independent registered public accounting firm that\nissues the audit report included elsewhere in this annual report, is subject to the PCAOB’s inspections to assess our auditor’s\ncompliance with the applicable professional standards. Inspections of other auditors conducted by the PCAOB outside mainland China have\nat times identified deficiencies in those auditors’ audit procedures and quality control procedures, which may be addressed as\npart of the inspection process to improve future audit quality. The lack of PCAOB inspections of audit work undertaken in mainland China\nprevents the PCAOB from regularly evaluating auditors’ audits and their quality control procedures. As a result, if there is any\ncomponent of our auditor’s work papers become located in mainland China in the future, such work papers will not be subject to\ninspection by the PCAOB. As a result, investors would be deprived of such PCAOB inspections, which could result in limitations or restrictions\nto our access of the U.S. capital markets.\n\n \n\nAs\npart of a continued regulatory focus in the United States on access to audit and other information currently protected by national law,\nin particular mainland China’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of the U.S. Congress\nwhich, if passed, would require the SEC to maintain a list of issuers for which PCAOB is not able to inspect or investigate the audit\nwork performed by a foreign public accounting firm completely. The proposed Ensuring Quality Information and Transparency for Abroad-Based\nListings on our Exchanges (“EQUITABLE”) Act prescribes increased disclosure requirements for these issuers and, beginning\nin 2025, the delisting from U.S. national securities exchanges such as NYSE of issuers included on the SEC’s list for three consecutive\nyears. It is unclear if this proposed legislation will be enacted. Furthermore, there have been recent deliberations within the U.S.\ngovernment regarding potentially limiting or restricting China-based companies from accessing U.S. capital markets. On May 20, 2020,\nthe U.S. Senate passed the Holding Foreign Companies Accountable Act (the “HFCA Act”), which includes requirements for the\nSEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because\nof a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The U.S. House of Representatives passed\nthe HFCA Act on December 2, 2020, and the HFCA Act was signed into law on December 18, 2020. Additionally, in July 2020, the U.S. President’s\nWorking Group on Financial Markets issued recommendations for actions that can be taken by the executive branch, the SEC, the PCAOB or\nother federal agencies and department with respect to Chinese companies listed on U.S. stock exchanges and their audit firms, in an effort\nto protect investors in the United States. In response, on November 23, 2020, the SEC issued guidance highlighting certain risks (and\ntheir implications to U.S. investors) associated with investments in China-based issuers and summarizing enhanced disclosures the SEC\nrecommends China-based issuers make regarding such risks. On March 24, 2021, the SEC adopted interim final rules relating to the implementation\nof certain disclosure and documentation requirements of the HFCA Act. We will be required to comply with these rules if the SEC identifies\nus as having a “non-inspection” year (as defined in the interim final rules) under a process to be subsequently established\nby the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements\ndescribed above. Under the HFCA Act, our securities may be prohibited from trading on NYSE or other U.S. stock exchanges if our auditor\nis not inspected by the PCAOB for three consecutive years, and this ultimately could result in our Class A Ordinary Shares being delisted.\n\n \n\n22\n\n \n\n \n\nFurthermore,\non June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if\nenacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges\nif its auditor is not subject to PCAOB inspections for two consecutive years instead of three and would reduce the time before our securities\nmay be prohibited from trading or delisted. On September 22, 2021, the PCAOB adopted a final rule implementing the AHFCAA, which provides\na framework for the PCAOB to use when determining, as contemplated under the AHFCAA, whether the Board is unable to inspect or investigate\ncompletely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities\nin that jurisdiction. On November 5, 2021, the SEC approved the PCAOB’s Rule 6100, Board Determinations Under the HFCA Act. On\nDecember 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act.\nThe rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public\naccounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a\nposition taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a Determination Report which found that\nthe PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the\nPRC, and (2) Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject\nto these determinations. On December 29, 2022, the Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated\nAppropriations Act contained, among other things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection\nyears required for triggering the prohibitions under the HFCA Act from three years to two. Our auditor, Assentsure, is headquartered\nin Singapore, not mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB’s determination.\nTherefore, our auditor is not currently subject to the determinations announced by the PCAOB on December 16, 2021, and it is currently\nsubject to the PCAOB inspections.\n\n \n\nWhile\nour auditor is based in Singapore and is registered with the PCAOB and will be inspected by the PCAOB on a regular basis, in the event\nit is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority\nin a foreign jurisdiction, then such lack of inspection could cause trading in the our securities to be prohibited under the HFCA Act,\nand ultimately result in a determination by a securities exchange to delist our securities. In addition, the recent developments would\nadd uncertainties to the listing and trading of our Class A Ordinary Shares and we cannot assure you whether NYSE or regulatory authorities\nwould apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures\nand quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it\nrelates to the audit of our financial statements. It remains unclear what the SEC’s implementation process related to the above\nrules will entail or what further actions the SEC, the PCAOB or NYSE will take to address these issues and what impact those actions\nwill have on U.S. companies that have significant operations in the PRC and have securities listed on a U.S. stock exchange (including\na national securities exchange or over-the-counter stock market). In addition, the above amendments and any additional actions, proceedings,\nor new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors,\nthe market price of our Class A Ordinary Shares could be adversely affected, and we could be delisted if we and our auditor are unable\nto meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management\ntime.\n\n \n\nOn\nAugust 26, 2022, the PCAOB signed a Statement of Protocol (the “SOP”) Agreements with the CSRC and China’s Ministry\nof Finance. The SOP Agreement, together with two protocol agreements (collectively, “SOP Agreements”), governs inspections\nand investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to\ninspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet\nwith respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection\nor investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined\nthat the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland\nChina and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise\nfail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. Delisting\nof our Class A Ordinary Shares would force holders of our Class A Ordinary Shares to sell their Class A Ordinary Shares. The market price\nof our Class A Ordinary Shares could be adversely affected as a result of anticipated negative impacts of these executive or legislative\nactions upon, as well as negative investor sentiment towards, companies with significant operations in China that are listed in the United\nStates, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance.\n\n \n\n23\n\n \n\n \n\n**The\nHong Kong legal system embodies uncertainties which could limit the availability of legal protections.**\n\n \n\nAs\none of the conditions for the handover of the sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong’s\nBasic Law. The Basic Law ensured Hong Kong will retain its own currency (Hong Kong Dollar), legal system, parliamentary system and people’s\nrights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom to function with a high degree of autonomy.\nThe Special Administrative Region of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary\nand courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English\ncommon law system.\n\n \n\nHowever,\nif the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s\ncommon law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could,\nin turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality\nprotections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect\nof future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation\nor enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections\navailable to us, including our ability to enforce our agreements with our customers.\n\n \n\n**Our\nHong Kong subsidiaries are subject to Hong Kong laws and regulations regarding data security, which could subject them to government\nenforcement actions and investigations, fines, penalties, and suspension or disruption of their operations.**\n\n \n\nOur\nHong Kong subsidiaries, including China SOS Limited, Future Technology Global Limited, Future Digital Investment Limited and Future Digital\nTrade Limited, operate in Hong Kong and are thus subject to laws and regulations in Hong Kong in respect of data privacy, data security,\nand data protection. The main legislation in Hong Kong concerning data security is the Personal Data (Privacy) Ordinance (Cap. 486 of\nthe Laws of Hong Kong) (the “PDPO”), which regulates the collection, usage, storage, and transfer of personal data and imposes\na statutory duty on data users to comply with the six data protection principles contained therein. Pursuant to section 33 of the PDPO,\nthe PDPO is applicable to the collection and processing of personal data if such activities take place in Hong Kong, or if the personal\ndata is collected by a data user whose principal place of business is in Hong Kong. As of the date of this annual report, we and our\nHong Kong subsidiaries have complied with the laws and requirements in respect of data security in Hong Kong. Our directors confirm that:\n(i) each of our directors and our Hong Kong subsidiaries has not been involved in any litigation or regulatory action relating to breach\nof the PDPO; and (ii) they are not aware of any non-compliance incidents relating to breach of the PDPO since the date of incorporation\nof our Hong Kong subsidiaries. Since our PRC subsidiaries conduct substantially all of their business operations in the mainland China,\nwe believe that the incumbent data security statutory requirements under Hong Kong laws do not materially affect their business. However,\nthe laws on cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, resulting in uncertainties\nabout the scope of our responsibilities in that regard. Failure to comply with the cybersecurity and data privacy requirements in a timely\nmanner, or at all, may subject us or our Hong Kong subsidiaries to consequences including but not limited to government enforcement actions\nand investigations, fines, penalties, and suspension or disruption of our Hong Kong subsidiaries’ operations.\n\n \n\n**Failure\nto comply with laws and regulations applicable to our business could subject us to fines and penalties and could also cause us to lose\ncustomers or otherwise harm our business.**\n\n \n\nOur\nbusiness is subject to regulation by various governmental agencies in China, including agencies responsible for monitoring and enforcing\ncompliance with various legal obligations, such as intellectual property laws, employment and labor laws, workplace safety, environmental\nlaws, consumer protection laws, governmental trade laws, import and export controls, anti-corruption and anti-bribery laws, and tax laws\nand regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in China. These laws and regulations\nimpose added costs on our business. Noncompliance with applicable regulations or requirements could subject us to:\n\n \n\n \n●\ninvestigations, enforcement\nactions, and sanctions;\n\n \n\n \n●\nmandatory changes to our\nnetwork and products;\n\n \n\n \n●\ndisgorgement of profits,\nfines, and damages;\n\n \n\n \n●\ncivil and criminal penalties\nor injunctions;\n\n \n\n \n●\nclaims for damages by our\ncustomers or channel partners;\n\n \n\n \n●\ntermination of contracts;\n\n \n\n \n●\nloss of intellectual property\nrights;\n\n \n\n \n●\nfailure to obtain, maintain\nor renew certain licenses, approvals, permits, registrations or filings necessary to conduct our operations; and\n\n \n\n \n●\ntemporary or permanent\ndebarment from sales to public service organizations.\n\n \n\n24\n\n \n\n \n\nIf\nany governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of\noperations, and financial condition could be adversely affected. In addition, responding to any action will likely result in a significant\ndiversion of our management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could\nmaterially harm our business, results of operations, and financial condition.\n\n \n\nAny\nreviews by regulatory agencies or legislatures may result in substantial regulatory fines, changes to our business practices, and other\npenalties, which could negatively affect our business and results of operations. Changes in social, political, and regulatory conditions\nor in laws and policies governing a wide range of topics may cause us to change our business practices. Further, our expansion into a\nvariety of new fields also could raise a number of new regulatory issues. These factors could negatively affect our business and results\nof operations in material ways.\n\n \n\nMoreover,\nwe are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate\nwith, who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability\nand penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business.\n\n \n\n**If\nwe cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange\nAct applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would\nnot incur as a foreign private issuer.**\n\n \n\nAs\na foreign private issuer, we will remain exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy\nstatements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery\nprovisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic\nreports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we will not be required\nto disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently\nexpect to continue to qualify as a foreign private issuer, we may cease to qualify as a foreign private issuer in the future.\n\n** **\n\n**We\nmay fail to obtain, maintain and update licenses and permits necessary to conduct our operations in the PRC, and our business may be\nmaterially and adversely affected as a result of any changes in the laws and regulations governing the VATS industry in the PRC.**\n\n \n\nThe\nlaws and regulations regarding value-added telecommunications services, or VATS, licenses in the PRC are relatively new and are still\nevolving, and their interpretation and enforcement involve significant uncertainties. Investment activities in the PRC by foreign investors\nare principally governed by the Industry Catalog Relating to Foreign Investment, or the Catalog. The Catalog divides industries into\nthree categories: encouraged, restricted and prohibited. Industries not included in the Catalog are permitted industries. Industries\nsuch as VATS, including Internet data warehouse services, or IDC services, restrict foreign investment. Specifically, the Administrative\nRegulations on Foreign-Invested Telecommunications Enterprises restrict the ultimate capital contribution percentage held by foreign\ninvestor(s) in a foreign-invested VATS enterprise to 50% or less. Under the Telecommunications Regulations, telecommunications service\nproviders are required to procure operating licenses prior to their commencement of operations. The Administrative Measures for Telecommunications\nBusiness Operating License, which took effect on April 10, 2009 and was amended on September 1, 2017, set forth the types of\nlicenses required to provide telecommunications services in China and the procedures and requirements for obtaining such licenses.\n\n \n\n25\n\n \n\n \n\nAs\nof the date of this report, we have obtained a Telecommunications Business License and a Telecommunication Network Number Utilization\nResource Certificate for our 10086 hot-line center and are currently applying for an ICP license from the Chinese Ministry of Industry\nand Information Technology.\n\n \n\nThere\ncan be no assurance that we will be able to maintain our existing licenses or permits necessary to provide our current IDC services in\nthe PRC, renew any of them when their current term expires, or update existing licenses or obtain additional licenses necessary for our\nfuture business expansion. The failure to obtain, retain, renew or update any license or permit generally, and our IDC licenses in particular,\ncould materially and adversely disrupt our business and future expansion plans.\n\n \n\nIn\naddition, if future PRC laws or regulations governing the VATS industry require that we obtain additional licenses or permits or update\nexisting licenses in order to continue to provide our IDC services, there can be no assurance that we would be able to obtain such licenses\nor permits or update existing licenses in a timely fashion, or at all. If any of these situations occur, our business, financial condition\nand prospects would be materially and adversely affected.\n\n \n\n**We\nmay rely principally on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements\nwe may have, and any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on\nour ability to conduct our business.**\n\n \n\nWe\nare a holding company, and we may rely principally on dividends and other distributions on equity paid by our PRC subsidiaries for our\ncash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and\nservice any debt we may incur. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt\nmay restrict their ability to pay dividends or make other distributions to us.\n\n \n\nUnder\nPRC laws and regulations, our PRC subsidiaries, may pay dividends only out of their accumulated profits as determined in accordance with\nPRC accounting standards and regulations. In addition, our PRC subsidiaries are required to set aside at least 10% of its accumulated after-tax profits\nafter making up the previous year’s accumulated losses each year, if any, to fund statutory reserve funds, until the aggregate\namount of such fund reaches 50% of its registered capital. It may allocate a portion of its after-tax profits based on PRC\naccounting standards to discretionary reserve funds according to its shareholder’s decision. These statutory reserve funds and\ndiscretionary reserve funds are not distributable as cash dividends.\n\n \n\nIn\naddition, the PRC Enterprise Income Tax Law and its implementation rules provide that withholding tax rate of 10% will be applicable\nto dividends payable by PRC companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties\nor arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises\nare incorporated.\n\n \n\nAny\nlimitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit\nour ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and\nconduct our business.\n\n \n\n26\n\n \n\n \n\n**Adverse\nchanges in China’s economic, political and social conditions, as well as laws and government policies, may materially and adversely\naffect our business, financial condition, results of operations and growth prospects.**\n\n \n\nWe\nconduct businesses in the PRC, and therefore our financial conditions and results of operations are subject to influences from PRC’s\neconomic, political and social conditions to a great extent. The PRC economy differs from the economies of most developed countries in\nmany aspects, including, but not limited to, the degree of government involvement, control level of corruption, control of capital investment,\nreinvestment control of foreign exchange, allocation of resources, growth rate and development level. Although the PRC government has\nimplemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive\nassets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in\nChina is still owned by the government. In addition, the PRC government continues to play a significant role in regulating industry development\nby imposing industrial policies. The PRC government also exercises significant control over China’s economic growth by allocating\nresources, controlling payment of foreign currency-denominated obligations, setting monetary policy, regulating financial services and\ninstitutions and providing preferential treatment to particular industries or companies.\n\n \n\nFor\napproximately four decades, the PRC government has implemented economic reform measures to utilize market forces in the development of\nthe PRC economy. We cannot predict whether changes in the PRC’s economic, political and social conditions and in its laws, regulations\nand policies will have any adverse effect on our current or future business, financial condition or results of operations. In addition,\nmany of the economic reforms carried out by the PRC government are unprecedented or experimental and are expected to be refined and improved\nover time. This refining and improving process may not necessarily have a positive effect on our operations and business development.\nFor example, the PRC government has in the past implemented a number of measures intended to slow down certain segments of the economy,\nincluding the real property industry, which the government believed to be overheating. These actions, as well as other actions and policies\nof the PRC government, could cause a decrease in the overall level of economic activity in the PRC and, in turn, have an adverse impact\non our business and financial condition.\n\n \n\n**Uncertainties\nin the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.**\n\n \n\nWe\nconduct a substantial portion of business operations in the PRC, and our PRC subsidiaries are subject to laws, rules and regulations\napplicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes. Unlike the common law\nsystem, prior court decisions may be cited for reference but have limited precedential value. The PRC legal system is evolving rapidly,\nand the interpretation of many laws, regulations and rules may contain inconsistencies and enforcement of these laws, regulations and\nrules involves uncertainties.\n\n \n\nIn\n1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general.\nThe overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of\nforeign investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations\nmay not sufficiently cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by\nPRC regulatory agencies. In particular, because these laws, rules and regulations are relatively new, and because of the limited number\nof published decisions and the nonbinding nature of such decisions, and because the laws, rules and regulations often give the relevant\nregulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve\nuncertainties and can be inconsistent and unpredictable.\n\n \n\n27\n\n \n\n \n\nFrom\ntime to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC judicial\nand administrative authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms,\nit may be more difficult to predict the outcome of a judicial or administrative proceeding than that in more developed jurisdictions.\nFurthermore, the PRC legal system is based, in part, on government policies and internal rules, some of which are not published in a\ntimely manner, or at all, but which may have retroactive effects. As a result, we may not always be aware of any potential violation\nof these policies and rules. Such unpredictability towards our contractual, property (including intellectual property) and procedural\nrights could adversely affect our business and impede our ability to continue our operations.\n\n \n\n**Uncertainties\nwith respect to the PRC legal system could affect us**\n\n \n\nChanges\nin the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could\nhave a significant impact upon our ability to operate profitably in the PRC.\n\n \n\nThe\nChinese government may exercise significant oversight and discretion over the conduct of business in the PRC and may intervene in or\ninfluence our operations at any time, which could result in a material change in our operations and/or the value of our securities. We\nare also currently not required to obtain approval from Chinese authorities to list on U.S. exchanges, however, if we are required to\nobtain approval in the future and are denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue\nlisting on U.S. exchange, which would materially affect the interest of the investors.\n\n \n\nThe\nPRC government may intervene or influence our business operations at any time or may exert more control over offerings conducted overseas\nand foreign investment in China based issuers, which could result in a material change in our business operations or the value of our\nsecurities. Additionally, the governmental and regulatory interference could significantly limit or completely hinder our ability to\noffer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.\n\n \n\n**Failure\nto comply with PRC regulations regarding the registration requirements for employee share ownership plans or share option plans may subject\nthe PRC plan participants or us to fines and other legal or administrative sanctions.**\n\n \n\nPursuant\nto the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan\nof Overseas Publicly Listed Company, issued by the State Administration of Foreign Exchange, or SAFE, in February 2012, employees, directors,\nsupervisors and other senior management participating in any stock incentive plan of an overseas publicly listed company who are PRC\ncitizens or who are non-PRC citizens residing in China for a continuous period of not less than one year, subject to a few\nexceptions, are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiaries of such overseas\nlisted company, and complete certain other procedures. We and our directors, executive officers and other employees who are PRC citizens\nor who reside in the PRC for a continuous period of not less than one year and who have been granted restricted shares, restricted share\nunits or options will be subject to these regulations if those employees exercise such restricted shares, restricted share units or options.\nSeparately, SAFE Circular 37 also requires certain registration procedures to be completed if those employees exercise restricted shares,\nrestricted share units or options before listing. Failure to complete the SAFE registrations may subject them to fines and legal sanctions\nand may also limit our ability to contribute additional capital into our wholly foreign-owned subsidiaries in China and limit these subsidiaries’\nability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive\nplans for our directors and employees under PRC law.\n\n \n\n28\n\n \n\n \n\nIn\naddition, the State Administration of Taxation, or the SAT has issued certain circulars concerning employee share options or restricted\nshares. Under these circulars, the employees working in the PRC who exercise share options or are granted restricted share units will\nbe subject to PRC individual income tax. Our WFOEs have obligations to file documents related to employee share options or restricted\nshares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options. If\nour employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions\nimposed by the tax authorities or other PRC government authorities.\n\n \n\n**Failure\nto make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.**\n\n \n\nCompanies\noperating in China are required to participate in various government-mandated employee benefit contribution plans, including certain\nsocial insurance, housing funds and other welfare plans, open and register accounts for social insurance accounts and housing funds,\nand contribute in their own names to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances,\nof employees up to a maximum amount specified by the local government from time to time at locations where companies operate our businesses.\nThe requirements of employee benefit contribution plans have not been implemented consistently by the local governments in China given\nthe different levels of economic development in different geographical areas.\n\n \n\nAs\nof the date of this report, certain of our PRC subsidiaries failed to open and register the accounts for housing funds, and so failed\nto pay housing provident fund for some of our employees. We may be required to make up the contributions for these welfare plans as well\nas late fees and fines. If we are subject to investigations or penalties related to non-compliance with labor laws, our business,\nfinancial condition and results of operations could be adversely affected.\n\n \n\n**The\nenforcement of the Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, and other labor-related\nregulations in the PRC may increase our labor costs, impose limitations on our labor practices and adversely affect our business and\nour results of operations.**\n\n \n\nOn\nJune 29, 2007, the Standing Committee of the National People’s Congress of China enacted the PRC Labor Contract Law, which\nbecame effective on January 1, 2008 and was amended on December 28, 2012. The PRC Labor Contract Law introduces specific provisions\nrelated to fixed-term employment contracts, part-time employment, probation, consultation with labor unions and employee assemblies,\nemployment without a written contract, dismissal of employees, severance, and collective bargaining, which together represent enhanced\nenforcement of labor laws and regulations. According to the PRC Labor Contract Law, an employer is obliged to sign an unfixed-term labor\ncontract with any employee who has worked for the employer for 10 consecutive years. Further, if an employee requests or agrees\nto renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unfixed\nterm, with certain exceptions. The employer must pay economic compensation to an employee where a labor contract is terminated or expires\nin accordance with the PRC Labor Contract Law, except for certain situations which are specifically regulated. In addition, the government\nhas issued various labor-related regulations to further protect the rights of employees. According to such laws and regulations, employees\nare entitled to annual leave ranging from five to 15 days and are able to be compensated for any untaken annual leave days in the\namount of three times their daily salary, subject to certain exceptions. In the event that we decide to change our employment or labor\npractices, the PRC Labor Contract Law and its implementation rules may also limit our ability to effect those changes in a manner that\nwe believe to be cost-effective. In addition, as the interpretation and implementation of these new regulations are still evolving, our\nemployment practices may not be at all times deemed in compliance with the new regulations. If we are subject to severe penalties or\nincur significant liabilities in connection with labor disputes or investigations, our business and financial conditions may be adversely\naffected.\n\n \n\n29\n\n \n\n \n\n**It\nmay be difficult to effect service of process upon us, our directors or our executive officers that reside in China or to enforce any\njudgments obtained from non-PRC courts or bring actions against them or us in China.**\n\n \n\nCertain\nof our directors and most of our executive officers reside in China. In addition, most of our assets and those of our directors and executive\nofficers are located in China. The PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of\ncourts with the United States, the United Kingdom, Japan and many other jurisdictions. As a result, it may not be possible for investors\nto serve process upon us or those persons in China, or to enforce against us or them in China, any judgments obtained from non-PRC jurisdictions.\n\n \n\nOn\nJuly 14, 2006, the Supreme People’s Court of China and the Government of the Hong Kong Special Administrative Region signed\nan Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters, or the 2006 Arrangement. Under\nsuch arrangement, where any designated People’s Court or any designated Hong Kong court has made an enforceable final judgment\nrequiring payment of money in a civil and commercial case pursuant to a choice of court agreement, any party concerned may apply to the\nrelevant People’s Court or Hong Kong court for recognition and enforcement of the judgment. On January 18, 2019, the Supreme\nCourt of the People’s Republic of China and the Department of Justice under the Government of the Hong Kong Special Administrative\nRegion signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of\nthe Mainland and of the Hong Kong Special Administrative Region, or the 2019 Arrangement. The 2019 Arrangement, for the reciprocal recognition\nand enforcement of judgments in civil and commercial matters between the courts in mainland China and those in the Hong Kong Special\nAdministrative Region, stipulates the scope and particulars of judgments, the procedures and ways of the application for recognition\nor enforcement, the review of the jurisdiction of the court that issued the original judgment, the circumstances where the recognition\nand enforcement of a judgment shall be refused, and the approaches towards remedies, among others. After a judicial interpretation has\nbeen promulgated by the Supreme People’s Court and the relevant procedures have been completed by the Hong Kong Special Administrative\nRegion, both sides shall announce a date on which the 2019 Arrangement shall come into effect. The 2019 Arrangement shall apply to any\njudgment made on or after its effective date by the courts of both sides. The 2006 Arrangement shall be terminated on the same day when\nthe 2019 Arrangement comes into effect. If a “written choice of court agreement” has been signed by parties according to\nthe 2006 Arrangement prior to the effective date of the 2019 Arrangement, the 2006 Arrangement shall still apply. Although the 2019 Arrangement\nhas been signed, its effective date has yet to be announced. Therefore, there are still uncertainties about the outcomes and effectiveness\nof enforcement or recognition of judgments under the 2019 Arrangement.\n\n \n\nShareholder\nclaims that are common in the United States, including securities law class actions and fraud claims, generally are difficult to pursue\nas a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to obtaining information\nneeded for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities\nin China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to\nimplement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the\nUnited States has not been efficient in the absence of mutual and practical cooperation mechanism. According to Article 177 of the PRC\nSecurities Law which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or\nevidence collection activities within the PRC. Accordingly, without the consent of the competent PRC securities regulators or other relevant\nauthorities, no entity or individual may provide any documents and materials relating to securities business activities to foreign entities\nor government agencies.\n\n \n\n30\n\n \n\n \n\n**Risks\nRelated to Our Class A Ordinary Shares**\n\n \n\n**The\ntrading price of our Class A Ordinary Shares may be volatile, which could result in substantial losses to investors.**\n\n \n\nThe\ntrading price of our Class A Ordinary Shares may be volatile and could fluctuate widely due to factors beyond our control. This may happen\nbecause of broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business\noperations located mainly in China that have listed their securities in the United States. A number of Chinese companies have listed\ntheir securities on U.S. stock markets, and some of these companies have experienced significant volatility. The trading performances\nof these Chinese companies’ securities after their offerings may affect the attitudes of investors toward Chinese companies listed\nin the United States in general and consequently may impact the trading performance of our Class A Ordinary Shares, regardless of our\nactual operating performance.\n\n \n\nIn\naddition to market and industry factors, the price and trading volume for our Class A Ordinary Shares may be highly volatile for factors\nspecific to our own operations, including the following:\n\n \n\n \n●\nvariations\nin our revenues, earnings, cash flow and data related to our user base or user engagement;\n\n \n\n \n●\nannouncements of new investments,\nacquisitions, strategic partnerships or joint ventures by us or our competitors;\n\n \n\n \n●\nannouncements of new products,\nservices and expansions by us or our competitors;\n\n \n\n \n●\nannouncements of changes\nto regulations;\n\n \n\n \n●\nchanges in financial estimates\nby securities analysts;\n\n \n\n \n●\ndetrimental adverse publicity\nabout us, our services or our industry;\n\n \n\n \n●\nadditions or departures\nof key personnel;\n\n \n\n \n●\nrelease of lock-up or other\ntransfer restrictions on our outstanding equity securities or sales of additional equity securities; and\n\n \n\n \n●\nPotential litigation or\nregulatory investigations.\n\n \n\nAny\nof these factors may result in large and sudden changes in the volume and price at which our Class A Ordinary Shares trade.\n\n \n\nIn\nthe past, shareholders of public companies have often brought securities class action suits against those companies following periods\nof instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount\nof our management’s attention and other resources from our business and operations and require us to incur significant expenses\nto defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our\nreputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be\nrequired to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.\n\n \n\nIn\nDecember 2019, the Company instructed its Depositary Bank to implement a ratio change for its American Depositary Shares (“ADSs”)\n(“ADS Ratio”). The new ratio is 10 Class A ordinary shares per 1 ADS. The effective date for the ratio change is December\n3, 2019.\n\n \n\nIn\nJune 2022, the Company adjusted its ADS Ratio from the existing ratio of 1 ADS representing 10 Class A ordinary shares to one ADS representing\n500 Class A ordinary shares. The effective date for the ratio change is July 6, 2022.\n\n \n\nIn\nMay 2023, the shareholders of the Company approved the 2023 Share Consolidation in the 2023 Annual General Meeting. In connection with\nthe 2023 Share Consolidation, the Company adjusted its ADS Ratio from the previous ratio of 1 ADS representing 500 Class A ordinary shares\nto 1 ADS representing 10 Class A ordinary shares, effective June 16, 2023.\n\n \n\n31\n\n \n\n \n\nIn\nNovember 2024, the Company changed the ratio of its ADS to Class A ordinary shares from 1 ADS representing 10 Class A ordinary shares\nto 1 ADS representing 150 Class A ordinary shares. The effective date is November 19, 2024.\n\n \n\nIn\nSeptember 2025, the Company terminated its ADS and directly listed its Class A Ordinary Shares on the NYSE. The effective date is September\n8, 2025.\n\n \n\n**Techniques\nemployed by short sellers may drive down the market price of our Class A Ordinary Shares.**\n\n \n\nShort\nselling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention\nof buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value\nof the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects\nto pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security\nto decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business\nprospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short\nattacks have, in the past, led to selling of shares in the market.\n\n \n\nPublic\ncompanies listed in the United States that have a substantial majority of their operations in China have been the subject of short selling.\nMuch of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting\nresulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto\nand, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations\ninto the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.\n\n \n\nWe\nhave been in the past, and may in the future be, the subject of unfavorable allegations made by short sellers. Any such allegations may\nbe followed by periods of instability in the market price of our Class A Ordinary Shares and negative publicity. If and when we become\nthe subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant\namount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller\nattacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech,\napplicable federal or state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming and could\ndistract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against\nus could severely impact our business operations and shareholder’s equity, and the value of any investment in our Class A Ordinary\nShares could be greatly reduced or rendered worthless.\n\n \n\n**Substantial\nfuture sales or perceived potential sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary\nShares to decline.**\n\n \n\nSales\nof our Class A Ordinary Shares in the public market, or the perception that these sales could occur, could cause the market price of\nour Class A Ordinary Shares to decline.\n\n \n\nCertain\nmajor holders of our Class A Ordinary Shares may cause us to register under the Securities Act the sale of their shares. Registration\nof these shares under the Securities Act would result in Class A Ordinary Shares becoming freely tradable without restriction under the\nSecurities Act immediately upon the effectiveness of the registration. Sales of these registered Class A Ordinary Shares in the public\nmarket could cause the price of our Class A Ordinary Shares to decline.\n\n \n\n32\n\n \n\n \n\n**Because\nwe do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A Ordinary Shares for return\non your investment.**\n\n \n\nWe\ncurrently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our\nbusiness. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment\nin our Class A Ordinary Shares as a source for any future dividend income.\n\n \n\nOur\nboard of directors has complete discretion as to whether to distribute dividends. Our shareholders may by ordinary resolution declare\na dividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, dividends may be declared and\npaid only out of funds legally available therefor, namely out of either profits or our share premium account, provided that a dividend\nmay not be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.\nEven if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend\non, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions,\nif any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by\nour board of directors. Accordingly, the return on your investment in our Class A Ordinary Shares will likely depend entirely upon any\nfuture price appreciation of our Class A Ordinary Shares. There is no guarantee that our Class A Ordinary Shares will appreciate in value\nor even maintain the price at which you purchased the Class A Ordinary Shares. You may not realize a return on your investment in our\nClass A Ordinary Shares and you may even lose your entire investment.\n\n \n\n**We\nmay be classified as a passive foreign investment company for U.S. federal income tax purposes, which could result in adverse U.S. federal\nincome tax consequences to U.S. Holders of our ordinary shares.**\n\n \n\nDepending\nupon the value of our assets, which is determined in part by the market value of our ordinary shares, and the composition of our assets\nand income over time, we could be classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes.\nBased on the projected composition of our assets and income, we do not anticipate becoming a PFIC for our taxable year ending December\n31, 2025. While we do not anticipate becoming a PFIC, fluctuations in the market price of our ordinary shares may cause us to become\na PFIC for the current or any subsequent taxable year.\n\n \n\nA\nnon-U.S. corporation, such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year, if\neither (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more\nof the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for the production of\npassive income. Whether we are a PFIC is a factual determination and we must make a separate determination each taxable year as to whether\nwe are a PFIC (after the close of each taxable year). Accordingly, we cannot assure you that we will not be a PFIC for our taxable year\nending December 31, 2025 or any future taxable year. The determination of whether we will become a PFIC will depend, in part, on how,\nand how quickly, we use our liquid assets and the cash that was raised in our IPO.\n\n \n\nIf\nwe were to be classified as a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional information—E.\nTaxation—U.S. Federal Income Tax Considerations”) holds ordinary shares, such U.S. Holder would generally be subject to reporting\nrequirements and might incur significantly increased U.S. federal income tax on gain recognized on the sale or other disposition of the\nordinary shares and on the receipt of distributions on the ordinary shares to the extent such gain or distribution is treated as an “excess\ndistribution” under the applicable U.S. federal income tax rules. Further, if we were to be classified as a PFIC for any year during\nwhich a U.S. Holder holds ourordinary shares, we generally would continue to be treated as a PFIC for all succeeding years during which\nsuch U.S. Holder holds our ordinary shares even if we cease to qualify as a PFIC under the rules set forth above. You are urged to consult\nyour tax advisor concerning the U.S. federal income tax consequences of acquiring, holding, and disposing of ordinary shares if we were\nto be classified as a PFIC. For more information see “Item 10. Additional information—E. Taxation—U.S. Federal Income\nTax Considerations—PFIC Rules.”\n\n \n\n33\n\n \n\n \n\n**Our\nmemorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders\nof our Class A Ordinary Shares.**\n\n \n\nOur\nsixth amended and restated memorandum and articles of association contains provisions that limit the ability of others to acquire control\nof our company or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders\nof an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain\ncontrol of our company in a tender offer or similar transaction. For example, our board of directors has the authority, without further\naction by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges,\nand relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights,\nconversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights\nassociated with our Class A Ordinary Shares. Preferred shares could be issued quickly with terms calculated to delay or prevent a change\nin control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares,\nthe price of our Class A Ordinary Shares may fall and the voting and other rights of the holders of our Class A Ordinary Shares may be\nmaterially and adversely affected.\n\n \n\n**Our\ndual-class voting structure limits your ability to influence corporate matters and could discourage others from pursuing any change of\ncontrol transactions that holders of our Class A Ordinary Shares may view as beneficial.**\n\n \n\nOur\nordinary shares are divided into Class A Ordinary Shares and Class B ordinary shares. Holders of Class A Ordinary Shares are entitled\nto one vote per share, while holders of Class B ordinary shares are entitled to 10 votes per share, subject to the limitations set forth\nin “Item 10. Additional Information—B. Memorandum and Articles of Association—Ordinary Shares.” Each Class B\nordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A Ordinary Shares are not convertible\ninto Class B ordinary shares under any circumstances. Upon any transfer of Class B ordinary shares by a holder thereof to any person\nor entity which is not an affiliate of such holder, such Class B ordinary shares shall be automatically and immediately converted into\nan equal number of Class A Ordinary Shares.\n\n \n\n**You\nmay face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because\nwe are registered under Cayman Islands law.**\n\n \n\nWe\nare an exempted company limited by shares registered under the laws of the Cayman Islands. Our corporate affairs are governed by our\nmemorandum and articles of association, the Companies Law (2018 Revision) of the Cayman Islands and the common law of the Cayman Islands.\nThe rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors\nto us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands\nis derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the\ndecisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders\nand the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or\njudicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities\nlaws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate\nlaw than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action\nin a federal court of the United States.\n\n \n\nShareholders\nof Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain\ncopies of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether\nor not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available\nto our shareholders (other than our memorandum and articles of association and any special resolutions passed by our shareholders). This\nmay make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit\nproxies from other shareholders in connection with a proxy contest.\n\n \n\nCertain\ncorporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies\nincorporated in other jurisdictions such as the U.S. Currently, we do not plan to rely on home country practice with respect to any corporate\ngovernance matter. However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection\nthan they otherwise would under rules and regulations applicable to U.S. domestic issuers.\n\n \n\n34\n\n \n\n \n\nAs\na result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken\nby management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated\nin the United States. For a discussion of significant differences between the provisions of the Companies Law of the Cayman Islands and\nthe laws applicable to companies incorporated in the United States and their shareholders, see “Item 10. Additional Information—B.\nMemorandum and Articles of Association—Differences in Corporate Law.”\n\n \n\n**Certain\njudgments obtained against us by our shareholders may not be enforceable.**\n\n \n\nWe\nare a Cayman Islands company and substantially all of our assets are located outside of the United States. Substantially all of our current\noperations are conducted in China. As a result, it may be difficult or impossible for you to bring an action against us in the United\nStates in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if\nyou are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a\njudgment against our assets.\n\n \n\n**We\nare a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions\napplicable to United States domestic public companies.**\n\n \n\nBecause\nwe are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations\nin the United States that are applicable to U.S. domestic issuers, including:\n\n \n\n \n●\nthe rules under the Exchange\nAct requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;\n\n \n\n \n●\nthe sections of the Exchange\nAct regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;\n\n \n\n \n●\nthe sections of the Exchange\nAct requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit\nfrom trades made in a short period of time; and\n\n \n\n \n●\nthe selective disclosure\nrules by issuers of material non-public information under Regulation FD.\n\n \n\nWe\nare required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we have published\nprior to 2022, and intend to continue to publish in the future, our results on a semi-annual basis through press releases, distributed\npursuant to the rules and regulations of the NYSE.  Press releases relating to financial results and material events will also be\nfurnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive\nand less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the\nsame protections or information, which would be made available to you, were you investing in a U.S. domestic issuer. In addition, if\nand to the extent we fail to qualify as a foreign private issuer in any future period, we would have increased disclosure and other requirements,\nwhich would increase our compliance and other costs.\n\n \n\n**You\nmay experience dilution of your holdings due to inability to participate in rights offerings.**\n\n \n\nWe\nmay, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the\ndepositary will not distribute rights to holders of Class A Ordinary Shares unless the distribution and sale of rights and the securities\nto which these rights relate are either exempt from registration under the Securities Act with respect to all holders of Class A Ordinary\nShares, or are registered under the provisions of the Securities Act. The depositary may, but is not required to, attempt to sell these\nundistributed rights to third parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration\nunder the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying\nsecurities or to endeavor to have a registration statement declared effective. Accordingly, holders of Class A Ordinary Shares may be\nunable to participate in our rights offerings and may experience dilution of their holdings as a result.\n\n \n\n**We\nincur significant costs as a result of being a public company.**\n\n \n\nAs\na public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, the Sarbanes-Oxley\nAct of 2002, or the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations\nof the NYSE. Being subject to these rules and regulations results in legal, accounting and financial compliance costs, makes some activities\nmore difficult, time-consuming and costly and can also place significant strain on our personnel, systems and resources.\n\n \n\n35"}