{"url_path":"/sec/wyhg/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1999860/0001213900-26-056618-index.html","accession_number":"0001213900-26-056618","cik":"0001999860","ticker":"WYHG","issuer_name":"Wing Yip Food Holdings Group Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1999860/0001213900-26-056618-index.html","primary_entity_key":"0001999860","primary_entity_name":"Wing Yip Food Holdings Group Ltd"},"word_count":7956,"has_tables":true,"body_markdown":"**Item 10. ADDITIONAL INFORMATION**\n\n** **\n\nA. Share Capital\n\n \n\nNot applicable.\n\n \n\nB. Memorandum and Articles of Association\n\n \n\nWe incorporate by reference into this annual report\nthe description of our articles of association, Exhibit 3.1, and the description of differences in corporate laws contained in our registration\nstatement on Form F-1 (File No. 333-277694), as amended, initially filed with the SEC on March 6, 2024.\n\n \n\nC. Material Contracts\n\n \n\nWe have not entered into any material contracts\nother than in the ordinary course of business and other than those described in “Item 4. Information on the Company” or elsewhere\nin this annual report.\n\n \n\nD. Exchange Controls\n\n \n\nThere are no exchange control regulations or currency\nrestrictions in Hong Kong. \n\n \n\n98\n\n \n\n** **\n\nE. Taxation \n\n** **\n\n**Mainland China Enterprise Taxation**\n\n** **\n\n**Enterprise Income Tax (“EIT”)**\n\n \n\nPursuant to the EIT Law, which was promulgated\non March 16, 2007 and last amended on December 29, 2018, and the Regulation on the Implementation of the Enterprise Income Tax\nLaw of the PRC which was promulgated on December 6, 2007 and most recently amended on December 6, 2024 and effective on January 20,\n2025, the income tax for both domestic and foreign-invested enterprises is at the same rate of 25%. Furthermore, resident enterprises,\nwhich refer to enterprises that are set up in accordance with mainland China laws, or that are set up in accordance with the law of the\nforeign country (region) but with its actual administration institution in mainland China, shall pay enterprise income tax originating\nboth within and outside mainland China. While non-resident enterprises that have set up institutions or premises in mainland China\nshall pay enterprise income tax in relation to the income originating from mainland China and obtained by their institutions or establishments,\nand the income incurred outside mainland China but there is an actual relationship with the institutions or establishments set up by such\nenterprises. Where non-resident enterprises that have not set up institutions or establishments in mainland China, or where institutions\nor establishments are set up but there is no actual relationship with the income obtained by the institutions or establishments set up\nby such enterprises, they shall pay enterprise income tax in relation to the income originating from mainland China at the rate of 20%.\n\n** **\n\n**Value-Added Tax (“VAT”)**\n\n \n\nPursuant to the Provisional Regulations on Value-added\nTax of the PRC (the “VAT Provisional Regulations”), promulgated on December 13, 1993 and last amended on November 19,\n2017 and its implementation rules, all entities or individuals in mainland China engaging in the sale of goods, the provision of processing\nservices, repairs and replacement services, and the importation of goods are required to pay value-added tax. Pursuant to the Circular\non Comprehensively Promoting the Pilot Program of the Collection of Value-added Tax in Lieu of Business Tax promulgated on March 23,\n2016 and as amended on July 11, 2017, December 25, 2017 and March 20, 2019 respectively, upon approval of the State Council,\nthe pilot program of the collection of value-added tax in lieu of business tax shall be promoted nationwide in a comprehensive manner\nas of May 1, 2016, and all taxpayers of business tax engaged in the building industry, the real estate industry, the financial industry\nand the life service industry shall be included in the scope of the pilot program with regard to payment of value-added tax instead of\nbusiness tax.\n\n \n\nPursuant to the Circular of the Ministry of Finance\nand the State Administration of Taxation on Adjusting Value-added Tax Rates promulgated on April 4, 2018 and come to effect on May 1,\n2018, by Ministry of Finance and State Administration of Taxation, where a taxpayer engages in a taxable sales activity for the value-added\ntax purpose or imports goods, the previous applicable 17% and 11% tax rates are adjusted to be 16% and 10% respectively.\n\n \n\nOn December 25, 2024, the SCNPC promulgated the\nValue-added Tax Law of the PRC (the “VAT Law”), which will become effective on January 1, 2026 and abolish the VAT Provisional\nRegulations. Pursuant to the VAT Law, entities and individuals (including individual businesses) engaged in sale of goods, services, intangible\nassets and immovables and importation of goods within mainland China are VAT payers and shall pay VAT in accordance with the VAT Law.\n\n** **\n\n**Withholding Income Tax**\n\n \n\nPursuant to the Arrangement between Mainland China\nand Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, which was last\namended on 6 December 2019, a company incorporated in Hong Kong will be subject to withholding income tax at a rate of 5% on\ndividends it receives from its PRC subsidiary if it holds 25% or more equity interest in such PRC subsidiary at the time of the distribution,\nor at a rate of 10% on dividends it receives from its PRC subsidiary if it holds less than 25% equity interest in such PRC subsidiary\nat the time of the distribution.\n\n** **\n\n99\n\n \n\n** **\n\n**Hong Kong Taxation** \n\n** **\n\n**Profits tax**\n\n \n\nIn the opinion of Patrick Mak & Tse,\nour Hong Kong counsel, the following discussion correctly describes the mechanism of profit tax in Hong Kong. Such summary is\nsubject to changes in Hong Kong law.\n\n \n\nHong Kong adopts a territorial basis for\ntaxing profits derived from a trade, profession, or business carried on in Hong Kong. Profits tax is only charged on profits which\narise in or are derived from Hong Kong. In simple terms, this means that a person who carries on a business in Hong Kong but\nderives profits from another place is not required to pay tax in Hong Kong on those profits.\n\n \n\nNo tax is imposed in Hong Kong in respect\nof capital gains from the sale of property, such as the Ordinary Shares underlying the ADSs. Generally, gains arising from disposal of\nthe ADSs or the underlying Ordinary Shares which are held more than two years are considered capital in nature. However, trading\ngains from the sale of property by persons carrying on a trade, profession or business in Hong Kong where such gains are derived\nfrom or arise in Hong Kong from such trade, profession or business will be chargeable to Hong Kong profit tax. Liability for\nHong Kong profits tax would therefore arise in respect of trading gains from the sale of ADSs or the underlying Ordinary Shares realized\nby persons in the course of carrying on a business of trading or dealing in securities in Hong Kong where the purchase or sale contracts\nare effected (being negotiated, concluded and/or executed) in Hong Kong.\n\n \n\nIn addition, Hong Kong does not impose withholding\ntax on gains derived from the sale of stock in Hong Kong companies and does not impose withholding tax on dividends paid outside\nof Hong Kong by Hong Kong companies. Accordingly, investors will not be subject to Hong Kong withholding tax with respect\nto a disposition of their ADSs or with respect to the receipt of dividends on their ADSs, if any. No income tax treaty relevant to the\nacquiring, withholding or dealing in the ADSs or the Ordinary Shares underlying the ADSs exists between Hong Kong and the United States.\n\n \n\nSince the year of tax assessment 2008/09, entities\nincorporated in Hong Kong are subject to profits tax in Hong Kong at the rate of 16.5%. A two-tiered profits tax rates regime\nwas introduced for the year of assessment 2018/19 onwards. Under such regime, the profits tax rate for the first HK$2 million of\nassessable profits for entities will be lowered to 8.25%, being half of the rate specified in Schedule 8 to the Inland Revenue Ordinance\n(Chapter 112 of the Laws of Hong Kong), and the assessable profits above HK$2 million will continue to be subject to the\nrate of 16.5%. All entities with profits chargeable to profits tax in Hong Kong would qualify for the two-tiered profits tax rates,\nexcept those with a connected entity which is nominated to be chargeable at the two-tiered rates. If, at the end of the basis period of\nthe entity for the relevant year of assessment, the entity has one or more connected entities, the two-tiered profits tax rates would\nonly apply to the one which is nominated to be chargeable at the two-tiered rates. The others would not qualify for the two-tiered profits\ntax rates.\n\n \n\nAn entity is a connected entity of another entity\nif (i) one of them has control over the other, or (ii) both of them are under the control of the same entity. Generally, an\nentity has control over another entity if the first-mentioned entity, whether directly or indirectly through one or more than one other\nentity, (a) owns or controls more than 50% in aggregate of the issued share capital of the latter entity; (b) is entitled to\nexercise or control the exercise of more than 50% in aggregate of the voting rights in the latter entity; or (c) is entitled to more\nthan 50% in aggregate of the capital or profits of the latter entity.\n\n \n\nAs the ultimate holding company of Wing Yip GD\nis Wing Yip, and therefore only one of the two entities may benefit from the two-tiered profits tax rates. The other entity that is not\nsubjected to the two-tiered profits tax rates will be subjected to profit tax at the rate of 16.5%.\n\n** **\n\n**Stamp duty**\n\n \n\nHong Kong stamp duty is generally payable\non the transfer of “Hong Kong stocks.” The term “stocks” refers to shares in companies incorporated in Hong Kong,\nas widely defined under the Stamp Duty Ordinance (Cap. 117 of the laws of Hong Kong), or SDO, and includes the Ordinary Shares underlying\nthe ADSs but not the ADSs. Even if the ADSs are caught under the definition of “stocks,” they would not be considered “Hong Kong\nstocks” under the SDO since the transfer of the ADSs are not required to be registered in Hong Kong given that the books for\nthe transfer of ADSs are located in the United States. The transfer of ADSs is therefore not subject to stamp duty in Hong Kong.\nIf Hong Kong stamp duty applies, both the purchaser and the seller are liable for the stamp duty charged on each of the sold note\nand bought note at the ad valorem rate of 0.10% on the higher of the consideration stated on the contract notes or the fair market value\nof the shares transferred. In addition, a fixed duty, currently of HK$5.00, is payable on an instrument of transfer.\n\n** **\n\n100\n\n \n\n** **\n\n**United States Federal Income Taxation** \n\n** **\n\n**WE URGE POTENTIAL PURCHASERS OF OUR ORDINARY\nSHARES OR ADSS TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX CONSEQUENCES OF\nPURCHASING, OWNING, AND DISPOSING OF OUR ORDINARY SHARES OR ADSS.**\n\n \n\nThe following brief summary does not address the\nU.S. tax consequences to any particular investor or to persons in special tax situations such as:\n\n \n\n \n●\nbanks;\n\n \n\n \n●\nfinancial institutions;\n\n \n\n \n●\ninsurance companies;\n\n \n\n \n●\nregulated investment companies;\n\n \n\n \n●\nreal estate investment trusts;\n\n \n\n \n●\nbroker-dealers;\n\n \n\n \n●\npersons that elect to mark their securities to market;\n\n \n\n \n●\nU.S. expatriates or former long-term residents of the U.S.;\n\n \n\n \n●\ngovernments or agencies or instrumentalities thereof;\n\n \n\n \n●\ntax-exempt entities;\n\n \n\n \n●\npersons liable for alternative minimum tax;\n\n \n\n \n●\npersons holding our Ordinary Shares or ADSs as part of a straddle, hedging, conversion or integrated transaction;\n\n \n\n \n●\npersons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares or ADSs);\n\n \n\n \n●\npersons who acquired our Ordinary Shares or ADSs pursuant to the exercise of any employee share option or otherwise as compensation;\n\n \n\n \n●\npersons holding our Ordinary Shares or ADSs through partnerships or other pass-through entities;\n\n \n\n \n●\nbeneficiaries of a Trust holding our Ordinary Shares or ADSs; or\n\n \n\n \n●\npersons holding our Ordinary Shares or ADSs through a trust.\n\n \n\nThe brief discussion set forth below is addressed\nonly to U.S. Holders that purchase our Ordinary Shares or the ADSs. Prospective purchasers are urged to consult their own tax advisors\nabout the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign\nand other tax consequences to them of the purchase, ownership and disposition of our Ordinary Shares or ADSs.\n\n** **\n\n101\n\n \n\n** **\n\n**Material Tax Consequences Applicable to\nU.S. Holders of Our Ordinary Shares or ADSs**\n\n \n\nThe following brief summary sets forth the material\nU.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares or ADSs. It is directed to U.S. Holders\n(as defined below) of our Ordinary Shares or ADSs and is based upon laws and relevant interpretations thereof in effect as of the date\nof this annual report, all of which are subject to change. This brief description does not deal with all possible tax consequences relating\nto ownership and disposition of the ADSs or our Ordinary Shares or U.S. tax laws, other than the U.S. federal income tax laws,\nsuch as the tax consequences under non-U.S. tax laws, state, local and other tax laws.\n\n \n\nThe following brief description applies only to\nU.S. Holders (defined below) that hold ADSs or Ordinary Shares as capital assets and that have the U.S. dollar as their functional\ncurrency. This brief description is based on the federal income tax laws of the United States in effect as of the date of this annual\nreport and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial\nand administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which\nchange could apply retroactively and could affect the tax consequences described below.\n\n \n\nThe brief description below of the U.S. federal\nincome tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of ADSs or Ordinary Shares\nand you are, for U.S. federal income tax purposes,\n\n \n\n \n●\nan individual who is a citizen or resident of the United States;\n\n \n\n \n●\na corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;\n\n \n\n \n●\nan estate whose income is subject to U.S. federal income taxation regardless of its source; or\n\n \n\n \n●\na trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.\n\n \n\nIf a partnership (or other entities treated as\na partnership for United States federal income tax purposes) is a beneficial owner of our Ordinary Shares or ADSs, the tax treatment\nof a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners\nof a partnership holding our Ordinary Shares or ADSs are urged to consult their tax advisors regarding an investment in our Ordinary Shares\nor ADSs.\n\n \n\nAn individual is considered a resident of the\nU.S. for federal income tax purposes if he or she meets either the “Green Card Test” or the “Substantial Presence\nTest” described as follows:\n\n \n\nThe Green Card Test: You are a lawful permanent\nresident of the United States, at any time, if you have been given the privilege, according to the immigration laws of the United States,\nof residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration\nServices issued you an alien registration card, Form I-551, also known as a “green card.”\n\n \n\nThe Substantial Presence Test: If an alien is\npresent in the United States on at least 31 days of the current calendar year, he or she will (absent an applicable exception)\nbe classified as a resident alien if the sum of the following equals 183 days or more (See §7701(b)(3)(A) of the Internal\nRevenue Code and related Treasury Regulations):\n\n \n\n \n●\nThe actual days in the United States in the current year; plus\n\n \n\n \n●\nOne-third of his or her days in the United States in the immediately preceding year; plus\n\n \n\n \n●\nOne-sixth of his or her days in the United States in the second preceding year.\n\n \n\nThis summary is based, in part, upon the representations\nmade by the depositary to us and assumes that the deposit agreement for the ADSs, and all other related agreements, will be performed\nin accordance with their terms.\n\n** **\n\n102\n\n \n\n** **\n\n**Federal Income Tax Treatment of ADSs**\n\n \n\nU.S. Holders of ADSs generally will be treated\nfor U.S. federal income tax purposes as holding our Ordinary Shares represented by the ADSs. No gain or loss will be recognized on\nan exchange of our Ordinary Shares for ADSs or an exchange of ADSs for our Ordinary Shares if the depositary has not taken any action\ninconsistent with the material terms of the deposit agreement for the ADSs or the U.S. Holder’s ownership of the underlying\nOrdinary Shares. A U.S. Holder’s tax basis in the Ordinary Shares received in exchange for ADSs will be the same as its tax\nbasis in the ADSs, and the holding period in the shares will include the holding period in the ADSs.\n\n** **\n\n**Taxation of Dividends and Other Distributions\non the ADSs or our Ordinary Shares**\n\n \n\nSubject to the PFIC rules discussed below,\nthe gross amount of distributions made by us to you with respect to the ADSs or Ordinary Shares (including the amount of any taxes withheld\ntherefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent\nthat the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax\nprinciples). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed\nto corporations in respect of dividends received from other U.S. corporations.\n\n \n\nWith respect to non-corporate U.S. Holders,\nincluding individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income,\nprovided that (1) the ADSs or Ordinary Shares are readily tradable on an established securities market in the United States,\nor we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange\nof information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding\ntaxable year, and (3) certain holding period requirements are met. There is no income tax treaty between the United States and\nHong Kong. However, the ADSs or our Ordinary Shares are intended to be tradable on an established securities market in the United States.\nUnder U.S. Internal Revenue Service authority, ADSs or Ordinary Shares are considered for purpose of clause (1) above to be\nreadily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently\ninclude the NYSE and the Nasdaq Stock Market. You are urged to consult your tax advisors regarding the availability of the lower rate\nfor dividends paid with respect to the ADSs or our Ordinary Shares, including the effects of any change in law after the date of this\nannual report. We did not declare or pay any dividends for the current taxable year.\n\n \n\nDividends will constitute foreign source income\nfor foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of\nthe dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the\ndividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign\ntaxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed\nby us with respect to the ADSs or our Ordinary Shares will constitute “passive category income” but could, in the case of\ncertain U.S. Holders, constitute “general category income.”\n\n \n\nTo the extent that the amount of the distribution\nexceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated\nfirst as a tax-free return of your tax basis in your ADSs or Ordinary Shares, and to the extent the amount of the distribution exceeds\nyour tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal\nincome tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution\nwould otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.\n\n** **\n\n103\n\n \n\n** **\n\n**Taxation of Dispositions of ADSs or Ordinary\nShares**\n\n \n\nSubject to the PFIC rules discussed below,\nyou will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between\nthe amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the ADSs or Ordinary Shares. The\ngain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who\nhas held the ADSs or Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of\ncapital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source\nincome or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.\n\n** **\n\n**Passive Foreign Investment Company (“PFIC”)\nConsequences**\n\n \n\nA non-U.S. corporation is considered a PFIC,\nas defined in Section 1297(a) of the U.S. Internal Revenue Code, for any taxable year if either:\n\n \n\n \n●\nat least 75% of its gross income for such taxable year is passive income; or\n\n \n\n \n●\nat least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).\n\n \n\nPassive income generally includes dividends, interest,\nrents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition\nof passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income\nof any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition\nof our assets for purposes of the PFIC asset test, (1) the cash we raised in our past offerings will generally be considered to be\nheld for the production of passive income and (2) the value of our assets must be determined based on the market value of the ADSs\nor our Ordinary Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all\nof our assets on any particular quarterly testing date for purposes of the asset test.\n\n \n\nBased on our operations and the composition of\nour assets, we are not in the current year a PFIC under the current PFIC rules. We must make a separate determination each year as to\nwhether we are a PFIC. However, there can be no assurance with respect to our status as a PFIC for any future taxable year. Depending\non the amount of cash we raised in any past offerings, together with any other assets held for the production of passive income, it is\npossible that, for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We\nwill make this determination following the end of any particular tax year. In addition, because the value of our assets for purposes of\nthe asset test will generally be determined based on the market price of our Ordinary Shares and because cash is generally considered\nto be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of the ADSs or\nOrdinary Shares and the amount of cash we raised in the initial public offering. Accordingly, fluctuations in the market price of the\nADSs or Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty\nin several respects and the composition of our income and assets will be affected by how, and how quickly, we spend the cash we raise\nin the initial public offering. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as\nstated above, the determination of the value of our assets will depend upon material facts (including the market price of our Ordinary\nShares from time to time) that may not be within our control. If we are a PFIC for any year during which you hold ADSs or Ordinary Shares,\nwe will continue to be treated as a PFIC for all succeeding years during which you hold ADSs or Ordinary Shares. If we cease to be\na PFIC and you did not previously make a timely “mark-to-market” election as described below, you may avoid some of the adverse\neffects of the PFIC regime by making a “purging election” (as described below) with respect to the ADSs or Ordinary Shares.\n\n \n\n104\n\n \n\n \n\nIf we are a PFIC for your taxable year(s) during\nwhich you hold ADSs or Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution”\nthat you receive and any gain you realize from a sale or other disposition (including a pledge) of the ADSs or Ordinary Shares, unless\nyou make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than\n125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period\nfor the ADSs or Ordinary Shares will be treated as an excess distribution. Under these special tax rules:\n\n \n\n \n●\nthe excess distribution or gain will be allocated ratably over your holding period for the ADSs or Ordinary Shares;\n\n \n\n \n●\nthe amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and\n\n \n\n \n●\nthe amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.\n\n \n\nThe tax liability for amounts allocated to years\nprior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years,\nand gains (but not losses) realized on the sale of the ADSs or Ordinary Shares cannot be treated as capital, even if you hold the ADSs\nor Ordinary Shares as capital assets.\n\n \n\nA U.S. Holder of “marketable stock”\n(as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the U.S. Internal Revenue Code for such\nstock to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or\nare deemed to hold) ADSs or Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an\namount equal to the excess, if any, of the fair market value of the ADSs or Ordinary Shares as of the close of such taxable year over\nyour adjusted basis in such ADSs or Ordinary Shares, which excess will be treated as ordinary income and not capital gain. You are allowed\nan ordinary loss for the excess, if any, of the adjusted basis of the ADSs or Ordinary Shares over their fair market value as of the close\nof the taxable year. Such ordinary loss, however, is allowable only to the extent of any net mark-to-market gains on the ADSs or Ordinary\nShares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well\nas gain on the actual sale or other disposition of the ADSs or Ordinary Shares, are treated as ordinary income. Ordinary loss treatment\nalso applies to any loss realized on the actual sale or disposition of the ADSs or Ordinary Shares, to the extent that the amount of such\nloss does not exceed the net mark-to-market gains previously included for such ADSs or Ordinary Shares. Your basis in the ADSs or Ordinary\nShares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that\napply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital\ngains rate for qualified dividend income discussed above under “— Taxation of Dividends and Other Distributions on the\nADSs or our Ordinary Shares” generally would not apply.\n\n \n\nThe mark-to-market election is available only\nfor “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during\neach calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury\nregulations), including the Nasdaq Capital Market. If the ADSs or Ordinary Shares are regularly traded on the Nasdaq Capital Market and\nif you are a holder of ADSs or Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.\n\n \n\nAlternatively, a U.S. Holder of stock in\na PFIC may make a “qualified electing fund” election under Section 1295(b) of the U.S. Internal Revenue Code\nwith respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund\nelection with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s\nearnings and profits for the taxable year. The qualified electing fund election, however, is available only if such PFIC provides such\nU.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations.\nWe do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If\nyou hold ADSs or Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service\nForm 8621 in each such year and provide certain annual information regarding such ADSs or Ordinary Shares, including regarding distributions\nreceived on the ADSs or Ordinary Shares and any gain realized on the disposition of the ADSs or Ordinary Shares.\n\n \n\n105\n\n \n\n \n\nIf you do not make a timely “mark-to-market”\nelection (as described above), and if we were a PFIC at any time during the period you hold the ADSs or Ordinary Shares, then such ADSs\nor Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year,\nunless you make a “purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed\nsale of such ADSs or Ordinary Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The\ngain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess\ndistribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the\nADSs or Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding\nperiod will begin the day after such last day) in your ADSs or Ordinary Shares for tax purposes.\n\n \n\nIRC Section 1014(a) provides for a step-up\nin basis to the fair market value for the ADSs or Ordinary Shares when inherited from a decedent that was previously a holder of the ADSs\nor Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely\nqualified electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) the ADSs\nor Ordinary Shares, or a mark-to-market election and ownership of those ADSs or Ordinary Shares are inherited, a special provision in\nIRC Section 1291(e) provides that the new U.S. Holder’s basis should be reduced by an amount equal to the Section 1014\nbasis minus the decedent’s adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent’s\npassing, the PFIC rules will cause any new U.S. Holder that inherits the ADSs or Ordinary Shares from a U.S. Holder to\nnot get a step-up in basis under Section 1014 and instead will receive a carryover basis in those ADSs or Ordinary Shares.\n\n \n\nYou are urged to consult your tax advisors regarding\nthe application of the PFIC rules to your investment in the ADSs or Ordinary Shares and the elections discussed above.\n\n** **\n\n**Information Reporting and Backup Withholding**\n\n \n\nDividend payments with respect to the ADSs or\nOrdinary Shares and proceeds from the sale, exchange or redemption of the ADSs or Ordinary Shares may be subject to information reporting\nto the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the U.S. Internal\nRevenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct\ntaxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is\notherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such\ncertification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding\nthe application of the U.S. information reporting and backup withholding rules.\n\n \n\nBackup withholding is not an additional tax. Amounts\nwithheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any\nexcess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal\nRevenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. Transactions\neffected through certain brokers or other intermediaries, however, may be subject to withholding taxes (including backup withholding),\nand such brokers or intermediaries may be required by law to withhold such taxes.\n\n \n\nUnder the Hiring Incentives to Restore Employment\nAct of 2010, certain U.S. Holders are required to report information relating to the ADSs or Ordinary Shares, subject to\ncertain exceptions (including an exception for the ADSs or Ordinary Shares held in accounts maintained by certain financial institutions),\nby attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return\nfor each year in which they hold the ADSs or Ordinary Shares.\n\n** **\n\n106\n\n \n\n** **\n\n**Korean Taxation**\n\n \n\nThe following summary of Korean tax considerations\napplies to you so long as you are not:\n\n \n\n \n●\na resident of Korea;\n\n \n\n \n●\na corporation with its head office, principal place of business or place of effective management in Korea; or\n\n \n\n \n●\nengaged in a trade or business in Korea through a permanent establishment or a fixed base to which the relevant income is attributable or with which the relevant income is effectively connected.\n\n** **\n\n**Taxation of Dividends on Ordinary Shares\nor ADSs**\n\n \n\nWe will not deduct Korean withholding tax from\ndividends paid to you (whether payable in cash or in shares) at a rate of 22.0% (inclusive of local income surtax) since the dividends\npaid by foreign corporation would not be deemed Korean sourced income.\n\n** **\n\n**Taxation of Capital Gains from Transfer\nof Ordinary Shares or ADSs**\n\n \n\nAs a general rule, capital gains earned by non-residents upon\ntransfer of the Ordinary Shares issued by foreign corporation but listed in Korea Exchange are subject to Korean withholding tax at the\nlower of (1) 11.0% (inclusive of local income surtax) of the gross proceeds realized or (2) subject to the production of satisfactory\nevidence of acquisition costs and certain direct transaction costs of the Ordinary Shares, 22.0% (inclusive of local income surtax) of\nthe net realized gain, unless exempt from Korean income taxation under the applicable Korean tax treaty with the non-resident’s country\nof tax residence. See “Material Income Tax Consideration — Korean Taxation — Tax Treaties”\nbelow for a discussion on treaty benefits. Even if you do not qualify for an exemption under a tax treaty, you will not be subject to\nthe foregoing withholding tax on capital gains if you qualify under the relevant Korean domestic tax law exemptions discussed in the following\nparagraphs.\n\n \n\nIn regards to the transfer of the Ordinary Shares\nthrough the Korea Exchange, you will not be subject to the withholding tax on capital gains (as described in the preceding paragraph)\nif you (1) have no permanent establishment in Korea and (2) did not own or have not owned (together with any shares owned by\nany person with which you have a certain special relationship) 25% or more of the total issued and outstanding shares, which may include\nthe Ordinary Shares represented by the ADSs, at any time during the calendar year in which the sale occurs and during the five consecutive\ncalendar years prior to the calendar year in which the sale occurs.\n\n \n\nUnder Korean tax law, it is unclear whether ADSs\nare viewed as shares of common stock for capital gains tax purposes and if ADSs are treated as our Ordinary Shares capital gains from\nthe sale or disposition of ADSs are taxed (if such sale or disposition constitutes a taxable event) as if such gains are from the sale\nor disposition of the underlying ordinary shares.\n\n** **\n\n**Tax Treaties**\n\n \n\nKorea has entered into a number of income tax\ntreaties with other countries (including the United States), which would reduce or exempt Korean withholding tax on dividends on,\nand capital gains on transfer of, the Ordinary Shares or ADSs. For example, under the Korea-United States income tax treaty,\nreduced rates of Korean withholding tax of 16.5% or 11.0% (depending on your shareholding ratio and inclusive of local income surtax)\non dividends and an exemption from Korean withholding tax on capital gains are available to residents of the United States that are\nbeneficial owners of the relevant dividend income or capital gains, subject to certain exceptions. However, under Article 17 (Investment\nor Holding Companies) of the Korea-United States income tax treaty, such reduced rates and exemption do not apply if (i) you\nare a United States corporation, (ii) by reason of any special measures, the tax imposed on you by the United States with\nrespect to such dividend income or capital gains is substantially less than the tax generally imposed by the United States on corporate\nprofits and (iii) 25% or more of your capital is held of record or is otherwise determined, after consultation between competent\nauthorities of the United States and Korea, to be owned directly or indirectly by one or more persons who are not individual residents\nof the United States. Also, under Article 16 (Capital Gains) of the Korea-United States income tax treaty, the exemption\non capital gains does not apply if (a) you have a permanent establishment in Korea and any shares of common stock in which you hold\nan interest and which gives rise to capital gains are effectively connected with such permanent establishment, (b) you are an individual\nand you maintain a fixed base in Korea for an aggregate of 183 days or more during a given taxable year and your ADSs or the Ordinary\nShares giving rise to capital gains are effectively connected with such fixed base or (c) you are an individual and you are present\nin Korea for an aggregate of 183 days or more during a given taxable year.\n\n \n\n107\n\n \n\n \n\nYou should inquire for yourself whether you are\nentitled to the benefit of a tax treaty between Korea and the country where you are a resident. It is the responsibility of the party\nclaiming the benefits of an income tax treaty in respect of dividend payments or capital gains to submit to us, the purchaser or the financial\ninvestment company, as applicable, a certificate as to his tax residence. In the absence of sufficient proof, we, the purchaser or the\nfinancial investment company, as applicable, must withhold tax at the normal rates. Furthermore, in order for you to claim the benefit\nof a tax rate reduction or tax exemption on certain Korean source income (such as dividends or capital gains) under an applicable tax\ntreaty, Korean tax law requires you (or your agent) to submit an application (for reduced withholding tax rate, “application for\nentitlement to reduced tax rate,” and in the case of exemptions from withholding tax, “application for tax exemption,”\nalong with a certificate of your tax residency issued by a competent authority of your country of tax residence, subject to certain exceptions)\nas the beneficial owner of such Korean source income (“BO application”), provided that if such tax exemption is being sought\nby an entity for an amount that is Won 1 billion or more (including where the aggregate amount exempted within one year from the last\nday of the month in which the payment was made, is Won 1 billion or more), in addition to the certificate of tax residence issued by a\ncompetent authority of your residence country, it will also be required to submit the names and addresses of all of the members of board\nof directors, the identities and shareholding percentages of all of shareholders (provided that if there are more than 100 shareholders,\nyou may instead provide a statement showing the total number of shareholders and aggregate investment amount from each country), and financial\nstatements (including appendices), tax returns or audit reports for the most recent three years submitted to tax authorities of your country\nof residence (or, if you are an entity that has been in existence for less than three years, the aforementioned documents since your incorporation).\nFor example, a U.S. resident would be required to provide Form 6166 as a certificate of tax residency together with the application for\nentitlement to reduced tax rate or the application for tax exemption. Such application should be submitted to the withholding agent prior\nto the payment date of the relevant income. Subject to certain exceptions, where the relevant income is paid to an overseas investment\nvehicle (which is not the beneficial owner of such income) (“OIV”), a beneficial owner claiming the benefit of an applicable\ntax treaty with respect to such income must submit its BO application to such OIV, which must submit an OIV report and a schedule of beneficial\nowners (and the BO applications collected from each beneficial owner, if such beneficial owner is applying for tax exemption) to the withholding\nagent prior to the payment date of such income. Effective from January 1, 2022, an OIV is deemed to be a beneficial owner of the Korean\nsource income if (i) under the applicable tax treaty, the OIV bears tax liabilities in the country in which it is established and (ii)\nthe Korean source income is eligible for benefits under the tax treaty. The benefits under a tax treaty between Korea and the country\nof such OIV’s residence will apply with respect to the relevant income paid to such OIV, subject to certain application requirements\nas prescribed by the Corporate Income Tax or Individual Income Tax Law. In the case of a tax exemption application, the withholding agent\nis required to submit such applications (together with the applicable OIV report in the case of income paid to an OIV) to the relevant\ndistrict tax office by the ninth day of the month following the date of the payment of such income.\n\n** **\n\n**Inheritance Tax and Gift Tax**\n\n \n\nIf you die while holding an ADS or donate an ADS,\nit is unclear whether, for Korean inheritance tax and gift tax purposes, you will be treated as the owner of the Ordinary Shares underlying\nthe ADSs. If the tax authority interprets depositary receipts as the underlying share certificates, you may be treated as the owner of\nthe Ordinary Shares and your heir or the donee (or in certain circumstances, you as the donor) will be subject to Korean inheritance tax\nor gift tax presently at the rate of 10% to 50%, provided that the value of the ADSs or the Ordinary Shares is greater than a specified\namount.\n\n \n\nIf you die while holding an Ordinary Share or\ndonate an Ordinary Share, your heir or donee (or in certain circumstances, you as the donor) will be subject to Korean inheritance tax\nor gift tax at the same rate as indicated above.\n\n \n\nHowever, if ADS or the Ordinary Shares underlying\nshare the ADSs are not located within Korea, Korean inheritance tax or gift tax will not be applied.\n\n \n\nAt present, Korea has not entered into any tax\ntreaty relating to inheritance tax or gift tax.\n\n** **\n\n108\n\n \n\n** **\n\n**Securities Transaction Tax**\n\n \n\nIf you transfer the Ordinary Shares on the KOSDAQ, you will be subject\nto securities transaction tax at the rate of 0.20% of the sale price of the Ordinary Shares but will not be subject to an agriculture\nand fishery special surtax. If your transfer of the Ordinary Shares is not made on the KOSDAQ, subject to certain exceptions, you will\nbe subject to securities transaction tax at the rate of 0.35% and will not be subject to an agriculture and fishery special surtax.\n\n \n\nUnder the Securities Transaction Tax Law, depositary\nreceipts (such as American depositary receipts) constitute share certificates subject to the securities transaction tax. However, the\ntransfer of depositary receipts listed on the New York Stock Exchange, the Nasdaq Global Market, or other qualified foreign exchanges\nis exempt from the securities transaction tax.\n\n \n\nF. Dividends and Paying Agents\n\n \n\nNot applicable.\n\n \n\nG. Statement by Experts\n\n \n\nNot applicable.\n\n \n\nH. Documents on Display\n\n \n\nWe have previously filed with the SEC our registration\nstatements on Form F-1 (File No. 333-277694), as amended.\n\n \n\nWe are subject to the periodic reporting and\nother informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other information with\nthe SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year. The SEC maintains\na website at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants\nthat make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules of the Exchange\nAct prescribing, among other things, the furnishing and content of proxy statements to shareholders, and our executive officers, directors\nand principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange\nAct.\n\n \n\nI. Subsidiary Information\n\n \n\nFor a listing of our subsidiaries, see “Item\n4. Information on the Company—A. History and Development of the Company.”\n\n \n\nJ. Annual Report to Security Holders\n\n \n\nNot applicable.\n\n \n\n109"}