{"url_path":"/sec/wyhg/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 INFORMATION ON THE COMPANY**","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":19210,"has_tables":true,"body_markdown":"**Item 4. INFORMATION ON THE COMPANY**\n\n** **\n\nA. History and Development of the Company\n\n \n\n**Corporate History and Structure**\n\n \n\nOur operations commenced on December 2, 2010\nthrough our wholly owned subsidiary Wing Yip GD in Guangdong, China. On April 24, 2015, Wing Yip was established in Hong Kong\nas a limited liability company. In December 2015, Wing Yip acquired 100% equity interests in Wing Yip GD, and as a result, Wing Yip\nbecame the holding company of Wing Yip GD. On November 26, 2017, Horgos Wing Yip Brand Business Service Co., Ltd. was established\nas a wholly owned subsidiary of Wing Yip GD, which was voluntarily dissolved in September 2022.\n\n \n\nIn 2018, we were successfully listed on KOSDAQ\n(stock code: 900340). On August 12, 2020, Wing Yip HN was established as a private limited liability company in Hainan, China, as\na wholly owned subsidiary of Wing Yip GD. On August 3, 2021, Huaiji Wing Yip Food Technology Co., Ltd. was established as a private\nlimited liability company in Guangdong China, as a wholly owned subsidiary of Wing Yip GD, which was voluntarily dissolved in February\n2024.\n\n \n\nOn November 10, 2025, Shenzhen Qianhai Miaoyu\nTechnology Co., Ltd. (“Qianhai Miaoyu”) was formed under the laws of mainland China, as a wholly owned subsidiary of Wing\nYip. As of the date of this annual report, Qianhai Miaoyu has not commenced business operations. Qianhai Miaoyu is proposed to be principally\nengaged in food sales, food online sales, food import and export, and import and export of goods.\n\n \n\nAs of the date of this annual report, Wing Yip\nGD has seven branches, each of which operate its own physical store in Guangdong Province, China. See “Item 4. Information on the\nCompany — B. Business Overview — Facilities.”\n\n \n\n**Completion of the Initial Public Offering\n(“IPO”)**\n\n** **\n\nOn November 27, 2024, the Company closed its IPO\nof 2,050,000 ADSs, at a public offering price of $4.00 per ADS. The gross proceeds to the Company from the IPO, before deducting the underwriting\ndiscounts, the non-accountable expense allowance, and other expenses, were US$ 8.20 million. On January 8, 2025, the underwriters exercised\nthe over-allotment option in full to purchase the additional 307,500 ADSs. The closing for the sale of the over-allotment ADSs took place\non January 14, 2025, resulting in additional gross proceeds of $1,230,000, before underwriting discounts and offering expenses. As a result,\nthe Company has raised aggregate gross proceeds of approximately US$9.43 million in the IPO, including the full exercise of the over-allotment\noption, prior to deducting underwriting discounts and offering expenses payable by the Company.\n\n \n\nThe ADSs were previously approved for listing\non The Nasdaq Capital Market and commenced trading under the ticker symbol “WYHG” on November 26, 2024.\n\n \n\n**Corporate Structure**\n\n** ** \n\nThe following chart illustrates our corporate\nstructure as of the date of this annual report.\n\n \n\n \n\nFor details of our principal shareholders’\nownership, please refer to the beneficial ownership table in “Item 6. Directors, Senior Management and Employees—E. Share\nOwnership.”\n\n \n\n35\n\n \n\n \n\n**Corporate Information**\n\n** **\n\nOur Ordinary Shares have been listed on KOSDAQ since 2018 and have been trading on the Nasdaq Capital Market since November 26, 2024.\nOur principal executive office is located at No. 9, Guanxian North Rd, Huangpu Town, Zhongshan, Guangdong, China, and our phone number\nis 86-760-23215457. Our registered office in HK is at Unit B, 17/F, United Centre, 95 Queensway, Admiralty, Hong Kong. We maintain a corporate\nwebsite at http://ir.wingyip-food.com/. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East\n42nd Street, 18th Floor, New York, NY 10168.\n\n \n\nThe SEC maintains a website at www.sec.gov that\ncontains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC using\nits EDGAR system.\n\n \n\nB. Business Overview\n\n \n\n**Overview**\n\n \n\nThrough the operating subsidiaries in China, we\nare a notable meat product processing company in China. As of the date of this annual report, our products are primarily marketed and\nsold across 18 provinces in mainland China through 7 self-operated stores, 87 distributors, including major retail outlets and supermarkets\nand 7 e-commerce platforms, including one platform owned by us.\n\n \n\nThe operating subsidiaries are primarily engaged\nin the processing, sales and distribution of i) cured meat products, including cured pork sausages, cured pork meat and other cured meat\nproducts, such as cured chicken, cured duck and cured fish; ii) snack products, including ready-to-eat sausages, jerky, duck necks, duck\nfeet and claypot rice; and iii) frozen meat products, including frozen sausages, frozen beef patties and frozen chicken breast fillets.\n\n \n\nWe, through the operating subsidiaries, sell and\nmarket our products under our flagship brand “Wing Yip” (“荣业”), which can trace its history back\nto 1915, when our predecessor business began processing and selling cured sausages under the name “Wing Yip” (“荣业”).\nSince the commencement of operations through our subsidiary, Wing Yip GD in 2010, we have continuously developed our business and built\nour brand. In addition to “Wing Yip” (“荣业”), we have also developed the snack product brands “Jiangwang”\n(“匠王”) and “Kuangke” (“狂客”).\n\n \n\nWe, through the operating subsidiaries, focus\non product development and are committed to improving product quality and expanding our product offerings to cater to evolving consumer\npreferences. As of the date of this annual report, our research and development department is composed of 51 employees and it closely\ncollaborates with the sales and marketing department, and the production department to periodically introduce new products and enhance\nthe ingredients and packaging of existing products. We also enter into strategic cooperation agreements with external research institutions\nfor the development of new products and product formulas. Leveraging our expertise in new product development, we developed and introduced\n51, 81 and 94 new products to the market, during fiscal years 2023, 2024 and 2025, respectively.\n\n \n\nWe also pride ourselves in upholding high standards\nfor food safety, product quality and sustainability. The operating subsidiaries have stringent quality control systems in place at every\nstage of our value chain, from processing to sales and distribution. The operating subsidiaries have obtained internationally recognized\nquality assurance certifications, including (i) the ISO 22000:2018 Food Safety Management System Certificate, and (ii) the Hazard\nAnalysis and Critical Control Point (HACCP) System Certificate.\n\n \n\nWe generate revenue primarily from sales of cured\nmeat products, snack products and frozen meat products.\n\n \n\nFor the fiscal years ended December 31,\n2023, 2024 and 2025, we had total revenue of approximately US$134,068,317, US$144,629,055 and US$135,192,629, respectively, representing\nan increase by approximately 7.88% from fiscal year 2023 to 2024, and a decrease by approximately 6.52% from fiscal year 2024 to 2025.\nRevenue derived from sales of cured meat products accounted for approximately 62.11%, approximately 59.48% and approximately 59.16% of\nthe total revenue for those fiscal years, respectively. Revenue derived from sales of snack products accounted for approximately\n32.55%, approximately 34.95% and approximately 35.13% of the total revenue for those fiscal years, respectively. Revenue derived\nfrom sales of frozen meat products accounted for approximately 5.34%, approximately 5.57% and approximately 5.71% of the total revenue\nfor those fiscal years, respectively.\n\n \n\n36\n\n \n\n \n\n**Our Strengths**\n\n** **\n\nWe believe the following competitive strengths\nare essential for our success and differentiate us from our competitors:\n\n \n\n**Excellent Track Record and Reputation**\n\n \n\nWe, through the operating subsidiaries, have an\nexcellent track record in China’s meat processing market and have established a strong brand recognition under the “Wing Yip”\n(“荣业”) brand. Our “Wing Yip” (“荣业”) brand was awarded the title of the\n“Most Popular Cured Meat Brand in the Guangdong-Hong Kong-Macao Region” by a joint collaboration of China High-end Restaurant\n& Hotel Asian Leaders Summit, Guangdong Culinary Association, International 5-S Association, The Association for Hong Kong Catering\nServices Management LTD., The United Association of Food and Beverage Merchants of Macao, and “Guangdong Cuisine” Magazine\nin 2015. In 2017, we, through our operating subsidiaries, were honored with the title of “Guangdong Time-Honored Brand” by\nthe Guangdong Time-Honored Brand Working Committee. Additionally, in 2017, we, though the operating subsidiaries, were recognized as the\n“Leading Agricultural Enterprise” in Zhongshan City by the People’s Government of Zhongshan City. In 2021, we through\nthe operating subsidiaries, was awarded “National Key Leading Enterprise in Agricultural Industrialization”, by a joint collaboration\nof certain government authorities. For more information, see “Item 4. Information on the Company — B. Business Overview —\nLicenses, Awards and Certificates.”\n\n \n\nThe operating subsidiaries promote our brand and\nproducts through various channels, including outdoor advertisements, television commercials, and large-scale exhibitions. In recent years,\nto expand our consumer coverage, the operating subsidiaries have also begun promoting our brand through e-commerce platforms. See also\n“Item 4. Information on the Company — B. Business Overview — Distribution — E-commerce Platforms.” We believe\nthat our understanding of industry trends and consumer preferences, as well as our ability to provide quality meat products, have bolstered\nconsumer confidence in us and enhanced our reputation within the industry.\n\n \n\n**Focus on Quality Control and Maintaining\nHigh Standards for Food Safety.**\n\n** **\n\nWe believe that the safety and quality of our\nmeat products are crucial to our success. We, through the operating subsidiaries, have established rigorous and comprehensive food safety\nand quality control systems to ensure the quality of our meat products. The operating subsidiaries are dedicated to ensuring high safety\nand quality standards for both our meat products and the raw materials that the operating subsidiaries procure for their production. The\noperating subsidiaries have obtained internationally recognized quality assurance certifications, including the ISO 22000:2018 Food Safety\nManagement System Certificate, and Hazard Analysis and Critical Control Point (HACCP) System Certificate for our processing facilities\nsince 2017. As of the date of this annual report, our quality control team consists of 7 members, all of whom possess qualifications relevant\nto internal product quality testing. Our quality control team closely monitors our processing procedures.\n\n \n\nTo ensure the safety and quality of our products,\nwe, through the operating subsidiaries, have also established and maintained strict technical specifications and procedures for each processing\nstep. Our products comply with the standards set by the China National Medical Products Administration and routinely undergo relevant\ntests to determine the presence of veterinary drugs or prohibited chemicals (such as Sudan red dyes), consistent with industry practices\nprescribed by such regulatory authority. We, through the operating subsidiaries, have established and operationalized supplier control\nmeasures, including a supplier assessment system based on various factors, such as product quality and service standards. The operating\nsubsidiaries also conduct sampling tests on the raw materials they procure to ensure their quality meets relevant standards. Our quality\ncontrol team is responsible for controlling the quality of incoming raw materials. See also “Item 4. Information on the Company\n— B. Business Overview — Quality Control and Food Safety.”\n\n \n\nAs of the date of this annual report, the operating\nsubsidiaries have not incurred any significant fines or penalties from any relevant government authorities due to the quality or safety\nof our products, nor have we been required to conduct any significant product recalls.\n\n \n\n37\n\n \n\n \n\n**Strong Product Development Capabilities\nand a Diverse Range of Innovative Products.**\n\n** **\n\nWe, through the operating subsidiaries, are dedicated\nto enhancing our product quality and expanding our product variety to meet evolving consumer preferences. Our product development strategy\nincludes introducing new products as well as improving the ingredients and packaging of existing products. Leveraging our expertise in\nnew product development, we, through the operating subsidiaries, developed and introduced 51, 81 and 94 new products to the market, during\nfiscal years 2023, 2024 and 2025, respectively, including ready-to-eat western-style sausages, health foods (such as chicken breast fillets),\nand frozen meat products. During fiscal years 2023, 2024 and 2025, our research and development costs were approximately US$4.25 million,\nUS$4.97 million and US$4.13 million, accounting for 15.25%, 17.13% and 3.05% of our total operating costs, respectively.\n\n \n\nAs of the date of this annual report, our internal\ntechnical R&D department consists of 51 members, primarily responsible for developing new products and improving the formulations\nof existing products. Our technical R&D department actively collaborates with our sales and marketing department, as well as the production\ndepartment, to gather market intelligence from various segments. This enhances our understanding and adaptability to changes in consumer\ntastes and preferences, with particular focus on product flavor, appearance, ingredients, and packaging, while maintaining our production\ncosts at an acceptable level. In addition to our in-house R&D engineers, as of the date of this annual report, we, through the operating\nsubsidiaries, also collaborate with 6 external R&D consultants who have rich experience in food processing technology, flavorings,\nand food additives, to develop new products. Furthermore, to stay updated on the latest market developments and trends, we, through the\noperating subsidiaries, have signed strategic research collaboration agreements with 4 strategic partners, including research institutions\nand flavor suppliers, to develop new products. In addition, we, through our operating subsidiaries, have also retained six external consultants\nto provide consulting services for product development and product quality.\n\n \n\nIn an effort to take advantage of the improving\nliving standards and increasing health awareness among end consumers in China, we, through the operating subsidiaries, have initiated\na strategic collaboration with Foodnamoo, Inc., a Korean company engaged in manufacturing and distributing packaged meat products, listed\non KOSDAQ (stock code: 290720), a stock exchange in the Republic of Korea (“Korea”). To this end, in 2021, we established\na joint venture company Food Health Technology (China) Holdings Group Limited (“Food Health”), with Foodnamoo, Inc. in Hong\nKong, under a joint venture shareholders’ agreement by and between us and Foodnamoo, Inc., dated November 30, 2020 (the “Joint\nVenture Agreement”), to develop healthy foods such as chicken breast fillets in mainland China. Under the Joint Venture Agreement,\nwe will hold a 40% equity interest in of Food Health and Foodnamoo, Inc. will hold a 60% equity interest, and there will be four directors,\nmade up of two directors from us and two directors from Foodnamoo, Inc. The Joint Venture Agreement also imposes certain restrictions\non our and Foodnamoo, Inc.’s ability to engage in the same or similar product activities as Food Health in the PRC without mutual\nconsent, subject to certain exceptions and we cannot directly or indirectly solicit or employ each other’s executive or managerial\nindividuals for the time period when such individual in question is a shareholder of Food Health and for a period of 12 months after such\nindividual in question ceases to be a shareholder of Food Health.\n\n \n\nOn April 18, 2025, the Company entered into a\nJoint Venture Termination Agreement (the “JV Termination Agreement”) to, among other things, terminate the Joint Venture Framework\nAgreement, the Test Product Production Agreement, and the Joint Venture Agreement, and to dissolve the PRC and Hong Kong joint venture\nentities. As of April 2026, both entities had been deregistered.\n\n \n\nHowever, we anticipate continuing developing and\nlaunching new products to cater to the growing demand for a healthier lifestyle among the new generation of consumers. In 2024, we developed\nplant-based meat alternatives made from plant proteins, and launched frozen plant-based meat patty products with various flavors, including\nbeef, chicken and pork flavors. In 2025, we continued to orient our research and development efforts toward healthier product formulations.\nIn furtherance of this strategy, we launched low-sugar, low-salt cured sausages, designed to reduce the adverse effects of excessive sodium\nintake on human health. We also introduced meal-replacement chicken breast fillet products, available in original and barbecue flavors,\nwhich are ready-to-eat upon opening, high in protein, and formulated to provide a sense of satiety. In addition, we launched five-grain\nglutinous rice chicken products, which incorporate healthy whole grains that are nutritious and easy to digest, are shelf-stable, and\nare ready-to-eat upon opening, drawing on the tradition of Cantonese morning tea dim sum. We believe that our product development capabilities\nwill enable us to expand our product offerings, differentiate ourselves from competitors, and maintain sustainable growth and development.\n\n \n\n38\n\n \n\n \n\n**Extensive sales and distribution network.**\n\n \n\nOur sales and distribution network covers a wide\ngeographical area and encompasses all major distribution channels. As of the date of this annual report, we, through the operating subsidiaries,\noperate 7 self-owned stores in Guangdong Province. See “Item 4. Information on the Company — B. Business Overview —\nFacilities.” We also utilize a distribution model by selling our products to third-party distributors, including large supermarkets,\nretailers, and wholesalers. As of the date of this annual report, we, through the operating subsidiaries, have 87 distributors, enabling\nour meat products to reach consumers in 18 provinces across mainland China, including Guangdong, Zhejiang, Shanghai, and Hunan. We have\noptimized our distribution structure through careful and standardized selection. This network extends to numerous sales points, allowing\nus to sell our products in markets ranging from provinces to counties and even covering some remote areas in China. We believe that the\nscale of our sales and distribution network gives us a competitive advantage over our competitors. Additionally, we benefit from the high\nlevel of commitment from our distributors, many of whom have long-standing partnerships with us.\n\n \n\nTo strengthen our customer relationships, we maintain\na dedicated sales team that periodically visits our distributors to gather feedback on our products and offer assistance. We work closely\nwith our distributors to understand the needs of end consumers, devise marketing plans, and expand our product offerings. We believe that\nour stable business relationships with distributors also enable us to successfully launch new products tailored to specific tastes and\npreferences of end consumers.\n\n \n\nTo capitalize on the opportunities presented by\nChina’s rapidly growing e-commerce landscape and meet the demand for convenient shopping, we, through the operating subsidiaries,\nbegan operating our online store, the Wing Yip Mall, in October 2017 (shop.wingyip-food.com). We also collaborate with third-party e-commerce\noperators to expand our distribution channels to well-known e-commerce platforms, including Tmall, JD.com, TikTok (Chinese version), Kuaishou,\nPinduoduo, and 1688. Through these online platforms, the operating subsidiaries directly sell our products to end consumers and increase\nour market share in the Chinese online market. During fiscal years 2023, 2024 and 2025, our revenue derived from e-commerce platforms\nwas approximately US$1.78 million, approximately US$2.08 million and approximately US$2.10 million, respectively, accounting for approximately\n1.33%, approximately 1.44% and approximately 1.56% of our total revenue, respectively.\n\n \n\n**An Experienced and Capable Management Team.**\n\n \n\nWe have an experienced and capable management\nteam with a wealth of market knowledge and experience in the Chinese food and food processing industry. Our Executive Directors, Mr. Xiantao\nWang and Ms. Tingfeng Wang, each possesses over 10 years of experience in business management and the food processing industry, enabling\nus to better understand market trends, develop new products, and identify and capture new business opportunities. Our senior management\nteam also brings extensive operational and management experience in the production of processed foods in China, product development, marketing,\nand human resources management. We believe that their active involvement in the operating subsidiaries’ day-to-day operations allows\nthem to make timely decisions when needed. \n\n** **\n\n39\n\n \n\n \n\n**Our Strategies**\n\n \n\nWe intend to develop our business and strengthen\nbrand loyalty by implementing the following strategies:\n\n \n\n**Providing Customized Chinese-style Pre-cooked\nMeat Products for Various Businesses, Specifically Offline Dining Chain Brands and Fast-food Brands**\n\n** **\n\nWe are exploring new business opportunities and\naim to provide customized Chinese-style pre-cooked meat products for various businesses, including offline dining chains and fast-food\nenterprises. We expect that this approach will allow for tailored solutions that can meet the specific requirements and taste profiles\nof different brands, fostering stronger partnerships.\n\n \n\nChinese-style pre-cooked meats such as barbecued\npork (char siu) hold a significant place in Chinese cuisine. By providing these products to offline dining chains, we expect to tap into\nthe market’s desire for authentic and quality ingredients. This move is designed to cater to a growing consumer base seeking traditional\nflavors in a convenient, ready-to-use format. Fast-food brands, especially those specializing in items such as instant noodles or claypot\nrice dishes, require ready-to-use meat products for quick preparation. Offering sausages or cured meats specifically tailored for these\ntypes of dishes addresses the need for convenience, ultimately catering to the fast-paced nature of this market segment. The emphasis\non “customized” products signifies our flexibility and willingness to collaborate closely with our business clients. We believe\nthat the introduction of these specialized meat products will set us apart in the market, distinguishing us from our competitors. We expect\nthis strategy to position us as a provider of high-quality, authentic Chinese-style meats, potentially opening up opportunities for expansion\nand market penetration.\n\n \n\n**Increasing Investment in Developing Snack\nProducts**\n\n \n\nWe, through the operating subsidiaries, are committed\nto increasing investment in snack products in our future development, particularly focusing on the research and market promotion of snack\nproducts such as ready-to-eat sausages and claypot rice. We believe that with the growing demand from consumers for delicious, convenient,\nand diverse snack options, the snack food market holds tremendous growth potential. As of December 31, 2025, we had a total of 183 varieties\nof snack products, accounting for 34.72% of the overall product range. In the future, we will further increase the proportion of snack\nproducts in our portfolio.\n\n \n\nWe will also employ marketing strategies such\nas brand upgrades, innovative packaging designs, and virtual idol AI live streaming to better attract young consumers and meet their demands\nfor delicious snacks and brand experiences. Simultaneously, we will continuously expand our distribution channels, such as convenience\nstores and kiosks, to integrate our products more widely into the daily lives of young people.\n\n \n\nWe believe that the vast growth opportunities\nin the snack food market will provide strong support for our strategies in future development. Through continuous innovation, high-quality\nproducts, and market expansion, we aim to achieve greater success in the competitive market.\n\n \n\n**Continuing to Expand our Product Range of\nHealthy Foods**\n\n** **\n\nWe plan to dive deeper into the healthy food sector,\nwith a focus on a core product line centered around chicken, specifically catering to the nutritional needs of fitness enthusiasts by\noffering high-protein, low-fat options. Additionally, we will actively innovate in the plant-based meat product category to meet the growing\ndemand for sustainable, healthy, and plant-based foods among consumers.\n\n \n\nWe believe that the potential in the healthy food\nmarket is immense. As people increasingly prioritize a healthy lifestyle and the demand for quality protein and plant-based diets rises,\nour strategies will explore vast opportunities in the market. We will be driven by innovation, combining premium ingredients with advanced\nproduction techniques to create delicious products that fulfill nutritional requirements of customers. In the field of health foods, our\ngoal is to become the preferred brand trusted by consumers. We will continuously strive for quality, innovation, and health, seizing market\nopportunities through the expansion of our product range and sales channels.\n\n \n\n40\n\n \n\n \n\n**Developing a New Line of Pre-Made Meal Products**\n\n \n\nWe understand that the fast-paced lifestyles of\nyoung people have led to an increasing demand for convenient foods. We plan to actively develop and launch a new frozen sausage and pre-made\nmeal product line, closely aligned with the consumption habits of modern young individuals. Our aim is to provide them with convenient,\ndelicious, and nutritionally balanced food choices. In mid-July 2024, we conducted small-scale trial production of two new products and\nobtained positive feedback from the market. We established a formal production line at the end of 2024 and commenced mass production for\nthe new series in the first quarter of 2025. In mid-2025, we launched a series of pre-made meal chicken products, including spicy and\npepper chicken, salt-baked chicken, and soy sauce chicken.\n\n \n\nTo develop and introduce the new line of pre-made\nmeal products to the market, we intend to strengthen our research and development capabilities by (i) hiring more R&D engineers, (ii)\nupgrading our existing R&D production equipment, and (iii) enhancing collaboration with external research institutions for new product\ndevelopment and market research on consumer preferences. We believe that our robust product development capabilities, combined with our\nwell-known brand name and extensive sales and distribution network, provide a strong foundation for us to develop and launch new products\ninto the market. Going forward, we plan to continue researching and developing new pre-made meal product series to further expand our\nproduct offerings and meet the evolving demands of consumers.\n\n \n\n**Cured Meat Claypot Rice Supply Chain Solutions**\n\n** **\n\nWe had planned to establish a series of chain\nrestaurants specializing in cured meat claypot rice to meet the modern consumers’ pursuit of delicious, convenient, and innovative\ndining. However, due to the adverse economic impact on the catering industry, we postponed the launch of our cured meat claypot rice restaurant\nchain in 2025. In lieu of directly operating chain restaurants, we have pivoted our strategy toward providing supply chain solutions to\nclaypot rice restaurant customers, enabling them to enhance operational efficiency and reduce costs. By leveraging our established supply\nchain infrastructure and expertise in cured meat products, we are able to support restaurant operators with quality raw materials, standardized\nproduction techniques, and strict food safety processes.\n\n \n\nWe launched our first cured meat claypot rice\nrestaurant in July 2024. In 2025, in response to challenging conditions in the catering industry, we refocused our efforts on supplying\ncured meat products, pre-made meal products, and supply chain solutions to third-party claypot rice restaurant operators. We believe that\nthis approach allows us to preserve and promote the culinary heritage of traditional cured meat claypot rice while generating stable business\nopportunities through our supply chain capabilities. Going forward, we will continue to evaluate market conditions and explore opportunities\nto further expand our presence in the claypot rice segment, whether through direct restaurant operations or supply chain partnerships.\nAdditionally, we aim to strengthen our engagement with younger consumers through social media channels. We also intend to introduce a\nfranchise model, in addition to self-owned restaurant operations, to accelerate the expansion of our brand’s market presence, and\nwe will provide comprehensive training, operational support, and management guidance to franchisees to facilitate the successful operation\nof their businesses.\n\n \n\n**Strengthening Product Quality and Food Safety\nControls**\n\n \n\nAs of the date of this annual report, we have\nengaged a third-party quality testing center to conduct regular quality inspections and certifications of our products in accordance with\napplicable laws and regulations. We established our own quality testing center in April 2024. Our quality testing center is currently\nused for testing our own products. Due to changes in applicable regulations in 2025, the timeline for obtaining all required governmental\npermits has been delayed, and there can be no assurance that we will be able to obtain all such permits. Subject to the receipt of all\nrequired governmental permits, we intend to open the quality testing center to other market participants for quality testing. By establishing\nour own quality testing center, we believe that the data collected related to product quality issues can be further analyzed, enabling\nus to better understand and detect any potential risks and quality issues at an early stage. This, in turn, will help us improve our product\nquality and strengthen our food safety controls. Additionally, we believe that after obtaining the relevant certifications, offering certification\nservices to other third-party suppliers can expand our sources of income.\n\n** **\n\n**Our Products**\n\n** **\n\n**Overview**\n\n \n\nWe, through our operating subsidiaries, offer\na wide range of meat products. The main categories of our products are i) cured meat products, including cured pork sausages, cured pork\nmeat and other cured meat products, such as cured chicken, cured duck and cured fish; ii) snack products, including ready-to-eat sausages,\njerky, duck necks, duck feet and claypot rice; and iii) frozen meat products, including frozen sausages, frozen beef patties and frozen\nchicken breast fillets.\n\n \n\n41\n\n \n\n \n\nThe following tables present our revenue for the\nfiscal years ended December 31, 2023, 2024 and 2025.\n\n \n\n  \n   \nRevenue \n\n  \n   \nFiscal Year Ended\n\nDecember 31, \n\n  \n2025  \n2024  \n2023 \n\nCured Meat Products \n$   \n$   \n$  \n\n– Cured Pork Sausages \n 53,856,546  \n 56,415,055  \n 48,589,050 \n\n– Cured Pork Meat \n 14,521,670  \n 16,558,601  \n 21,972,199 \n\n– Other Cured Meat Products \n 11,601,643  \n 13,042,373  \n 12,714,581 \n\nSnack Products \n 47,499,585  \n 50,541,248  \n 43,635,556 \n\nFrozen Meat Products \n 7,713,185  \n 8,071,778  \n 7,156,931 \n\nTotal \n$135,192,629  \n$144,629,055  \n$134,068,317 \n\n** **\n\n**Cured Meat Products**\n\n \n\nMost of our revenue was generated from sales of\ncured meat products for the fiscal years ended December 31, 2023, 2024 and 2025. Our cured meat products include i) cured pork\nsausages, ii) cured pork meat and iii) other cured meat products, such as cured chicken, cured duck and cured fish. As of the date of\nthis annual report, we provide over 279 cured meat products.\n\n \n\ncured pork sausage\n \n\ncured pork\nmeat\n\ncured duck\n \n\ncured fish\n\ncured pork meat with salted egg yolk\n \n\ncured meat\ngift box\n\n \n\nFor the fiscal years ended December 31,\n2023, 2024 and 2025, our revenue generated from sales of cured meat products was US$83,275,830, US$86,016,029 and US$79,979,859, respectively,\naccounting for 62.11%, 59.48% and 59.16% of our total revenue. Generally, the production cycle and lead time for our cured meat products\nfrom the date of customer order placement to the date of finished product shipment is approximately 48 to 72 hours. The shelf life\nof our cured meat products ranges from 90 to 270 days.\n\n** **\n\n42\n\n \n\n** **\n\n**Snack Products**\n\n \n\nDrawing on our experience in producing cured meat\nproducts, we, through the operating subsidiaries, have continuously expanded our product portfolio by developing various types of snack\nproducts. As of the date of this annual report, we offer more than 187 varieties of snacks, such as ready-to-eat sausages, jerky, duck\nnecks, duck feet, and claypot rice.\n\n \n\nReady-to-eat sausages\n \n\njerky\n\ninstant claypot rice\n \n\ngrilled meat slices for breakfast\n\nduck necks\n \n\nduck feet\n\n \n\nFor the fiscal years ended December 31,\n2023, 2024 and 2025, our revenue generated from sales of snack products was US$43,635,556, US$50,541,248 and US$47,499,585, respectively,\naccounting for 32.55%, 34.95% and 35.13% of our total revenue. Generally, the lead time for production of our snack products from the\ndate of customer order placement to the date of finished product shipment is approximately 72 hours. Our snack products are typically\nallowed to sit in a dry environment for two days after production to ensure there is no air leakage before packaging for storage\nand transportation. The shelf life of our snack products ranges from 180 to 270 days.\n\n** **\n\n43\n\n \n\n** **\n\n**Frozen Meat Products**\n\n \n\nTo further diversify our product range, we, through\nthe operating subsidiaries, began selling frozen meat products in 2019. Our frozen meat products primarily include frozen sausages, beef\npatties, and chicken breast fillets. As of the date of this annual report, we offer more than 70 varieties of frozen meat products.\n\n \n\nsmoked chicken breast fillets\n \n\nfrozen cheddar cheese sausages\n\nfrozen pork sausages\n \n\nfrozen cuttlefish style sausages\n\n \n\nFor the fiscal years ended December 31,\n2023, 2024 and 2025, our revenue generated from sales of frozen meat products was US$7,156,931, US$8,071,778 and US$7,713,185, respectively,\naccounting for 5.34%, 5.57% and 5.71% of our total revenue.\n\n \n\nGenerally, the lead time for production of our\nfrozen meat products from the date of customer order placement to the date of finished product shipment is approximately 72 hours.\nThe shelf life of our frozen meat products is around 1 year.\n\n** **\n\n44\n\n \n\n** **\n\n**Production**\n\n** **\n\n**Production Process**\n\n \n\nThe production process of our products is illustrated\nin the following diagram.\n\n \n\n \n\n \n●\nraw meat and thawing: our raw meat and other raw materials are purchased and stored according to our procurement guidelines. After the production order is confirmed, frozen raw meat will be thawed for further processing. Depending on the thickness of the meat, the thawing process takes approximately six to eight hours.\n\n \n\n45\n\n \n\n \n\n \n●\ncutting, grinding, and mixing: the thawed raw meat is then cut and ground using a meat grinder and mixed with other complementary ingredients (such as salt, sugar, and other seasonings) for approximately 10 to 15 minutes.\n\n \n\n \n●\nfilling and baking: the mixed meat blend is filled into molds to achieve the desired final product shape. The addition of ingredients strictly adheres to the product recipe’s requirements, and additives are used according to relevant standards. The filled meat blend is then baked using an oven. The baking time and temperature vary depending on the type of product being produced. Baking times for our products range from 30 minutes to 72 hours, and baking temperatures range from 48 degrees Celsius to 105 degrees Celsius. Certain products, such as sausages, undergo two rounds of baking to ensure thorough and even cooking.\n\n \n\n \n●\ntrimming, cooling, and packaging: after the meat products have finished baking, some meat processed products are trimmed into their final shapes. Subsequently, the meat processed products are cooled for 1 to 48 hours before being packaged.\n\n \n\n \n●\nmetal detection and sterilization: we conduct metal detection on packaged products to ensure the safety and integrity of our products by identifying metal contaminants. Low-temperature meat processed products are subsequently sterilized at a core temperature of up to 80 to 100 degrees Celsius for 10 to 20 minutes, while high-temperature meat processed products are sterilized at a core temperature of 105 to 121 degrees Celsius for 15 to 30 minutes. Lower sterilization temperatures are used for low-temperature meat processed products to retain nutritional content, tenderness and flavor. The higher sterilization temperatures for high-temperature meat processed products effectively eliminate more microorganisms, extending shelf life and enabling room temperature storage.\n\n \n\n \n●\nfreezing: our frozen meat products are subject to a low-temperature freezing process at minus 18 degrees Celsius for 20 minutes.\n\n \n\n \n●\npackaging, storage, transportation, and distribution: after sterilization, our products are left idle for two days to detect any issues, such as swelling or leakage. Finally, our meat products are packaged and delivered to warehouses for distribution and sale.\n\n** **\n\n**Production Facilities**\n\n \n\nThe operating subsidiaries produce our products\nthrough a self-owned food processing plant with a total floor area of approximately 19,339 square meters, located in Zhongshan City, Guangdong\nProvince. See “Item 4. Information on the Company — B. Business Overview — Facilities”. As of the\ndate of this annual report, the operating subsidiaries have 14 production lines for processing cured meat products, 8 production lines\nfor processing snack products, and 4 production lines for processing frozen meat products. The estimated total annual production capacity\nis 20,000 tons of cured meat products, 10,000 tons of snack products, and 5,000 tons of frozen meat products.\n\n \n\nIn fiscal years 2023, 2024 and 2025, the\nutilization rates for processing cured meat products (our main products) were approximately 78%, 83% and 87%, respectively.\n\n \n\nKey equipment used in our meat processing includes\novens, natural gas boilers, vacuum emulsifying machine, vacuum filling line, microwave thawing line, vacuum cutting mixer, vacuum mixing\nmachine, automatic tying machine, cleaning and drying line, automatic weighing line. The operating subsidiaries procure most of the machinery\nrequired for our production lines from manufacturers in China.\n\n \n\nTo expand our production capacity, we initiated\nplans to construct additional baking and packaging production lines starting in 2023. The estimated total floor area for this expansion\nis approximately 5,000 square meters. The expansion took place on the vacant area adjacent to our existing food processing plant located\nin Zhongshan City, Guangdong Province. The construction was completed in 2024. In 2025, we began utilizing a portion of the expanded area\nfor our packaging production lines and e-commerce warehouse operations. See “Item 4. Information on the Company — B. Business\nOverview — Facilities.”\n\n** **\n\n46\n\n \n\n** **\n\n**Research and Development**\n\n \n\nThrough years of operation, we have accumulated\nexperience in processing high-quality meat products and developed a diverse product portfolio. Our product development strategy includes\nlaunching new products and improving the ingredients and packaging of existing products. We strive to expand our product offerings and\nenhance product quality to meet evolving consumer preferences.\n\n \n\nIn the fiscal years ended December 31,\n2023, 2024 and 2025, we introduced 51, 81 and 94 new products, respectively. These included ready-to-eat western-style sausages, health\nfoods such as chicken breast fillets, and frozen meat products. As we aim to target younger generations, we developed and introduced 21,\n35 and 39 new snack products in fiscal years 2023, 2024 and 2025, respectively. These included items like “hand-torn beef\njerky,” “marinated beef,” and “grilled sausages.”\n\n \n\nAs of the date of this annual report, our internal\nR&D department consists of 51 members, primarily responsible for developing new products and enhancing the formulations of existing\nones. Our R&D engineers possess extensive experience in the Chinese food industry, and their efforts have resulted in 19 patents related\nto various processing technologies.\n\n \n\nOur new product development process usually begins\nwith market research and feasibility studies of market trends and consumer preferences. We conduct internal sample testing and formulation\nmodifications for new products. During new product development, we perform market testing by introducing a limited quantity of new products\nthrough our self-operated stores or online channels to gather customer feedback. Once the product formulation is finalized, we hire third-party\ntesting centers to conduct quality control tests and certifications before commencing mass production and sales.\n\n \n\nOur R&D department actively collaborates with\nour sales and marketing department, and the production departments to gather market intelligence for different segments, enhancing our\nunderstanding and response to changing consumer tastes and preferences. We focus on product taste, appearance, ingredients, and packaging\nwhile keeping our production costs at acceptable levels.\n\n \n\nIn addition to our in-house R&D engineers,\nwe also collaborate with 6 external R&D consultants who have rich experience in food processing technology, flavors, spices, and\nfood additives to develop new products. Furthermore, to stay updated on market developments and trends, we have signed strategic research\ncooperation agreements with 4 strategic partners, including research institutions and flavor suppliers, to develop new products. These\npartners provide technical research support on a project basis. We retain full intellectual property rights to any creations or inventions\ndeveloped resulting from such agreements. In return, we offer job and internship opportunities for students from these research institutions.\nIn addition, we, through our operating subsidiaries, have also retained six external consultants to provide consulting services for product\ndevelopment and product quality.\n\n \n\nWe plan to continue developing and\nintroducing new products to cater to the increasing demand for healthier lifestyles among the new generation. In 2023, we developed\nplant-based meat alternatives made from plant proteins, and launched frozen plant-based meat patty products with various flavors,\nincluding beef flavor, chicken flavor and pork flavor. We developed and launched a series of pre-made meal chicken products in\nmid-2025, and we plan to continue researching and developing new pre-made meal product series to further expand our product\nofferings and meet the evolving demands of consumers. See “—Our Strategies—Developing a New Line of Pre-Made Meal\nProducts.” We believe our product development capabilities enable us to expand our product supply, stand out from competitors,\nand drive our sustainable growth and development.\n\n \n\nIn fiscal years 2023, 2024 and 2025, our research and development costs were US$4,250,451, US$4,973,452, and US$4,127,391, respectively,\naccounting for 15.25%, 17.13%, and 14.26% of our total operating costs, respectively.\n\n** **\n\n47\n\n \n\n** **\n\n**Distribution**\n\n \n\nWe, through the operating subsidiaries, have established\nan extensive sales and distribution network. We primarily sell our products through distributors, our self-operated stores, and online\nchannels, including our online store, the Wing Yip Mall (shop.wingyip-food.com), and other third-party e-commerce platforms. As of the\ndate of this annual report, we mainly distribute and sell our products through i) 87 distributors across 18 provinces in mainland China,\nincluding major retail outlets and supermarkets, ii) 7 e-commerce platforms and iii) 7 self-operated stores.\n\n** **\n\n**Distributors**\n\n \n\nOur primary sales channel involves selling our\nproducts to distributors whose designated sales regions are located within mainland China. We believe that by selling our products through\ndistributors, we can leverage their local market knowledge and resources to further promote the sales of our meat products, deepen our\nmarket penetration, and expand our geographical coverage.\n\n \n\nAs of the date of this annual report, we have\nestablished partnerships with 87 distributors, all of which are independent third parties located in China.\n\n* *\n\n*Distribution Agreements*\n\n \n\nWe, through the operating subsidiaries, enter\ninto non-exclusive distribution agreements with our distributors. The common key terms of our distribution agreements include the following:\n\n \n\n**Term**\n \n**Typical one year**\n\nTerritory\n \nDistributors are typically prohibited from selling our products outside of the specified distribution territory outlined in the distribution agreement.\n\n \n \n \n\nMinimum sales target and incentive plan\n \nMinimum sales targets are established based on the distributor’s sales performance in the previous period. We incentivize distributors to achieve progressive sales targets through incentive programs, often in the form of rebates calculated based on sales amounts exceeding the sales targets.\n\n \n \n \n\nPricing\n \nWe sell our products to distributors at discounted price and require them to adhere to the distributor price when reselling our products to sub-distributors.\n\n \n \n \n\nDelivery\n \n\nWe are responsible to deliver our products to\nthe warehouses of the distributors, or other locations designated by the distributors. Distributors are responsible for arranging logistics\nand transportation to various sales point.\n\n \n\nUpon product delivery and acceptance, ownership\nof the products and all associated risks and rewards are transferred to distributors.\n\n \n \n \n\nReturn policy\n \nDistributors are not allowed to return our products unless they are defective.\n\n \n \n \n\nPayment and credit terms\n \nThe credit terms are usually one to three months after products delivery.\n\n \n \n \n\nIntellectual property rights\n \nNo transfer of intellectual property rights.\n\n \n \n \n\nTermination\n \n\nThe distribution agreement will be automatically\nrenewed for another three months.\n\n \n\nWe can terminate the distribution agreement based\non provisions in the distribution agreement in the event of a serious breach by distributors.\n\n \n\n48\n\n \n\n \n\nThe distribution agreement does not contain any\nrestrictions on distributors from selling our products to other sub-distributors, nor does it include clauses regarding product liability.\nOnce the products are sold to distributors, and all ownership and risk associated with those products have been transferred to distributors,\nwe will recognize the sales of our products. After distributors acknowledge receipt of these products, they have no recourse against us\nif they are unable to sell our products subsequently.\n\n* *\n\n*Management of Distributors*\n\n \n\nBefore selecting each distributor, we, through\nthe operating subsidiaries, conduct a review of potential distributors’ experience, creditworthiness, market reputation, business\ncapabilities, and qualifications. To promote our products, ensure compliance with the terms of the distribution agreement, and manage\nthe operations of distributors, our sales personnel (i) periodically communicate with distributors to gather their feedback; (ii) observe\nthe sales performance of our products to understand market conditions; and (iii) conduct on-site checks of the corresponding selling\nprices of our products at randomly selected distributor locations, to ensure compliance with our pricing policies.\n\n \n\nOur distributors are only allowed to sell our\nproducts through specific sales channels within the regions specified in the distribution agreement. To minimize the risk of cannibalization,\nthe operating subsidiaries typically take the following measures: (i) during the distributor screening process, the operating subsidiaries\nconsider their respective geographical ranges to avoid potential competition among distributors in the same area; (ii) our distribution\nagreements specify designated distribution areas; and (iii) the operating subsidiaries communicate with distributors and conduct\non-site inspections of sales points to monitor various aspects of their sales activities and track any potential cannibalization or competition\namong distributors. As of the date of this annual report, we did not discover any significant cannibalization or competition among distributors\nin the same sales area.\n\n** **\n\n**Self-operated Stores**\n\n \n\nWe, through our operating subsidiaries, operate\nself-operated stores under the “Wing Yip” (“荣业”) brand. We believe that the self-operated model\nallows the operating subsidiaries to effectively enhance hygiene and product safety, execute operational and financial plans, gather valuable\ncustomer data and feedback, and quickly adapt to evolving market trends and consumer preferences. In fiscal years 2023, 2024 and\n2025, we had 7, 7 and 7 self-operated stores, respectively.\n\n \n\nAll of our self-operated stores are located in\nGuangdong Province, China, with an average floor area of 108.73 square meters for each store, leased from independent third parties. Typically,\nwe sign lease agreements for our stores ranging from two to four years. See “— Facilities.” In our self-operated\nstores, we sell cured meat products, snack products, and frozen meat products to both direct retail customers and some wholesale customers.\n\n \n\nIn fiscal years 2023, 2024 and 2025, our\nrevenue derived from sales through self-operated stores amounted to approximately US$20.94 million, US$21.24 million and US$20.43\nmillion, respectively, accounting for approximately 15.62%, 14.69% and 15.11% of our total revenue.\n\n** **\n\n49\n\n \n\n** **\n\n**E-commerce Platforms**\n\n \n\nTo capitalize on the opportunities presented by\nthe rapid growth of e-commerce in China and meet consumer demands for more convenient shopping, we launched our online store, the Wing\nYip Mall (shop.wingyip-food.com), in 2018. The primary target customers of our online store, the Wing Yip Mall (shop.wingyip-food.com),\nare wholesalers and group buyers who purchase our products at discounted prices in bulk.\n\n \n\nWe, through the operating subsidiaries, have also\nestablished presence on well-known third-party online marketplaces in China, including Tmall, JD.com, Tik Tok (Chinese version), Kuaishou,\nPinduoduo, and 1688. We have established stores across six different online platforms as of the date of this annual report. Through these\nonline platforms, we sell our products directly to end consumers and have increased our market share in the online market in China.\n\n \n\nIn fiscal years 2023, 2024 and 2025, our\nrevenue derived from sales through e-commerce platforms amounted to approximately US$1.78 million, US$2.08 million and US$2.10 million,\nrespectively, accounting for approximately 1.33%, 1.45% and 1.56% of our total revenue.\n\n** **\n\n**Pricing**\n\n \n\nOur products are generally not subject to any\nprice controls or regulatory restrictions imposed by Chinese government authorities. Typically, we determine product prices using a cost-plus\nmodel, considering factors such as raw material costs, production costs, marketing expenses, market conditions, and our adopted business\nstrategies. For newly developed products, we often use target profit pricing, taking into account factors such as production quantities,\nproduction costs, and our target profit margins. We adopt different pricing strategies for different sales channels.\n\n \n\nIn our online store, the Wing Yip Mall (shop.wingyip-food.com),\nwe, through the operating subsidiaries, usually sell our products at relatively lower prices, because we accept bulk orders and provide\ndiscounts to these customers. We, through the operating subsidiaries, also engage in marketing activities through online channels, offering\nproducts to customers at discounted prices.\n\n \n\nIn the event of significant fluctuations in raw\nmaterial costs, we may adjust product prices. We communicate such adjustments to our distributors in accordance with relevant distribution\nagreements.\n\n \n\nAdditionally, we, through the operating subsidiaries,\nhave incentive programs that provide rebates to distributors, based on sales exceeding set targets, aiming to motivate distributors to\nachieve progressive sales objectives. The rebate amounts vary depending on the sales targets and performance of the respective distributors.\n\n** **\n\n**Customers**\n\n \n\nCustomers of our operating subsidiaries include\nthird-party distributors, which encompass both retailers and wholesalers, as well as customers who purchase from i) our self-operated\nstores, ii) our online store, the Wing Yip Mall (shop.wingyip-food.com), and iii) other third-party e-commerce platforms. All of the sales\nare within China.\n\n \n\nWe, through the operating subsidiaries, typically\ndo not enter into long-term agreements with our major customers. Instead, we have annual distribution agreements with our distributors.\n\n \n\n50\n\n \n\n \n\nBelow is a list of the top three customers and\nthe percentages each of them individually accounted for our annual total revenue, during the fiscal years ended December 31,\n2025, 2024, and 2023.\n\n \n\nFor fiscal year 2025\n\nCustomer Name \nRevenue  \n%\nof Total\nRevenue \n\nCustomer A \n$1,644,933.84  \n 1.22%\n\nCustomer B \n$1,688,343.70  \n 1.25%\n\nCustomer C \n$1,583,516.03  \n 1.17%\n\n \n\n \n\nFor fiscal year 2024\n\nCustomer Name \nRevenue  \n%\nof Total\nRevenue \n\nCustomer A \n$1,785,783.68  \n 1.23%\n\nCustomer B \n$1,826,928.14  \n 1.26%\n\nCustomer C \n$1,756,561.30  \n 1.21%\n\n \n\nFor fiscal year 2023\n\nCustomer Name \nRevenue  \n%\n of Total\nRevenue \n\nCustomer A \n$2,790,532  \n 2.08%\n\nCustomer B \n$2,661,042  \n 1.98%\n\nCustomer C \n$2,168,516  \n 1.62%\n\n \n\n**Suppliers**\n\n \n\nOur operating subsidiaries primarily rely on suppliers\nto provide raw materials, including fresh meat, ingredients, and packaging materials. All of the raw materials and packaging materials\nare sourced from suppliers in China. Our operating subsidiaries maintain a list of qualified suppliers for each procurement category.\nOur operating subsidiaries have also implemented an internal quality assessment system for suppliers.\n\n \n\nWe, through the operating subsidiaries, generally\ndo not enter into long-term agreements with our major suppliers, but instead renew agreements on an annual basis. Since our operating\nsubsidiaries maintain a variety of suppliers on the qualified list for different categories of supplies and can easily procure commodities\nfrom alternative suppliers at similar prices in the market, they are not reliant on any single source for procuring goods. In the event\nthat operating subsidiaries’ relationship with any supplier terminates, we believe that they will be able to source necessary supplies\nfrom alternative suppliers at similar prices.\n\n \n\nDuring fiscal years 2023, 2024 and 2025,\nour operating subsidiaries did not experience any significant disruptions to their operations due to raw material shortages, nor did we\nencounter any difficulties in procuring raw materials.\n\n \n\n51\n\n \n\n \n\nBelow is a list of the top three suppliers and\nthe percentages each of them individually accounted for our annual total purchase, during the fiscal years ended December 31,\n2025, 2024 and 2023.\n\n \n\nFor fiscal year 2025\n\nSupplier Name \nAmount  \n%\nof Total\nPurchase \n\nSupplier A \n$11,822,222  \n 13.18%\n\nSupplier E \n$9,477,661  \n 10.56%\n\nSupplier B \n$9,465,781  \n 10.55%\n\n \n\n \n\nFor fiscal year 2024\n\nSupplier Name \nAmount  \n%\nof Total Purchase \n\nSupplier A \n$15,124,955  \n 16.04%\n\nSupplier B \n$14,065,630  \n 14.92%\n\nSupplier E \n$10,709,830  \n 11.36%\n\n \n\nFor fiscal year 2023\n\nSupplier Name \nAmount  \n%\nof Total\nPurchase \n\nSupplier A \n$11,434,336  \n 14.36%\n\nSupplier B \n$10,032,075  \n 12.06%\n\nSupplier C \n$6,527,122  \n 8.20%\n\n \n\n**Quality Control and Food Safety**\n\n** **\n\n**Quality Control Management**\n\n \n\nQuality control and product safety are crucial\nto our reputation and business. As a result, we, through the operating subsidiaries, implement strict quality control and product safety\nstandards and measures throughout the entire processing process, covering the raw material supply chain, product processing, packaging,\nstorage, and logistics, to ensure the safety and quality of our products. Our quality control team is responsible for developing, managing,\nand overseeing the implementation of our quality control system. As of the date of this annual report, our quality control team consists\nof 7 members, all of whom are qualified in internal product quality testing.\n\n \n\nOur quality control team reports to the general\nmanager of the operating subsidiaries and is responsible for, among other things:\n\n \n\n \n●\nestablishing and implementing quality standards for quality assurance;\n\n \n\n \n●\ndeveloping product safety and quality assurance policies and management systems and ensuring their effective implementation;\n\n \n\n \n●\ntaking all necessary measures, including training, education, and internal communication, to ensure compliance with all relevant laws, regulations, and standards;\n\n \n\n \n●\nregularly analyzing, evaluating, preventing, and managing potential product safety risks; and\n\n \n\n \n●\noverseeing the implementation of quality control measures.\n\n \n\n52\n\n \n\n \n\nThe operating subsidiaries require employees to\nstrictly adhere to our product safety and quality control measures and procedures, such as maintaining quality management records and\npromptly reporting to senior management.\n\n \n\nAs of the date of this annual report, the operating\nsubsidiaries have not encountered any significant complaints related to product quality.\n\n \n\nWe have obtained multiple international quality\nmanagement certifications for our processing facilities, including:\n\n \n\n \n●\nISO 22000:2018 Food Safety Management System Certificate: Since 2015, we have held the ISO 22000 certificate, which outlines the requirements for a food safety management system. It mandates that organizations demonstrate their ability to control food safety hazards throughout the food supply chain to ensure the safety of food when consumed by people.\n\n \n\n \n●\nHazard Analysis and Critical Control Point (HACCP) System Certificate: Since 2017, our processing facilities have obtained HACCP certification. HACCP stands for Hazard Analysis and Critical Control Points, and it requires organizations to address food safety issues through biological, chemical, and physical hazard analysis and control, ranging from the production, procurement, and handling of raw materials to the manufacturing, distribution, and consumption of finished products.\n\n \n\nWe applied for these certifications by submitting\napplications to independent certification bodies and successfully completing their document reviews and on-site inspections. These certifications\nundergo regular independent audits by relevant certification bodies to ensure compliance. These certifications ensure that we have implemented\nstringent measures for food safety and quality, safeguarding the safety and consistency of our products. We will continue to maintain\ncompliance with these international quality standards through regular audits.\n\n** **\n\n**Food Safety Management**\n\n \n\nWe, through the operating subsidiaries, have established\nand continuously implemented a food safety management system that covers all stages of our operations. Since 2016, we, through the operating\nsubsidiaries, have formed a Food Safety Task Force, consisting of members from various departments, such as production, quality control,\nresearch and development, sales and marketing, and procurement. This task force is responsible for developing, supervising, and implementing\nthe food safety management system.\n\n* *\n\n*Raw Materials*\n\n \n\nThe raw materials the operating subsidiaries use\nin our production are fresh meat, primarily including pork, followed by poultry, fish, and beef, as well as seasonings and packaging materials.\nThe operating subsidiaries have implemented strict quality control measures for the procurement of these raw materials, primarily including\nsupplier selection, quality testing and on-site inspection.\n\n* *\n\n*Production*\n\n \n\nThe operating subsidiaries implement monitoring\ntools and procedures for key production processes. Our production team conducts regular inspections of various production processes to\nensure they meet our required standards. If any anomalies are detected, the operating subsidiaries notify the management personnel of\nthe production team and quality control team, who take appropriate actions.\n\n \n\n53\n\n \n\n \n\nOur quality control team conducts inspections\nand sampling tests during different production processes. The operating subsidiaries perform sampling tests on finished meat products.\n\n* *\n\n*Storage and Transportation*\n\n \n\nTo maintain the high quality and food safety of\nour products, the operating subsidiaries produce our products based on customer orders received. Therefore, the operating subsidiaries\ndo not maintain significant finished product inventory. The operating subsidiaries maintain storage conditions based on the nature of\nthe raw materials and implement strict hygiene standards to prevent contamination and cross-contamination. The operating subsidiaries\ntightly control the inflow and outflow of the warehouse and unauthorized access is not permitted.\n\n \n\nGiven the perishable nature of our products, especially\nfrozen meat products, the operating subsidiaries implement strict control over the transportation processes of our logistics providers.\nThe operating subsidiaries require logistics providers to store our frozen meat products within specific temperature ranges. The operating\nsubsidiaries distribute automatic temperature trackers to each logistics provider for record-keeping and real-time monitoring. The operating\nsubsidiaries also conduct annual inspections of logistics providers to assess their performance.\n\n** **\n\n**Sales and Marketing**\n\n \n\nOur sales and marketing department is responsible\nfor overseeing and managing the sales and marketing activities of the operating subsidiaries, as well as formulating marketing strategies\nto enhance product visibility, marketability, and brand recognition.\n\n \n\nOur sales and marketing efforts primarily included\nsales and promotional activities conducted at individual sales points and large exhibitions, outdoor advertising campaigns, and advertising\nactivities on television, social media, and third-party e-commerce platforms. To cater to the purchasing patterns of the younger generation\nand expand our customer base, we have strategically increased our marketing efforts on emerging online social media platforms.\n\n \n\nWe, through the operating subsidiaries, typically\nlaunch advertising campaigns in conjunction with the release of new products. In the future, we plan to intensify the promotion of our\nown brand through various marketing strategies to reinforce our market position. This includes leveraging “live streaming sales”\nand “fan economy” on various online social media platforms to cater to the buying habits of young consumers and expand our\nproduct coverage without geographical restrictions.\n\n** **\n\n**Licenses, Awards and Certificates**\n\n \n\nTo lawfully operate our business in China, our\noperating subsidiaries have acquired the following permits and licenses as of the date of this annual report:\n\n \n\n**Subsidiary**\n \n**License/Permit**\n \n**Valid Through**\n\nWing Yip GD\n \nReceipt of Pollution Discharge Registration for Fixed Pollution Sources (固定污染源排污登记回执)\n \nApril 23, 2030\n\nWing Yip GD\n \nFood Production License\n \nJanuary 9, 2027\n\nWing Yip GD\n \nRegistration for Operators Solely Selling Pre-Packaged Food\n \nLong-term\n\nWing Yip GD (Guangzhou Dongwang Store)\n \nRegistration for Operators Solely Selling Pre-Packaged Food\n \nLong-term\n\nWing Yip GD (Xinguangming Shichang Store)\n \nFood and Drug Distribution License\n \nSeptember 24, 2029\n\nWing Yip GD (Xiaolan Store)\n \nRegistration for Operators Solely Selling Pre-Packaged Food\n \nLong-term\n\nWing Yip GD (Shenzhen Haijixing Store)\n \nRegistration for Operators Solely Selling Pre-Packaged Food\n \nLong-term\n\nWing Yip GD (Guzhen Store)\n \nRegistration for Operators Solely Selling Pre-Packaged Food\n \nLong-term\n\nWing Yip GD (Huangpu Store)\n \nRegistration for Operators Solely Selling Pre-Packaged Food\n \nLong-term\n\nWing Yip GD (Kuchong Store)\n \nRegistration for Operators Solely Selling Pre-Packaged Food\n \nLong-term\n\n \n\n54\n\n \n\n \n\nAs an endorsement of the quality of the implementation\nof our processing processes, we have obtained the following certifications as of the date of this annual report:\n\n \n\n**Award**\n \n**Organization**\n \n**Date of\nConferment**\n\nThe most popular cured meat brand in the Guangdong-Hong Kong-Macao region\n\n(粤港澳最受消费者喜爱腊味品牌)\n \nChina High-end Restaurant ? Hotel Asian Leaders Summit, Guangdong Culinary Association, International 5-S Association, The Association for Hong Kong Catering Services Management LTD., The United Association of Food and Beverage Merchants of Macao, and “Guangdong Cuisine” Magazine\n\n(中国高端餐饮酒店亚洲领袖峰会组委会，广东烹饪协会，国际五常法协会，香港餐务管理协会，澳门饮食业联合商会, 广东烹饪杂志社)\n \nJanuary 2015\n\nLeading Agricultural Enterprise in Zhongshan City\n\n(中山市农业龙头企业)\n \nPeople’s Government of Zhongshan City\n\n(中山市人民政府)\n \nMarch 2017\n\nGuangdong Time-Honored Brand\n\n(广东老字号)\n \nGuangdong Time-Honored Brand Working Committee\n\n(广东老字号工作委员会)\n \nJuly 2017\n\nGuangdong Key Leading Enterprise in Agriculture\n\n(广东省重点农业龙头企业)\n \nGuangdong Department of Agriculture and Rural Affairs\n\n(广东省农业农村厅)\n \nDecember 2019\n\nGuangdong Province Engineering Technology Research Center for Chinese-style Cured Meat Products\n\n(广东省中式腌制肉制品工程技术研究中心)\n \nDepartment of Science and Technology of Guangdong Province\n\n(广东省科学技术厅)\n \nMarch 2020\n\nNational Key Leading Enterprise in Agricultural Industrialization\n\n(农业产业化国家重点龙头企业)\n \nMinistry of Agriculture and Rural Affairs of the People’s Republic of China, National Development and Reform Commission, Ministry of Commerce PRC, The People’s Bank of China, State Taxation Administration, China Securities Regulatory Commission, All-China Federation of Supply and Marketing Cooperatives.\n\n(农业农村部，国家发展与改革委员会，商务部，中国人民银行，国家税务总局，中国证券监督管理委员会，中华全国供销合作总社)\n \nDecember 2021\n\nHigh and New Technology Enterprise Certificate\n\n(高新技术企业证书)\n \nDepartment of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province and Taxation Bureau of Guangdong Province\n\n(广东省科学技术厅，广东省财政厅，国家税务总局广东省税务局)\n \nDecember 2023\n\nSpecialized and Sophisticated Small- and Medium-Sized Enterprise that Produces New and Unique Products\n\n(专精特新中小企业)\n \nDepartment of Industry and Information Technology Guangdong Province\n\n(广东省工业和信息化厅)\n \nJanuary 2024\n\nInnovative Small- and Medium-Sized Enterprise\n\n(创新型中小企业)\n \nDepartment of Industry and Information Technology Guangdong Province\n\n(广东省工业和信息化厅)\n \nSeptember 2023\n\n** **\n\n**Competition**\n\n \n\nThe meat processing market is highly fragmented,\nand competition in this market tends to be regionalized due to customers’ localized food preferences. All of our meat products are\nsold in China. Our major competitors are international and domestic companies that produce and sell meat products in China. Our operating\nsubsidiaries compete for customers primarily on the basis of the price and quality of their products, food safety, brand awareness and\nloyalty, responsiveness to customer demand and market trends, customer experience, the ability to accurately estimate sales quota and\ncontrol inventory, production capacity, and operation and management of chain stores. For a discussion of competition-related risks, please\nsee “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry — We\nface increasing competition in our business, which may adversely affect our market share and profitability.”\n\n** **\n\n55\n\n \n\n \n\n**Intellectual Property**\n\n \n\nWe regard our trademarks, patents, domain names,\nsoftware copyrights, trade secrets, and similar intellectual property as critical to our success. We rely on a combination of trademark\nlaw and confidentiality and non-disclosure agreements to protect our intellectual property rights. We also regularly monitor any infringement\nor misappropriation of our intellectual property rights.\n\n** **\n\n**Trademarks**\n\n \n\nAs of the date of this annual report, Wing Yip\nGD has registered the brand name “Wing Yip,” (“荣业”) “Jiangwang,” (“匠王”)\n“Kuangke,” (“狂客”) and another three brand names under 48 trademarks, including one trademark in\nHong Kong and 47 in mainland China. The following tables summarize these registered trademark registrations:\n\n \n\nTrademarks Registered in Mainland China:\n\n \n\n**Registration\nNumber**\n \n**Category**\n \n**Effective\nPeriod**\n \n**Trademark\nLogo**\n\n81083394\n \n36\n \n03/14/2025 – 03/13/2035\n \n\n81078998\n \n39\n \n03/14/2025 – 03/13/2035\n \n\n81072413\n \n16\n \n03/14/2025 – 03/13/2035\n \n\n81093439\n \n33\n \n03/14/2025 – 03/13/2035\n \n\n81072418\n \n29\n \n03/14/2025 – 03/13/2035\n \n\n81078980\n \n30\n \n03/14/2025 – 03/13/2035\n \n\n81089453\n \n43\n \n03/14/2025 – 03/13/2035\n \n\n81093437\n \n32\n \n03/14/2025 – 03/13/2035\n \n\n81093446\n \n37\n \n03/14/2025 – 03/13/2035\n \n****\n\n81093434\n \n31\n \n03/14/2025 – 03/13/2035\n \n****\n\n78685575A\n \n29\n \n11/28/2024 – 11/27/2034\n \n****\n\n78688172A\n \n5\n \n11/28/2024 – 11/27/2034\n \n\n78685863A\n \n40\n \n11/28/2024 – 11/27/2034\n \n\n78687019\n \n36\n \n11/07/2024 – 11/06/2034\n \n****\n\n78685860\n \n2\n \n11/07/2024 – 11/06/2034\n \n****\n\n78685574\n \n30\n \n01/14/2025 – 01/13/2035\n \n\n78685963\n \n41\n \n11/07/2024 – 11/06/2034\n \n\n78688173\n \n43\n \n11/07/2024 – 11/06/2034\n \n\n78687328\n \n1\n \n11/07/2024 – 11/06/2034\n \n****\n\n78687760\n \n7\n \n11/07/2024 – 11/06/2034\n \n****\n\n77449439\n \n35\n \n02/14/2025 – 02/13/2035\n \n****\n\n1001082\n \n29\n \n05/07/2017 – 05/06/2027\n \n\n7606629\n \n29\n \n11/21/2020 – 11/20/2030\n \n\n17257615\n \n29\n \n08/28/2016 – 08/27/2026\n \n\n17257723\n \n29\n \n08/28/2016 – 08/27/2026\n \n****\n\n21977158\n \n29\n \n01/07/2018 – 01/06/2028\n \n****\n\n21977356\n \n29\n \n01/07/2018 – 01/06/2028\n \n\n21977548\n \n29\n \n01/07/2018 – 01/06/2028\n \n\n \n\n56\n\n \n\n \n\n**Registration\nNumber**\n** **\n**Category**\n** **\n**Effective\nPeriod**\n** **\n**Trademark\nLogo**\n\n22240904\n \n29\n \n01/28/2018 – 01/27/2028\n \n\n36800562\n \n29\n \n11/07/2019 – 11/06/2029\n \n\n40189895\n \n1\n \n03/21/2020 – 03/20/2030\n \n\n40207748\n \n2\n \n03/21/2020 – 03/20/2030\n \n\n40198990\n \n41\n \n03/28/2020 – 03/27/2030\n \n\n40199329\n \n30\n \n03/28/2020 – 03/27/2030\n \n\n40183667\n \n36\n \n04/07/2020 – 04/06/2030\n \n\n40197291\n \n43\n \n04/07/2020 – 04/06/2030\n \n\n \n\n57\n\n \n\n \n\n**Registration\nNumber**\n** **\n**Category**\n** **\n**Effective\nPeriod**\n** **\n**Trademark\nLogo**\n\n40194262\n \n40\n \n05/28/2020 – 05/27/2030\n \n\n40202536\n \n5\n \n06/14/2020 – 06/13/2030\n \n\n40203848\n \n7\n \n06/28/2020 – 06/27/2030\n \n\n40197192\n \n29\n \n04/21/2021 – 04/20/2031\n \n\n47471550\n \n29\n \n05/07/2021 – 05/06/2031\n \n\n72318967A\n \n29\n \n01/14/2024 – 01/13/2034\n \n\n72307314A\n \n35\n \n01/21/2024 – 01/20/2034\n \n\n78688172\n \n5\n \n02/14/2026\n– 02/12/2036\n \n\n78685863\n \n40\n \n01/21/2026\n– 01/20/2036\n \n\n81075184\n \n35\n \n06/14/2025\n– 06/13/2035\n \n \n\n72307314\n \n35\n \n04/08/2025\n– 04/07/2035\n \n\n \n\nTrademarks Registered in Hong Kong:\n\n \n\n**Registration\nNumber**\n** **\n**Category**\n** **\n**Effective\nPeriod**\n** **\n**Trademark\nLogo**\n\n304639294\n \n29\n \n08/20/2018 – 08/19/2028\n \n\n** **\n\n58\n\n \n\n \n\n**Patents**\n\n \n\nAs of the date of this annual report, Wing Yip\nGD has registered 19 patents in mainland China. The following table summarizes these patent registrations:\n\n \n\n \n \n**Patent Number**\n \n**Patent Type**\n \n**Application Date**\n \n**Effective Period**\n\n1.\n \nZL 2013 1 0685188.3\n \nInvention\n \n12/13/2013\n \n20 years\n\n2.\n \nZL 2017 1 0376861.3\n \nInvention\n \n05/25/2017\n \n20 years\n\n3.\n \nZL 2017 1 0376939.1\n \nInvention\n \n05/25/2017\n \n20 years\n\n4.\n \nZL 2017 1 0376864.7\n \nInvention\n \n05/25/2017\n \n20 years\n\n5.\n \nZL 2019 2 0885087.3\n \nUtility Model\n \n06/13/2019\n \n10 years\n\n6.\n \nZL 2018 1 1546570.5\n \nInvention\n \n12/15/2018\n \n20 years\n\n7.\n \nZL 2017 1 1406974.X\n \nInvention\n \n12/22/2017\n \n20 years\n\n8.\n \nZL 2019 2 1059840.X\n \nUtility Model\n \n07/09/2019\n \n10 years\n\n9.\n \nZL 2019 2 0951322.2\n \nUtility Model\n \n06/24/2019\n \n10 years\n\n10.\n \nZL 2019 1 0453019.4\n \nInvention\n \n05/28/2019\n \n20 years\n\n11.\n \nZL 2019 1 0191739.8\n \nInvention\n \n03/14/2019\n \n20 years\n\n12.\n \nZL 2018 1 1133976.0\n \nInvention\n \n09/27/2018\n \n20 years\n\n13.\n \nZL 2018 1 0701856.X\n \nInvention\n \n06/29/2018\n \n20 years\n\n14.\n \nZL 2018 1 0701366.X\n \nInvention\n \n06/29/2018\n \n20 years\n\n15.\n \nCN202422557619.4\n \nUtility Model\n \n10/23/2024\n \n10 years\n\n16.\n \nCN202422425196.0\n \nUtility Model\n \n10/09/2024\n \n10 years\n\n17.\n \nCN202421447277.4\n \nUtility Model\n \n06/21/2024\n \n10 years\n\n18.\n \nCN202420082405.3\n \nUtility Model\n \n01/12/2024\n \n10 years\n\n19.\n \nCN202310651157.X\n \nInvention\n \n06/05/2023\n \n20 years\n\n** **\n\n59\n\n \n\n** **\n\n**Software Copyrights**\n\n \n\nAs of the date of this annual report, Wing Yip\nGD has registered 12 software copyrights in mainland China. The following table summarizes these software copyrights registrations:\n\n \n\n \n \n**Registration Number**\n \n**Software Name**\n \n**Development\nCompletion Date**\n \n**Date of\nFirst Publication**\n\n1\n \n2019SR0205544\n \n\nMeat Products Warehouse Management Software V1.0\n\n(肉制品仓库管理软件V1.0)\n\n \n01/03/2019\n \n01/04/2019\n\n2\n \n2019SR0206986\n \n\nAutomatic Sausage Cutting and Weighing Software\nV1.0\n\n(腊肠成品自动切割称重软件V1.0\n)\n\n \n06/09/2016\n \n06/10/2016\n\n3\n \n2019SR0205444\n \n\nProcessing Meat Raw Materials and Ingredients\nControl and Source Management Software V1.0\n\n(加工肉类原、辅料控制及源头管理软件V1.0\n)\n\n \n11/16/2017\n \n11/17/2017\n\n4\n \n2019SR0209582\n \n\nElectric Meat Grinder Automatic Cleaning Software\nV1.0\n\n(电动绞肉机自动清洗软件V1.0)\n\n \n07/07/2017\n \n07/08/2017\n\n5\n \n2019SR0207449\n \n\nFully Automated Meat Product Drying Control Software\nV1.0\n\n(全自动肉制品烘干控制软件V1.0)\n\n \n09/08/2016\n \n09/09/2016\n\n6\n \n2019SR0207569\n \n\nFrozen Meat Cold Storage State Monitoring Software\nV1.0\n\n(冷冻肉冷藏状态监测软件V1.0)\n\n \n11/30/2018\n \n12/01/2018\n\n7\n \n2019SR0207453\n \n\nMeat Product Quality Control Rapid Monitoring\nSoftware V1.0\n\n(肉制品质量控制快速监测软件V1.0)\n\n \n01/02/2019\n \n01/03/2019\n\n8\n \n2019SR0207571\n \n\nIntelligent Weighing Management Software for Meat\nProduct Inbound and Outbound Operations V1.0\n\n(肉食品出入库智能称重管理软件V1.0)\n\n \n08/16/2018\n \n08/17/2018\n\n9\n \n2019SR0205452\n \n\nFrozen Meat Transport Scheduling and Management\nSoftware V1.0\n\n(冷冻肉运输调度管理软件V1.0)\n\n \n08/04/2017\n \n08/10/2017\n\n10\n \n2019SR0207413\n \n\nMeat Grinder Feeding Auger Speed Control Software\nV1.0\n\n(绞肉机供料螺旋转速控制软件V1.0)\n\n \n04/12/2018\n \n04/13/2018\n\n11\n \n2020SR0402282\n \n\nRong Pork Pasture Management Software V1.5.8\n\n(猪肉荣牧场软件V1.5.8)\n\n \n03/28/2020\n \nNot published yet\n\n12\n \n2023SR0195946\n \n\nRongye Pasture Game APP V1.0\n\n(荣业牧场小游戏APP\nV1.0)\n\n \n08/02/2022\n \nNot published yet\n\n** **\n\n** **\n\n60\n\n \n\n** **\n\n**Domain Names**\n\n \n\nAs of the date of this annual report, Wing Yip GD has registered three\ndomain names; namely, wingyip-food.com, 荣业食品.com and 荣业腊味.com in mainland China.\n\n** **\n\n**Employees**\n\n \n\nAs of December 31, 2025, 2024, 2023, we had\n410, 426 and 491 full-time employees, respectively. As of December 31, 2025, we had 409 full-time employee in China and one\nfull-time employee in Korea. The following table sets forth the number of our full-time employees as of December 31, 2025:\n\n \n\nFunction: \nNumber \n\nManagement, Administration and Human Resources \n 29 \n\nFinance and Accounting \n 12 \n\nProcurement \n 5 \n\nProduction \n 205 \n\nResearch & Development \n 51 \n\nQuality Control \n 7 \n\nSales and Marketing \n 101 \n\nTotal \n 410 \n\n \n\nWe enter into employment contracts and non-disclosure\nagreements with our full-time employees.\n\n \n\nWe believe that we maintain a good working relationship\nwith our employees, and we have not experienced material labor disputes in the past. None of our employees are represented by labor unions.\n\n** **\n\n**Facilities**\n\n \n\nWe, through our operating subsidiaries, produce\nour products through a self-owned food processing plant with a total floor area of approximately 19,339 square meters, in Zhongshan City,\nGuangdong province, China.\n\n \n\nWing Yip GD currently operates 7 stores in Guangdong\nProvince, China, with an average floor area of 108.73 square meters of each store, and an average monthly rent of RMB3,099.31. The operating\nsubsidiaries lease all these store spaces from third-party individuals and corporations. The following table shows the information of\nthe stores as of the date of this annual report:\n\n \n\n \n \n**Store**\n \n**City**\n \n \n**Annual\nRent (RMB)**\n \n \n**Lease\nValid Term**\n \n**Size\n(Square\nMeters)**\n \n \n**Opened**\n \n\n1\n \nXiaolan\n \n \nZhongshan\n \n \n \n20,160\n \n \nUntil 04/30/2027\n \n \n87.36\n \n \n \n02/23/2018\n \n\n2\n \nDongwang\n \n \nGuangzhou\n \n \n \n36,000\n \n \nUntil 09/30/2026\n \n \n25\n \n \n \n02/14/2019\n \n\n3\n \nHuangpu\n \n \nZhongshan\n \n \n \n90,000\n \n \nUntil 08/15/2026\n \n \n500\n \n \n \n07/30/2016\n \n\n4\n \nKuchong\n \n \nZhongshan\n \n \n \n39,968\n*\n \nUntil 08/31/2026\n \n \n39\n \n \n \n07/30/2016\n \n\n5\n \nGuzhen\n \n \nZhongshan\n \n \n \n24,000\n \n \nUntil 04/30/2027\n \n \n50\n \n \n \n04/04/2018\n \n\n6\n \nXinguangming Shichang\n \n \nZhongshan\n \n \n \n14,214\n \n \nUntil 07/31/2026\n \n \n9.75\n \n \n \n09/11/2019\n \n\n7\n \nShenzhen Haijixing\n \n \nShenzhen\n \n \n \n36,000\n \n \nUntil 08/14/2026\n \n \n50\n \n \n \n05/06/2019\n \n\n \n\n*\nThe rent will increase 5% every two years.\n\n \n\n61\n\n \n\n \n\nOur subsidiary, Wing Yip HN, leases a factory\nin Haikou City, Hainan for meat products processing and storage, with a floor area of 380 square meters and monthly rent of RMB5,871,\nuntil July 31, 2027.\n\n \n\nWe believe that the food processing plant that\nwe own and the stores that we currently lease are adequate to meet our needs for the foreseeable future.\n\n \n\nTo expand our production capacity, we initiated\nplans to construct additional baking and packaging production lines starting in 2023. The estimated total floor area for this expansion\nis approximately 5,000 square meters. The expansion took place on the vacant area adjacent to our existing food processing plant located\nin Zhongshan City, Guangdong Province. The construction was completed in 2024. In 2025, we began utilizing a portion of the expanded area\nfor our packaging production lines and e-commerce warehouse operations.\n\n** **\n\n**Insurance**\n\n \n\nTo mitigate risks across different aspects of\nour operations and to ensure comprehensive coverage, we maintain various insurance policies and we believe the insurance coverage we maintain\nis in line with industry norms. As of the date of this annual report, we maintain product liability insurance, company group accidental\ninjury insurance, company property insurance, and various insurance for the vehicles that the operating subsidiaries own.\n\n** **\n\n**Environmental Matters**\n\n \n\nOur production generates wastewater, solid waste,\nand other industrial waste at various stages of the processing process. All of our processing facilities underwent necessary environmental\nimpact assessments during the initial construction phase, and relevant environmental protection equipment was installed. They also passed\nfinal inspections by government agencies before commercial production commenced.\n\n \n\nWe have been in compliance with state and local\nlaws and regulations relating to the environment as of the date of this annual report and have not experienced any material adverse effects\nupon our capital expenditures, earnings, or competitive position with respect to environmental compliance and we do not anticipate any\nmaterial adverse effects in the future based on the nature of our future operations. As of the date of this annual report, none of the\noperating subsidiaries have received any notifications of noncompliance of any environmental regulations from relevant governmental authorities\nin mainland China.\n\n** **\n\n**Seasonality**\n\n \n\nDuring the past financial reporting periods, we\ndid not experience any material seasonality in our business. However, our performance in a specific financial period may not necessarily\nrepresent the expected performance in other financial periods. Additionally, there are several factors that could contribute to fluctuations\nin our performance over certain periods, including overall demand for our products, timing of new product launches and quantity of new\nproducts, as well as our production capacity and utilization rate.\n\n** **\n\n**Legal Proceedings**\n\n \n\nFrom time to time, we may become a party to various\nlegal or administrative proceedings arising in the ordinary course of our business, including actions with respect to intellectual property\ninfringement, violation of third-party licenses or other rights, breach of contract, and labor and employment claims. We are currently\nnot a party to, and we are not aware of any threat of, any legal or administrative proceedings that, in the opinion of our management,\nare likely to have any material and adverse effect on our business, financial condition, cash flow, or results of operations.\n\n \n\n62\n\n \n\n \n\n**Regulations**\n\n** **\n\n**Mainland China**\n\n \n\nThe discussion below sets forth a summary of the\nprincipal laws, regulations, and rules relevant to our business and operations in mainland China.\n\n* *\n\n*Regulations on Food Production and operation*\n\n* *\n\n*Regulatory Framework*\n\n \n\nIn accordance with the Food Safety Law of the\nPRC (the “Food Safety Law”), as effective on June 1, 2009, and latest amended on September 12, 2025, a person or\nentity who engages in food production and operation shall obtain the relevant food production and/or operation license in accordance with\nthe law. The Implementation Rules of the Food Safety Law (the “Implementation Rules”), which further specifies the detailed\nmeasures to be taken by and conformed to food producers and business operators in order to ensure food safety, were promulgated on July 20,\n2009 and came into effect on the same date, and were amended on February 6, 2016 and March 26, 2019 (the “Revised Implementation\nRules”), respectively. The Revised Implementation Rules, which came into effect on December 1, 2019, introduce extra regulatory\nmeasures such as conducting random supervisory checks, improving the food safety violation reporting reward system, and establishing a\nblacklist system for food producers and business operators with serious food safety violations and a joint punishment mechanism against\ndiscreditable acts. The Revised Implementation Rules ascertain the primary responsibility of food producers and operators for food safety,\ndetail the responsibilities of principals of enterprises, standardize the food storage and transportation requirements, forbid false publicity\nof food, and optimize the administrative system for special food. The Implementation Rules also provide for strict legal liabilities for\nviolating food safety-related laws and regulations.\n\n \n\nIn accordance with the Food Safety Law and the\nRevised Implementation Rules, with the purpose of guaranteeing food safety and safeguarding the health and life safety of the public,\nmainland China sets up a system of the supervision, monitoring and appraisal on the food safety risk, compulsory adoption of food safety\nstandards, operating standards for food production, food inspection, food export and import and food safety accident response.\n\n \n\nThe Food Safety Law sets out, as penalties for\nviolation, various legal liabilities in the form of warnings, orders to rectify, confiscations of illegal gains, confiscations of utensils,\nequipment, raw materials and other articles used for illegal production and operation, fines, recalls and destructions of food in violation\nof laws and regulations, orders to suspend production and/or operation, revocations of production and/or operation license, and even criminal\npunishment.\n\n \n\nA food recall system is established under the\nFood Safety Law and the Revised Implementation Rules. Where a food producer or trader finds that food it has produced or sold does not\ncomply with relevant food safety standards, it shall immediately cease the production or trade thereof and notify the relevant producers,\ntraders and consumers. The food producer or trader shall maintain records of the recall and notification procedures and report the recall\nand treatment to the relevant authorities.\n\n* *\n\n*Food Production License*\n\n \n\nThe Measures for the Administration of Food Production\nLicensing, which were promulgated on April 7, 2010, by the General Administration of Quality Supervision, Inspection and Quarantine\nand came into effect on June 1, 2010, and amended on August 31, 2015, November 17, 2017 and January 2, 2020, provide\nthat any enterprise engaging in food production activities must obtain a food production license. Food production licensing shall be subject\nto the principle of one license for one enterprise, that is, the same food producer engaged in food production activities shall obtain\none food production license. Departments for market regulation shall implement classified licensing for food production in accordance\nwith the risk degrees of food and in light of such factors as raw materials and processes of food.\n\n \n\n63\n\n \n\n \n\nThe State Administration for Market Regulation\n(the “SAMR”) shall be responsible for the supervision and guidance of food production licensing administration nationwide.\nLocal market regulatory departments at and above the county level shall be responsible for the supervision and administration of food\nproduction licensing within their respective administrative regions. The food production license shall be valid for five years. Food\nproducers shall hang or place their food production license originals in prominent places of their production sites.\n\n \n\nAs of the date of this annual report, Wing Yip\nGD has obtained valid food productions license in compliance with the relevant mainland China laws.\n\n* *\n\n*Food Distribution License and Record-Filing*\n\n \n\nOn August 31, 2015, China Food and Drug Administration\n(the “CDA”, now merged into the SAMR) promulgated the Administrative Measures for Food Operation Licensing, which was later\namended on November 17, 2017. Based on the Administrative Measures for Food Distribution Licensing, a food distribution license shall\nbe obtained in accordance with the law to engage in food selling and catering services within mainland China. The principle of one\nlicense for one site shall also apply to the licensing for food distribution. Food and drug administrative authorities shall implement\nclassified licensing for food distribution according to food operators’ types of distribution and the degree of risk of their distribution\nprojects. The license is valid for five years. Food distributors shall hang or place their food distribution license originals in\nprominent places of their operation sites.\n\n \n\nBased on the Food Safety Law, those operating\nin food sales and/or catering services shall obtain a permit. However, the sale of edible agricultural products and the sale of pre-packaged\nfood only are not subject to a permit. Where only pre-packaged food is sold, it shall be filed with the local food safety regulatory department\nof the local people’s government at or above the county level for the record. On June 15, 2023, the SAMR released the Administrative\nMeasures for Food Distribution Licensing and Record-Filing (the “Food Distribution Licensing and Filing Measures”), which\nbecame effective on December 1, 2023, and replaced the Administrative Measures for Food Distribution Licensing. The Food Distribution\nLicensing and Filing Measures further detail the licensing and the record-filing system.\n\n \n\nAs of the date of this annual report, Wing Yip\nGD and its seven stores engaging in the sale of food have obtained valid food distribution licenses and/or completed the relevant record-filings\nas required by mainland China laws.\n\n* *\n\n*Food Recall System*\n\n \n\nThe Administrative Measures for Food Recalls,\nwhich was promulgated by the CDA on March 11, 2015, effective on September 1, 2015, and later amended on October 23, 2020\nand January 27, 2026, stipulate the details of administration on unsafe food in mainland China, including cease of product and/or\noperation, recall, and disposals of such unsafe food. Pursuant to the Administrative Measures for Food Recalls currently in effect, a\nfood producer or business operator shall assume primary responsibilities for food safety, by establishing a sound management system, collecting\nand analyzing food safety information and performing legal duties of the cease of production and operation of as well as recall and disposal\nof unsafe food. Further, where the food producer or business operator fails to forthwith cease production or business operation, to make\na voluntary recall, to start a recall within the prescribed time limit, to recall according to its recall plan or to dispose of unsafe\nfood as required, the local administration for market regulation shall give a warning and concurrently impose a fine of not less than\nRMB5,000 but not more than RMB50,000.\n\n \n\nAs of the date of this annual report, the Company\nand its PRC subsidiaries have not initiated any food recall voluntarily or as required by the competent mainland China authorities.\n\n* *\n\n64\n\n \n\n* *\n\n*Regulations on Product Quality and Consumer\nProtection*\n\n* *\n\n*Product Quality Law*\n\n \n\nAccording to the Product Quality Law of the PRC\neffective on September 1, 1993 and amended on July 8, 2000, August 27, 2009 and December 29, 2018, respectively, producers\nare liable for the quality of the products they produce. Where anyone produces or sells products that do not comply with the relevant\nnational or industrial standards safeguarding the health and safety of persons and property, the relevant authority will order such person\nto suspend production and/or sales, confiscate the products, impose a fine of an amount higher than the value of the products and less\nthan three times of the value of the products, confiscate illegal gains (if any) as well as revoke the business license of the producer\nin severe cases. Where the activities constitute a crime, the offender will be prosecuted in accordance with the Criminal Law of the PRC.\n\n* *\n\n*Consumer Protection Law*\n\n \n\nThe Consumer Protection Law of the PRC was\npromulgated by the SCNPC on October 31, 1993, amended on August 27, 2009 and October 25, 2013, sets out standards of\nbehavior for business operators in their dealings with consumers, including, among other things, (i) compliance of goods and\nservices with the Product Quality Law and other relevant laws and regulations; (ii) accurate information concerning goods and\nservices and the quality and use of such goods and services; (iii) issuance of receipts to consumers in accordance with\nrelevant national regulations, business practices or upon customer request; (iv) ensuring the actual quality and functionality\nof goods or services are consistent with advertising materials, product descriptions or samples; (v) assumption of the\nresponsibilities related to repairing, replacing, returning or other liability in accordance with national regulations or any\nagreements with the consumer; and (vi) not stipulating unreasonable or unfair terms for consumers and not excluding themselves\nfrom civil liability to undermine the legal rights and interests of consumers.\n\n* *\n\n*Regulations on Environmental Protection*\n\n \n\nThe Environmental Protection Law of the PRC (the\n“Environmental Protection Law”) was promulgated and effective on December 26, 1989, and amended on April 24, 2014,\nunder which any entity which discharges or will discharge pollutants during the course of operations or other activities must implement\neffective environmental protection safeguards and procedures to control and properly treat waste gas, waste water, waste residue, dust,\nmalodorous gases, radioactive substances, noise, vibrations, electromagnetic radiation, and other hazards produced during such activities.\nThe Environmental Protection Law makes it clear that the legal liabilities of any violation of said law include warning, fine, rectification\nwithin a time limit, compulsory cease operation, compulsory reinstallation of dismantled installations of the prevention and control of\npollution or compulsory reinstallation of those left idle, compulsory shutout or closedown, or even criminal punishment. Any person or\nentity that pollutes the environment resulting in damage could also be held liable under the PRC Civil Code. In addition, environmental\norganizations may also bring lawsuits against any entity that discharges pollutants detrimental to the public welfare.\n\n \n\nPursuant to the Regulations on the Administration\nof Pollutant Discharge Permits, adopted by the State Council on December 9, 2020, and effective on March 1, 2021, pollutant\ndischarging entities are subject to the classified management of pollutant discharge permits based on the factors such as the amount of\npollutants produced and discharged, extent of impact on the environment. According to the relevant regulations of the “the List\nof Classification Management of Emission Permit for Fixed Source of Pollution (2019 Edition),” key management, simplified management,\nand registration management of pollutant discharge permit have been implemented. For pollutant discharging entities that produce and discharge\na relatively small amount of pollutants or have a relatively little impact on the environment, the simplified management of pollutant\ndischarge permits shall be implemented. Further, under the Measures for Pollutant Discharge Permitting Administration, promulgated by\nthe Ministry of Ecology and Environment on December 25, 2023 and effective on July 1, 2024, a pollutant discharging entity shall\nobtain and hold a pollutant discharge permit as required by law and discharge the pollutant as provided in the pollutant discharge permit.\nWithout a required pollutant discharge permit, no pollutant may be discharged. Where the discharge of pollutants violates the provisions\nof the pollutant discharge permit, the environmental protection authority at or above the county level shall order the entity to take\ncorrective actions, carry out production in a limited manner, or suspend production for rectification, and impose a fine of not less than\nRMB200,000 but not more than RMB1,000,000.\n\n \n\n65\n\n \n\n \n\nAs of the date of this annual report, Wing Yip\nGD has completed the pollution discharge registrations for fixed pollution sources, as their productions are deemed to be producers and\ndischargers of a relatively small amount of pollutants or having a relatively little impact on the environment as stipulated by the relevant\nmainland China laws. As of the date of this annual report, none of the operating subsidiaries have received any notifications of noncompliance\nof any environmental regulations from relevant governmental authorities in mainland China.\n\n* *\n\n*Laws and Regulations on Labor and Work Safety*\n\n* *\n\n*Labor Contract Law*\n\n \n\nAccording to the Labor Contract Law of the PRC\n(the “Labor Contract Law”), which was implemented on January 1, 2008 and amended on December 28, 2012, an employer\nestablishes an employment relationship with an employee from the date when the employer puts the employee to work. Written labor contract\nshall be concluded in the establishment of an employment relationship. Enterprises and institutions are forbidden to force the laborers\nto work beyond the time limit and the employers shall pay employees overtime working compensation in accordance with national regulations.\nIn addition, the labor wages shall not be lower than local standards on minimum wages and shall be paid to the laborers timely. According\nto the Labor Law of the PRC effective as of January 1, 1995, as amended on August 27, 2009 and December 29, 2018, the employer\nshall establish and perfect its system for labor safety and sanitation, strictly abide by State rules and standards on labor safety and\nsanitation, educate laborers in labor safety and sanitation, prevent accidents in the process of labor, and reduce occupational hazards.\nLabor safety and sanitation facilities shall meet State-fixed standards.\n\n* *\n\n*Regulations on Social Insurance and Housing\nProvident Fund*\n\n \n\nAccording to the Social Insurance Law of the PRC\neffective as of July 1, 2011 and as amended on December 29, 2018, the Regulations on Occupational Injury Insurance effective\nas of January 1, 2004 and as amended on December 20, 2010, the Interim Measures concerning the Maternity Insurance for Enterprise\nEmployees effective as of January 1, 1995, the Interim Regulations concerning the Levy of Social Insurance effective as of January 22,\n1999 and as amended on March 24, 2019 and the Regulations concerning the Administration of Housing Provident Fund effective as of\nApril 3, 1999, and amended on March 24, 2002 and March 24, 2019, enterprises and institutions in mainland China shall provide\ntheir employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, occupational injury insurance\nand medical insurance, as well as housing fund and other welfare plans.\n\n* *\n\n*Work Safety Law*\n\n \n\nAccording to the Law on Work Safety of the PRC\neffective on November 1, 2002, and amended on August 27, 2009, August 31, 2014 and June 10, 2021 respectively, production\nand operation units must strengthen work safety management, establish and improve their work safety responsibility systems and work safety\npolices and rules, enhance work safety conditions and promote work safety standardization. The state shall apply an accountability enforcement\nsystem to work safety accidents, and the persons liable for such accidents shall be subject to legal liability. If the company fails to\ncomply with the provisions of the Law on Work Safety, the supervisory authority on production safety may issue a rectification order,\nimpose a fine, order the company to cease production and operation, or revoke the relevant permit.\n\n* *\n\n66\n\n \n\n* *\n\n*Laws and Intellectual Property Rights*\n\n* *\n\n*Trademark Law*\n\n \n\nTrademarks are protected by the Trademark Law\nof the PRC, which was adopted in 1982 and subsequently amended in 1993, 2001, 2013 and 2019, respectively, as well as the Implementation\nRegulation of the Trademark Law of the PRC adopted in 2002 and amended in 2014 by the State Council. The Trademark Office of China National\nIntellectual Property Administration handles trademark registrations and grants a term of ten years to registered trademarks which\nmay be renewed for consecutive ten-year periods upon request by the trademark owner. Trademark license agreements must be filed with the\nTrademark Office for record. The Trademark Law of the PRC has adopted a “first-to-file” principle with respect to trademark\nregistration. Where a trademark for which a registration has been made is identical or similar to another trademark which has already\nbeen registered or been subject to a preliminary examination and approval for use on the same kind of or similar commodities or services,\nthe application for registration of such trademark may be rejected. Any person applying for the registration of a trademark may not prejudice\nthe existing right first obtained by others, nor may any person register in advance a trademark that has already been used by another\nparty and has already gained a “sufficient degree of reputation” through such party’s use.\n\n* *\n\n*Domain Names*\n\n \n\nIn accordance with the Measures for the Administration\nof Internet Domain Names, which was promulgated by the Ministry of Industry and Information Technology (the “MIIT”) on August 24,\n2017 and came into effect on November 1, 2017, and the Implementing Rules for the Registration of National Top-level Domain Names,\nwhich was promulgated and took effective on June 18, 2019, by China Internet Network Information Center, domain name registrations\nare handled through domain name service agencies established under relevant regulations, and an applicant becomes a domain name holder\nupon successful registration.\n\n \n\nIn accordance with the Notice from the Ministry\nof Industry and Information Technology on Regulating the Use of Domain Names in Internet Information Services, which was promulgated by\nthe MIIT on November 27, 2017 and came into effect on January 1, 2018, Internet access service providers shall verify the identity\nof each Internet information service provider, and shall not provide services to any Internet information service provider which fails\nto provide real identity information.\n\n* *\n\n*Patent Law*\n\n \n\nThe Patent Law of the PRC, which was promulgated\nby the SCNPC on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008 and October 17,\n2020, and its implementation rules, which was promulgated by the State Council on June 15, 2001 and latest amended on December 11,\n2023, provide for three types of patents, “invention,” “utility model” and “design.” “Invention”\nrefers to any new technical solution relating to a product, a process or improvement thereof; “utility model” refers to any\nnew technical solution relating to the shape, structure, or their combination, of a product, which is suitable for practical use; and\n“design” refers to any new design of the shape, pattern, color or the combination of any two of them, of a product, which\ncreates an aesthetic feeling and is suitable for industrial application. The duration of a patent right for “invention” is\ntwenty years, and the duration of a patent right for “utility model” is ten years, and for “designs” is fifteen years,\nfrom the date of application.\n\n* *\n\n67\n\n \n\n \n\n*Copyright*\n\n \n\nPursuant to the Copyright Law of the PRC\namended by the SCNPC on November 11, 2020, and coming into effect on June 1, 2021, Chinese citizens, legal persons or\nother organizations shall, whether published or not, enjoy copyright in their works, which include, among other things, works of\nliterature, art, natural science, social science, engineering technology and computer software created in writing or oral or other\nforms. A copyright holder shall enjoy a number of rights, including the right of publication, the right of authorship and the right\nof reproduction.\n\n \n\nPursuant to the Measures for the Registration\nof Computer Software Copyright promulgated by the National Copyright Administration on February 20, 2002 and the Regulation on Computers\nSoftware Protection amended by the State Council on January 30, 2013 and coming into effect on March 1, 2013, the National Copyright\nAdministration is mainly responsible for the registration and management of software copyright in mainland China and recognizes the China\nCopyright Protection Center as the software registration organization. The China Copyright Protection Center shall grant certificates\nof registration to computer software copyright applicants in compliance with the regulations of the Measures for the Registration of Computer\nSoftware Copyright and the Regulation on Computers Software Protection.\n\n* *\n\n*Regulations on Foreign Investment*\n\n \n\nThe establishment, operation, and management of\ncompanies in China are governed by the Company Law of the People’s Republic of China (the “PRC Company Law”), which\nwas promulgated by the SCNPC on December 29, 1993, last amended on December 29, 2023 and became effective on July 1, 2024. The PRC Company\nLaw governs the establishment and withdrawal of a company, the organizational structure and the capital system of a company, and strengthens\nthe responsibilities of shareholders and management personnel and corporate social responsibility. The PRC Company Law applies to both\nPRC domestic companies and foreign-invested companies. The direct or indirect investment activities of a foreign investor shall be governed\nby the Foreign Investment Law of the People’s Republic of China (the “Foreign Investment Law”) and its implementation\nrules.\n\n \n\nThe Foreign Investment Law was promulgated by\nthe SCNPC on March 15, 2019 and took effect on January 1, 2020, which replaced the PRC Sino-foreign Joint Venture Enterprise Law, the\nPRC Sino-foreign Cooperative Enterprise Law and the PRC Wholly Foreign-owned Enterprise Law. The Foreign Investment Law adopts the\nadministrative system of pre-establishment national treatment along with a negative list for foreign investments, establishing the basic\nframework for the access to, and the promotion, protection and administration of, foreign investments in view of investment protection\nand fair competition.\n\n \n\nPursuant to the Special Administrative Measures\n(Negative List) for Foreign Investment Access (2024 edition) (the “Negative List (2024)”) jointly issued by the National Development\nand Reform Commission of the PRC (the “NDRC”) and the Ministry of Commerce of the PRC (the “MOFCOM”) on September\n6, 2024 and effective on November 1, 2024, processing, sales and distribution of traditional preserved meat products, snack products and\nfrozen meat products does not fall into the Negative List (2024).\n\n \n\nOn December 30, 2019, the MOFCOM and the\nSAMR promulgated the Measures for the Reporting of Foreign Investment Information, which came into effect on January 1, 2020 and\nreplaced the Interim Administrative Measures on the Record-filing of the Incorporation and Changes of Foreign-invested Enterprises. Since\nJanuary 1, 2020, for carrying out investment activities directly or indirectly in mainland China, the foreign investors or foreign-invested\nenterprises shall submit investment information to the commerce authorities pursuant to these measures.\n\n* *\n\n*Regulations on Mergers & Acquisitions\nand Overseas Listings*\n\n \n\nOn August 8, 2006, six mainland China regulatory\nagencies, including the CSRC, MOFCOM, the State-owned Assets Supervision and Administration Commission, the SAT, the State Administration\nof Industry and Commerce and SAFE, adopted the M&A Rules, which became effective on September 8, 2006, and were amended on June 22,\n2009. Foreign investors shall comply with the M&A Rules when they purchase equity interests of a domestic company or subscribe the\nincreased capital of a domestic company, and thus changing the nature of the domestic company into a foreign-invested enterprise, when\nthe foreign investors establish a foreign-invested enterprise in mainland China, purchase the assets of a domestic company and operate\nthe assets, or when the foreign investors purchase the assets of a domestic company, establish a foreign-invested enterprise by injecting\nsuch assets, and operate the assets. As for merger and acquisition of a domestic company with a related party relationship by a domestic\ncompany, enterprise or natural person in the name of an overseas company legitimately incorporated or controlled by the domestic company,\nenterprise of natural person, such merger and acquisition shall be subject to examination and approval of MOFCOM. The parties involved\nshall not use domestic investment by foreign investment enterprises or other methods to circumvent the requirement of examination and\napproval.\n\n \n\n68\n\n \n\n \n\nPursuant to the Manual of Guidance on Administration\nfor Foreign Investment Access, which was issued and became effective on December 18, 2008 by MOFCOM, notwithstanding the fact that\n(i) the domestic shareholder is connected with the foreign investor or not, or (ii) the foreign investor is the existing shareholder\nor the new investor, the M&A Rules shall not apply to the transfer of an equity interest in an incorporated foreign-invested enterprise\nfrom the domestic shareholder to the foreign investor.\n\n \n\nOn July 6, 2021, 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. The Opinions\nemphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based\ncompanies. The Opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal\nwith the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection.\n\n \n\nOn February 17, 2023, the CSRC promulgated\nthe Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures”)\nand five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Administrative Measures, domestic\ncompanies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC\npursuant to the requirements of the Trial Administrative Measures within three business days following its submission of initial\npublic offerings or listing application. If a domestic company fails to complete required filing procedures or conceals any material fact\nor falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order\nto rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable\npersons may also be subject to administrative penalties, such as warnings and fines.\n\n \n\nThe Trial Administrative Measures establish a\nlist outlining the circumstances where a mainland China enterprise is prohibited from offering and listing securities overseas, and the\nCSRC has the authority to block offshore listings, including that : (i) are explicitly prohibited by laws; (ii) may endanger\nnational security as determined by relevant competent departments under the State Council; (iii) involve criminal offenses that disrupting\nChina’s economy such as corruption, bribery, embezzlement, or misappropriation of property by the issuer, the controlling shareholder,\nand/or actual controller in the recent three years; (iv) involve the issuer under investigations for suspicion of criminal offenses\nor major violations of laws and regulations; or (v) involve material ownership disputes over the shares held by the controlling shareholder\nor by other shareholders that are controlled by the controlling shareholder and/or actual controller. An issuer seeking direct or indirect\noverseas listing is also required to undergo national security review or obtain clearance from relevant authorities, if necessary, before\nmaking any application with overseas regulator or listing venue. Where an overseas securities regulator investigates and collects evidence\nrelating to the overseas offering and listing of a mainland China enterprise and related activities, and requests the CSRC for cooperation\nin accordance with the cross-border supervision and management cooperation mechanism, the CSRC may provide necessary assistance according\nto law and based on the principle of reciprocity. Our application for listing on Nasdaq does not fall under the circumstance that such\noverseas listing is prohibited by the Trial Administrative Measures, nor do we need to undertake the review such as security review or\nclearance approval from relevant authorities.\n\n \n\nOn February 24, 2023, the CSRC, together\nwith the Ministry of Finance, National Administration of State Secrets Protection and National Archives Administration of China, revised\nthe Provisions on Strengthening Confidentiality and Archives Administration in Overseas Issuance and Listing of Securities (the “Provisions”)\nissued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The\nrevised Provisions came into effect on March 31, 2023, together with the Trial Administrative Measures. One of the major revisions\nto the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial\nAdministrative Measures. The revised Provisions require that, among other things, (a) a domestic company that plans to, either directly\nor indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities\ncompanies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets\nof government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative\ndepartment at the same level; and (b) a domestic company that plans to, either directly or indirectly through its overseas listed\nentity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers,\nand overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest,\nshall strictly fulfill relevant procedures stipulated by applicable national regulations. Any failure or perceived failure by our Company\nor our subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and\nother mainland China laws and regulations may result in the relevant entities being held legally liable by competent authorities, and\nreferred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.\n\n* *\n\n69\n\n \n\n* *\n\n*Regulations on Foreign Exchange*\n\n \n\nPursuant to the Foreign Exchange Administration\nRegulations, as amended in August 2008, RMB is freely convertible for current account items, including the distribution of dividends,\ninterest payments, trade and service-related foreign exchange transactions, but not for capital account items, such as direct investments,\nloans, repatriation of investments and investments in securities outside mainland China, unless prior approval of the SAFE is obtained\nand prior registration with SAFE is made. The Circular of the SAFE on Printing and distributing the Administrative Provisions on Foreign\nExchange in Domestic Direct Investment by Foreign Investors and Relevant Supporting Documents was promulgated in May 2013 and amended\nin October 2018 and December 2019, which provides for and simplifies the operational steps and regulations on foreign exchange\nmatters related to direct investment by foreign investors, including foreign exchange registration, account opening and use, receipt and\npayment of funds, and settlement and sales of foreign exchange.\n\n \n\nAccording to the SAFE Circular 37, promulgated\non July 14 2014, domestic resident, individuals or institutions, are required to register with the bureau of foreign exchange administration\nbefore they invest in special purpose vehicles with legitimate assets or equity interests inside and outside mainland China. Failure\nto comply with the registration procedures set forth in the SAFE Circular 37 may result in restrictions imposed on the subsequent foreign\nexchange activities of the relevant domestic residents, including the remitting back of dividends and profits. Domestic residents who\ninvest special purpose vehicles with legitimate assets or equity interests inside and outside mainland China prior to the implementation\nof the SAFE Circular 37, but fail to conduct the foreign exchange registration of overseas investments shall submit explanatory statement\nand state the reasons to the bureau of foreign exchange administration. The bureau of foreign exchange administration may allow complementary\nregistration under the principles of legality and legitimacy. In the event of any violation of foreign exchange regulations by domestic\nresidents who apply for the foresaid complementary registration, administrative penalty would be imposed in accordance with relevant laws.\n\n \n\nAccording to the SAFE Notice 13, which was promulgated\non February 13, 2015 and became effective on June 1, 2015, the above mentioned registration under SAFE Circular 37 will be handled\ndirectly by the bank that has obtained the financial institution identification codes issued by the foreign exchange regulatory authorities\nand that has opened the capital account information system at the foreign exchange regulatory authority in the place where it is located\nand the foreign exchange regulatory authorities shall perform indirect regulation over the direct investment-related foreign exchange\nregistration via banks.\n\n \n\nThe SAFE Circular 28 was promulgated and became\neffective on October 23, 2019. According to the SAFE Circular 28, non-investment foreign-funded enterprises are allowed to lawfully\nmake domestic equity investments using their capital if the domestic investment projects are in compliance with the prevailing special\nadministrative measures for access of foreign investments and relevant regulations.\n\n** **\n\n**Korea**\n\n \n\nSince our Ordinary Shares are listed on KRX, our\nOrdinary Shares and the ADSs are also subject to certain Korean foreign exchange controls and securities regulations.\n\n* *\n\n70\n\n \n\n* *\n\n*General*\n\n \n\nThe Foreign Exchange Transactions Act of Korea\nand the Presidential Decree and regulations under such Act and Decree, which we refer to collectively as the “Foreign Exchange Transaction\nLaws”, regulate investments in Korean securities (including KRW securities, such as our Ordinary Shares and KRW linked securities,\nsuch as the ADSs) by non-residents and issuances of securities outside Korea by Korean companies. Non-residents may invest in Korean securities\npursuant to the Foreign Exchange Transaction Laws. The Financial Services Commission has also adopted, pursuant to its authority under\nthe Financial Investment Services and Capital Markets Act of Korea (the “FSCMA”), regulations that regulate investments by\nforeigners in Korean securities and issuances of securities outside Korea by Korean companies.\n\n \n\nSubject to certain limitations, the Ministry of\nFinance and Economy has the authority to take the following actions under the Foreign Exchange Transaction Laws:\n\n \n\n \n●\nif the Korean government deems it necessary on account of war, armed conflict, natural disaster, grave and sudden and significant changes in domestic or foreign economic circumstances, or similar events or circumstances, the Ministry of Finance and Economy may (i) temporarily suspend payment, receipt, or performance under any or all foreign exchange transactions, in whole or in part, to which the Foreign Exchange Transaction Laws apply (including suspension of payment and receipt of foreign exchange), (ii) impose an obligation to deposit, safe-keep, or sell precious metal or any means of payment to The Bank of Korea, a foreign exchange equalization fund, or certain other governmental agencies or financial companies, or (iii) require resident creditors to collect and recover debts owed by non-resident debtors and to retrieve them to Korea; and\n\n \n\n \n●\nif the Korean government concludes that the international balance of payments and international financial markets are experiencing or are likely to experience significant disruption or that the movement of capital between Korea and other countries is likely to adversely affect its currency policies, exchange rate policies or other macroeconomic policies, the Ministry of Finance and Economy may take action to require any person who intends to effect a capital transaction to obtain permission or to require any person who effects a capital transaction to deposit a portion of the means of payment acquired in such transaction with The Bank of Korea, a foreign exchange equalization fund, or certain other governmental agencies or financial companies.\n\n* *\n\n*Government review of issuances of ADSs*\n\n \n\nIn order for us to issue Ordinary Shares or ADSs\n(including with respect to the deposit of any new or existing Ordinary Shares), we are required to submit a report to the Ministry of\nFinance and Economy with respect to the issuance of such Ordinary Shares or ADSs as KRW securities or KRW linked securities prior to and\nafter such issuance. The Ministry of Finance and Economy may at its discretion direct us to take necessary measures to avoid exchange\nrate fluctuations in connection with its acceptance of the report of our issuance of the Ordinary Shares or the ADSs.\n\n \n\nUnder current Korean laws and regulations, in\norder for the depositary to accept for deposit any existing Ordinary Shares from holders of the Ordinary Shares, other than from us, for\nthe purpose of issuing ADSs representing such Ordinary Shares, the depositary would be required to obtain our prior consent for the purposes\nof the above-mentioned prior report to the Ministry of Finance and Economy and the filing of a securities registration statement noted\nin “*Restrictions applicable to ADSs*”. For the avoidance of doubt, the issuer must obtain approval from the Ministry\nof Finance and Economy for all issuances of ADSs and a securities registration statement must be submitted to FSCMA for all issuances,\nirrespective of whether the issuance is of Ordinary Shares deposited with the Custodian purchased over KRX, rather than newly-issued Ordinary\nShares.\n\n* *\n\n71\n\n \n\n* *\n\n*Restrictions applicable to ADSs*\n\n \n\nNo Korean governmental approval is necessary for\nthe sale and purchase of ADSs in the secondary market outside Korea or for the withdrawal of shares underlying ADSs. Persons who have\nacquired shares as a result of the withdrawal of shares underlying the ADSs may exercise their preemptive rights for any newly issued\nshares of ours and participate in free distributions and receive dividends on shares without any further governmental approval. In addition,\nwe are required to file a securities registration statement with the Financial Services Commission and such securities registration statement\nhas to become effective pursuant to the FSCMA in order for us to issue ADSs, except in certain limited circumstances.\n\n* *\n\n*Restrictions applicable to shares*\n\n \n\nThe Ordinary Shares must be kept in custody with\nan eligible custodian in Korea. Only foreign exchange banks, investment dealers or brokers (which may include a Korean securities company\nand a non-Korean securities company’s branch office in Korea), the Korea Securities Depository, asset management companies, and\ninternationally recognized custodians are eligible to act as a custodian of such shares for a non-resident or foreign investor. A custodian\nacting for a non-resident or foreign investor must deposit the shares with the Korea Securities Depository. However, a foreign investor\nmay be exempted from such deposit requirement with the approval of the Governor of the Financial Supervisory Service (the “Governor”)\nin circumstances where its compliance with such requirement is impracticable, including cases where such compliance would contravene the\nlaws of its home country.\n\n \n\nA foreign investor may appoint one or more standing\nproxies from among the Korea Securities Depository, foreign exchange banks, investment dealers or brokers (which may include Korean securities\ncompanies and Korean branch offices of non-Korean securities companies), asset management companies, and internationally recognized foreign\ncustodians. Generally, a foreign investor may not allow any person, other than its standing proxy, to exercise any rights associated with\nits shares or perform any tasks related to such shares on its behalf. However, a foreign investor may be exempted from complying with\nthese standing proxy rules with the approval of the Governor in circumstances where such compliance is impracticable, including cases\nwhere such compliance would contravene the laws of its home country.\n\n \n\nNo governmental approval is required for a foreign\ninvestor to receive any dividends or sales proceeds in Korean Won of any shares listed in a Korean company which are to be paid, received,\nand retained in Korea. Such dividends or sales proceeds received by such foreign investor may be deposited in a Korean Won account established\nwith such investor’s investment dealer or investment broker or its Korean Won account established with a foreign exchange bank.\nFunds in such foreign investor’s Korean Won account may be transferred to its foreign currency account in Korea or withdrawn for\ninvesting in shares in any Korean company (including the Company) and other limited purposes.\n\n \n\nInvestment dealers and investment brokers are\nallowed to open foreign currency accounts with foreign exchange banks exclusively for accommodating foreign investors’ stock investments\nin Korea. Through these accounts, investment dealers and investment brokers may enter into foreign exchange transactions on a limited\nbasis, such as conversion of foreign currency funds and Korean Won funds, either as a counterparty to or on behalf of foreign investors,\nwithout the investors having to open their own accounts with foreign exchange banks.\n\n* *\n\n72\n\n \n\n* *\n\n*Reporting Requirements for Holders of Substantial\nInterests in Korea*\n\n* *\n\n*Report on substantial shareholding (5% report)*\n\n \n\nUnder the FSCMA, any person whose direct or beneficial\nownership of a listed company’s shares with voting rights, equity-related debt securities including convertible bonds, bonds with\nwarrants, exchangeable bonds, certificates representing the rights to subscribe for shares, derivatives-linked securities and depository\nreceipts for the aforementioned securities, which we refer to collectively as equity securities, together with the shares and other equity\nsecurities directly or beneficially owned by certain related persons or by any person acting in concert with the person, accounts for\n5% or more of the total outstanding shares and other equity securities of such listed company is required to report the status and purpose\n(in terms of whether the purpose of the shareholding is simple investment, general investment or participation in the management of the\nissuer) of the holdings and the material contents of the agreements relating to the equity securities and other matters prescribed by\nthe Presidential Decree under the FSCMA to the Financial Services Commission and the Korea Exchange within five business days after\nreaching the 5% ownership interest.\n\n \n\nIn addition, (A) any change in the number\nof the owned shares and other equity securities that equals or exceeds 1% of the total outstanding shares and other equity securities\nor (B) any change in (i) the purpose of the shareholding or in the ownership of the shares and other equity securities, (ii) the\nmajor terms and conditions of the agreements relating to the shares and other equity securities owned (such as trust agreements and collateral\nagreements) to the extent the number of relevant shares and other equity securities is 1% or more of the total outstanding shares and\nother equity securities or (iii) the type of the ownership (direct ownership or holdings) to the extent the number of relevant shares\nand other equity securities is equal to or exceeds 1% of the total outstanding shares and other equity securities, subsequent to the report,\nmust be reported to the Financial Services Commission and the Korea Exchange within five business days from the date of such change\n(or by the tenth day of the month following the month in which the change described in (A) above occurs, in the case of a person\n(other than certain professional investors designated by the Financial Services Commission) with no intent to seek management control).\nNotwithstanding the foregoing, certain professional investors designated by the Financial Services Commission may report the 5% ownership\nstatus and the changes described in (A) above to the Financial Services Commission and the Korea Exchange by the tenth day of\nthe month immediately following the end of the quarter in which such 5% ownership interest is reached or the change occurs.\n\n \n\nWhen filing a report to the Financial Services\nCommission and the Korea Exchange in accordance with the reporting requirements described above, a copy of such report must also be sent\nto the relevant listed company.\n\n \n\nViolation of these reporting requirements may\nsubject a person to sanctions such as prohibition on the exercise of voting rights with respect to the equity securities for which the\nreporting requirement was violated, or fines and/or imprisonment. Furthermore, the Financial Services Commission may order the disposal\nof the equity securities for which the reporting requirement was violated.\n\n \n\nA person reporting to the Financial Services Commission\nand the Korea Exchange that his/her purpose of holding the equity securities is to participate in the management of the listed company\nis prohibited from acquiring additional equity securities of the listed company and exercising voting rights during the period commencing\nfrom the date on which the event triggering the reporting requirement occurs and ending on the fifth day from the date on which the\nreport is made.\n\n* *\n\n*Report by the major shareholder on its shareholding\nstatus (10% report)*\n\n \n\nIn addition to the reporting requirements described\nabove, any person whose direct or beneficial ownership of our voting stock and/or depository receipts for our voting stock accounts for\n10% or more of the total issued and outstanding voting stock, or otherwise qualifies as a major shareholder under the FSCMA by exercising\nde facto influence over important management matters of the company, whom we refer to collectively as a major shareholder, must file a\nreport to the Securities and Futures Commission of Korea and to the Korea Exchange within five business days after the date on which\nthe person reached such shareholding limit. In addition, such person must file a report to the Securities and Futures Commission of Korea\nand to the Korea Exchange regarding any subsequent change in his/her ownership of shares, specific securities, etc. of the listed company.\nSuch report on a subsequent change in shareholding must be filed within five business days of the occurrence of any such change (subject\nto certain exceptions and special reporting deadlines prescribed under the Enforcement Decree of the FSCMA). Violation of these reporting\nrequirements may subject a person to criminal sanctions such as fines and/or imprisonment.\n\n* *\n\n73\n\n \n\n* *\n\n*Report by the Major Shareholder of its Plan\nto Transaction Specific Securities*\n\n \n\nThe FSCMA, amended on January 23, 2024 and\nimplemented from July 24, 2024, stipulates that if any major shareholder wishes to sell, buy, or carry out other transactions prescribed\nby the enforcement decree of the FSCMA involving, specific securities, it shall file a report on its plan for such transactions including\nthe details on the purpose, transaction volume, transaction period and other matters prescribed by the enforcement decree of the FSCMA,\nto the SFC and the Korea Exchange during the period prescribed by the enforcement decree of the FSCMA within 30 days to 90 days\nprior to the commencement of such transactions.\n\n \n\nThe enforcement decree of the FSCMA provides the details of the foregoing\nreporting requirements.\n\n \n\nAccording to the FSCMA, the following entities\nand any foreign entities equivalent thereto are excluded from the scope of persons subject to the reporting requirements under the enforcement\ndecree of the FSCMA: (i) Korean Government, (ii) The Bank of Korea, (iii) a bank under the Banking Act, (iv) The Korea\nDevelopment Bank, (v) The Industrial Bank of Korea, (vi) The Export-Import Bank of Korea, (vii) National Agricultural Cooperative\nFederation, (viii) National Federation of Fisheries Cooperatives, (ix) an insurance company under the Insurance Business Act,\n(x) a financial investment firm under the FSCMA, (xi) Korea Securities Finance Corporation, (xii) a merchant bank under\nthe FSCMA, (xiii) a money brokerage corporation under the FSCMA, (xiv) a financial holding company under the Financial Holding\nCompanies Act, (xv) a specialized credit financial corporation under the Specialized Credit Financial Business Act, (xvi) Korea\nFederation of Savings Bank and a mutual savings bank under the Mutual Savings Bank Act, (xvii) National Forest Cooperatives Federation,\n(xviii) Korean Federation of Community Credit Cooperatives, (xix) National Credit Union Federation, (xx) Korea Deposit\nInsurance Corporation and a financial resolution institution under the Depositor Protection Act, (xxi) Korea Asset Management Corporation,\n(xxii) Korea Housing Finance Corporation, (xxiii) Korea Investment Corporation, (xxiv) Korea Financial Investment Association,\n(xxv) Korea Securities Depositary, (xxvi) an electronic registration institution under the Act on Electronic Registration of\nStocks, Bonds, Etc., (xxvii) Korea Exchange, (xxviii) FSS, (xxix) a collective investment vehicle (fund) established under\nthe FSCMA, (xxx) a credit guarantee fund established under the Credit Guarantee Fund Act, (xxxi) a technology credit guarantee\nfund established under the Technology Credit Guarantee Fund Act, (xxxii) a fund or pension fund established pursuant to Korean law\n(excluding the credit guarantee fund and the technology credit guarantee fund above) or a corporation manages such fund or pension fund,\n(xxxiii) a corporation that operates the mutual aid business pursuant to Korean law, (xxxiv) Korean local government, (xxxv) a\nspecial purpose vehicle of the private equity fund under the FSCMA (xxxvi) Korea SMEs and Startups Agency, and (xxxvii) a privately\nplaced collective investment scheme excluded from the definition of collective investment under Article 6, Paragraph 5(1) of\nthe FSCMA (except for an individual investment association under the Venture Investment Promotion Act).\n\n \n\nFurthermore, the Enforcement Decree of the FSCMA\nalso excludes some types of the transactions from the transactions subject to the above reporting obligation, and the excluded transactions\nare expected to include a transaction to acquire or dispose of the securities as a result of issuance of, or exercise the exchange rights\nunder, the exchangeable bonds among the specific securities.\n\n \n\nC. Organizational Structure\n\n \n\nSee “—A. History and Development of\nthe Company.”\n\n \n\nD. Property, Plants and Equipment\n\n \n\nSee “—B. Business Overview—Facilities.”\n\n \n\n74"}