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Item 1A. Risk Factors

2024-11-13 compared with 2023-11-13 · 612 added, 576 removed, 365 unchanged (76% of the section changed)

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are subject to the risks encountered by early-stage companies .

We have only been in business since November 2015.

We have only been in business

since November 2015.

We did not generate any revenue until the fiscal year ended July 31, 2016.

We launched AT Consulting Center, which offers financial

and advisory services to our clients in August 2018 and acquired CNNM, a media and news platform, in September 2018.

As a start-up

company, our business strategies and model are constantly being tested by the market and operating results, and we pursue to adjust our

allocation of resources accordingly.

As such, our business may be subject to significant fluctuations in operating results in terms of

amounts of revenues and percentages of total with respect to the business segments.

We are, and expect for the foreseeable future

to be, subject to all the risks and uncertainties, inherent in a new business and in an industry which is in the early stages of development

As a result, we must establish many functions necessary to operate a business, including expanding our managerial and administrative

structure, assessing and implementing our marketing program, implementing financial systems and controls and personnel recruitment.

you should consider our prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by companies with

a limited operating history.

We launched AT Consulting Center,

which offers financial and advisory services to our clients in August 2018 and acquired CNNM, a media and news platform, in September 2018.

As a start-up company, our business strategies and model are constantly being tested by the market and operating results, and we pursue

to adjust our allocation of resources accordingly.

As such, our business may be subject to significant fluctuations in operating results

in terms of amounts of revenues and percentages of total with respect to the business segments.

We are, and expect for the

foreseeable future to be, subject to all the risks and uncertainties, inherent in a new business and in an industry which is in the early

stages of development in China.

As a result, we must establish many functions necessary to operate a business, including expanding our

managerial and administrative structure, assessing and implementing our marketing program, implementing financial systems and controls

and personnel recruitment.

Accordingly, you should consider our prospects in light of the costs, uncertainties, delays, and difficulties

frequently encountered by companies with a limited operating history.

These risks and challenges are, among other things:

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we may not be able to attract, retain and motivate qualified professionals.

Our future growth will depend substantially on

our ability to address these and the other risks described in this annual report.

If we do not successfully address these risks, our business

would be significantly harmed.

Our future growth will depend

substantially on our ability to address these and the other risks described in this annual report.

If we do not successfully address these

risks, our business would be significantly harmed.

We have incurred net losses for the year

ended July 31, 2024 and expect losses to continue in the near future.

the fiscal year ended July 31, 2023, we incurred a loss of $2.9 million.

operations have been adversely affected by the effect of Covid 19.

In addition, the PRC has recently issued statements that may have the

effect of slowing down our business consulting services of assisting PRC companies to go public in the United States.

As a result, until

the PRC further clarifies its views and regulations regarding PRC companies seeking to go public in the United States, and PRC companies

are comfortable with the business climate and seeking our services, we anticipate that we continue to experience losses in the future.

For the fiscal year ended

July 31, 2024, we incurred a loss of $3.2 million.

Our operations have been adversely affected by the effect of declining Economic

In addition, the PRC has recently issued statements that may have the effect of slowing down our business consulting services

of assisting PRC companies to go public in the United States.

As a result, until the PRC further clarifies its views and regulations

regarding PRC companies seeking to go public in the United States, and PRC companies are comfortable with the business climate and seeking

our services, we anticipate that we continue to experience losses in the future.

Raising additional capital may cause dilution

to our existing stockholders

As of July 31, 2023, we had cash of $0.6 million.

We may seek additional capital through a combination of private and public equity offerings, debt financings, strategic partnerships and

alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities,

existing ownership interests will be diluted and the terms of such financings may include liquidation or other preferences that adversely

affect the rights of existing stockholders.

Debt financings may be coupled with an equity component, such as warrants to purchase shares,

which could also result in dilution of our existing stockholders’ ownership.

The incurrence of indebtedness would result in increased

fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional

debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely

impact our ability to conduct our business and may result in liens being placed on our assets and intellectual property.

If we were to

default on such indebtedness, we could lose such assets and intellectual property.

If we do not continue to satisfy the Nasdaq

Capital Market continued listing requirements, our Ordinary Shares could be delisted.

The listing of our Ordinary Shares on the Nasdaq

Capital Market is contingent on our compliance with the Nasdaq Capital Market’s conditions for continued listing.

On December 16,

2020, we received notice from The Nasdaq Stock Market (“Nasdaq”) indicating we were not in compliance with the minimum bid

price requirement of $1.00 per share under the Nasdaq Listing Rules.

In addition, on December 17, 2020, we received notice from Nasdaq

stating that because we had not yet filed our Annual Report on Form 20-F for the year ended July 31, 2020 (the “Form 20-F”)

by its due date, we were no longer in compliance with Listing Rule which requires listed companies to timely file all required periodic

financial reports with the Securities and Exchange Commission.

On December 31, 2020, we filed our Form 20-F with the SEC and on January

28,2021 Nasdaq provide us confirmation that our closing bid price traded over $1.00 for ten consecutive business days.

Accordingly, we

are now in compliance with the Nasdaq Listing Rules.

On July 26, 2021, we received another notice from

Nasdaq indicating we that were not in compliance with the minimum bid price requirement of $1.00 per share under the Nasdaq Listing Rules.

The July 26, 2021 notice indicated that it had 180 calendar days, or until January 24, 2022, to regain compliance with the Listing Rules.

On August 23, 2021, we effected the Reverse Split in order to the meet the minimum bid price of $1.00, and on September 14, 2021, we received

notice from Nasdaq that we were back in compliance.

In the future, should we fail to meet the Nasdaq

Listing Rules, we may be subject to delisting by Nasdaq.

In the event our Ordinary Shares are no longer listed for trading on the Nasdaq

Capital Markets, our trading volume and share price may decrease and we may experience difficulties in raising capital which could materially

affect our operations and financial results.

Further, delisting from the Nasdaq Capital Market could also have other negative effects,

including potential loss of confidence by partners, lenders, suppliers and employees.

Finally, delisting could make it harder for us to

raise capital and sell securities.

We lost our foreign private issuer status,

which could result in significant additional costs and expenses.

The regulatory and compliance costs under U.S.

federal securities laws as a U.S.

domestic issuer may be significantly more than the costs incurred as a foreign private issuer.

we are no longer deemed to be a foreign private issuer, we are required to file periodic and current reports and registration statements

domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer.

In addition, we lost the ability to rely upon certain exemptions from the Nasdaq Capital Market’s corporate governance requirements

that are available to foreign private issuers.

As of July 31, 2024, we had

cash of $1.2 million.

We may seek additional capital through a combination of private and public equity offerings, debt financings, strategic

partnerships and alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible

debt securities, existing ownership interests will be diluted and the terms of such financings may include liquidation or other preferences

that adversely affect the rights of existing stockholders.

Debt financings may be coupled with an equity component, such as warrants

to purchase shares, which could also result in dilution of our existing stockholders’ ownership.

The incurrence of indebtedness

would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our

ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions

that could adversely impact our ability to conduct our business and may result in liens being placed on our assets and intellectual property.

If we were to default on such indebtedness, we could lose such assets and intellectual property.

we fail to comply with the continued listing requirements of NASDAQ, we would face possible delisting, which would result in a limited

public market for our shares and make obtaining future debt or equity financing more difficult for us.

Stockholders’ Equity Requirement

As previously reported on

November 22, 2023, the Company received a letter from Nasdaq (the Stockholder Equity Letter), regarding its non-compliance with the minimum

stockholders’ equity requirement for continued listing on the Nasdaq Capital Market.

The letter notified the Company that its stockholders’

equity, reported at $1,539,353 in the Annual Report on Form 10-K for the period ending July 31, 2023, did not meet the Nasdaq Capital

Market’s minimum stockholders’ equity requirement of $2,500,000 for continued listing as per Nasdaq Listing Rule 5550(b)(1)

(the Stockholders’ Equity Requirement).

Nasdaq gave the Company until January 8, 2024, to submit a plan to regain compliance with

the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1).

previously reported in a Current Report on Form 8-K April 16, 2024 the Company entered into a Securities Purchase Agreement (the

“Purchase Agreement”) with a non- U.S investor named in the Purchase Agreement (the “Purchaser”), pursuant

to which the Company agreed to sell an aggregate of 1,092,512 newly issued ordinary shares of the Company, $0.001 par value per

ordinary share (the “Ordinary Shares”) at a purchase price of $1.23 per share (the “Private Placement”).

connection with the Private Placement, the Company received gross proceeds in the amount of $1,343,789.76.

As previously reported in

a Current Report on Form 8-K, on April 18, 2024, the Company entered into two securities purchase agreements (the “April 18

Purchase Agreements”) in a private placement (the “April 18 Private Placement”) of the Company’s 813,010

newly issued ordinary shares, par value $0.001 per ordinary share, with one (1) U.S.

accredited investor, as defined under Rule 501

of Regulation D, and one (1) non-U.S.

investor (individually, an “Investor” and collectively, the

“Investors”), at the purchase price of $1.23 per ordinary share.

The Company received gross proceeds in the amount of

$1,000,002.38 in connection with the April 18 Private Placement.

previously reported in a Form 8-K, on April 29, 2024, the Company entered into a deferred salary conversion agreement (“ Deferred

Salary Conversion Agreement ”) with Mr.

Jun Liu, the president, chief executive officer and chairman of the board of directors

of the Company.

Pursuant to the Agreement, the Company issued 384,478 ordinary shares to Mr.

Liu (“ Deferred Salary Debt Shares ”),

$0.001 par value in lieu of an unpaid salary of $349,875 owed to Mr.

Liu at a per share price of $0.91 which was the Nasdaq consolidated

closing bid price per share of the Company’s ordinary shares on April 29, 2024.

On May 16, 2024, Nasdaq granted

the Company an extension of time until May 20, 2024 to provide evidence of compliance, by filing a Current Report on Form 8-K which includes

(1) disclosure of Nasdaq’s deficiency letter and the specific deficiency or deficiencies cited;

(2) a description of the completed

transaction or event that enabled the Company to satisfy the stockholders’ equity requirement for continued listing;

(3) an affirmative

statement that, as of the date of the report, the Company believes it has regained compliance with the stockholders’ equity requirement

based upon the specific transaction or event referenced in item (2) above;

and (4) a disclosure stating that Nasdaq will continue to monitor

the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report

the Company does not evidence compliance, that it may be subject to delisting.

As of May 16, 2024,

the Company submitted to Nasdaq that it believes its shareholders’ equity as of April 30, 2024, on a pro forma basis after giving

effect to the transactions described above would be $2,683,042 and therefore, believes it has regained compliance with the stockholders’

equity requirement based upon the specific transactions and events referenced above.

Nasdaq will continue to monitor the Company’s

ongoing compliance with the stockholders’ equity requirement, and if at the time of its next periodic report, which will be its

annual report on Form 10-K for the year ended July 31, 2024, the Company does not evidence compliance, it may be subject to delisting.

As of July 31, 2024, the Company’s

stockholders’ equity was $1,753,754.

There can be no assurance

that the company will continue to have a minimum stockholders’ equity of $2,500,000 and satisfy Nasdaq’s requirements for

continued listing under Nasdaq Listing Rule 5550(b)(1), the Stockholders’ Equity Requirement.

If we fail to satisfy any of Nasdaq’s

continued listing requirements, Nasdaq may take steps to delist our ordinary shares, which could have a materially adverse effect on our

ability to raise additional funds as well as the price and liquidity

the Company fails to regain compliance with Nasdaq’s Listing Rules, we could be subject to suspension and delisting proceedings.

If our securities lose their status on The NASDAQ Capital Market, our securities would likely trade in the over-the-counter market.

our securities were to trade on the over-the-counter market, selling our securities could be more difficult because smaller quantities

of securities would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced.

In addition, in the event our securities are delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage

broker-dealers from effecting transactions in our securities, further limiting the liquidity of our securities.

These factors could result

in lower prices and larger spreads in the bid and ask prices for our securities.

Such delisting from The NASDAQ Capital Market and continued

or further declines in our share price could also greatly impair our ability to raise additional necessary capital through equity or debt

financing, and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing or other

transactions.

Our historical financial results may not

be indicative of our future performance.

may not be able to sustain our historical rapid growth and/or may not be able to grow our business at all.

Our net revenue increased from

$3.6 million for the fiscal year ended July 31, 2017 and $5.3 million for the fiscal year ended July 31, 2018.

net revenue decreased to $1.7 million, $0.9 million and $0.6 million for the fiscal year ended July 31, 2022, 2021 and 2020,

respectively.

Our net income was $0.6 million for the fiscal year ended July 31, 2017, $1.9 million for the fiscal year ended July 31,

2018, and $0.4 million for the fiscal year ended July 31, 2019, and decreased to a net loss of $17.3 million for the fiscal year

ended July 31, 2020, and a net loss of $9.0 million for the fiscal year 2021, and our net losses were $2.9 million and $3.4 million

for the years ended July 31, 2023 and 2022 respectively.

However, our historical growth rate, limited history of operation, changes to

business operations, among other factors, make it difficult to evaluate our prospects.

We may not be able to sustain

our historical rapid growth and/or may not be able to grow our business at all.

Our net revenue was $0.6 million and $2.5 million for

the years ended July 31, 2024 and 2023, respectively.

Our net loss was $3.2 million and $2.9 million for the years ended July 31, 2024

and 2023, respectively.

However, our historical growth rate, limited history of operation, changes to business operations, among other

factors, make it difficult to evaluate our prospects.

Substantial doubt about our ability to continue

as a going concern.

Because of our losses from operations, working

capital deficit, and our requirement of additional capital to fund our current operating plan, at July 31, 2023, these factors indicate

the existence of an uncertainty that raises substantial doubt about our ability to continue as a going concern and is dependent on our

ability to raise addition working capital through debt or equity financings.

may incur liability for unpaid taxes, including interest and penalties.

the normal course of business, we may be subject to challenges from various taxing authorities regarding the amounts of taxes due.

taxing authorities may take the position that we owe more taxes than we have paid.

We recorded tax liabilities of approximately $31,200

and $0.1 million as of July 31, 2023 and 2022, respectively,

for the possible underpayment of income and business taxes.

It is possible that our tax for past taxes may be higher than those amounts

if the authorities determine that we are subject to penalties or that we have not paid the correct amount.

Although our management believes

it may be able to negotiate with local taxing authorities a reduction to any amounts that such authorities may believe are due and a

reduction to any interest or penalties thereon, we have no guarantee that we will be able to negotiate such a reduction.

To the extent

we are able to negotiate such amounts, national-level taxing authorities may take the position that localities are without power to reduce

such liabilities, and such taxing authorities may attempt to collect unpaid taxes, interest and penalties in amounts greatly exceeding

management’s estimates.

of our losses from operations, cash outflow in operating activities, and

our requirement of additional capital to fund our current operating plan, at July 31, 2024, these factors indicate the existence of an

uncertainty that raises substantial doubt about our ability to continue as a going concern and is dependent on our ability to raise addition

working capital through debt or equity financings.

We may incur liability for unpaid taxes,

including interest and penalties.

In the normal course of business,

we may be subject to challenges from various taxing authorities regarding the amounts of taxes due.

The taxing authorities may take the

position that we owe more taxes than we have paid.

We recorded tax liabilities of approximately $3,300 and $31,200 as of July 31, 2024

and 2023, respectively, for the possible underpayment of income and business taxes.

It is possible that our tax for past taxes may be

higher than those amounts if the authorities determine that we are subject to penalties or that we have not paid the correct amount.

our management believes it may be able to negotiate with local taxing authorities a reduction to any amounts that such authorities may

believe are due and a reduction to any interest or penalties thereon, we have no guarantee that we will be able to negotiate such a reduction.

To the extent we are able to negotiate such amounts, national-level taxing authorities may take the position that localities are without

power to reduce such liabilities, and such taxing authorities may attempt to collect unpaid taxes, interest and penalties in amounts greatly

exceeding management’s estimates.

Changes in the U.S.

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make our services less attractive to our clients and adversely affect our business and financial condition.

Our consulting services help our clients become

public companies.

Our consulting services help

our clients become public companies.

For the year ended July 31, 2024, our clients were primarily based in Hong Kong and North America.

We are expanding

our consulting services to include Chinese domestic exchanges and the Hong Kong Stock Exchange, but currently, all of our former and current

clients have chosen to go public in the U.S.

We believe this is due to the more flexible rules provided by the U.S.

OTC markets and

exchanges than the Chinese domestic exchanges, as well as the attractive financing and growth opportunities the U.S.

capital market, which

has remained relatively stable comparing to the Chinese capital market, are perceived to be able to provide to the Chinese enterprises.

We are expanding our consulting services to include Chinese domestic exchanges and the Hong Kong Stock Exchange, but currently, all of

our former and current clients have chosen to go public in the U.S.

We believe this is due to the more flexible rules provided by

OTC markets and exchanges than the Chinese domestic exchanges, as well as the attractive financing and growth opportunities the

capital market, which has remained relatively stable comparing to the Chinese capital market, are perceived to be able to provide

to the Chinese enterprises.

As a result, our going public consulting business has flourished since its inception in 2015.

However, changes in the U.S.

capital markets

could make our service less desirable to Chinese enterprises.

However, changes

capital markets could make our service less desirable to Chinese enterprises.

For example, if the U.S.

OTC markets and exchanges make their rules more

stringent to Chinese enterprises, then fewer Chinese enterprises will be able to use our consulting services to go public in the U.S.,

and our business and financial condition will be adversely affected as a result.

Failure to maintain or enhance our brand

or image could have a material and adverse effect on our business and results of operations.

We believe our “ATIF” brand is associated

with a well-recognized, integrated consulting services company in the market that it operates, with comprehensive personalized one-stop

consulting services to suit our clients’ needs.

OTC markets and exchanges

make their rules more stringent to Chinese enterprises, then fewer Chinese enterprises will be able to use our consulting services

to go public in the U.S., and our business and financial condition will be adversely affected as a result.

Failure to maintain or enhance our brand or image could

have a material and adverse effect on our business and results of operations.

We believe our “ATIF”

brand is associated with a well-recognized, integrated consulting services company in the market that it operates, with comprehensive

personalized one-stop consulting services to suit our clients’ needs.

Our brand is integral to our sales and marketing efforts.

Our continued success

in maintaining and enhancing our brand and image depends to a large extent on our ability to satisfy customers’ needs by further

developing and maintaining quality of services across our operations, as well as our ability to respond to competitive pressures.

are unable to satisfy customers’ needs or if our public image or reputation were otherwise diminished, our business transactions

with our clients may decline, which could in turn adversely affect our results of operations.

Our continued success in maintaining and enhancing our brand and image depends to a large extent on our ability to satisfy customers’

needs by further developing and maintaining quality of services across our operations, as well as our ability to respond to competitive

If we are unable to satisfy customers’ needs or if our public image or reputation were otherwise diminished, our business

transactions with our clients may decline, which could in turn adversely affect our results of operations.

We may not be successful in implementing

important new strategic initiatives, which may have an adverse impact on our business and financial results.

There is no assurance that we will be able to

implement important strategic initiatives in accordance with our expectations, which may result in an adverse impact on our business and

financial results.

Our new strategic initiatives, AT Consulting Center and CNNM, which were launched in 2018, and the investment and financing

analysis reporting business, which was launched in July 2019, are designed to create growth, improve our results of operations and

drive long-term shareholder value.

However, our management may lack required experience, knowledge, insight, or human and capital resources

to carry out the effective implementation to expand into new spaces outside the financial consulting industry.

As such, we may not be

able to realize our expected growth, and our business and financial results will be adversely impacted.

There is no assurance that

we will be able to implement important strategic initiatives in accordance with our expectations, which may result in an adverse impact

on our business and financial results.

Our new strategic initiatives, AT Consulting Center and CNNM, which were launched in 2018, and

the investment and financing analysis reporting business, which was launched in July 2019, are designed to create growth, improve

our results of operations and drive long-term shareholder value.

However, our management may lack required experience, knowledge, insight,

or human and capital resources to carry out the effective implementation to expand into new spaces outside the financial consulting industry.

As such, we may not be able to realize our expected growth, and our business and financial results will be adversely impacted.

Increasing competition within our industry

could have an impact on our business prospects.

The financial consulting market is an industry

where new competitors can easily enter into since there are no significant barriers to entry.

Competing companies may have significantly

greater financial and other resources than we do and may offer services that are more attractive to companies seeking funds;

competition would have a negative impact on both our revenues and our profit margins.

The financial consulting market

is an industry where new competitors can easily enter into since there are no significant barriers to entry.

Competing companies may have

significantly greater financial and other resources than we do and may offer services that are more attractive to companies seeking funds;

increased competition would have a negative impact on both our revenues and our profit margins.

Our results of operations and cash flows

may fluctuate due to the non-recurring nature of our going public consulting services provided to our clients.

generated the bulk of our total revenues from going public consulting services provided to small and medium-sized enterprises.

Unlike other service businesses that have the potential of retaining their clients for long-term and recurring services, our consulting

contractual relationships with our clients usually last for 12 months;

there is no recurring business from our clients once they become

public companies.

Therefore, we face the constant challenge of identifying and recruiting new clients in order to maintain our operations

and cash flows, which are difficult for us to predict from year to year.

In addition, even though we screen our prospective

clients carefully before entering into service agreements, occasionally we have to discontinue our consulting services due to a variety

of unforeseeable reasons such as the client’s shortage in funds, disagreements regarding the going public process, and changes in

the client’s business and expectations, among others.

Due to the fact that our consulting fee is paid on installments, we will not

be able to realize the complete contracted amounts under these circumstances, without getting into potentially costly litigations.

We generated the bulk of our

total revenues from going public consulting services provided to small and medium-sized enterprises.

Unlike other service businesses that

have the potential of retaining their clients for long-term and recurring services, our consulting contractual relationships with our

clients usually last for 12 months;

there is no recurring business from our clients once they become public companies.

Therefore, we face

the constant challenge of identifying and recruiting new clients in order to maintain our operations and cash flows, which are difficult

for us to predict from year to year.

In addition, even though we

screen our prospective clients carefully before entering into service agreements, occasionally we have to discontinue our consulting services

due to a variety of unforeseeable reasons such as the client’s shortage in funds, disagreements regarding the going public process,

and changes in the client’s business and expectations, among others.

Due to the fact that our consulting fee is paid on installments,

we will not be able to realize the complete contracted amounts under these circumstances, without getting into potentially costly litigations.

Arbitration proceedings, legal proceedings,

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damages, undertake remedial measures, or prevent us from taking certain actions, any of which could adversely affect our business.

In the course of our business, we are, and in

the future may be, a party to arbitration proceedings, legal proceedings, investigations, and other claims or disputes, which have related

and may relate to subjects including commercial transactions, intellectual property, securities, employee relations, or compliance with

applicable laws and regulations.

As discussed below, we are engaged in a lawsuit relating to certain engagement agreements we had in connection

with our and Leaping Group Co.’s initial public offering.

On May 14, 2020, Boustead Securities, LLC (“Boustead”)

filed its original complaint in the United States District Court for the Southern District of New York (CV-03749) against LGC and us.

The case arises from a consulting agreement between us and Boustead, wherein Boustead claims that it is entitled to fees in connection

with our cancellation of an $1,851,000 outstanding debt owed by LGC and issuance of 9,940,002 ordinary shares (1,988,000 ordinary shares

retrospectively restated for effect of reverse stock split on August 30, 2021) to LGC in exchange for a 51.2% interest in LGC.

claims that we breached that consulting agreement and is entitled to fees in connection with our acquiring control of LGC.

complaint alleges four causes of action against us including breach of contract;

breach of the implied covenant of good faith and fair

tortious interference with business relationships and quantum meruit.

On October 6, 2020, we filed a motion to dismiss

In the course of our business,

we are, and in the future may be, a party to arbitration proceedings, legal proceedings, investigations, and other claims or disputes,

which have related and may relate to subjects including commercial transactions, intellectual property, securities, employee relations,

or compliance with applicable laws and regulations.

As discussed below, we are engaged in a lawsuit relating to certain engagement agreements

we had in connection with our and Leaping Group Co.’s initial public offering.

On May 14, 2020, Boustead filed a lawsuit

against the Company and LGC for breaching the underwriting agreement Boustead had with each of the Company and LGC, in which Boustead

was separately engaged as the exclusive financial advisor to provide financial advisory services to the Company and LGC.

In April 2020, the Company acquired 51.2%

equity interest in LGC after LGC terminated its efforts to launch an IPO on its own.

Boustead alleged that the acquisition transaction

between the Company and LGC was entered into during the tail period of the exclusive agreement between Boustead and the Company, and therefore

deprived Boustead of compensation that Boustead would otherwise have been entitled to receive under its exclusive agreement with the Company

Therefore, Boustead is attempting to recover from the Company an amount equal to a percentage of the value of the transaction

it conducted with LGC.

Boustead’s Complaint alleges four causes

of action against the Company, including breach of contract;

breach of the implied covenant of good faith and fair dealing;

tortious interference

with business relationships and quantum meruit.

On October 6, 2020, ATIF filed a motion to dismiss

Boustead’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(5).

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Court for the Southern District of New York directed Boustead to respond to the motion or amend its Complaint by November 10, 2020.

opted to amend its complaint and filed the amended complaint on November 10, 2020.

Boustead’s first amended complaint asserted the

same four causes of action against LGC and us as its original complaint.

We filed another motion to dismiss Boustead’s amended complaint

on December 8, 2020.

Boustead opted to amend its complaint and filed the amended complaint on November 10, 2020.

Boustead’s amended complaint asserts

the same four causes of action against ATIF and LGC as its original complaint.

The Company filed another motion to dismiss Boustead’s

amended complaint on December 8, 2020.

On August 25, 2021, the United States District

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and opinion, the United States District Court for the Southern District of New York allowed Boustead to move for leave to amend its causes

of action against us as to breach of contract and tortious interference with business relationships, but not breach of the implied covenant

of action against ATIF as to breach of contract and tortious interference with business relationships, but not breach of the implied covenant

of good faith and fair dealing and quantum meruit.

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filed its opposition on February 1, 2022 and the Company replied on February 8, 2022.

On July 6, 2022, the Court

denied our motion to dismiss the second amended complaint.

Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration.

Briefing on the Company’s motion to compel concluded

on August 23, 2022 Since the agreement between ATIF and Boustead contains a valid arbitration clause that applies to Boustead’s

breach of contract claim, and the parties have not engaged in discovery, on February 14, 2023, the Court ordered that ATIF’s motion

to compel arbitration is granted and this case is stayed pending arbitration.

On July 6, 2022, the Court denied our motion to

dismiss the second amended complaint.

Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration of Boustead’s

claims in California.

Briefing on the Company’s motion to compel concluded on August 23, 2022.

Since the agreement between ATIF

and Boustead contains a valid arbitration clause that applies to Boustead’s breach of contract claim, and the parties have not engaged

in discovery, on February 14, 2023, the Court ordered that ATIF’s motion to compel arbitration is granted and this case is stayed

pending arbitration.

On March 10, 2023, Boustead,

filed Demand for Arbitration against ATIF (the Respondent) before JAMS in California and the case Ref.

filed Demand for Arbitration against ATIF (the Respondent) before JAMS in California and the assigned JAMS case Ref.

is 5220002783.

On May 25, 2023,

ATIF filed its answer to deny Boustead’s Demand for Arbitration, which was unsuccessful and the arbitration process was initiated.

The arbitrator ordered a motion to be filed by Boustead for a determination of contact interpretation, prior to extensive discovery into

issues such as the alleged merits and damages, and to determine whether the contract interpretation should allow the matter to further

On May 25, 2023, ATIF filed its answer to deny Boustead’s Demand for Arbitration, which was unsuccessful and the arbitration process

was initiated.

The arbitrator ordered a motion to be filed by Boustead for a determination of contact interpretation, prior to extensive

discovery into issues such as the alleged merits and damages, and to determine whether the contract interpretation should allow the matter

to further proceed.

Boustead had filed the Motion for Contract Interpretation Determination.

ATIF filed its opposition to that Motion on October

The hearing on the motion was held on November 8, 2023, during which

the arbitrator extended the hearing to February 29, 2024.

The arbitrator also established December 15, 2023, as the deadline for Boustead

to submit its reply regarding the contract interpretation issues raised by the Company.

Simultaneously, the Company was granted until

February 12, 2024, to present its response brief.

Our management believes it

is premature to assess and predict the outcome of this pending arbitration.

ATIF filed its opposition to that Motion

on October 16, 2023.

The hearing on the motion was held on November 8, 2023, during which the arbitrator extended the hearing to February

The arbitrator also established December 15, 2023, as the deadline for Boustead to submit its reply regarding the contract

interpretation issues raised by the Company.

Simultaneously, the Company was granted until February 12, 2024, to present its response

On September 24, 2024, the Company and Boustead entered into a settlement

agreement, pursuant to which the Company shall pay a total amount of $1,000,000 to Boustead.

The payment is made in three instalments,

the first instalment of $250,000 is payable upon execution of the settlement agreement, the second instalment of $500,000 is payable

before March 1, 2025, and the final instalment of $250,000 is payable before December 31, 2025.

On December 22, 2023, J.P Morgan Securities LLC (“JPMS”)

filed a lawsuit in the Superior Court of California, County of Orange, bearing Case Number 30-2023-01369978-CU-FR-CJC against ATIF Holdings

Limited (“Holdings”), ATIF Inc., ATIF-1 GP, LLC (ATIF-1 GP”), and two officers of Holdings and ATIF Inc., Jun Liu and

Zhiliang “Ian” Zhou, alleging and asserting that it is entitled to recover $5,064,160 in damages plus interest and attorneys’

fees relating to a stock transaction by ATIF-1 GP.

The parties have agreed to

attempt to mediate the dispute before proceeding to litigation.

A mediation was held on May 6, 2024, but the parties could not come

to a resolution.

The Defendants’ time to respond to the lawsuit was May 20, 2024.

On May 15, 2024, the Defendants filed a Petition

with the Superior Court of California seeking to compel arbitration under the operative agreements and stay the underlying State Court

On or about August 16, 2024, the parties agreed that JPMS and ATIF-1 GP, LLC would submit any disputes between the two of them

only, to FINRA arbitration, and stay the California state court case pending such arbitration.

At this time, the management is still in

the process of evaluating the claims and defenses.

We may be subject to damages resulting from unauthorized access

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managerial and other employees, our business and results of operations could be materially and adversely affected.

We place substantial reliance on the consulting

and financial service industry experience and knowledge of our senior management team as well as their relationships with other industry

participants.

The loss of the services of one or more members of our senior management could hinder our ability to effectively manage

our business and implement our growth strategies.

Finding suitable replacements for our current senior management could be difficult,

and competition for such personnel of similar experience is intense.

If we fail to retain our senior management, our business and results

of operations could be materially and adversely affected.

Our consulting service personnel are critical

to maintaining the quality and consistency of our services, brand, and reputation.

It is important for us to attract qualified managerial

and other employees who have experience in consulting services and are committed to our service approach.

There may be a limited supply

of such qualified individuals.

We must hire and train qualified managerial and other employees on a timely basis to keep pace with our

rapid growth while maintaining consistent quality of services across our operations.

We must also provide continuous training to our managerial

and other employees so that they are equipped with up-to-date knowledge of various aspects of our operations and can meet our demand for

high-quality services.

If we fail to do so, the quality of our services may decrease, which in turn, may cause a negative perception of

our brand and adversely affect our business.

We place substantial reliance

on the consulting and financial service industry experience and knowledge of our senior management team as well as their relationships

with other industry participants.

The loss of the services of one or more members of our senior management could hinder our ability to

effectively manage our business and implement our growth strategies.

Finding suitable replacements for our current senior management could

be difficult, and competition for such personnel of similar experience is intense.

If we fail to retain our senior management, our business

and results of operations could be materially and adversely affected.

Our consulting service personnel

are critical to maintaining the quality and consistency of our services, brand, and reputation.

It is important for us to attract qualified

managerial and other employees who have experience in consulting services and are committed to our service approach.

There may be a limited

supply of such qualified individuals.

We must hire and train qualified managerial and other employees on a timely basis to keep pace with

our rapid growth while maintaining consistent quality of services across our operations.

We must also provide continuous training to our

managerial and other employees so that they are equipped with up-to-date knowledge of various aspects of our operations and can meet our

demand for high-quality services.

If we fail to do so, the quality of our services may decrease, which in turn, may cause a negative perception

of our brand and adversely affect our business.

Any failure to protect our trademarks and

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We believe our trademarks,

in Hong Kong, “ATIF” in Hong Kong and China, “亚洲时代” in China, “CNNM” in

Hong Kong “INTERNATIONAL SCHOOL OF FINANCE” in Hong Kong, “IPOEX” in China, the United Kingdom, the European Union,

and Singapore, and is also in the process of registration with the trademark office of Korea, and other intellectual property rights are

critical to our success.

Any unauthorized use of our trademarks and other intellectual property rights could harm our competitive advantages

and business.

Historically, China has not protected intellectual property rights to the same extent as the United States, and infringement

of intellectual property rights continues to pose a serious risk of doing business in China.

Monitoring and preventing unauthorized use

are difficult.

The measures we take to protect our intellectual property rights may not be adequate.

Furthermore, the application of laws

governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to us.

are unable to adequately protect our brand, trademarks and other intellectual property rights, we may lose these rights and our business

may suffer materially.

As internet domain name rights are not rigorously

regulated or enforced in China, other companies may incorporate in their domain names elements similar in writing or pronunciation to

the “ATIF”, “CNNM,” and “INTERNATIONAL SCHOOL OF FINANCE,” and “IPOEX” trademarks or their

Chinese equivalents.

This may result in confusion between those companies and our company and may lead to the dilution of our brand value,

which could adversely affect our business.

“亞洲時代” in Hong Kong, “ATIF” in Hong Kong and China, “亚洲时代”

in China, “CNNM” in Hong Kong “INTERNATIONAL SCHOOL OF FINANCE” in Hong Kong, “IPOEX” in China, the

United Kingdom, the European Union, and Singapore, and is also in the process of registration with the trademark office of Korea, and

other intellectual property rights are critical to our success.

Any unauthorized use of our trademarks and other intellectual property

rights could harm our competitive advantages and business.

Historically, China has not protected intellectual property rights to the same

extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business in China.

Monitoring and preventing unauthorized use are difficult.

The measures we take to protect our intellectual property rights may not be

Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and

could involve substantial risks to us.

If we are unable to adequately protect our brand, trademarks and other intellectual property rights,

we may lose these rights and our business may suffer materially.

As internet domain name rights

are not rigorously regulated or enforced in China, other companies may incorporate in their domain names elements similar in writing or

pronunciation to the “ATIF”, “CNNM,” and “INTERNATIONAL SCHOOL OF FINANCE,” and “IPOEX”

trademarks or their Chinese equivalents.

This may result in confusion between those companies and our company and may lead to the dilution

of our brand value, which could adversely affect our business.

We depend heavily on a limited number

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For more information, see “Where You Can Find More Information.”

Relating to Doing Business in China

Risks Relating to Doing Business in China

Changes in China’s economic, political,

or social conditions or government policies could have a material adverse effect on our business and operations.

the Company is engaged by clients in mainland China and Hong Kong and we derive revenue from mainland China and Hong Kong, our business,

financial condition, results of operations, and prospects may be influenced, to a degree, by political, economic, and social conditions

in China generally.

The Chinese economy differs from the economies of most developed countries in many respects, including the level

of government involvement, level of development, growth rate, control of foreign exchange, and allocation of resources.

Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, including the reduction

of state ownership of productive assets and the establishment of improved corporate governance in business enterprises, a significant

portion of productive assets in China is still owned by the government.

In addition, the Chinese government continues to play a significant

role in regulating industries by imposing regulatory guidance or policies.

The Chinese government also exercises significant control

over China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting

monetary policies, and providing preferential treatment to particular industries or companies.

If the Company is engaged

by clients in mainland China and Hong Kong and we derive revenue from mainland China and Hong Kong, our business, financial condition,

results of operations, and prospects may be influenced, to a degree, by political, economic, and social conditions in China generally.

The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement,

level of development, growth rate, control of foreign exchange, and allocation of resources.

Although the Chinese government has implemented

measures emphasizing the utilization of market forces for economic reform, including the reduction of state ownership of productive assets

and the establishment of improved corporate governance in business enterprises, a significant portion of productive assets in China is

still owned by the government.

In addition, the Chinese government continues to play a significant role in regulating industries by imposing

regulatory guidance or policies.

The Chinese government also exercises significant control over China’s economic growth by allocating

resources, controlling payment of foreign currency-denominated obligations, setting monetary policies, and providing preferential treatment

to particular industries or companies.

While the Chinese economy

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We have been closely monitoring

China’s regulatory developments regarding any approvals from the CSRC, the CAC, or other PRC regulatory authorities required for our business

However, significant uncertainty remains about enacting, interpreting, and implementing regulatory requirements related to

overseas securities offerings and other capital markets activities.

The PRC government may take actions to exert more oversight and control

over offerings by China-based issuers conducted overseas and/or foreign investment in such companies, which could significantly limit

or ultimately hinder our ability to offer or continue to offer services to companies looking to get listed outside China and which might

impact our revenue.

If it is determined in the future that the approval or permissions of the CSRC, the CAC, or any other regulatory authority

is required for the business operations and if we do not receive or maintain the approvals or permissions, or if we inadvertently conclude

that such approvals or permissions are not required, or applicable laws, regulations, or interpretations change such that we are required

to obtain approvals or permissions in the future, we may be subject to investigations by competent regulators, fines or penalties, ordered

to suspend our relevant operations and rectify any non-compliance, or take other actions prohibited from engaging in a relevant business

or conducting any offering.

These risks could result in a material adverse change in our operations, significantly impact our revenue

or ultimately hinder our ability to offer or continue to offer securities to investors, or cause such securities to decline in value or

become worthless.

China’s regulatory developments regarding any approvals from the CSRC, the CAC, or other PRC regulatory authorities required for

our business operations.

However, significant uncertainty remains about enacting, interpreting, and implementing regulatory requirements

related to overseas securities offerings and other capital markets activities.

The PRC government may take actions to exert more oversight

and control over offerings by China-based issuers conducted overseas and/or foreign investment in such companies, which could significantly

limit or ultimately hinder our ability to offer or continue to offer services to companies looking to get listed outside China and which

might impact our revenue.

If it is determined in the future that the approval or permissions of the CSRC, the CAC, or any other regulatory

authority is required for the business operations and if we do not receive or maintain the approvals or permissions, or if we inadvertently

conclude that such approvals or permissions are not required, or applicable laws, regulations, or interpretations change such that we

are required to obtain approvals or permissions in the future, we may be subject to investigations by competent regulators, fines or penalties,

ordered to suspend our relevant operations and rectify any non-compliance, or take other actions prohibited from engaging in a relevant

business or conducting any offering.

These risks could result in a material adverse change in our operations, significantly impact our

revenue or ultimately hinder our ability to offer or continue to offer securities to investors, or cause such securities to decline in

value or become worthless.

In light of recent events indicating greater

55 unchanged sentences

that the Public Company Accounting Oversight Board (the “PCAOB”) is unable to inspect or investigate our auditor completely.

audit report included in our annual

report on Form 20-F for the year ended July 31, 2021, was issued by ZH CPA, a U.S.-based accounting firm that is registered with the PCAOB

and can be inspected by the PCAOB.

We have no intention of dismissing ZH CPA in the future or of engaging any auditor not based in the

The audit report included

in our annual report on Form 10-K for the years ended July 31, 2024 and 2023, was issued by ZH CPA, a U.S.-based accounting firm that is registered

with the PCAOB and can be inspected by the PCAOB.

We have no intention of dismissing ZH CPA in the future or of engaging any auditor not

based in the U.S.

and not subject to regular inspection by the PCAOB.

There is no guarantee, however, that any future auditor engaged by the Company

would remain subject to full PCAOB inspection during the entire term of our engagement.

The PCAOB is currently unable to conduct inspections

in China without the approval of Chinese government authorities.

If it is later determined that the PCAOB is unable to inspect or investigate

our auditor completely, investors may be deprived of the benefits of such inspection.

Any audit reports not issued by auditors that are

completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly

evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements

and disclosures are adequate and accurate.

In addition, under the HFCAA, our securities may be prohibited from trading on the Nasdaq or

There is no guarantee, however, that any future auditor engaged

by the Company would remain subject to full PCAOB inspection during the entire term of our engagement.

The PCAOB is currently unable to

conduct inspections in China without the approval of Chinese government authorities.

If it is later determined that the PCAOB is unable

to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection.

Any audit reports not

issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents

the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance

that our financial statements and disclosures are adequate and accurate.

In addition, under the HFCAA, our securities may be prohibited

from trading on the Nasdaq or other U.S.

stock exchanges or in the over the counter trading market in the U.S.

if our auditor is not inspected by the PCAOB for three

consecutive years, and this ultimately could result in our Ordinary Shares being delisted.

Furthermore, on June 22, 2021, the U.S.

passed the AHFCAA, which w as signed into law on

December 29, 2022, amending the HFCAA and requiring the SEC to prohibit an issuer’s securities from trading on any U.S.

stock exchange

if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years.

On December 2, 2021, SEC has announced the adoption

of amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.

The rules apply to registrants the

SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in

a foreign jurisdiction and that the PCAOB is unable to inspect or investigate (Commission-Identified Issuers).

The final amendments require

Commission-Identified Issuers to submit documentation to the SEC establishing that, if true, it is not owned or controlled by a governmental

entity in the public accounting firm’s foreign jurisdiction.

The amendments also require that a Commission-Identified Issuer that

is a “foreign issuer,” as defined in Exchange Act Rule 3b-4, provide certain additional disclosures in its annual report for

itself and any of its consolidated foreign operating entities.

Further, the adopting release provides notice regarding the procedures

the SEC has established to identify issuers and to impose trading prohibitions on the securities of certain Commission-Identified Issuers,

as required by the HFCAA.

The SEC will identify Commission-Identified Issuers for fiscal years beginning after Dec.

A Commission-Identified

Issuer will be required to comply with the submission and disclosure requirements in the annual report for each year in which it was identified.

If a registrant is identified as a Commission-Identified Issuer based on its annual report for the fiscal year ended Dec.

31, 2021, the

registrant will be required to comply with the submission or disclosure requirements in its annual report filing covering the fiscal year

if our auditor is not inspected

by the PCAOB for three consecutive years, and this ultimately could result in our Ordinary Shares being delisted.

Furthermore, on June

22, 2021, the U.S.

Senate passed the AHFCAA, which was signed into law on December 29, 2022, amending the HFCAA and requiring the SEC

to prohibit an issuer’s securities from trading on any U.S.

stock exchange if its auditor is not subject to PCAOB inspections for

two consecutive years instead of three consecutive years.

On December 2, 2021, SEC

has announced the adoption of amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.

rules apply to registrants the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting

firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate (Commission-Identified Issuers).

The final amendments require Commission-Identified Issuers to submit documentation to the SEC establishing that, if true, it is not owned

or controlled by a governmental entity in the public accounting firm’s foreign jurisdiction.

The amendments also require that a

Commission-Identified Issuer that is a “foreign issuer,” as defined in Exchange Act Rule 3b-4, provide certain additional

disclosures in its annual report for itself and any of its consolidated foreign operating entities.

Further, the adopting release provides

notice regarding the procedures the SEC has established to identify issuers and to impose trading prohibitions on the securities of certain

Commission-Identified Issuers, as required by the HFCAA.

The SEC will identify Commission-Identified Issuers for fiscal years beginning

A Commission-Identified Issuer will be required to comply with the submission and disclosure requirements in the

annual report for each year in which it was identified.

Risks Relating to the our Ordinary Shares

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expensive to raise capital in the future.

a November 5, 2020, private placement, we sold warrants to purchase 869,565 Ordinary Shares at an exercise price of $4.60 per Ordinary

Each warrant will expire five years from the date of issuance.

The warrant exercise price may be subject to adjustment in the event

that we issue certain securities at prices below the then exercise price.

In connection with our reverse stock split, the exercise price

for these warrants were repriced at $2.74 per ordinary share.

Until these warrants all exercised, these repricing exercise features may

have the effect of limiting our ordinary share price and make it more expensive to raise capital in the future.

As of July 31, 2023, 563,855

warrants have been exercised for 459,986 Ordinary Shares, among which 389,855 warrants were exercised at $2.74 per ordinary share for

an aggregate total of $1.1 million, and the remaining 174,000 warrants were cashless exercises.

In a November 5, 2020, private

placement, we sold warrants to purchase 869,565 Ordinary Shares at an exercise price of $4.60 per Ordinary Share.

Each warrant will expire

five years from the date of issuance.

The warrant exercise price may be subject to adjustment in the event that we issue certain securities

at prices below the then exercise price.

In connection with our reverse stock split, the exercise price for these warrants were repriced

at $2.74 per ordinary share.

Until these warrants all exercised, these repricing exercise features may have the effect of limiting our

ordinary share price and make it more expensive to raise capital in the future.

As of July 31, 2024, 563,855 warrants have been exercised

for 459,986 Ordinary Shares, among which 389,855 warrants were exercised at $2.74 per ordinary share for an aggregate total of $1.1 million,

and the remaining 174,000 warrants were cashless exercises.

Sales of a significant number of our Ordinary

Shares in the public market, or the perception that such sales could occur, could depress the market price of our Ordinary Shares.

In connection with a private placement of warrants

to purchase 869,565 Ordinary Shares that closed on November 5, 2020, we have filed a registration statement allowing the holders of the

warrants to resale the Ordinary Shares that they may acquire upon the exercise thereof in the public market.

The exercise of the warrants

and subsequent sales of those Ordinary Shares in the public market could depress the market price of our Ordinary Shares and impair our

ability to raise capital through the sale of additional equity securities.

We cannot predict the effect that future sales of our Ordinary

Shares would have on the market price of our Ordinary Shares.

In connection with a private

placement of warrants to purchase 869,565 Ordinary Shares that closed on November 5, 2020, we have filed a registration statement allowing

the holders of the warrants to resale the Ordinary Shares that they may acquire upon the exercise thereof in the public market.

of the warrants and subsequent sales of those Ordinary Shares in the public market could depress the market price of our Ordinary Shares

and impair our ability to raise capital through the sale of additional equity securities.

We cannot predict the effect that future sales

of our Ordinary Shares would have on the market price of our Ordinary Shares.

Our largest shareholder owns approximately

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way of resolution of members.

Jun Liu, who is our President, Chief Executive Officer and Chairman of the Board, is currently the beneficial owner of 5,268,330 ordinary

shares (as adjusted to reflect the Reverse Split), or 54.7% of our current outstanding Ordinary Shares (36.0% directly held by Tianzhen

Investments Limited, an entity 100% owned by Mr.

Liu, and the remaining 19.0% that may be deemed to be beneficially owned by Mr.

the assignment of a proxy agreement entered with Eno Group Limited on September 30, 2018 to Tianzhen Investments Limited on February

Liu has the power to elect all directors and approve all matters requiring shareholder approval without the votes of any other shareholder,

significant influence over a decision to enter into any corporate transaction, and the ability to prevent any transaction that requires

the approval of shareholders, regardless of whether or not our directors or other shareholders believe that such a transaction is in our

best interests.

Such concentration of voting power could have the effect of delaying, deterring, or preventing a change of control or

other business combination, which could, in turn, have an adverse effect on the market price of our Ordinary Shares or prevent our shareholders

from realizing a premium over the then-prevailing market price for their Ordinary Shares.

Jun Liu, who is our President,

Chief Executive Officer and Chairman of the Board, is currently the beneficial owner of 5,652,808 ordinary shares (as adjusted to reflect

the Reverse Split), or 47.4% of our current outstanding Ordinary Shares (32.2% directly held by Mr.

Liu including 28.9% directly held

by Tianzhen Investments Limited which is an entity that 100% owned by Mr.

Liu, and the remaining 15.3% that may be deemed to be beneficially

Liu through the assignment of a proxy agreement entered with Eno Group Limited on September 30, 2018 to Tianzhen Investments

Limited on February 10, 2021).

Liu has the power to elect all directors and approve all matters requiring shareholder approval without

the votes of any other shareholder, significant influence over a decision to enter into any corporate transaction, and the ability to

prevent any transaction that requires the approval of shareholders, regardless of whether or not our directors or other shareholders believe

that such a transaction is in our best interests.

Such concentration of voting power could have the effect of delaying, deterring, or

preventing a change of control or other business combination, which could, in turn, have an adverse effect on the market price of our

Ordinary Shares or prevent our shareholders from realizing a premium over the then-prevailing market price for their Ordinary Shares.

Since we are deemed a “controlled

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adversely affect our public shareholders.

Our largest shareholder owns more than a majority

of the voting power of our outstanding ordinary shares.

Under the Nasdaq listing rules, a company of which more than 50% of the voting

power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance

with the independent committee requirements.

Although we do not intend to rely on the “controlled company” exemptions under

the Nasdaq listing rules even though we are deemed a “controlled company,” we could elect to rely on these exemptions

in the future.

If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board

of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist

entirely of independent directors.

Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during

any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to

shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Our largest shareholder owns

more than a majority of the voting power of our outstanding ordinary shares.

Under the Nasdaq listing rules, a company of which more than

50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to

phase in its compliance with the independent committee requirements.

Although we do not intend to rely on the “controlled company”

exemptions under the Nasdaq listing rules even though we are deemed a “controlled company,” we could elect to rely on

these exemptions in the future.

If we were to elect to rely on the “controlled company” exemptions, a majority of the members

of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might

not consist entirely of independent directors.

Accordingly, if we rely on the exemptions, during the period we remain a controlled company

and during any transition period following a time when we are no longer a controlled company, you would not have the same protections

afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

We do not intend to pay dividends for the

foreseeable future.

We currently intend to retain any future earnings

to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.

As a result, you may only receive a return on your investment in our Ordinary Shares if the market price of our Ordinary Shares increases.

We currently intend to retain

any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the

foreseeable future.

As a result, you may only receive a return on your investment in our Ordinary Shares if the market price of our Ordinary

Shares increases.

If we fail to maintain an effective system

of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

are subject to reporting obligations under the U.S.

We are subject to reporting obligations under the U.S.

securities laws.

The Securities and Exchange Commission, or the SEC, as required by

Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, adopted rules requiring every public company to include

a management report on such company’s internal controls over financial reporting in its annual report, which contains management’s

assessment of the effectiveness of the company’s internal controls over financial reporting.

As we are an “emerging growth

company,” we are expected to first include a management report on our internal controls over financial reporting in our annual report

in the second fiscal year end following the effectiveness of our IPO.

As such, these requirements applied to our annual report on Form 10-K

for the fiscal year ending on July 31, 2023.

Our management may conclude that our internal controls over our financial reporting

are not effective.

Moreover, even if our management concludes that

our internal controls over financial reporting are effective, our independent registered public accounting firm may still decline to attest

to our management’s assessment or may issue a report that is qualified if it is not satisfied with our internal controls or the

level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently

Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources

and systems for the foreseeable future.

Prior to our IPO, we were a private company with

limited accounting personnel and other resources with which to address our internal controls and procedures.

We plan to remedy our material

weaknesses and other control deficiencies in time to meet the deadline imposed by Section 404 of the Sarbanes-Oxley Act.

to timely achieve or maintain the adequacy of our internal controls, we may not be able to conclude that we have effective internal controls

The Securities and Exchange Commission, or the SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley

Act, adopted rules requiring every public company to include a management report on such company’s internal controls over financial

reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal controls

over financial reporting.

Moreover, effective internal controls over financial reporting are necessary for us to produce reliable financial

reports and are important to help prevent fraud.

As a result, our failure to achieve and maintain effective internal controls over financial

reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our

business and negatively impact the trading price of our Ordinary Shares.

Furthermore, we anticipate that we will incur considerable costs

and devote significant management time and efforts and other resources to comply with Section 404 of the Sarbanes-Oxley Act.

Our management may conclude that our internal controls over our financial reporting are not effective.

Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered

public accounting firm may still decline to attest to our management’s assessment or may issue a report that is qualified if it

is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it

interprets the relevant requirements differently from us.

Our reporting obligations as a public company will place a significant strain

on our management, operational and financial resources and systems for the foreseeable future.

Prior to our IPO, we were

a private company with limited accounting personnel and other resources with which to address our internal controls and procedures.

plan to remedy our material weaknesses and other control deficiencies in time to meet the deadline imposed by Section 404 of the

Sarbanes-Oxley Act.

If we fail to timely achieve or maintain the adequacy of our internal controls, we may not be able to conclude that

we have effective internal controls over financial reporting.

Moreover, effective internal controls over financial reporting are necessary

for us to produce reliable financial reports and are important to help prevent fraud.

As a result, our failure to achieve and maintain

effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial

statements, which in turn could harm our business and negatively impact the trading price of our Ordinary Shares.

Furthermore, we anticipate

that we will incur considerable costs and devote significant management time and efforts and other resources to comply with Section 404

of the Sarbanes-Oxley Act.

If securities or industry analysts do not

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Shares and trading volume could decline.

The trading market for our Ordinary Shares may

depend in part on the research and reports that industry or securities analysts publish about us or our business.

We do not have any control

over these analysts.

If one or more of the analysts who cover us downgrade us, the price of our Ordinary Shares would likely decline.

If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in

the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline.

The trading market for our

Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business.

We do not have any control over these analysts.

If one or more of the analysts who cover us downgrade us, the price of our Ordinary Shares

would likely decline.

If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could

lose visibility in the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline.

The market price of our Ordinary Shares

may be volatile or may decline regardless of our operating performance.

The market price of our Ordinary Shares may fluctuate

significantly in response to numerous factors, many of which are beyond our control, including:

The market price of our Ordinary

Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

actual or anticipated fluctuations in our revenue and other operating results;

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other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock markets have experienced

extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.

Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies.

In addition, the stock markets

have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities

of many companies.

Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance

of those companies.

In the past, stockholders have filed securities class action litigation following periods of market volatility.

If we were to become involved

in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business,

and adversely affect our business.

Because we are an “emerging growth

company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence

in us and our Ordinary Shares.

We are an “emerging growth company,”

as defined in the JOBS Act, and we intend to take advantage of certain exemptions from disclosure and other requirements applicable to

other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor

attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company.

if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may

deem important.

After we are no longer an “emerging growth company,” we expect to incur significant additional expenses and

devote substantial management effort toward ensuring compliance increased disclosure requirements.

Because we have ceased to qualify as a foreign

private issuer, we are required to comply fully with the reporting requirements of the Exchange Act applicable to U.S.

domestic issuers,

and we will incur significant additional legal, accounting, and other expenses that we would not incur as a foreign private issuer.

Because we are no longer a foreign private issuer,

we are no longer exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our

officers, directors, and principal shareholders are no longer exempt from the reporting and short-swing profit recovery provisions contained

in Section 16 of the Exchange Act.

In addition, we are now required under the Exchange Act to file periodic reports and financial

statements with the SEC as frequently or as promptly as United States domestic issuers, and we are now required to disclose in our periodic

reports all of the information that United States domestic issuers are required to disclose.

we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management

from our business, and adversely affect our business.

If we were deemed an investment company

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and could have a material adverse effect on our business and the price of our Ordinary Shares.

We do not believe that we are an “investment

company” under the Investment Company Act of 1940 (the “1940 Act”).

Generally, a person is an “investment company”

if it owns investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S.

government securities

and cash items) on an unconsolidated basis.

We intend to conduct our operations so that we will not be deemed an investment company.

if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and

our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and would have a material

adverse effect on our business and the price of our Ordinary Shares.

We do not believe that we

are an “investment company” under the Investment Company Act of 1940 (the “1940 Act”).

Generally, a person is

an “investment company” if it owns investment securities having a value exceeding 40% of the value of its total assets (exclusive

government securities and cash items) on an unconsolidated basis.

We intend to conduct our operations so that we will not be deemed

an investment company.

However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations

on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated

and would have a material adverse effect on our business and the price of our Ordinary Shares.

Anti-takeover provisions in our amended

and restated memorandum and articles of association may discourage, delay, or prevent a change in control.

Some provisions in our amended and restated memorandum

and articles of association, may discourage, delay, or prevent a change in control of our company or management that shareholders may

consider favorable, including, among other things, the following:

Some provisions in our amended

and restated memorandum and articles of association, may discourage, delay, or prevent a change in control of our company or management

that shareholders may consider favorable, including, among other things, the following:

provisions that permit our board of directors by resolution to amend certain provisions of the memorandum and articles of association, including to create and issue classes of shares with preferred, deferred or other special rights or restrictions as the board of directors determine in their discretion, without any further vote or action by our shareholders.

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unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain.

We are incorporated in the BVI and some of our

directors and officers reside outside of the United States.

As a result, it may be difficult or impossible for you to bring an action

against us or against these individuals in the United States in the event that you believe we have violated your rights, either under

United States federal or state securities laws or otherwise, or if you have a claim against us.

Even if you are successful in bringing

an action of this kind, the laws of the BVI may not permit you to enforce a judgment against our assets outside of the United States or

the assets of our directors and officers.

We are incorporated in the

BVI and some of our directors and officers reside outside of the United States.

As a result, it may be difficult or impossible for you

to bring an action against us or against these individuals in the United States in the event that you believe we have violated your rights,

either under United States federal or state securities laws or otherwise, or if you have a claim against us.

Even if you are successful

in bringing an action of this kind, the laws of the BVI may not permit you to enforce a judgment against our assets outside of the United

States or the assets of our directors and officers.

Our board of directors may decline to register

transfers of ordinary shares in certain circumstances.

Our board of directors may, in its sole discretion,

decline to register any transfer of any Ordinary Share issued in certificated form, which is not fully paid up or on which we have a lien.

Our directors may also decline to register any transfer of any share issued in certificated form in the case of a transfer to joint

holders, the number of joint holders to whom the share is to be transferred does not exceed four.

A shareholder wishing to transfer its

Ordinary Shares is liable to pay to the Company a fee of such maximum sum as Nasdaq Capital Market may determine to be payable, or

such lesser sum as our board of directors may from time to time require in respect thereof.

If our directors refuse to register a transfer

they shall, within one month after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee

notice of such refusal.

The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers

or by electronic means, be suspended and the register closed at such times and for such periods as our board of directors may from time

to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than

30 days in any year.

Our board of directors may,

in its sole discretion, decline to register any transfer of any Ordinary Share issued in certificated form, which is not fully paid up

or on which we have a lien.

Our directors may also decline to register any transfer of any share issued in certificated form in the

case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four.

A shareholder

wishing to transfer its Ordinary Shares is liable to pay to the Company a fee of such maximum sum as Nasdaq Capital Market may determine

to be payable, or such lesser sum as our board of directors may from time to time require in respect thereof.

If our directors refuse to

register a transfer they shall, within one month after the date on which the instrument of transfer was lodged, send to each of the transferor

and the transferee notice of such refusal.

The registration of transfers may, on 14 days’ notice being given by advertisement in

such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as our board

of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register

closed for more than 30 days in any year.

Certain types of class or derivative actions

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rights of shareholders may be limited.

Whilst statutory provisions do exist in British

Virgin Islands law for derivative actions to be brought in certain circumstances, these rights may be more limited than the rights afforded

to minority shareholders under the laws of states in the United States and shareholders of BVI companies may not have standing to initiate

a shareholder derivative action in a court of the United States.

Furthermore, questions of interpretation of our memorandum and articles

of association will be questions of BVI law and determined by the BVI courts.

In any event, the circumstances in which any such action

may be brought, if at all, and the procedures and defenses that may be available in respect to any such action, may result in the rights

of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States.

shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

The BVI courts are

also unlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S.

securities law or to impose liabilities against us, in original actions brought in the BVI, based on certain liability provisions of U.S.

Whilst statutory provisions

do exist in British Virgin Islands law for derivative actions to be brought in certain circumstances, these rights may be more limited

than the rights afforded to minority shareholders under the laws of states in the United States and shareholders of BVI companies may

not have standing to initiate a shareholder derivative action in a court of the United States.

Furthermore, questions of interpretation

of our memorandum and articles of association will be questions of BVI law and determined by the BVI courts.

In any event, the circumstances

in which any such action may be brought, if at all, and the procedures and defenses that may be available in respect to any such action,

may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the

United States.

Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

The BVI courts are also unlikely to recognize or enforce against us judgments of courts in the United States based on certain liability

provisions of U.S.

securities law or to impose liabilities against us, in original actions brought in the BVI, based on certain liability

provisions of U.S.

securities laws that are penal in nature.

There is no statutory recognition in the BVI of

judgments obtained in the United States, although the courts of the BVI will in certain circumstances recognize such a foreign judgment

and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary

provided that:

There is no statutory recognition

in the BVI of judgments obtained in the United States, although the courts of the BVI will in certain circumstances recognize such a foreign

judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would

be necessary provided that:

court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process;

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the proceedings pursuant to which judgment was obtained were not contrary to natural justice.

In appropriate circumstances, a BVI Court may

give effect in the British Virgin Islands to other kinds of final foreign judgments such as declaratory orders, orders for performance

of contracts and injunctions.

In appropriate circumstances,

a BVI Court may give effect in the British Virgin Islands to other kinds of final foreign judgments such as declaratory orders, orders

for performance of contracts and injunctions.

You may have more difficulty protecting

your interests than you would as a shareholder of a U.S.

Our corporate affairs are governed by the provisions

of our memorandum and articles of association, as amended and restated from time to time, the BVI Business Companies Act, 2004 as amended

from time to time (the “BVI Act”) and the common law of the BVI.

The rights of shareholders and the statutory duties and fiduciary

responsibilities of our directors and officers under BVI law may not be clearly established as they would be under statutes or judicial

precedents in some jurisdictions in the United States, and some states (such as Delaware) have more fully developed and judicially interpreted

bodies of corporate law.

These rights and responsibilities are governed

by our amended and restated memorandum and articles of association, the BVI Act and the common law of the BVI.

The common law of the BVI

is derived in part from judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority

on a court in the BVI.

In addition, BVI law does not make a distinction between public and private companies and some of the protections

and safeguards (such as statutory pre-emption rights, save to the extent expressly provided for in the amended and restated memorandum

and articles of association) that investors may expect to find in relation to a public company are not provided for under BVI law.

There may be less publicly available information

about us than is regularly published by or about U.S.

Also, the BVI regulations governing the securities of BVI companies may

not be as extensive as those in effect in the United States, and the BVI law and regulations regarding corporate governance matters may

not be as protective of minority shareholders as state corporation laws in the United States.

Therefore, you may have more difficulty

protecting your interests in connection with actions taken by our directors and officers or our principal shareholders than you would

as a shareholder of a corporation incorporated in the United States.

Our corporate affairs are

governed by the provisions of our memorandum and articles of association, as amended and restated from time to time, the BVI Business

Companies Act, 2004 as amended from time to time (the “BVI Act”) and the common law of the BVI.

The rights of shareholders

and the statutory duties and fiduciary responsibilities of our directors and officers under BVI law may not be clearly established as

they would be under statutes or judicial precedents in some jurisdictions in the United States, and some states (such as Delaware) have

more fully developed and judicially interpreted bodies of corporate law.

These rights and responsibilities

are governed by our amended and restated memorandum and articles of association, the BVI Act and the common law of the BVI.

law of the BVI is derived in part from judicial precedent in the BVI as well as from English common law, which has persuasive, but not

binding, authority on a court in the BVI.

In addition, BVI law does not make a distinction between public and private companies and some

of the protections and safeguards (such as statutory pre-emption rights, save to the extent expressly provided for in the amended and

restated memorandum and articles of association) that investors may expect to find in relation to a public company are not provided for

under BVI law.

There may be less publicly

available information about us than is regularly published by or about U.S.

Also, the BVI regulations governing the securities

of BVI companies may not be as extensive as those in effect in the United States, and the BVI law and regulations regarding corporate

governance matters may not be as protective of minority shareholders as state corporation laws in the United States.

Therefore, you may

have more difficulty protecting your interests in connection with actions taken by our directors and officers or our principal shareholders

than you would as a shareholder of a corporation incorporated in the United States.

The laws of BVI provide limited protections

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the shareholders are dissatisfied with the conduct of our affairs.

Under the laws of the BVI there is limited statutory

protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies.

The principal protections

under BVI statutory law are derivative actions, actions brought by one or more shareholders for relief from unfair prejudice, oppression

and unfair discrimination and/or to enforce the BVI Act or the amended and restated memorandum and articles of association.

are entitled to have the affairs of the company conducted in accordance with the BVI Act and the amended and restated memorandum and articles

of association, and are entitled to payment of the fair value of their respective shares upon dissenting from certain enumerated corporate

transactions.

The common law of the BVI is derived in part from

judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority on a court in the BVI.

There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the

common law of the BVI is less extensive than that of England.

Under the general rule pursuant to English company law known as the

rule in Foss v.

Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority

of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors.

However, every shareholder is entitled to seek to have the affairs of the company conducted properly according to law and the constitutional

documents of the company.

As such, if those who control the company have persistently disregarded the requirements of company law or the

provisions of the company’s memorandum and articles of association, then the courts may grant relief.

Generally, the areas in which

the courts will intervene are the following:

(i) a company is acting or proposing to act illegally or beyond the scope of its authority;

(ii) the act complained of, although not beyond the scope of the authority, could only be effected if duly authorized by more than

the number of votes which have actually been obtained;

(iii) the individual rights of the plaintiff shareholder have been infringed

or are about to be infringed;

Under the laws of the BVI

there is limited statutory protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies.

The principal protections under BVI statutory law are derivative actions, actions brought by one or more shareholders for relief from

unfair prejudice, oppression and unfair discrimination and/or to enforce the BVI Act or the amended and restated memorandum and articles

of association.

Shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the amended

and restated memorandum and articles of association, and are entitled to payment of the fair value of their respective shares upon dissenting

from certain enumerated corporate transactions.

The common law of the BVI

is derived in part from judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority

on a court in the BVI.

There are common law rights for the protection of shareholders that may be invoked, largely dependent on English

company law, since the common law of the BVI is less extensive than that of England.

Under the general rule pursuant to English company

law known as the rule in Foss v.

Harbottle, a court will generally refuse to interfere with the management of a company at the insistence

of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board

of directors.

However, every shareholder is entitled to seek to have the affairs of the company conducted properly according to law and

the constitutional documents of the company.

As such, if those who control the company have persistently disregarded the requirements

of company law or the provisions of the company’s memorandum and articles of association, then the courts may grant relief.

the areas in which the courts will intervene are the following:

(i) a company is acting or proposing to act illegally or beyond the

scope of its authority;

(ii) the act complained of, although not beyond the scope of the authority, could only be effected if duly

authorized by more than the number of votes which have actually been obtained;

(iii) the individual rights of the plaintiff shareholder

have been infringed or are about to be infringed;

or (iv) those who control the company are perpetrating a “fraud on the minority.”

These rights may be more limited than the rights

afforded to minority shareholders under the laws of states in the United States.

These rights may be more limited

than the rights afforded to minority shareholders under the laws of states in the United States.

There are no pre-emptive rights in favor

of holders of ordinary shares so you may not be able to participate in future equity offerings.

There are no pre-emptive rights applicable under

the BVI Act or the amended and restated memorandum and articles of association in favor of holders of ordinary shares in respect of further

issues of shares of any class.

Consequently, you will not be entitled under applicable law to participate in any such future offerings

of further ordinary shares or any preferred or other classes of shares.

There are no pre-emptive rights

applicable under the BVI Act or the amended and restated memorandum and articles of association in favor of holders of ordinary shares

in respect of further issues of shares of any class.

Consequently, you will not be entitled under applicable law to participate in any

such future offerings of further ordinary shares or any preferred or other classes of shares.

If we are classified as a passive foreign

investment company, United States taxpayers who own our Ordinary Shares may have adverse United States federal income tax consequences.

corporation such as ourselves will

be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either

corporation such

as ourselves will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year,

At least 75% of our gross income for the year is passive income;

The average percentage of our assets (determined at the end of each quarter) during the taxable year which produce passive income or which are held for the production of passive income is at least 50%.

Passive income generally includes dividends, interest,

rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition

of passive assets.

If we are determined to be a PFIC for any taxable

year (or portion thereof) that is included in the holding period of a U.S.

taxpayer who holds our ordinary shares, the U.S.

be subject to increased U.S.

Passive income generally includes

dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains

from the disposition of passive assets.

If we are determined to be

a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S.

taxpayer who holds our ordinary shares,

taxpayer may be subject to increased U.S.

federal income tax liability and may be subject to additional reporting requirements.

Depending on the amount of assets held for the

production of passive income, it is possible that, for our 2022 taxable year or for any subsequent year, more than 50% of our assets may

be assets which produce passive income.

We will make this determination following the end of any particular tax year.

For purposes of

the PFIC analysis, in general, according to Internal Revenue Code Section 1297(c), a non-U.S.

corporation is deemed to own its pro

rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the stock by value.

Depending on the amount of

assets held for the production of passive income, it is possible that, for our 2024 taxable year or for any subsequent year, more than

50% of our assets may be assets which produce passive income.

We will make this determination following the end of any particular tax

For purposes of the PFIC analysis, in general, according to Internal Revenue Code Section 1297(c), a non-U.S.

corporation is

deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the stock

Volatility in the market price of our

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our results of operations;

● issuance of new or changed securities analysts’

reports or recommendations;

issuance of new or changed securities analysts’ reports or recommendations;

developments impacting the industry or our competitors;

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strategic actions by us or our competitors;

● announcements by us or our competitors of significant

contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;

● the public’s reaction to press releases, other public announcements by us

or third parties, including our filings with the SEC;

● guidance, if any, that we provide to the public,

any changes in this guidance or failure to meet this guidance;

announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;

the public’s reaction to press releases, other public announcements by us or third parties, including our filings with the SEC;

guidance, if any, that we provide to the public, any changes in this guidance or failure to meet this guidance;

changes in the credit rating of our debt;

● sale, or anticipated sale, of large blocks of

sale, or anticipated sale, of large blocks of our stock;

additions or departures of key personnel;

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changes in accounting principles;

● other events or factors, including those resulting

from natural disasters, war, acts of terrorism or responses to those events.

other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to those events.

In addition, stock markets

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Future fluctuations in stock markets may lead to volatility in the market price of our ordinary shares which could lead to losses by investors.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors