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Item 1A. Risk Factors

2025-07-15 compared with 2024-06-28 · 792 added, 698 removed, 180 unchanged (89% of the section changed)

10 unchanged sentences

to us or that we currently do not believe are material.

Summary of Risk Factors

Risks Related to the Company’s Business,

Operations, and Industry

● We may not meet our growing production and delivery plans, which could harm our business.

● We rely heavily on a few key vendors in China for vehicle components.

● Trade tensions, especially between the U.S.

and China, may negatively impact our operations.

● We depend on third parties for quality control on China-sourced parts.

● Our ability to produce vehicles at scale and with consistent quality is unproven.

● Supply chain changes may increase costs and hurt our financial performance.

● Rising material costs or shortages, including from global conflicts, could disrupt production.

● Our vehicles may not meet customer expectations.

● Growth depends on consumer adoption of electric vehicles (EVs).

● We operate in a complex and evolving regulatory environment.

● We may struggle to control operational costs effectively.

● Weak brand recognition may impact customer acceptance and sales.

● Our limited operating history makes it hard to predict future performance.

● There is substantial doubt about our ability to continue as a going concern.

● Material weaknesses exist in our internal controls over financial reporting.

● We face intense competition in a young and fast-evolving market.

● Product liability claims could significantly harm our financial position.

● We rely on key executives;

their loss could impact operations.

● Our management lacks experience running a public company.

● We may face costly and time-consuming intellectual property disputes.

● Inadequate protection of IP could lead to litigation and brand damage.

● Cybersecurity threats could compromise our systems and data.

● We may fail to develop new products or improve existing ones to meet demand.

● Limited experience with vehicle servicing may harm customer satisfaction.

● Warranty claims or recalls could have a major financial impact.

● Aftermarket modifications may impair vehicle performance and harm our reputation.

Risks Related to Our Securities

● A stable and active market for our stock may not develop or be maintained.

● Stock price may be highly volatile and unpredictable.

● Directors and officers hold significant control, limiting shareholder influence.

● Public company status increases compliance costs.

● Lack of analyst coverage or negative analyst opinions may reduce stock value.

● “Emerging growth company” status may deter investors due to reduced disclosures.

● As a “smaller reporting company,” we may provide less public information.

● Future issuance of preferred stock could deter takeovers and affect stock value.

● We do not expect to pay cash dividends in the near future.

● Future stock sales may dilute ownership and lower the stock price.

● Directors and executive officers’ 18.7% control may block beneficial actions for shareholders.

● Delaware laws and corporate bylaws may hinder mergers or takeovers.

● Public company compliance diverts management focus from core operations.

● We may fail to meet Nasdaq listing requirements.

● FINRA rules may restrict buying/selling of our stock.

● Warrant holders have no stockholder rights until conversion.

● Lack of analyst reports or negative changes in coverage could harm our stock.

Risks Related to the Company’s Business,

Operations, and Industry

We may be unable to meet our growing production

plans and delivery plans, any of which could harm our business and prospects.

In order to meet the increasing demand of our

products, we plan to open more stores in the future.

Our plans call for achieving and sustaining increases in vehicles production and

Our ability to achieve these plans will depend upon a number of factors, including our suppliers’ ability to support

our needs and our ability to utilize our current assembling capacity, achieve the planned production yield and further increase capacity

as planned while maintaining our desired quality levels and optimize design and production changes.

If we are unable to realize our plans,

our brand, business, prospects, financial condition and operating results could be materially damaged.

We are dependent on certain principal vendors

in China for a significant portion of our vehicle components, and the inability of these vendors to deliver necessary components of our

products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage

these components, could have a material adverse effect on our financial condition and operating results.

We source a significant portion of our vehicle

components from China and then assemble these parts into our products in the United States.

We rely on certain principal vendors

who help us source and supply parts used in our vehicles from various suppliers in China.

We currently do not maintain long-term contracts

with our suppliers and vendors.

While we believe our contract management processes are strong, we nevertheless could experience difficulties.

If our principal vendors decide to terminate their

partnership with us, experience sourcing failures, or otherwise become unable to provide us with the necessary components in sufficient

quantities, in a timely manner, and on acceptable terms, we may have to delay the production and sale of our products or find an alternative

Any significant unanticipated demand would require us to procure additional components in a short amount of time.

While we believe

that we will be able to secure additional or alternate sources of supply for most of our components in a relatively short time frame,

there is no assurance that we will be able to do so or develop our own replacements for certain highly customized components of our products.

In addition, as a result of COVID-19, normal economic

life throughout China was sharply curtailed and there were disruptions to normal operation of businesses in various areas.

in 2022, when China rigorously enforced its “Zero-COVID” policy, some manufacturing facilities were closed and work at other

facilities was curtailed in many places where we sourced our vehicle components.

Some of our vendors had to temporarily close a facility

for disinfecting after employees tested positive for COVID-19, and others faced staffing shortages from employees who were sick or apprehensive

about coming to work.

Further, the ability of our vendors to ship their goods to us became difficult as transportation networks and distribution

facilities reduced capacity, all of which caused an increase in shipping costs and time and affected the availability of inventories to

meet our sales demand.

Although the anti-pandemic policies have been

lifted in China since the beginning of 2023, it is uncertain whether the Chinese government will mandate similar restrictive policies

and measures again in the future.

Furthermore, the lingering impacts of the global pandemic may continue adversely affecting our supply

chain, which in turn may materially and adversely affect our business and results of operations.

Although our business operations were

not materially impacted because of measures we took during the lockdown period in 2022 in China, which included increasing order quantities

for vehicle components and maintaining higher inventory levels, as well as avoiding heavy reliance on a single vendor, there can be no

assurance as to whether and to what extent these mitigation measures will be effective in the event of future supply chain disruptions.

Maintenance of high inventories can increase our costs and involve other risks.

See “ Item 1A.

Risk Factors — Risks

Related to the Company’s Business, Operations, and Industry — Changes in our supply chain may result in increased

If we are unsuccessful in our efforts to control and reduce supplier costs and manage inventory at optimal levels, our operating

results will suffer .” In addition, if we encounter unexpected difficulties with our principal vendors, and if we are unable

to fill these needs from other vendors in a timely manner, we could experience production delays and potential loss of access to important

technology and parts for producing, servicing and supporting our vehicles.

The loss of any vendors or the disruption in the supply of

components from these vendors could lead to design changes and delays in product deliveries to our customers, which could hurt our relationships

with our customers and result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects,

financial condition and operating results.

In order to meet the demand

of our products in domestic and overseas markets, we plan to open more stores overseas while focusing on developing more wholesale domestic

Our plans call for achieving and sustaining increases in vehicles production and deliveries.

Our ability to achieve these plans

will depend upon a number of factors, including our suppliers’ ability to support our needs and our ability to utilize our current

assembling capacity, achieve the planned production yield and further increase capacity as planned while maintaining our desired quality

levels and optimize design and production changes.

If we are unable to realize our plans, our brand, business, prospects, financial condition

and operating results could be materially damaged.

We are dependent on a limited number of

principal vendors in China for a significant portion of our vehicle components, and the inability of these vendors to deliver necessary

components of our products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently

manage these components, could have a material adverse effect on our financial condition and operating results.

We source a significant portion

of our vehicle components from China and then assemble these parts into our products in the United States.

We rely on a limited number

of principal vendors who help us source and supply parts used in our vehicles from various suppliers in China.

We currently do not maintain

long-term contracts with our suppliers and vendors.

While we believe our contract management processes are strong, we nevertheless could

experience difficulties.

If our principal vendors decide

to terminate their partnership with us, experience sourcing failures, or otherwise become unable to provide us with the necessary components

in sufficient quantities, in a timely manner, and on acceptable terms, we may have to delay the production and sale of our products or

find an alternative vendor.

Any significant unanticipated demand would require us to procure additional components in a short amount of

While we believe that we will be able to secure additional or alternate sources of supply for most of our components in a relatively

short time frame, there is no assurance that we will be able to do so or develop our own replacements for certain highly customized components

of our products.

In addition, if we encounter

unexpected difficulties with our principal vendors, and if we are unable to fill these needs from other vendors in a timely manner, we

could experience production delays and potential loss of access to important technology and parts for producing, servicing and supporting

our vehicles.

The loss of any vendors or the disruption in the supply of components from these vendors could lead to design changes and

delays in product deliveries to our customers, which could hurt our relationships with our customers and result in negative publicity,

damage to our brand and a material and adverse effect on our business, prospects, financial condition and operating results.

The current tensions in international trade

policies and rising political tensions, particularly between the United States and China, may adversely impact our business and operating

We source a significant portion

of our vehicle components from China.

The application of sanctions, trade restrictions or tariffs by the U.S.

or other countries

may adversely impact the industry supply chain.

government has implemented policies restricting international trade and

investment, such as tariffs, export controls, economic or trade sanctions, and foreign investment filing and approval requirements.

actions may materially and adversely affect international trade, global financial markets, and the stability of the global economic condition.

In the past, the U.S.

government has imposed higher tariffs on certain products imported from China to penalize China for what it

characterizes as unfair trade practices.

China has responded by imposing higher tariffs on certain products imported from the United States.

In particular, in April 2025

the United States announced an across-the-board 10% tariff on all countries and individualized higher tariffs on certain countries, including

A great deal of uncertainty surrounds the state of tariffs and other trade measures worldwide.

While the current U.S.

administration

has been actively focused on trade, the exact implementation, amount, scope and nature of these tariffs remains unclear.

It also remains

unclear how other countries will respond to the United States’ trade proposals and actions.

As of now, high reciprocal

tariffs are in effect between China and the United States and the United States has announced, but temporarily paused the effective date

of, tariffs on goods imported from many other countries, including Mexico, Canada, Taiwan and the European Union.

Significant trade partners

such as Mexico, Canada and the European Union have announced retaliatory tariffs.

Further, while the United States has exempted certain

technology products such as semiconductors and electronics from the reciprocal tariffs announced on April 2, 2025 such that our products

are not subject to the announced tariffs, it has also initiated Section 232 investigations on such products, possibly leading to the imposition

of specific tariffs on these products or on products that incorporate them.

We cannot predict what additional

actions, if any, may be taken with respect to tariffs or trade relations between the United States and China, what products may be

subject to such actions, or what actions may be taken by the China in retaliation.

The adoption and expansion of trade restrictions, the

occurrence of a trade war, or other governmental action related to tariffs, trade agreements or related policies have the potential to

adversely impact our supply chain and access to equipment, our costs and our product margins.

The additional tariffs imposed on components

or equipment that we source from China will increase our costs and could have an adverse impact on our operating results and financial

conditions in future periods.

We rely on third parties for quality control

on the parts sourced from China.

We rely on one of our principal vendors in China

to monitor the factories manufacturing the parts sourced from China for use in our vehicles.

We have limited control over the ability

of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel.

If our principal vendor

fails to perform its duties, including proper inspections on sample products before mass production, the third-party manufacturers may

fail to manufacture our product components according to our schedule and requirements or at all.

The quality of our products is crucial

to our continued growth.

If our principal vendor fails to perform its supervising and inspecting duties properly, our final products could

have quality issues, which could result in product recall, return of products and potential lawsuits against us if our products cause

any injuries or damages due to the quality issues.

Any occurrence of the foregoing could hurt our relationship with our customers and

result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects, financial condition and

operating results.

We rely on one of our principal

vendors in China to monitor the factories manufacturing the parts sourced from China for use in our vehicles.

We have limited control

over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel.

principal vendor fails to perform its duties, including proper inspections on sample products before mass production, the third-party

manufacturers may fail to manufacture our product components according to our schedule and requirements or at all.

The quality of our

products is crucial to our continued growth.

If our principal vendor fails to perform its supervising and inspecting duties properly,

our final products could have quality issues, which could result in product recall, return of products and potential lawsuits against

us if our products cause any injuries or damages due to the quality issues.

Any occurrence of the foregoing could hurt our relationship

with our customers and result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects,

financial condition and operating results.

Our success will depend on our ability to

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and at scale is unproven.

Our business success will depend in large part

on our ability to economically produce, market and sell our vehicles at sufficient capacity to meet the demands of our customers.

need to scale our production capacity in order to successfully implement our growth strategy.

We currently have one facility in which we assemble

all of our products in Brooklyn, New York.

We have no experience in large-scale production of our vehicles, and we do not know whether

we will be able to develop efficient, automated, low-cost production capabilities and processes, such that we will be able to meet the

quality, price and production standards, as well as the production volumes, required to successfully market our vehicles and meet our

business objectives and customer needs.

Any failure to develop and scale our production capability and processes could have a material

adverse effect on our business, prospects, financial condition and operating results.

Our business success will depend

in large part on our ability to economically produce, market and sell our vehicles at sufficient capacity to meet the demands of our customers.

We will need to scale our production capacity in order to successfully implement our growth strategy.

We currently have one facility

in which we assemble all of our products in Maspeth, New York.

We have no experience in large-scale production of our vehicles, and

we do not know whether we will be able to develop efficient, automated, low-cost production capabilities and processes, such that we will

be able to meet the quality, price and production standards, as well as the production volumes, required to successfully market our vehicles

and meet our business objectives and customer needs.

Any failure to develop and scale our production capability and processes could have

a material adverse effect on our business, prospects, financial condition and operating results.

Changes in our supply chain may result in

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operating results will suffer.

As we plan to continue expanding our business,

we expect to include more products and their components in our inventory, which will make it more challenging for us to manage our inventory

effectively and will put more pressure on our warehousing system.

Maintaining excessive inventory levels beyond customer demand can lead

to higher inventory carrying costs.

High inventory levels may also require us to commit substantial capital resources, preventing us from

using that capital for other important purposes.

On the other hand, if we underestimate customer demand or encounter delays from our vendors

in supplying vehicle components promptly, we may face inventory shortages.

This could potentially compel us to procure vehicle components

at higher costs, leading to a backorder situation or unfulfilled customer orders, which could lead to potential cancellations or loss

of customers to competitors and negatively impact our brand image and reputation.

There is no assurance that our suppliers will

ultimately be able to meet our cost, quality and volume needs, or do so on a timely basis.

Furthermore, as the volume of our sales increases,

we will need to accurately forecast, purchase and warehouse components at much higher volumes than we have experience with.

unable to accurately match the timing and quantities of component purchases to our actual needs, or successfully implement automation,

inventory management and other systems to accommodate the increased complexity in our supply chain, we may incur unexpected production

disruption, or storage, transportation and write-off costs.

Any of the above could have a material adverse effect on our business, prospects,

financial condition and operating results.

As we plan to continue expanding

our business, we expect to include more products and their components in our inventory, which will make it more challenging for us to

manage our inventory effectively and will put more pressure on our warehousing system.

Maintaining excessive inventory levels beyond customer

demand can lead to higher inventory carrying costs.

High inventory levels may also require us to commit substantial capital resources,

preventing us from using that capital for other important purposes.

On the other hand, if we underestimate customer demand or encounter

delays from our vendors in supplying vehicle components promptly, we may face inventory shortages.

This could potentially compel

us to procure vehicle components at higher costs, leading to a backorder situation or unfulfilled customer orders, which could lead to

potential cancellations or loss of customers to competitors and negatively impact our brand image and reputation.

There is no assurance that

our suppliers will ultimately be able to meet our cost, quality and volume needs, or do so on a timely basis.

Furthermore, as the volume

of our sales increases, we will need to accurately forecast, purchase and warehouse components at much higher volumes than we have experience

If we are unable to accurately match the timing and quantities of component purchases to our actual needs, or successfully implement

automation, inventory management and other systems to accommodate the increased complexity in our supply chain, we may incur unexpected

production disruption, or storage, transportation and write-off costs.

Any of the above could have a material adverse effect on our business,

prospects, financial condition and operating results.

Increases in costs, disruption of supply,

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between Russia and Ukraine, could harm our business.

We may experience increases in the cost or a sustained

interruption in the supply or shortage of materials.

Any such increase, supply interruption or shortage could materially and negatively

impact our business, prospects, financial condition and operating results.

The prices for these materials fluctuate, and their available

supply may be unstable, depending on market conditions and global demand for these materials, including as a result of increased production

of similar products by our competitors, and could adversely affect our business and operating results.

These risks include:

We may experience increases

in the cost or a sustained interruption in the supply or shortage of materials.

Any such increase, supply interruption or shortage could

materially and negatively impact our business, prospects, financial condition and operating results.

The prices for these materials fluctuate,

and their available supply may be unstable, depending on market conditions and global demand for these materials, including as a result

of increased production of similar products by our competitors, and could adversely affect our business and operating results.

● an increase in the cost, or decrease in the available supply,

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dollar as our purchases for the components of our products are denominated in Chinese Renminbi.

Disruption in our supply chain and rising prices

of raw materials as a result of the conflict between Russia and Ukraine may also negatively impact our businesses.

In February 2022, Russian

military forces launched a military action in Ukraine.

The ongoing military action between Russia and Ukraine, sanctions and other measures

imposed against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk

People’s Republic by the U.S.

and other countries and bodies around the world, as well as the existing and potential further responses

from Russia or other countries to such sanctions, tensions and military actions, has in the past and in the future could continue to adversely

affect the global economy and financial markets and could adversely affect our business, prospects, financial condition and operating

Disruption in our supply chain

and rising prices of raw materials as a result of the conflict between Russia and Ukraine may also negatively impact our businesses.

February 2022, Russian military forces launched a military action in Ukraine.

The ongoing military action between Russia and Ukraine,

sanctions and other measures imposed against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic

and the so-called Luhansk People’s Republic by the U.S.

and other countries and bodies around the world, as well as the existing

and potential further responses from Russia or other countries to such sanctions, tensions and military actions, has in the past and in

the future could continue to adversely affect the global economy and financial markets and could adversely affect our business, prospects,

financial condition and operating results.

Additional potential sanctions and penalties have also been proposed and/or threatened.

Although our operations have not experienced

a material adverse impact on supply chain or other aspects of our business from the ongoing conflict between Russia and Ukraine, during

times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks

that could materially disrupt our operations, supply chain, and ability to produce, sell and distribute our products.

We cannot predict

the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the conflict, and any resulting government

reactions, are rapidly developing and beyond our control.

The extent and duration of the military action, sanctions and resulting market

disruptions could be significant, could result in increases in commodity, freight, logistics and input costs and could potentially have

substantial impact on the global economy and our business for an unknown period of time.

Substantial increases in the prices for our materials

or prices charged to us would increase our operating costs, and could reduce our margins if we cannot recoup the increased costs through

increased prices.

Any attempts to increase prices in response to increased material costs could result in cancellations of vehicle orders

and therefore materially and adversely affect our brand, business, prospects, financial condition and operating results.

our operations have not experienced a material adverse impact on supply chain or other aspects of our business from the ongoing conflict

between Russia and Ukraine, during times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable

to a heightened risk of these attacks that could materially disrupt our operations, supply chain, and ability to produce, sell and distribute

our products.

We cannot predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the

conflict, and any resulting government reactions, are rapidly developing and beyond our control.

The extent and duration of the military

action, sanctions and resulting market disruptions could be significant, could result in increases in commodity, freight, logistics and

input costs and could potentially have substantial impact on the global economy and our business for an unknown period of time.

Substantial increases in the

prices for our materials or prices charged to us would increase our operating costs, and could reduce our margins if we cannot recoup

the increased costs through increased prices.

Any attempts to increase prices in response to increased material costs could result in

cancellations of vehicle orders and therefore materially and adversely affect our brand, business, prospects, financial condition and

operating results.

Our vehicles may not perform in line with

customer expectations.

Our vehicles may not perform in line with customers’

expectations.

For example, our vehicles may not have the durability or longevity of other vehicles in the market, and may not be as easy

and convenient to repair as other vehicles on the market.

Any product defects or any other failure of our vehicles to perform as expected

could harm our reputation and result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims, harm

to our brand and reputation, and significant warranty and other expenses, and could have a material adverse impact on our business, prospects,

financial condition and operating results.

In addition, the range of our vehicles on a single

charge declines principally as a function of usage, time and charging patterns as well as other factors.

For example, a customer’s

use of his or her electric vehicle as well as the frequency with which he or she charges the battery can result in additional deterioration

of the battery’s ability to hold a charge.

Furthermore, our vehicles may contain defects in design and manufacture that may cause

them not to perform as expected or that may require repair.

If any of our vehicles fail to perform as expected, we may need to delay deliveries,

initiate product recalls and provide servicing or updates under warranty at our expenses, which could materially and adversely affect

our brand, business, prospects, financial condition and operating results.

Our vehicles may not perform

in line with customers’ expectations.

For example, our vehicles may not have the durability or longevity of other vehicles in the

market, and may not be as easy and convenient to repair as other vehicles on the market.

Any product defects or any other failure of our

vehicles to perform as expected could harm our reputation and result in adverse publicity, lost revenue, delivery delays, product recalls,

product liability claims, harm to our brand and reputation, and significant warranty and other expenses, and could have a material adverse

impact on our business, prospects, financial condition and operating results.

In addition, the range of our

vehicles on a single charge declines principally as a function of usage, time and charging patterns as well as other factors.

a customer’s use of his or her electric vehicle as well as the frequency with which he or she charges the battery can result in

additional deterioration of the battery’s ability to hold a charge.

Furthermore, our vehicles may contain defects in design and

manufacture that may cause them not to perform as expected or that may require repair.

If any of our vehicles fail to perform as expected,

we may need to delay deliveries, initiate product recalls and provide servicing or updates under warranty at our expenses, which could

materially and adversely affect our brand, business, prospects, financial condition and operating results.

Our future growth is dependent on the demand

for, and upon consumers’ willingness to adopt electric vehicles.

Demand for our products depends to a large extent

on general, economic, political and social conditions in a given market and the introduction of new electric vehicles and technologies.

Demand for our products depends

to a large extent on general, economic, political and social conditions in a given market and the introduction of new electric vehicles

and technologies.

As our business grows, economic conditions and trends will impact our business, prospects and operating results as well.

Demand for our electric vehicles may also be affected

by factors directly impacting the price or the cost of purchasing and operating electric vehicles such as sales and financing incentives,

prices of raw materials, parts and components and governmental regulations, including tariffs, import regulation and other taxes.

in demand may lead to lower vehicle unit sales, which may result in further downward price pressure and adversely affect our business,

prospects, financial condition and operating results.

In addition, the demand for our vehicles and services

will highly depend upon the adoption by consumers of new energy vehicles in general and electric vehicles in particular.

The market for

new energy vehicles is still rapidly evolving, characterized by rapidly changing technologies, price and other competition, evolving government

regulation and industry standards and changing consumer demands and behaviors.

Other factors that may influence the adoption

of new energy vehicles, and specifically electric vehicles, include:

Demand for our electric vehicles

may also be affected by factors directly impacting the price or the cost of purchasing and operating electric vehicles such as sales and

financing incentives, prices of raw materials, parts and components and governmental regulations, including tariffs, import regulation

and other taxes.

Volatility in demand may lead to lower vehicle unit sales, which may result in further downward price pressure and adversely

affect our business, prospects, financial condition and operating results.

In addition, the demand for

our vehicles and services will highly depend upon the adoption by consumers of new energy vehicles in general and electric vehicles in

The market for new energy vehicles is still rapidly evolving, characterized by rapidly changing technologies, price and other

competition, evolving government regulation and industry standards and changing consumer demands and behaviors.

Other factors that may influence

the adoption of new energy vehicles, and specifically electric vehicles, include:

● perceptions about electric vehicle quality, safety, design,

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● macroeconomic factors.

Any of the factors described above may cause current

or potential customers not to purchase our electric vehicles and use our services.

If the market for electric vehicles does not develop

as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating results will be affected.

The electric mobility industry is subject to rapidly changing

and often complex regulatory environments.

The electric mobility industry is subject to rapidly

changing and often complex regulatory environments at local, state, national, and international levels.

Evolving regulations related to

safety standards, emissions, licensing, and operational requirements can have a substantial impact on our business operations and profitability.

Compliance with these changing regulations may necessitate costly modifications to our products, business processes, or market strategies,

which could lead to increased expenses and delays in product development and market entry.

Failure to navigate and adhere to evolving

regulations adequately could result in legal and financial liabilities, damage to our reputation, and potential market restrictions.

inconsistency in regulations between different jurisdictions may create challenges in maintaining uniform business practices and product

offerings, increasing our exposure to regulatory risks.

Furthermore, a significant portion of our customer base comprises food delivery

workers, and if leading food delivery platforms like Uber Eats and DoorDash impose new requirements on the type of electric vehicles they

allow, non-compliance on our part could result in the loss of these customers.

While we believe we are presently in compliance with applicable

laws and regulations in our operating regions, there can be no assurance that we can always promptly adapt to the rapidly changing regulatory

If we fail to effectively adjust to the changing regulatory landscape and comply with applicable laws and regulations in

our operating regions, our business, prospects, financial condition and operating results would be materially and adversely affected.

Any of the factors described

above may cause current or potential customers not to purchase our electric vehicles and use our services.

If the market for electric

vehicles does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating

results will be affected.

The electric mobility industry is subject

to rapidly changing and often complex regulatory environments.

The electric mobility

industry is subject to rapidly changing and often complex regulatory environments at local, state, national, and international

Evolving regulations related to safety standards, emissions, licensing, and operational requirements can have a substantial

impact on our business operations and profitability.

Compliance with these changing regulations may necessitate costly modifications

to our products, business processes, or market strategies, which could lead to increased expenses and delays in product development

and market entry.

Failure to navigate and adhere to evolving regulations adequately could result in legal and financial liabilities,

damage to our reputation, and potential market restrictions.

Furthermore, inconsistency in regulations between different

jurisdictions may create challenges in maintaining uniform business practices and product offerings, increasing our exposure to

regulatory risks.

Furthermore, a significant portion of our customer base comprises food delivery workers, and if leading food

delivery platforms like Uber Eats and DoorDash impose new requirements on the type of electric vehicles they allow, non-compliance

on our part could result in the loss of these customers.

While we believe we are presently in compliance with applicable laws and

regulations in our operating regions, there can be no assurance that we can always promptly adapt to the rapidly changing regulatory

If we fail to effectively adjust to the changing regulatory landscape and comply with applicable laws and regulations

in our operating regions, our business, prospects, financial condition and operating results would be materially and adversely

We may be unable to adequately control the

costs associated with our operations.

We expect to incur significant costs which will

impact our profitability, including research and development expenses as we roll out new models and improve existing models, raw material

procurement costs and selling and distribution expenses as we build our brand and market our vehicles.

Our ability to remain profitable

in the future will not only depend on our ability to successfully market our vehicles and other products and services but also to control

If we are unable to cost efficiently design, manufacture, market, sell and distribute and service our vehicles and services,

our business, prospects, financial condition and operating results would be materially and adversely affected.

We expect to incur significant

costs which will impact our profitability, including research and development expenses as we roll out new models and improve existing

models, raw material procurement costs and selling and distribution expenses as we build our brand and market our vehicles.

to remain profitable in the future will not only depend on our ability to successfully market our vehicles and other products and services

but also to control our costs.

If we are unable to cost efficiently design, manufacture, market, sell and distribute and service our vehicles

and services, our business, prospects, financial condition and operating results would be materially and adversely affected.

We may not succeed in establishing, maintaining

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affect our business, results of operations or financial condition.

Our business and prospects heavily depend on our

ability to develop, maintain and strengthen the Fly E-Bike brand.

If we are unable to establish, maintain and strengthen our brand, we

may lose the opportunity to build and maintain a critical mass of customers.

Our ability to develop, maintain and strengthen our brand

will depend heavily on the success of our marketing efforts.

Failure to develop and maintain a strong brand could materially and adversely

affect customer acceptance of our vehicles, could result in suppliers and other third parties being less likely to invest time and resources

in developing business relationships with us, and could materially adversely affect our business, prospects, financial condition and operating

Our business and prospects

heavily depend on our ability to develop, maintain and strengthen the Fly E-Bike brand.

If we are unable to establish, maintain and strengthen

our brand, we may lose the opportunity to build and maintain a critical mass of customers.

Our ability to develop, maintain and strengthen

our brand will depend heavily on the success of our marketing efforts.

Failure to develop and maintain a strong brand could materially

and adversely affect customer acceptance of our vehicles, could result in suppliers and other third parties being less likely to invest

time and resources in developing business relationships with us, and could materially adversely affect our business, prospects, financial

condition and operating results.

We have a relatively short operating history,

which makes it difficult to evaluate our future prospects, forecast financial results, and assess the risks and challenges we may face.

Our business is relatively new and rapidly evolving.

Our business is relatively

new and rapidly evolving.

We first launched our business in 2018 and have a limited operating history.

We have encountered in the past, and will encounter in the

future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries.

Risks and challenges we have faced or expect to face as a result of our relatively limited operating history and evolving business model

include our ability to:

We have encountered in the past,

and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories

in rapidly changing industries.

Risks and challenges we have faced or expect to face as a result of our relatively limited operating history

and evolving business model include our ability to:

● make operating decisions and evaluate our future prospects

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to enhance the experience of customers.

If our assumptions regarding these risks and uncertainties,

which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results

of operations could differ materially from our expectations and our business, prospects, financial condition and operating results could

be adversely affected.

If our assumptions regarding

these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks

successfully, our results of operations could differ materially from our expectations and our business, prospects, financial condition

and operating results could be adversely affected.

There is substantial doubt about our ability

to continue as a going concern.

We believe there is substantial

doubt about our ability to continue as a going concern as of the date of this annual report.

The going concern may be included in our

future reports and could materially limit our ability to raise additional funds through the issuance of new debt or equity securities

or otherwise.

As of March 31, 2025, we had

cash of $0.8 million.

We had working capital of $1.3 million and $0.3 million as of March 31, 2025 and March 31, 2024,

respectively.

We had net loss of $5.3 million and net income of $1.9 million for the year ended March 31, 2025 and 2024, respectively.

During the year ended March 31, 2025, net cash used in operating activities of the Company was approximately $10.1 million.

March 31, 2025, we had a current portion of contractual obligation of approximately $8.9 million.

We plan to alleviate the going

concern risk through (i) equity financing to support the Company’s working capital;

(ii) other available sources of financing

(including debt) from banks and other financial institutions;

and (iii) financial support from the Company’s related parties.

There is no assurance that we will be successful in implementing the foregoing plans or that additional financing will be available to

us on commercially reasonable terms, or at all.

Our inability to secure needed financing when required could require material changes

to our business plans and could have a material adverse effect on our ability to continue as a going concern and results of operations.

We identified material weaknesses in our

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our financial condition or results of operations, which may adversely affect our business and stock price.

In connection with the preparation and audit of

our consolidated financial statements for the year ended March 31, 2024, we identified material weaknesses in our internal control

over financial reporting.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting

such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will

not be prevented or detected on a timely basis.

In connection with the preparation

and audit of our consolidated financial statements for the year ended March 31, 2025, we identified material weaknesses in our internal

control over financial reporting.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial

reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements

will not be prevented or detected on a timely basis.

The material weaknesses that have been identified included our lack of (i) sufficient

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management as well as cyber security management.

In response to the material weaknesses identified

for the year ended March 31, 2024, we are in the process of implementing a number of measures to address the material weaknesses

identified, including but not limited to (i) hiring additional qualified accounting and financial personnel with appropriate knowledge

and experience in U.S.

response to the material weaknesses identified for the year ended March 31, 2025, we are in the process of implementing a number

of measures to address the material weaknesses identified, including but not limited to (i) hiring additional qualified accounting

and financial personnel with appropriate knowledge and experience in U.S.

GAAP accounting and SEC reporting;

(ii) organizing regular training for our accounting staff, especially

training related to U.S.

(ii) organizing

regular training for our accounting staff, especially training related to U.S.

GAAP and SEC reporting requirements;

and (iii) regularly conducting checks on the IT software we utilize

to ensure its proper functionality, and arranging training sessions for our IT staff.

We also plan to adopt additional measures to improve

our internal control over financial reporting, including, among others, creating a U.S.

GAAP accounting policies and procedures manual,

which will be maintained, reviewed and updated, on a regular basis, to the latest U.S.

GAAP accounting standards, strengthening corporate

governance as well as general control over our information technology.

While we believe these efforts will remediate the material

weaknesses, we may not be able to complete our evaluation, testing or any required remediation in a timely fashion, or at all.

assure you that the measures we have taken to date and may take in the future, will be sufficient to remediate the control deficiencies

that led to our material weaknesses in internal control over financial reporting, to prevent the identification of significant deficiencies

in the future or that they will prevent or avoid potential future material weaknesses.

The effectiveness of our internal control over

financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions

about the likelihood of future events, the possibility of human error and the risk of fraud.

If we are unable to remediate the material

weaknesses, our ability to record, process and report financial information accurately, and to prepare financial statements within the

time periods required of public companies could be adversely affected which, in turn, may adversely affect our reputation and business

and the market price of our common stock.

In addition, any such failures could result in litigation or regulatory actions by the SEC or

other regulatory authorities, loss of investor confidence, delisting of our securities and harm our reputation and financial condition,

or diversion of financial and management resources from the operation of our business.

and (iii) regularly

conducting checks on the IT software we utilize to ensure its proper functionality, and arranging training sessions for our IT staff.

We also plan to adopt additional measures to improve our internal control over financial reporting, including, among others, creating

GAAP accounting policies and procedures manual, which will be maintained, reviewed and updated, on a regular basis, to the

GAAP accounting standards, strengthening corporate governance as well as general control over our information technology.

While we believe these efforts, once completed, will remediate the material weaknesses, we may not be able to complete our evaluation,

testing or any required remediation in a timely fashion, or at all.

We cannot assure you that the measures we have taken to date and

may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses in internal control

over financial reporting, to prevent the identification of significant deficiencies in the future or that they will prevent or avoid

potential future material weaknesses.

The effectiveness of our internal control over financial reporting is subject to various inherent

limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility

of human error and the risk of fraud.

If we are unable to remediate the material weaknesses, our ability to record, process and report

financial information accurately, and to prepare financial statements within the time periods required of public companies could be adversely

affected which, in turn, may adversely affect our reputation and business and the market price of our common stock.

In addition, any

such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence,

delisting of our securities and harm our reputation and financial condition, or diversion of financial and management resources from

the operation of our business.

The markets in which we operate are in their

infancy and highly competitive, and we may not be successful in competing in this industry.

The market of electric two-wheel vehicles is in

its infancy, and we expect it will become more competitive in the future.

There is no assurance that our vehicles will be successful in

the respective markets in which they compete.

A significant and growing number of established and new companies, as well as other companies,

have entered or are reported to have plans to enter the electric vehicle market.

Most of our current and potential competitors have significantly

greater financial, technical, manufacturing, marketing, sales networks and other resources than we do and may be able to devote greater

resources to the design, development, manufacturing, distribution, promotion, sale and support of their products.

Increased competition

could result in lower vehicles sales, price reductions, revenue shortfalls, loss of customers and loss of market share, which could harm

our business, prospects, financial condition and operating results.

The market of electric two-wheel

vehicles is in its infancy, and we expect it will become more competitive in the future.

There is no assurance that our vehicles will

be successful in the respective markets in which they compete.

A significant and growing number of established and new companies, as well

as other companies, have entered or are reported to have plans to enter the electric vehicle market.

Most of our current and potential

competitors have significantly greater financial, technical, manufacturing, marketing, sales networks and other resources than we do and

may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their

Increased competition could result in lower vehicles sales, price reductions, revenue shortfalls, loss of customers and loss

of market share, which could harm our business, prospects, financial condition and operating results.

An adverse determination in any significant

product liability claim against us could materially adversely affect our business, results of operations or financial condition.

The development, production, marketing, sale and

usage of our vehicles will expose us to significant risks associated with product liability claims.

As a provider of consumer products,

we are, from time to time, subject to civil litigation regarding those products, including in publicly-available court filings.

is vulnerable to product liability claims, and we may face inherent risk of exposure to claims in the event our vehicles do not perform

or are claimed to not have performed as expected.

If our products are defective, malfunction or are used incorrectly by our customers,

it may result in bodily injury, property damage or other injury, including death, which could give rise to product liability claims against

For example, our certain EVs use lithium-ion batteries, which, if not appropriately managed and controlled, can rapidly release energy

by venting smoke and flames that can ignite nearby materials.

Furthermore, there is some risk of electrocution if individuals who attempt

to repair battery packs do not follow applicable maintenance and repair protocols.

Any such damage or injury would likely lead to product

liability claims against us and potentially a safety recall.

Any losses that we may suffer from any liability claims and the effect that

any product liability litigation may have upon the brand image, reputation and marketability of our products could have a material adverse

impact on our business, results of operations or financial condition.

No assurance can be given that material product liability claims

will not be made in the future against us, or that claims will not arise in the future in excess or outside of our insurance coverage

and contractual indemnities with suppliers and manufacturers.

We may not be able to obtain adequate product liability insurance for our

existing or new products or the cost of doing so may be prohibitive.

Adverse determinations of material product liability claims made

against us could also harm our reputation and cause us to lose customers and could have a material adverse effect on our business, prospects,

financial condition and operating results.

The development, production,

marketing, sale and usage of our vehicles will expose us to significant risks associated with product liability claims.

As a provider

of consumer products, we are, from time to time, subject to civil litigation regarding those products, including in publicly-available

court filings.

Our business is vulnerable to product liability claims, and we may face inherent risk of exposure to claims in the event

our vehicles do not perform or are claimed to not have performed as expected.

If our products are defective, malfunction or are used incorrectly

by our customers, it may result in bodily injury, property damage or other injury, including death, which could give rise to product liability

claims against us.

For example, our certain EVs use lithium-ion batteries, which, if not appropriately managed and controlled, can rapidly

release energy by venting smoke and flames that can ignite nearby materials.

Furthermore, there is some risk of electrocution if individuals

who attempt to repair battery packs do not follow applicable maintenance and repair protocols.

Any such damage or injury would likely

lead to product liability claims against us and potentially a safety recall.

Any losses that we may suffer from any liability claims and

the effect that any product liability litigation may have upon the brand image, reputation and marketability of our products could have

a material adverse impact on our business, results of operations or financial condition.

No assurance can be given that material product

liability claims will not be made in the future against us, or that claims will not arise in the future in excess or outside of our insurance

coverage and contractual indemnities with suppliers and manufacturers.

We may not be able to obtain adequate product liability insurance

for our existing or new products or the cost of doing so may be prohibitive.

Adverse determinations of material product liability claims

made against us could also harm our reputation and cause us to lose customers and could have a material adverse effect on our business,

prospects, financial condition and operating results.

We are dependent upon our executives for

their services and any interruption in their ability to provide their services could cause us to cease operations.

The loss of the services of our CEO could have

a material adverse effect on us.

We do not maintain any key man life insurance on our executives, including our CEO.

the services of any of our executive management could impair our ability to execute our business plan and growth strategy, as we may not

be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased costs, or at all.

future success will also depend on our ability to attract, retain and motivate other highly skilled employees.

Competition for personnel

in our industry is intense.

We may not be able to retain our key employees or attract, assimilate or retain other highly qualified employees

in the future.

If we do not succeed in attracting new personnel or retaining and motivating our current personnel, our business, prospects,

financial condition and operating results will be adversely affected.

The loss of the services of

any member of our management team, including our CEO, could have a material adverse effect on us.

We do not maintain any key man life

insurance on our executives, including our CEO.

The loss of the services of any of our executive management could impair our ability

to execute our business plan and growth strategy, as we may not be able to find suitable individuals to replace such personnel on a timely

basis or without incurring increased costs, or at all.

Our future success will also depend on our ability to attract, retain and motivate

other highly skilled employees.

Competition for personnel in our industry is intense.

We may not be able to retain our key employees or

attract, assimilate or retain other highly qualified employees in the future.

If we do not succeed in attracting new personnel or retaining

and motivating our current personnel, our business, prospects, financial condition and operating results will be adversely affected.

Our management team does not have any experience

in operating a publicly traded company.

While our management team has a wide breadth of

business experience, none of our executive officers have held an executive position at a publicly traded company.

Given the onerous compliance

requirements to which public companies are subject, there is a chance our executive officers will fail to perform at a level expected

of public company officers.

In such an event, the Company’s share price could be adversely effected.

The management team’s

limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in

that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted

While our management team has

a wide breadth of business experience, none of our executive officers have held an executive position at a publicly traded company.

the onerous compliance requirements to which public companies are subject, there is a chance our executive officers will fail to perform

at a level expected of public company officers.

In such an event, the Company’s share price could be adversely affected.

The management

team’s limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage

in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted

to the management and growth of the company.

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patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs.

Companies, organizations or individuals, including

our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability

to make, use, develop, sell or market our vehicles, which could make it more difficult for us to operate our business.

From time to time,

we may receive communications from holders of patents or trademarks regarding their proprietary rights.

Companies holding patents or other

intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights.

If we are determined

to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

Companies, organizations or

individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or

interfere with our ability to make, use, develop, sell or market our vehicles, which could make it more difficult for us to operate our

From time to time, we receive communications from holders of patents or trademarks regarding their proprietary rights, including

in publicly available court filings.

Companies holding patents or other intellectual property rights may bring suits alleging infringement

of such rights or otherwise assert their rights.

If we are determined to have infringed upon a third party’s intellectual property

rights, we may be required to do one or more of the following:

● cease selling, incorporating certain components into, or

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and services.

In the event of a successful claim of infringement

against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business,

prospects, operating results and financial condition could be materially and adversely affected.

In addition, any litigation or claims,

whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

In the event of a successful

claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property

right, our business, prospects, operating results and financial condition could be materially and adversely affected.

In addition, any

litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management

If we are unable to adequately establish,

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and our business may be adversely affected.

Our future success and competitive position depend

on our ability to establish, maintain, protect and enforce our intellectual property and proprietary rights.

We currently hold one trademark

in the United States.

Other than that, we do not own any issued patents, copyright nor other intellectual property registrations in the

United States.

We also seek to protect our trade secrets and other proprietary information through common law copyright and trademark

principles, but these actions may be inadequate.

The steps we have taken and will take may not prevent unauthorized use, reverse engineering

or misappropriation of our technologies and we may be unable to detect any of the foregoing.

Our lack of intellectual property protection

in the United States may restrict our ability to protect our technologies and processes from competition.

Defending and enforcing

our intellectual property rights may result in litigation, which can be costly and divert management attention and resources.

to apply for patents, additional trademarks and other intellectual property registrations in the United States in the future to protect

our brand and technologies.

Our future success and competitive

position depend on our ability to establish, maintain, protect and enforce our intellectual property and proprietary rights.

hold one trademark in the United States.

Other than that, we do not own any issued patents, copyright nor other intellectual property

registrations in the United States.

We also seek to protect our trade secrets and other proprietary information through common law

The steps we have taken and will take may not prevent unauthorized

use, reverse engineering or misappropriation of our technologies and we may be unable to detect any of the foregoing.

Our lack of intellectual

property protection in the United States may restrict our ability to protect our technologies and processes from competition.

and enforcing our intellectual property rights may result in litigation, which can be costly and divert management attention and resources.

We plan to apply for patents, additional trademarks and other intellectual property registrations in the United States in the future

to protect our brand and technologies.

However, the intellectual property application process is complex and can be time-consuming.

Even after investing

significant resources in preparing and filing an application, there is no guarantee that it will be granted.

If our efforts to protect

our technologies and intellectual property are inadequate, the value of our brand and other intangible assets may be diminished and competitors

may be able to mimic our cloud services.

Any of these events could have a material adverse effect on our business, prospects, financial

condition and operating results.

after investing significant resources in preparing and filing an application, there is no guarantee that it will be granted.

If our efforts

to protect our technologies and intellectual property are inadequate, the value of our brand and other intangible assets may be diminished

and competitors may be able to mimic our cloud services.

Any of these events could have a material adverse effect on our business, prospects,

financial condition and operating results.

Improper activities by third parties, exploitation

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or compromise of our networks and technology systems.

Our systems, website, data (wherever stored),

software or networks and those of third-party suppliers and service providers, are vulnerable to security breaches, including unauthorized

access, computer viruses or other malicious code and other cyber threats that could have a security impact.

We, our third-party suppliers

and service providers may not be able to anticipate evolving techniques used to effect security breaches (which change frequently and

may not be known until launched), or prevent attacks by hackers, including phishing or other cyber-attacks, or prevent breaches due to

employee error or malfeasance, in a timely manner or at all.

Cyber-attacks have become far more prevalent in the past few years, potentially

leading to the theft or manipulation of confidential and proprietary information or loss of access to, or destruction of, data on our

or third-party systems, as well as interruptions or malfunctions in our or third parties’ operations.

If a breach occurs within

the supply chain, disjointed or delayed response efforts can exacerbate the impact, prolong recovery time, and increase potential damage

to our operations and reputation.

In addition, at present, there are no existing contractual agreements delineating cybersecurity responsibilities

between our company and our suppliers or service providers.

This absence of clear terms poses a risk wherein disputes regarding liability

and accountability in the event of a security breach may emerge.

Such disputes could potentially result in legal complexities, financial

losses, and impeded incident resolution within our supply chain.

We have taken and are taking steps to monitor

and enhance the security of our information technology systems.

Furthermore, our board of directors schedules periodic discussions with

management regarding significant risk exposures, including risks related to data privacy and cybersecurity, and assists in taking steps

to mitigate the risk of cyberattacks on us.

However, the techniques used by cyber criminals change frequently and often cannot be recognized

until launched against a target;

accordingly, we may not be able to anticipate these frequently changing techniques, implement adequate

preventive measures for all of them or remediate any unauthorized access on a timely basis.

All preventive measures, as well as additional

measures that may be required to comply with rapidly evolving security standards and protocols imposed by law, regulation, industry standards

or contractual obligations, may cause us to incur substantial expenses.

Any unauthorized access into our customers’ sensitive information,

data belonging to us or our vendors or employee data, even if we are compliant with industry security standards, could put us at a competitive

disadvantage, result in deterioration of our customers’, vendors’ and employees’ confidence in us and subject us to

investigations, required notifications, potential litigation, liability, fines and penalties and consent decrees, resulting in a possible

material adverse impact on our brand, business, prospects, financial condition and operating results.

Potential tariffs and other restrictions

on trade could increase our costs and could further increase the cost of our products, which could adversely impact the competitiveness

of our products and our financial results.

We source a significant portion of our vehicle

components from China.

The application of sanctions, trade restrictions or tariffs by the U.S.

or other countries or the impact of public

health concerns, may adversely impact the industry supply chain.

For example, in 2019, the U.S.

government increased tariffs on U.S.

with China as their country of origin.

We cannot predict what additional actions, if any, may be taken with respect to tariffs or trade

relations between the United States and China, what products may be subject to such actions, or what actions may be taken by the

China in retaliation.

The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related

to tariffs, trade agreements or related policies have the potential to adversely impact our supply chain and access to equipment, our

costs and our product margins.

The additional tariffs imposed on components or equipment that we source from China will increase our costs

and could have an adverse impact on our operating results and financial conditions in future periods.

Our systems, website, data

(wherever stored), software or networks and those of third-party suppliers and service providers, are vulnerable to security breaches,

including unauthorized access, computer viruses or other malicious code and other cyber threats that could have a security impact.

our third-party suppliers and service providers may not be able to anticipate evolving techniques used to effect security breaches (which

change frequently and may not be known until launched), or prevent attacks by hackers, including phishing or other cyber-attacks, or prevent

breaches due to employee error or malfeasance, in a timely manner or at all.

Cyber-attacks have become far more prevalent in the past

few years, potentially leading to the theft or manipulation of confidential and proprietary information or loss of access to, or

destruction of, data on our or third-party systems, as well as interruptions or malfunctions in our or third parties’ operations.

If a breach occurs within the supply chain, disjointed or delayed response efforts can exacerbate the impact, prolong recovery time, and

increase potential damage to our operations and reputation.

In addition, at present, there are no existing contractual agreements delineating

cybersecurity responsibilities between our company and our suppliers or service providers.

This absence of clear terms poses a risk wherein

disputes regarding liability and accountability in the event of a security breach may emerge.

Such disputes could potentially result in

legal complexities, financial losses, and impeded incident resolution within our supply chain.

We have taken and are taking

steps to monitor and enhance the security of our information technology systems.

Furthermore, our board of directors schedules periodic

discussions with management regarding significant risk exposures, including risks related to data privacy and cybersecurity, and assists

in taking steps to mitigate the risk of cyberattacks on us.

However, the techniques used by cyber criminals change frequently and often

cannot be recognized until launched against a target;

accordingly, we may not be able to anticipate these frequently changing techniques,

implement adequate preventive measures for all of them or remediate any unauthorized access on a timely basis.

All preventive measures,

as well as additional measures that may be required to comply with rapidly evolving security standards and protocols imposed by law, regulation,

industry standards or contractual obligations, may cause us to incur substantial expenses.

Any unauthorized access into our customers’

sensitive information, data belonging to us or our vendors or employee data, even if we are compliant with industry security standards,

could put us at a competitive disadvantage, result in deterioration of our customers’, vendors’ and employees’ confidence

in us and subject us to investigations, required notifications, potential litigation, liability, fines and penalties and consent decrees,

resulting in a possible material adverse impact on our brand, business, prospects, financial condition and operating results.

We may be unable to improve our existing

products and develop and market new products that respond to customer needs and preferences and achieve market acceptance.

We may not be able to compete as effectively with

our competitors, and ultimately satisfy the needs and preferences of our customers unless we can successfully enhance existing products,

develop new innovative products and distinguish our products from our competitors’ products through innovation and design.

development requires significant financial, technological and other resources.

There can be no assurance that we will be able to incur

a level of investment in research and development that will be sufficient to successfully make us competitive in product innovation and

In addition, even if we are able to successfully enhance existing products and develop new products, there is no guarantee that

the markets for our existing products and new products will progress as anticipated.

If any of the markets in which our existing products

compete do not develop as expected, our business, prospects, financial condition and operating results could be materially adversely affected.

We may not be able to compete

as effectively with our competitors, and ultimately satisfy the needs and preferences of our customers unless we can successfully enhance

existing products, develop new innovative products and distinguish our products from our competitors’ products through innovation

Product development requires significant financial, technological and other resources.

There can be no assurance that we will

be able to incur a level of investment in research and development that will be sufficient to successfully make us competitive in product

innovation and design.

In addition, even if we are able to successfully enhance existing products and develop new products, there is no

guarantee that the markets for our existing products and new products will progress as anticipated.

If any of the markets in which our

existing products compete do not develop as expected, our business, prospects, financial condition and operating results could be materially

adversely affected.

We have limited experience servicing our

vehicles, and if we are unable to address the service requirements of our customers, our business could be materially and adversely affected.

We have limited experience servicing or repairing

our vehicles.

Servicing electric vehicles is different than servicing traditional vehicles and requires specialized skills, including

training and servicing techniques for electric vehicles.

If we are unable to successfully address the servicing requirements of our customers

or establish a market perception that we maintain high-quality support, our reputation could be harmed, we may be subject to claims from

our customers, and our business, prospects, financial condition and operating results may be materially and adversely affected.

We have limited experience

servicing or repairing our vehicles.

Servicing electric vehicles is different than servicing traditional vehicles and requires specialized

skills, including training and servicing techniques for electric vehicles.

If we are unable to successfully address the servicing requirements

of our customers or establish a market perception that we maintain high-quality support, our reputation could be harmed, we may be subject

to claims from our customers, and our business, prospects, financial condition and operating results may be materially and adversely affected.

Significant product repair and/or replacement

due to product warranty claims or product recalls could have a material adverse impact on our business, results of operations or financial

We provide a three-month warranty against defects

for our EVs and three-month warranty on the battery.

Our warranty will generally require us to repair or replace defective products during

such warranty periods at no cost to the consumer.

We will record provisions based on an estimate of product warranty claims, but there

is the possibility that actual claims may exceed these provisions and therefore negatively impact our results of operations or financial

In addition, we may in the future be required

to make product recalls or could be held liable in the event that some of our products do not meet safety standards or statutory requirements

on product safety, even if the defects related to any such recall or liability are not covered by our limited warranty.

The repair and

replacement costs that we could incur in connection with a recall could have a material adverse effect on our business, results of operations

We provide a three-month warranty

against defects for our EVs and three-month warranty on the battery.

Our warranty will generally require us to repair or replace defective

products during such warranty periods at no cost to the consumer.

We will record provisions based on an estimate of product warranty claims,

but there is the possibility that actual claims may exceed these provisions and therefore negatively impact our results of operations

or financial condition.

Product recalls could also harm our reputation and cause us to lose customers, particularly if recalls cause consumers

to question the safety or reliability of our products, which could have a material adverse effect on our business, prospects, financial

condition and operating results.

In addition, we may in the

future be required to make product recalls or could be held liable in the event that some of our products do not meet safety standards

or statutory requirements on product safety, even if the defects related to any such recall or liability are not covered by our limited

The repair and replacement costs that we could incur in connection with a recall could have a material adverse effect on our

business, results of operations or financial condition.

Product recalls could also harm our reputation and cause us to lose customers,

particularly if recalls cause consumers to question the safety or reliability of our products, which could have a material adverse effect

on our business, prospects, financial condition and operating results.

If our vehicle owners customize our vehicles

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and could harm our business.

Electric vehicle enthusiasts may seek to “hack”

our vehicles to modify their performance, which could compromise vehicle safety systems.

Also, customers may customize their vehicles

with after-market parts that can compromise driver safety.

We do not test, nor do we endorse, such changes or products.

In addition, the

use of improper external cabling or unsafe charging outlets can expose our customers to injury from high voltage electricity.

Such unauthorized

modifications could reduce the safety of our vehicles and any injuries resulting from such modifications could result in adverse publicity

which would negatively affect our brand and harm our business, prospects, financial condition and operating results.

Risks Related to Our Common Stock

Electric vehicle enthusiasts

may seek to “hack” our vehicles to modify their performance, which could compromise vehicle safety systems.

Also, customers

may customize their vehicles with after-market parts that can compromise driver safety.

We do not test, nor do we endorse, such changes

In addition, the use of improper external cabling or unsafe charging outlets can expose our customers to injury from high

voltage electricity.

Such unauthorized modifications could reduce the safety of our vehicles and any injuries resulting from such modifications

could result in adverse publicity which would negatively affect our brand and harm our business, prospects, financial condition and operating

Risks Related to Our Securities

An active, liquid and orderly trading market

for our common stock may not develop or be maintained, and our stock price may be volatile.

We cannot predict the nature of the market for

our common stock, and we cannot assure you that an active, liquid or orderly trading market for our common stock will be maintained.

the extent that an active market does not develop, you may have difficulty in selling any shares of our common stock.

If there is no active,

liquid or orderly market for our common stock, the reported bid and asked price at the time you seek to purchase or sell shares may not

reflect the price at which you could either buy or sell shares of our common stock.

We cannot predict the nature

of the market for our common stock, and we cannot assure you that an active, liquid or orderly trading market for our common stock will

be maintained.

To the extent that an active market does not develop, you may have difficulty in selling any shares of our common stock.

If there is no active, liquid or orderly market for our common stock, the reported bid and asked price at the time you seek to purchase

or sell shares may not reflect the price at which you could either buy or sell shares of our common stock.

Our directors and executive officers will

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a change in corporate control.

The existing holdings of our directors and executive

officers is in the aggregate, approximately 68.5% of our outstanding common stock as of the date of this annual report.

As a result, these

stockholders will be able to influence our management and affairs and control the outcome of matters submitted to our stockholders for

approval, including the election of directors and any sale, merger, consolidation, or sale of all or substantially all of our assets.

The concentration of voting power among one or more of these stockholders may have an adverse effect on the price of our common stock.

In addition, this concentration of ownership might

adversely affect the market price of our common stock by:

(1) delaying, deferring or preventing a change of control of our company;

The existing holdings of our directors and executive officers is in

the aggregate, approximately 18.7% of our outstanding common stock as of the date of this annual report.

As a result, these stockholders

may be able to influence our management and affairs and control the outcome of matters submitted to our stockholders for approval, including

the election of directors and any sale, merger, consolidation, or sale of all or substantially all of our assets.

The concentration of

voting power among one or more of these stockholders may have an adverse effect on the price of our common stock.

In addition, this concentration

of ownership might adversely affect the market price of our common stock by:

(1) delaying, deferring or preventing a change of control

of our company;

(2) impeding a merger, consolidation, takeover or other business combination involving our company;

or (3) discouraging a potential

acquirer from making a tender offer or otherwise attempting to obtain control of our company.

Our management will have broad discretion

in application of the net proceeds of the IPO and may not use these proceeds effectively.

Our management will have considerable discretion

in the application of the net proceeds of the IPO.

As a result, investors will be relying upon management’s judgment with only limited

information about our specific intentions for the use of the net proceeds of the IPO.

We may use the net proceeds for purposes that do

not yield a significant return or any return at all for our stockholders.

In addition, pending their use, we may invest the net proceeds

from the IPO in a manner that does not produce income or that loses value.

A portion of the compensation to our senior

executive officers may not be deductible, which may increase our taxes.

Section 162(m) of the Internal Revenue Code limits

the deduction that public companies may take for annual compensation paid to its chief executive officer, chief financial officer and

the three other most highly compensated officers, who are referred to as “covered employees.” All compensation in excess of

$1.0 million paid to a covered employee, including post termination compensation and death benefits, may be nondeductible for federal

income tax purposes.

In the event that the compensation we pay to any covered employee exceeds $1.0 million, such excess may not be deductible

which, if our operations are profitable, could increase our income taxes and reduce our net income, which could negatively affect the

price of our stock.

As an emerging growth company, we are exempt

from the requirements under the Sarbanes-Oxley Act that a public accounting firm attest as to internal controls, and we lack the financial

controls and safeguards required of public companies.

We do not have the internal infrastructure necessary,

and are not required, to complete an attestation about our financial controls that would be required under Section 404 of the Sarbanes

Oxley Act of 2002.

There can be no assurance that there are no significant deficiencies or material weaknesses in the quality

of our financial controls.

We expect to incur additional expenses and diversion of management’s time if and when it becomes necessary

to perform the system and process evaluation, testing and remediation required in order to comply with the management certification and

auditor attestation requirements.

We may not meet continued listing standards

on the Nasdaq Capital Market.

The Nasdaq Capital Market requires companies to

fulfill specific requirements in order for their shares to continue to be listed.

In order to qualify for continued listing on the Nasdaq

Capital Market, we must meet certain criteria, including the following:

● Our stockholders’ equity must be at least $2,500,000;

or the market value of our listed securities must be at least $35,000,000;

or our net income from continuing operations in our last fiscal

year (or two of the last three fiscal years) must have been at least $500,000;

● The market value of our publicly held shares must be at least

● The minimum bid price for our shares must be at least $1.00

● We must have at least 300 stockholders;

● We must have at least 500,000 publicly held shares;

● We must have at least 2 market makers;

● We must have adopted Nasdaq-mandated corporate governance

measures, including a board of directors comprised of a majority of independent directors, an Audit Committee comprised solely of independent

directors and the adoption of a code of ethics among other items.

If our shares are delisted from the Nasdaq Capital

Market at some later date, our stockholders could find it difficult to sell our shares.

In addition, if our common stock is delisted from

the Nasdaq Capital Market at some later date, we may apply to have our common stock quoted on the Bulletin Board or in the “pink

sheets” maintained by the National Quotation Bureau, Inc.

The Bulletin Board and the “pink sheets” are generally considered

to be less efficient markets than the Nasdaq Capital Market.

In addition, if our common stock is not so listed or are delisted at some

later date, our common stock may be subject to the “penny stock” regulations.

These rules impose additional sales practice

requirements on broker-dealers that sell low-priced securities to persons other than established customers and institutional accredited

investors and require the delivery of a disclosure schedule explaining the nature and risks of the penny stock market.

As a result, the

ability or willingness of broker-dealers to sell or make a market in our common stock might decline.

If our common stock is not so listed

or is delisted from the Nasdaq Capital Market at some later date or become subject to the penny stock regulations, it is likely that the

price of our shares would decline and that our stockholders would find it difficult to sell their shares.

or (3) discouraging

a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company.

The price of our common stock may be volatile

and fluctuate substantially and rapidly, which could result in the loss of a significant part of your investment.

The market price of our common stock may fluctuate

substantially and rapidly and may be higher or lower than the public offering price.

The stock market, in general, and the market for

smaller companies such as ours, in particular, have experienced extreme price and volume fluctuations.

Such volatility, including any

stock-run up, may be unrelated or disproportionate to the actual or expected operating performance and financial condition or prospects

of those companies, making it difficult for the investors to assess the rapidly changing value of our common stock.

These fluctuations

may be even more pronounced in the trading market for our common stock shortly following the listing of our common stock on Nasdaq as

a result of the limited public float available following the IPO.

The market price for our common stock may be influenced by many factors,

● limited trading volume;

● our success in commercializing our products;

● developments with respect to competitive products or technologies;

● developments or disputes concerning patent applications,

issued patents or other intellectual property or proprietary rights;

● the recruitment or departure of key personnel;

● actual or anticipated changes in estimates as to financial

results, commercialization timelines or recommendations by securities analysts;

● variations in our financial results or the financial results

of companies that are perceived to be similar to us;

● sales of common stock by us, our executive officers, directors

or principal stockholders or others;

● general economic, industry and market conditions, such as

the impact of the COVID-19 pandemic on our industry;

● the publication of unfavorable research reports and updates

thereto by financial analysts;

● the other factors described in this “Risk Factors”

In the past, many companies that have experienced volatility in the

market price of their stock have been subject to securities class action litigation.

We may be the target of this type of litigation in

Securities litigation against us could result in substantial costs and divert our management’s attention from other

business concerns, which could seriously harm our business.

We will incur increased costs as a result

of being a publicly traded company.

The market price of our

common stock may fluctuate substantially and rapidly and may be higher or lower than the public offering price.

The stock market, in

general, and the market for smaller companies such as ours, in particular, have experienced extreme price and volume fluctuations.

volatility, including any stock-run up, may be unrelated or disproportionate to the actual or expected operating performance and financial

condition or prospects of those companies, making it difficult for the investors to assess the rapidly changing value of our common stock.

These fluctuations may be even more pronounced in the trading market for our common stock shortly following the listing of our common

stock on Nasdaq as a result of the limited public float available following the IPO.

The market price for our common stock may be

influenced by many factors, including:

● limited trading

● our success in

commercializing our products;

● developments with

respect to competitive products or technologies;

● developments or

disputes concerning patent applications, issued patents or other intellectual property or

proprietary rights;

● the recruitment

or departure of key personnel;

● actual or anticipated

changes in estimates as to financial results, commercialization timelines or recommendations

by securities analysts;

● variations in

our financial results or the financial results of companies that are perceived to be similar

● sales of common

stock by us, our executive officers, directors or principal stockholders or others;

● general economic,

industry and market conditions, such as the impact of the COVID-19 pandemic on our industry;

● the publication

of unfavorable research reports and updates thereto by financial analysts;

● the other factors

described in this “Risk Factors” section.

In the past, many companies

that have experienced volatility in the market price of their stock have been subject to securities class action litigation.

the target of this type of litigation in the future.

Securities litigation against us could result in substantial costs and divert our

management’s attention from other business concerns, which could seriously harm our business.

We incur increased costs as a result of

being a publicly traded company.

As a company with publicly traded securities,

we will incur additional legal, accounting and other expenses not presently incurred.

In addition, the Sarbanes-Oxley Act of 2002,

the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as rules promulgated by the SEC and the national

securities exchange on which we list, requires us to adopt corporate governance practices applicable to U.S.

we incur additional legal, accounting and other expenses not presently incurred.

In addition, the Sarbanes-Oxley Act of 2002, the Dodd-Frank

Wall Street Reform and Consumer Protection Act of 2010, as well as rules promulgated by the SEC and the national securities exchange

on which we list, requires us to adopt corporate governance practices applicable to U.S.

public companies.

rules and regulations will increase our legal and financial compliance costs.

These rules and regulations

will increase our legal and financial compliance costs.

If securities or industry analysts do not

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and trading volume could decline.

The trading market for our common stock will be

influenced by the research and reports that industry or securities analysts publish about us, our industry and our market.

The trading market for our common stock will

be influenced by the research and reports that industry or securities analysts publish about us, our industry and our market.

If no analyst

elects to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock price

could be adversely affected.

As a small-cap company, we are more likely than our larger competitors to lack coverage from securities analysts.

In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish reports

on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock, our

stock price could decline.

elects to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock

price could be adversely affected.

As a small-cap company, we are more likely than our larger competitors to lack coverage from securities

In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish

reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

If one or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock,

our stock price could decline.

We are an “emerging growth company”

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stock less attractive to investors.

We are an “emerging growth company,”

as defined in the federal securities laws, and we may take advantage of certain exemptions and relief from various reporting requirements

that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging

growth company”, (1) we will not be required to comply with the auditor attestation requirements of Section 404(b) of

the Sarbanes-Oxley Act, (2) we will be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotations

or a supplement to the auditor’s report on financial statements, (3) we will be subject to reduced disclosure obligations regarding

executive compensation in our periodic reports and proxy statements and (4) we will not be required to hold nonbinding advisory votes

on executive compensation or stockholder approval of any golden parachute payments not previously approved.

We will take advantage of

these exemptions.

In addition, an emerging growth company may take advantage of the extended transition period provided in Section 7(a)(2)(B) of

the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards,

meaning that the company can delay the adoption of certain accounting standards until those standards would otherwise apply to private

We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be

subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We may remain an “emerging growth company”

until the fiscal year-end following the fifth anniversary of the completion of this initial public offering, though we may cease to be

an “emerging growth company” earlier under certain circumstances, including (1) if we become a large accelerated filer,

(2) if our gross revenue exceeds $1.235 billion in any fiscal year, or (3) if we issue more than $1.0 billion in non-convertible

notes in any three year period.

We cannot assure you that we will be able to take advantage of all of the benefits of the available to

emerging growth companies.

We are a “smaller reporting company” and, even if

we no longer qualify as an emerging growth company, we may still be subject to reduced reporting requirements.

We are an “emerging

growth company,” as defined in the federal securities laws, and we may take advantage of certain exemptions and relief from various

reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular,

while we are an “emerging growth company”, (1) we will not be required to comply with the auditor attestation requirements

of Section 404(b) of the Sarbanes-Oxley Act, (2) we will be exempt from any rules that may be adopted by the PCAOB requiring

mandatory audit firm rotations or a supplement to the auditor’s report on financial statements, (3) we will be subject to

reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (4) we will not

be required to hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not

previously approved.

We will take advantage of these exemptions.

In addition, an emerging growth company may take advantage of the extended

transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities

Act”) for complying with new or revised accounting standards, meaning that the company can delay the adoption of certain accounting

standards until those standards would otherwise apply to private companies.

We have elected to avail ourselves of this exemption from

new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public

companies that are not emerging growth companies.

We may remain an “emerging

growth company” until the fiscal year-end following the fifth anniversary of the completion of this initial public offering, though

we may cease to be an “emerging growth company” earlier under certain circumstances, including (1) if we become a large

accelerated filer, (2) if our gross revenue exceeds $1.235 billion in any fiscal year, or (3) if we issue more than $1.0 billion

in non-convertible notes in any three year period.

We cannot assure you that we will be able to take advantage of all of the benefits

of the available to emerging growth companies.

We are a “smaller reporting company”

as defined in the Securities Exchange Act of 1934, as amended.

Smaller reporting companies may choose to present only the two most recent

fiscal years of audited financial statements in their annual reports on Form 10-K and have reduced disclosure obligations regarding executive

compensation and, if a smaller reporting company has less than $100 million in annual revenue, it would not be required to obtain an attestation

report on internal control over financial reporting issued by its independent registered public accounting firm.

We will remain a smaller

reporting company until the last day of any fiscal year for so long as either:

(i) the market value of our shares of common stock held

by non-affiliates does not equal or exceed $250 million measured on the last business day of our second fiscal quarter;

or (ii) our annual

revenues is less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates

is less than $700 million measured on the last business day of our second fiscal quarter.

To the extent we take advantage of such reduced

disclosure obligations, it may make the comparison of our financial statements with other public companies difficult or impossible.

We may issue shares of preferred stock in

the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common

and, even if we no longer qualify as an emerging growth company, we may still be subject to reduced reporting requirements.

We are a “smaller

reporting company” as defined in the Securities Exchange Act of 1934, as amended.

Smaller reporting companies may

choose to present only the two most recent fiscal years of audited financial statements in their annual reports on Form 10-K

and have reduced disclosure obligations regarding executive compensation and, if a smaller reporting company has less than $100 million

in annual revenue, it would not be required to obtain an attestation report on internal control over financial reporting issued by its

independent registered public accounting firm.

We will remain a smaller reporting company until the last day of any fiscal year

for so long as either:

(i) the market value of our shares of common stock held by non-affiliates does not equal or exceed $250 million

measured on the last business day of our second fiscal quarter;

or (ii) our annual revenues is less than $100 million

during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million

measured on the last business day of our second fiscal quarter.

To the extent we take advantage of such reduced disclosure obligations,

it may make the comparison of our financial statements with other public companies difficult or impossible.

We may issue shares of preferred stock

in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common

stock, which could depress the price of our common stock.

Our certificate of incorporation authorizes us

to issue one or more series of preferred stock.

Our board of directors will have the authority to determine the preferences, limitations

and relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation of such

series, without any further vote or action by our stockholders.

Our preferred stock could be issued with voting, liquidation, dividend

and other rights superior to the rights of our common stock.

The potential issuance of preferred stock may delay or prevent a change in

control of us, discouraging bids for our common stock at a premium to the market price, and materially adversely affect the market price

and the voting and other rights of the holders of our common stock.

Our certificate of incorporation

authorizes us to issue one or more series of preferred stock.

Our board of directors will have the authority to determine the preferences,

limitations and relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation

of such series, without any further vote or action by our stockholders.

Our preferred stock could be issued with voting, liquidation,

dividend and other rights superior to the rights of our common stock.

The potential issuance of preferred stock may delay or prevent

a change in control of us, discouraging bids for our common stock at a premium to the market price, and materially adversely affect the

market price and the voting and other rights of the holders of our common stock.

We have never declared or paid any cash

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We do not anticipate paying any cash dividends on our common stock in the foreseeable

We have never declared or paid any cash dividends

or distributions on our capital stock.

We currently intend to retain our future earnings, if any, to support operations and to finance

expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

The declaration, payment and amount of any future

dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations,

cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant.

There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount

of any such dividend.

As a result, investors will be reliant upon capital appreciation for any returns on their investment in the shares

of our common stock.

We have never declared or

paid any cash dividends or distributions on our capital stock.

We currently intend to retain our future earnings, if any, to support

operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable

The declaration, payment

and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things,

the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board

of directors considers relevant.

There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance

with respect to the amount of any such dividend.

As a result, investors will be reliant upon capital appreciation for any returns on

their investment in the shares of our common stock.

Future sales of our common stock in the

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may dilute your ownership in us.

As of June 27, 2024, there are 17,160,000 shares of restricted common

stock, which constitute approximately 69.8% of our outstanding common stock, may be eligible for sale pursuant to Rule 144 at

various times, subject to limitations provided by Rule 144 and lock-up agreements which our stockholders, including our directors

and officers, who hold 16,830,000 shares have signed lock-ups for period of 180 days from the closing of the IPO, which expires on December

2, 2024, release from the lock-up restriction at the discretion of the underwriters.

If the managing underwriter of our initial public

offering, waives or releases parties to the lock-up, the market price for our common stock could be adversely impacted.

We intend to file a registration statement with

the SEC on Form S-8 providing for the registration of shares of our common stock issued or reserved for issuance under our equity incentive

plan or pursuant to stock options.

Subject to the satisfaction of vesting conditions and the expiration of lock-up agreements, shares

registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction

other than those restrictions imposed on sales by affiliates pursuant to Rule 144.

We cannot predict the size of future issuances

of our common stock or securities convertible into common stock or the effect, if any, that future issuances and sales of shares of our

common stock will have on the market price of our common stock.

Sales of substantial amounts of our common stock (including shares issued

in connection with any acquisition we may make), or the perception that such sales, including sales by our existing stockholders pursuant

to Rule 144, could occur, may adversely affect prevailing market prices of our common stock.

As of July 15, 2025, there

are 3,432,000shares of restricted common stock, which constitute approximately 32.3% of our outstanding common stock, may be eligible

for sale pursuant to Rule 144 at various times, subject to limitations provided by Rule 144 and lock-up agreements which our stockholders,

including our directors and officers, who hold 3,366,000shares have signed lock-ups for period of 180 days from the closing of the registered

direct offering, which expires on December 1, 2025, release from the lock-up restriction at the discretion of the placement agent for

the registered direct offering.

If placement agent for the registered direct offering waives or releases parties to the lock-up, the

market price for our common stock could be adversely impacted.

We intend to file a registration

statement with the SEC on Form S-8 providing for the registration of shares of our common stock issued or reserved for issuance

under our equity incentive plan or pursuant to stock options.

Subject to the satisfaction of vesting conditions and the expiration of

lock-up agreements, shares registered under the registration statement on Form S-8 will be available for resale immediately in the

public market without restriction other than those restrictions imposed on sales by affiliates pursuant to Rule 144.

We cannot predict the size

of future issuances of our common stock or securities convertible into common stock or the effect, if any, that future issuances and

sales of shares of our common stock will have on the market price of our common stock.

Sales of substantial amounts of our common stock

(including shares issued in connection with any acquisition we may make), or the perception that such sales, including sales by our existing

stockholders pursuant to Rule 144, could occur, may adversely affect prevailing market prices of our common stock.

Because our directors and executive officers

own or have the right to vote approximately 68.5% of our outstanding common stock, they may be able to elect all directors, approve all

matters requiring stockholder approval and block any action which may be beneficial to stockholders.

As of June 27, 2024, our directors and executive officers beneficially

own approximately 68.5% of our outstanding common stock.

Our bylaws provide that a majority of the aggregate voting power of the stock

issued and outstanding and entitled to vote constitutes a quorum for a meeting of stockholders.

As a result, they may have the ability

to elect all of our directors and to approve actions requiring stockholder approval as well as to prevent any action from being taken

which they oppose even if such action would benefit stockholders.

Delaware law and

provisions in our amended and restated certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult,

thereby depressing the trading price of our common stock.

own or have the right to vote approximately 18.7% of our outstanding common stock, they may be able to elect all directors, approve

all matters requiring stockholder approval and block any action which may be beneficial to stockholders.

As of July 15, 2025, our

directors and executive officers beneficially own approximately 18.7% of our outstanding common stock.

Our bylaws provide that a majority

of the aggregate voting power of the stock issued and outstanding and entitled to vote constitutes a quorum for a meeting of stockholders.

As a result, they may have the ability to elect all of our directors and to approve actions requiring stockholder approval as well as

to prevent any action from being taken which they oppose even if such action would benefit stockholders.

Delaware law and provisions in our amended

and restated certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing

the trading price of our common stock.

Our amended and restated

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provisions include the following:

● establish a classified board of directors so that not all

members of our board of directors are elected at one time;

● permit the board of directors to establish the number of

directors and fill any vacancies and newly-created directorships;

● provide that directors may only be removed for cause;

● require super-majority voting to amend some provisions in

● prohibit stockholder action by written consent, which requires

all stockholder actions to be taken at a meeting of the stockholders;

● provide that the board of directors is expressly authorized

to amend or repeal our bylaws;

● restrict the forum for certain litigation against the Company

● establish advance notice requirements for nominations for

election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Any provision of our

amended and restated certificate of incorporation (as amended) or bylaws or Delaware law that has the effect of delaying or deterring

a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could

also affect the price that some investors are willing to pay for our common stock.

Our management

is required to devote a substantial amount of time to comply with public company regulations.

As a public company,

we incur significant legal, accounting and other expenses that we did not incur as a private company.

● establish a classified

board of directors so that not all members of our board of directors are elected at one time;

● permit the board

of directors to establish the number of directors and fill any vacancies and newly-created

directorships;

● provide that directors

may only be removed for cause;

● require super-majority

voting to amend some provisions in our bylaws;

● prohibit stockholder

action by written consent, which requires all stockholder actions to be taken at a meeting

of the stockholders;

● provide that the

board of directors is expressly authorized to amend or repeal our bylaws;

● restrict the forum

for certain litigation against the Company to Delaware;

● establish advance

notice requirements for nominations for election to our board of directors or for proposing

matters that can be acted upon by stockholders at annual stockholder meetings.

Any provision of our amended

and restated certificate of incorporation (as amended) or bylaws or Delaware law that has the effect of delaying or deterring a change

in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also

affect the price that some investors are willing to pay for our common stock.

Our management is required to devote a

substantial amount of time to comply with public company regulations.

As a public company, we

incur significant legal, accounting and other expenses that we did not incur as a private company.

The Sarbanes-Oxley Act, the Dodd-Frank

8 unchanged sentences

15d-15(f) under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Our compliance with these requirements

will require that it incur substantial accounting and related expenses and expend significant management efforts.

We will need to hire

additional accounting and financial staff to comply with public company regulations.

The costs of hiring such staff may be material and

there can be no assurance that such staff will be immediately available to us.

Moreover, because we

have identified deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, investors could

lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline and we could

Our compliance with these

requirements will require that it incur substantial accounting and related expenses and expend significant management efforts.

need to hire additional accounting and financial staff to comply with public company regulations.

The costs of hiring such staff may

be material and there can be no assurance that such staff will be immediately available to us.

Moreover, because we have

identified deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, investors could lose

confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline and we could

be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.

There can be no assurance that we will

be able to comply with the continued listing standards of Nasdaq.

Our eligibility for listing

on Nasdaq depends on our ability to comply with Nasdaq’s continued listing requirements.

On October 2, 2024, we received written

notice from Nasdaq indicating that the bid price for our common stock for the last 31 consecutive business days, had closed below

the minimum $1.00 per share and, as a result, we are not in compliance with the $1.00 minimum bid price requirement for the continued

listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq

Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, or until March 31, 2025, to regain compliance with

the minimum bid price requirement.

To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share

for a minimum of 10 consecutive business days during this 180 day period.

On April 2, 2025, Nasdaq notified us that, although

the Company has not regained compliance with the minimum bid price requirement, the Company is eligible to receive an additional 180

calendar day period or until September 29, 2025, to regain compliance with the minimum bid price requirement, pursuant to Nasdaq

Listing Rule 5810(c)(3)(A).

We will monitor the closing bid price of our common stock and may, if appropriate, consider implementing

available options, including, but not limited to, implementing a reverse share split of our common stock, to regain compliance with the

minimum bid price requirement under the Nasdaq Listing Rules.

On June 16, 2025, our board of directors approved a one-for-five (1:5)

reverse stock split of our issued and outstanding shares of common stock.

On July 3, 2025, we filed with the Secretary of State of the

State of Delaware a Certificate of Amendment to our Certificate of Incorporation to effect the 2025 Reverse Stock Split.

The 2025 Reverse

Stock Split became effective on July 3, 2025, and our common stock began trading on a split-adjusted basis on Nasdaq on July 7, 2025.

However, there can be no assurance that we will be able to regain such compliance.

If Nasdaq delists our common

stock from trading on its exchange, we and our stockholders could face significant material adverse consequences including:

● limited availability

of market quotations for our securities;

● a determination

that our common stock is a “penny stock,” which will require brokers trading

in our common stock to adhere to more stringent rules, possibly resulting in a reduced level

of trading activity in the secondary trading market for our common stock;

● a limited amount

of analyst coverage;

● decreased ability

to issue additional securities or obtain additional financing in the future.

FINRA sales practice requirements may limit

a stockholder’s ability to buy and sell our common stock.

The Financial Industry Regulatory

Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must

have reasonable grounds for believing that the investment is suitable for that customer.

Prior to recommending speculative low-priced

securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s

financial status, tax status, investment objectives and other information.

Under interpretations of these rules, the FINRA believes that

there is a high probability that speculative low-priced securities will not be suitable for at least some customers.

The FINRA requirements

make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing

the level of trading activity in our common stock.

As a result, fewer broker-dealers may be willing to make a market in our common stock,

reducing a stockholder’s ability to resell shares of our common stock.

Holders of the Warrants will have no rights

as a common stockholder until they acquire our common stock.

Until holders of the Warrants

acquire shares of our common stock upon exercise of the Warrants, the holders will have no rights with respect to shares of our common

stock issuable upon exercise of the Warrants.

Upon exercise of the Warrants, the holder will be entitled to exercise the rights of a

common stockholder as to the security exercised only as to matters for which the record date occurs after the exercise.

If securities or industry analysts do not

publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding

our securities adversely, our stock price and trading volume could decline.

The trading market for our

common stock is influenced by the research and reports that industry or securities analysts may publish about us, our business, our market

or our competitors.

If any of the analysts who may cover us change their recommendation regarding our common stock adversely, or provide

more favorable relative recommendations about our competitors, our stock price would likely decline.

If any analyst who may cover us

were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets,

which in turn could cause our stock price or trading volume to decline.

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