What changed in this filing

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Item 1A. Risk Factors

2022-01-14 compared with 2021-10-14 · 628 added, 633 removed, 113 unchanged (92% of the section changed)

addition to the information contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021, and this

Quarterly Report on Form 10-Q, we have identified the following material risks and uncertainties which reflect our outlook and

conditions known to us as of the date of this Quarterly Report.

These material risks and uncertainties should be carefully reviewed

by our stockholders and any potential investors in evaluating the Company, our business and the market value of our common stock.

Furthermore, any one of these material risks and uncertainties has the potential to cause actual results, performance, achievements

or events to be materially different from any future results, performance, achievements or events implied, suggested or expressed

by any forward-looking statements made by us or by persons acting on our behalf.

Refer to Cautionary Note Regarding Forward-looking

Statements as disclosed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021.

addition to the information contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021, and this Quarterly

Report on Form 10-Q, we have identified the following material risks and uncertainties which reflect our outlook and conditions known

to us as of the date of this Quarterly Report.

These material risks and uncertainties should be carefully reviewed by our stockholders

and any potential investors in evaluating the Company, our business and the market value of our common stock.

Furthermore, any one of

these material risks and uncertainties has the potential to cause actual results, performance, achievements or events to be materially

different from any future results, performance, achievements or events implied, suggested or expressed by any forward-looking statements

made by us or by persons acting on our behalf.

Refer to Cautionary Note Regarding Forward-looking Statements as disclosed

in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021.

is no assurance that we will be successful in preventing the material adverse effects that any one or more of the following material

risks and uncertainties may cause on our business, prospects, financial condition and operating results, which may result in a

significant decrease in the market price of our common stock.

Furthermore, there is no assurance that these material risks and

uncertainties represent a complete list of the material risks and uncertainties facing us.

There may be additional risks and uncertainties

of a material nature that, as of the date of this Quarterly Report, we are unaware of or that we consider immaterial that may

become material in the future, any one or more of which may result in a material adverse effect on us.

You could lose all or a

significant portion of your investment due to any one of these material risks and uncertainties.

risks and uncertainties may cause on our business, prospects, financial condition and operating results, which may result in a significant

decrease in the market price of our common stock.

Furthermore, there is no assurance that these material risks and uncertainties represent

a complete list of the material risks and uncertainties facing us.

There may be additional risks and uncertainties of a material nature

that, as of the date of this Quarterly Report, we are unaware of or that we consider immaterial that may become material in the future,

any one or more of which may result in a material adverse effect on us.

You could lose all or a significant portion of your investment

due to any one of these material risks and uncertainties.

Related to the Business

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have a limited operating history, which makes it difficult to forecast our future results.

You should not rely on our past results

of operations as indicators of future performance.

You should not rely on our past results of

operations as indicators of future performance.

You should consider and evaluate our prospects in light of the risks and uncertainty

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section, our business, financial condition and results of operations could be adversely affected.

Further, because we have limited

historical financial data and operate in an evolving market, any predictions about our future revenue and expenses may not be

as accurate as they would be if we had a longer operating history or operated in a more predictable market.

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.

If our assumptions regarding these risks and uncertainties 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, financial condition and results of operations could be adversely affected.

Further, because we have limited historical

financial data and operate in an evolving market, any predictions about our future revenue and expenses may not be as accurate as they

would be if we had a longer operating history or operated in a more predictable market.

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

If our assumptions regarding these risks and uncertainties 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, financial condition and results of operations

could be adversely affected.

have a history of net losses and we may not be able to achieve or maintain profitability in the future.

all annual periods of our operating history we have experienced net losses.

We generated a net loss of approximately $2.4 million

during the six months period ended August 31, 2021 and net losses of approximately $4.3 million, $3.0 million and $2.9 million

for the years ended February 28, 2021, 2020 and 2019, respectively.

At August 31, 2021 and February 28, 2021, we had an accumulated

deficit of approximately $14.6 million and $12.2 million, respectively.

We have not achieved profitability, and we may not realize

sufficient revenue to achieve profitability in future periods.

Our expenses will likely increase in the future as we develop and

launch new offerings and platform features, expand in existing and new markets, increase our sales and marketing efforts and continue

to invest in our platform.

These efforts may be more costly than we expect and may not result in increased revenue or growth in

our business.

If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant

losses in the future and may not be able to achieve or maintain profitability.

We generated a net loss of approximately $3.4 million during

the nine months period ended November 30, 2021 and net losses of approximately $4.3 million, $3.0 million and $2.9 million for the years

ended February 28, 2021, 2020 and 2019, respectively.

At November 30, 2021 and February 28, 2021, we had an accumulated deficit of approximately

$15.6 million and $12.2 million, respectively.

We have not achieved profitability, and we may not realize sufficient revenue to achieve

profitability in future periods.

Our expenses will likely increase in the future as we develop and launch new offerings and platform

features, expand in existing and new markets, increase our sales and marketing efforts and continue to invest in our platform.

efforts may be more costly than we expect and may not result in increased revenue or growth in our business.

If we are unable to generate

adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to achieve

or maintain profitability.

we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected.

are currently experiencing growth in our business.

This expansion increases the complexity of our business and has placed, and

will continue to place, strain on our management, personnel, operations, systems, technical performance, financial resources and

internal financial control and reporting functions.

Our ability to manage our growth effectively and to integrate new employees,

technologies and acquisitions into our existing business will require us to continue to expand our operational and financial infrastructure

and to continue to retain, attract, train, motivate and manage employees.

Continued growth could strain our ability to develop

and improve our operational, financial and management controls, enhance our reporting systems and procedures, recruit, train and

retain highly skilled personnel and maintain user satisfaction.

Additionally, if we do not effectively manage the growth of our

business and operations, the quality of our offerings could suffer, which could negatively affect our reputation and brand, business,

financial condition and results of operations.

impact of the novel coronavirus (COVID-19) pandemic on the global economy, our operations and consumer demand for consumer goods

and services remains uncertain, which could have a material adverse impact on our business, results of operations and financial

condition and on the market price of our common shares.

This expansion increases the complexity of our business and has placed, and will continue

to place, strain on our management, personnel, operations, systems, technical performance, financial resources and internal financial

control and reporting functions.

Our ability to manage our growth effectively and to integrate new employees, technologies and acquisitions

into our existing business will require us to continue to expand our operational and financial infrastructure and to continue to retain,

attract, train, motivate and manage employees.

Continued growth could strain our ability to develop and improve our operational, financial

and management controls, enhance our reporting systems and procedures, recruit, train and retain highly skilled personnel and maintain

user satisfaction.

Additionally, if we do not effectively manage the growth of our business and operations, the quality of our offerings

could suffer, which could negatively affect our reputation and brand, business, financial condition and results of operations.

impact of the novel coronavirus (COVID-19) pandemic on the global economy, our operations and consumer demand for consumer goods and

services remains uncertain, which could have a material adverse impact on our business, results of operations and financial condition

and on the market price of our common shares.

December 2019, a strain of novel coronavirus (now commonly known as COVID-19) was reported to have surfaced in Wuhan, China.

has since spread rapidly throughout many countries, and, on March 11, 2020, the World Health Organization declared COVID-19 to

be a pandemic.

In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States, Canada

and China, have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction

in economic activity in countries that have had significant outbreaks of COVID-19.

Although our operating subsidiaries and contractually

controlled entity report that is operation have not been materially affected at this point, significant uncertainty remains as

to the potential impact of the COVID-19 pandemic on our operations and on the global economy as a whole.

It is currently not possible

to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels.

COVID-19 pandemic has resulted in significant financial market volatility and uncertainty over the last year or so.

A continuation

or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability

to access capital, on our business, results of operations and financial condition, on the market price of our common shares, and

on consumer demand for consumer services, including those offered by our Company.

has since spread rapidly throughout many countries, and, on March 11, 2020, the World Health Organization declared COVID-19 to be a pandemic.

In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States, Canada and China, have imposed

unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries

that have had significant outbreaks of COVID-19.

Although our operating subsidiaries and contractually controlled entity report that

is operation have not been materially affected at this point, significant uncertainty remains as to the potential impact of the COVID-19

pandemic on our operations and on the global economy as a whole.

It is currently not possible to predict how long the pandemic will last

or the time that it will take for economic activity to return to prior levels.

The COVID-19 pandemic has resulted in significant financial

market volatility and uncertainty over the last year or so.

A continuation or worsening of the levels of market disruption and volatility

seen in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial

condition, on the market price of our common shares, and on consumer demand for consumer services, including those offered by our Company.

depend on our key personnel and other highly skilled personnel, and if we fail to attract, retain, motivate or integrate our personnel,

our business, financial condition and results of operations could be adversely affected.

success depends in part on the continued service of our founders, senior management team, key technical employees and other highly

skilled personnel and on our ability to identify, hire, develop, motivate, retain and integrate highly qualified personnel for

all areas of our organization.

We may not be successful in attracting and retaining qualified personnel to fulfill our current

or future needs.

Our competitors may be successful in recruiting and hiring members of our management team or other key employees,

and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms or at all.

If we are unable

to attract and retain the necessary personnel, particularly in critical areas of our business, we may not achieve our strategic

concentration of earnings from two telecommunications companies may have a material adverse affect on our financial condition

and results of operations.

currently derive a substantial amount of our total revenue through contracts secured with China Unicom and China Mobile.

were to lose the business of one or both of these mobile telecommunications companies, if either were to fail to fulfill its obligations

to us, if either were to experience difficulty in paying rebates to us on a timely basis, if either negotiated lower pricing terms,

or if either increased the number of licensed payment portals it permits to process its payments, it could have a material adverse

effect on our competitive position, business, financial condition, results of operations and cash flows.

Additionally, we cannot

guarantee that the volume of revenue we earn from China Unicom and China Mobile will remain consistent going forward.

Any substantial

change in our relationships with either China Unicom or China Mobile, or both, whether due to actions by our competitors, regulatory

authorities, industry factors or otherwise, could have a material adverse effect on our business, financial condition and results

success depends in part on the continued service of our founders, senior management team, key technical employees and other highly skilled

personnel and on our ability to identify, hire, develop, motivate, retain and integrate highly qualified personnel for all areas of our

organization.

We may not be successful in attracting and retaining qualified personnel to fulfill our current or future needs.

Our competitors

may be successful in recruiting and hiring members of our management team or other key employees, and it may be difficult for us to find

suitable replacements on a timely basis, on competitive terms or at all.

If we are unable to attract and retain the necessary personnel,

particularly in critical areas of our business, we may not achieve our strategic goals.

concentration of earnings from two telecommunications companies may have a material adverse affect on our financial condition and results

of operations.

actual or perceived security or privacy breach could interrupt our operations, harm our brand and adversely affect our reputation,

brand, business, financial condition and results of operations.

currently derive a substantial amount of our total revenue through contracts secured with China Unicom and China Mobile.

If we were to

lose the business of one or both of these mobile telecommunications companies, if either were to fail to fulfill its obligations to us,

if either were to experience difficulty in paying rebates to us on a timely basis, if either negotiated lower pricing terms, or if either

increased the number of licensed payment portals it permits to process its payments, it could have a material adverse effect on our competitive

position, business, financial condition, results of operations and cash flows.

Additionally, we cannot guarantee that the volume of revenue

we earn from China Unicom and China Mobile will remain consistent going forward.

Any substantial change in our relationships with either

China Unicom or China Mobile, or both, whether due to actions by our competitors, regulatory authorities, industry factors or otherwise,

could have a material adverse effect on our business, financial condition and results of operations.

actual or perceived security or privacy breach could interrupt our operations, harm our brand and adversely affect our reputation, brand,

business, financial condition and results of operations.

business involves the processing and transmission of our users personal and other sensitive data.

Because techniques used

to obtain unauthorized access to or to sabotage information systems change frequently and may not be known until launched against

us, we may be unable to anticipate or prevent these attacks.

Unauthorized parties may in the future gain access to our systems

or facilities through various means, including gaining unauthorized access into our systems or facilities or those of our service

providers, partners or users on our platform, or attempting to fraudulently induce our employees, service providers, partners,

users or others into disclosing names, passwords, payment information or other sensitive information, which may in turn be used

to access our information technology systems, or attempting to fraudulently induce our employees, partners or others into manipulating

payment information, resulting in the fraudulent transfer of funds to criminal actors.

In addition, users on our platform could

have vulnerabilities on their own mobile devices that are entirely unrelated to our systems and platform but could mistakenly

attribute their own vulnerabilities to us.

Further, breaches experienced by other companies may also be leveraged against us.

For example, credential stuffing attacks are becoming increasingly common and sophisticated actors can mask their attacks, making

them increasingly difficult to identify and prevent.

Certain efforts may be state-sponsored or supported by significant financial

and technological resources, making them even more difficult to detect.

we have developed systems and processes that are designed to protect our users data, prevent data loss and prevent other

security breaches, these security measures cannot guarantee security.

Our information technology and infrastructure may be vulnerable

to cyberattacks or security breaches;

also, employee error, malfeasance or other errors in the storage, use or transmission of

personal information could result in an actual or perceived privacy or security breach or other security incident.

actual or perceived breach of privacy or security could interrupt our operations, result in our platform being unavailable, result

in loss or improper disclosure of data, result in fraudulent transfer of funds, harm our reputation and brand, damage our relationships

with third-party partners, result in significant legal, regulatory and financial exposure and lead to loss of confidence in, or

decreased use of, our platform, any of which could adversely affect our business, financial condition and results of operations.

Any breach of privacy or security impacting any entities with which we share or disclose data (including, for example, our third-party

providers) could have similar effects.

Because techniques used to obtain

unauthorized access to or to sabotage information systems change frequently and may not be known until launched against us, we may be

unable to anticipate or prevent these attacks.

Unauthorized parties may in the future gain access to our systems or facilities through

various means, including gaining unauthorized access into our systems or facilities or those of our service providers, partners or users

on our platform, or attempting to fraudulently induce our employees, service providers, partners, users or others into disclosing names,

passwords, payment information or other sensitive information, which may in turn be used to access our information technology systems,

or attempting to fraudulently induce our employees, partners or others into manipulating payment information, resulting in the fraudulent

transfer of funds to criminal actors.

In addition, users on our platform could have vulnerabilities on their own mobile devices that

are entirely unrelated to our systems and platform but could mistakenly attribute their own vulnerabilities to us.

Further, breaches

experienced by other companies may also be leveraged against us.

For example, credential stuffing attacks are becoming increasingly common

and sophisticated actors can mask their attacks, making them increasingly difficult to identify and prevent.

Certain efforts may be state-sponsored

or supported by significant financial and technological resources, making them even more difficult to detect.

we have developed systems and processes that are designed to protect our users data, prevent data loss and prevent other security

breaches, these security measures cannot guarantee security.

Our information technology and infrastructure may be vulnerable to cyberattacks

or security breaches;

also, employee error, malfeasance or other errors in the storage, use or transmission of personal information could

result in an actual or perceived privacy or security breach or other security incident.

actual or perceived breach of privacy or security could interrupt our operations, result in our platform being unavailable, result in

loss or improper disclosure of data, result in fraudulent transfer of funds, harm our reputation and brand, damage our relationships

with third-party partners, result in significant legal, regulatory and financial exposure and lead to loss of confidence in, or decreased

use of, our platform, any of which could adversely affect our business, financial condition and results of operations.

Any breach of

privacy or security impacting any entities with which we share or disclose data (including, for example, our third-party providers) could

have similar effects.

Additionally,

defending against claims or litigation based on any security breach or incident, regardless of their merit, could be costly and

divert managements attention.

We cannot be certain that our insurance coverage will be adequate for data handling or data

security liabilities actually incurred, that insurance will continue to be available to us on commercially reasonable terms, or

at all, or that any insurer will not deny coverage as to any future claim.

The successful assertion of one or more large claims

against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium

increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our reputation,

brand, business, financial condition and results of operations.

defending against claims or litigation based on any security breach or incident, regardless of their merit, could be costly and divert

managements attention.

We cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities

actually incurred, that insurance will continue to be available to us on commercially reasonable terms, or at all, or that any insurer

will not deny coverage as to any future claim.

The successful assertion of one or more large claims against us that exceed available

insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible

or co-insurance requirements, could have an adverse effect on our reputation, brand, business, financial condition and results of operations.

failures and resulting interruptions in the availability of our platform or offerings could adversely affect our business, financial

condition and results of operations.

systems, or those of third parties upon which we rely, may experience service interruptions or degradation because of hardware

and software defects or malfunctions, distributed denial-of-service and other cyberattacks, human error, earthquakes, hurricanes,

floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts,

terrorist attacks, computer viruses, ransomware, malware or other events.

Our systems also may be subject to break-ins, sabotage,

theft and intentional acts of vandalism, including by our own employees.

Some of our systems are not fully redundant and our disaster

recovery planning may not be sufficient for all eventualities.

Our business interruption insurance may not be sufficient to cover

all of our losses that may result from interruptions in our service as a result of systems failures and similar events.

systems, or those of third parties upon which we rely, may experience service interruptions or degradation because of hardware and software

defects or malfunctions, distributed denial-of-service and other cyberattacks, human error, earthquakes, hurricanes, floods, fires, natural

disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer

viruses, ransomware, malware or other events.

Our systems also may be subject to break-ins, sabotage, theft and intentional acts of vandalism,

including by our own employees.

Some of our systems are not fully redundant and our disaster recovery planning may not be sufficient

for all eventualities.

Our business interruption insurance may not be sufficient to cover all of our losses that may result from interruptions

in our service as a result of systems failures and similar events.

have not experienced any system failures or other events or conditions that have interrupted the availability or reduced or affected

the speed or functionality of our offerings.

These events, were they to occur in the future, could adversely affect our business,

reputation, results of operations and financial condition.

successful operation of our business depends upon the performance and reliability of Internet, mobile, and other infrastructures

that are not under our control.

These events, were they to occur in the future, could adversely affect our business, reputation,

results of operations and financial condition.

successful operation of our business depends upon the performance and reliability of Internet, mobile, and other infrastructures that

are not under our control.

business depends on the performance and reliability of Internet, mobile and other infrastructures that are not under our control.

Disruptions in Internet infrastructure or the failure of telecommunications network operators to provide us with the bandwidth

we need to provide our services and offerings could interfere with the speed and availability of our platform.

If our platform

is unavailable when platform users attempt to access it, or if our platform does not load as quickly as platform users expect,

platform users may not return to our platform as often in the future, or at all, and may use our competitors products or

offerings more often.

In addition, we have no control over the costs of the services provided by national telecommunications operators.

If mobile Internet access fees or other charges to Internet users increase, consumer traffic may decrease, which may in turn cause

our revenue to significantly decrease.

in Internet infrastructure or the failure of telecommunications network operators to provide us with the bandwidth we need to provide

our services and offerings could interfere with the speed and availability of our platform.

If our platform is unavailable when platform

users attempt to access it, or if our platform does not load as quickly as platform users expect, platform users may not return to our

platform as often in the future, or at all, and may use our competitors products or offerings more often.

In addition, we have

no control over the costs of the services provided by national telecommunications operators.

If mobile Internet access fees or other

charges to Internet users increase, consumer traffic may decrease, which may in turn cause our revenue to significantly decrease.

business depends on the efficient and uninterrupted operation of mobile communications systems.

The occurrence of an unanticipated

problem, such as a power outage, telecommunications delay or failure, security breach or computer virus could result in delays

or interruptions to our services, offerings and platform, as well as business interruptions for us and platform users.

foreign governments may leverage their ability to shut down directed services, and local governments may shut down our platform

at the routing level.

Any of these events could damage our reputation, significantly disrupt our operations, and subject us to

liability, which could adversely affect our business, financial condition and operating results.

We have invested significant

resources to develop new products to mitigate the impact of potential interruptions to mobile communications systems, which can

be used by consumers in territories where mobile communications systems are less efficient.

However, these products may ultimately

be unsuccessful.

The occurrence of an unanticipated problem,

such as a power outage, telecommunications delay or failure, security breach or computer virus could result in delays or interruptions

to our services, offerings and platform, as well as business interruptions for us and platform users.

Furthermore, foreign governments

may leverage their ability to shut down directed services, and local governments may shut down our platform at the routing level.

of these events could damage our reputation, significantly disrupt our operations, and subject us to liability, which could adversely

affect our business, financial condition and operating results.

We have invested significant resources to develop new products to mitigate

the impact of potential interruptions to mobile communications systems, which can be used by consumers in territories where mobile communications

systems are less efficient.

However, these products may ultimately be unsuccessful.

may be subject to claims, lawsuits, government investigations and other proceedings that may adversely affect our business, financial

condition and results of operations .

may be subject to claims, lawsuits, arbitration proceedings, government investigations and other legal and regulatory proceedings

as our business grows and as we deploy new offerings, including proceedings related to our products or our acquisitions, securities

issuances or business practices.

The results of any such claims, lawsuits, arbitration proceedings, government investigations

or other legal or regulatory proceedings cannot be predicted with certainty.

Any claims against us, whether meritorious or not,

could be time-consuming, result in costly litigation, be harmful to our reputation, require significant management attention and

divert significant resources.

Determining reserves for litigation is a complex and fact-intensive process that requires significant

subjective judgment and speculation.

It is possible that such proceedings could result in substantial damages, settlement costs,

fines and penalties that could adversely affect our business, financial condition and results of operations.

These proceedings

could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions or other orders requiring a change

in our business practices.

Any of these consequences could adversely affect our business, financial condition and results of operations.

Furthermore, under certain circumstances, we have contractual and other legal obligations to indemnify and to incur legal expenses

on behalf of our business and commercial partners and current and former directors and officers.

may be subject to claims, lawsuits, arbitration proceedings, government investigations and other legal and regulatory proceedings as

our business grows and as we deploy new offerings, including proceedings related to our products or our acquisitions, securities issuances

or business practices.

The results of any such claims, lawsuits, arbitration proceedings, government investigations or other legal or

regulatory proceedings cannot be predicted with certainty.

Any claims against us, whether meritorious or not, could be time-consuming,

result in costly litigation, be harmful to our reputation, require significant management attention and divert significant resources.

Determining reserves for litigation is a complex and fact-intensive process that requires significant subjective judgment and speculation.

It is possible that such proceedings could result in substantial damages, settlement costs, fines and penalties that could adversely

affect our business, financial condition and results of operations.

These proceedings could also result in harm to our reputation and

brand, sanctions, consent decrees, injunctions or other orders requiring a change in our business practices.

Any of these consequences

could adversely affect our business, financial condition and results of operations.

Furthermore, under certain circumstances, we have

contractual and other legal obligations to indemnify and to incur legal expenses on behalf of our business and commercial partners and

current and former directors and officers.

may require additional funding to support our business.

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https://telecomstechnews.com/news/2019/nov/21/total-mobile-service-revenue-china-hit-165bn-end-2024-reveals-globaldata/ ).

For the Company to continue to grow, the deposit with the Telecoms needs to increase, as the GTV we process is dependent on the

size of the deposit we have with each Telecom.

We will likely need to raise additional capital to materially increase the amounts

of these deposits.

If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities

may have rights, preferences or privileges senior to those of our common stock, and our existing stockholders may experience dilution.

Any debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities

and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue

business opportunities.

We cannot be certain that additional funding will be available to us on favorable terms, or at all.

we are unable to obtain adequate funding or funding on terms satisfactory to us, when we require it, our ability to continue to

support our business growth and to respond to business challenges could be significantly limited, and our business, financial

condition and results of operations could be adversely affected.

the Company to continue to grow, the deposit with the Telecoms needs to increase, as the GTV we process is dependent on the size of the

deposit we have with each Telecom.

We will likely need to raise additional capital to materially increase the amounts of these deposits.

If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences

or privileges senior to those of our common stock, and our existing stockholders may experience dilution.

Any debt financing secured

by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational

matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities.

We cannot be certain

that additional funding will be available to us on favorable terms, or at all.

If we are unable to obtain adequate funding or funding

on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges

could be significantly limited, and our business, financial condition and results of operations could be adversely affected.

by others that we infringed their proprietary technology or other intellectual property rights could harm our business.

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of intellectual property rights.

In addition, certain companies and rights holders seek to enforce and monetize patents or other

intellectual property rights they own, have purchased or otherwise obtained.

As we gain a public profile and the number of competitors

in our market increases, the possibility of intellectual property rights claims against us grows.

From time to time, third parties

may assert claims of infringement of intellectual property rights against us.

Many potential litigants, including some of our

competitors and patent-holding companies, have the ability to dedicate substantial resources to assert their intellectual property

Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending

against the claim, could distract our management from our business and could require us to cease use of such intellectual property.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, we risk

compromising our confidential information during this type of litigation.

We may be required to pay substantial damages, royalties

or other fees in connection with a claimant securing a judgment against us, we may be subject to an injunction or other restrictions

that prevent us from using or distributing our intellectual property, or we may agree to a settlement that prevents us from distributing

our offerings or a portion thereof, which could adversely affect our business, financial condition and results of operations.

In addition, certain companies and rights holders seek to enforce and monetize patents or other intellectual

property rights they own, have purchased or otherwise obtained.

As we gain a public profile and the number of competitors in our market

increases, the possibility of intellectual property rights claims against us grows.

From time to time, third parties may assert claims

of infringement of intellectual property rights against us.

Many potential litigants, including some of our competitors and patent-holding

companies, have the ability to dedicate substantial resources to assert their intellectual property rights.

Any claim of infringement

by a third party, even those without merit, could cause us to incur substantial costs defending against the claim, could distract our

management from our business and could require us to cease use of such intellectual property.

Furthermore, because of the substantial

amount of discovery required in connection with intellectual property litigation, we risk compromising our confidential information during

this type of litigation.

We may be required to pay substantial damages, royalties or other fees in connection with a claimant securing

a judgment against us, we may be subject to an injunction or other restrictions that prevent us from using or distributing our intellectual

property, or we may agree to a settlement that prevents us from distributing our offerings or a portion thereof, which could adversely

affect our business, financial condition and results of operations.

respect to any intellectual property rights claim, we may have to seek out a license to continue operations found to be in violation

of such rights, which may not be available on favorable or commercially reasonable terms and may significantly increase our operating

Some licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to

If a third party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required

to develop alternative, non-infringing technology, which could require significant time (during which we would be unable to continue

to offer our affected offerings), effort and expense and may ultimately not be successful.

Any of these events could adversely

affect our business, financial condition and results of operations.

Some licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us.

a third party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop

alternative, non-infringing technology, which could require significant time (during which we would be unable to continue to offer our

affected offerings), effort and expense and may ultimately not be successful.

Any of these events could adversely affect our business,

financial condition and results of operations.

Related to Our Securities

stock has limited liquidity.

common stock trades on the OTCQX operated by OTC Markets Group Inc.

Trading volume in our shares may be sporadic and the price

could experience volatility.

If adverse market conditions exist, you may have difficulty selling your shares.

market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control,

including the following:

common stock began trading on the Nasdaq Capital Market on December 28, 2021, and before that it traded on the OTCQX operated by OTC

Markets Group Inc.

Trading volume in our shares may be sporadic and the price could experience volatility.

If adverse market conditions

exist, you may have difficulty selling your shares.

market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, including

the following:

or anticipated fluctuations in our operating results;

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by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;

● introduction

of product enhancements that reduce the need for our products;

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have never declared nor paid cash dividends on our capital stock.

We currently intend to retain any future earnings to finance

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

a result, stockholders must rely on sales of their common stock after price appreciation as the only way to realize any future

gains on their investment.

securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the

market price and trading volume of our common stock could decline.

trading market for our common stock may depend in part on the research and reports that securities or industry analysts publish

about us, our business, our market or our competition.

The analysts estimates are based upon their own opinions and are

often different from our estimates or expectations.

If one or more of the analysts who cover us downgrade our common stock, provide

a more favorable recommendation about our competitors or publish inaccurate or unfavorable research about our business, the price

of our securities would likely decline.

If few securities analysts commence coverage of us, or if one or more of these analysts

cease coverage of us or fail to publish reports on us regularly, demand for our securities could decrease, which might cause the

price and trading volume of our common stock to decline.

are subject to federal legislation to protect investors against corporate fraud.

legislation, such as the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act, has resulted in the adoption of various

corporate governance measures designed to promote the integrity of the corporate management and the securities markets.

these measures have been adopted in response to legal requirements.

Others have been adopted by companies in response to the requirements

of national securities exchanges, such as the NYSE or the Nasdaq Stock Market, on which their securities are listed.

corporate governance measures that are required under the rules of national securities exchanges are those that address board

of directors independence, audit committee oversight and the adoption of a code of ethics.

have not yet adopted any of these corporate governance measures such as an audit or other independent committees of our board

of directors.

Additionally, since our securities are not yet listed on a national securities exchange, we are not required to

If we expand our board membership in future periods to include independent directors, we may seek to establish an audit

and other committees of our board of directors.

It is possible that if we were to adopt some or all of these corporate governance

measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested

directors and that policies had been implemented to define responsible conduct.

For example, in the absence of audit, nominating

and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such

as compensation packages to our senior officers and recommendations for director nominees are made by a majority of directors

who have an interest in the outcome of the matters being decided.

Prospective investors should consider our current lack of corporate

governance measures in making their investment decisions.

We currently intend to retain any future earnings to finance the operation

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

As a result, stockholders

must rely on sales of their common stock after price appreciation as the only way to realize any future gains on their investment.

securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market

price and trading volume of our common stock could decline.

trading market for our common stock may depend in part on the research and reports that securities or industry analysts publish about

us, our business, our market or our competition.

The analysts estimates are based upon their own opinions and are often different

from our estimates or expectations.

If one or more of the analysts who cover us downgrade our common stock, provide a more favorable

recommendation about our competitors or publish inaccurate or unfavorable research about our business, the price of our securities would

likely decline.

If few securities analysts commence coverage of us, or if one or more of these analysts cease coverage of us or fail

to publish reports on us regularly, demand for our securities could decrease, which might cause the price and trading volume of our common

stock to decline.

continued sale of our equity securities will dilute the ownership percentage of our existing shareholders and may decrease the market

price for our common shares.

Certificate of Incorporation, as amended, authorize the issuance of up to 200,000,000 shares of common stock and up to 1,000,000 shares

of preferred stock.

Our Board of Directors has the authority to issue additional shares of our capital stock to provide additional financing

in the future and designate the rights of the preferred shares, which may include voting, dividend, distribution or other rights that

are preferential to those held by the common stockholders.

The issuance of any such common or preferred shares may result in a reduction

of the book value or market price of our outstanding common shares.

To grow our business substantially, we will likely have to issue

additional equity securities to obtain working capital to deposit with the telecommunications companies for which we process mobile recharge

Our efforts to fund our intended business plans will therefore result in dilution to our existing stockholders.

If we do issue

any such additional common shares, such issuance also will cause a reduction in the proportionate ownership and voting power of all other

stockholders.

As a result of such dilution, if you acquire common shares your proportionate ownership interest and voting power could

be decreased.

Furthermore, any such issuances could result in a change of control or a reduction in the market price for our common shares.

we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce

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The Sarbanes-Oxley

Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial

We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that

information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and

reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under

the Exchange Act is accumulated and communicated to our principal executive and financial officers.

We are also continuing to

improve our internal control over financial reporting.

We have expended, and anticipate that we will continue to expend, significant

resources in order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over

financial reporting.

Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required

to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods

specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated

to our principal executive and financial officers.

We are also continuing to improve our internal control over financial reporting.

have expended, and anticipate that we will continue to expend, significant resources in order to maintain and improve the effectiveness

of our disclosure controls and procedures and internal control over financial reporting.

current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business.

Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future.

Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement,

could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of

our financial statements for prior periods.

Any failure to implement and maintain effective internal control over financial reporting

could also adversely affect the results of periodic management evaluations and annual independent registered public accounting

firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually

be required to include in our periodic reports that will be filed with the SEC.

Ineffective disclosure controls and procedures

and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other

information, which would likely adversely affect the market price of our common stock

Industry Regulatory Authority (FINRA) sales practice requirements may also limit a shareholders ability to

buy and sell our Common Shares, which could depress the price of our Common Shares.

addition to the penny stock rules described above, FINRA has adopted rules that require a broker-dealer to have

reasonable grounds for believing that the investment is suitable for that customer before recommending an investment to a customer.

Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable

efforts to obtain information about the customers financial status, tax status, investment objectives, and other information.

Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will

not be suitable for at least some customers.

Thus, the FINRA requirements make it more difficult for broker-dealers to recommend

that their customers buy our Common Shares, which may limit your ability to buy and sell our Common Shares, have an adverse effect

on the market for our Common Shares, and thereby depress our price per Common Share.

weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future.

Any failure to

develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results

of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior

Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results

of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness

of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be

filed with the SEC.

Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors

to lose confidence in our reported financial and other information, which would likely adversely affect the market price of our common

Industry Regulatory Authority (FINRA) sales practice requirements may also limit a stockholders ability to buy and

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

rules require broker-dealers to have reasonable grounds for believing that the investment is suitable for a customer before recommending

that investment to the customer.

Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers

must make reasonable efforts to obtain information about the customers financial status, tax status, investment objectives, and

other information.

Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced

securities will not be suitable for at least some customers.

Thus, if our shares of common stock become speculative low-priced securities,

the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our shares of common stock, which

may limit your ability to buy and sell our shares of common stock, have an adverse effect on the market for our shares of common stock,

and thereby depress our price per share of common stock.

shares of common stock have been thinly traded, and you may be unable to sell at or near ask prices or at all if you need to sell your

shares of common stock to raise money or otherwise desire to liquidate your shares.

December 28, 2021, our shares of common stock were quoted on the OTCQB/QX where they were thinly-traded, meaning that the

number of persons interested in purchasing our shares of common stock at or near bid prices at any given time was relatively small or

non-existent.

Since we listed on the Nasdaq Capital Market on December 28, 2021, the volume of our shares of common stock traded has

increased, but that volume could decrease until we are thinly-traded again.

That could occur due to a number of factors, including that

we are relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate

or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and might be reluctant

to follow an unproven company such as ours or purchase or recommend the purchase of our shares of common stock until such time as we

became more seasoned.

As a consequence, there may be periods of several days or more when trading activity in our shares of common stock

is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally

support continuous sales without an adverse effect on share price.

Broad or active public trading market for our shares of common stock

may not develop or be sustained.

Related to the VIE Agreements

PRC government may determine that the VIE Agreements are not in compliance with applicable PRC laws, rules and regulations

Management manages and operates the mobile data business through JiuGe Technology pursuant to the rights its holds under the VIE

Almost all economic benefits and risks arising from JiuGe Technologys operations are transferred to JiuGe Management

under these agreements.

are risks involved with the operation of our business in reliance on the VIE Agreements, including the risk that the VIE Agreements

may be determined by PRC regulators or courts to be unenforceable.

Our PRC counsel has provided a legal opinion that the VIE Agreements

are binding and enforceable under PRC law, but has further advised that if the VIE Agreements were for any reason determined to

be in breach of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion

in dealing with such breach, including:

Management manages and operates the mobile data business through JiuGe Technology pursuant to the rights its holds under the VIE Agreements.

Almost all economic benefits and risks arising from JiuGe Technologys operations are transferred to JiuGe Management under these

are risks involved with the operation of our business in reliance on the VIE Agreements, including the risk that the VIE Agreements may

be determined by PRC regulators or courts to be unenforceable.

Our PRC counsel has provided a legal opinion that the VIE Agreements are

binding and enforceable under PRC law, but has further advised that if the VIE Agreements were for any reason determined to be in breach

of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion in dealing with such

breach, including:

economic penalties;

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or restricting the operations of JiuGe Technology or JiuGe Management;

conditions or requirements in respect of the VIE Agreements with which JiuGe Technology or JiuGe Management may not be able

conditions or requirements in respect of the VIE Agreements with which JiuGe Technology or JiuGe Management may not be able to comply;

our company to restructure the relevant ownership structure or operations;

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the business licenses and/or the licenses or certificates of JiuGe Management, and/or voiding the VIE Agreements.

of these actions could adversely affect our ability to manage, operate and gain the financial benefits of JiuGe Technology, which

would have a material adverse impact on our business, financial condition and results of operations.

of these actions could adversely affect our ability to manage, operate and gain the financial benefits of JiuGe Technology, which would

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

ability to manage and operate JiuGe Technology under the VIE Agreements may not be as effective as direct ownership.

conduct our mobile data business in the PRC and generate virtually all of our revenues through the VIE Agreements.

Our plans for

future growth are based substantially on growing the operations of JiuGe Technology.

However, the VIE Agreements may not be as

effective in providing us with control over JiuGe Technology as direct ownership.

Under the current VIE arrangements, as a legal

matter, if JiuGe Technology fails to perform its obligations under these contractual arrangements, we may have to (i) incur substantial

costs and resources to enforce such arrangements, and (ii) rely on legal remedies under PRC law, which we cannot be sure would

be effective.

Therefore, if we are unable to effectively control JiuGe Technology, it may have an adverse effect on our ability

to achieve our business objectives and grow our revenues.

Our plans for future

growth are based substantially on growing the operations of JiuGe Technology.

However, the VIE Agreements may not be as effective in

providing us with control over JiuGe Technology as direct ownership.

Under the current VIE arrangements, as a legal matter, if JiuGe

Technology fails to perform its obligations under these contractual arrangements, we may have to (i) incur substantial costs and resources

to enforce such arrangements, and (ii) rely on legal remedies under PRC law, which we cannot be sure would be effective.

Therefore, if

we are unable to effectively control JiuGe Technology, it may have an adverse effect on our ability to achieve our business objectives

and grow our revenues.

the VIE Agreements are governed by PRC law, we would be required to rely on PRC law to enforce our rights and remedies under them;

PRC law may not provide us with the same rights and remedies as are available in contractual disputes governed by the law of other

jurisdictions.

VIE Agreements are governed by the PRC law and provide for the resolution of disputes through arbitral proceedings pursuant to

If JiuGe Technology or its shareholders fail to perform the obligations under the VIE Agreements, we would be required

to resort to legal remedies available under PRC law, including seeking specific performance or injunctive relief, or claiming

We cannot be sure that such remedies would provide us with effective means of causing JiuGe Technology to meet its obligations

or recovering any losses or damages as a result of non-performance.

Further, the legal environment in China is not as developed

as in other jurisdictions.

Uncertainties in the application of various laws, rules, regulations or policies in PRC legal system

could limit our liability to enforce the VIE Agreements and protect our interests.

law may not provide us with the same rights and remedies as are available in contractual disputes governed by the law of other jurisdictions.

VIE Agreements are governed by the PRC law and provide for the resolution of disputes through arbitral proceedings pursuant to PRC law.

If JiuGe Technology or its shareholders fail to perform the obligations under the VIE Agreements, we would be required to resort to legal

remedies available under PRC law, including seeking specific performance or injunctive relief, or claiming damages.

We cannot be sure

that such remedies would provide us with effective means of causing JiuGe Technology to meet its obligations or recovering any losses

or damages as a result of non-performance.

Further, the legal environment in China is not as developed as in other jurisdictions.

Uncertainties

in the application of various laws, rules, regulations or policies in PRC legal system could limit our liability to enforce the VIE Agreements

and protect our interests.

payment arrangement under the VIE Agreements may be challenged by the PRC tax authorities.

generate our revenues through the payments we receive pursuant to the VIE Agreements.

We could face adverse tax consequences if

the PRC tax authorities determine that the VIE Agreements were not entered into based on arms length negotiations.

example, PRC tax authorities may adjust our income and expenses for PRC tax purposes which could result in our being subject to

higher tax liability or cause other adverse financial consequences.

We could face adverse tax consequences if the PRC

tax authorities determine that the VIE Agreements were not entered into based on arms length negotiations.

For example, PRC tax

authorities may adjust our income and expenses for PRC tax purposes which could result in our being subject to higher tax liability or

cause other adverse financial consequences.

of JiuGe Technology have potential conflicts of interest with our company which may adversely affect our business.

Li is the legal representative and general manager, and also a shareholder of JiuGe Technology.

There could be conflicts that

arise from time to time between our interests and the interests of Ms.

There could also be conflicts that arise between us

and JiuGe Technology that would require our shareholders and JiuGe Technologys shareholders to vote on corporate actions

necessary to resolve the conflict.

There could be conflicts that arise from

time to time between our interests and the interests of Ms.

There could also be conflicts that arise between us and JiuGe Technology

that would require our shareholders and JiuGe Technologys shareholders to vote on corporate actions necessary to resolve the conflict.

There can be no assurance in any such circumstances that Ms.

Li will vote her shares in our

best interest or otherwise act in the best interests of our company.

Li fails to act in our best interests, our operating

performance and future growth could be adversely affected.

rely on the approval certificates and business license held by JiuGe Management and any deterioration of the relationship between

JiuGe Management and JiuGe Technology could materially and adversely affect our business operations.

operate our mobile data business in China on the basis of the approval certificates, business license and other requisite licenses

held by JiuGe Management and JiuGe Technology.

There is no assurance that JiuGe Management and JiuGe Technology will be able to

renew their licenses or certificates when their terms expire with substantially similar terms as the ones they currently hold.

our relationship with JiuGe Technology is governed by the VIE Agreements that are intended to provide us with effective control

over the business operations of JiuGe Technology.

However, the VIE Agreements may not be effective in providing control over the

application for and maintenance of the licenses required for our business operations.

JiuGe Technology could violate the VIE Agreements,

go bankrupt, suffer from difficulties in its business or otherwise become unable to perform its obligations under the VIE Agreements

and, as a result, our operations, reputations and business could be severely harmed.

JiuGe Management exercises the purchase option it holds over JiuGe Technologys share capital pursuant to the VIE Agreements,

the payment of the purchase price could materially and adversely affect our financial position.

the VIE Agreements, JiuGe Technologys shareholders have granted JiuGe Management an option for the maximum period of time

permitted by law to purchase all of the equity interest in JiuGe Technology at a price equal to one dollar or the lowest applicable

price allowable by PRC laws and regulations.

As JiuGe Technology is already our contractually controlled affiliate, JiuGe Managements

exercising of the option would not bring immediate benefits to our company, and payment of the purchase prices could adversely

affect our financial position.

Li will vote her shares in our best interest or otherwise act in the best

interests of our company.

Li fails to act in our best interests, our operating performance and future growth could be adversely

rely on the approval certificates and business license held by JiuGe Management and any deterioration of the relationship between JiuGe

Management and JiuGe Technology could materially and adversely affect our business operations.

operate our mobile data business in China on the basis of the approval certificates, business license and other requisite licenses held

by JiuGe Management and JiuGe Technology.

There is no assurance that JiuGe Management and JiuGe Technology will be able to renew their

licenses or certificates when their terms expire with substantially similar terms as the ones they currently hold.

our relationship with JiuGe Technology is governed by the VIE Agreements that are intended to provide us with effective control over

the business operations of JiuGe Technology.

However, the VIE Agreements may not be effective in providing control over the application

for and maintenance of the licenses required for our business operations.

JiuGe Technology could violate the VIE Agreements, go bankrupt,

suffer from difficulties in its business or otherwise become unable to perform its obligations under the VIE Agreements and, as a result,

our operations, reputations and business could be severely harmed.

JiuGe Management exercises the purchase option it holds over JiuGe Technologys share capital pursuant to the VIE Agreements, the

payment of the purchase price could materially and adversely affect our financial position.

the VIE Agreements, JiuGe Technologys shareholders have granted JiuGe Management an option for the maximum period of time permitted

by law to purchase all of the equity interest in JiuGe Technology at a price equal to one dollar or the lowest applicable price allowable

by PRC laws and regulations.

As JiuGe Technology is already our contractually controlled affiliate, JiuGe Managements exercising

of the option would not bring immediate benefits to our company, and payment of the purchase prices could adversely affect our financial

Related to Doing Business in China

in Chinas political or economic situation could harm us and our operating results.

reforms adopted by the Chinese government have had a positive effect on the economic development of the country, but the government

could change these economic reforms or any of the legal systems at any time.

This could either benefit or damage our operations

and profitability.

reforms adopted by the Chinese government have had a positive effect on the economic development of the country, but the government could

change these economic reforms or any of the legal systems at any time.

This could either benefit or damage our operations and profitability.

Some of the things that could have this effect are:

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governance and a lack of flexible currency exchange policy still prevail in China.

As a result of these differences, we may not

develop in the same way or at the same rate as might be expected if the Chinese economy was similar to those of the OECD member

As a result of these differences, we may not develop

in the same way or at the same rate as might be expected if the Chinese economy was similar to those of the OECD member countries.

Uncertainties

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Our principal operating subsidiary

and affiliate, JiuGe Management and JiuGe Technology, are subject to laws and regulations applicable to foreign investments in

China and, in particular, laws applicable to foreign-invested enterprises.

The PRC legal system is based on written statutes,

and prior court decisions may be cited for reference but have limited precedential value.

Since 1979, a series of new PRC laws

and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.

since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always

uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available

to you and us.

In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources

and management attention.

In addition, most of our executive officers and all of our directors are not residents of the United

States, and substantially all the assets of these persons are located outside the United States.

As a result, it could be difficult

for investors to effect service of process in the United States or to enforce a judgment obtained in the United States against

our Chinese operations, subsidiary and affiliate.

and affiliate, JiuGe Management and JiuGe Technology, are subject to laws and regulations applicable to foreign investments in China

and, in particular, laws applicable to foreign-invested enterprises.

The PRC legal system is based on written statutes, and prior court

decisions may be cited for reference but have limited precedential value.

Since 1979, a series of new PRC laws and regulations have significantly

enhanced the protections afforded to various forms of foreign investments in China.

However, since the PRC legal system continues to

evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations

and rules involves uncertainties, which may limit legal protections available to you and us.

In addition, any litigation in China may

be protracted and result in substantial costs and diversion of resources and management attention.

In addition, most of our executive

officers and all of our directors are not residents of the United States, and substantially all the assets of these persons are located

outside the United States.

As a result, it could be difficult for investors to effect service of process in the United States or to enforce

a judgment obtained in the United States against our Chinese operations, subsidiary and affiliate.

current tensions in international trade and rising political tensions, particularly between the United States and China, may adversely

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there have been heightened tensions in international economic relations, such as the one between the United States and China.

Political tensions between the United States and China have escalated due to, among other things, trade disputes, the COVID-19

outbreak, sanctions imposed by the U.S.

Department of Treasury on certain officials of the Hong Kong Special Administrative Region

and the PRC central government and the executive orders issued by the U.S.

government in August 2020 that prohibit certain transactions

with certain China-based companies and their respective subsidiaries.

Rising political tensions could reduce levels of trade,

investments, technological exchanges, and other economic activities between the two major economies.

Such tensions between the

United States and China, and any escalation thereof, may have a negative impact on the general, economic, political, and social

conditions in China and, in turn, adversely impacting our business, financial condition, and results of operations.

were introduced which includes but not limited to Article 177 of the PRC Securities Law which states that overseas securities

regulatory authorities shall not carry out an investigation and evidence collection activities directly in China without the consent

of the securities regulatory authority of the State Council and the relevant State Council department(s).

It further defines that

no organization or individual shall provide the documents and materials relating to securities business activities to overseas

parties arbitrarily.

With this regulation in force, it may result in delays by the Company to fulfill any request to provide relevant

documents or materials by the regulatory authorities or in the worst-case scenario that the Company would not be able to fulfill

the request if the approval from the regulatory authority of the State Council and the relevant State Council department(s) were

tensions between the United States and China have escalated due to, among other things, trade disputes, the COVID-19 outbreak, sanctions

imposed by the U.S.

Department of Treasury on certain officials of the Hong Kong Special Administrative Region and the PRC central government

and the executive orders issued by the U.S.

government in August 2020 that prohibit certain transactions with certain China-based companies

and their respective subsidiaries.

Rising political tensions could reduce levels of trade, investments, technological exchanges, and

other economic activities between the two major economies.

Such tensions between the United States and China, and any escalation thereof,

may have a negative impact on the general, economic, political, and social conditions in China and, in turn, adversely impacting our

business, financial condition, and results of operations.

Regulations were introduced which includes but not limited to Article 177 of

the PRC Securities Law which states that overseas securities regulatory authorities shall not carry out an investigation and evidence

collection activities directly in China without the consent of the securities regulatory authority of the State Council and the relevant

State Council department(s).

It further defines that no organization or individual shall provide the documents and materials relating

to securities business activities to overseas parties arbitrarily.

this regulation in force, it may result in delays by the Company to fulfill any request to provide relevant documents or materials by

the regulatory authorities or in the worst-case scenario that the Company would not be able to fulfill the request if the approval from

the regulatory authority of the State Council and the relevant State Council department(s) were rejected.

may have difficulty enforcing judgments against us.

are a Delaware holding company, but Finger Motion (CN) Limited is a Hong Kong company, and our principal operating affiliate and

subsidiary, JiuGe Technology and JiuGe Management, are located in the PRC.

Most of our assets are located outside the United States

and most of our current operations are conducted in the PRC.

In addition, most of our directors and officers are nationals and

residents of countries other than the United States.

A substantial portion of the assets of these persons is located outside the

United States.

As a result, it may be difficult for you to effect service of process within the United States upon these persons.

It may also be difficult for you to enforce in U.S.

are a Delaware holding company, but Finger Motion (CN) Limited is a Hong Kong company, and our principal operating affiliate and subsidiary,

JiuGe Technology and JiuGe Management, are located in the PRC.

Most of our assets are located outside the United States and most of our

current operations are conducted in the PRC.

In addition, most of our directors and officers are nationals and residents of countries

other than the United States.

A substantial portion of the assets of these persons is located outside the United States.

it may be difficult for you to effect service of process within the United States upon these persons.

It may also be difficult for you

to enforce in U.S.

courts judgments predicated on the civil liability provisions of the U.S.

federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the

substantial majority of whose assets are located outside the United States.

In addition, there is uncertainty as to whether the

courts of the PRC would recognize or enforce judgments of U.S.

The recognition and enforcement of foreign judgments are

provided for under the PRC Civil Procedures Law.

Courts in China may recognize and enforce foreign judgments in accordance with

the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is made or

on reciprocity between jurisdictions.

China does not have any treaties or other arrangements that provide for the reciprocal recognition

and enforcement of foreign judgments with the United States.

In addition, according to the PRC Civil Procedures Law, courts in

the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates

basic principles of PRC law or national sovereignty, security or the public interest.

Therefore, it is uncertain whether a PRC

court would enforce a judgment rendered by a court in the United States.

federal securities laws against us and our

officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located

outside the United States.

In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law.

Courts in China

may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based on treaties between

China and the country where the judgment is made or on reciprocity between jurisdictions.

China does not have any treaties or other arrangements

that provide for the reciprocal recognition and enforcement of foreign judgments with the United States.

In addition, according to the

PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide

that the judgment violates basic principles of PRC law or national sovereignty, security or the public interest.

Therefore, it is uncertain

whether a PRC court would enforce a judgment rendered by a court in the United States.

PRC government exerts substantial influence over the manner in which we must conduct our business activities.

PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy

through regulation and state ownership.

Our ability to operate in China may be harmed by changes in its laws and regulations,

including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other

We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements.

However, the central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations

of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such

regulations or interpretations.

government actions in the future, including any decision not to continue to support recent economic reforms and to return to a

more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant

effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest

we then hold in Chinese properties or joint ventures.

PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through

regulation and state ownership.

Our ability to operate in China may be harmed by changes in its laws and regulations, including those

relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other matters.

We believe that

our operations in China are in material compliance with all applicable legal and regulatory requirements.

However, the central or local

governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations

that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally

planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic

conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties

or joint ventures.

inflation in China may inhibit our ability to conduct business in China.

recent years, the Chinese economy has experienced periods of rapid expansion and highly fluctuating rates of inflation.

the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%.

These factors have led to the

adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of

credit or regulate growth and contain inflation.

High inflation may in the future cause the Chinese government to impose controls

on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market

for our products and our company.

During the past

ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%.

These factors have led to the adoption by the

Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth

and contain inflation.

High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to

take other action, which could inhibit economic activity in China, and thereby harm the market for our products and our company.

on currency exchange may limit our ability to receive and use our revenues effectively.

majority of our revenues will be settled in Chinese Renminbi (RMB), and any future restrictions on currency exchanges may limit

our ability to use revenue generated in RMB to fund any future business activities outside China or to make dividend or other

payments in U.S.

Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the

RMB for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested

enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in China

authorized to conduct foreign exchange business.

In addition, conversion of RMB for capital account items, including direct investment

and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreign exchange

accounts for capital account items.

We cannot be certain that the Chinese regulatory authorities will not impose more stringent

restrictions on the convertibility of the RMB.

majority of our revenues will be settled in Chinese Renminbi (RMB), and any future restrictions on currency exchanges may limit our ability

to use revenue generated in RMB to fund any future business activities outside China or to make dividend or other payments in U.S.

Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the RMB for current account transactions,

significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit

foreign currencies after providing valid commercial documents, at those banks in China authorized to conduct foreign exchange business.

In addition, conversion of RMB for capital account items, including direct investment and loans, is subject to governmental approval

in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items.

certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the RMB.

in exchange rates could adversely affect our business and the value of our securities.

value of our common stock will be indirectly affected by the foreign exchange rate between U.S.

dollars and RMB and between those

currencies and other currencies in which our sales may be denominated.

Appreciation or depreciation in the value of the RMB relative

dollars and RMB and between those currencies

and other currencies in which our sales may be denominated.

Appreciation or depreciation in the value of the RMB relative to the U.S.

dollar would affect our financial results reported in U.S.

dollar terms without giving effect to any underlying change

in our business or results of operations.

Fluctuations in the exchange rate will also affect the relative value of any dividend

we issue that will be exchanged into U.S.

dollar terms without giving effect to any underlying change in our business

or results of operations.

Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that will be

exchanged into U.S.

dollars as well as earnings from, and the value of, any U.S.

dollar-denominated investments

we make in the future.

dollar-denominated investments we make in the future.

July 2005, the RMB is no longer pegged to the U.S.

Although the Peoples Bank of China regularly intervenes in the

foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate

significantly in value against the U.S.

Although the Peoples Bank of China regularly intervenes in the foreign

exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly

in value against the U.S.

dollar in the medium to long term.

Moreover, it is possible that in the future PRC authorities

may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Moreover, it is possible that in the future PRC authorities may lift restrictions

on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations.

To date, we have not

entered into any hedging transactions.

While we may enter into hedging transactions in the future, the availability and effectiveness

of these transactions may be limited, and we may not be able to successfully hedge our exposure at all.

In addition, our foreign

currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign

under PRC law on our PRC subsidiarys ability to make dividends and other distributions could materially and adversely affect

our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to our shareholders, and

otherwise fund and conduct our businesses.

To date, we have not entered

into any hedging transactions.

While we may enter into hedging transactions in the future, the availability and effectiveness of these

transactions may be limited, and we may not be able to successfully hedge our exposure at all.

In addition, our foreign currency exchange

losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

under PRC law on our PRC subsidiarys ability to make dividends and other distributions could materially and adversely affect our

ability to grow, make investments or acquisitions that could benefit our business, pay dividends to our shareholders, and otherwise fund

and conduct our businesses.

Substantially

all of our revenue is earned by JiuGe Management, our PRC subsidiary.

PRC regulations restrict the ability of our PRC subsidiary

to make dividends and other payments to its offshore parent company.

PRC legal restrictions permit payments of dividends by our

PRC subsidiary only out of its accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and

Our PRC subsidiary is also required under PRC laws and regulations to allocate at least 10% of our annual after-tax

profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50%

of our registered capital.

Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable

to us in the form of loans, advances or cash dividends.

Any limitations on the ability of our PRC subsidiary to transfer funds

to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our

business, pay dividends and otherwise fund and conduct our business.

to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject

our PRC resident shareholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our

PRC subsidiary or affiliate, limit our PRC subsidiarys and affiliates ability to distribute profits to us or otherwise

materially adversely affect us.

October 2005, the Chinese State Administration of Foreign Exchange ( SAFE ), issued the Notice on Relevant

Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside

China, generally referred to as Circular 75, which required PRC residents to register with the competent local SAFE branch before

establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing

outside of China on the strength of domestic PRC assets originally held by those residents.

Internal implementing guidelines issued

by SAFE, which became public in June 2007 (known as Notice 106), expanded the reach of Circular 75 by (1) purporting to cover

the establishment or acquisition of control by PRC residents of offshore entities which merely acquire control over

domestic companies or assets, even in the absence of legal ownership;

(2) adding requirements relating to the source of the PRC

residents funds used to establish or acquire the offshore entity;

covering the use of existing offshore entities for offshore

(3) purporting to cover situations in which an offshore SPV establishes a new subsidiary in China or acquires an unrelated

company or unrelated assets in China;

and (4) making the domestic affiliate of the SPV responsible for the accuracy of certain

documents which must be filed in connection with any such registration, notably, the business plan which describes the overseas

financing and the use of proceeds.

Amendments to registrations made under Circular 75 are required in connection with any increase

or decrease of capital, transfer of shares, mergers and acquisitions, equity investment or creation of any security interest in

any assets located in China to guarantee offshore obligations and Notice 106 makes the offshore SPV jointly responsible for these

In the case of an SPV which was established, and which acquired a related domestic company or assets, before the implementation

date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006;

this date was

subsequently extended indefinitely by Notice 106, which also required that the registrant establish that all foreign exchange

transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations.

Failure to comply

with the requirements of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties

PRC regulations restrict the ability of our PRC subsidiary to make

dividends and other payments to its offshore parent company.

PRC legal restrictions permit payments of dividends by our PRC subsidiary

only out of its accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations.

subsidiary is also required under PRC laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance

with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of our registered capital.

Allocations to

these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances or

cash dividends.

Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our

ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct

our business.

to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC

resident shareholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiary

or affiliate, limit our PRC subsidiarys and affiliates ability to distribute profits to us or otherwise materially adversely

October 2005, the Chinese State Administration of Foreign Exchange ( SAFE ), issued the Notice on Relevant Issues

in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, generally

referred to as Circular 75, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring

control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China on the

strength of domestic PRC assets originally held by those residents.

Internal implementing guidelines issued by SAFE, which became public

in June 2007 (known as Notice 106), expanded the reach of Circular 75 by (1) purporting to cover the establishment or acquisition of

control by PRC residents of offshore entities which merely acquire control over domestic companies or assets, even in the

absence of legal ownership;

(2) adding requirements relating to the source of the PRC residents funds used to establish or acquire

the offshore entity;

covering the use of existing offshore entities for offshore financings;

(3) purporting to cover situations in which

an offshore SPV establishes a new subsidiary in China or acquires an unrelated company or unrelated assets in China;

and (4) making the

domestic affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration,

notably, the business plan which describes the overseas financing and the use of proceeds.

Amendments to registrations made under Circular

75 are required in connection with any increase or decrease of capital, transfer of shares, mergers and acquisitions, equity investment

or creation of any security interest in any assets located in China to guarantee offshore obligations and Notice 106 makes the offshore

SPV jointly responsible for these filings.

In the case of an SPV which was established, and which acquired a related domestic company

or assets, before the implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before

March 31, 2006;

this date was subsequently extended indefinitely by Notice 106, which also required that the registrant establish that

all foreign exchange transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations.

to comply with the requirements of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties

under PRC laws for evasion of applicable foreign exchange restrictions.

Any such failure could also result in the SPVs

affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer

or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.

have advised our shareholders who are PRC residents, as defined in Circular 75, to register with the relevant branch of SAFE,

as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiary

and affiliate.

However, we cannot provide any assurances that their existing registrations have fully complied with, and they

have made all necessary amendments to their registration to fully comply with, all applicable registrations or approvals required

by Circular 75.

Moreover, because of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether

SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies.

For example, our

present and prospective PRC subsidiarys and affiliates ability to conduct foreign exchange activities, such as the

remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC

resident beneficial holders.

In addition, such PRC residents may not always be able to complete the necessary registration procedures

required by Circular 75.

We also have little control over either our present or prospective direct or indirect shareholders or

the outcome of such registration procedures.

A failure by our PRC resident beneficial holders or future PRC resident shareholders

to comply with Circular 75, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions,

restrict our overseas or cross-border investment activities, limit our subsidiarys and affiliates ability to make

distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

Any such failure could also result in the SPVs affiliates

being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation

to the SPV, or from engaging in other transfers of funds into or out of China.

have advised our shareholders who are PRC residents, as defined in Circular 75, to register with the relevant branch of SAFE, as currently

required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiary and affiliate.

However, we cannot provide any assurances that their existing registrations have fully complied with, and they have made all necessary

amendments to their registration to fully comply with, all applicable registrations or approvals required by Circular 75.

Moreover, because

of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict

how it will affect our business operations or future strategies.

For example, our present and prospective PRC subsidiarys and

affiliates ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated

borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders.

In addition, such PRC residents may

not always be able to complete the necessary registration procedures required by Circular 75.

We also have little control over either

our present or prospective direct or indirect shareholders or the outcome of such registration procedures.

A failure by our PRC resident

beneficial holders or future PRC resident shareholders to comply with Circular 75, if SAFE requires it, could subject these PRC resident

beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiarys

and affiliates ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect

our business and prospects.

the New EIT Law, we may be classified as a resident enterprise of China.

Such classification will likely result

in unfavorable tax consequences to us and our non-PRC shareholders.

the New EIT Law effective on January 1, 2008, an enterprise established outside China with de facto management bodies

within China is considered a resident enterprise, meaning that it can be treated in a manner similar to a Chinese

enterprise for enterprise income tax purposes.

The implementing rules of the New EIT Law define de facto management as substantial

and overall management and control over the production and operations, personnel, accounting, and properties of the enterprise.

April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese

Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies,

or the Notice, further interpreting the application of the New EIT Law and its implementation non-Chinese enterprise or group

controlled offshore entities.

Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by

a Chinese enterprise or group will be classified as a non-domestically incorporated resident enterprise if (i) its

senior management in charge of daily operations reside or perform their duties mainly in China;

(ii) its financial or personnel

decisions are made or approved by bodies or persons in China;

(iii) its substantial assets and properties, accounting books, corporate

chops, board and shareholder minutes are kept in China;

and (iv) at least half of its directors with voting rights or senior management

often resident in China.

A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income

and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders.

However, it remains unclear

as to whether the Notice is applicable to an offshore enterprise incorporated by a Chinese natural person.

Nor are detailed measures

on imposition of tax from non-domestically incorporated resident enterprises are available.

Therefore, it is unclear how tax authorities

will determine tax residency based on the facts of each case.

Such classification will likely result in unfavorable

tax consequences to us and our non-PRC shareholders.

the New EIT Law effective on January 1, 2008, an enterprise established outside China with de facto management bodies within

China is considered a resident enterprise, meaning that it can be treated in a manner similar to a Chinese enterprise for

enterprise income tax purposes.

The implementing rules of the New EIT Law define de facto management as substantial and overall

management and control over the production and operations, personnel, accounting, and properties of the enterprise.

April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment

Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice,

further interpreting the application of the New EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities.

Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be

classified as a non-domestically incorporated resident enterprise if (i) its senior management in charge of daily operations

reside or perform their duties mainly in China;

(ii) its financial or personnel decisions are made or approved by bodies or persons in

(iii) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in China;

and (iv) at least half of its directors with voting rights or senior management often resident in China.

A resident enterprise would

be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying

dividends to its non-PRC shareholders.

However, it remains unclear as to whether the Notice is applicable to an offshore enterprise incorporated

by a Chinese natural person.

Nor are detailed measures on imposition of tax from non-domestically incorporated resident enterprises are

Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.

the above conditions, although unlikely, we may be deemed to be a resident enterprise by Chinese tax authorities.

If the PRC tax

authorities determine that we are a resident enterprise for PRC enterprise income tax purposes, a number of unfavorable

PRC tax consequences could follow.

First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable

income as well as PRC enterprise income tax reporting obligations.

In our case, this would mean that income such as interest on

financing proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%.

Second, although

under the New EIT Law and its implementing rules dividends paid to us from our PRC subsidiary would qualify as tax-exempt

income, we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange

control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound

remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes.

Finally, it is possible

that future guidance issued with respect to the new resident enterprise classification could result in a situation

in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by

our non-PRC shareholders from transferring our shares.

We are actively monitoring the possibility of resident enterprise

If the PRC tax authorities

determine that we are a resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences

could follow.

First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise

income tax reporting obligations.

In our case, this would mean that income such as interest on financing proceeds and non-China source

income would be subject to PRC enterprise income tax at a rate of 25%.

Second, although under the New EIT Law and its implementing rules

dividends paid to us from our PRC subsidiary would qualify as tax-exempt income, we cannot guarantee that such dividends

will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have

not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for

PRC enterprise income tax purposes.

Finally, it is possible that future guidance issued with respect to the new resident enterprise

classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders

and with respect to gains derived by our non-PRC shareholders from transferring our shares.

We are actively monitoring the possibility

of resident enterprise treatment.

we were treated as a resident enterprise by PRC tax authorities, we would be subject to taxation in both the U.S.

and China, and our PRC tax may not be creditable against our U.S.

may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination

that we violated these laws could have a material adverse effect on our business.

are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments

to foreign governments and their officials and political parties by U.S.

persons and issuers as defined by the statute, for the

purpose of obtaining or retaining business.

We have operations, agreements with third parties and we earn the majority of our

revenue in China.

PRC also strictly prohibits bribery of government officials.

Our activities in China create the risk of unauthorized

payments or offers of payments by our executive officers, employees, consultants, sales agents or other representatives of our

Company, even though they may not always be subject to our control.

It is our policy to implement safeguards to discourage these

practices by our employees.

However, our existing safeguards and any future improvements may prove to be less than effective,

and the executive officers, employees, consultants, sales agents or other representatives of our Company may engage in conduct

for which we might be held responsible.

Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or

civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and

financial condition.

and our PRC tax may not be creditable against our U.S.

may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we

violated these laws could have a material adverse effect on our business.

are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign

governments and their officials and political parties by U.S.

persons and issuers as defined by the statute, for the purpose of obtaining

or retaining business.

We have operations, agreements with third parties and we earn the majority of our revenue in China.

PRC also strictly

prohibits bribery of government officials.

Our activities in China create the risk of unauthorized payments or offers of payments by

our executive officers, employees, consultants, sales agents or other representatives of our Company, even though they may not always

be subject to our control.

It is our policy to implement safeguards to discourage these practices by our employees.

However, our existing

safeguards and any future improvements may prove to be less than effective, and the executive officers, employees, consultants, sales

agents or other representatives of our Company may engage in conduct for which we might be held responsible.

Violations of the FCPA or

Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could

negatively affect our business, operating results and financial condition.

In addition, the U.S.

government may seek to hold our Company liable for successor liability FCPA violations

committed by companies in which we invest or that we acquire.

our business is located in the PRC, we may have difficulty establishing adequate management, legal and financial controls, which

we are required to do in order to comply with U.S.

government may seek to hold our Company

liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

our business is located in the PRC, we may have difficulty establishing adequate management, legal and financial controls, which we are

required to do in order to comply with U.S.

securities laws.

3 unchanged sentences

and trained in the Western system, and we may have difficulty hiring new employees in the PRC with such training.

of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial

data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western

Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required

under Section 404 of the Sarbanes-Oxley Act of 2002.

This may result in significant deficiencies or material weaknesses in our

internal controls, which could impact the reliability of our financial statements and prevent us from complying with Commission

rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002.

Any such deficiencies, weaknesses or lack of compliance

could have a materially adverse effect on our business.

As a result of these

factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing

financial statements, books of account and corporate records and instituting business practices that meet Western standards.

we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of

the Sarbanes-Oxley Act of 2002.

This may result in significant deficiencies or material weaknesses in our internal controls, which could

impact the reliability of our financial statements and prevent us from complying with Commission rules and regulations and the requirements

of the Sarbanes-Oxley Act of 2002.

Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on

our business.

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-Q

Item 1A. Risk Factors