What changed in this filing

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Item 1A. Risk Factors

2023-05-30 compared with 2022-05-31 · 370 added, 257 removed, 814 unchanged (44% of the section changed)

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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.

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

are currently experiencing growth in our business.

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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.

impact of the 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.

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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.

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

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

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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

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

of operations.

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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,

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

business, financial condition and results of operations.

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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

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

condition and results of operations.

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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

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

the speed or functionality of our offerings.

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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

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

condition and results of operations .

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Any of these consequences

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

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

Furthermore, under certain circumstances, we have

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may require additional funding to support our business.

grow our business, FingerMotion currently looks to take advantage of the immense mobile phone payment market, estimated at a monthly

gross transaction volume (GTV) is estimated at US$153 billion in 2019 and is expected to increase to US$165 billion by 2024 (source:

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

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.

grow our business, FingerMotion currently looks to take advantage of the immense growth in the total variety of mobile services provided

The combined business revenue in the telecom sector rose 8% year on year to about USD232.43 billion in 2021, with the growth

rate up 4.1 percentage point from 2020.

https://english.news.cn/20220201/da5fa2c2aa614d948e960e7776f84c76/c.html ).

the Company to continue to grow, the deposit with the Telecoms needs to increase, as most of the revenue 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.

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.

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

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

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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.

effect 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

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

Any of these events could adversely affect our business,

Any of these events could adversely effect our business,

financial condition and results of operations.

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timely and accurate financial statements or comply with applicable regulations could be impaired.

a public company, we are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley

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.

a public company, we are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “ SOA ”).

The SOA 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

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.

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

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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

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

Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and

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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.

Since we listed on Nasdaq 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

Related to the VIE Agreements

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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:

Our PRC counsel has advised us 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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have a material adverse impact on our business, financial condition and results of operations.

Furthermore, if the PRC government determines

that the contractual arrangements constituting part of our VIE structure do not comply with PRC regulations, or if regulations change

or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of our VIE, and our Common

Shares may decline in value or become worthless.

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

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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;

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 have never been challenged or recognized in court for the time being, the PRC government may determine that the VIE Agreements

are not in compliance with applicable PRC laws, rules and regulations.

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

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cause other adverse financial consequences.

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

of JiuGe Technology have potential conflicts of interest with our Company which may adversely effect our business.

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

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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.

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

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

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

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

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

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

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As JiuGe Technology is already our contractually controlled affiliate, JiuGe Management’s exercising

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

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

Related to Doing Business in China

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International

Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development,

or OECD, in many ways.

For example, state-owned enterprises still constitute a large portion of the Chinese economy and weak corporate

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 countries.

Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development (the

“OECD”), in many ways.

For example, state-owned enterprises still constitute a large portion of the Chinese economy and weak

corporate 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 countries.

Uncertainties

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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 impact our business, financial condition, and results of operations.

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

impact our business, financial condition, and results of operations.

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

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and the executive orders issued by the U.S.

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

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

and their respective subsidiaries.

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or joint ventures.

PRC government may exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based

statements by the PRC government indicate an intent to take actions to exert more oversight and control over offerings that are conducted

overseas and/or foreign investment in China-based issuers.

On February 17, 2023, the CSRC promulgated Trial Administrative Measures of

Overseas Securities Offering and Listing by Domestic Companies (the “ Overseas Listing Trial Measures ”) and five relevant

guidelines, which became effective on March 31, 2023.

The Overseas Listing Trial Measures regulate both direct and indirect overseas

offering and listing of PRC domestic companies’ securities by adopting a filing-based regulatory regime.

According to the Overseas

Listing Trial Measures, if the issuer meets both the following conditions, the overseas securities offering and listing conducted by

such issuer will be determined as indirect overseas offering, which shall subject to the filing procedure set forth under the Overseas

Listing Trial Measures:

(i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented

in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies;

the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located

in mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled

in mainland China.

Where an abovementioned issuer submits an application for an initial public offering to competent overseas regulators,

such issuer shall file with the CSRC within three business days after such application is submitted.

Where a domestic company fails to

fulfill filing procedure or in violation of the provisions as stipulated above, in respect of its overseas offering and listing, the

CSRC shall order rectification, issue warnings to such domestic company, and impose a fine ranging from RMB1,000,000 to RMB10,000,000.

Also the directly liable persons and actual controllers of the domestic company that organize or instruct the aforementioned violations

shall be warned and/or imposed fines.

on February 17, 2023, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice

on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that the domestic

companies that have already been listed overseas on or before the effective date of the Overseas Listing Trial Measures (March 31, 2023)

shall be deemed as “stock enterprises”.

Stock enterprises are not required to complete the filling procedures immediately,

and they shall be required to file with the CSRC when subsequent matters such as refinancing are involved.

we offer new securities in the future, we may have to file with the CSRC, which could significantly limit or completely hinder our ability

to offer or continue to offer securities to investors and could cause the value of our securities to significantly decline or be worthless.

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

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companies before their registration statements will be declared effective.

On August 1, 2021, the China Securities Regulatory Commission

stated in a statement that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese

companies and the recent regulatory development in China, and that both countries should strengthen communications on regulating China-related

We cannot guarantee that we will not be subject to tightened regulatory review and we could be exposed to government interference

On August 1, 2021, the CSRC stated in a statement that it

had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory

development in China, and that both countries should strengthen communications on regulating China-related issuers.

We cannot guarantee

that we will not be subject to tightened regulatory review and we could be exposed to government interference in China.

with China’s new Data Security Law, Measures on Cybersecurity Review (revised draft for public consultation), Personal Information

Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other

future laws and regulations may entail significant expenses and could materially affect our business.

future laws and regulations may entail significant expenses and could materially effect our business.

has implemented or will implement rules and is considering a number of additional proposals relating to data protection.

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and approval.

the Cyberspace Administration of China has taken action against several Chinese internet companies in connection with their initial public

offerings on U.S.

securities exchanges, for alleged national security risks and improper collection and use of the personal information

of Chinese data subjects.

According to the official announcement, the action was initiated based on the National Security Law, the Cyber

Security Law and the Measures on Cybersecurity Review, which are aimed at preventing national data security risks, maintaining

national security and safeguarding public interests. On July 10, 2021, the Cyberspace Administration of China published a revised

the Cyberspace Administration of China (the “ CAC ”) has taken action against several Chinese internet companies in

connection with their initial public offerings on U.S.

securities exchanges, for alleged national security risks and improper collection

and use of the personal information of Chinese data subjects.

According to the official announcement, the action was initiated based

on the National Security Law, the Cyber Security Law and the Measures on Cybersecurity Review, which are aimed at “preventing national

data security risks, maintaining national security and safeguarding public interests.” On July 10, 2021, the CAC published a revised

draft of the Measures on Cybersecurity Review, expanding the cybersecurity review to data processing operators in possession of personal

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stock market.

on August 20, 2021, the National Peoples Congress passed the Personal Information Protection Law, which was implemented on November

on November 20, 2021, the National People’s Congress passed the Personal Information Protection Law, which was implemented on November

The law creates a comprehensive set of data privacy and protection requirements that apply to the processing of personal information

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Moreover, the legal uncertainty created by

the Data Security Law and the recent Chinese government actions could materially adversely affect our ability, on favorable terms, to

the Data Security Law and the recent Chinese government actions could materially adversely effect our ability, on favorable terms, to

raise capital, including engaging in follow-on offerings of our securities in the U.S.

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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.

in exchange rates could adversely effect 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.

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to PRC regulations and approvals.

by us to our wholly-owned subsidiary in China, which is a foreign-invested enterprise, cannot

exceed statutory limits and must be registered with the State Administration of Foreign Exchange

of the PRC (the SAFE) or its local counterparts;

by us to our affiliated entities, which are domestic PRC entities, over a certain threshold

must be approved by the relevant government authorities and must also be registered with

SAFE or its local counterparts;

contributions to our wholly-owned subsidiary must file a record with the PRC Ministry of

Commerce (MOFCOM) or its local counterparts and shall also be limited to the

difference between the registered capital and the total investment amount.

by us to our wholly-owned subsidiary in China, which is a foreign-invested enterprise, cannot exceed statutory limits and must be

registered with the State Administration of Foreign Exchange of the PRC (the “ SAFE ”) or its local counterparts;

by us to our affiliated entities, which are domestic PRC entities, over a certain threshold must be approved by the relevant government

authorities and must also be registered with the SAFE or its local counterparts;

contributions to our wholly-owned subsidiary must file a record with the PRC Ministry of Commerce (“ MOFCOM ”) or

its local counterparts and shall also be limited to the difference between the registered capital and the total investment amount.

cannot assure you that we will be able to obtain these government registrations or filings on a timely basis, or at all.

If we fail to

finish such registrations or filings, our ability to capitalize our PRC subsidiarys operations may be adversely affected, which

could adversely affect our liquidity and our ability to fund and expand our business.

finish such registrations or filings, our ability to capitalize our PRC subsidiary’s operations may be adversely effected, which

could adversely effect our liquidity and our ability to fund and expand our business.

March 30, 2015, the SAFE promulgated a notice relating to the administration of foreign invested company of its capital contribution

in foreign currency into Renminbi (Hui Fa [2015]19) (or Circular 19).

in foreign currency into RMB (Hui Fa [2015]19) (“ Circular 19 ”).

Although Circular 19 has fastened the administration

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basis, it still requires that the bank review the authenticity and compliance of a foreign-invested company’s settlement of exchange

in previous time, and the settled in Renminbi converted from foreign currencies shall deposit on the foreign exchange settlement account,

in previous time, and the settled in RMB converted from foreign currencies shall deposit on the foreign exchange settlement account,

and shall not be used for several purposes as listed in the “negative list”.

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or affiliate, limit our PRC subsidiary’s and affiliate’s 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.

October 2005, the 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 (“ 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 the SAFE, which became public in June 2007 (“ 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 resident’s 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

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 30, 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 the 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 SPV’s 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

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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

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

how it will affect our business operations or future strategies.

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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 or future PRC resident shareholders to comply with Circular 75, if the 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 subsidiary’s

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

and affiliate’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely effect

our business and prospects.

may be subject to fines and legal sanctions by SAFE or other PRC government authorities if we or our employees who are PRC citizens fail

to comply with PRC regulations relating to employee stock options granted by offshore listed companies to PRC citizens.

March 28, 2007, SAFE promulgated the Operating Procedures for Foreign Exchange Administration of Domestic Individuals Participating in

Employee Stock Ownership Plans and Stock Option Plans of Offshore Listed Companies, or Circular 78.

Under Circular 78, Chinese citizens

who are granted share options by an offshore listed company are required, through a Chinese agent or Chinese subsidiary of the offshore

listed company, to register with SAFE and complete certain other procedures, including applications for foreign exchange purchase quotas

and opening special bank accounts.

may be subject to fines and legal sanctions by the SAFE or other PRC government authorities if we or our employees who are PRC citizens

fail to comply with PRC regulations relating to employee stock options granted by offshore listed companies to PRC citizens.

March 28, 2007, the SAFE promulgated the Operating Procedures for Foreign Exchange Administration of Domestic Individuals Participating

in Employee Stock Ownership Plans and Stock Option Plans of Offshore Listed Companies (“ Circular 78 ”).

Under Circular

78, Chinese citizens who are granted share options by an offshore listed company are required, through a Chinese agent or Chinese subsidiary

of the offshore listed company, to register with SAFE and complete certain other procedures, including applications for foreign exchange

purchase quotas and opening special bank accounts.

We and our Chinese employees who have been granted share options are subject to Circular

to comply with these regulations may subject us or our Chinese employees to fines and legal sanctions imposed by SAFE or other PRC government

authorities and may prevent us from further granting options under our share incentive plans to our employees.

Such events could adversely

affect our business operations.

Failure to comply with these regulations may subject us or our Chinese employees to fines and legal sanctions imposed by the SAFE

or other PRC government authorities and may prevent us from further granting options under our share incentive plans to our employees.

Such events could adversely effect our business operations.

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

7 unchanged sentences

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,

Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies (the “ Notice ”),

further interpreting the application of the New EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities.

32 unchanged sentences

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.

may be exposed to liabilities under the Foreign Corrupt Practices Act (the “FCPA”) 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 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.

operations, agreements with third parties and we earn the majority of our revenue in China.

PRC also strictly prohibits bribery of government

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.

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 effect 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.

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

9 unchanged sentences

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.

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 SOA.

such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business.

disclosures in our reports and other filings with the SEC and our other public announcements are not subject to the scrutiny of any regulatory

22 unchanged sentences

process which could make it more difficult for us to pursue growth through acquisitions in China.

Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the M&A Rules), which became

effective in September 2006 and were further amended in June 2009, requires that if an overseas company is established or controlled

Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “ M&A Rules ”), which

became effective in September 2006 and were further amended in June 2009, requires that if an overseas company is established or controlled

by PRC domestic companies or citizens intends to acquire equity interests or assets of any other PRC domestic company affiliated with

4 unchanged sentences

On September 21, 2006, the CSRC published a notice on its official website specifying

the documents and materials required to be submitted by overseas special purpose companies seeking CSRCs approval of their overseas

the documents and materials required to be submitted by overseas special purpose companies seeking the CSRC’s approval of their

overseas listings.

M&A Rules established additional procedures and requirements that could make merger and acquisition activities in China by foreign

5 unchanged sentences

In addition, the Implementing

Rules Concerning Security Review on Mergers and Acquisitions by Foreign Investors of Domestic Enterprises, issued by the MOFCOM in August

Rules Concerning Security Review on Mergers and Acquisitions by Foreign Investors of Domestic Enterprises, issued by the MOFCOM in November

2011, require that mergers and acquisitions by foreign investors in “any industry with national security concerns” be subject

15 unchanged sentences

fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the conversion and remittance

of our funds in foreign currencies into the PRC, or take other actions that could materially and adversely affect our business, financial

of our funds in foreign currencies into the PRC, or take other actions that could materially and adversely effect our business, financial

condition, results of operations, reputation and prospects, as well as the trading price of our common stock.

audit report included in this Annual Report is prepared by an auditor who is not inspected by the Public Company Accounting Oversight

Board and as such, our investors are deprived of the benefits of such inspection.

We could be delisted if we are unable to timely meet

the PCAOB inspection requirements established by the Holding Foreign Companies Accountable Act.

a public company with securities listed on Nasdaq Capital Market, we are required to have our financial statements audited by an independent

registered public accounting firm registered with the PCAOB.

A requirement of being registered with the PCAOB is that if requested by

the SEC or PCAOB, such accounting firm is required to make its audits and related audit work papers be subject to regular inspections

to assess its compliance with the applicable professional standards.

Since our auditor is located in Hong Kong and PRC, a jurisdiction

where the PCAOB has been unable to conduct inspections without the approval of the PRC authorities due to various state secrecy laws

and the revised Securities Law, the PCAOB currently does not have free access to inspect the work of our auditor.

This lack of access

to the PCAOB inspection in the PRC prevents the PCAOB from fully evaluating audits and quality control procedures of our auditor based

As a result, the investors may be deprived of the benefits of such PCAOB inspections.

The inability of the PCAOB to conduct

inspections of auditors in the PRC makes it more difficult to evaluate the effectiveness of these accounting firms audit procedures

or quality control procedures as compared to auditors outside of the PRC that are subject to the PCAOB inspections.

December 18, 2020, the Holding Foreign Companies Accountable Act, or HFCAA, was enacted.

In essence, the act requires the SEC to prohibit

securities of any foreign companies from being listed on U.S.

securities exchanges or traded over-the-counter if a company

retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021.

Our independent

registered public accounting firm is located in and organized under the laws of Hong Kong and the PRC, a jurisdiction where the PCAOB

is currently unable to conduct inspections without the approval of the PRC authorities, and therefore our auditors are not currently

inspected by the PCAOB.

substantially all of our operations are conducted through the VIE in China, our ability to pay dividends is primarily dependent on receiving

distributions of funds from the VIE.

However, the PRC government might exert more oversight and control over offerings that are conducted

overseas and/or foreign investment in China-based issuers, which would likely result in a material change in our operations, even significantly

limit or completely hinder our ability to offer or continue to offer securities or dividends to investors, and the value of our common

stock may depreciate significantly or become worthless.

July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council

jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law (the “ Cracking

Down on Illegal Securities Activities Opinions ”).

The Cracking Down on Illegal Securities Activities Opinions emphasized the

need to strengthen the administration over illegal securities activities and the supervision over overseas listings by China-based companies,

and proposed to take measures, including promoting the construction of relevant regulatory systems to control the risks and deal with

the incidents faced by China-based overseas-listed companies.

addition, on December 24, 2021, the CSRC issued the draft Administration Provisions of the State Council on the Administration of Overseas

Securities Offering and Listing by Domestic Companies (the “ Draft Administration Provisions ”) and the draft Administrative

Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (the “ Draft Administrative Measures ”),

for public comments.

The Draft Administration Provisions and the Draft Administrative Measures regulate overseas securities offering

and listing by domestic companies in direct or indirect form.

The Draft Administration Provisions specify the responsibilities of the

CSRC to regulate the activities of overseas securities offering and listing by domestic companies and establish a filing-based regime.

As a supporting measure to the Draft Administration Provisions, the Draft Administrative Measures, detail the determination criteria

for indirect overseas listing in overseas markets.

Specifically, an offering and listing shall be considered as an indirect overseas

offering and listing by a domestic company if the issuer meets the following conditions:

(i) the operating income, gross profit, total

assets, or net assets of the domestic enterprise in the most recent fiscal year was more than 50% of the relevant line item in the issuer’s

audited consolidated financial statement for that year;

and (ii) senior management personnel responsible for business operations and

management are mostly PRC citizens or are ordinarily resident in the PRC, or the main place of business is in the PRC or carried out

In accordance with the Draft Administrative Measures, the issuer or its designated material domestic company, shall file

with the CSRC and report the relevant information for its initial public offering.

February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines, which became effective on March

The Overseas Listing Trial Measures regulate both direct and indirect overseas offering and listing of PRC domestic companies’

securities by adopting a filing-based regulatory regime.

According to the Overseas Listing Trial Measures, if the issuer meets both the

following conditions, the overseas securities offering and listing conducted by such issuer will be determined as indirect overseas offering,

which shall subject to the filing procedure set forth under the Overseas Listing Trial Measures:

(i) 50% or more of the issuer’s

operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most

recent accounting year is accounted for by domestic companies;

and (ii) the main parts of the issuer’s business activities are

conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business

operations and management are mostly Chinese citizens or domiciled in mainland China.

Where an abovementioned issuer submits an application

for an initial public offering to competent overseas regulators, such issuer shall file with the CSRC within three business days after

such application is submitted.

Where a domestic company fails to fulfill filing procedure or in violation of the provisions as stipulated

above, in respect of its overseas offering and listing, the CSRC shall order rectification, issue warnings to such domestic company,

and impose a fine ranging from RMB1,000,000 to RMB10,000,000.

Also the directly liable persons and actual controllers of the domestic

company that organize or instruct the aforementioned violations shall be warned and/or imposed fines.

on February 17, 2023, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice

on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that the domestic

companies that have already been listed overseas on or before the effective date of the Overseas Listing Trial Measures (March 31, 2023)

shall be deemed as “stock enterprises”.

Stock enterprises are not required to complete the filling procedures immediately,

and they shall be required to file with the CSRC when subsequent matters such as refinancing are involved.

to the Overseas Listing Trial Measures, we may have to file with the CSRC with respect to an offering of new securities, which may

subject us to additional compliance requirements in the future and we cannot assure you that we will be able to get the clearance

from the CSRC for any offering of new securities on a timely manner.

Any failure of us to comply with the new Overseas Listing Trial

Measures may significantly limit or completely hinder our ability to offer or continue to offer our securities, cause significant

disruption to our business operations, and severely damage our reputation.

it is uncertain when and whether we will be able to obtain permission or approval from the CSRC or the PRC government to offer securities

to list on U.S.

exchanges or the execution of a VIE Agreement in the future.

However, our operations are conducted through the VIE in

PRC, and our ability to pay dividends is primarily dependent on receiving distributions of funds from the VIE, if we do not obtain or

maintain any of the permissions or approvals which may be required in the future by the PRC government for the operation of the VIE or

the execution of VIE Agreements, our operations and financial conditions could be adversely effected, even significantly limit or completely

hinder our ability to offer or continue to offer securities or dividends to investors and cause the value of our securities to significantly

decline or become worthless.

audit report included in this Annual Report is prepared by an auditor who is currently being inspected by the PCAOB.

However, if PCAOB

inspection is not able to be completed or completed in a timely manner, we could be delisted if we are unable to meet the PCAOB inspection

requirements established by the HFCAA.

a public company with securities listed on Nasdaq, we are required to have our financial statements audited by an independent registered

public accounting firm registered with the PCAOB.

A requirement of being registered with the PCAOB is that if requested by the SEC or

PCAOB, such accounting firm is required to make its audits and related audit work papers be subject to regular inspections to assess

its compliance with the applicable professional standards.

Since our auditor is located in Hong Kong and PRC, a jurisdiction where the

PCAOB has been unable to conduct inspections without the approval of the PRC authorities due to various state secrecy laws and the revised

Securities Law, the PCAOB currently does not have free access to inspect the work of our auditor.

This lack of access to the PCAOB inspection

in the PRC prevents the PCAOB from fully evaluating audits and quality control procedures of our auditor based in the PRC.

the investors may be deprived of the benefits of such PCAOB inspections.

The inability of the PCAOB to conduct inspections of auditors

in the PRC makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control

procedures as compared to auditors outside of the PRC that are subject to the PCAOB inspections.

December 18, 2020, the HFCAA was enacted.

In essence, the act requires the SEC to prohibit securities of any foreign companies from being

listed on U.S.

securities exchanges or traded “over-the-counter” if a company retains a foreign accounting firm that cannot

be inspected by the PCAOB for three consecutive years, beginning in 2021.

Our independent registered public accounting firm is located

in and organized under the laws of Hong Kong and the PRC, a jurisdiction where the PCAOB is currently unable to conduct inspections without

the approval of the PRC authorities, and therefore our auditors are not currently inspected by the PCAOB.

March 24, 2021, the SEC adopted interim final amendments, which will become effective 30 days after publication in the Federal Register,

13 unchanged sentences

June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign Companies Accountable Act which, if enacted, would decrease the

number of non-inspection years from three years to two, thus reducing the time period before the Companys securities may be delisted

or prohibited from trading.

Senate passed the AHFCAA which, if enacted, would decrease the number of non-inspection years from three years

to two, thus reducing the time period before the Company’s securities may be delisted or prohibited from trading.

November 5, 2021, the SEC approved PCAOB Rule 6100, Board Determination Under the Holding Foreign Companies Accountability Act, effective

6 unchanged sentences

public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate (“ Commission-Identified

The final amendments require Commission-Identified Issuers to submit documentation to the SEC establishing that, if true, it

is not owned or controlled by a governmental entity in the public accounting firms foreign jurisdiction.

The amendments also require

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

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

Further, the adopting release provides

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

Commission-Identified Issuers, as required by the HFCAA.

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

after December 18, 2020.

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

the annual report for each year in which it was identified.

If a registrant is identified as a Commission-Identified Issuer based on

its annual report for the fiscal year ended December 31, 2021, the registrant will be required to comply with the submission or disclosure

requirements in its annual report filing covering the fiscal year ended December 31, 2022.

The final amendments require Commission-Identified Issuers to submit documentation to the SEC establishing that,

if true, it is not owned or controlled by a governmental entity in the public accounting firm’s foreign jurisdiction.

The amendments

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

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

Further, the adopting

release provides notice regarding the procedures the SEC has established to identify issuers and to impose trading prohibitions on the

securities of certain Commission-Identified Issuers, as required by the HFCAA.

The SEC will identify Commission-Identified Issuers for

fiscal years beginning after December 18, 2020.

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

requirements in the annual report for each year in which it was identified.

If a registrant is identified as a Commission-Identified

Issuer based on its annual report for the fiscal year ended December 31, 2021, the registrant will be required to comply with the submission

or disclosure requirements in its annual report filing covering the fiscal year ended December 31, 2022.

December 16, 2021, PCAOB issued a report on its determinations that PCAOB is unable to inspect or investigate completely PCAOB-registered

6 unchanged sentences

respectively.

The audit report included in this Annual Report on Form 10-K for the years ended February 28, 2022 and 2021, was issued

by Centurion ZD CPA & Co.

( CZD CPA ), an audit firm headquartered in Hong Kong, a jurisdiction that the PCAOB

has determined that the PCAOB is unable to conduct inspections or investigate auditors.

Our auditors CZD CPA is among those listed by

the PCAOB Hong Kong Determination, a determination announced by the PCAOB on December 16, 2021 that the PCAOB is unable to inspect or

investigate completely registered public accounting firms headquartered in Hong Kong, a Special Administrative Region and dependency

of the PRC, because of a position taken by one or more authorities in Hong Kong.

The lack of access to the PCAOB inspection in PRC prevents

the PCAOB from fully evaluating audits and quality control procedures of the auditors based in PRC.

As a result, the investors may be

deprived of the benefits of such PCAOB inspections.

The inability of the PCAOB to conduct inspections of auditors in PRC makes it more

difficult to evaluate the effectiveness of these accounting firms audit procedures or quality control procedures as compared to

auditors outside of the PRC that are subject to the PCAOB inspections.

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

from trading on the U.S.

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

if our auditor is not inspected by the

PCAOB for three consecutive years, and this ultimately could result in our common stock being delisted.

Furthermore, on June 22, 2021,

Senate passed the Accelerating Holding Foreign Companies Accountable Act (AHFCAA), which, if enacted, would amend

the HFCAA and require the SEC to prohibit an issuers securities from trading on any U.S.

stock exchanges or in the over the counter

trading market in the U.S.

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

In the future,

if we do not engage an auditor that is subject to regular inspection by the PCAOB, our common stocks may be delisted.

The audit report included in our Annual Report on Form 10-K for the years ended February 28, 2023 and 2022, was issued

by CZD CPA, an audit firm headquartered in Hong Kong, a jurisdiction that the PCAOB previously determined that the PCAOB is unable to

conduct inspections or investigate auditors.

However, on December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete

access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate

its previous determinations.

Should the PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future,

the PCAOB will consider the need to issue a new determination.

June 2022, we were identified as a Commission-Identified Issuer on the SEC’s “Conclusive list of issuers identified under

the HFCAA” (available at https://www.sec.gov/hfcaa ) and, as a result, we will be required to comply with the submission

or disclosure requirements in our annual report covering the fiscal year ending February 28, 2023.

If we are so identified for another

two consecutive years, the SEC would prohibit our securities from trading on a securities exchange or in the over-the-counter trading

market in the United States the earliest in early 2024

the HFCAA (as amended by the Consolidated Appropriations Act, 2023), our securities may be prohibited from trading on the U.S.

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

if our auditor is not inspected by the PCAOB for two consecutive years,

and this ultimately could result in our common stock being delisted.

On June 22, 2021, the U.S.

Senate passed the AHFCAA, which was enacted

under the Consolidated Appropriations Act, 2023, as further described below.

August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance

of the PRC, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered

in mainland China and Hong Kong.

The Statement of Protocol gives the PCAOB sole discretion to select the firms, audit engagements and

potential violations it inspects and investigates and put in place procedures for PCAOB inspectors and investigators to view complete

audit work papers with all information included and for the PCAOB to retain information as needed.

In addition, the Statement of Protocol

grants the PCAOB direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

While significant, the Statement of Protocol is only a first step.

Uncertainties still exist as to whether and how this new Statement

of Protocol will be implemented.

Notwithstanding the signing of the Statement of Protocol, if the PCAOB cannot make a determination that

it is able to inspect and investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, trading

of our securities will still be prohibited under the HFCAA and Nasdaq will determine to delist our securities.

Therefore, there is no

assurance that the Statement of Protocol will relieve us from the delisting risk under the HFCAA.

December 29, 2022, the Consolidated Appropriations Act, 2023, was signed into law, which amended the HFCAA (i) to reduce the number of

consecutive years that would trigger delisting from three years to two years, and (ii) so that any foreign jurisdiction could be the

reason why the PCAOB does not to have complete access to inspect or investigate a company’s auditors.

As it was originally enacted,

the HFCAA applied only if the PCAOB’s inability to inspect or investigate because of a position taken by an authority in the foreign

jurisdiction where the relevant public accounting firm is located.

As a result of the Consolidated Appropriations Act, 2023, the HFCAA

now also applies if the PCAOB’s inability to inspect or investigate the relevant accounting firm is due to a position taken by

an authority in any foreign jurisdiction.

The denying jurisdiction does not need to be where the accounting firm is located.

SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection.

For example, on

August 6, 2020, the Presidents Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors

from Significant Risks from Chinese Companies to the then President of the United States.

This report recommended that the SEC implement

five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory

November 6, 2020, the President’s Working Group on Financial Markets issued the Report on Protecting United States Investors from

Significant Risks from Chinese Companies to the then President of the United States.

This report recommended that the SEC implement five

recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory

Some of the concepts of these recommendations were implemented with the enactment of the HFCAA.

7 unchanged sentences

materially adversely affected.

Additionally, whether the PCAOB will be able to conduct inspections of our auditor in the next three years,

Additionally, whether the PCAOB will be able to conduct inspections of our auditor in the next two years,

or at all, is subject to substantial uncertainty and depends on a number of factors out of our control.

7 unchanged sentences

UNRESOLVED STAFF COMMENTS

corporate headquarters is located at 1460 Broadway, New York, New York.

corporate headquarters is located at 111 Somerset Road, Level 3, Singapore, 238164.

We do not own any real property.

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

What changed 10-K

Item 1A. Risk Factors