What changed in this filing

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Item 1A. Risk Factors

2023-07-14 compared with 2023-01-17 · 176 added, 137 removed, 1010 unchanged (24% of the section changed)

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We generated a net loss of approximately $1.26 million during

the nine months period ended November 30, 2022 and net losses of approximately $4.9 million, $4.3 million and $3.0 million for the years

ended February 28, 2022, 2021 and 2020, respectively.

At November 30, 2022 and February 28, 2022, we had an accumulated deficit of approximately

the three-month period ended May 31, 2023 and net losses of approximately $7.5 million, $4.9 million and $4.3 million for the years ended

February 28, 2023, 2022 and 2021, respectively.

At May 31, 2023 and February 28, 2023, we had an accumulated deficit of approximately

$25.9 million and $24.7 million, respectively.

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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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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 growth in the total mobile services in China.

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.

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 ).

For 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.

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.

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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stock has limited liquidity.

common stock began trading on Nasdaq on December 28, 2021, and before that it traded on the OTCQX operated by OTC Markets Group Inc.

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.

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

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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 stockholders ability to buy and

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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 shares

of common stock may decline in value or become worthless.

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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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 Technologys 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 Technologys 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 Managements 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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or joint ventures.

Recent 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.

Such actions could significantly limit or completely

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

or become worthless.

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

PRC government has made recent statements indicating an intent to exert more oversight and control over offerings that are conducted

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.

Any such action by the PRC government 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.

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 issuers 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 issuers 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

(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.

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 Chinas 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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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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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.

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 subsidiary’s 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 subsidiarys 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 RMB (Hui Fa [2015]19) ( Circular 19 ).

Although Circular 19 has fastened the administration relating

to the settlement of exchange of foreign-investment, allows the foreign-invested company to settle the exchange on a voluntary 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 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”.

As a result, the notice may limit our ability to

transfer funds to our operations in China through our PRC subsidiary, which may affect our ability to expand our business.

Although Circular 19 has fastened the administration

relating to the settlement of exchange of foreign-investment, allows the foreign-invested company to settle the exchange on a voluntary

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

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.

As a result, the notice may limit our ability

to transfer funds to our operations in China through our PRC subsidiary, which may affect our ability to expand our business.

the foreign exchange policy is unpredictable in China, it shall be various with the nationwide economic pattern, the strict foreign exchange

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

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

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

our business and prospects.

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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.

Such events could adversely effect our business operations.

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

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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

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.

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strong corporate governance, internal controls and computer, financial and other control systems.

Some of our staff is not educated

and trained in the Western system, and we may have difficulty hiring new employees in the PRC with such training.

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

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.

Some of our staff is not educated and

trained in the Western system, and we may have difficulty hiring new employees in the PRC with such training.

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.

Therefore, we may,

in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the SOA.

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.

Any 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

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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

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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.

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 our the VIE.

distributions of funds from the VIE.

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

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

final version and effective date of the Draft Administration Provisions and the Draft Administrative Measures are subject to change with

substantial uncertainty, which may subject us to additional compliance requirement in the future, and we cannot assure you that we will

be able to get the clearance of filing procedures under the Draft Administration Provisions and the Draft Administrative Measures on

a timely manner.

Any failure of us to fully comply with new regulatory requirements 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

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

exchanges or the execution of the VIE Agreement in the future, however, our operations are conducted through the VIE in

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 issuers

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 issuers 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 the VIE Agreements, our operations and financial conditions could be adversely affected, 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 not inspected by the Public Company Accounting Oversight

Board (the “PCAOB”) 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 (the “HFCAA”).

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 our Annual Report for the fiscal year ended February 28, 2023 was prepared by an auditor who was 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

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June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign Companies Accountable Act (“ 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.

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 Companys 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

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The audit report included in our Annual Report on Form 10-K for the years ended February 28, 2023 and 2022, 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 AHFCAA, which, if enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s 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.

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 PCAOBs 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 SECs Conclusive list of issuers identified under

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market in the United States the earliest in early 2024

If the AHFCAA is passed by the U.S.

House of Representatives and signed into

law, such prohibition would take effect the earliest in early 2023.

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

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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 companys auditors.

As it was originally enacted,

the HFCAA applied only if the PCAOBs 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 PCAOBs 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.

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period before a company would be delisted would end on January 1, 2022.

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

of the PRC to allow the PCAOB to inspect and investigate completely registered public accounting firms headquartered in China and Hong

Kong, consistent with the HFCAA, and that the PCAOB will be required to reassess its determinations by the end of 2022.

enactment of the HFCAA and the implications of any additional rulemaking efforts to increase U.S.

2 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

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