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Item 1A. Risk Factors

2025-10-14 compared with 2025-07-15 · 390 added, 386 removed, 728 unchanged (52% of the section changed)

ITEM 1A – RISK FACTORS

In addition to

the information contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025, and this Quarterly Report on

Form 10-Q, we have identified the following material risks and uncertainties which reflect our outlook and conditions known to us as of

the date of this Quarterly Report.

In addition to the

information contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025, and this Quarterly Report on Form

10-Q, we have identified the following material risks and uncertainties which reflect our outlook and conditions known to us as of the

date of this Quarterly Report.

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

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Risks Related to the Business

We have a limited operating history and,

as a result, our past results may not be indicative of future operating performance.

We have a limited operating history, which makes

it difficult to forecast our future results.

We have a limited operating history and, as

a result, our past results may not be indicative of future operating performance.

We have a limited operating history, which makes it

difficult to forecast our future results.

You should not rely on our past results of operations as indicators of future performance.

You should consider and evaluate our prospects in light of the risks and uncertainty frequently encountered by companies like ours.

If we fail to address the risks and difficulties

that we face, including those described elsewhere in this “ Risk Factors ” section, our business, financial condition

and results of operations could be adversely affected.

should consider and evaluate our prospects in light of the risks and uncertainty frequently encountered by companies like ours.

If we fail to address the risks and difficulties that

we face, including those described elsewhere in this “ Risk Factors ” section, our business, financial condition and

results of operations could be adversely affected.

Further, because we have limited historical financial data and operate in an evolving

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

We have a history of net losses and we may

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

For all annual periods of our operating history

we have experienced net losses.

We generated a net loss of approximately $1.98 million during the three-month period ended May 31, 2025

We have a history of net losses and we may not

be able to achieve or maintain profitability in the future.

For all annual periods of our operating history we

have experienced net losses.

We generated a net loss of approximately $3.57 million during the six-month period ended August 31, 2025

and net losses of approximately $5.1 million, $3.8 million and $7.5 million for the years ended February 28, 2025, 2024 and 2023, respectively.

At May 31, 2025 and February 28, 2025, we had an accumulated deficit of approximately $36.1 million and $34.2 million, respectively.

have not achieved profitability, and we may not realize sufficient revenue to achieve profitability in future periods.

Our expenses will

likely increase in the future as we develop and launch new offerings and platform features, expand in existing and new markets, increase

At August 31, 2025 and February 28, 2025, we had an accumulated deficit of approximately $37.7 million and $34.2 million, respectively.

We have not achieved profitability, and we may not realize sufficient revenue to achieve profitability in future periods.

will likely increase in the future as we develop and launch new offerings and platform features, expand in existing and new markets, increase

our sales and marketing efforts and continue to invest in our platform.

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our reputation and brand, business, financial condition and results of operations.

We 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.

We 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 success depends in part on the continued service

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companies may have a material adverse effect on our financial condition and results of operations.

We currently derive a substantial amount of our

total revenue through contracts secured with China Unicom and China Mobile.

If we were to lose the business of one or both of these mobile

telecommunications companies, if either were to fail to fulfill its obligations to us, if either were to experience difficulty in paying

rebates to us on a timely basis, if either negotiated lower pricing terms, or if either increased the number of licensed payment portals

it permits to process its payments, it could have a material adverse effect on our competitive position, business, financial condition,

results of operations and cash flows.

Additionally, we cannot guarantee that the volume of revenue we earn from China Unicom and China

Mobile will remain consistent going forward.

Any substantial change in our relationships with either China Unicom or China Mobile, or

both, whether due to actions by our competitors, regulatory authorities, industry factors or otherwise, could have a material adverse

effect on our business, financial condition and results of operations.

We currently derive a substantial amount of our total

revenue through contracts secured with China Unicom and China Mobile.

If we were to lose the business of one or both of these mobile telecommunications

companies, if either were to fail to fulfill its obligations to us, if either were to experience difficulty in paying rebates to us on

a timely basis, if either negotiated lower pricing terms, or if either increased the number of licensed payment portals it permits to

process its payments, it could have a material adverse effect on our competitive position, business, financial condition, results of operations

and cash flows.

Additionally, we cannot guarantee that the volume of revenue we earn from China Unicom and China Mobile will remain consistent

going forward.

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

our competitors, regulatory authorities, industry factors or otherwise, could have a material adverse effect on our business, financial

condition and results of operations.

Any actual or perceived security or privacy

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them even more difficult to detect.

Although we have developed systems and processes

that are designed to protect our users’ data, prevent data loss and prevent other security breaches, these security measures cannot

guarantee security.

Although we have developed systems and processes that

are designed to protect our users’ data, prevent data loss and prevent other security breaches, these security measures cannot guarantee

Our information technology and infrastructure may be vulnerable to cyberattacks or security breaches;

also, employee

error, malfeasance or other errors in the storage, use or transmission of personal information could result in an actual or perceived

privacy or security breach or other security incident.

also, employee error,

malfeasance or other errors in the storage, use or transmission of personal information could result in an actual or perceived privacy

or security breach or other security incident.

Any actual or perceived breach of privacy or security

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similar events.

We 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.

These events, were they to occur in the future, could adversely affect our business, reputation, results of operations and financial condition.

The successful operation of our business

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

We 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.

events, were they to occur in the future, could adversely affect our business, reputation, results of operations and financial condition.

The successful operation of our business depends

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

Our business depends on the performance and reliability

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

Claims by others that we infringed their

proprietary technology or other intellectual property rights could harm our business.

Claims by others that we infringed their proprietary

technology or other intellectual property rights could harm our business.

Companies in the Internet and technology industries

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

With respect to any intellectual property rights

claim, we may have to seek out a license to continue operations found to be in violation of such rights, which may not be available on

favorable or commercially reasonable terms and may significantly increase our operating expenses.

Some licenses may be non-exclusive,

and therefore our competitors may have access to the same technology licensed to us.

If a third party does not offer us a license to its

intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology, which could

require significant time (during which we would be unable to continue to offer our affected offerings), effort and expense and may ultimately

not be successful.

With respect to any intellectual property rights claim,

we may have to seek out a license to continue operations found to be in violation of such rights, which may not be available on favorable

or commercially reasonable terms and may significantly increase our operating expenses.

Some licenses may be non-exclusive, and therefore

our competitors may have access to the same technology licensed to us.

If a third party does not offer us a license to its intellectual

property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology, which could require significant

time (during which we would be unable to continue to offer our affected offerings), effort and expense and may ultimately not be successful.

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

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and China Could Adversely Affect Our Operations and Business Environment.

Although our services are not directly affected

by tariffs, ongoing political and trade tensions between the United States and China could lead to new regulations or restrictions that

may impact our operations.

These may include changes in laws, data rules, or cross-border business policies that we cannot predict at

Although our services are not directly affected by

tariffs, ongoing political and trade tensions between the United States and China could lead to new regulations or restrictions that may

impact our operations.

These may include changes in laws, data rules, or cross-border business policies that we cannot predict at this

Any unexpected government action could affect how we operate or grow our business in the future.

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changes in overall global market sentiments and economy trends

We do not intend to pay cash dividends for

the foreseeable future.

We have never declared nor paid cash dividends

on our capital stock.

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we

do not expect to declare or pay any cash dividends in the foreseeable future.

We do not intend to pay cash dividends for the

foreseeable future.

We have never declared nor paid cash dividends on

our capital stock.

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do

not expect to declare or pay any cash dividends in the foreseeable future.

As a result, stockholders must rely on sales of their common

stock after price appreciation as the only way to realize any future gains on their investment.

If securities or industry analysts do not

publish research or publish inaccurate or unfavorable research about our business, the market price and trading volume of our common stock

could decline.

If securities or industry analysts do not publish

research or publish inaccurate or unfavorable research about our business, the market price and trading volume of our common stock could

The trading market for our common stock may depend

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could decrease, which might cause the price and trading volume of our common stock to decline.

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

price for our Common Shares.

The continued

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

our Common Shares.

Our Certificate

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price for our common shares.

If we fail to maintain an effective system

of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements

or comply with applicable regulations could be impaired.

If we fail to maintain an effective system of

disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or

comply with applicable regulations could be impaired.

As a public company, we are subject to the reporting

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controls and procedures and internal control over financial reporting.

Our current controls and any new controls that

we develop may become inadequate because of changes in the conditions in our business.

Further, weaknesses in our disclosure controls

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

Our current controls and any new controls that we

develop may become inadequate because of changes in the conditions in our business.

Further, weaknesses in our disclosure controls or

our internal control over financial reporting may be discovered in the future.

Any failure to develop or maintain effective controls,

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reported financial and other information, which would likely adversely affect the market price of our common stock.

Financial Industry Regulatory Authority

(“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our shares of common stock,

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

Financial Industry Regulatory Authority (“FINRA”)

sales practice requirements may also limit a stockholder’s ability to buy and sell our shares of common stock, which could depress

the price of our shares of common stock.

FINRA rules require broker-dealers to have reasonable

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Risks Related to the VIE Agreements

The PRC government may determine that the

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

JiuGe Management, our WFOE, manages and operates

the mobile data business through JiuGe Technology, the VIE, pursuant to the rights its holds under the VIE Agreements.

The PRC government may determine that the VIE

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

JiuGe Management, our WFOE, manages and operates the

mobile data business through JiuGe Technology, the VIE, pursuant to the rights its holds under the VIE Agreements.

Almost all economic

benefits and risks arising from JiuGe Technology’s operations are transferred to JiuGe Management under these agreements.

There are risks involved with the operation of

our business in reliance on the VIE Agreements, including the risk that the VIE Agreements may be determined by PRC regulators or courts

to be unenforceable.

Our PRC counsel has 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:

There are risks involved with the operation of our

business in reliance on the VIE Agreements, including the risk that the VIE Agreements may be determined by PRC regulators or courts to

be unenforceable.

Our PRC counsel has 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:

imposing economic penalties;

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

Any of these actions could adversely affect our

ability to manage, operate and gain the financial benefits of JiuGe Technology, which would have a material adverse impact on our business,

financial condition and results of operations.

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.

Our ability to manage and operate JiuGe

Technology under the VIE Agreements may not be as effective as direct ownership.

We conduct our mobile data business in the PRC

and generate virtually all of our revenues through the VIE Agreements.

Our plans for future growth are based substantially on growing

the operations of JiuGe Technology.

Any of these actions could adversely affect our ability

to manage, operate and gain the financial benefits of JiuGe Technology, which would have a material adverse impact on our business, financial

condition and results of operations.

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.

Our ability to manage and operate JiuGe Technology

under the VIE Agreements may not be as effective as direct ownership.

We conduct our mobile data business in the PRC and

generate virtually all of our revenues through the VIE Agreements.

Our plans for future growth are based substantially on growing the

operations of JiuGe Technology.

However, the VIE Agreements may not be as effective in providing us with control over JiuGe Technology

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PRC laws, rules and regulations.

The VIE Agreements are governed by the PRC law

and provide for the resolution of disputes through arbitral proceedings pursuant to PRC law.

The VIE Agreements are governed by the PRC law and

provide for the resolution of disputes through arbitral proceedings pursuant to PRC law.

If JiuGe Technology or its shareholders fail

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may be challenged by the PRC tax authorities.

We generate our revenues through the payments

we receive pursuant to the VIE Agreements.

We could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements

were not entered into based on arm’s length negotiations.

For example, PRC tax authorities may adjust our income and expenses for

PRC tax purposes which could result in our being subject to higher tax liability or cause other adverse financial consequences.

We generate our revenues through the payments we receive

pursuant to the VIE Agreements.

We could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements were

not entered into based on arm’s length negotiations.

For example, PRC tax authorities may adjust our income and expenses for PRC

tax purposes which could result in our being subject to higher tax liability or cause other adverse financial consequences.

Shareholders of JiuGe Technology have potential

conflicts of interest with our Company which may adversely affect our business.

Li Li is the legal representative and general

manager, and also a shareholder of JiuGe Technology.

There could be conflicts that arise from time to time between our interests and the

interests of Ms.

There could also be conflicts that arise between us and JiuGe Technology that would require our shareholders and

JiuGe Technology’s shareholders to vote on corporate actions necessary to resolve the conflict.

There can be no assurance in any

such circumstances that Ms.

Li Li is the legal representative and general manager,

and also a shareholder of JiuGe Technology.

There could be conflicts that arise from time to time between our interests and the interests

There could also be conflicts that arise between us and JiuGe Technology that would require our shareholders and JiuGe Technology’s

shareholders to vote on corporate actions necessary to resolve the conflict.

There can be no assurance in any such circumstances that

Li will vote her shares in our best interest or otherwise act in the best interests of our company.

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

We 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.

We operate our mobile data business in China on

the basis of the approval certificates, business license and other requisite licenses held by JiuGe Management and JiuGe Technology.

Li fails to act in our

best interests, our operating performance and future growth could be adversely affected.

We 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.

We operate our mobile data business in China on the

basis of the approval certificates, business license and other requisite licenses held by JiuGe Management and JiuGe Technology.

is no assurance that JiuGe Management and JiuGe Technology will be able to renew their licenses or certificates when their terms expire

with substantially similar terms as the ones they currently hold.

Further, our relationship with JiuGe Technology

is governed by the VIE Agreements that are intended to provide us with effective control over the business operations of JiuGe Technology.

Further, our relationship with JiuGe Technology is

governed by the VIE Agreements that are intended to provide us with effective control over the business operations of JiuGe Technology.

However, the VIE Agreements may not be effective in providing control over the application for and maintenance of the licenses required

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could be severely harmed.

If 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

If 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.

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International conflict.

The 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.

The Chinese economy differs from the economies of

most countries belonging to the Organization for Economic Cooperation and Development (the “ OECD ”), in many ways.

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 with respect to the PRC legal

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and results of operations.

Recently there have been heightened tensions in

international economic relations, such as the one between the United States and China.

Political tensions between the United States and

China have escalated due to, among other things, trade disputes, the COVID-19 outbreak, sanctions imposed by the U.S.

Department of Treasury

on certain officials of the Hong Kong Special Administrative Region and the PRC central government and the executive orders issued by

government in November 2020 that prohibit certain transactions with certain China-based companies and their respective subsidiaries.

Rising political tensions could reduce levels of trade, investments, technological exchanges, and other economic activities between the

two major economies.

Such tensions between the United States and China, and any escalation thereof, may have a negative impact on the

general, economic, political, and social conditions in China and, in turn, adversely impacting our business, financial condition, and

results of operations.

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

that overseas securities regulatory authorities shall not carry out an investigation and evidence collection activities directly in China

without the consent of the securities regulatory authority of the State Council and the relevant State Council department(s).

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

parties arbitrarily.

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

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

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

Recently there have been heightened tensions in international

economic relations, such as the one between the United States and China.

Political tensions between the United States and China have escalated

due to, among other things, trade disputes, the COVID-19 outbreak, sanctions imposed by the U.S.

Department of Treasury on certain officials

of the Hong Kong Special Administrative Region and the PRC central government and the executive orders issued by the U.S.

government in

November 2020 that prohibit certain transactions with certain China-based companies and their respective subsidiaries.

Rising political

tensions could reduce levels of trade, investments, technological exchanges, and other economic activities between the two major economies.

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

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

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

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

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

It further defines that no organization or individual

shall provide the documents and materials relating to securities business activities to overseas parties arbitrarily.

With this regulation

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

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

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

You may have difficulty enforcing judgments

We are a Delaware holding company, but Finger

Motion (CN) Limited is a Hong Kong company, and our principal operating affiliate and subsidiary, JiuGe Technology and JiuGe Management,

are located in the PRC.

Most of our assets are located outside the United States and most of our current operations are conducted in the

We are a Delaware holding company, but Finger Motion

(CN) Limited is a Hong Kong company, and our principal operating affiliate and subsidiary, JiuGe Technology and JiuGe Management, are

located in the PRC.

Most of our assets are located outside the United States and most of our current operations are conducted in the PRC.

In addition, all of our directors and officers are nationals and residents of countries other than the United States.

A substantial

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

As a result, it may be difficult for you to effect service

of process within the United States upon these persons.

A substantial portion

of the assets of these persons is located outside the United States.

As a result, it may be difficult for you to effect service of process

within the United States upon these persons.

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

courts judgments predicated

on the civil liability provisions of the U.S.

federal securities laws against us and our officers and directors, all of whom are not residents

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

In addition, there is uncertainty

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

courts judgments predicated on the civil

liability provisions of the U.S.

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

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

In addition, there is uncertainty as

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

The recognition and enforcement of foreign judgments

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over the manner in which we must conduct our business activities.

The PRC government has exercised and continues

to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.

to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs,

The PRC government has exercised and continues to

exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.

Our ability to

operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs,

environmental regulations, land use rights, property and other matters.

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on our part to ensure our compliance with such regulations or interpretations.

Accordingly, government actions in the future,

including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional

or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular

regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.

Accordingly, government actions in the future, including

any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local

variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions

thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.

The PRC government may exert more oversight

and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.

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

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.

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

Future inflation in China may inhibit our

ability to conduct business in China.

Future inflation in China may inhibit our ability

to conduct business in China.

In recent years, the Chinese economy has experienced

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and thereby harm the market for our products and our company.

Capital outflow policies in the PRC may

hamper our ability to remit income to the United States.

Capital outflow policies in the PRC may hamper

our ability to remit income to the United States.

The PRC has adopted currency and capital transfer

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or to our shareholders.

Adverse regulatory developments in China

may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC

in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like

Adverse regulatory developments in China may

subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in

response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like

us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.

The recent regulatory developments in China, in

particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in

China over our financing and capital raising activities in the United States.

In addition, we may be subject to industry-wide regulations

that may be adopted by the relevant PRC authorities, which may have the effect of limiting our service offerings, restricting the scope

of our operations in China, or causing the suspension or termination of our business operations in China entirely, all of which will materially

The recent regulatory developments in China, in particular

with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in China over

our financing and capital raising activities in the United States.

In addition, we may be subject to industry-wide regulations that may

be adopted by the relevant PRC authorities, which may have the effect of limiting our service offerings, restricting the scope of our

operations in China, or causing the suspension or termination of our business operations in China entirely, all of which will materially

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

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expenses and could materially affect our business.

China has implemented or will implement rules

and is considering a number of additional proposals relating to data protection.

China’s new Data Security Law promulgated by the

Standing Committee of the National People’s Congress of China in June 2021, or the Data Security Law, took effect in September 2021.

The Data Security Law provides that the data processing activities must be conducted based on “data classification and hierarchical

China has implemented or will implement rules and

is considering a number of additional proposals relating to data protection.

China’s new Data Security Law promulgated by the Standing

Committee of the National People’s Congress of China in June 2021, or the Data Security Law, took effect in September 2021.

Data Security Law provides that the data processing activities must be conducted based on “data classification and hierarchical

protection system” for the purpose of data protection and prohibits entities in China from transferring data stored in China to

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Security Law, we may need to make adjustments to our data processing practices to comply with this law.

Additionally, China’s Cyber Security Law,

requires companies to take certain organizational, technical and administrative measures and other necessary measures to ensure the security

of their networks and data stored on their networks.

Additionally, China’s Cyber Security Law, requires

companies to take certain organizational, technical and administrative measures and other necessary measures to ensure the security of

their networks and data stored on their networks.

Specifically, the Cyber Security Law provides that China adopt a multi-level protection

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a foreign country.

It is unclear at the present time how widespread

the cybersecurity review requirement and the enforcement action will be and what effect they will have on the telecommunications sector

generally and the Company in particular.

China’s regulators may impose penalties for non-compliance ranging from fines or suspension

of operations, and this could lead to us delisting from the U.S.

It is unclear at the present time how widespread the

cybersecurity review requirement and the enforcement action will be and what effect they will have on the telecommunications sector generally

and the Company in particular.

China’s regulators may impose penalties for non-compliance ranging from fines or suspension of operations,

and this could lead to us delisting from the U.S.

stock market.

12 unchanged sentences

for serious violations of up to RMB 50 million or 5% of annual revenues from the prior year.

Interpretation, application and enforcement of

these laws, rules and regulations evolve from time to time and their scope may continually change, through new legislation, amendments

to existing legislation and changes in enforcement.

Compliance with the Cyber Security Law and the Data Security Law could significantly

increase the cost to us of providing our service offerings, require significant changes to our operations or even prevent us from providing

certain service offerings in jurisdictions in which we currently operate or in which we may operate in the future.

Despite our efforts

to comply with applicable laws, regulations and other obligations relating to privacy, data protection and information security, it is

possible that our practices, offerings or platform could fail to meet all of the requirements imposed on us by the Cyber Security Law,

the Data Security Law and/or related implementing regulations.

Any failure on our part to comply with such law or regulations or any other

obligations relating to privacy, data protection or information security, or any compromise of security that results in unauthorized access,

use or release of personally identifiable information or other data, or the perception or allegation that any of the foregoing types of

failure or compromise has occurred, could damage our reputation, discourage new and existing counterparties from contracting with us or

result in investigations, fines, suspension or other penalties by Chinese government authorities and private claims or litigation, any

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

Even if our practices are not

subject to legal challenge, the perception of privacy concerns, whether or not valid, may harm our reputation and brand and adversely

affect our business, financial condition and results of operations.

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 raise capital, including engaging

in follow-on offerings of our securities in the U.S.

Interpretation, application and enforcement of these

laws, rules and regulations evolve from time to time and their scope may continually change, through new legislation, amendments to existing

legislation and changes in enforcement.

Compliance with the Cyber Security Law and the Data Security Law could significantly increase

the cost to us of providing our service offerings, require significant changes to our operations or even prevent us from providing certain

service offerings in jurisdictions in which we currently operate or in which we may operate in the future.

Despite our efforts to comply

with applicable laws, regulations and other obligations relating to privacy, data protection and information security, it is possible

that our practices, offerings or platform could fail to meet all of the requirements imposed on us by the Cyber Security Law, the Data

Security Law and/or related implementing regulations.

Any failure on our part to comply with such law or regulations or any other obligations

relating to privacy, data protection or information security, or any compromise of security that results in unauthorized access, use or

release of personally identifiable information or other data, or the perception or allegation that any of the foregoing types of failure

or compromise has occurred, could damage our reputation, discourage new and existing counterparties from contracting with us or result

in investigations, fines, suspension or other penalties by Chinese government authorities and private claims or litigation, any of which

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

Even if our practices are not subject to

legal challenge, the perception of privacy concerns, whether or not valid, may harm our reputation and brand and adversely affect our

business, financial condition and results of operations.

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 raise capital, including engaging in

follow-on offerings of our securities in the U.S.

Restrictions on currency exchange may limit

our ability to receive and use our revenues effectively.

The majority of our revenues will be settled in

Chinese Renminbi (RMB), and any future restrictions on currency exchanges may limit our ability to use revenue generated in RMB to fund

any future business activities outside China or to make dividend or other payments in U.S.

Although the Chinese government introduced

regulations in 1996 to allow greater convertibility of the RMB for current account transactions, significant restrictions still remain,

including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid

commercial documents, at those banks in China authorized to conduct foreign exchange business.

In addition, conversion of RMB for capital

account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open

and maintain separate foreign exchange accounts for capital account items.

We cannot be certain that the Chinese regulatory authorities

will not impose more stringent restrictions on the convertibility of the RMB.

The majority of our revenues will be settled in Chinese

Renminbi (RMB), and any future restrictions on currency exchanges may limit our ability to use revenue generated in RMB to fund any future

business activities outside China or to make dividend or other payments in U.S.

Although the Chinese government introduced regulations

in 1996 to allow greater convertibility of the RMB for current account transactions, significant restrictions still remain, including

primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial

documents, at those banks in China authorized to conduct foreign exchange business.

In addition, conversion of RMB for capital account

items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain

separate foreign exchange accounts for capital account items.

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

more stringent restrictions on the convertibility of the RMB.

Fluctuations in exchange rates could adversely

affect our business and the value of our securities.

The value of our common stock will be indirectly

affected by the foreign exchange rate between U.S.

dollars and RMB and between those currencies and other currencies in which our sales

may be denominated.

The value of our common stock will be indirectly affected

by the foreign exchange rate between U.S.

dollars and RMB and between those currencies and other currencies in which our sales may be

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

dollar would affect our financial results

reported in U.S.

dollar would affect our financial results reported

dollar terms without giving effect to any underlying change in our business or results of operations.

Fluctuations in

the exchange rate will also affect the relative value of any dividend we issue that will be exchanged into U.S.

dollars as well as earnings

from, and the value of, any U.S.

Fluctuations in the exchange

rate will also affect the relative value of any dividend we issue that will be exchanged into U.S.

dollars as well as earnings from, and

the value of, any U.S.

dollar-denominated investments we make in the future.

Since July 2005, the RMB is no longer pegged to

Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant

short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S.

dollar in the

medium to long term.

Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange

rate and lessen intervention in the foreign exchange market.

Very limited hedging transactions are available

in China to reduce our exposure to exchange rate fluctuations.

Since July 2005, the RMB is no longer pegged to the

Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term

fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S.

dollar in the medium to

Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate

and lessen intervention in the foreign exchange market.

Very limited hedging transactions are available in

China to reduce our exposure to exchange rate fluctuations.

To date, we have not entered into any hedging transactions.

enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not

be able to successfully hedge our exposure at all.

In addition, our foreign currency exchange losses may be magnified by PRC exchange

control regulations that restrict our ability to convert RMB into foreign currencies.

While we may enter

into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able

to successfully hedge our exposure at all.

In addition, our foreign currency exchange losses may be magnified by PRC exchange control

regulations that restrict our ability to convert RMB into foreign currencies.

Restrictions under PRC law on our PRC subsidiary’s

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that could benefit our business, pay dividends to our shareholders, and otherwise fund and conduct our businesses.

Substantially all of our revenue is earned by

JiuGe Management, our PRC subsidiary.

PRC regulations restrict the ability of our PRC subsidiary to make dividends and other payments

to its offshore parent company.

PRC legal restrictions permit payments of dividends by our PRC subsidiary only out of its accumulated

after-tax profits, if any, determined in accordance with PRC accounting standards and regulations.

Our PRC subsidiary is also required

under PRC laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance with PRC GAAP to a statutory

general reserve fund until the amount in said fund reaches 50% of our registered capital.

Allocations to these statutory reserve funds

can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends.

Any limitations

on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments

or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

Substantially all of our revenue is earned by JiuGe

Management, our PRC subsidiary.

PRC regulations restrict the ability of our PRC subsidiary to make dividends and other payments to its

offshore parent company.

PRC legal restrictions permit payments of dividends by our PRC subsidiary only out of its accumulated after-tax

profits, if any, determined in accordance with PRC accounting standards and regulations.

Our PRC subsidiary is also required under PRC

laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance with PRC GAAP to a statutory general

reserve fund until the amount in said fund reaches 50% of our registered capital.

Allocations to these statutory reserve funds can only

be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends.

Any limitations on the

ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions

that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

PRC regulation of loans and direct investment

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to fund and expand our business.

On 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

On 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

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

7 unchanged sentences

and affiliate’s ability to distribute profits to us or otherwise materially adversely affect us.

In 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

In 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

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Under the New EIT Law effective on January 1, 2008,

2008, an enterprise established outside China with “de facto management bodies” within China is considered a “resident

enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes.

implementing rules of the New EIT Law define de facto management as “substantial and overall management and control over the production

and operations, personnel, accounting, and properties” of the enterprise.

On 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 (the “ Notice ”), further interpreting the

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

Pursuant to the Notice,

an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically

an enterprise established outside China with “de facto management bodies” within China is considered a “resident enterprise,”

meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes.

The implementing rules

of the New EIT Law define de facto management as “substantial and overall management and control over the production and operations,

personnel, accounting, and properties” of the enterprise.

On 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 (the “ Notice ”), further interpreting the application

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

Pursuant to the Notice, an enterprise

incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically

incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly

10 unchanged sentences

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

Given the above conditions, although unlikely,

we may be deemed to be a resident enterprise by Chinese tax authorities.

Given the above conditions, although unlikely, we

may be deemed to be a resident enterprise by Chinese tax authorities.

If the PRC tax authorities determine that we are a “resident

16 unchanged sentences

and China, and our PRC tax may not be creditable against our

We 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.

We 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.

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.

We 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.

We 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.

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.

addition, the U.S.

government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which

we invest or that we acquire.

Our activities in China create the

risk of unauthorized payments or offers of payments by our executive officers, employees, consultants, sales agents or other representatives

of our Company, even though they may not always be subject to our control.

It is our policy to implement safeguards to discourage these

practices by our employees.

However, our existing safeguards and any future improvements may prove to be less than effective, and the

executive officers, employees, consultants, sales agents or other representatives of our Company may engage in conduct for which we might

be held responsible.

Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may

be subject to other liabilities, which could negatively affect our business, operating results and financial condition.

In addition, the

government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest

or that we acquire.

Because our business is located in the PRC,

1 unchanged sentence

securities laws.

PRC companies have historically not adopted a

Western style of management and financial reporting concepts and practices, which includes 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.

Therefore, we may, in turn, experience difficulties in implementing

and maintaining adequate internal controls as required under Section 404 of the SOX.

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 SOX.

Any such deficiencies, weaknesses or lack of compliance could have a

materially adverse effect on our business.

The disclosures in our reports and other

filings with the SEC and our other public announcements are not subject to the scrutiny of any regulatory bodies in the PRC.

our public disclosure should be reviewed in light of the fact that no governmental agency that is located in the PRC, where part of our

operations and business are located, has conducted any due diligence on our operations or reviewed or cleared any of our disclosure.

We are regulated by the SEC and our reports and

other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities

PRC companies have historically not adopted a Western

style of management and financial reporting concepts and practices, which includes 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.

Therefore, we may, in turn, experience difficulties in implementing and maintaining

adequate internal controls as required under Section 404 of the SOX.

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 SOX.

Any such deficiencies, weaknesses or lack of compliance could have a materially

adverse effect on our business.

The disclosures in our reports and other filings

with the SEC and our other public announcements are not subject to the scrutiny of any regulatory bodies in the PRC.

Accordingly, our

public disclosure should be reviewed in light of the fact that no governmental agency that is located in the PRC, where part of our operations

and business are located, has conducted any due diligence on our operations or reviewed or cleared any of our disclosure.

We are regulated by the SEC and our reports and other

filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities

Act and the Exchange Act.

12 unchanged sentences

of our other public announcements has been reviewed or otherwise been scrutinized by any local regulator.

Certain PRC regulations, including those

relating to mergers and acquisitions and national security, may require a complicated review and approval process which could make it

more difficult for us to pursue growth through acquisitions in China.

The 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 the PRC domestic companies or citizens,

such acquisition must be submitted to the MOFCOM, rather than local regulators, for approval.

In addition, the M&A Rules requires

that an overseas company controlled directly or indirectly by PRC companies or citizens and holding equity interests of PRC domestic companies

needs to obtain the approval of the China Securities Regulatory Commission, or CSRC, prior to listing its securities on an overseas stock

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 the CSRC’s approval of their overseas listings.

Certain PRC regulations, including those relating

to mergers and acquisitions and national security, may require a complicated review and approval process which could make it more difficult

for us to pursue growth through acquisitions in China.

The 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 the PRC domestic companies or citizens, such acquisition

must be submitted to the MOFCOM, rather than local regulators, for approval.

In addition, the M&A Rules requires that an overseas

company controlled directly or indirectly by PRC companies or citizens and holding equity interests of PRC domestic companies needs to

obtain the approval of the China Securities Regulatory Commission, or CSRC, prior to listing its securities on an overseas stock exchange.

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 the CSRC’s approval of their overseas listings.

The M&A Rules established additional procedures

9 unchanged sentences

control arrangement, are strictly prohibited.

There is significant uncertainty regarding the

interpretation and implementation of these regulations relating to merger and acquisition activities in China.

In addition, complying

with these requirements could be time-consuming, and the required notification, review or approval process may materially delay or affect

our ability to complete merger and acquisition transactions in China.

As a result, our ability to seek growth through acquisitions may

be materially and adversely affected.

In addition, if the MOFCOM determines that we should have obtained its approval for our entry into

contractual arrangements with our affiliated entities, we may be required to file for remedial approvals.

There is no assurance that we

would be able to obtain such approval from the MOFCOM.

There is significant uncertainty regarding the interpretation

and implementation of these regulations relating to merger and acquisition activities in China.

In addition, complying with these requirements

could be time-consuming, and the required notification, review or approval process may materially delay or affect our ability to complete

merger and acquisition transactions in China.

As a result, our ability to seek growth through acquisitions may be materially and adversely

In addition, if the MOFCOM determines that we should have obtained its approval for our entry into contractual arrangements

with our affiliated entities, we may be required to file for remedial approvals.

There is no assurance that we would be able to obtain

such approval from the MOFCOM.

If the MOFCOM, the CSRC and/or other PRC regulatory

6 unchanged sentences

and prospects, as well as the trading price of our common stock.

As 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.

As 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.

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

On July 6, 2021, the General Office of the Central

24 unchanged sentences

initial public offering.

On February 17, 2023,

the CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines, which became effective on March 31, 2023.

On February 17, 2023, the

CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines, which became effective on March 31, 2023.

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

17 unchanged sentences

Also on February 17, 2023,

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.

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.

Due to the Overseas Listing

5 unchanged sentences

and severely damage our reputation.

Furthermore, 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.

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.

Furthermore, 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.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES

AND USE OF PROCEEDS

None that have not already been reported on a Current

Report on Form 8-K.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable.

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