What changed in this filing

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Item 1A. Risk Factors

2022-04-01 compared with 2021-04-26 · 1645 added, 1047 removed, 118 unchanged (96% of the section changed)

should carefully consider the risks described below and elsewhere in this Annual Report, which could materially and adversely

affect our business, results of operations or financial condition.

Our business faces significant risks and the risks described

below may not be the only risks we face.

Additional risks not presently known to us or that we currently believe are immaterial

may materially affect our business, results of operations, or financial condition.

If any of these risks occur, the trading price

of our common stock could be decline and you may lose all or part of your investment.

pandemic has had, and may continue to have, an adverse effect on our business and our financial results.

December 2019, a novel strain of coronavirus was discovered in China, which has and is continuing to spread throughout

On January 30, 2020, the World Health Organization declared the outbreak of the COVID-19 disease a “Public Health

Emergency of International Concern.”

On March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.”

The COVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health

crisis that could materially and adversely affect the economies and financial markets worldwide, and the operations and financial

position of any potential target business with which we consummate a business combination could be materially and adversely affected.

Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit

the ability to have meetings with potential investors, if the target company’s personnel, vendors and service providers

are unavailable to negotiate and consummate a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn.

The extent to which COVID-19 impacts our search for business combinations will depend on future developments, which are

highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the

actions to contain COVID-19 or treat its impact, among others.

If the disruptions posed by COVID-19 or other matters of global

concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target

business with which we ultimately consummate a business combination, may be materially adversely affected.

addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing

which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity

and third-party financing being unavailable on terms acceptable to us or at all.

could negatively affect our internal controls over financial reporting as a portion of our workforce is required to work from

home and therefore new processes, procedures, and controls could be required to respond to changes in our business environment.

Further, should any key employees become ill from COVID-19 and unable to work, the attention of the management team and resources

could be diverted.

potential effects of COVID-19 could also heighten the risks we face related to each of the risk factors disclosed below.

and its impacts are unprecedented and continuously evolving, the potential impacts to these risk factors remain uncertain.

a result, COVID-19 may also materially adversely affect our operating and financial results in a manner that is not currently

known to us or that we do not currently consider may present significant risks to our operations.

related to our business

have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light

of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company.

in our securities involves a high degree of risk.

Before making any investment decision, you should consider carefully the following

risks and other information in this report, including our consolidated financial statements and related notes.

The risks and

uncertainties we describe are not the only ones facing us.

Additional risks and uncertainties that we are unaware of or that we believe

are not material at the time could also materially adversely affect our business, financial condition or results of operations.

case, the value of our common stock could decline, and you could lose all or part of your investment.

Please also see the section entitled

“Cautionary Note Regarding Forward-Looking Statements.”

Related to Our Business and Industry

have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the

problems, expenses, difficulties, complications and delays frequently encountered by a small developing company.

were incorporated in Nevada in March 2014.

For the years ended December 31, 2020 and 2019, we have generated $5,005,694

and $275,219, respectively, in revenues and incurred net losses of $3,647,353 and $377,756, respectively.

The likelihood

of our success must be considered in the light of the problems, expenses, difficulties, complications and delays frequently encountered

by a small company starting a new business enterprise and the highly competitive environment in which we are operating.

a limited operating history upon which an evaluation of our future success or failure can be made.

Our ability to achieve and

maintain profitability and positive cash flow is dependent upon:

For the years ended December 31, 2021 and 2020, we generated $8,021,823 and $5,005,694, respectively,

in revenues, and had net income of $1,963,469 and net loss of $3,647,353, respectively.

The likelihood of our success

must be considered in the light of the problems, expenses, difficulties, complications and delays frequently encountered by a small company

starting a new business enterprise and the highly competitive environment in which we are operating.

We have a limited operating history

upon which an evaluation of our future success or failure can be made.

Our ability to achieve and maintain profitability and positive

cash flow is dependent upon:

ability to market our products;

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ability to raise the capital necessary to continue marketing and developing our product and online platform.

we are unable to gain any significant market acceptance for our products and services or establish a significant market presence,

we may be unable to generate sufficient revenue to continue our business.

growth strategy is substantially dependent upon our ability to successfully market our products and services to prospective clients.

However, our planned self-conduct or consignment products may not achieve significant acceptance.

Such acceptance, if achieved,

may not be sustained for any significant period of time.

Failure of our products to achieve or sustain market acceptance could

have a material adverse effect on our business, financial conditions and the results of our operations.

Management’s

ability to implement our business strategy may be slower than expected and we may be unable to generate or sustain profits.

business plans, including developing and optimizing our online platform, may not generate profit in the near

term or may not become profitable at all, which will result in losses.

may be unable to enter into our intended markets successfully.

The factors that could affect our growth strategy include our success

in (a) developing our business plan, (b) obtaining new clients, (c) obtaining adequate financing on acceptable terms, and

(d) adapting our internal controls and operating procedures to accommodate our future growth.

systems, procedures and controls may not be adequate to support the expansion of our business operations.

Significant growth will

place managerial demands on all aspects of our operations.

Our future operating results will depend substantially upon our ability

to manage changing business conditions and to implement and improve our technical, administrative and financial controls and reporting

may enter our business sector with superior products which could affect our business adversely.

believe that barriers to entry are low because of economies of scale, cost advantage and brand identity.

Potential competitors

may enter this sector with superior products.

This would have an adverse effect upon our business and our results of operations.

In addition, a high level of support is critical for the successful marketing and recurring sales of our products.

Despite having

accumulated customers from the past seven years, we may still need to continue to improve our marketing strategic, products

and platform in order to assist potential customers in using our platform, and we also need to provide effective support to future

If we are unable to increase customer support and improve our platform in the face of i ncreasing

competition, with the increase in competition, our ability to sell our products to potential customers could adversely affect

our brand, which would harm our reputation.

operate in a highly competitive industry, and our failure to compete effectively could adversely affect our market share, revenues

and growth prospects.

to successfully execute our online and offline-channel strategy and the cost of our investments in our online platform and technology

may materially adversely affect our gross profit, net sales and financial performance

food and beverage supply chain business continue to rapidly evolve and consumers increasingly embrace digital shopping.

the portion of total consumer expenditures with retailers and wholesale stores occurring through digital platforms is increasing and

the pace of this increase could continue to accelerate.

Our strategy, which includes investments in our online platform, technology,

acquisitions and store remodels, may not adequately or effectively allow us to continue to grow our online platform transaction volume,

increase comparable store sales, maintain or grow our overall market position or otherwise offset the impact on the growth of our business

of a moderated pace of new store openings.

to successfully execute this strategy may adversely affect our market position, gross profit, net sales and financial performance which

could also result in impairment charges to intangible assets or other long-lived assets.

In addition, a greater concentration of online

platform sales, including increasing online food sales, could result in a reduction in the amount of traffic in our stores, which would,

in turn, reduce the opportunities for cross-store sales of food merchandise that such traffic creates and could reduce our sales within

our stores and materially adversely affect our financial performance.

pandemic has had, and may continue to have, an adverse effect on our business and our financial results.

December 2019, a novel strain of coronavirus first emerged in China, which has and is continuing to spread throughout the world.

30, 2020, the World Health Organization declared the outbreak of the COVID-19 disease a “Public Health Emergency of International

Concern.” On March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19

outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that could

materially and adversely affect the economies and financial markets worldwide, and the operations and financial position of any potential

target business with which we consummate a business combination could be materially and adversely affected.

Furthermore, we may be unable

to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with

potential investors, if the target company’s personnel, vendors and service providers are unavailable to negotiate and consummate

a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn.

The extent to which COVID-19 impacts our search

for business combinations will depend on future developments, which are highly uncertain and cannot be predicted, including new information

which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

If the disruptions

posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination,

or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing which may

be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party

financing being unavailable on terms acceptable to us or at all.

could negatively affect our internal controls over financial reporting as a portion of our workforce is required to work from home and

therefore new processes, procedures, and controls could be required to respond to changes in our business environment.

Further, should

any key employees become ill from COVID-19 and unable to work, the attention of the management team and resources could be diverted.

potential effects of COVID-19 could also heighten the risks we face related to each of the risk factors disclosed below.

and its impacts are unprecedented and continuously evolving, the potential impacts to these risk factors remain uncertain.

COVID-19 may also materially adversely affect our operating and financial results in a manner that is not currently known to us or that

we do not currently consider may present significant risks to our operations.

have a history of operating losses, and continued future operating losses would have a material adverse effect on our ability to continue

as a going concern.

We have a history of

operating losses and had net losses of approximately $3.6 million and $0.4 million for the years ended December 31, 2020 and 2019, respectively.

We generated a net income of $1,963,469 for the year ended December 31, 2021 as a result of the increased product sale.

there can be no assurance that we will have net income in future periods.

Our history of operating losses and our projections of the

level of capital that will be required for our future expanded operations may impair our ability to grow our business at the level we

If in the future we incur operating losses or are unable to obtain the requisite amount of capital needed to fund our planned

operations, it could have a material adverse effect on our business and ability to continue as a going concern.

operate in a highly competitive industry, and our failure to compete effectively could adversely affect our market share, revenues and

growth prospects.

food and beverage industry in China is highly fragmented and intensely competitive.

Industry participants include large scale

and well-funded manufacturers and distributors, as well as smaller counterparts.

We believe that the market is also highly sensitive

to the introduction of new products, including the ever-growing list of new alcohol and non-alcohol beverages, water and edible

oil products, which may rapidly capture a significant share of the market.

Presently most of our business operations and product

distribution are concentrated in Guangdong province, China, and we expect to expand our product sales into broader markets and

more geographic areas in China.

We compete for sales with heavily advertised national and international brands sponsored by large

food companies or distribution networks.

Our competitors include China home-grown manufacturers and distributors, foreign companies

with China operations, as well as product importers and distributors that carry the same categories of products as ours.

not be able to compete effectively and our attempt to do so may require us to reduce our prices and result in lower margins.

to effectively compete could adversely affect our market share, revenues, and growth prospects.

failure to appropriately respond to changing consumer preferences and demand for new products could significantly harm our customer

relationships and product sales.

Industry participants include large scale and well-funded

manufacturers and distributors, as well as smaller counterparts.

We believe that the market is also highly sensitive to the introduction

of new products, including the ever-growing list of new alcohol and non-alcohol beverages, water and edible oil products, which may rapidly

capture a significant share of the market.

Presently most of our business operations and product distribution are concentrated in Guangdong

province, China, and we expect to expand our product sales into broader markets and more geographic areas in China.

We compete for sales

with heavily advertised national and international brands sponsored by large food companies or distribution networks.

Our competitors

include China home-grown manufacturers and distributors, foreign companies with China operations, as well as product importers and distributors

that carry the same categories of products as ours.

We may not be able to compete effectively and our attempt to do so may require us

to reduce our prices and result in lower margins.

Failure to effectively compete could adversely affect our market share, revenues, and

growth prospects.

failure to appropriately respond to changing consumer preferences and demand for new products could significantly harm our customer relationships

and product sales.

business is particularly subject to changing consumer trends and preferences.

Our continued success depends in part on our ability

to anticipate and respond to these changes, and we may not be able to respond in a timely or commercially appropriate manner to

these changes.

Our continued success depends in part on our ability to

anticipate and respond to these changes, and we may not be able to respond in a timely or commercially appropriate manner to these changes.

If we are unable to do so, our customer relationships and product sales could be harmed significantly.

the food and beverage industry in particular is characterized by rapid and frequent changes in demand for products and new product

introductions.

Our failure to accurately predict these trends could negatively impact consumer opinion with respect to the products

we distribute.

This could harm our customer relationships and cause losses to our market share.

The success of our new product

offerings depends upon a number of factors, including our ability to accurately anticipate customer needs, identify the right

suppliers, successfully commercialize new products in a timely manner, price our products competitively, deliver our products

in sufficient volumes and in a timely manner, and differentiate our product offerings from those of our competitors.

we do not introduce new products or make sufficient adjustments to meet the changing needs of our customers in a timely manner,

some of our products could become obsolete in the view of consumers, which could have a material adverse effect on our revenues

and operating results.

do not have long term contractual commitments with our retail or distributor customers, and our business may be negatively affected

the food and beverage industry in particular is characterized by rapid and frequent changes in demand for products and new product introductions.

Our failure to accurately predict these trends could negatively impact consumer opinion with respect to the products we distribute.

could harm our customer relationships and cause losses to our market share.

The success of our new product offerings depends upon a number

of factors, including our ability to accurately anticipate customer needs, identify the right suppliers, successfully commercialize new

products in a timely manner, price our products competitively, deliver our products in sufficient volumes and in a timely manner, and

differentiate our product offerings from those of our competitors.

we do not introduce new products or make sufficient adjustments to meet the changing needs of our customers in a timely manner, some

of our products could become obsolete in the view of consumers, which could have a material adverse effect on our revenues and operating

may enter our business sector with superior products which could affect our business adversely.

believe that barriers to entry are low because of economies of scale, cost advantage and brand identity.

Potential competitors may enter

this sector with superior products.

This would have an adverse effect upon our business and our results of operations.

In addition, a

high level of support is critical for the successful marketing and recurring sales of our products.

Despite having accumulated customers

from the past seven years, we may still need to continue to improve our marketing strategic, products and platform in order to assist

potential customers in using our platform, and we also need to provide effective support to future clients.

If we are unable to increase

customer support and improve our platform in the face of increasing competition, with the increase in competition, our ability to sell

our products to potential customers could adversely affect our brand, which would harm our reputation.

chain issues that increase our costs or cause a delay in our ability to fulfill orders, could have an adverse impact on our business

and operating results, and our failure to estimate customer demand properly may result in excess or obsolete product supply, which could

adversely affect our gross margins.

the exception of some of the bottled water products, we do not own or operate production facilities but instead rely on third party vendors

to manufacture our products, and we expect that we will continue to rely on existing and new suppliers and manufacturers for the foreseeable

The following reliance issues could have an adverse impact on the supply of our products and on our business and operating results:

financial or other supply problems of our contract suppliers or manufacturers could limit supply or increase costs;

of production capacity at our suppliers or contract manufacturers by other companies could limit supply or increase costs.

addition, the following supply chain-related issues could adversely affect our customer relationships, operating results and financial

reduction or interruption in supply of one or more products;

significant increase in the price of one or more products;

failure to adequately procure inventory by our suppliers or manufacturers;

failure to appropriately cancel, reschedule or adjust our requirements based on our business needs.

do not have long term contractual commitments with our retail customers and some distributors, and our business may be negatively affected

if we are unable to maintain those important relationships and distribute our products.

1 unchanged sentence

supplemented by the sales at our own store and online sales.

We will continue our efforts to reinforce and expand our distribution

network by partnering with new retailers and distributors.

While we have entered written agreements with most of our customers,

we currently do not have, nor do we anticipate in the future that we will be able to establish, long-term contractual commitments

from most major customers.

In addition, we may not be able to maintain our current distribution relationships or establish and

maintain successful relationships with distributors in new geographic distribution areas.

Moreover, there is a possibility that

we may have to incur additional costs to attract and maintain new customers.

Our inability to maintain our sales network or attract

additional customers would adversely affect our revenues and financial results.

we rely on our retailer customers and wholesale distributors for the majority of our sales that distribute our competitors’

products along with our products, we have little control in ensuring those retailers and distributors will not prefer our competitors’

products over ours, which could cause our sales to suffer.

ability to establish a market for our products in new geographic areas, as well as maintain and expand our existing markets, is

dependent on our ability to establish and maintain successful relationships with reliable distributors and retailers positioned

to serve those areas.

Most of our distributors and retailers sell and distribute competing products, including non-alcoholic and

alcoholic beverages, and our products may represent a small portion of their business.

To the extent that our distributors and

retailers prefer to sell our competitors’

products over our products or do not employ sufficient efforts in managing and

selling our products, including re-stocking retail shelves with our products, our sales and results of operations could be adversely

Our ability to maintain our distribution network and attract additional distributors and retailers will depend on several

factors, some of which are outside our control.

Some of these factors include:

the level of demand for our brands and products

in a distribution area;

our ability to price our products at levels competitive with those of competing products;

ability to deliver products in the quantity and at the time ordered by distributors or retailers.

If any of the above factors

work negatively against us, our sales will likely decline and our results of operations will be adversely affected.

our retail customers and distributors are not required to place minimum orders with us, we need to manage our inventory levels,

and it is difficult to predict the timing and amount of our sales.

We will continue our efforts to reinforce and expand our distribution network

by partnering with new retailers and distributors.

While we have entered written agreements with most of our customers, we currently

do not have, nor do we anticipate in the future that we will be able to establish, long-term contractual commitments from most major

In addition, we may not be able to maintain our current distribution relationships or establish and maintain successful relationships

with distributors in new geographic distribution areas.

Moreover, there is a possibility that we may have to incur additional costs to

attract and maintain new customers.

Our inability to maintain our sales network or attract additional customers would adversely affect

our revenues and financial results.

If any customer accounts for a significant portion of our revenue in our operation, the loss of any such customers or a material decline

in the transaction would have an adverse effect on our operating results

customers can be categorized into retailer

customers and wholesale distributors.

Management’s strategies to avoid customer concentration is expanding the customers base

by launching wider range of products while developing new customers with existing products.

For the years ended

December 31, 2020 and 2021 there’s no customer who accounted for more than 10% of the Company’s total

Avoiding customers concentration issues is always one of our marketing strategies.

However, no guarantee could

be made that such wide range of client base can always be maintained.

If the concentration on customers occurs in our

future operations, any decline in such customers’ transaction volume would lower our revenues, which would adversely affect our

operating results, of course, avoiding customer concentration is one of our core marketing strategy, we will strife to maintain the

wide range of customers base.

we rely on our retailer customers and wholesale distributors for the majority of our sales that distribute our competitors’ products

along with our products, we have little control in ensuring those retailers and distributors will not prefer our competitors’ products

over ours, which could cause our sales to suffer.

ability to establish a market for our products in new geographic areas, as well as maintain and expand our existing markets, is dependent

on our ability to establish and maintain successful relationships with reliable distributors and retailers positioned to serve those

Most of our distributors and retailers sell and distribute competing products, including non-alcohol and alcohol beverages, and

our products may represent a small portion of their business.

To the extent that our distributors and retailers prefer to sell our competitors’

products over our products or do not employ sufficient efforts in managing and selling our products, including re-stocking retail shelves

with our products, our sales and results of operations could be adversely affected.

Our ability to maintain our distribution network

and attract additional distributors and retailers will depend on several factors, some of which are outside our control.

Some of these

factors include:

the level of demand for our brands and products in a distribution area;

our ability to price our products at levels

competitive with those of competing products;

and our ability to deliver products in the quantity and at the time ordered by distributors

or retailers.

If any of the above factors work negatively against us, our sales will likely decline and our results of operations will

be adversely affected.

our retail customers and distributors are not required to place minimum orders with us, we need to manage our inventory levels, and it

is difficult to predict the timing and amount of our sales.

customers are not required to place minimum monthly or annual orders for our products.

There is no assurance as to the timing

or quantity of purchases by any of our customers or that any of our distributors will continue to purchase products from us in

the same frequencies and volumes as they may have in the past.

To be able to sell our products on a timely basis, we need to maintain

adequate inventory levels of the desired products, but we cannot predict the frequency or size of orders by a substantial portion

of our customers.

If we fail to meet our shipping schedules, we could damage our relationships with distributors or retailers,

increase our shipping costs or cause sales opportunities to be delayed or lost, which would unfavorably impact our future sales

and adversely affect our operating results.

In addition, if the inventory of our products held by our distributors or retailers

is too high, they will not place orders for additional products, which would also unfavorably impact our future sales and adversely

affect our operating results.

There is no assurance as to the timing or quantity

of purchases by any of our customers or that any of our distributors will continue to purchase products from us in the same frequencies

and volumes as they may have in the past.

To be able to sell our products on a timely basis, we need to maintain adequate inventory levels

of the desired products, but we cannot predict the frequency or size of orders by a substantial portion of our customers.

to meet our shipping schedules, we could damage our relationships with distributors or retailers, increase our shipping costs or cause

sales opportunities to be delayed or lost, which would unfavorably impact our future sales and adversely affect our operating results.

In addition, if the inventory of our products held by our distributors or retailers is too high, they will not place orders for additional

products, which would also unfavorably impact our future sales and adversely affect our operating results.

business plan and future growth is dependent in part on our distribution arrangements with retailers and wholesale distributors.

If we are unable to effectively implement our business plan and distribution strategy, our results of operations and financial

condition could be adversely affected.

currently have sales arrangements with most of wholesale distributors and retail accounts to distribute our products directly

through their venues.

are unable to effectively implement our business plan and distribution strategy, our results of operations and financial condition could

be adversely affected.

currently have sales arrangements with most of wholesale distributors and retail accounts to distribute our products directly through

their venues.

However, there are several risks associated with this distribution strategy.

We do not have long-term agreements

in place with any of these customers and thus, the arrangements are terminable at any time by these retailers or us.

we may not be able to maintain continuing relationships with any of these accounts.

A decision by any of these retailers to decrease

the amount purchased from us or to cease carrying our products could have a material adverse effect on our reputation, financial

condition or results of operations.

In addition, our dependence on existing major retail accounts may result in pressure on us

to reduce our pricing to them or allow significant product discounts.

Any increase in our costs for these retailers to carry our

product, reduction in price, or demand for product discounts could have a material adverse effect on our profit margin.

rely on independent suppliers and manufacturers of our products, and such dependence could make management of our marketing and

distribution efforts inefficient or unprofitable.

do not own the plants or the equipment required to make and package the products we sell, and do not directly manufacture our

products but instead purchase our products from our independent suppliers who source the products from independent manufacturers.

We do not anticipate bringing the manufacturing process in-house in the future.

Currently, our products are sourced from approximately

twenty-one independent suppliers.

Our ability to attract and maintain effective relationships with our suppliers, and other third

parties for the production and delivery of our beverage products in a geographic distribution area is important to the success

of our operations within each distribution area.

Competition for contract manufacturers’

business is intense, especially

in the western U.S., and this could make it more difficult for us to obtain new or replacement manufacturers, or to locate back-up

manufacturers, in our various distribution areas, and could also affect the economic terms of our agreements with our manufacturers.

Our contract manufacturers may terminate their arrangements with us at any time, in which case we could experience disruptions

in our ability to deliver products to our customers.

We may not be able to maintain our relationships with current contract manufacturers

or establish satisfactory relationships with new or replacement contract manufacturers, whether in existing or new geographic

distribution areas.

The failure to establish and maintain effective relationships with contract manufacturers for a distribution

area could increase our manufacturing costs and thereby materially reduce profits realized from the sale of our products in that

In addition, poor relations with any of our contract manufacturers could adversely affect the amount and timing of product

delivered to our distributors for resale, which would in turn adversely affect our revenues and financial condition.

is customary in the contract manufacturing industry for comparably sized companies, we are expected to arrange for our contract

manufacturing needs sufficiently in advance of anticipated requirements.

We continually evaluate which of our contract manufacturers

to utilize based on the cost structure and forecasted demand for the geographic area where our contract manufacturers are located.

To the extent demand for our products exceeds available inventory or the production capacity of our contract manufacturing arrangements,

or orders are not submitted on a timely basis, we will be unable to fulfill distributor orders on demand.

Conversely, we may produce

more product than warranted by actual demand, resulting in higher storage costs and the potential risk of inventory spoilage.

Our failure to accurately predict and manage our contract manufacturing requirements may impair relationships with our independent

distributors and key accounts, which, in turn, would likely have a material adverse effect on our ability to maintain effective

relationships with those distributors and key accounts.

We do not have long-term agreements in place

with any of these customers and thus, the arrangements are terminable at any time by these retailers or us.

Accordingly, we may not be

able to maintain continuing relationships with any of these accounts.

A decision by any of these retailers to decrease the amount purchased

from us or to cease carrying our products could have a material adverse effect on our reputation, financial condition or results of operations.

In addition, our dependence on existing major retail accounts may result in pressure on us to reduce our pricing to them or allow significant

product discounts.

Any increase in our costs for these retailers to carry our product, reduction in price, or demand for product discounts

could have a material adverse effect on our profit margin.

rely on independent suppliers and manufacturers of our products, and such dependence could make management of our marketing and distribution

efforts inefficient or unprofitable.

do not own the plants or the equipment required to make and package the products we sell, and do not directly manufacture our products

but instead purchase our products from our independent suppliers who source the products from independent manufacturers.

We do not anticipate

bringing the manufacturing process in-house in the future.

Currently, our products are sourced from approximately 34 independent suppliers.

Our ability to attract and maintain effective relationships with our suppliers, and other third parties for the production and delivery

of our food and beverage products in a geographic distribution area is important to the success of our operations within each distribution

Our suppliers may terminate their arrangements with us at any time, in which case we could experience disruptions in our ability

to deliver products to our customers.

We may not be able to maintain our relationships with current suppliers or establish satisfactory

relationships with new or replacement suppliers, whether in existing or new geographic distribution areas.

The failure to establish and

maintain effective relationships with suppliers or product manufacturers for a distribution area could increase our product supply costs

and thereby materially reduce profits realized from the sale of our products in that area.

In addition, poor relations with any of our

suppliers or product manufacturers could adversely affect the amount and timing of product delivered to our distributors and consumers,

which would in turn adversely affect our revenues and financial condition.

is customary in the food and beverage supply chain industry, we are expected to arrange for our product procurement needs sufficiently

in advance of anticipated requirements.

We continually evaluate which of our suppliers to utilize based on the cost structure and forecasted

demand for the geographic area where our suppliers or product manufacturers are located.

To the extent demand for our products exceeds

available inventory, or orders are not submitted on a timely basis, we will be unable to fulfill distributor orders on demand.

we may order more products than warranted by actual demand, resulting in higher storage costs and the potential risk of inventory spoilage.

Our failure to accurately predict and manage our supply requirements may impair relationships with our distributors and key accounts,

which, in turn, would likely have a material adverse effect on our ability to maintain effective relationships with those distributors

and key accounts.

ability to implement our business strategy may be slower than expected and we may be unable to generate or sustain profits.

business plans, including developing and optimizing our online platform, may not generate profit in the near term or may not become profitable

at all, which will result in losses.

We may be unable to enter into our intended markets successfully.

The factors that could affect

our growth strategy include our success in (a) developing our business plan, (b) obtaining new clients, (c) obtaining adequate financing

on acceptable terms, and (d) adapting our internal controls and operating procedures to accommodate our future growth.

systems, procedures and controls may not be adequate to support the expansion of our business operations.

Significant growth will place

managerial demands on all aspects of our operations.

Our future operating results will depend substantially upon our ability to manage

changing business conditions and to implement and improve our technical, administrative and financial controls and reporting systems.

we are unable to manage our inventory effectively, our operating results could be adversely affected.

business requires us to manage inventory effectively.

For many products, we depend on our forecasts of demand for and popularity of various

products to make purchase decisions and to manage our inventory.

Demand for products, however, can change between the time inventory

is ordered and the date of sale.

Demand may be affected by, among other things, the COVID-19 pandemic, changes in product pricing, promotions,

changes in consumer spending patterns, changes in consumer tastes with respect to our products and other factors, and our consumers may

not purchase products in the quantities that we expect.

may be difficult to accurately forecast demand and determine appropriate levels of product supply.

We generally do not have the right

to return unsold products to our suppliers.

If we fail to manage our inventory effectively, we may be subject to a heightened risk of

inventory obsolescence, a decline in inventory values, and inventory write-downs or write-offs.

In addition, if we may be required to

lower sale prices in order to reduce inventory levels, our profit margins might be negatively affected.

In addition, our ability to meet

customer demand may be negatively impacted by a shortage in inventory due to reduced inventory purchases or disruptions in the supply

chain due to a number of factors, including the COVID-19 pandemic.

Any failure to manage or accurately forecast demand for our products

could adversely affect inventory levels, growth and operating results.

we fail to effectively manage our product storage or turnovers, the quality and freshness of our products could suffer and our operating

results could be adversely affected.

are subject to risks affecting the food industry generally, including food spoilage, contamination or expiration.

In managing our product

storage and inventory turnovers, we seek to improve supply chain efficiency, while closely monitor the quality and freshness of food

products and effectively reduce inventory losses.

While we believe food spoilage or contamination currently does not have a significant

impact on our operations, there is no guarantee that our inventory management will always be able to effectively control or reduce contamination

or inventory losses of certain products which may be unsuitable for human consumption after a certain period of time, such as seasonings

or edible oil products.

Our temperature-controlled storage and transportation systems could fail to function properly and product contamination

Failures to maintain freshness and safety of our products could negatively impact sales and accordingly have an adverse

impact on our business and results of operations.

the products we sell are not safe or otherwise fail to meet our customers’ expectations, we could lose customers, incur liability

for any injuries suffered by customers using or consuming our products or otherwise experience a material impact to our brand, reputation

and financial performance.

We are also subject to reputational and other risks related to third-party sales on our online platforms.

customers count on us to provide them with safe food products.

Concerns regarding the safety of food that we source from our suppliers

or that we sell could cause customers to avoid purchasing certain food products from us, or to seek alternative sources of supply for

all of their food needs, even if the basis for the concern is outside of our control.

Any lost confidence on the part of our customers

would be difficult and costly to reestablish and such products also expose us to product liability or food safety claims.

issue regarding the safety of any food items we sell, regardless of the cause, could adversely affect our brand, reputation and financial

Whether laws related to such sales apply to us is currently unsettled and any unfavorable changes could expose us to loss

of sales, reduction in transactions and deterioration of our competitive position.

In addition, we may face reputational, financial and

other risks, including liability, for third-party sales of goods that are controversial, counterfeit or otherwise fail to comply with

applicable law.

Although we impose contractual terms on sellers that are intended to prohibit sales of certain type of products, we may

not be able to detect, enforce, or collect sufficient damages for breaches of such terms.

Any of these events could have a material adverse

impact on our business and results of operations and impede the execution of our E-Commerce growth strategy.

are exposed to risks associated with the distribution of products manufactured by third parties.

acquire and import most of our alcohol beverage products from France and Spain and contract with third-parties, such as wineries

or wine distributors to supply our products.

We do not have full control over the product making activities of the wine and

other product producers.

Significant delays and defects in our products resulting from the activities of our product makers may

have a material adverse effect on our Company’s results of operations and financial condition.

the PRC law, for the third party products that we distribute, the third party manufacturers are responsible for the quality of

the products.

purchase almost all of our products from third-party suppliers, such as wineries, wine and drinking water distributors to supply our

We do not have full control over the product making activities of the wine and other product producers.

Significant delays

and defects in our products resulting from the activities of our product makers may have a material adverse effect on our Company’s

results of operations and financial condition.

the PRC law, for the third party products that we distribute, the third party manufacturers are responsible for the quality of the products.

We, however, may still be liable under certain circumstances.

For example, product sellers bear tort liabilities

for product defects as a result of the seller’s negligence which has caused the consumers’

damages or if the sellers

are unable to specify the manufacturer of a defective product.

In the event consumers suffer from damages caused by product defects,

consumers may seek compensation either from the product manufacturer or from the seller of the products.

If a product defect occurs

during the manufacturing period and the compensation is paid by a seller, then the seller is entitled to recover losses from the

manufacturer.

However, if a defect occurs during the selling period and the compensation is paid by the manufacturer, then the

manufacturer is entitled to recover losses from the seller.

In the event that product defects are caused by the manufacturers,

while we have the right to seek recourse against the manufacturers after we pay damages to the consumers, there can be no assurance

that we could recover any of our compensation payments we will have made.

For example, product sellers bear tort liabilities for product defects

as a result of the seller’s negligence which has caused the consumers’ damages or if the sellers are unable to specify the

manufacturer of a defective product.

In the event consumers suffer from damages caused by product defects, consumers may seek compensation

either from the product manufacturer or from the seller of the products.

If a product defect occurs during the manufacturing period and

the compensation is paid by a seller, then the seller is entitled to recover losses from the manufacturer.

However, if a defect occurs

during the selling period and the compensation is paid by the manufacturer, then the manufacturer is entitled to recover losses from

In the event that product defects are caused by the manufacturers, while we have the right to seek recourse against the manufacturers

after we pay damages to the consumers, there can be no assurance that we could recover any of our compensation payments we will have

may be subject to product liability claims.

are a food and beverage product distributor, and the products we sell are not made by us which may contain defects or have quality

As a result, sales of such products could expose us to product liability claims relating to personal injury or property

damage and may require product recalls or other actions.

Third parties subject to such injury or damage may bring claims or legal

proceedings against us as the distributor or retailer of the product.

Although we would have legal recourse against the manufacturer

of such products under applicable law, attempting to enforce our rights against the manufacturer may be expensive, time-consuming

and ultimately futile.

In addition, we do not currently maintain any third-party liability insurance or product liability insurance

in relation to products we sell.

As a result, any material product liability claim or litigation could have a material and adverse

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

Even unsuccessful claims could result in the expenditure

of funds and managerial efforts in defending them and could have a negative impact on our reputation.

business and financial results depend on the continuous supply and availability of raw materials, and rising raw material, fuel

and freight costs as well as freight capacity issues may have an adverse impact on our sales and earnings.

principal raw materials for the wine products we sell include glass bottles, labels, closures, flavorings, stevia, pure cane sugar

and other natural ingredients.

are a food and beverage product distributor, and the products we sell are not made by us which may contain defects or have quality issues.

As a result, sales of such products could expose us to product liability claims relating to personal injury or property damage and may

require product recalls or other actions.

Third parties subject to such injury or damage may bring claims or legal proceedings against

us as the distributor or retailer of the product.

Although we would have legal recourse against the manufacturer of such products under

applicable law, attempting to enforce our rights against the manufacturer may be expensive, time-consuming and ultimately futile.

addition, we do not currently maintain any third-party liability insurance or product liability insurance in relation to products we

As a result, any material product liability claim or litigation could have a material and adverse effect on our business, financial

condition and results of operations.

Even unsuccessful claims could result in the expenditure of funds and managerial efforts in defending

them and could have a negative impact on our reputation.

business and financial results depend on the continuous supply and availability of raw materials, and rising raw material, fuel and freight

costs as well as freight capacity issues may have an adverse impact on our sales and earnings.

principal raw materials for the wine products we sell include glass bottles, labels, closures, flavorings, stevia, pure cane sugar and

other natural ingredients.

The costs of the product ingredients are subject to fluctuation.

If any supply of these raw materials

is impaired or if prices increase significantly, our business would be adversely affected.

Prices of any raw materials or ingredients

may continue to rise in the future and we would incur higher supply costs which we may not be able to pass any cost increases

on to our customers.

industry-wide shortages of certain concentrates, supplements and sweeteners have been experienced could, from time to time in

the future, be experienced, which could interfere with and/or delay production and supply of certain of our products we source

and could have a material adverse effect on our business and financial results.

If any supply of these raw materials is impaired

or if prices increase significantly, our business would be adversely affected.

Prices of any raw materials or ingredients may continue

to rise in the future and we would incur higher supply costs which we may not be able to pass any cost increases on to our customers.

industry-wide shortages of certain concentrates, supplements and sweeteners have been experienced could, from time to time in the future,

be experienced, which could interfere with and/or delay production and supply of certain of our products we source and could have a material

adverse effect on our business and financial results.

addition, any supply shortage or volatility in the global oil markets would result in unstable fuel and freight prices.

the price sensitivity of our products, we may not be able to pass any increased costs on to our customers.

At the same time, the

economy appears to be returning to pre-pandemic levels resulting in the rise of freight volumes which is exacerbated by carrier

failures to meet demands and fleet reductions due to higher transportation demand in China and global logistics service industry.

We may be unable to secure available transportation carrier capacity at reasonable rates, which could have a material adverse

effect on our operations.

Due to the price

sensitivity of our products, we may not be able to pass any increased costs on to our customers.

At the same time, the economy appears

to be returning to pre-pandemic levels resulting in the rise of freight volumes which is exacerbated by carrier failures to meet demands

and fleet reductions due to higher transportation demand in China and global logistics service industry.

We may be unable to secure available

transportation carrier capacity at reasonable rates, which could have a material adverse effect on our operations.

rely upon our ongoing relationships with our key suppliers.

If we are unable to source our products on acceptable terms from our

key suppliers, we could suffer disruptions in our business.

we purchase our alcohol products from seven major suppliers and food and non-alcohol beverage products from fourteen major suppliers,

and we anticipate that we will purchase our products from others with the intention of developing other sources of supply for

our products.

If we are unable to source our products on acceptable terms from our key

suppliers, we could suffer disruptions in our business.

we purchase our alcohol products from eleven major suppliers and food and non-alcohol beverage products from twenty-three major suppliers,

and we anticipate that we will purchase our products from others with the intention of developing other sources of supply for our products.

The prices of our products are determined by our suppliers and manufacturers and may be subject to change.

Consequently,

we do not have control over any price increases of the products we sell and may be unable to obtain those products from alternative

suppliers on short notice.

Consequently, we do not have

control over any price increases of the products we sell and may be unable to obtain those products from alternative suppliers on short

addition, we may not correctly estimate demand for our products.

Our ability to estimate demand for our products is imprecise,

particularly with new products, and may be less precise during periods of rapid growth, particularly in new markets.

If we materially

underestimate demand for our products or are unable to secure sufficient product supplies, we might not be able to satisfy demand

on a short-term basis.

If we must replace a product supplier, we could experience disruptions in our ability to deliver products

to our customers or experience a change in the quality or customer appeal of our products, all of which could have a material

adverse effect on our results of operations.

to manage our growth could strain our operational and other resources, which could materially and adversely affect our business

and prospects.

Our ability to estimate demand for our products is imprecise, particularly

with new products, and may be less precise during periods of rapid growth, particularly in new markets.

If we materially underestimate

demand for our products or are unable to secure sufficient product supplies, we might not be able to satisfy demand on a short-term basis.

If we must replace a product supplier, we could experience disruptions in our ability to deliver products to our customers or experience

a change in the quality or customer appeal of our products, all of which could have a material adverse effect on our results of operations.

may be unable to obtain or renew required permits, licenses or approvals necessary for our business operations, and could be imposed

with fines and penalties for any violations of the license requirements.

are required to maintain certain permits, licenses and approvals issued by relevant government agencies to operate business in the PRC.

Our inability to secure any permits, licenses and approvals in the PRC in a timely manner or at all could result in operational delays,

suspensions and/or administrative fines and penalties, which could have a material adverse effect on our operations, results of operations

and financial condition.

Telecommunications Regulations of the PRC issued by the State Council of the PRC, as amended, provide the general framework for the provision

of telecommunication services by PRC companies and require a telecommunication service provider in China to obtain an operating license

from the Ministry of Industry and Information Technology, or MIIT, or its provincial counterparts, prior to commencement of operations.

Our subsidiary, FVT Supply Chain, engages in food, beverage and related product purchases and sales via its online platform.

As a provider

of online data processing and transaction processing services, FVT Supply Chain is required to obtain a license issued by the relevant

telecommunications administrative authorities and has applied for an Electronic Data Interchange (EDI) certificate.

The online platform

run by FVT Supply Chain was registered and established on August 14, 2019 and put into operations in April 2021.

FVT Supply Chain obtained

the EDI License on September 30, 2021.

Prior to receiving the License, the company was not qualified to operate value-added telecommunication

services for several months.

Under the Telecommunication Regulation of the People’s Republic of China (2016 Revision), we could

be subject to fines and penalties and the income generated before receiving the EDI License could be confiscated.

Since our online platform

was in the test phase before we obtained the EDI License and income from the platform operations was very small, and we have not received

any notice of warning or penalty from the administration agency, we believe that such fines and penalties, if imposed, would not have

a material adverse effect on our operations and financial condition.

to the Measures for the Administration of Food Business Licenses, businesses engaged in food operations activities without a food business

license are subject to penalties imposed under the Food Safety Law of the People’s Republic of China.

The Food Safety Law provides,

among other things, that any person engages in food production and business activities without a food production and business license

shall be subject to confiscation of illegal income and tools, equipment, and other items used in illegal production and operation, and

be subject to fines and penalties as set forth in the applicable provisions.

Therefore, companies that carry out food related operations

before obtaining food business licenses are at risk of being subject to administrative penalties.

Our subsidiary, Xixingdao and some

of its subsidiaries, had engaged in certain food purchase and sale activities before obtaining their food business licenses.

assure you that the relevant administrative agencies will not impose fines and penalties for our prior sale should they decide to enforce

the above PRC license requirements for prior violations.

Should our subsidiaries be required to pay fines or penalties, our results of

operations and financial condition would be materially adversely affected.

addition, there is no assurance that we will be able to renew any existing permits, licenses and approvals when they expire or that we

will be able to obtain or renew future permits, licenses and approvals in a timely manner, or at all.

Further, there can be no assurance

that such permits, licenses or approvals will not be revoked for whatever reason by the relevant authorities in the future.

obtain or renew such permits, licenses and approvals as planned could materially and adversely affect our business, results of operations

and financial condition.

may be subject to penalties under relevant PRC laws and regulations due to failure to make full social security and housing fund contributions

for our employees.

PRC subsidiaries have not made full contribution to the social security and housing funds for some or all of their employees as required

by the relevant social security and housing fund regulations.

Pursuant to the Regulation on the Administration of Housing Accumulation

Funds, as amended in 2019, the relevant housing fund authority may order an enterprise to pay outstanding contributions within a prescribed

Pursuant to the PRC Social Insurance Law promulgated in 2010 and amended in 2018, the social security authority may order

an enterprise to pay the outstanding contributions within a prescribed time limit and may impose penalties if there is a failure to do

To the extent the relevant authorities determine we have not paid or underpaid, our PRC subsidiaries may be required to pay outstanding

contributions and penalties to the extent they did not make full contributions to the social security and housing funds.

addition, in July 2018, the General Office of the Central Committee of the Communist Party of China and the General Office of the State

Council jointly issued the Reform Plan of the Taxation and Collection Systems of National Taxes and Local Taxes, which states that, effective

January 1, 2019, basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, injury insurance

premiums and maternity insurance premiums shall be levied by the tax authorities.

Under the new system, tax collection is likely to be

stringently administrated and enforced.

of the date hereof, the aggregate amount of unpaid social security and housing fund contributions is approximately RMB 341,207 (approximately

$52,755) and the amount of potential penalties, if levied, is estimated to be RMB 52,049 (approximately $8,031).

Due to the fact that

the payment of social security and housing accumulation funds will reduce the net amounts of the employees’ wages, after consulting

with and receiving voluntary waivers from those employees, our PRC subsidiaries decided not to pay social security and housing accumulation

funds for those employees in full.

As of the date of this report, we have not had any complaints, investigations, lawsuits

and arbitration proceedings brought against us by our employees or PRC authorities.

In addition, according to the Enterprise Credit Report

issued by the government, our subsidiaries are in good standing and have not been warned or administratively penalized for failing to

pay social security and housing accumulation funds.

Our PRC subsidiaries intend to pay the full social security and housing accumulation

funds for employees according to the laws and regulations.

With respect to the previously unpaid social security and housing funds of

our PRC subsidiaries, our largest shareholder, Yumin Lin, has provided a personal guarantee that, if the subsidiaries incur any losses

due to our subsidiaries’ failure to pay full contributions, he would be jointly liable for the payment to compensate any losses

the Company may incur.

For the reasons stated above, we don’t believe that our subsidiaries’ business and operations would

be materially adversely affected by previous nonpayment of full social security and housing accumulation fund contributions.

Nevertheless,

there can be no assurance that our subsidiaries will not be required to pay all of the previously delinquent social insurance and housing

fund contribution amounts and associated administrative penalties or that any financial losses our subsidiaries may suffer will actually

be borne by Mr.

Lin through his personal guarantee.

to manage our growth could strain our operational and other resources, which could materially and adversely affect our business and prospects.

2018, our business has experienced significant growths through acquisitions and product diversification.

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channels and customers we serve.

Pursuing these strategies has resulted in, and will continue to result in substantial demands

on our capital and operating resources.

Pursuing these strategies has resulted in, and will continue to result in substantial demands on our

capital and operating resources.

In particular, the management of our growth will require, among other things:

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training and hiring qualified employees and professionals.

we are not able to manage our growth successfully, our business, financial condition and operating results would be materially

and adversely affected.

we are unable to maintain brand image and product quality, or if we encounter other product issues such as product recalls, our

business may suffer.

success depends on our ability to maintain brand reputation for our existing products and effectively build up brand image for

new products and brand extensions.

There can be no assurance, however, that additional expenditures on advertising and marketing

will have the desired impact on our products’

brand image and on consumer preferences.

Product quality issues or allegations

of product contamination, even when false or unfounded, could tarnish the image of the affected brands and may cause consumers

to choose other products.

In addition, because of changing government regulations or their implementation, we may be required

from time to time to recall products entirely or from specific markets.

Product recalls could affect our profitability and could

negatively affect brand image.

we are not able to manage our growth successfully, our business, financial condition and operating results would be materially and adversely

we are unable to maintain brand image and product quality, or if we encounter other product issues such as product recalls, our business

success depends on our ability to maintain brand reputation for our existing products and effectively build up brand image for new products

and brand extensions.

There can be no assurance, however, that additional expenditures on advertising and marketing will have the desired

impact on our products’ brand image and on consumer preferences.

Product quality issues or allegations of product contamination,

even when false or unfounded, could tarnish the image of the affected brands and may cause consumers to choose other products.

because of changing government regulations or their implementation, we may be required from time to time to recall products entirely

or from specific markets.

Product recalls could affect our profitability and could negatively affect brand image.

inability to attract and retain key personnel would directly affect our efficiency and results of operations.

success depends on our ability to attract and retain highly qualified employees in such areas as distribution, sales, marketing

success depends on our ability to attract and retain highly qualified employees in such areas as distribution, sales, marketing and finance.

We compete to hire new employees, and, in some cases, must train them and develop their skills and competencies.

Our operating results could be adversely affected by increased costs due to increased competition for employees, higher employee

turnover or increased employee benefit costs.

Any unplanned turnover, particularly involving our key personnel, could negatively

impact our operations, financial condition and employee morale.

Our operating results

could be adversely affected by increased costs due to increased competition for employees, higher employee turnover or increased employee

benefit costs.

Any unplanned turnover, particularly involving our key personnel, could negatively impact our operations, financial condition

and employee morale.

inability to protect our trademarks and trade secrets may prevent us from successfully marketing our products and competing effectively.

to protect our intellectual property could harm our brand and our reputation, and adversely affect our ability to compete effectively.

Further, enforcing or defending our intellectual property rights, including our trademarks, copyrights, licenses and trade secrets,

could result in the expenditure of significant financial and managerial resources.

We regard our intellectual property, particularly

our trademarks and trade secrets to be of considerable value and importance to our business and our success.

We rely on a combination

of trademark and trade secrecy laws, confidentiality procedures and contractual provisions to protect our intellectual property

In addition, there can be no assurance that other parties will not assert infringement claims against us, and we may have

to pursue litigation against other parties to assert our rights.

Further, enforcing or defending our intellectual property rights, including our trademarks, copyrights, licenses and trade secrets, could

result in the expenditure of significant financial and managerial resources.

We regard our intellectual property, particularly our trademarks

and trade secrets to be of considerable value and importance to our business and our success.

We rely on a combination of trademark and

trade secrecy laws, confidentiality procedures and contractual provisions to protect our intellectual property rights.

In addition, there

can be no assurance that other parties will not assert infringement claims against us, and we may have to pursue litigation against other

parties to assert our rights.

Any such claim or litigation could be costly.

In addition, any

event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse

effect on our ability to market or sell our brands or profitably exploit our products.

we are unable to maintain effective disclosure controls and procedures and internal control over financial reporting, our stock

price and investor confidence in us could be materially and adversely affected.

In addition, any event that would jeopardize our proprietary

rights or any claims of infringement by third parties could have a material adverse effect on our ability to market or sell our brands

or profitably exploit our products.

we are unable to maintain effective disclosure controls and procedures and internal control over financial reporting, our stock price

and investor confidence in us could be materially and adversely affected.

are required to maintain both disclosure controls and procedures and internal control over financial reporting that are effective.

Because of its inherent limitations, internal control over financial reporting, however well designed and operated, can only provide

reasonable, and not absolute, assurance that the controls will prevent or detect misstatements.

Because of these and other inherent

limitations of control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals

under all potential conditions.

The failure of controls by design deficiencies or absence of adequate controls could result in

a material adverse effect on our business and financial results.

we are not aware of any data breach in the past, cyber-attacks, computer viruses or any future failure to adequately maintain

security and prevent unauthorized access to electronic and other confidential information could result in a data breach which

could materially adversely affect our reputation, financial condition and operating results.

protection of our customers’, business partners’, our Company’s and employees’

data is critically important

Our customers, business partners, and employees expect we will adequately safeguard and protect their sensitive personal

and business information.

of its inherent limitations, internal control over financial reporting, however well designed and operated, can only provide reasonable,

and not absolute, assurance that the controls will prevent or detect misstatements.

Because of these and other inherent limitations of

control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals under all potential conditions.

The failure of controls by design deficiencies or absence of adequate controls could result in a material adverse effect on our business

and financial results.

we are not aware of any data breach in the past, cyber-attacks, computer viruses or any future failure to adequately maintain security

and prevent unauthorized access to electronic and other confidential information could result in a data breach which could materially

adversely affect our reputation, financial condition and operating results.

protection of our customers’, business partners’, our Company’s and employees’ data is critically important to

Our customers, business partners, and employees expect we will adequately safeguard and protect their sensitive personal and business

We have become increasingly dependent upon automated information technology processes.

Improper activities

by third parties, exploitation of encryption technology, data-hacking tools and discoveries and other events or developments may

result in a future compromise or breach of our networks, payment terminals or other settlement systems.

In particular, the techniques

used by criminals to obtain unauthorized access to sensitive data change frequently and often are not recognized until launched

against a target;

accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures.

can be no assurance that we will not suffer a criminal cyber-attack in the future, that unauthorized parties will not gain access

to personal or business information or sensitive data, or that any such incident will be discovered in a timely manner.

also face indirect technology, cybersecurity and operational risks relating to the third parties whom we work with to facilitate

our business activities, including, among others, third-party online service providers who manage accounts for our customers and

external cloud service provider.

As a result of increasing consolidation and interdependence of technology systems, a technology

failure, cyber-attack or other information or security breach that significantly compromises the systems of one entity could have

a material impact on its counterparties.

Any cyber-attack, computer viruses, physical or electronic break-ins or similar disruptions

of such third-party service providers could adversely affect our operations and could result in misappropriation of funds of our

Improper activities by third parties,

exploitation of encryption technology, data-hacking tools and discoveries and other events or developments may result in a future compromise

or breach of our networks, payment terminals or other settlement systems.

In particular, the techniques used by criminals to obtain unauthorized

access to sensitive data change frequently and often are not recognized until launched against a target;

accordingly, we may be unable

to anticipate these techniques or implement adequate preventative measures.

There can be no assurance that we will not suffer a criminal

cyber-attack in the future, that unauthorized parties will not gain access to personal or business information or sensitive data, or

that any such incident will be discovered in a timely manner.

also face indirect technology, cybersecurity and operational risks relating to the third parties whom we work with to facilitate our

business activities, including, among others, third-party online service providers who manage accounts for our customers and external

cloud service provider.

As a result of increasing consolidation and interdependence of technology systems, a technology failure, cyber-attack

or other information or security breach that significantly compromises the systems of one entity could have a material impact on its

counterparties.

Any cyber-attack, computer viruses, physical or electronic break-ins or similar disruptions of such third-party service

providers could adversely affect our operations and could result in misappropriation of funds of our customers.

breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information,

time-consuming and expensive litigation and negative publicity.

If security measures are breached because of third-party action,

employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships

with customers and cooperation partners could be severely damaged, we could incur significant liability and our business and operations

could be adversely affected.

If security measures are breached because of third-party action, employee

error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships with

customers and cooperation partners could be severely damaged, we could incur significant liability and our business and operations could

be adversely affected.

are substantially dependent upon our senior management and key information technology and development personnel.

are highly dependent on our senior management to manage our business and operations and our marketing and distribution personnel

for the sale of products.

In particular, we rely substantially on members of our senior management, including Chief Executive

Officer, Yumin Lin, and Chief Financial Officer, Kaihong Lin, and executives at our key subsidiaries to manage our operations.

we provide the legally required personal insurance for the benefit of our employees, we do not maintain key man life insurance

on any of our senior management or key personnel.

The loss of any one of them would have a material adverse effect on our business

and operations.

Competition for senior management and our other key personnel is intense and the pool of suitable candidates is

We may be unable to locate a suitable replacement for any senior management or key personnel that we lose.

if any member of our senior management or key personnel joins a competitor or forms a competing company, they may compete with

us for customers, business partners and other key professionals and staff members of our Company.

Although each of our senior

management and key personnel has signed a confidentiality agreement in connection with their employment with us, we cannot assure

you that we will be able to successfully enforce these provisions in the event of a dispute between us and any member of our senior

management or key personnel.

compete for qualified personnel with other technology companies and research institutions.

Intense competition for these personnel

could cause our compensation costs to increase, which could have a material adverse effect on our results of operations.

success and ability to grow our business will depend in part on the continued service of these individuals and our ability to

identify, hire and retain additional qualified personnel.

If we are unable to attract and retain qualified employees, we may be

unable to meet our business and financial goals.

are dependent upon the services of experienced personnel who possess skills that are valuable in our industry, and we may have

to actively compete for their services.

are highly dependent on our senior management to manage our business and operations and our marketing and distribution personnel for

the sale of products.

In particular, we rely substantially on members of our senior management, including Chief Executive Officer, Yumin

Lin, and Chief Financial Officer, Kaihong Lin, and executives at our key subsidiaries to manage our operations.

we provide the legally required personal insurance for the benefit of our employees, we do not maintain key man life insurance on any

of our senior management or key personnel.

The loss of any one of them would have a material adverse effect on our business and operations.

Competition for senior management and our other key personnel is intense and the pool of suitable candidates is limited.

We may be unable

to locate a suitable replacement for any senior management or key personnel that we lose.

In addition, if any member of our senior management

or key personnel joins a competitor or forms a competing company, they may compete with us for customers, business partners and other

key professionals and staff members of our Company.

Although each of our senior management and key personnel has signed a confidentiality

agreement in connection with their employment with us, we cannot assure you that we will be able to successfully enforce these provisions

in the event of a dispute between us and any member of our senior management or key personnel.

compete for qualified personnel with other food supply chain companies.

Intense competition for these personnel could cause our compensation

costs to increase, which could have a material adverse effect on our results of operations.

Our future success and ability to grow our

business will depend in part on the continued service of these individuals and our ability to identify, hire and retain additional qualified

If we are unable to attract and retain qualified employees, we may be unable to meet our business and financial goals.

are dependent upon the services of experienced personnel who possess skills that are valuable in our industry, and we may have to actively

compete for their services.

are heavily dependent upon our ability to attract, retain and motivate skilled personnel to serve our customers.

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Some of our competitors may be able to pay our employees more than we are able to pay to retain them.

Our ability to profitably operate is substantially dependent upon our ability to locate, hire, train and retain our personnel.

There can be no assurance that we will be able to retain our current personnel, or that we will be able to attract and assimilate

other personnel in the future.

If we are unable to effectively obtain and maintain skilled personnel, the development and quality

of our services could be materially impaired.

See “Our Employees.”

ability to profitably operate is substantially dependent upon our ability to locate, hire, train and retain our personnel.

be no assurance that we will be able to retain our current personnel, or that we will be able to attract and assimilate other personnel

in the future.

If we are unable to effectively obtain and maintain skilled personnel, the development and quality of our services could

be materially impaired.

we fail to protect our intellectual property rights, it could harm our business and competitive position.

rely on a combination of trademark and trade secret laws and non-disclosure agreements and other methods to protect our intellectual

property rights.

We own a number of trademarks in China, all of which have been properly registered with regulatory agencies such

as the State Intellectual Property Office and Trademark Office.

This intellectual property has allowed our products to earn market

share in the financial services and supply chain solutions industries.

rely on a combination of trademark, trade secret laws, non-disclosure agreements and other methods to protect our intellectual property

We own a number of trademarks, copyrights and Internet domain names in China, most of which have been properly registered with

regulatory agencies such as the State Intellectual Property Office and Trademark Office.

Some of the trademarks that are being used by

our subsidiary, Xixingdao, are owned by Mr.

Yuwen Li, one of our shareholders, who has authorized us to use these trademarks.

our agreement with Mr.

Li, the ownership to those trademarks is in the process of being transferred to us from Mr.

Li at no cost to us,

and we expect to own those trademarks upon completion of the registration process at the regulatory agencies.

Our intellectual property

has allowed our products to earn market share in the food supply chain industry.

also rely on trade secret rights to protect our business through non-disclosure agreements with certain employees.

If any of our

employees breach their non-disclosure obligations, we may not have adequate remedies in China, and our trade secrets may become

known to our competitors.

In accordance with Chinese intellectual property laws and regulations, we will have to renew our trademarks

once the terms expire.

If any of our employees

breach their non-disclosure obligations, we may not have adequate remedies in China, and our trade secrets may become known to our competitors.

In accordance with Chinese intellectual property laws and regulations, we will have to renew our trademarks once the terms expire.

Implementation

of PRC intellectual property-related laws has historically been lacking, primarily because of ambiguities in the PRC laws and

enforcement difficulties.

Accordingly, intellectual property rights and confidentiality protections in China may not be as effective

as in the United States or other western countries.

Furthermore, policing unauthorized use of proprietary technology is difficult

and expensive, and we may need to resort to litigation to enforce or defend our intellectual property rights, or to determine

the enforceability, scope and validity of our proprietary rights or those of others.

Such litigation and an adverse determination

in any such litigation, if any, could result in substantial costs and diversion of resources and management attention, which could

harm our business and competitive position.

may be exposed to intellectual property infringement and other claims by third parties which, if successful, could disrupt our

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

of PRC intellectual property-related laws has historically been lacking, primarily because of ambiguities in the PRC laws and enforcement

difficulties.

Accordingly, intellectual property rights and confidentiality protections in China may not be as effective as in the United

States or other western countries.

Furthermore, policing unauthorized use of proprietary technology is difficult and expensive, and we

may need to resort to litigation to enforce or defend our intellectual property rights, or to determine the enforceability, scope and

validity of our proprietary rights or those of others.

Such litigation and an adverse determination in any such litigation, if any, could

result in substantial costs and diversion of resources and management attention, which could harm our business and competitive position.

may be exposed to intellectual property infringement and other claims by third parties which, if successful, could disrupt our business

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

success depends, in large part, on our ability to use and develop our intellectual property without infringing third party intellectual

property rights.

If we sell our branded products internationally, and as litigation becomes more common in China, we face a higher

risk of being the subject of claims for intellectual property infringement, invalidity or indemnification relating to other parties’

If we sell our branded products internationally, and as litigation becomes more common in China, we face a higher risk

of being the subject of claims for intellectual property infringement, invalidity or indemnification relating to other parties’

proprietary rights.

Our current or potential competitors, many of which have substantial resources and have made substantial investments

in competing technologies, may have or may obtain patents that will prevent, limit or interfere with our ability to make, use

or sell our branded products in either China or other countries, including the United States and other countries in Asia.

the defense of intellectual property suits, including patent infringement suits, and related legal and administrative proceedings

can be both costly and time consuming and may significantly divert the efforts and resources of our technical and management personnel.

Furthermore, an adverse determination in any such litigation or proceedings to which we may become a party could cause us to:

in competing technologies, may have or may obtain patents that will prevent, limit or interfere with our ability to make, use or sell

our branded products in either China or other countries, including the United States and other countries in Asia.

In addition, the defense

of intellectual property suits, including patent infringement suits, and related legal and administrative proceedings can be both costly

and time consuming and may significantly divert the efforts and resources of our technical and management personnel.

Furthermore, an

adverse determination in any such litigation or proceedings to which we may become a party could cause us to:

damage awards;

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restricted by injunctions.

of which could effectively prevent us from pursuing some or all of our business and result in our customers or potential customers

deferring or limiting their purchase or use of our branded products, which could have a material adverse effect on our financial

condition and results of operations.

of which could effectively prevent us from pursuing some or all of our business and result in our customers or potential customers deferring

or limiting their purchase or use of our branded products, which could have a material adverse effect on our financial condition and

results of operations.

may not maintain sufficient insurance coverage for the risks associated with our business operations.

As a result, we may incur

uninsured losses.

for property, accident and automobile insurance, we do not have other insurance of such as business liability or disruption insurance

coverage for our operations in the PRC.

As a result, we may incur uninsured liabilities and losses as a result of the conduct

of our business.

There can be no guarantee that we will be able to obtain additional insurance coverage in the future, and even

if we are able to obtain additional coverage, we may not carry sufficient insurance coverage to satisfy potential claims.

uninsured losses occur, it could adversely affect our business, results of operations and financial condition.

the products we sell are not safe or otherwise fail to meet our customers’

expectations, we could lose customers, incur

liability for any injuries suffered by customers using or consuming our products or otherwise experience a material impact

to our brand, reputation and financial performance.

We are also subject to reputational and other risks related to third-party

sales on our online platforms.

customers count on us to provide them with safe food products.

Concerns regarding the safety of food that we source from our suppliers

or that we prepare and then sell could cause customers to avoid purchasing certain food products from us, or to seek alternative

sources of supply for all of their food needs, even if the basis for the concern is outside of our control.

Any lost confidence

on the part of our customers would be difficult and costly to reestablish and such products also expose us to product liability

or food safety claims.

As such, any issue regarding the safety of any food items we sell, regardless of the cause, could adversely

affect our brand, reputation and financial performance.

In addition, third-parties sell goods on some of our online platforms.

Whether laws related to such sales apply to us is currently unsettled and any unfavorable changes could expose us to loss

of sales, reduction in transactions and deterioration of our competitive position.

In addition, we may face reputational, financial

and other risks, including liability, for third-party sales of goods that are controversial, counterfeit or otherwise fail to

comply with applicable law.

Although we impose contractual terms on sellers that are intended to prohibit sales of certain type

of products, we may not be able to detect, enforce, or collect sufficient damages for breaches of such terms.

events could have a material adverse impact on our business and results of operations and impede the execution of our eCommerce

growth strategy.

to successfully execute our online and offline-channel strategy and the cost of our investments in our online platform

and technology may materially adversely affect our gross profit, net sales and financial performance

food trade business continues to rapidly evolve and consumers increasingly embrace digital shopping.

As a result, the portion

of total consumer expenditures with retailers and wholesale stores occurring through digital platforms is increasing and the pace

of this increase could continue to accelerate .

strategy, which includes investments in our online platform, technology, acquisitions and store remodels, may not adequately

or effectively allow us to continue to grow our online platform business, increase comparable store sales, maintain or grow our

overall market position or otherwise offset the impact on the growth of our business of a moderated pace of new store openings.

to successfully execute this strategy may adversely affect our market position, gross profit, net sales and financial performance

which could also result in impairment charges to intangible assets or other long-lived assets.

In addition, a greater concentration

of online platform sales, including increasing online food sales, could result in a reduction in the amount of traffic in our

stores, which would, in turn, reduce the opportunities for cross-store sales of food merchandise that such traffic creates and

could reduce our sales within our stores and materially adversely affect our financial performance .

Related to Doing Business in the PRC

face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able

to conduct in the PRC and the profitability of such business.

PRC’s economy is in a transition from a planned economy to a market-oriented economy subject to five-year and annual plans

adopted by the central government that set national economic development goals.

Policies of the PRC government can have significant

effects on the economic conditions of the PRC.

The PRC government has confirmed that economic development will follow the model

of a market economy.

Under this direction, we believe that the PRC will continue to strengthen its economic and trading relationships

with foreign countries and business development in the PRC will follow market forces.

While we believe that this trend will continue,

we cannot assure you that this will be the case.

A change in policies by the PRC government could adversely affect our interests

by, among other factors:

changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency

conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises.

Although the PRC government

has been pursuing economic reform policies for more than two decades, we cannot assure you that the government will continue to

pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership,

social or political disruption, or other circumstances affecting the PRC’s political, economic and social environment.

As a result, we may incur uninsured

do not have any insurance of such as business liability or disruption insurance coverage for our operations in the PRC.

we may incur uninsured liabilities and losses as a result of the conduct of our business.

There can be no guarantee that we will be able

to obtain additional insurance coverage in the future, and even if we are able to obtain additional coverage, we may not carry sufficient

insurance coverage to satisfy potential claims.

Should uninsured losses occur, it could adversely affect our business, results of operations

and financial condition.

in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors

or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in

any such actions.

of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or officer,

except in limited circumstances, pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by the Nevada Revised

Specifically, Section 78.138 of the Nevada Revised Statutes provides that a director or officer is not individually liable

to the company or its shareholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a

director or officer unless it is proven that (1) the director’s or officer’s act or failure to act constituted a breach of

his or her fiduciary duties as a director or officer and (2) his or her breach of those duties involved intentional misconduct, fraud

or a knowing violation of law.

This provision is intended to afford directors and officers protection against and to limit their potential

liability for monetary damages resulting from suits alleging a breach of the duty of care by a director or officer.

Accordingly, you

may be unable to prevail in a legal action against our directors or officers even if they have breached their fiduciary duty of care.

In addition, we are allowed to indemnify our directors and officers from and against any and all costs, charges and expenses resulting

from their acting in such capacities with us.

If you were able to enforce an action against our directors or officers, in all likelihood,

we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be

required to pay.

Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business,

financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock.

Related to Doing Business in China

political climate and economic conditions, as well as changes in government policies, laws and regulations which may be quick with little

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

business, financial condition, results of operations and prospects are subject, to a significant extent, to economic, political and legal

developments in China.

For example, as a result of recent proposed changes in the cybersecurity regulations in China that would require

certain Chinese technology firms to undergo a cybersecurity review before being allowed to list on foreign exchanges, this may have the

effect of further narrowing the list of potential businesses in China’s consumer, technology and mobility sectors that we intend

to focus on for our business combination or the ability of the combined entity to list in the United States.

economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level

of development, growth rate, control of foreign exchange and allocation of resources.

While the PRC economy has experienced significant

growth in the past two to three decades, growth has been uneven, both geographically and among various sectors of the economy.

for target services and products depends, in large part, on economic conditions in China.

Any slowdown in China’s economic growth

may cause our potential customers to delay or cancel their plans to purchase our services and products, which in turn could reduce our

net revenues.

China’s economy has been transitioning from a planned economy to a more market-oriented economy since the late 1970s, the PRC government

continues to play a significant role in regulating industry development by imposing industrial policies.

The PRC government also exercises

significant control over China’s economic growth through allocating resources, controlling the incurrence and payment of foreign

currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

Changes in any of these policies, laws and regulations may be quick with little advance notice and could adversely affect the economy

in China and could have a material adverse effect on our business and the value of our common stock.

PRC government has implemented various measures to encourage foreign investment and sustainable economic growth and to guide the allocation

of financial and other resources.

However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce

new measures that will have a negative effect on us, or more specifically, we cannot assure you that the PRC government will not initiate

possible governmental actions or scrutiny to us, which could substantially affect our operation and the value of our common stock may

depreciate quickly.

China’s social and political conditions may change and become unstable.

Any sudden changes to China’s

political system or the occurrence of widespread social unrest could have a material adverse effect on our business and results of operations.

Uncertainties

with respect to the PRC legal system could adversely affect us.

conduct all of our business through our subsidiaries in China.

with respect to the PRC legal system could adversely affect us, including risks and uncertainties regarding the enforcement of laws

and that rules and regulations in China can change quickly with little advance notice.

conduct substantially all of our business through our subsidiaries in China.

Our operations in China are governed by PRC laws and regulations.

Our PRC subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular,

laws and regulations applicable to wholly foreign-owned enterprises.

Our PRC subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws

and regulations applicable to wholly foreign-owned enterprises.

The PRC legal system is based on statutes.

Prior court decisions

may be cited for reference but have limited precedential value.

1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments

Prior court decisions may

be cited for reference but have limited precedential value.

1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in

However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently

cover all aspects of economic activities in China.

In particular, because these laws and regulations are relatively new, and because

of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and

regulations involve uncertainties.

In addition, the PRC legal system is based in part on government policies and internal rules

(some of which are not published on a timely basis or at all) that may have a retroactive effect.

In particular, the interpretation and enforcement of these laws and regulations

involve uncertainties.

Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory

provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of

legal protection we enjoy.

These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce

our contractual rights or tort claims.

In addition, these regulatory uncertainties may be exploited through unmerited or frivolous legal

actions or threats in attempts to extract payments or benefits from us.

addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely

basis or at all) that may change quickly with little advance notice or have a retroactive effect.

As a result, we may not be aware

of our violation of these policies and rules until sometime after the violation.

In addition, any litigation in China may be protracted

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

of new laws or changes to existing laws by the PRC government may adversely affect our business.

PRC legal system is a codified legal system made up of written laws, regulations, circulars, administrative directives and internal

Unlike common law jurisdictions like the U.S., decided cases (which may be taken as reference) do not form part of

the legal structure of the PRC and thus have no binding effect on subsequent cases with similar issues and fact patterns.

in line with its transformation from a centrally planned economy to a relatively free market economy, the PRC government is still

in the process of developing a comprehensive set of laws and regulations.

As the legal system in the PRC is still evolving, laws

and regulations or the interpretation of the same may be subject to further changes.

For example, the PRC government may impose

restrictions on the amount of service fees that may be payable by municipal governments to wastewater and sludge treatment service

Also, the PRC central and municipal governments may impose more stringent environmental regulations which would affect

our ability to comply with, or our costs to comply with, such regulations.

Such changes, if implemented, may adversely affect

our business operations and may reduce our profitability

may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the foreign corrupt

practices act could have a material adverse effect on our business.

are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments

to foreign governments and their officials and political parties by U.S.

persons and issuers as defined by the statute for the

purpose of obtaining or retaining business.

We will have operations, agreements with third parties and make sales in the PRC,

which may experience corruption.

Our proposed activities in the PRC create the risk of unauthorized payments or offers of payments

by one of the employees, consultants, or sales agents of our Company, because these parties are not always subject to our control.

It is our policy to implement safeguards to discourage these practices by our employees.

Also, our existing safeguards

and any future improvements may prove to be less than effective, and the employees, consultants, or sales agents of our Company

may engage in conduct for which we might be held responsible.

Violations of the FCPA 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.

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

Party of China Central Committee and the General Office of the State Council jointly issued a document to enhance its enforcement against

illegal activities in the securities markets and promote the high-quality development of capital markets, which, among other things,

requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance

supervision over Chinese companies listed overseas, and to establish and improve the system of extraterritorial application of the Chinese

securities laws.

Since this document is relatively new, uncertainties exist in relation to how soon legislative or administrative regulation-making

bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or

promulgated, if any, and the potential impact such modified or new laws and regulations will have on companies like us.

It is especially

difficult for us to accurately predict the potential impact on us of new legal requirements in mainland China because the Chinese legal

system is a civil law system based on written statutes.

Unlike the common law system, prior court decisions under the civil law system

may be cited for reference but have limited precedential value.

uncertainties, including any inability to enforce

our contracts, together with any development or interpretation of PRC law that is adverse to us, could materially and adversely affect

our business and operations.

Furthermore, intellectual property rights and confidentiality protections in China may not be as effective

as in the United States or other more developed countries.

We cannot predict the effect of future developments in the PRC legal system,

including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local

regulations by national laws.

These uncertainties could limit the legal protections available to us and our investors.

Chinese government may intervene or influence the operation of our PRC subsidiaries and exercise significant oversight and discretion

over the conduct of their business and may intervene in or influence their operations at any time, or may exert more control over securities

offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in operations

of our PRC subsidiaries and/or the value of our common stock.

Chinese 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 securities regulation, data protection, cybersecurity and mergers and acquisitions and other matters.

The central or local

governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require

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

actions in the future could significantly affect economic conditions in China or particular regions thereof, and could require us to

materially change our operating activities or divest ourselves of any interests we hold in Chinese assets.

Our business may be subject

to various government and regulatory interference in the areas in which we operate.

We may incur increased costs necessary to comply

with existing and newly adopted laws and regulations or penalties for any failure to comply.

Our operations could be adversely affected,

directly or indirectly, by existing or future laws and regulations relating to our business or industry.

recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted

overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability

to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.

the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued

the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which was made available to

the public on July 6, 2021.

The Opinions emphasized the need to strengthen the administration over illegal securities activities, and

the need to strengthen the supervision over overseas listings by Chinese companies.

Effective measures, such as promoting the construction

of relevant regulatory systems, will be taken to deal with the risks and incidents of China-based overseas listed companies.

date of this report, we have not received any inquiry, notice, warning, or sanctions from PRC government authorities in connection

with the Opinions.

June 10, 2021, the Standing Committee of the National People’s Congress of China, or the SCNPC, promulgated the Data Security Law,

which took effect in September 2021.

The PRC Data Security Law imposes data security and privacy obligations on entities and individuals

carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data

in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights

and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used.

Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes

export restrictions on certain data an information.

The law provides for privacy obligations of entities and individuals carrying out

data activities, prohibits entities and individuals in China from providing any foreign judicial or law enforcement authority with any

data stored in China without approval from the competent PRC authority, and sets forth the legal liabilities of entities and individuals

found to be in violation of their data protection obligations, including rectification order, warning, fines of up to RMB10 million,

suspension of relevant business, and revocation of business permits or licenses.

early July 2021, regulatory authorities in China launched cybersecurity investigations with regard to several China-based companies that

are listed in the United States.

The Chinese cybersecurity regulator announced on July 2 that it had begun an investigation of Didi Global

DIDI) and two days later ordered that the company’s app be removed from smartphone app stores.

On July 5, 2021, the

Chinese cybersecurity regulator launched the same investigation on two other Internet platforms, China’s Full Truck Alliance of

Full Truck Alliance Co.

YMM) and Boss of KANZHUN LIMITED (Nasdaq:

On July 24, 2021, the General Office of the Communist

Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden

of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which foreign investment

in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from that sector.

July 10, 2021, the CAC released the Cybersecurity Review Measures (Revised Draft for Solicitation of Comments), or the Revised Cybersecurity

Measures, pursuant to which operator holding more than one million users/users’ (which is to be further specified) individual information

shall be subject to cybersecurity review before listing abroad.

The cybersecurity review will evaluate, among others, the risk of critical

information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously

used by foreign governments after going public overseas.

The procurement of network products and services, data processing activities

and overseas listing should also be subject to cybersecurity review if they concern or potentially pose risks to national security.

to the effective Cybersecurity Review Measures, online platform/website operators of certain industries may be identified as critical

information infrastructure operators by the CAC, once they meet standard as stated in the National Cybersecurity Inspection Operation

Guide, and such operators may be subject to cybersecurity review.

The scope of business operations and financing activities that are

subject to the Revised Cybersecurity Measures and the implementation thereof is not yet clear.

As of the date of this report,

we have not been informed by any PRC governmental authority of any requirement that we file for approval in connection with an offering

of our common stock.

August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure,

or the Regulations, which took effect on September 1, 2021.

The Regulations supplement and specify the provisions on the security of

critical information infrastructure as stated in the Cybersecurity Review Measures.

The Regulations provide, among others, that protection

department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification

of certain critical information infrastructure.

August 20, 2021, the SCNPC adopted the Personal Information Security Law, which took effect on November 1, 2021.

The Personal Information

Protection Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information,

the rights of individuals in personal information processing activities, the obligations of personal information processors, and the

legal responsibilities for illegal collection, processing, and use of personal information.

As the first systematic and comprehensive

law specifically for the protection of personal information in the PRC, the Personal Information Protection Law provides, among others,

that (i) an individual’s consent shall be obtained to use sensitive personal information, such as biometric characteristics and

individual location tracking, (ii) personal information operators using sensitive personal information shall notify individuals of the

necessity of such use and impact on the individual’s rights, and (iii) where personal information operators reject an individual’s

request to exercise his or her rights, the individual may file a lawsuit with a People’s Court.

December 28, 2021, the CAC, NDRC, and other regulatory agencies jointly issued the final version of the Revised Cybersecurity

Review Measures, or the Measures, which took effect and replace the previously issued Revised Measures for Cybersecurity

Review on February 15, 2022.

Under the Revised Review Measures, an “online platform operator” in possession of personal data

of more than one million users must apply for a cybersecurity review if it intends to list its securities on a foreign stock exchange.

The operators of critical information infrastructure purchasing network products and services, and the online platform operators (together

with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that

affect or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than

one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to

be listed in a foreign country.

With regard to the current effective data security management regulations, we don’t

believe that we are required to conduct data security review for listing overseas.

However, according to the Regulations on Network Data

Security Management (Draft for Comment), as an overseas listed company, we will be required to conduct an annual data security review

and to comply with the relevant reporting obligations.

We have been closely monitoring the development in the regulatory landscape in

China, particularly regarding the requirement of approvals, including on a retrospective basis, from the CSRC, the CAC or other PRC authorities

with respect to this offering, as well as regarding any annual data security review or other procedures that may be imposed on us.

any approval, review or other procedure is in fact required, we cannot assure you that we will be able to obtain such approval or complete

such review or other procedure timely or at all.

For any approval that we may be able to obtain, it could nevertheless be revoked and

the terms of its issuance may impose restrictions on our operations and offerings relating to our securities.

The regulatory requirements

with respect to cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, and significant

changes, resulting in uncertainties about the scope of our responsibilities in that regard.

Failure to comply with the cybersecurity

and data privacy requirements in a timely manner, or at all, may subject us to government enforcement actions and investigations, fines,

penalties, suspension or disruption of our operations, among other things.

that the above referenced laws, regulations and policies were recently promulgated or publicly released, their interpretation, application

and enforcement are subject to substantial uncertainties.

regulatory developments in China, including greater oversight and control by the CAC over data security, may subject us to additional

regulatory review and any actions by the Chinese government to exert more oversight and control over foreign investment in

China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors

and cause the value of such securities to significantly decline or be worthless.

statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas

and/or foreign investments in China based issuers.

PRC government recently initiated a series of regulatory actions and statements to regulate business operations in China with

little advance notice, among other things, including adopting new measures to extend the scope of cybersecurity reviews, cracking down

on illegal activities in the securities market, and expanding the efforts in anti-monopoly enforcement.

The PRC government is increasingly

focused on data security, recently launching cybersecurity review against a number of mobile apps operated by several U.S.-listed Chinese

companies and prohibiting these apps from registering new users during the review period.

We are subject to various risks and costs related

to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information

and other data.

Such covered data is wide ranging and relates to our investors, employees, contractors and other third parties.

PRC laws apply not only to third-party transactions, but also to transfers of information between FVTI Nevada, offshore subsidiaries,

our PRC subsidiaries, and other parties with which we have commercial relations.

PRC regulatory and enforcement regime with regard to privacy and data security is evolving.

The PRC Cybersecurity Law, which was promulgated

on November 7, 2016 and became effective on June 1, 2017, provides that personal information and important data collected and generated

by operators of critical information infrastructure in the course of their operations in the PRC should be stored in the PRC, and the

law imposes heightened regulation and additional security obligations on operators of critical information infrastructure.

November 14, 2021, the CAC published the Regulations of Internet Data Security Management (Draft for Comments), which further regulate

the internet data processing activities and emphasize the supervision and management of network data security, and further stipulate

the obligations of internet platform operators, such as to establish a system for disclosure of platform rules, privacy policies and

algorithmic strategies related to data.

Specifically, the draft regulations require data processors to, among others, (i) adopt immediate

remediation measures when finding that network products and services they use or provide have security defects and vulnerabilities, or

threaten national security or endanger public interest, and (ii) follow a series of detailed requirements with respect to processing

of personal information, management of important data and proposed overseas transfer of data.

In addition, the draft regulations require

data processors handling important data or the data processors to be listed overseas to complete an annual data security assessment and

file a data security assessment report to applicable regulators.

Such annual assessment, as required by the draft regulations, would

encompass areas including, but not limited to, the status of important data processing, data security risks identified and the measures

adopted, the effectiveness of data protection measures, the implementation of national data security laws and regulations, data security

incidents that occurred and their handling, and a security assessment with respect to sharing and provision of important data overseas.

As of the date of this report, the draft regulations have been released for public comment only and have not been formally

The final provisions and the timeline for its adoption are subject to changes and uncertainties.

currently operate an online trading platform, primarily engaged in sales of products to our customers in China, where our customers can

Our online platform collects

and transmits product, supplier and customer information and data.

Since our online trading platform has only been in operation for about

a year, we are in the process of studying the newly issued rules and regulations governing cybersecurity and data protection and

the industry best practice, as well as assessing the extent to which our information and data system is not in full compliance with the

various requirements under the newly proposed regulations.

Based on the preliminary assessment, our management has determined that we

are not in full compliance with those new proposed rules.

For example, we have not consistently informed users of the purpose, method

and scope of personal information and data collections and uses.

We also have not fully implemented the measures designed by us to provide

additional security to personal information obtained and stored by us through our online platform.

As of the date of this report,

the proposed rules have not been adopted and thus we are not subject to those requirements in the proposed rules.

are committed to taking the necessary actions to satisfy the effective personal information protection and internet data security regulatory

requirements.

We have designed a user information protection mechanism, which includes seven detailed personal information and data security

protection measures.

We have implemented some of those measures while are in the process of completing the execution of others.

to fully comply with the following requirements should the final rules are issued in the same form as proposed:

(a) enter into

user information collection, storage and use rules and privacy agreements with all users, (b) fully inform users of the purpose, method

and scope of personal information and data collection, (c) provide channels for inquiring stored personal information and correcting

inaccuracies in information and data, and (d) remediate for violations of personal information and data security protection policies

and guidelines, among other things.

December 28, 2021, the CAC, NDRC, and several other agencies jointly issued the Cybersecurity Review Measures, or the Measures,

which took effect on February 15, 2022 and replaced Revised Measures for Cybersecurity Review previously issued

in July 2021.

Under the Measures, an “online platform operator” in possession of personal data of more than one million

users must apply for a cybersecurity review if it intends to list its securities on a foreign stock exchange.

The operators of critical

information infrastructure purchasing network products and services, and the online platform operators (together with the operators of

critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national

security, shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal

information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.

Pursuant to the Measures, we don’t believe we will be subject to the cybersecurity review by the CAC, given that (i) we possess

personal information of a relatively small number of users (approximately 10,840 users) in our business operations as of the date

of this report, significantly less than the one million user threshold set for a data processing operator applying for listing

on a foreign exchange that is required to pass such cybersecurity review;

and (ii) data processed in our business does not have a bearing

on national security and thus shall not be classified as core or important data by the authorities.

We don’t believe that we are

an Operator within the meaning of the Measures, nor do we control more than one million users’ personal information, and as such,

we should not be required to apply for a cybersecurity review under the Measures.

in view of the fact that the Measures was released recently and there is a general lack of guidance and substantial uncertainties exist

with respect to their interpretation and implementation.

For example, there is still no clear definition of “online platform operator”.

Whether the data processing activities carried out by traditional enterprises (such as food, medicine, automobile and other production

enterprises) are subject to such review and the scope of the review remain to be further clarified by the regulatory authorities in the

subsequent implementation process.

the CAC released the draft of the Regulations on Network Data Security Management (Draft for Comment) in November 2021 for public consultation,

which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by

engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity

department before January 31 of the following year.

If the draft Regulations on Network Data Security Management are enacted in the current

form, we, as an overseas listed company, will be required to carry out an annual data security review and comply with the relevant reporting

regard to the current effective data security management

regulations, we don’t believe that we are required to conduct data security review for listing overseas.

However, according to

the Regulations on Network Data Security Management (Draft for Comment), as an overseas listed company, we will be required to conduct

an annual data security review and to comply with the relevant reporting obligations.

We have been closely monitoring the development

in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the

CSRC, the CAC or other PRC authorities with respect to securities offering, as well as regarding any annual data security review

or other procedures that may be imposed on us.

If any approval, review or other procedure is in fact required, we cannot assure you that

we will be able to obtain such approval or complete such review or other procedure timely or at all.

For any approval that we may be

able to obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and securities

Any actions by the Chinese government to exert more oversight and control over foreign investment in China-based

issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the

value of such securities to significantly decline or be worthless.

regulatory requirements with respect to cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations,

and significant changes, resulting in uncertainties about the scope of our responsibilities in that regard.

Failure to comply with the

cybersecurity and data privacy requirements in a timely manner, or at all, may subject us to government enforcement actions and investigations,

fines, penalties, suspension or disruption of our operations, among other things.

with the PRC Cybersecurity Law, the PRC National Security Law, the Data Security Law, the Personal Information Protection Law, the Cybersecurity

Review Measures, as well as additional laws and regulations that PRC regulatory bodies may enact in the future, may result in additional

expenses to us and subject us to negative publicity, which could harm our reputation among users and negatively affect the trading price

of our shares in the future.

There are also uncertainties with respect to how the PRC Cybersecurity Law, the PRC National Security Law

and the Data Security Law will be implemented and interpreted in practice.

PRC regulators, including the Ministry of Public Security,

the MIIT, the SAMR and the CAC, have been increasingly focused on regulation in the areas of data security and data protection, including

for mobile apps, and are enhancing the protection of privacy and data security by rule-making and enforcement actions at national and

local levels.

We expect that these areas will receive greater and continued attention and scrutiny from regulators and the public going

forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security and

If we are unable to manage these risks, we could become subject to penalties, including fines, suspension of business, prohibition

against new user registration (even for a short period of time) and revocation of required licenses, and our reputation and results of

operations could be materially and adversely affected.

If the Chinese

government determines that our corporate structure does not comply with Chinese regulations, or if Chinese regulations change or are

interpreted differently in the future, Chinese regulatory authorities could disallow our current operating structure, which would likely

result in a material change in our operations and/or cause the value of such securities to significantly decline or become worthless.

In July 2021, the Chinese government provided

new guidance on Chinese companies raising capital outside of mainland China, including through arrangements called variable interest

entities, or VIEs.

Currently, our corporate structure contains no variable interest entities and we are not in an industry that is subject

to foreign ownership limitations in mainland China.

However, there are uncertainties with respect to the Chinese legal system and there

may be changes in laws, regulations and policies, including how those laws, regulations and policies will be interpreted or implemented.

If in the future the Chinese government determines that our corporate structure does not comply with Chinese regulations, or if Chinese

regulations change or are interpreted differently, the value of our securities may decline or become worthless.

Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas

and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or

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

government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations as

the government deems appropriate to further regulatory, political and societal goals.

The Chinese government has recently published new

policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility

that it will in the future release regulations or policies regarding the food and beverage industry or the supply china industry that

could require us to seek permission from Chinese authorities to continue to operate our business, which may adversely affect our business,

financial condition and results of operations.

Furthermore, recent statements made by the Chinese government have indicated an intent

to increase the government’s oversight and control over offerings of companies with significant operations in mainland China that

are to be conducted in foreign markets, as well as foreign investment in China-based issuers like us.

Any future action by the Chinese

government expanding the categories of industries and companies whose foreign securities offerings are subject to government review could

significantly limit or completely hinder our ability to offer or continue to offer securities to investors or could disallow our current

operating structure, which would likely result in a material change in our operations and/or a material change in the value of our securities,

including causing the value of such securities to significantly decline or become worthless.

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

issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital

market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law enforcement

and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system

of extraterritorial application of the PRC securities laws.

Since this document is still relatively new, uncertainties still exist

in relation to how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations

or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new

laws and regulations will have on our future business combination with a company with major operation in China.

Chinese government continues to exert more oversight and control over Chinese technology firms.

On July 2, 2021, Chinese cybersecurity

regulator announced, that it had begun an investigation of Didi Global Inc.

DIDI) and two days later ordered that the company’s

application be removed from smartphone application stores.

On July 5, 2021, the Chinese cybersecurity regulator launched the same investigation

on two other Internet platforms, China’s Full Truck Alliance of Full Truck Alliance Co.

YMM) and Boss of KANZHUN LIMITED

December 24, 2021, the CSRC issued the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of

Securities by Domestic Enterprises (the “Draft Administrative Provisions”) and the Measures for the Overseas Issuance of

Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the “Draft Filing Measures”), collectively,

the Draft Overseas Listing Rules, which are currently published for public comments only.

According to the Draft Overseas Listing Rules,

among other things, all China-based companies applying for overseas securities issuance, listing and post-listing capital operations

shall be subject to statutory procedures, such as filing and information reporting requirement.

After making initial applications with

overseas stock markets for offerings or listings, all China-based companies shall file with the CSRC within three business days.

overseas offerings and listings may be prohibited for such China-based companies when any of the following applies:

(a) if the securities

offerings and listings are prohibited by applicable PRC laws and rules;

(b) if securities offerings and listings may constitute a threat

to, or endanger national security as reviewed and determined by PRC authorities;

equity interests, major assets, core technologies or other items;

(d) if a PRC company or its controlling shareholders or de facto controllers

have committed certain crimes, under investigation for suspicion of major violations in the prior three years;

(e) if any directors,

supervisors, or senior executives of applicants have been subject to administrative punishments for severe violations, or are under investigations

for crimes or major violations;

or (f) other circumstances as provided.

The Draft Administrative Provisions further provide that a fine

between RMB 1 million and RMB 10 million may be imposed if a company fails to fulfill the filing requirements with the CSRC or conducts

an overseas offering or listing in violation of the Draft Overseas Listing Rules.

In the case of severe violations, an order to suspend

relevant businesses or halt operations for rectification may be issued, and relevant business permits or operational license revoked.

Overseas issuance and listings subject to the Draft Overseas Listing Rules include direct and indirect issuance and listings.

that our future securities offerings and proposed listing of our shares on Nasdaq Capital Market would be deemed an Indirect

Overseas Issuance and Listing under the Draft Overseas Listing Rules and will be required to complete the filing procedures and submit

the relevant information to CSRC after the Draft Overseas Listing Rules become effective.

As of the date of this report, such

rules have not become effective and we are not required to complete the filing procedures if we complete this offering and begin the

trading of our common stock on the Nasdaq before the rules take effect.

In addition, after the rules take effect, we would only need

to submit the filing materials and no CSRC approval would be required under the rules.

Because we are relying on an opinion of counsel,

there is uncertainty inherent in relying on an opinion of counsel in connection with whether we are required to obtain permissions from

a governmental agency that is required to approve of our operations and/or listings.

In the event that an government approval

is required, we cannot assure you that we will be able to receive clearance in a timely manner, or at all.

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 common

stock, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial

condition and results of operations and cause our shares to significantly decline in value or become worthless.

Securities Regulatory Commission and other Chinese government agencies may exert more oversight and control over offerings that are conducted

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

Additional compliance procedures may be required in connection with

the offering of our securities and our business operations, and, if required, we cannot predict whether we will be able

to obtain such approval.

As a result, we face uncertainty about future actions by the PRC government that could significantly affect

our ability to offer or continue to offer securities to investors and/or conduct our operations and cause the value of our shares

to significantly decline or be worthless.

in our securities may be prohibited

under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completed

our auditors for three consecutive years beginning in 2021, or for two consecutive years if the Accelerating Holding Foreign Companies

Accountable Act or the America COMPETES Act becomes law .

recent years, U.S.

regulatory authorities have continued to express their concerns about challenges in their oversight of financial statement

audits of U.S.-listed companies with significant operations in China.

As part of a continued regulatory focus in the United States on

access to audit and other information, the Holding

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

The HFCAA includes requirements for the SEC to

identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a

restriction imposed by a non-U.S.

authority in the auditor’s local jurisdiction.

The HFCAA also requires that, to the extent that

the PCAOB has been unable to inspect an issuer’s auditor for three consecutive years since 2021, the SEC shall prohibit its securities

registered in the United States from being traded on any national securities exchange or over-the-counter markets in the United States.

March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements

of the HFCAA.

The interim final rule applies to registrants that the SEC identifies as having filed an annual report with an audit

report issued by a registered public accounting firm that is located in a foreign jurisdiction that the PCAOB is unable to inspect or

investigate completely because of a position taken by an authority in that jurisdiction.

Consistent with the HFCAA, the interim final

rule requires the submission of documentation to the SEC establishing that such a registrant is not owned or controlled by a government

entity in that foreign jurisdiction and also requires disclosure in a foreign issuer’s annual report regarding the audit arrangements

of, and government influence on, such registrants.

On May 13, 2021, the PCAOB issued proposed PCAOB Rule 6100, Board Determinations Under

the Holding Foreign Companies Accountable Act for public comment.

The proposed rule provides a framework for making determinations as

to whether PCAOB is unable to inspect an audit firm in a foreign jurisdiction, including the timing, factors, bases, publication and

revocation or modification of such determinations, and such determinations will be made on a jurisdiction-wide basis in a consistent

manner applicable to all firms headquartered in the jurisdiction.

In November 2021, the SEC approved PCAOB Rule 6100.

2, 2021, the SEC adopted amendments to final rules implementing the disclosure and submission requirements of the HFCAA.

June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign Companies Accountable Act or AHFCAA, and on February 4,

2022, the U.S.

House of Representatives passed the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and

Economic Strength (COMPETES) Act of 2022, or the COMPETES Act.

If either bill is enacted into law, it would amend the HFCAA and

require the SEC to prohibit an issuer’s securities from trading on any U.S.

stock exchanges if its auditor is not subject to

PCAOB inspections or complete investigations for two consecutive years instead of three.

As a result, our securities may be

prohibited from trading on Nasdaq or over-the-counter markets if our auditor is not inspected by the PCAOB for three consecutive

years as specified in the HFCAA or two years if the AHFCAA or the COMPETES Act becomes law, and would reduce the time before our

securities may be prohibited from trading or delisted.

December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.

rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public

accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a

position taken by an authority in foreign jurisdictions.

December 16, 2021, the PCAOB announced the PCAOB Holding Foreign Companies Accountable Act determinations (the “PCAOB determinations”)

relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland

China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more

authorities in the PRC or Hong Kong.

lack of access to the PCAOB inspection or investigation in China prevents the PCAOB from fully evaluating audits and quality control

procedures of the auditors based in China.

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

inability of the PCAOB to conduct inspections or investigations of auditors in China makes it more difficult to evaluate the effectiveness

of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject

to the PCAOB inspections and investigations, which could cause existing and potential investors in our stock to lose confidence

in our audit procedures and reported financial information and the quality of our financial statements.

current auditor, MaloneBailey, LLP, an independent registered public accounting firm that is headquartered in the United States with

offices in Beijing and Shenzhen, is a firm registered with the U.S.

Public Company Accounting Oversight Board (the “PCAOB”),

and is required by the laws of the U.S.

to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S.

and professional standards.

MaloneBailey, LLP has been subject to PCAOB inspections, and is not among the PCAOB-registered public accounting

firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination on December 16, 2021 of having been unable

to inspect or investigate completely.

Notwithstanding the foregoing, if it is later determined that the PCAOB is unable to inspect

or investigate our auditor completely, or if there is any regulatory change or step taken by PRC regulators that does not permit MaloneBailey,

LLP to provide audit documentations located in China or Hong Kong to the PCAOB for inspection or investigation, or the PCAOB expands

the scope of the Determination so that we are subject to the HFCAA, as the same may be amended, you may be deprived of the benefits of

such inspection.

Any audit reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB

inspections or investigations of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’

audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate

and accurate.

the recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities would

apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality

control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to

the audit of our financial statements.

It remains unclear what further actions the SEC, the PCAOB or Nasdaq will take to address these

issues and what impact those actions will have on U.S.

companies that have significant operations in the PRC and have securities listed

stock exchange (including a national security exchange or over-the-counter stock market).

In addition, any additional actions,

proceedings, or new rules resulting from these efforts to increase U.S.

regulatory access to audit information could create some uncertainty

for investors, the market price of our ordinary shares could be adversely affected, and we could be delisted if we and our auditor are

unable to meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense

and management time.

may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the foreign corrupt practices

act could have a material adverse effect on our business.

are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign

governments and their officials and political parties by U.S.

persons and issuers as defined by the statute for the purpose of obtaining

or retaining business.

We will have operations, agreements with third parties and make sales in the PRC, which may experience corruption.

Our proposed activities in the PRC create the risk of unauthorized payments or offers of payments by one of the employees, consultants,

or sales agents of our Company, because these parties are not always subject to our control.

It is our policy to implement safeguards

to discourage these practices by our employees.

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

and the employees, consultants, or sales agents of our Company may engage in conduct for which we might be held responsible.

of the FCPA 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.

may have difficulty enforcing judgments against us.

are a Nevada corporation but most of our assets are and will be located outside of the United States.

Almost all our operations

are conducted in the PRC.

In addition, most of our officers and directors are the nationals and residents of a country other than

the United States.

Most of their assets are located outside the United States.

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

service of process within the United States upon them.

Almost all our operations are conducted

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

all of their assets are located outside the United States.

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

the United States upon them.

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

courts judgments on

the civil liability provisions of the U.S.

federal securities laws against us and our officers and directors, since he or she

is not a resident in the United States.

In addition, there is uncertainty as to whether the courts of the PRC or other jurisdictions

would recognize or enforce judgments of U.S.

courts judgments on the civil liability provisions of

federal securities laws against us and our officers and directors, since he or she is not a resident in the United States.

addition, there is uncertainty as to whether the courts of the PRC or other jurisdictions would recognize or enforce judgments of U.S.

economic growth slowdown may have a negative effect on our business.

2014, Chinese economic growth has been slowing down from double-digit GDP speed.

The annual rate of growth declined from 7.3%

in 2014 to 6.9% in 2015, to 6.7% in 2016, to 6.9% in 2017, to 6.6% in 2018, and to 6.1% in 2019.

Due to the impact of COVID-19,

China’s economic growth rate in 2020 has slowed to 2.3%, its lowest level in years.

While technology-based financial services

companies have not been affected by the pandemic on the same level as companies in certain other industries, nevertheless a slow

economic growth could adversely affect many of our customers and partners, which in turn may materially adversely affect our financial

condition and results of operations.

the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise”

Such classification will

likely result in unfavorable tax consequences to us and our non-PRC stockholders.

passed an Enterprise Income Tax Law (the “EIT Law”) and implementing rules, both of which became effective on January

Under the EIT Law, an enterprise established outside of China with “de facto management bodies”

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 EIT Law define de facto management as “substantial and

overall management and control over the production and operations, personnel, accounting, and properties”

of the enterprise.

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

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

Bodies, or the Notice, further interpreting the application of the EIT Law and its implementation to offshore entities controlled

by a Chinese enterprise or group.

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”

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

(ii) its financial or personnel

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

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

stamps, board and stockholder minutes are kept in China;

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

management are often resident in China.

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

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

does not have a PRC enterprise or enterprise group as its primary controlling shareholder and is therefore not a Chinese-controlled

offshore incorporated enterprise within the meaning of the Notice, so we believe the Notice is not applicable to us.

in the absence of guidance specifically applicable to us, we have applied the guidance set forth in the Notice to evaluate the

tax residence status of FVTI.

The annual rate of growth declined from 7.3% in 2014

to 6.9% in 2015, to 6.7% in 2016, to 6.9% in 2017, to 6.6% in 2018, and to 6.1% in 2019.

Due to the impact of COVID-19, China’s

economic growth rate in 2020 has slowed to 2.3%, its lowest level in years.

While technology-based financial services companies have

not been affected by the pandemic on the same level as companies in certain other industries, nevertheless a slow economic growth could

adversely affect many of our customers and partners, which in turn may materially adversely affect our financial condition and results

of operations.

the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China.

Such classification will likely

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

passed an Enterprise Income Tax Law (the “EIT Law”), as most recently amended and effective on December 29, 2018, and the

related Implementation Regulations, as amended and effective on April 23 2019.

Under the EIT Law, an enterprise established outside of

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 EIT Law define

de facto management as “substantial and overall management and control over the production and operations, personnel, accounting,

and properties” of the enterprise.

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

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

the Notice, further interpreting the application of the EIT Law and its implementation to offshore entities controlled by a Chinese enterprise

Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group

will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily

operations reside or perform their duties mainly in China;

(ii) its financial or personnel decisions are made or approved by bodies or

persons in China;

(iii) its substantial assets and properties, accounting books, corporate stamps, board and stockholder minutes are

kept in China;

and (iv) at least half of its directors with voting rights or senior management are often resident in China.

enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate

of 10% when paying dividends to its non-PRC stockholders.

does not have a PRC enterprise or enterprise group as its primary controlling shareholder and is therefore not a Chinese-controlled offshore

incorporated enterprise within the meaning of the Notice, so we believe the Notice is not applicable to us.

However, in the absence of

guidance specifically applicable to us, we have applied the guidance set forth in the Notice to evaluate the tax residence status of

do not believe that we meet some of the conditions outlined.

As a holding company, the key assets and records of FVTI including

the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are

located and maintained outside the PRC.

In addition, we are not aware of any offshore holding companies with a corporate structure

similar to ours that have been deemed a PRC “resident enterprise”

by the PRC tax authorities.

Accordingly, we believe

that FVTI should not be treated as a “resident enterprise”

for PRC tax purposes if the criteria for “de facto

management body”

as set forth in the Notice were deemed applicable to us.

However, as the tax residency status of an enterprise

is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term

“de facto management body”

as applicable to our offshore entities, we will continue to monitor our tax status.

the PRC tax authorities determine that we are a “resident enterprise”

for PRC enterprise income tax purposes, a number

of unfavorable PRC tax consequences could follow.

First, we may be subject to the enterprise income tax at a rate of 25% on our

worldwide taxable income as well as PRC enterprise income tax reporting obligations.

In our case, this would mean that income

such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%.

Currently, we do not have any

non-China source income, so this would have minimal effect on us;

however, if we develop non-China source income in the future,

we could be adversely affected.

Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries

would qualify as “tax-exempt income.”

Finally, it is possible that future guidance issued with respect to the new

“resident enterprise”

classification could result in a situation in which a 10% withholding tax is imposed on dividends

we pay to our non-PRC stockholders and with respect to gains derived by our non-PRC stockholders from transferring our shares.

If we were treated as a “resident enterprise”

by the PRC tax authorities, we would be subject to taxation in both

and China, but our PRC source income will not be taxed in the U.S.

again because the U.S.-China tax treaty will avoid

double taxation between these two nations.

regulation of loans and direct investment by offshore holding companies in PRC entities may delay or prevent us from using the

proceeds of our securities offerings to make loans or additional capital contributions to our PRC operating subsidiaries, which

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

the normal course of our business or in utilizing proceeds of any future securities offerings, we may make loans to our PRC subsidiaries

or may make additional capital contributions to our PRC subsidiaries.

Any loans to our PRC subsidiaries are subject to PRC regulations.

For example, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits

and must be registered with the State Administration of Foreign Exchange, or SAFE.

Currently, China is holding more open and tolerant

attitude toward FIEs.

More open rules and regulations are published in recent years to replace previous ones which are more restrictive.

On March 30 th , 2015, SAFE promulgated Circular 19 which is about Reforming the Management Approach regarding the

Settlement of Foreign Exchange Capital of Foreign-invested Enterprises) and effective since June 1, 2015.

has made some important changes in rules regarding the conversion of foreign exchanges to RMB, which are as follows in particular:

of the payment-based exchange settlement system under previous Circular 142 and Circular 88, new rules of discretional foreign

exchange settlement have been established, which means the foreign exchange capital in the capital account of foreign-invested

enterprises for which the confirmation of rights and interests of monetary contribution by the local foreign exchange bureau

(or the book-entry registration of monetary contribution by the banks in accordance with Circular 13 as we mentioned in the

comment below) has been handled can be settled at the banks based on the actual operational needs of the enterprises, and

the proportion of foreign exchange which can be discretionally converted by each FIE is temporarily determined as 100% (SAFE

may adjust such scale as necessary).

So regulation wise FIEs no longer needs to report the use of its RMB before or after

a conversion which are required by previous Circular 142 and Circular 88.

However, actually SAFE and the banks are experiencing

a transitional period in this regard, so for the time being, most banks still need the FIEs to report their proposed use of

the RMB to be converted from foreign exchanges, as well as the actual use of the RMB obtained in the last conversion.

the transitional period will not be too long and therefore optimistically from the year of 2016, the report obligation will

no longer be required.

currency-denominated capital no longer needs to be verified by an accounting firm before converting into RMB.

stipulated in Circular 19, the use of capital by FIEs shall follow the principles of authenticity and self-use within the

business scope of enterprises, shall not be used for the following purposes:

shall not be directly or indirectly used for the payment beyond the business scope of the enterprises or the payment prohibited

by national laws and regulations;

shall not be directly or indirectly used for investment in securities unless otherwise provided by laws and regulations;

shall not be directly or indirectly used for granting the entrust loans in RMB (unless permitted by the scope of business),

repaying the inter-enterprise borrowings (including advances by the third party) or repaying the bank loans in Renminbi that

have been sub-lent to the third party;

shall not be used for paying the expenses related to the purchase of real estate not for self-use, except for the foreign-invested

real estate enterprises.

May 10, 2013, SAFE released Circular 21, which came into effect on May 13, 2013;

also, on February 13, 2015 SAFE published Circular

13 (Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related

Foreign Exchange Administration Policies ) to update some measures stipulated in Circular 21.

According to Circular 21, SAFE

has significantly simplified the foreign exchange administration procedures with respect to the registration, account openings

and conversions, settlements of FDI-related foreign exchange, as well as fund remittances.

Meanwhile, Circular 13 has further

simplified foreign exchange administration procedures, most important among which is that SAFE delegated foreign exchange registration

to the banks, meanwhile the related registration approval by SAFE has been annulled.

with more and more open policy toward FDI and FIEs, the Circulars mentioned above may still have some limit our ability to convert,

transfer and use the net proceeds from our securities offerings and any offering of additional equity securities in China, which

may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

may also decide to finance our subsidiaries by means of capital contributions.

These capital contributions must be approved by

the Ministry of Commerce of China, or MOFCOM, or its local counterpart.

We may not be able to obtain these government approvals

on a timely basis, if at all, with respect to future capital contributions by us to our PRC subsidiaries.

If we fail to receive

such approvals, we will not be able to use the proceeds of our offerings and capitalize our PRC operations, which could adversely

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

As a holding company, the key assets and records of FVTI including the resolutions

and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained

outside the PRC.

In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that have

been deemed a PRC “resident enterprise” by the PRC tax authorities.

Accordingly, we believe that FVTI should not be treated

as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in

the Notice were deemed applicable to us.

However, as the tax residency status of an enterprise is subject to determination by the PRC

tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable

to our offshore entities, we will continue to monitor our tax status.

the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of

unfavorable PRC tax consequences could follow.

First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide

taxable income as well as PRC enterprise income tax reporting obligations.

In our case, this would mean that income such as non-China

source income would be subject to PRC enterprise income tax at a rate of 25%.

Currently, we do not have any non-China source income,

so this would have minimal effect on us;

however, if we develop non-China source income in the future, we could be adversely affected.

Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt

income.” Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification

could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC stockholders and with respect

to gains derived by our non-PRC stockholders from transferring our shares.

If we were treated as a “resident enterprise”

by the PRC tax authorities, we would be subject to taxation in both the U.S.

and China, but our PRC source income will not be taxed in

again because the U.S.-China tax treaty will avoid double taxation between these two nations.

addition, pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double

Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be reduced to 5% if a Hong

Kong resident enterprise owns no less than 25% of a PRC entity.

However, the 5% withholding tax rate does not automatically apply and

certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of

the relevant dividends;

and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the

12 consecutive months preceding its receipt of the dividends.

In practice, a Hong Kong entity must obtain a tax resident certificate

from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate.

As the Hong Kong tax authority will issue such a

tax resident certificate on a case-by-case basis, we cannot be certain that we will be able to obtain the tax resident certificate from

the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with

respect to any dividends to be paid by our WFOE, QHDX, to our Hong Kong subsidiary, DILHK.

QHDX currently does not have any plan to declare

and pay dividends, and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority.

DILHK will apply

for the tax resident certificate when QHDX plans to declare and pay dividends.

regulation of loans and direct investment by offshore holding companies in PRC entities may delay or prevent us from using the proceeds

of our securities offerings to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially

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

the normal course of our business, we may make loans to our PRC subsidiaries or may make additional capital contributions to our PRC

subsidiaries.

Any loans to our wholly foreign-owned or holding subsidiaries in China, which are treated as foreign-invested enterprises

(“FIEs”) under PRC law, are subject to PRC regulations and foreign exchange loan registrations.

For example, loans by us

to our FIE subsidiaries in China to finance their activities cannot exceed statutory limits and must be registered with SAFE.

a foreign invested enterprise shall use its capital pursuant to the principle of authenticity and self-use within its business scope.

The capital of a foreign invested enterprise shall not be used for the following purposes:

(i) directly or indirectly used for payment

beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations;

(ii) directly or indirectly

used for investment in securities or investments other than banks’ principal-secured products unless otherwise provided by relevant

laws and regulations;

(iii) granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license;

and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate

enterprises).

promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement

of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant

Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested

Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration

of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration

of Certain Capital Account Foreign Exchange Businesses.

According to SAFE Circular 19, the flow and use of the RMB capital converted

from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used

for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of banks loans that have been transferred

to a third party.

Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested

enterprise to be used for equity investments within China, it also reiterates the principle that RMB converted from the foreign currency-denominated

capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope.

SAFE promulgated

the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management

Policy of Capital Account, or SAFE Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular

19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested

company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-associated enterprises.

of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties.

SAFE Circular 19 and SAFE Circular 16 may significantly

limit our ability to transfer any foreign currency we hold, including the net proceeds from this offering, to our PRC subsidiaries, which

may adversely affect our liquidity and our ability to fund and expand our business in China.

On October 23, 2019, the SAFE promulgated

the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment,

or the SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated

capital for equity investments in China, as long as the equity investment is genuine, does not violate applicable laws, and complies

with the negative list on foreign investment.

However, since the SAFE Circular 28 is newly promulgated, it is unclear how SAFE and competent

banks will implement the relevant rules in practice.

light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies,

we cannot be certain that we will be able to complete the necessary government registrations or obtain the necessary government approvals

on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions by us to our subsidiaries

As a result, uncertainties exist as to our ability to provide prompt funding to our PRC subsidiaries when needed.

to complete such registrations or obtain such approvals, our ability to use the proceeds we expect to receive from this offering and

to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our financial

condition and operating results.

control of currency conversion may affect the value of your investment.

PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance

of currency out of China.

PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency

out of China.

We receive substantially all of our revenues in RMB.

Under our current corporate structure, our income

will currently only be derived from dividend payments from our PRC subsidiaries.

Shortages in the availability of foreign currency

may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us,

or otherwise satisfy their foreign currency denominated obligations.

Under existing PRC foreign exchange regulations, payments

of current account items, including profit distributions, interest payments and expenditures from trade-related transactions can

be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements.

However, approval

from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China

to pay capital expenses such as the repayment of loans denominated in foreign currencies.

The PRC government may also at its discretion

restrict access in the future to foreign currencies for current account transactions.

If the foreign exchange control system prevents

us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign

currencies to our security-holders.

Under our current corporate structure, our income will currently only

be derived from dividend payments from our PRC subsidiaries.

Shortages in the availability of foreign currency may restrict the ability

of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign

currency denominated obligations.

Under existing PRC foreign exchange regulations, payments of current account items, including profit

distributions, interest payments and expenditures from trade-related transactions can be made in foreign currencies without prior approval

from SAFE by complying with certain procedural requirements.

However, approval from appropriate government authorities is required where

RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated

in foreign currencies.

The PRC government may also at its discretion restrict access in the future to foreign currencies for current

account transactions.

If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency

demands, we may not be able to pay dividends in foreign currencies to our security-holders.

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

in the value of the RMB against the U.S.

dollar, Euro and other foreign currencies are affected by, among other things, changes

in China’s political and economic conditions.

Any significant revaluation of the RMB may have a material adverse effect

on our revenues and financial condition, and the value of, and any dividends payable on our shares in U.S.

dollar, Euro and other foreign currencies are affected by, among other things, changes in China’s

political and economic conditions.

Any significant revaluation of the RMB may have a material adverse effect on our revenues and financial

condition, and the value of, and any dividends payable on our shares in U.S.

dollar terms.

to the extent that we need to convert U.S.

dollars we receive from our securities offerings into RMB for our operations, appreciation

of the RMB against the U.S.

dollar would have an adverse effect on RMB amount we would receive from the conversion.

if we decide to convert our RMB into U.S.

dollars for the purpose of paying dividends on our common stock or for other business

purposes, appreciation of the U.S.

dollar against the RMB would have a negative effect on the U.S.

dollar amount available to

In addition, fluctuations of the RMB against other currencies may increase or decrease the cost of imports and exports, and

thus affect the price-competitiveness of our products against products of foreign manufacturers or products relying on foreign

For example, to the extent that we need to

dollars we receive from our securities offerings into RMB for our operations, appreciation of the RMB against the U.S.

would have an adverse effect on RMB amount we would receive from the conversion.

Conversely, if we decide to convert our RMB into U.S.

dollars for the purpose of paying dividends on our common stock or for other business purposes, appreciation of the U.S.

dollar against

the RMB would have a negative effect on the U.S.

dollar amount available to us.

In addition, fluctuations of the RMB against other currencies

may increase or decrease the cost of imports and exports, and thus affect the price-competitiveness of our products against products

of foreign manufacturers or products relying on foreign inputs.

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

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.

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.

reflect the impact of currency translation adjustments in our financial statements under the heading “accumulated other

comprehensive income (loss).”

For the years ended December 31, 2020 and 2019, we had foreign currency translation gain of

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.

reflect the impact of currency translation adjustments in our financial statements under the heading “accumulated other comprehensive

income (loss).” For the years ended December 31, 2021 and 2020, we had foreign currency translation gain of $269,234

and $321,337, respectively.

Very limited hedging transactions are available in China to reduce our exposure to exchange

rate fluctuations.

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.

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 gains and losses may be magnified by PRC exchange control regulations

that restrict our ability to convert RMB into foreign currencies.

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

shareholders to penalties and limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’

ability to distribute profits to us, or otherwise adversely affect us.

SAFE promulgated the Notice on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment

through Special Purpose Vehicles, or Notice 37, in July 2014 that requires PRC residents or entities to register with SAFE or

its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas

investment or financing.

In addition, such PRC residents or entities must update their SAFE registrations when the offshore special

purpose vehicle undergoes material events relating to material change of capitalization or structure of the PRC resident itself

(such as capital increase, capital reduction, share transfer or exchange, merger or spin off).

On October 16, 2015, nine of our

shareholders who are Chinese residents completed the registration with SAFE under this Notice.

to comply with the Individual Foreign Exchange Rules relating to the overseas direct investment or the engagement in the issuance

or trading of securities overseas by our PRC resident stockholders may subject such stockholders to fines or other liabilities.

than Notice 37, our ability to conduct foreign exchange activities in the PRC may be subject to the interpretation and enforcement

of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007

(as amended and supplemented, the “Individual Foreign Exchange Rules”).

Under the Individual Foreign Exchange Rules,

any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities

or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions.

PRC individuals who fail to

make such registrations may be subject to warnings, fines or other liabilities.

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.

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

RMB into foreign currencies.

to comply with the Individual Foreign Exchange Rules relating to the overseas direct investment or the engagement in the issuance or

trading of securities overseas by our PRC resident stockholders may subject such stockholders to fines or other liabilities.

ability to conduct foreign exchange activities in the PRC may be subject to the interpretation and enforcement of the Implementation

Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007 (as amended and supplemented,

the “Individual Foreign Exchange Rules”).

Under the Individual Foreign Exchange Rules, any PRC individual seeking to make

a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate

registrations in accordance with SAFE provisions.

PRC individuals who fail to make such registrations may be subject to warnings, fines

or other liabilities.

promulgated the Notice on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through

Special Purpose Vehicles, or Notice 37, in July 2014 that requires PRC residents or entities to register with SAFE or its local branch

in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.

In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes

material events relating to material change of capitalization or structure of the PRC resident itself (such as capital increase, capital

reduction, share transfer or exchange, merger or spin off).

may not be fully informed of the identities of all our beneficial owners who are PRC residents.

For example, because the investment

in or trading of our shares will happen in an overseas public or secondary market where shares are often held with brokers in

brokerage accounts, it is unlikely that we will know the identity of all of our beneficial owners who are PRC residents.

we have no control over any of our future beneficial owners and we cannot assure you that such PRC residents will be able to complete

the necessary approval and registration procedures required by the Individual Foreign Exchange Rules.

For example, because the investment in

or trading of our shares will happen in an overseas public or secondary market where shares are often held with brokers in brokerage

accounts, it is unlikely that we will know the identity of all of our beneficial owners who are PRC residents.

Furthermore, we have no

control over any of our future beneficial owners and we cannot assure you that such PRC residents will be able to complete the necessary

approval and registration procedures required by the Individual Foreign Exchange Rules.

our knowledge, our beneficial owners, who are PRC residents, have not completed the Notice 37 registration.

And we cannot guarantee that

all or any of the shareholders will complete the Notice 37 registration prior to the closing of this Offering.

Failure by any such shareholders

or beneficial owners to comply with Notice 37 could restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’

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

In addition, the PRC resident shareholders who fail to complete Notice 37 registration may subject to fines less than RMB50,000.

these foreign exchange and outbound investment related regulations are relatively new and their interpretation and implementation has

been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border investments

and transactions, will be interpreted, amended and implemented by the relevant government authorities.

is uncertain how the Individual Foreign Exchange Rules will be interpreted or enforced and whether such interpretation or enforcement

1 unchanged sentence

Because of this uncertainty, we cannot be sure whether the failure

by any of our PRC resident stockholders to make the required registration will subject our PRC subsidiaries to fines or legal

sanctions on their operations, delay or restriction on repatriation of proceeds of our securities offerings into the PRC, restriction

on remittance of dividends or other punitive actions that would have a material adverse effect on our business, results of operations

and financial condition.

by any of our PRC resident stockholders to make the required registration will subject our PRC subsidiaries to fines or legal sanctions

on their operations, delay or restriction on repatriation of proceeds of our securities offerings into the PRC, restriction on remittance

of dividends or other punitive actions that would have a material adverse effect on our business, results of operations and financial

are uncertainties under the PRC laws relating to the procedures for U.S.

1 unchanged sentence

located in the PRC.

claims that are common in the U.S., including securities law class actions and fraud claims, among other matters, generally are

difficult to pursue as a matter of law or practicality in China.

For example, in China, there are significant legal and other

obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect

to foreign entities.

Although the local authorities in China may establish a regulatory cooperation mechanism with the securities

regulatory authorities of another country or region to implement cross-border supervision and administration, such regulatory

cooperation with the securities regulatory authorities in the Unities States have not been efficient in the absence of mutual

and practical cooperation mechanism.

According to Article 177 of the PRC Securities Law, which became effective in March 2020,

or Article 177, the securities regulatory authority of the State Council may collaborate with securities regulatory authorities

of other countries or regions in order to monitor and oversee cross border securities activities.

Article 177 further provides

that overseas securities regulatory authorities are not permitted to carry out investigation and evidence collection directly

within the territory of the PRC, and that any Chinese entities and individuals are not allowed to provide documents or materials

related to securities business activities to overseas agencies without prior consent of the securities regulatory authority of

the State Council and the competent departments of the State Council.

claims that are common in the U.S., including securities law class actions and fraud claims, among other matters, generally are difficult

to pursue as a matter of law or practicality in China.

For example, in China, there are significant legal and other obstacles to obtaining

information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities.

the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another

country or region to implement cross-border supervision and administration, such regulatory cooperation with the securities regulatory

authorities in the Unities States have not been efficient in the absence of mutual and practical cooperation mechanism.

Article 177 of the PRC Securities Law, which became effective in March 2020, or Article 177, the securities regulatory authority of the

State Council may collaborate with securities regulatory authorities of other countries or regions in order to monitor and oversee cross

border securities activities.

Article 177 further provides that overseas securities regulatory authorities are not permitted to carry

out investigation and evidence collection directly within the territory of the PRC, and that any Chinese entities and individuals are

not allowed to provide documents or materials related to securities business activities to overseas agencies without prior consent of

the securities regulatory authority of the State Council and the competent departments of the State Council.

principal business operations are conducted in the PRC.

In the event that the U.S.

regulators carry out investigations with respect

to our business and need to conduct investigation or collect evidence within the territory of the PRC, the U.S.

regulators may

not be able to carry out such investigation or evidence collection directly in the PRC under the PRC laws.

may consider cross-border cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic

channels or regulatory cooperation mechanism established with the securities regulatory authority of the PRC.

However, there can

be no assurance that the U.S.

regulators could succeed in establishing such cross-border cooperation in a specific case or could

establish the cooperation in a timely manner.

regulators carry out investigations with respect to

our business and need to conduct investigation or collect evidence within the territory of the PRC, the U.S.

regulators may not be able

to carry out such investigation or evidence collection directly in the PRC under the PRC laws.

regulators may consider cross-border

cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation

mechanism established with the securities regulatory authority of the PRC.

However, there can be no assurance that the U.S.

could succeed in establishing such cross-border cooperation in a specific case or could establish the cooperation in a timely manner.

regulators are unable to conduct such investigations, such U.S.

may determine to suspend and ultimately delist our common stock from the Nasdaq Capital Market or choose to suspend or de-register

our SEC registration.

enacted Holding Foreign Companies Accountable Act, recent regulatory actions taken by the SEC and the Public Company Accounting

Oversight Board, or the PCAOB, and proposed rule changes submitted by Nasdaq calling for additional and more stringent criteria

to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance costs.

April 2020, the SEC then-Chairman, Jay Clayton, and PCAOB Chairman, William D.

Duhnke III, along with other senior SEC staff,

released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations

in emerging markets including China.

The joint statement emphasized the risks associated with lack of access for the PCAOB to

inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

regulators may determine to suspend and ultimately delist our

common stock from the Nasdaq Capital Market or choose to suspend or de-register our SEC registration.

to comply with laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause

us to lose customers or otherwise harm our business .

business is subject to regulation by various governmental agencies in China, including agencies responsible for monitoring and enforcing

compliance with various legal obligations, such as privacy and data protection-related laws and regulations, intellectual property laws,

employment and labor laws, workplace safety, environmental laws, consumer protection laws, governmental trade laws, import and export

controls, anti-corruption and anti-bribery laws, and tax laws and regulations.

These laws and regulations impose added costs on our business.

Noncompliance with applicable regulations or requirements could subject us to:

investigations,

enforcement actions, and sanctions;

changes to our supply chain system and products;

of profits, fines, and damages;

and criminal penalties or injunctions;

for damages by our customers or partners;

of contracts;

of intellectual property rights;

to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings

to conduct our operations;

or permanent debarment from sales to public service organizations.

any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of

operations, and financial condition could be adversely affected.

In addition, responding to any action will likely result in a significant

diversion of our management’s attention and resources and an increase in professional fees.

Enforcement actions and sanctions could

materially harm our business, results of operations, and financial condition.

are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate with,

who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability

and penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business.

enacted Holding Foreign Companies Accountable Act, recent regulatory actions taken by the SEC and the Public Company Accounting Oversight

Board, and proposed rule changes submitted by Nasdaq calling for additional and more stringent criteria to be applied to China-based

public companies could add uncertainties to our capital raising activities and compliance costs.

public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative

publicity by investors, financial commentators and regulatory agencies, such as the SEC.

Much of the scrutiny, criticism and negative

publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial

accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.

December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S.

regulators in their

oversight of financial statement audits of U.S.-listed companies with significant operations in China.

On April 21, 2020, the SEC Chairman

and PCAOB Chairman, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in

companies based in or have substantial operations in emerging markets including China, reiterating past SEC and PCAOB statements on matters

including the difficulty associated with inspecting accounting firms and audit work papers in China and higher risks of fraud in emerging

markets and the difficulty of bringing and enforcing SEC, Department of Justice and other U.S.

regulatory actions, including in instances

of fraud, in emerging markets generally.

May 18, 2020, NASDAQ filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating

in a “Restrictive Market”, such as China, (ii) adopt a new requirement relating to the qualification of management

or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant

or listed company based on the qualifications of the company’s auditors.

in a “Restrictive Market”, (ii) prohibit Restrictive Market companies from directly listing on NASDAQ Capital Market, and

only permit them to list on NASDAQ Global Select or NASDAQ Global Market in connection with a direct listing, and (iii) apply additional

and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.

May 20, 2020, the U.S.

Senate passed the Holding Foreign Companies Accountable Act (“HFCAA”

or the “Act”)

requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified

reports because the company uses a foreign auditor not subject to PCAOB inspection.

If the PCAOB is unable to inspect the company’s

auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange.

August 2020, the President’s Working Group on Financial Markets (“PWG”) issued a Report on Protecting United

States Investors from Significant Risks from Chinese Companies.

The Report made five recommendations designed to address risks

to investors in U.S.

financial markets posed by the Chinese government’s failure to allow audit firms that are registered

with the PCAOB to comply with U.S.

securities laws and investor protection requirements.

Among the recommendations was advice

to enhance the listing standards of U.S.

exchanges to require, as a condition of initial and continued exchange listing, PCAOB

access to main auditor work papers either directly or through co-audits.

December 2, 2020, the U.S.

House of Representatives passed the HFCAA.

On December 18, the HFCAA was signed into law.

things, the HFCAA amends the Sarbanes-Oxley Act of 2002 to require the SEC to prohibit the securities of foreign companies from

being traded on U.S.

securities markets, if the company retains a foreign accounting firm that cannot be inspected or investigated

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

The Act also requires foreign companies to make certain

disclosures about their ownership by governmental entities.

The HFCAA requires the SEC to issue new rules within 90 days of the

enactment to implement the Act.

a statement issued on December 18, 2020, the SEC then-Chairman Clayton observed that the SEC staff’s proposal in response

to the PWG’s recommendations would substantially overlap with the Act.

As a result, Clayton indicated that he had directed

the SEC staff to consider providing a single consolidated proposal for the SEC’s consideration on issues related to the

PCAOB’s access to audit work papers, exchange listing standards, and trading prohibitions.

March 24, 2021, the SEC adopted interim final amendments to implement congressionally mandated submission and disclosure requirements

of the HFCA Act.

The interim final amendments will apply to registrants that the SEC identifies as having filed an annual

report on Forms 10-K and other forms with an audit report issued by a registered public accounting firm that is located in a foreign

jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by

an authority in that jurisdiction.

The SEC will implement a process for identifying such a registrant and any such identified

registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental

entity in that foreign jurisdiction, and will also require disclosure in a company’s annual report regarding the audit arrangements

of, and governmental influence on, such a registrant.

lack of access to the audit work paper or other inspections prevents the PCAOB from fully evaluating audits and quality control

procedures of the auditors based in China.

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

inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of those

accounting firms’

audit procedures or quality control procedures as compared to auditors outside of China that are subject

to the PCAOB inspections.

independent registered public accounting firm that issued the audit reports on our financial statements, as an auditor of companies

that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant

to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards.

Our auditor is based on the U.S.

and has been inspected by the PCAOB on a regular basis.

However, the recent U.S.

and regulatory developments as related to PRC companies listing or seeking to list stock on U.S.

exchanges would add uncertainties

to the trading and price volatility of our stock.

We cannot be certain whether SEC, FINRA or other U.S.

regulatory authorities

would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures

and quality control procedures, adequacy of personnel and training, geographic reach, or sufficiency of resources as it relates

to the audit of our financial statements.

Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned

or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not

subject to PCAOB inspection.

If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s

securities are prohibited to trade on a national exchange.

On December 2, 2020, the U.S.

House of Representatives passed the Holding

Foreign Companies Accountable Act.

On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.

March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure

requirements of the Act.

The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report

on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction

and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that

jurisdiction.

The SEC will implement a process for identifying such a registrant and any such identified registrant will be required

to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction,

and will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence

on, such a registrant.

June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), a bill which,

if passed by the U.S.

House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required

for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two and, thus, would reduce the

time before our securities may be prohibited from trading or delisted.

December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the Holding

Foreign Companies Accountable Act.

The rules apply to registrants that the SEC identifies as having filed an annual report with an audit

report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or

investigate completely because of a position taken by an authority in foreign jurisdictions.

December 16, 2021, PCAOB announced the PCAOB Holding Foreign Companies Accountable Act determinations (the “PCAOB determinations”)

relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland

China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more

authorities in the PRC or Hong Kong.

recent regulatory developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities

would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures

and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it

relates to the audit of our financial statements.

It remains unclear what further actions the SEC, the PCAOB or Nasdaq will take to address

these issues and what impact those actions will have on U.S.

companies that have significant operations in the PRC and have securities

listed on a U.S.

stock exchange (including a national security exchange or over-the-counter stock market).

In addition, any additional

actions, proceedings, or new rules resulting from these efforts to increase U.S.

regulatory access to audit information could create

some uncertainty for investors, the market price of our ordinary shares could be adversely affected, and we could be delisted if we and

our auditor are unable to meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant

expense and management time.

a result of these scrutiny, criticism and negative publicity, the publicly traded stock of many U.S.

listed Chinese companies sharply

decreased in value and, in some cases, has become virtually worthless.

Many of these companies are now subject to shareholder lawsuits

and SEC enforcement actions, and are conducting internal and external investigations into the allegations.

It is not clear what effect

this sector-wide scrutiny, criticism and negative publicity will have on us, our future securities offerings, business and our share

If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have

to expend significant resources to investigate such allegations and defend our Company.

Our management would have to divert valuable

resources and attention away from our operations and may negatively impact our operations.

If such allegations are not proven to be groundless,

we and our business operations will be severely affected and you could sustain a significant decline in the value of our shares.

factors outside of our control related to doing business in China could negatively affect our business.

factors that could negatively affect our business include a potential significant revaluation of the Renminbi, which may result

in an increase in the cost of commodity or products in the PRC supply chain industry, labor shortages and increases in labor costs

in China as well as difficulties in moving products manufactured in China out of the country, whether due to infrastructure inadequacy,

labor disputes, slowdowns, PRC regulations and/or other factors.

Prolonged disputes or slowdowns can negatively impact both the

time and cost of goods.

Natural disasters or health pandemics impacting China can also have a significant negative impact on our

Further, the imposition of trade sanctions or other regulations against products supplied or sold in the supply chain

industry transactions for which we provide solutions or the loss of “normal trade relations”

status with China could

significantly affect our operating results and harm our business.

factors that could negatively affect our business include a potential significant revaluation of the Renminbi, which may result in an

increase in the cost of commodity or products in the PRC supply chain industry, labor shortages and increases in labor costs in China

as well as difficulties in moving products manufactured in China out of the country, whether due to infrastructure inadequacy, labor

disputes, slowdowns, PRC regulations and/or other factors.

Prolonged disputes or slowdowns can negatively impact both the time and cost

Natural disasters or health pandemics impacting China can also have a significant negative impact on our business.

the imposition of trade sanctions or other regulations against products supplied or sold in the supply chain industry transactions for

which we provide solutions or the loss of “normal trade relations” status with China could significantly affect our operating

results and harm our business.

of dividends is subject to restrictions under Nevada and the PRC laws.

Nevada law, we may only pay dividends subject to our ability to service our debts as they become due and provided that our assets

will exceed our liabilities after the payment of such dividends.

Our ability to pay dividends will therefore depend on our ability

to generate adequate profits.

In addition, because of a variety of rules applicable to our operations in the PRC and the regulations

on foreign investments as well as the applicable tax law, we may be subject to further limitations on our ability to declare and

pay dividends to our shareholders.

Nevada law, we may only pay dividends subject to our ability to service our debts as they become due and provided that our assets will

exceed our liabilities after the payment of such dividends.

Our ability to pay dividends will therefore depend on our ability to generate

adequate profits.

In addition, because of a variety of rules applicable to our operations in the PRC and the regulations on foreign investments

as well as the applicable tax law, we may be subject to further limitations on our ability to declare and pay dividends to our shareholders.

a holding company, we may rely on dividends and other distributions from our PRC subsidiaries and WFOEs for cash requirements.

incurs any debts, the instruments governing such debts may restrict its ability to pay dividends to us.

In order for us to pay dividends

or other distributions to our shareholders, including investors in this offering, we will rely on payments from our subsidiaries.

or other assets may be transferred to us from our subsidiaries in the following manner:

(i) funds from our operating subsidiaries to

WFOEs may be remitted as services fees, dividends or other distributions;

and (ii) WFOEs may make dividends or other distributions to

us through our Hong Kong subsidiaries.

PRC regulations permit Chinese operating subsidiaries to pay dividends to foreign parent companies only out of their accumulated profits,

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

In addition, each of our subsidiaries in China is

required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches

50% of its registered capital.

Each of our subsidiaries in China is also required to further set aside a portion of its after-tax profits

to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors.

While the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess

of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

dividends, if any, on our common stock will be paid in U.S.

The PRC government also imposes restrictions on the conversion of

RMB into foreign currencies and the remittance of currencies out of the PRC.

As such, we may experience difficulties in completing the

administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any.

if our subsidiaries in the PRC incur any debts, the existence of debts evidenced by the debt instruments may significantly limit their

ability to pay dividends or make other payments.

If we are unable to receive earnings distributions from our operating subsidiaries in

China, we would be unable to pay dividends on our shares.

we are deemed by the PRC tax authorities as a PRC tax resident enterprise for tax purposes, any dividends we pay to our non-PRC resident

shareholders may be regarded as China-sourced income and as a result, may be subject to PRC withholding tax at a rate of up to 10.0%.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation

and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be reduced to 5% if a Hong Kong

resident enterprise owns no less than 25% of a PRC entity.

However, the 5% withholding tax rate does not automatically apply and certain

requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant

and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive

months preceding its receipt of the dividends.

In practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong

tax authority to apply for the 5% lower PRC withholding tax rate.

As the Hong Kong tax authority will issue such a tax resident certificate

on a case-by-case basis, we cannot be certain that we will be able to obtain the tax resident certificate from the relevant Hong Kong

tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to any dividends

to be paid by our WFOE, QHDX, to our Hong Kong subsidiary, DILHK.

QHDX currently does not have any plan to declare and pay dividends,

and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority.

DILHK will apply for the tax resident

certificate when QHDX plans to declare and pay dividends.

of the date of this report, we have not paid, and do not anticipate paying in the foreseeable future, dividends or other distributions

to our shareholders.

There have not been any dividends or other distributions from QHDX to DILHK.

None of our PRC subsidiaries have ever

paid any dividends or distributions outside of China.

We presently intend to retain all earnings to fund our operations and business

can give no assurance that we will declare dividends of any amounts, at any rate or at all in the future.

The declaration of future

dividends, if any, will be at the discretion of our board of directors and will depend upon our future operations and earnings,

capital requirements, general financial conditions, legal and contractual restrictions and other factors that our board of directors

may deem relevant.

The declaration of future dividends,

if any, will be at the discretion of our board of directors and will depend upon our future operations and earnings, capital requirements,

general financial conditions, legal and contractual restrictions and other factors that our board of directors may deem relevant.

Related to our Common Stock

shares may not develop an active trading market and the price and trading volume of our shares may fluctuate significantly.

shares of common stock are listed for quotation on the OTC Pink Marketplace.

Previously our common stock traded on the OTCQB marketplace

but were removed because it failed to maintain a freely traded public float of at least 10% of the total shares issued and outstanding

of the class of security that traded on the OTCQB.

We cannot predict whether we will be able to address this requirement to return

to the OTCQB or whether investor interest in us will lead to the development of an active and liquid trading market.

no assurances can be given regarding when, and if, we will eventually be able to list on a national exchange, including whether

or not we will be able to meet applicable listing standards for any such exchange.

If an active trading market does not develop,

holders of our shares of common stock may have difficulty selling our shares that may now be owned or may be purchased later.

In addition, until we are able to be listed on a national exchange, the number of investors willing to hold or acquire our shares

may be reduced, we may receive decreased news and analyst coverage and we may be limited in our ability to issue additional securities

or obtain additional financing in the future on terms acceptable to us, or at all.

Even if an active trading market develops for

our shares, the market price of our shares may be highly volatile and could be subject to wide fluctuations.

In addition, the

trading volume of our shares may fluctuate and cause significant price variations to occur.

sales of substantial amounts of the shares of our Common Stock by existing shareholders could adversely affect the price

of our Common Stock.

our existing shareholders sell substantial amounts of the shares, then the market price of our Common Stock could fall.

by our existing shareholders might make it more difficult for us to issue new equity or equity-related securities in the future

at a time and place we deem appropriate.

If any existing shareholders sell substantial amounts of shares, the prevailing market

price for our shares could be adversely affected.

market price of our shares is likely to be highly volatile and subject to wide fluctuations in response to factors such as:

in our actual and perceived operating results;

regarding gains or losses of customers or partners by us or our competitors;

regarding gains or losses of key personnel by us or our competitors;

announcements

of competitive developments, acquisitions or strategic alliances in our industry by us or our competitors;

in earnings estimates or buy/sell recommendations by financial analysts;

market conditions or other developments affecting us or our industry;

operating and stock price performance of other companies, other industries and other events or factors beyond our control.

addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related

to the operating performance of certain companies.

These market fluctuations may also materially and adversely affect the market

price of the shares.

common stock may not develop an active trading market and the price and trading volume of our shares may fluctuate significantly.

of common stock are currently quoted on the OTC marketplace and, following this offering, will be listed on the NASDAQ Capital Market.

We cannot predict whether investor interest in us will lead to the development of an active and liquid trading market.

In addition, no

assurances can be given regarding when, and if, we will be able to list on a national exchange, including whether or not we will be able

to meet applicable listing standards for any such exchange.

If an active trading market does not develop, holders of our shares of common

stock may have difficulty selling our shares that may now be owned or may be purchased later.

In addition, until we are able to be listed

on a national exchange, the number of investors willing to hold or acquire our shares may be reduced, we may receive decreased news and

analyst coverage, and we may be limited in our ability to issue additional securities or obtain additional financing in the future on

terms acceptable to us, or at all.

Even if an active trading market develops for our shares, the market price of our shares may be highly

volatile and could be subject to wide fluctuations.

In addition, the trading volume of our shares may fluctuate and cause significant

price variations to occur.

case that our shares trade under $5.00 per share they will be considered penny stock.

Trading in penny stocks has many restrictions

and these restrictions could severely affect the price and liquidity of our shares.

our stock trades below $5.00 per share, our stock would be known as a “penny stock”, which is subject to various regulations

Trading in penny stocks has many restrictions and

these restrictions could severely affect the price and liquidity of our common stock.

our stock trades below $5.00 per share, our stock would be known as a “penny stock”, which is subject to various regulations

involving disclosures to be given to you prior to the purchase of any penny stock.

Securities and Exchange Commission

(the “SEC”) has adopted regulations which generally define a “penny stock”

to be any equity security that

has a market price of less than $5.00 per share, subject to certain exceptions.

Depending on market fluctuations, our Common Stock

would be considered as a “penny stock”.

A penny stock is subject to rules that impose additional sales practice requirements

on broker/dealers who sell these securities to persons other than established Members and accredited investors.

For transactions

covered by these rules, the broker/dealer must make a special suitability determination for the purchase of these securities.

In addition, he must receive the purchaser’s written consent to the transaction prior to the purchase.

He must also provide

certain written disclosures to the purchaser.

Consequently, the “penny stock”

rules may restrict the ability of broker/dealers

to sell our securities and may negatively affect the ability of holders of shares of our Common Stock to resell them.

These disclosures

require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss

of your entire investment.

Penny stocks are low priced securities that do not have a very high trading volume.

Securities and Exchange Commission (the “SEC”)

has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less

than $5.00 per share, subject to certain exceptions.

Depending on market fluctuations, our Common Stock would be considered as a “penny

A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities

to persons other than established Members and accredited investors.

For transactions covered by these rules, the broker/dealer must make

a special suitability determination for the purchase of these securities.

In addition, he must receive the purchaser’s written

consent to the transaction prior to the purchase.

He must also provide certain written disclosures to the purchaser.

Consequently, the

price of the stocks is often volatile, and you may not be able to buy or sell the stock when you want to.

“penny stock” rules may restrict the ability of broker/dealers to sell our securities and may negatively affect the ability

of holders of shares of our Common Stock to resell them.

These disclosures require you to acknowledge that you understand the risks associated

with buying penny stocks and that you can absorb the loss of your entire investment.

Penny stocks are low priced securities that do not

have a very high trading volume.

Consequently, the price of the stocks is often volatile, and you may not be able to buy or sell the

stock when you want to.

do not anticipate paying cash dividends on our Common Stock in the foreseeable future.

do not anticipate paying cash dividends in the foreseeable future.

Presently, we intend to retain all our earnings, if any, to

finance development and expansion of our business.

Consequently, your only opportunity to achieve a positive return on your investment

in us will be if the market price of our Common Stock appreciates.

our Chief Executive Officer, Mr.

Presently, we intend to retain all our earnings, if any, to finance

development and expansion of our business.

Consequently, your only opportunity to achieve a positive return on your investment in us

will be if the market price of our Common Stock appreciates.

Chief Executive Officer, Mr.

Yumin Lin, and our Director, Mr.

Minghua Cheng, own a large percentage of our outstanding stock

and could significantly influence the outcome of our corporate matters.

Minghua Cheng, collectively own a majority of our outstanding shares of

common stock and could significantly influence the outcome of our corporate matters.

Yumin Lin, our CEO, beneficially owns 41.53% of our outstanding shares of Common Stock, and Mr.

2 unchanged sentences

As a result, Messrs.

Yumin Lin and Minghua Cheng are collectively

able to exercise significant influence over all matters that require us to obtain shareholder approval, including the election

of directors to our board and approval of significant corporate transactions that we may consider, such as a merger or other sale

of our company or its assets.

This concentration of ownership in our shares by executive officers will limit other shareholders’

ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control

price of our common stock may be volatile or may decline regardless of our operating performance, and stockholders may not be

able to resell their shares.

trading price for our common stock has fluctuated since our common stock was first quoted on OTCQB.

After our common stock became

quoted on OTCQB, the trading price of our stock has ranged from under $1.0 to $2.05 per share on December 31, 2020, and the last

reported on the OTC Pink Marketplace on April 13, 2021 was $5.13 per share.

The market price of our stock may fluctuate significantly

in response to numerous factors, many of which are beyond our control, including:

Yumin Lin and Minghua Cheng are collectively able to

exercise significant influence over all matters that require us to obtain shareholder approval, including the election of directors to

our board and approval of significant corporate transactions that we may consider, such as a merger or other sale of our company or its

This concentration of ownership in our shares by executive officers will limit other shareholders’ ability to influence

corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

price of our common stock may be volatile or may decline regardless of our operating performance, and stockholders may not be able to

resell their shares.

trading price for our common stock has fluctuated since our common stock was first quoted on the OTC marketplace.

The market price of

our stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

or anticipated fluctuations in our revenue and other operating results;

financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts

who follow our company, or our failure to meet these estimates or the expectations of investors;

of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow

our company, or our failure to meet these estimates or the expectations of investors;

announcements

3 unchanged sentences

events or factors, including those resulting from health pandemics, war or incidents of terrorism, or responses to these events.

addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the

market prices of securities of many companies.

Stock prices of many companies have fluctuated in a manner unrelated or disproportionate

to the operating performance of those companies.

in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against

our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors

or officers in any such actions.

of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or

officer, except in limited circumstances, pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by

the Nevada Revised Statutes.

Specifically, Section 78.138 of the Nevada Revised Statutes provides that a director or officer is

not individually liable to the company or its shareholders or creditors for any damages as a result of any act or failure to act

in his or her capacity as a director or officer unless it is proven that (1) the director’s or officer’s act or failure

to act constituted a breach of his or her fiduciary duties as a director or officer and (2) his or her breach of those duties

involved intentional misconduct, fraud or a knowing violation of law.

This provision is intended to afford directors and officers

protection against and to limit their potential liability for monetary damages resulting from suits alleging a breach of the duty

of care by a director or officer.

Accordingly, you may be unable to prevail in a legal action against our directors or officers

even if they have breached their fiduciary duty of care.

In addition, we are allowed to indemnify our directors and officers from

and against any and all costs, charges and expenses resulting from their acting in such capacities with us.

If you were able to

enforce an action against our directors or officers, in all likelihood, we would be required to pay any expenses they incurred

in defending the lawsuit and any judgment or settlement they otherwise would be required to pay.

Accordingly, our indemnification

obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations

and cash flows, and adversely affect prevailing market prices for our common stock.

we continue to be unable to implement and maintain effective internal control over financial reporting in the future, investors

may lose confidence in the accuracy and completeness of our financial reports and investors may lose the value of their investment.

a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses

in such internal control.

In addition, we have been required to furnish a report by management on the effectiveness of our internal

control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

If we continue to identify material weaknesses

in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely

manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting

firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors

may lose confidence in the accuracy and completeness of our financial reports and the price of our stock could be negatively affected,

and we could become subject to investigations by the SEC, FINRA or other regulatory authorities, which could require additional

financial and management resources.

requirements of being a public company may strain our resources and divert management’s attention.

a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange

Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other

applicable securities rules and regulations.

Despite recent reforms made possible by the JOBS Act, compliance with these rules

and regulations will nonetheless increase our management, legal and financial compliance costs, make some activities more difficult,

time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging

growth company.”

The Exchange Act requires, among other things, that we file annual, semiannual, and current reports with

respect to our business and operating results.

a result of disclosure of information in this annual report, periodic reports, current reports and in other filings required of

a public company, our business and financial condition are more visible, which we believe may result in threatened or actual litigation,

including by competitors and other third parties.

If such claims are successful, our business and operating results could be harmed,

and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary

to resolve them, could divert the resources of our management and adversely affect our business, brand and reputation and results

of operations.

also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director

and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain

These factors could also make it more difficult for us to attract and retain qualified members of our board of directors,

particularly to serve on our audit committee and compensation committee, and qualified executive officers.

incur increased costs as a result of being a public company.

a public company, we incur legal, accounting and other expenses that we did not incur as a private company.

For example, we must

now engage U.S.

securities law counsel and U.S.

GAAP auditors that we did not require as a private company, and we will have annual

payments for listing on a stock exchange if we are so listed.

In addition, the Sarbanes-Oxley Act, as well as new rules subsequently

implemented by the SEC and NASDAQ, has required changes in corporate governance practices of public companies.

We expect these

new rules and regulations to increase our legal, accounting and financial compliance costs and to make certain corporate activities

more time-consuming and costly.

In addition, we incur additional costs associated with our public company reporting requirements.

While it is impossible to determine the amounts of such expenses in advance, we expect that we will incur additional expenses

of between $500,000 and $1 million per year that we did not experience as a private company.

addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market

prices of securities of many companies.

Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the

operating performance of those companies.

sales of substantial amounts of the shares of our Common Stock by existing shareholders could adversely affect the price of our Common

our existing shareholders sell substantial amounts of the shares, then the market price of our Common Stock could fall.

Such sales by

our existing shareholders might make it more difficult for us to issue new equity or equity-related securities in the future at a time

and place we deem appropriate.

If any existing shareholders sell substantial amounts of shares, the prevailing market price for our shares

could be adversely affected.

Unresolved Staff Comments

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

What changed 10-K

Item 1A. Risk Factors