What changed in this filing

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Item 1A. Risk Factors

2023-03-31 compared with 2022-04-01 · 768 added, 417 removed, 1346 unchanged (47% of the section changed)

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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.”

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.

In any 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

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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, 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:

We were incorporated in Nevada in March 2014.

For the years ended December

31, 2022 and 2021, we generated $9,234,079 and $8,021,823, respectively, in revenues, and had net loss of $2,156,679 and net income of

$1,963,469, 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.

to achieve and maintain profitability and positive cash flow is dependent upon:

ability to market our products;

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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.

We had net operating losses of approximately $1.9 million and $3.1 million

for the years ended December 31, 2022 and 2020, respectively.

We generated a net operating income of approximately $2.1 million 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

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 desire.

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

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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

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

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

For the years ended December 31, 2022 and 2021, there was no customer who accounted for more than 10% of the

Company’s total revenue.

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.

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

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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.

As of the date hereof, the aggregate amount of unpaid social security and

housing fund contributions is approximately RMB 899,940 (approximately $135,985) and the amount of potential penalties, if levied, is

estimated to be RMB 133,460 (approximately $20,187).

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.

to the previously unpaid social security and housing funds of our PRC subsidiaries, one of our major shareholders, 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.

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

Related to Doing Business in China

Risks 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

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Uncertainties

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.

in the PRC legal system and the interpretation and enforcement of PRC laws and regulations could limit the legal protections available

to us and our investors, and rules and regulations in China can change quickly with little advance notice.

Such uncertainties could cause

our shares to significantly decline in value or become worthless.

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

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cover all aspects of economic activities in China.

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.

In particular, because of the limited volume of published decisions and their nonbinding

nature, 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

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.

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.

As a result, we may not be aware of

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

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

Since this document is relatively new, uncertainties exist as to how soon legislative or administrative regulation-making bodies

will respond and what existing or new laws, regulations or detailed implementations and interpretations will be modified or promulgated

or mo 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, including you.

Such uncertainties could cause the value of such securities to significantly decline

or be worthless.

Chinese government may intervene or influence the operation of our PRC subsidiaries and exercise significant oversight and discretion

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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.

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,

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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.

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,

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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

December 28, 2021, the CAC, NDRC, and other government agencies jointly issued the Revised Measures for Cybersecurity Review Measures,

or the Revised Cybersecurity Measures, which will take effect and replace the previously issued Revised Measures for Cybersecurity Review

on February 15, 2022.

Under the Revised Cybersecurity 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.

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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.

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.

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 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

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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.

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.

The 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

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

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.

The relevant 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.

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law imposes heightened regulation and additional security obligations on operators of critical information infrastructure.

July 10, 2021, the CAC issued the Revised Cybersecurity Measures for public comments.

According to the Revised Cybersecurity Measures,

the scope of cybersecurity reviews is extended to data processing operators engaging in data processing activities that affect or may

affect national security.

The Revised Cybersecurity Measures further require that any operator applying for listing on a foreign exchange

must go through cybersecurity review if it possesses personal information of more than one million users.

A cybersecurity review assesses

potential national security risk that may be brought about by any procurement, data processing, or overseas listing.

The review focuses

on several factors, including, among others, (i) the risk of theft, leakage, corruption, illegal use or export of any core or important

data, or a large amount of personal information, and (ii) the risk of any critical information infrastructure, core or important data,

or a large amount of personal information being affected, controlled or maliciously exploited by a foreign government after a company

is listed overseas.

November 14, 2021, the CAC published the Regulations of Internet Data Security Management (Draft for Comments), which further regulate

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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.

As of the date of this report, the draft regulations have been released for public comment only and have not been formally adopted.

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

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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.

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.

However, if the final rules are adopted

as proposed, we intend to fully comply with the requirements of the regulations.

are committed to taking the necessary actions to satisfy the effective personal information protection and internet data security regulatory

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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.

to fully comply with the following requirements should the final rules are issued 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 final version of the Revised Measures for Cybersecurity

Review, or the Revised Cybersecurity Measures, which took effect on February 15, 2022 and replaced the previously issued Revised Measures

for Cybersecurity Review.

Under the Revised Cybersecurity 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 Revised Cybersecurity 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 (less than 12,000 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.

believe that we are an Operator within the meaning of the Revised Cybersecurity 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 Revised Cybersecurity Measures.

there remains uncertainty as to how the Revised Cybersecurity Measures may be interpreted or implemented and whether the PRC regulatory

agencies, including the CAC, may adopt new rules and regulations related to the Revised Cybersecurity Measures.

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, manufacturing and merchandise sales 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.

If any new laws, regulations,

implementation measures or interpretation are adopted, we may need to take further actions and invest resources to comply with such new

rules and to minimize any potential negative effects on us.

In addition, if the number of our online platform users increases to a level

close to one million, we would expect to prepare for the required cybersecurity review procedure and approval from the PRC government.

the CAC released the draft of the Regulations on Network Data Security Management (Draft for Comment) in November 2021 for public consultation,

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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.

summary, 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

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.

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

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.

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,

18 unchanged sentences

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.

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 a material change in the value of the securities we are registering for sale,

including that it could cause the value of such securities to significantly decline or become worthless.

business in China, through the operations of our PRC subsidiaries, are governed by PRC law, including PRC foreign investment laws and

regulations, among others.

On January 1, 2020, the PRC Foreign Investment Law, or the Foreign Investment Law, and the Regulations

for Implementation of the Foreign Investment Law of the People’s Republic of China, or the Implementation Regulations, came into

effect and replaced the trio of prior laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise

Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation

rules and ancillary regulations.

The relevant PRC Telecommunications Regulations 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.

Foreign direct investment in telecommunications companies in China is governed by the Administrative

Rules on Foreign-invested Telecommunications Enterprises, or the FITE Regulations, which was issued by the State Council on December

11, 2001 and amended on February 6, 2016.

On March 29, 2022, the State Council issued the Decision on Revising or Abolishing Some Administrative

Regulations which will take effective May 1, 2022, made certain significant changes to the 2016 FITE Regulations.

Under the 2016 FITE

Regulations, a foreign investor who invests in a value-added telecommunications business in the PRC must possess prior experience in

and a proven track record of operating value-added telecommunications businesses overseas (the “Qualification Requirements”),

while the 2022 Decision repeals the Qualification Requirements.

Therefore, the restrictions of Qualification Requirements no longer apply

to foreign investors.

Investments in the PRC by foreign investors and foreign-invested enterprises are also regulated by the Catalogue

of Industries in which Foreign Investment is Encouraged (2020 Edition), or the 2020 Catalogue, and the Special Administrative Measures

for Foreign Investment Access (Negative List 2021), or the 2021 Negative List.

Under the Circular on Loosening the Restriction on Foreign

Shareholdings in Online Data Processing and Transaction Processing Business (for E-commerce), or Circular 196, issued by MIIT on June

19, 2015, foreign investors may hold up to 100% of all equity interest in an online data processing and transaction processing business

operating e-commerce in China.

Apart from e-commerce, the 2021 Negative List also provides that foreign investors may hold 100% equity

interest in domestic multi-party communications, data collection and transmission services and call centers.

Pursuant to these laws and

regulations, we are permitted, through our subsidiaries, to engage

in food and related product purchases and sales via online platforms as a provider of online data processing and transaction processing

However, the relevant PRC foreign investment regulations are still evolving, and there have been limited guidance and interpretation

with respect to these new rules and regulations.

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

addition, pursuant to the PRC M&A Rules, an offshore special purpose vehicle formed for listing purposes and controlled directly

or indirectly by Chinese companies or individuals is required to obtain the approval of the CSRC prior to the listing and trading of

such SPV’s securities on an overseas stock exchange.

However, the provisions of the M&A Rules remains unclear regarding the

scope and applicability of the CSRC approval requirement.

The CSRC has not issued any definitive rule or interpretations.

current laws and regulations, our Chinese legal counsel has advised us that the M&A Rules and related regulations do not require

the Company or its PRC subsidiaries to obtain prior approval from CSRC for the listing and trading of the Company’s shares on an

overseas securities market, given that our wholly foreign-owned enterprise subsidiaries were established by direct investment, rather

than by a merger with or an acquisition of any PRC domestic companies as defined under the M&A Rules.

However, there are substantial

uncertainties as to how the M&A Rules are interpreted or implemented in the context of an overseas offering and our PRC counsel’s

opinions stated above are subject to further changes in PRC laws or implementations and interpretations of the M&A Rules, and there

can be no assurance that the PRC governmental agencies will ultimately take a view that is consistent with our PRC counsel’s opinion

stated above.

the PRC regulatory authorities were to find our legal structure and operations in the PRC to be in violation of any PRC laws, administrative

regulations or provisions, we are uncertain what impact of PRC regulatory authorities’ actions would have on us and our subsidiaries

and we may lose our right to operate in China through our investment and ownership in our PRC subsidiaries.

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 a material change in the value of the securities we are registering for sale, including that

it could cause the value of such securities to significantly 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.

and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of the securities

we are registering for sale.

Chinese 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 chain 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

3 unchanged sentences

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.

Since this document is 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.

9 unchanged sentences

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.

the Draft Overseas Listing Rules.

On February 17, 2023, the CSRC issued the Trial Measures and five application guidelines, or the Overseas

Listing Rules, which will become effective on March 31, 2023.

According to the 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.

In addition, overseas offerings and listings

are prohibited for such China-based companies when any of the following applies:

(a) where such securities offering and listing is explicitly

prohibited by applicable PRC laws, administrative regulations and rules;

(b) where a intended securities offering and listing may endanger

national security as reviewed and determined by competent authorities under the State Council in accordance with law;

company intending to make a securities offering and listing, or its controlling shareholder(s) or actual controlling person(s), have

committed crimes, such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market

economy, during the past three years;

(d) where a domestic company intending to make a securities offering and listing is suspected of

committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet

been made thereof;

(e) where there are material ownership disputes over equity held by the domestic company’s controlling shareholder

or by other shareholders that are controlled by the controlling shareholder and/or actual controller.

The Overseas Listing Rules 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 Overseas Listing Rules.

Overseas issuance and listings subject

to the Overseas Listing Rules include direct and indirect issuance and listings.

According to the Notice on the Administrative Procedures

for the Filing of Overseas Offerings and Listings by Domestic Companies published by the CSRC on February 17, 2023, existing listed companies

are not required to make any filings until they conduct a new offering or financing transaction in the future.

A company is regarded

as an existing listed company if it (a) has already completed overseas listing or offering, or (b) has already obtained the approval

for the offering or listing from overseas securities regulatory authorities or stock exchanges but has not completed such offering or

listing before effective date of the Overseas Listing Rules and also completes the offering or listing before September 30, 2023.

the effective date of the Overseas Listing Rules, PRC companies that have already submitted offering and listing applications but have

not yet obtained the approvals from overseas securities regulators or exchanges shall make filings with the CSRC at a reasonable time

before the completion of the offerings or listings.

We believe that our offering and the listing of our shares on Nasdaq Capital Market

would be deemed an indirect overseas offering and listing under the Overseas Listing Rules and will be required to complete the filing

procedures and submit the relevant information to CSRC if we cannot obtain the approvals for this offering and listing from the U.S.

securities regulators or the Nasdaq before the Overseas Listing Rules become effective.

As of the date of this report, the Overseas Listing

Rules have not become effective and we are not required to complete the filing procedures if we obtain the approvals for this offering

and listing from the U.S.

securities regulators and the Nasdaq before the Overseas Listing Rules take effect and complete this offering

and begin the trading of our securities on the Nasdaq before September 30, 2023.

In addition, after the Overseas Listing Rules take effect,

even if we are required to complete the filing procedures, 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

overseas and foreign investment in China-based issuers, especially those in the technology filed.

Additional compliance procedures may

be required in connection with this offering 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 .

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

may be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information,

such as personal information and other data.

These laws continue to develop, and the PRC government may adopt other rules and restrictions

in the future.

Non-compliance could result in penalties or other significant legal liabilities.

failure or perceived failure by our PRC subsidiaries to comply with the Anti-Monopoly Guidelines for Internet Platforms Economy Sector

and other PRC anti-monopoly laws and regulations may result in governmental investigations or enforcement actions, litigation or claims

against us and could have an adverse effect on our business, financial condition and results of operations.

PRC anti-monopoly enforcement agencies have strengthened enforcement under the PRC Anti-Monopoly Law in the recent years.

28, 2018, the SAMR issued the Notice on Anti-monopoly Enforcement Authorization, pursuant to which its province-level branches are authorized

to conduct anti-monopoly enforcement within their respective jurisdictions.

On September 11, 2020, the Anti-Monopoly Commission of the

State Council issued Anti-monopoly Compliance Guideline for Operators, which requires operators to establish anti-monopoly compliance

management systems under the PRC Anti-Monopoly Law to manage anti-monopoly compliance risks.

On February 7, 2021, the Anti-Monopoly Commission

of the State Council published Anti-Monopoly Guidelines for the Internet Platform Economy Sector that specified circumstances under which

an activity of an internet platform will be identified as monopolistic act as well as concentration filing procedures for business operators.

According to the PRC Anti-Monopoly Law, if a business operator carries out a concentration in violation of the law, the relevant authority

shall order the business operator to terminate the concentration, dispose of the shares or assets or transfer the business within a specified

time limit, or take other measures to restore the pre-concentration status, and impose a fine of up to RMB500,000.

On March 12, 2021,

the SAMR published several administrative penalty cases in connection with concentration of business operators that violated PRC Anti-Monopoly

Law in the internet sector.

October 23, 2021, the Standing Committee of the National People’s Congress issued a discussion draft of the amended Anti-Monopoly

Law, which proposes to increase the fines for illegal concentration of business operators to “no more than ten percent of its last

year’s sales revenue if the concentration of business operator has or may have an effect of excluding or limiting competition;

or a fine of up to RMB5 million if the concentration of business operator does not have an effect of excluding or limiting competition.”

The draft also proposes for the relevant authority to investigate transaction where there is evidence that the concentration has or may

have the effect of eliminating or restricting competition, even if such concentration does not reach the filing threshold.

24, 2021, nine government agencies, including the NDRC, jointly issued the Opinions on Promoting the Healthy and Sustainable Development

of Platform Economy, which provides that, among others, monopolistic agreements, abuse of dominant market position and illegal concentration

of business operators in the field of platform economy will be strictly investigated and punished in accordance with the relevant laws.

the present time, we have a relatively small scale supply chain platform operations based on our market share in our product markets

and other factors.

We are not an operator with a dominant market position, and our operating activity cannot constitute an anti-monopoly

behavior that abuses our dominant market position.

We have not entered into monopoly agreements prohibited by the Anti-Monopoly Law with

competing business operators.

As of the date of the report, we have not received a notification from the anti-monopoly regulatory authority

requiring us to file the concentration of undertakings or received any related administrative penalties.

We believe that we are in compliance

with the currently effective PRC anti-monopoly laws in all material aspects.

Nevertheless, if the PRC regulatory authorities identify

any of our activities as monopolistic under the PRC Anti-Monopoly Law or the Anti-Monopoly Guidelines for the Internet Platform Economy

Sector, we may be subject to investigations and administrative penalties, and therefore materially

and adversely affect our financial conditions, operations and business prospects.

If we are required to take any rectifying or remedial

measures or are subject to any penalties, our reputation and business operations may be materially and adversely affected.

in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect

or investigate completely our auditors for two consecutive years .

recent years, U.S.

2 unchanged sentences

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.

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.

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.

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.

6 unchanged sentences

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.

August 26, 2022, the PCAOB signed a SOP with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered

public accounting firms in the PRC and Hong Kong which establishes a method for the PCAOB to conduct inspections of PCAOB-registered

public accounting firms in the PRC and Hong Kong, as contemplated by the Sarbanes-Oxley Act.

Under the agreement, (a) the PCAOB has sole

discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, or

input from, PRC authorities;

(b) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with

all information included and for the PCAOB to retain information as needed;

from all personnel associated with the audits the PCAOB inspects or investigates;

and (d) the PCAOB shall have the unfettered ability

to transfer information to the SEC in accordance with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory

purposes, including administrative or civil enforcement actions.

The PCAOB was required to reassess its determinations as to whether

it is able to carry out inspections and investigations completely and without obstruction by the end of 2022.

On December 15, 2022, the

PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered

in mainland China and Hong Kong and vacated its previous determinations.

However, should PRC authorities obstruct or otherwise fail to

facilitate the PCAOB’s access in the future, the PCAOB will consider the need to issue a new determination.

passed fiscal year 2023 Omnibus spending legislation in December 2022, which contained provisions to accelerate the HFCAA timeline for

implementation of trading prohibitions from three years to two years.

As a result, the SEC is required 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.

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.

offices in Beijing and Shenzhen, is a firm registered with 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

MaloneBailey, LLP has been subject to PCAOB

inspections on a regular basis with the last inspection conducted in 2021 and is not among the PCAOB-registered public accounting firms

headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination.

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, we would fail to meet the PCAOB’s requirements.

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.

of these developments have brought additional 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

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 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.

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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).

to our FIE subsidiaries in China to finance their activities cannot exceed statutory limits and must be registered with SAFE or its local

counterparts, or filed with SAFE in its information system.

In addition, 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

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condition and operating results.

may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may

have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our

ability to conduct our business.

rely principally on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services

of any debt we may incur.

Our PRC subsidiaries’ ability to distribute dividends is based upon their distributable earnings.

PRC regulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits,

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

In addition, each of our PRC subsidiaries, as a Foreign

Invested Enterprise, or FIE, are required to draw 10% of its after-tax profits each year, if any, to fund a statutory reserve, which

may stop drawing its after-tax profits if the aggregate balance of the statutory reserve has already accounted for over 50 percent of

its registered capital.

These reserves are not distributable as cash dividends.

If our PRC subsidiaries incur debt on their own behalf

in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.

Any limitation

on the ability of our PRC subsidiaries to distribute dividends or other payments to their respective shareholders could materially and

adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise

fund and conduct our business.

addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable

to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties

or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises

are incorporated.

control of currency conversion may affect the value of your investment.

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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.

demands, we may not be able to pay dividends in foreign currencies to our security-holders or to fund our business activities outside

In addition, there can be no assurance that the PRC government will not intervene or impose restrictions on our ability to

transfer cash or assets within our organization or to foreign investors, which could result in an inability or prohibition on making

transfers or distributions outside of PRC and may adversely affect our business, financial condition and results of operations.

the extent cash or assets in the business is in the PRC or Hong Kong or a PRC or Hong Kong entity, such cash or assets may not be available

to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations

on the ability of us or our subsidiaries by the PRC government to transfer cash or assets.

transfer of cash and assets among us, our Hong Kong and PRC subsidiaries is subject to restrictions.

The PRC government imposes controls

on the conversion of the RMB into foreign currencies and the remittance of currencies out of the PRC.

In addition, the PRC Enterprise

Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by

Chinese companies to non-PRC-resident enterprises, unless reduced under treaties or arrangements between the PRC central government and

the governments of other countries or regions where the non-PRC resident enterprises are tax resident.

of the date of this report, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within,

into and out of Hong Kong (including funds from Hong Kong to the PRC), except for the transfer of funds involving money laundering and

criminal activities.

However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may

impose such restrictions in the future.

a result of the foregoing PRC laws and regulations, to the extent cash or assets in the business is in the PRC or Hong Kong or a PRC

or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due

to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government

to transfer cash or assets.

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

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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.

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.

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.

We 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, 2022 and 2021,

we had foreign currency translation loss of $807,766 and foreign currency translation gain of $269,234, respectively.

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.

to comply with the Individual Foreign Exchange Rules relating to the overseas direct investment or the engagement in the issuance or

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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.

investigations, enforcement

actions, and sanctions;

mandatory changes to our

supply chain system and products;

disgorgement of profits,

fines, and damages;

civil and criminal penalties

or injunctions;

claims for damages by our

customers or partners;

termination of contracts;

loss of intellectual property

failure to obtain, maintain

or renew certain licenses, approvals, permits, registrations or filings

necessary to conduct our

temporary 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

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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

March 24, 2021, the SEC adopted interim final amendments to implement congressionally mandated submission and disclosure requirements

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

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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

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authorities in the PRC or Hong Kong.

August 26, 2022, the PCAOB signed a SOP with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered

public accounting firms in the PRC and Hong Kong.

The SOP seeks to establish a method for the PCAOB to conduct inspections of PCAOB-registered

public accounting firms in the PRC and Hong Kong.

Under the agreement, (a) the PCAOB has sole discretion to select the firms, audit engagements

and potential violations it inspects and investigates without consultation with, or input from, PRC authorities;

(b) procedures are in

place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain

information as needed;

the PCAOB inspects or investigates;

and (d) the PCAOB shall have the unfettered ability to transfer information to the SEC in accordance

with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory purposes, including administrative or civil enforcement

The PCAOB is required to reassess its determinations as to whether it is able to carry out inspections and investigations completely

and without obstruction by the end of 2022.

December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public

accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations.

However, should PRC authorities

obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB will consider the need to issue a new determination.

December 2022, Congress passed fiscal year 2023 Omnibus spending legislation, which contained provisions to accelerate the HFCAA timeline

for implementation of trading prohibitions from three years to two years.

As a result of the legislation, the SEC is required 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.

recent regulatory developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities

10 unchanged sentences

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.

some uncertainty for investors, the market price of our 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.

30 unchanged sentences

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.

To the extent cash or assets

in the business is in the PRC or a PRC subsidiary, the cash or assets may not be available to fund operations or for other use outside

of the PRC due to interventions in or the imposition of restrictions and limitations on our or our subsidiaries’ ability by the

PRC government to transfer cash or assets.

PRC regulations permit Chinese operating subsidiaries to pay dividends to foreign parent companies only out of their accumulated profits,

45 unchanged sentences

general financial conditions, legal and contractual restrictions and other factors that our board of directors may deem relevant.

may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China

against us or Hong Kong or other foreign laws.

July 14, 2006, Hong Kong and the PRC entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and

Commercial Matters by the Courts of the PRC and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements

Between Parties Concerned, or the 2006 Arrangement, pursuant to which a party with a final court judgment rendered by a Hong Kong court

requiring payment of money in a civil and commercial case pursuant to a choice of court agreement in writing may apply for recognition

and enforcement of the judgment in the PRC.

Similarly, a party with a final judgment rendered by a PRC court requiring payment of money

in a civil and commercial case pursuant to a choice of court agreement in writing may apply for recognition and enforcement of the judgment

in Hong Kong.

A choice of court agreement in writing is defined as any agreement in writing entered into between parties after the effective

date of the 2006 Arrangement in which a Hong Kong court or a PRC court is expressly designated as the court having sole jurisdiction

for the dispute.

Therefore, it is not possible to enforce a judgment rendered by a Hong Kong court in the PRC if the parties in dispute

have not agreed to enter into a choice of court agreement in writing.

The 2006 Arrangement became effective on August 1, 2008.

on January 18, 2019, Hong Kong and the PRC entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil

and Commercial Matters between the Courts of the Mainland and of the Hong Kong Special Administrative Region, or the Arrangement, pursuant

to which, among other things, the scope of application was widened to cover both monetary and non-monetary judgments in most civil and

commercial matters, including effective judgments on civil compensation in criminal cases.

In addition, the requirement of a choice of

court agreement in writing has been removed.

It is no longer necessary for parties to agree to enter into a choice of court agreement

in writing, as long as it can be shown that there is a connection between the dispute and the requesting place, such as place of the

defendant’s residence, place of the defendant’s business or place of performance of the contract or tort.

The 2019 Arrangement

shall apply to judgments in civil and commercial matters made on or after its effective date by the courts of both sides.

The 2006 Arrangement

shall be terminated on the same day when the 2019 Arrangement comes into effect.

If a “written choice of court agreement”

has been signed by parties according to the 2006 Arrangement prior to the effective date of the 2019 Arrangement, the 2006 Arrangement

shall still apply.

2019 Arrangement will be implemented by local legislation in Hong Kong.

The Legislative Council in Hong Kong has passed the Mainland

Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance on 26 October 2022.

The Chief Judge of the Hong Kong High

Court will make rules to provide for the relevant practice and procedures.

In the PRC, the Supreme People’s Court will promulgate

a judicial interpretation to implement the 2019 Arrangement.

When the rules and the judicial interpretation have been prepared, the Department

of Justice in Hong Kong will liaise with the PRC as to the date on which the 2019 Arrangement will take effect in both places simultaneously.

The 2019 Arrangement will apply to judgments made on or after the commencement date of the 2019 Arrangement.

Therefore, there are still

uncertainties about the outcomes and effectiveness of enforcement or recognition of judgments under the 2019 Arrangement.

Related to Business Operations in Hong Kong

risks associated with conducting business in Hong Kong.

have two holding subsidiaries incorporated in Hong Kong, including DILHK and JJHK.

Neither DILHK nor JJHK is currently engaged in any

business operations in Hong Kong, and their only activities are limited to certain administrative functions and holding the equity interests

in their respective PRC subsidiaries.

Additionally, none of our customers purchasing our products via our Fugu Online platform or through

our online stores at third party e-commerce websites is a Hong Kong resident individual or enterprise, nor have we generated revenue

from the Hong Kong source.

If however in the future our Hong Kong subsidiaries conduct business operations or our customer base expands

into Hong Kong, our business operations and financial condition could be affected by the political and legal developments in Hong Kong.

Any changes in the economic, social and/or political conditions, material social unrest, strike, riot, civil disturbance or disobedience,

as well as significant natural disasters, may affect the market and the business operations of our Hong Kong subsidiaries if in the future

our Hong Kong subsidiaries conduct operations.

Hong Kong is a special administrative region of the PRC and the basic policies of the

PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s constitutional document, which provides Hong Kong with

a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the

principle of “one country, two systems.” Nevertheless, we cannot ensure that there will not be any changes in the economic,

political and legal environment in Hong Kong in the future.

the Basic Law, Hong Kong is exclusively in charge of its internal affairs and external relations, while the government of the PRC is

responsible for its foreign affairs and defense.

As a separate customs territory, Hong Kong maintains and develops relations with foreign

states and regions.

Based on certain recent development including the Law of the People’s Republic of China on Safeguarding National

Security in the Hong Kong Special Administrative Region issued by the Standing Committee of the National People’s Congress of the

PRC (“NPC”) in June 2020, the U.S.

State Department has indicated that the United States no longer considers Hong Kong to

have significant autonomy from China and President Trump signed an executive order and Hong Kong Autonomy Act, or HKAA, to remove Hong

Kong’s preferential trade status and to authorize the U.S.

administration to impose sanctions against foreign individuals and entities

who are determined by the U.S.

administration to have materially contributed to the failure to preserve Hong Kong’s autonomy.

United States may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from mainland

These and other recent actions may represent an escalation in political and trade tensions involving the U.S., China and Hong

Kong, which could potentially harm our business if our operations expand into Hong Kong in the future.

Given the relatively small geographical

size of Hong Kong, any of such incidents could have a material effect on the future operations if we expand our business operations into

Hong Kong, which could in turn materially affect our business, results of operations and financial condition.

It is difficult to predict

the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong.

Furthermore, legislative or administrative actions

in respect of China-U.S.

relations could cause investor uncertainty for affected issuers, including us, if in the future we conduct our

business in Hong Kong and the market price of our common stock could be affected.

may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions

in Hong Kong against us or our directors or officers based on Hong Kong laws.

you want to enforce a judgment of the United States in Hong Kong, it must be a final judgment conclusive upon the merits of the claim,

for a definite sum of money in a civil matter and not in respect of taxes, fines, penalties, or similar charges, the proceedings in which

the judgment was obtained were not contrary to natural justice, and the enforcement of the judgment is not contrary to public policy

of Hong Kong.

Such a judgment must be for a fixed sum and must also come from a competent court.

effect of HKAA and other U.S.

government policies in response to the enactment of Law of the PRC on Safeguarding National Security in

the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong holding subsidiaries.

June 30, 2020, the Standing Committee of the PRC NPC adopted the Hong Kong National Security Law.

This law defines the duties and government

bodies of the Hong Kong National Security Law for safeguarding national security and four categories of offences — secession, subversion,

terrorist activities, and collusion with a foreign country or external elements to endanger national security — and their corresponding

On July 14, 2020, the former U.S.

President Donald Trump signed the HKAA into law, authorizing the U.S.

administration to

impose sanctions against foreign individuals and entities who are determined by the U.S.

administration to have materially contributed

to the failure to preserve Hong Kong’s autonomy.

On August 7, 2020 the U.S.

government imposed HKAA-authorized sanctions on eleven

individuals, including Hong Kong’s then chief executive, Carrie Lam.

On October 14, 2020, the U.S.

State Department submitted to

relevant committees of Congress the report required under HKAA, identifying persons materially contributing to “the failure of

the Government of China to meet its obligations under the Joint Declaration or the Basic Law.” The HKAA further authorizes secondary

sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant

transaction with foreign persons sanctioned under this authority.

The imposition of sanctions may directly affect the foreign financial

institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted.

It is difficult

to predict the full impact of the HKAA on Hong Kong and companies located in Hong Kong.

If our Hong Kong subsidiaries conduct business

operations in the future and were determined to be in violation of the Hong Kong National Security Law or the HKAA for some reasons,

however unlikely, our business operations, financial position and results of operations could be materially and adversely affected.

Hong Kong legal system embodies uncertainties which could limit the availability of legal protections.

Kong is a Special Administrative Region of the PRC.

Following British colonial rule from 1842 to 1997, China assumed sovereignty under

the “one country, two systems” principle.

The Hong Kong Special Administrative Region’s constitutional document, the

Basic Law, ensures that the current political situation will remain in effect for 50 years.

Hong Kong has enjoyed the freedom to function

with a high degree of autonomy for its affairs, including currencies, immigration and customs operations, and its independent judiciary

system and parliamentary system.

On July 14, 2020, the United States signed an executive order to end the special status enjoyed by Hong

Kong post-1997.

Any compromise on the autonomy of Hong Kong could have an adverse effect in our business and operations in Hong Kong

if and when we expand our business or customer base in Hong Kong in the future.

We cannot predict the effect of future developments in

the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof.

Related to our Common Stock

47 unchanged sentences

Chief Executive Officer, Mr.

Yumin Lin, and our Director, Mr.

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, and our former Director, Mr.

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.

Minghua Cheng, our Director, beneficially

owns 44.4% of our outstanding shares of Common Stock.

Minghua Cheng, our former Director,

beneficially owns 44.4% of our outstanding shares of Common Stock.

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

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.

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 over

price of our common stock may be volatile or may decline regardless of our operating performance, and stockholders may not be able to

25 unchanged sentences

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

What changed 10-K

Item 1A. Risk Factors