What changed in this filing

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Item 1A. Risk Factors

2024-04-15 compared with 2023-03-31 · 160 added, 128 removed, 1986 unchanged (13% of the section changed)

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

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;

ability to generate revenue;

ability to obtain higher gross profit products;

ability to obtain healthier and economical products;

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

were incorporated in Nevada in March 2014.

For the years ended December 31, 2023 and 2022, we generated $4,236,565 and $9,234,079, respectively,

in revenues, and had net loss of $3,637,351 and $2,156,679, 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:

Our ability to market our

Our ability to generate

Our ability to obtain higher

gross profit products;

Our ability to obtain healthier

and economical products;

Our ability to raise the

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

We have a history of operating losses, and continued

future operating losses would have a material adverse effect on our ability to continue as a going concern.

We had net operating losses of approximately $4.3

million and $2.2 million for the years ended December 31, 2023 and 2022, respectively.

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 desire.

If in the future we continue to 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.

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

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

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

as a going concern.

We 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

growth prospects.

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

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

Industry participants include large scale and well-funded

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

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

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

Any financial or other

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

Reservation of production

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

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

reduction or interruption in supply of one or more products;

significant increase in the price of one or more products;

failure to adequately procure inventory by our suppliers or manufacturers;

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

a reduction or interruption

in supply of one or more products;

a significant increase

in the price of one or more products;

a failure to adequately

procure inventory by our suppliers or manufacturers;

a failure to appropriately

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

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

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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.

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.

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, 2023 and 2022, there was no customer who accounted for more than 10% of the Company’s total revenue.

customers concentration issues is always one of our marketing strategies.

However, no guarantee could be made that such wide range of

client base can always be maintained.

If the concentration on customers occurs in our future operations, any decline in such customers’

transaction volume would lower our revenues, which would adversely affect our operating results, of course, avoiding customer concentration

is one of our core marketing strategy, we will strife to maintain the wide range of customers base.

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

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them and could have a negative impact on our reputation.

Climate change, or legal, regulatory or market

responses to climate change may adversely affect our business, results of operations or financial condition

There has been an increased focus by governments,

non-governmental organizations and other stakeholders on environmental sustainability matters including climate change.

There is an emerging

scientific consensus on climate change with respect to the frequency and severity of storms, floods and other weather events.

suppliers and their raw material providers could be adversely affected by extreme weather events, which in turn could negatively affect

the supply of the products our subsidiaries sell.

Our PRC subsidiaries are subject to various PRC national and local environmental

regulations and requirements.

Compliance with existing and new environmental regulations requires substantial resources.

Changes in environmental

and climate related laws or regulations could lead to additional operational restrictions and compliance requirements upon our subsidiaries,

their products or services, or otherwise could negatively impact our business.

We may experience future increases in the costs associated

with environmental regulatory compliance to meet environmental regulatory and other compliance requirements, all of which could adversely

affect our business, results of operations or financial condition.

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

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stringently administrated and enforced.

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.

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.

With respect 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.

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.

his personal guarantee.

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

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

integration of our existing operations and acquired businesses;

cost controls and adequate liquidity;

strengthening

of financial and risk controls;

marketing, sales and support activities;

training and hiring qualified employees and professionals.

successful integration

of our existing operations and acquired businesses;

stringent cost controls

and adequate liquidity;

strengthening of financial

and risk controls;

increased marketing, sales

and support activities;

retaining, training and

hiring qualified employees and professionals.

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

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and financial results.

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

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

adversely affect our reputation, financial condition and operating results.

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

security and prevent unauthorized access to our information technology system or data could result in a disruption of our business operations

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

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

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

damage awards;

licenses from third parties;

ongoing royalties;

restricted by injunctions.

pay damage awards;

seek licenses from third

pay ongoing royalties;

be restricted by injunctions.

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

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

Risks Related to Doing Business in China

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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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

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

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.

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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.

Listing Rules, which became effective on March 31, 2023.

According to the Overseas Listing Rules, among other things, all China-based

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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 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.

current auditor, YCM CPA, an independent registered public accounting firm that is headquartered in the Irvine, California,

with offices in China, 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 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.

YCM CPA has been subject to PCAOB

inspections on a regular basis 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

regulatory change or step taken by PRC regulators that does not permit YCM CPA 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

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on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

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.

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, 2023 and 2022, we had foreign currency translation loss of $240,510 and foreign

currency translation loss of $807,766, 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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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.

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 former 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 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

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 us.

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

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our stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

or anticipated fluctuations in our revenue and other operating results;

financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow

our company, or our failure to meet these estimates or the expectations of investors;

announcements

by us or our competitors of significant products, acquisitions, strategic partnerships, joint ventures, or capital commitments;

and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

threatened or filed against us;

events or factors, including those resulting from health pandemics, war or incidents of terrorism, or responses to these events.

actual or anticipated fluctuations

in our revenue and other operating results;

the financial projections

we may provide to the public, any changes in these projections or our failure to meet these projections;

actions of securities analysts

who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our

failure to meet these estimates or the expectations of investors;

announcements by us or

our competitors of significant products, acquisitions, strategic partnerships, joint ventures, or capital commitments;

price and volume fluctuations

in the overall stock market, including as a result of trends in the economy as a whole;

lawsuits threatened or

filed against us;

other events or factors,

including those resulting from health pandemics, war or incidents of terrorism, or responses to these events.

addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market

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could be adversely affected.

Unresolved Staff Comments

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

What changed 10-K

Item 1A. Risk Factors