What changed in this filing

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Item 1A. Risk Factors

2024-09-27 compared with 2023-03-31 · 162 added, 83 removed, 324 unchanged (43% of the section changed)

3 unchanged sentences

as defined by Rule 229.10(f)(1).

are currently not in compliance with the Nasdaq continued listing requirements.

If we are unable to regain compliance with Nasdaq’s

listing requirements, our securities could be delisted, which could affect our common stock’s market price and liquidity and reduce

our ability to raise capital.

Company received a notice (the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC

(“Nasdaq”) on April 18, 2024 notifying the Company that due to the Company’s failure to timely file its Annual Report

on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”), with the SEC, the Company is not in compliance

with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires the timely

filing of all required periodic reports with the SEC, and the Company subsequently received a notice (the “May Notice”) from

Nasdaq on May 21, 2024 due to the Company’s non-compliance with the Rule as a result of the Company’s failure to timely file

its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (the “Form 10-Q”, together with the Form 10-K,

the “Delinquent Reports”).

The May Notice states that the Company has until June 17, 2024 to submit to Nasdaq a plan to regain

compliance with the Rule.

June 26, 2024, the Company received a letter from Nasdaq indicating that, based on its further review and the plan of compliance submitted

by the Company on June 14, 2024, Nasdaq has determined to grant an exception to enable the Company to regain compliance with the Rule.

The terms of the exception are as follows:

on or before October 14, 2024, the Company must file the Delinquent Reports, as required by

In the event the Company does not satisfy the terms, Nasdaq will provide written notification that its securities will be delisted.

At that time, the Company may appeal Nasdaq’s determination to a hearings panel.

Subsequently,

on August 20, 2024, the Company received a notice (the “August Notice”) from Nasdaq indicating that, because the Company is

delinquent in filing its quarterly report on Form 10-Q for the period ended June 30, 2024, the Company is not in compliance with the Rule.

The Notice also indicates that as a result of this additional delinquency, the Company must submit an update to its original plan to regain

compliance with respect to the filing requirements.

The Company has until September 4, 2024 to submit such update to Nasdaq.

August Notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Select Market.

While the Company can provide no assurance to the timing, the Company has submitted a letter to Nasdaq confirming that there has been

no change to its original plan to regain compliance with respect to the filing requirements, and will continue to work diligently to complete

and file its delayed SEC reports.

or before October 14, 2024, we must evidence compliance with the Rule, which requires the timely filing of all required periodic reports

with the SEC.

If we fail to regain compliance with the Rule, or fail to evidence compliance with the Rule by October 14, 2024, we may

be subject to delisting.

In that event, we would have the right to a hearing before a Nasdaq hearings panel, which would stay any suspension

or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the

panel following the hearing.

cannot assure you that we will be able to regain compliance with Nasdaq listing standards.

Our failure to continue to meet these requirements

would result in our common stock being delisted from Nasdaq, and if our common stock is delisted, our warrants will also be delisted.

We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq.

In particular:

we may be unable to raise equity capital on acceptable terms or at all;

we may lose the confidence of our customers, which would jeopardize our ability to continue our business as currently conducted;

the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;

holders may be unable to sell or purchase our securities when they wish to do so;

we may become subject to stockholder litigation;

we may lose the interest of institutional investors in our common stock;

we may lose media and analyst coverage;

our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock;

we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all.

As a China-based issuer, the Company provides

44 unchanged sentences

platform operator” controlling personal information of no less than one million users which seeks to list in a foreign stock exchange

should also be subject to cyber security review.

should also be subject to cybersecurity review.

Pursuant to the Revised Measures, companies holding data on more than 1 million users

14 unchanged sentences

significantly decline or be worthless.

The occurrence of security breaches and

cyber-attacks could negatively impact our business.

Information technology systems

are important to our business and operations.

We are subject to attempts to compromise our security and information systems, including

denial of service attacks, viruses, malicious software or ransomware, and exploitations of system flaws or weaknesses.

Error or malfeasance

or other irregularities may also result in the failure of our or our third-party service providers' cybersecurity measures and may give

rise to a cybersecurity incident.

The techniques used to conduct security breaches and cyber-attacks, as well as the sources and targets

of these attacks, change frequently and may not be recognized until launched against us or our third-party service providers.

third-party service providers may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of

cyber-attacks.

The primary risks that could directly result from the occurrence of security breaches and cyber-attacks include operational

interruption, financial losses, personal information leakage and non-compliance.

The occurrence of such incidents could negatively impact

our business operations and our relationships with customers and employees, and damage our reputation.

If we or our third-party service

providers are unable to avert security breaches and cyber-attacks, we could incur significantly higher costs, including remediation costs

to repair damage caused by the breach, costs to deploy additional personnel and network protection technologies, train employees and engage

third-party experts and consultants, as well as litigation costs resulting from the incident.

These costs, which could be material, could

adversely impact our results of operations in the period in which they are incurred and may not meaningfully limit the success of future

attempts to breach our information technology systems.

Uncertainties with respect to the PRC legal

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CSRC released the Trial Administrative Measures for Administration of Overseas Securities Offerings and Listings by Domestic Companies

(the “Trial Measures”) and five supporting guidelines, which will come into effect on March 31, 2023.

Pursuant to the Trial

Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedures

(the “Trial Measures”) and five supporting guidelines, which came into effect on March 31, 2023.

Pursuant to the Trial Measures,

domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedures

and report relevant information to the CSRC.

26 unchanged sentences

The HFCAA, was enacted on December 18, 2020.

The HFCAA states if the

SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection

by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such ordinary shares from being traded on a national

securities exchange or in the over the counter trading market in the U.S.

On March 24, 2021, the SEC adopted interim final rules relating to

the implementation of certain disclosure and documentation requirements of the HFCAA.

A company will be required to comply with these

rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.

The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described

HFCAA states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been

subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such ordinary shares from being

traded on a national securities exchange or in the over the counter trading market in the U.S.

On March 24, 2021, the SEC adopted interim

final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA.

A company will be

required to comply with these rules if the SEC identifies it as having a “non inspection” year under a process to be

subsequently established by the SEC.

The SEC is assessing how to implement other requirements of the HFCAA, including the listing

and trading prohibition requirements described above.

Furthermore, on June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was signed

into law on December 29, 2022, amends the HFCAA and requires 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 for two consecutive years instead of three.

On September 22, 2021,

the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated

under the HFCAA Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a

foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On December 2, 2021, the SEC issued

amendments to finalize the interim final rules previously adopted in March 2021 to implement the submission and disclosure requirements

in the HFCAA.

The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by

a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate

completely because of a position taken by an authority in a foreign jurisdiction.

On December 16, 2021, the PCAOB issued a Determination

Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in:

(1) mainland China of the PRC, because of a position taken by one or more authorities in mainland China;

and (2) Hong Kong, a Special

Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.

The PCAOB has made

such designations as mandated under the HFCAA.

Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis,

identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future.

On August 26, 2022,

the PCAOB signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations

of audit firms based in mainland China and Hong Kong.

The Protocol remains unpublished and is subject to further explanation and implementation.

Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any

issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC.

On December 15, 2022, the

PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered

in China mainland and Hong Kong completely in 2022.

The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable

to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong Kong.

However, whether

the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in

China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control.

The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and is already making plans to resume

regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations

The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed.

Therefore, the PCAOB may in the future determine that it is unable to inspect or investigate completely registered public accounting

firms in mainland China and Hong Kong.

Our auditor, WWC, P.C., Certified Public Accountants, the independent

registered public accounting firm that issued the audit report included in our annual report, an auditor of companies that are traded

publicly in the United States and an U.S.-based accounting firm registered with the PCAOB, is subject to laws in the United States pursuant

to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.

Our auditor is based

in the United States and is subject to inspection by the PCAOB on a regular basis with the last inspection in November 2021.

However, our auditor’s working papers related to us and our subsidiaries

are located in China.

If our auditor is not permitted to provide requested audit work papers located in China to the PCAOB, investors

would be deprived of the benefits of PCAOB’s oversight of our auditor through such inspections which could result in limitation

or restriction to our access to the U.S.

capital markets, and trading of our securities may be prohibited under the HFCAA, which would

result in the delisting of our securities from the Nasdaq.

Senate passed the Accelerating Holding

Foreign Companies Accountable Act, which was signed into law on December 29, 2022, amends the HFCAA and requires 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 for two

consecutive years instead of three.

On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a

framework for the PCAOB to use when determining, as contemplated under the HFCAA Act, whether the PCAOB is unable to inspect or

investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or

more authorities in that jurisdiction.

On December 2, 2021, the SEC issued amendments to finalize the interim final rules previously

adopted in March 2021 to implement the submission and disclosure requirements in the HFCAA.

The rules apply to registrants that the

SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located

in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an

authority in a foreign jurisdiction.

On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is

unable to inspect or investigate completely registered public accounting firms headquartered in:

(1) mainland China of the PRC,

because of a position taken by one or more authorities in mainland China;

and (2) Hong Kong, a Special Administrative Region and

dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.

The PCAOB has made such designations as

mandated under the HFCAA.

Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers

that have used non-inspected audit firms and thus are at risk of such suspensions in the future.

On August 26, 2022, the PCAOB

signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations of

audit firms based in mainland China and Hong Kong.

The Protocol remains unpublished and is subject to further explanation and

implementation.

Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent

discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate

PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong completely in 2022.

The PCAOB Board vacated

its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms

headquartered in China mainland and Hong Kong.

However, whether the PCAOB will continue to be able to satisfactorily conduct

inspections of PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong is subject to uncertainty and

depends on a number of factors out of our, and our auditor’s, control.

The PCAOB is continuing to demand complete access in

China mainland and Hong Kong moving forward and was already making plans to resume regular inspections in early 2023 and beyond, as

well as to continue pursuing ongoing investigations and initiate new investigations as needed.

The PCAOB has indicated that it will

act immediately to consider the need to issue new determinations with the HFCAA if needed.

Therefore, the PCAOB may in the future

determine that it is unable to inspect or investigate completely registered public accounting firms in mainland China and Hong

Our auditor, GGF CPA LTD, Certified

Public Accountants, the independent registered public accounting firm that issued the audit report included in our annual report, an auditor

of companies that are traded publicly in the United States and an China-based accounting firm registered with the PCAOB, is subject to

laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional

Our auditor is based in the China and is subject to inspection by the PCAOB on a regular basis.

However, our auditor’s working papers related

to us and our subsidiaries are located in China.

If our auditor is not permitted to provide requested audit work papers located in China

to the PCAOB, investors would be deprived of the benefits of PCAOB’s oversight of our auditor through such inspections which could

result in limitation or restriction to our access to the U.S.

capital markets, and trading of our securities may be prohibited under the

HFCAA, which would result in the delisting of our securities from the Nasdaq.

Changes in China’s economic, political

72 unchanged sentences

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.

Current 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 common reserve, which may stop drawing its after-tax profits if the aggregate balance

of the common reserve has already accounted for over 50 percent of its registered capital.

These reserves are not distributable as cash

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.

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

Current 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 common reserve, which may stop

drawing its after tax profits if the aggregate balance of the common 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.

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.

In addition, the Enterprise

101 unchanged sentences

regulators may be limited or prohibited.

Unresolved Staff Comments.

Not applicable.

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

What changed 10-K

Item 1A. Risk Factors