What changed in this filing

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Item 1A. Risk Factors

2025-11-19 compared with 2025-08-13 · 387 added, 53 removed, 4 unchanged (99% of the section changed)

Investing in our common stock involves a high degree of risk.

you invest you should carefully review our Management’s Discussion and Analysis of Financial Condition and Results of Operations

set forth in Item 2 of Part I of this Quarterly Report on Form 10-Q, our consolidated financial statements and related notes included

in Item 1 of Part I of this Quarterly Report on Form 10-Q and our consolidated financial statements and related notes, as well as our

Management’s Discussion and Analysis of Financial Condition and Results of Operations and the other information in our Annual Report

on Form 10-K for the fiscal year ended December 31, 2024.

Readers should carefully review risks described in other documents we file from

time to time with the Securities and Exchange Commission.

We 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.

On May 6, 2025, the Company was notified by the Listing Qualifications

Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that the Staff granted the Company’s request

to transfer the listing of its common stock, par value $0.0005 per share (the “Common Shares”), from The Nasdaq Global Select

Market tier to The Nasdaq Capital Market tier, and that the Staff granted the Company’s request for a second 180-calendar day period,

or until November 3, 2025 (the “Second Compliance Period”), to regain compliance with the $1.00 bid price requirement, as

set forth in Nasdaq Listing Rule 5550(a)(2).

To regain compliance with such minimum price requirement, the Company must evidence a closing

bid price of at least $1.00 per share for a minimum of 10 consecutive business days.

The transfer of the listing of the Common Shares

from The Nasdaq Global Select Market to The Nasdaq Capital Market took effect with the open of business on May 8, 2025.

The transfer is

not expected to impact trading in the Common Shares, which will continue to trade on Nasdaq under the symbol “GURE.”

As previously announced, on November 5, 2024, the Staff notified the

Company that the bid price for the Common Shares had closed below $1.00 per share for 30 consecutive business days and, as a result, the

Company no longer satisfied Nasdaq Listing Rule 5450(a)(1), the minimum bid price requirement applicable to The Nasdaq Global Select Market

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was afforded an initial 180-calendar day grace period, through May

5, 2025, to regain compliance with the minimum bid price requirement.

Issuers listed on The Nasdaq Global Select Market are not eligible

for a second 180-day grace period under the Nasdaq Listing Rules.

However, based upon the Company’s compliance with the various

criteria required under Nasdaq Listing Rule 5810(c)(3)(A)(ii) to obtain a second 180-day grace period applicable to issuers listed on

The Nasdaq Capital Market, the Company applied to transfer the listing of its Common Shares to The Nasdaq Capital Market.

As noted above,

the Staff approved the Company’s transfer application on May 6, 2025.

The Company intends to closely monitor the closing bid price for its

Common Shares and consider all available options to timely remedy the bid price deficiency.

If at any time during the Second Compliance

Period, the closing bid price of the Common Shares is at least $1.00 per share for a minimum of 10 consecutive business days, the Staff

will provide the Company with written confirmation of compliance and the matter will be closed, unless the Staff exercises its discretion

to extend this ten-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H).

The Company can give no assurance that it will regain or demonstrate

compliance during the Second Compliance Period.

If the Company is not able to demonstrate compliance with the minimum bid price requirement

by November 3, 2025, or the Company does not comply with the terms of the extension, the Staff will provide written notification to the

Company that the Common Shares will be delisted.

At that time, the Company may appeal the Staff’s determination to the Nasdaq Hearings

Panel (the “Panel”).

The Company’s appeal request would stay any delisting action by the Staff at least pending a hearing

before the Panel and the expiration of any extension that may be granted by the Panel to the Company following the hearing.

The Company has provided written notice to Nasdaq of its intention

to cure the deficiency during the Second Compliance Period by effecting a reverse stock split, if necessary.

Investing in our common stock involves a high degree

Before you invest you should carefully review our Management’s Discussion and Analysis of Financial Condition and Results

of Operations set forth in Item 2 of Part I of this Quarterly Report on Form 10-Q, our consolidated financial statements and related notes

included in Item 1 of Part I of this Quarterly Report on Form 10-Q and our consolidated financial statements and related notes, as well

as our Management’s Discussion and Analysis of Financial Condition and Results of Operations and the other information in our Annual

Report on Form 10-K for the fiscal year ended December 31, 2024.

Readers should carefully review risks described in other documents we

file from time to time with the Securities and Exchange Commission.

If we are unable to comply with the applicable

continued listing requirements or standards of Nasdaq, there is a possibility that our common stock could be delisted.

At present, we

are not in compliance with certain Nasdaq continued listing requirements.

Should we be unable to regain compliance, our securities may

be subject to delisting, which could impact the market price and liquidity of our common stock and potentially limit our access to capital.

We have received a determination

from Nasdaq regarding potential delisting and, while we have effected a reverse stock split and timely appealed against such determination.

While these actions reflect our commitment to maintaining our listing, there can be no assurance that we will regain or maintain compliance

with Nasdaq’s continued listing requirements.

A delisting could have implications for the trading and liquidity of our common stock,

as well as our capital-raising efforts.

On November 4, 2025, we received a

letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we had not regained

compliance with Nasdaq Listing Rule 5550(a)(2) (“Minimum Bid Price Requirement”) by the November 3, 2025 deadline.

our securities would be scheduled for trading suspension.

On November 7, 2025, we promptly appealed the Staff’s determination to

the Nasdaq Hearings Panel (the “Panel a hearing before the Panel has been scheduled on December 9, 2025.

We are actively evaluating a range

of available strategic and corporate actions that may assist in regaining compliance with the Minimum Bid Price Requirement.

the reverse stock split which we have already implemented, we also intend to enhance investor engagement and pursue operational improvements,

subject to board and shareholder approval.

While we are making every effort to

address the listing requirements, there can be no assurance that the Panel will determine that we have achieved compliance with Listing

Rule 5550(a)(2) within the prescribed period or that we will qualify for any additional compliance period that may be available or that

we will ultimately satisfy all applicable Nasdaq listing standards.

If our common stock is delisted, it could result in:

• limited availability of market quotations for our securities;

• reduced liquidity for the Company’s securities;

• a determination that the Company’s common stock is a “penny stock” which may impose additional trading restrictions;

• a limited amount of news and analyst coverage;

• challenges in raising capital or issuing additional securities in the future.

There can also be no assurance that

the market price of the Company’s common stock will maintain the Minimum Bid Price Requirement.

The Chinese government exerts substantial

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

We are currently not required to obtain approval from Chinese

authorities to list on U.S exchanges, however, if our holding company or subsidiaries were required to obtain approval or filing in the

future and were denied permission from Chinese authorities to list on U.S.

exchanges, we will not be able to continue listing on U.S.

exchange, which would materially affect the interest of the investors.

The Chinese government has exercised and can continue

to exercise substantial control to intervene on virtually every sector of the Chinese economy through regulation and state ownership,

and as a result, it can influence the manner in which we must conduct our business activities and effect material changes in our operations

or the value of the common stock we are registering in this resale.

Under the current government leadership, the government of the PRC

has been pursuing reform policies which have adversely affected China-based operating companies whose securities are listed in the U.S.,

with significant policies changes being made from time to time without notice.

There are substantial uncertainties regarding the interpretation

and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement

and performance of our contractual arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or

criminal proceedings.

Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to

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

The central or local governments of these jurisdictions

may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts

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

Accordingly, government actions in the future, including

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

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

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

Given recent statements by the Chinese government

indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based

issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors

and cause the value of such securities to significantly decline or become worthless.

Recently, the General Office of the Central Committee

of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal

Securities Activities According to Law, or the Opinions, which was made available to the public on July 6, 2021.

The Opinions emphasized

the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas

listings by Chinese companies.

Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to

deal with the risks and incidents of China-concept overseas listed companies.

As of the date hereof, we have not received any inquiry,

notice, warning, or sanctions from PRC government authorities in connection with the Opinions.

On June 10, 2021, the Standing Committee of the

National People’s Congress of China, or the SCNPC, promulgated the PRC Data Security Law, which took effect in September 2021.

PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces

a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree

of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when

such data is tampered with, destroyed, leaked, illegally acquired or used.

The PRC Data Security Law also provides for a national security

review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

In early July 2021, regulatory authorities in

China launched cybersecurity investigations with regard to several China-based companies that are listed in the United States.

cybersecurity regulator announced on July 2 that it had begun an investigation of Didi Global Inc.

DIDI) and two days later ordered

that the company’s app be removed from smartphone app stores.

On July 5,2021, the Chinese cybersecurity regulator launched the same

investigation on two other Internet platforms, China’s Full Truck Alliance of Full Truck Alliance Co.

YMM) and Boss

of KANZHUN LIMITED (Nasdaq:

On July 24, 2021, the General Office of the Communist Party of China Central Committee and the General

Office of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring

for Students at the Stage of Compulsory Education, pursuant to which foreign investment in such firms via mergers and acquisitions, franchise

development, and variable interest entities are banned from this sector.

On August 17, 2021, the State Council promulgated

the Regulations on the Protection of the Security of Critical Information Infrastructure, or the Regulations, which took effect on September

The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the

Cybersecurity Review Measures.

The Regulations provide, among others, that protection department of certain industry or sector shall notify

the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

On August 20, 2021, the SCNPC promulgated the

Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect in November 2021.

first systematic and comprehensive law specifically for the protection of personal information in the PRC, the Personal Information Protection

Law provides, among others, that (i) an individual’s consent shall be obtained to use sensitive personal information, such as biometric

characteristics and individual location tracking, (ii) personal information operators using sensitive personal information shall notify

individuals of the necessity of such use and impact on the individual’s rights, and (iii) where personal information operators reject

an individual’s request to exercise his or her rights, the individual may file a lawsuit with a People’s Court.

As such, the Company’s business segments

may be subject to various government and regulatory interference in the provinces in which they operate.

The Company could be subject

to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions.

The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure

Additionally, the governmental and regulatory interference 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.

Furthermore, it is uncertain when and whether

the Company will be required to obtain permission from the PRC government to list on U.S.

exchanges in the future, and even when such

permission is obtained, whether it will be denied or rescinded.

Although the Company is currently not required to obtain permission from

any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S.

exchange, our

operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or

On February 17, 2023, the CSRC promulgated Trial

Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”)

and five relevant guidelines, which became effective on March 31, 2023.According to the Overseas Listing Trial Measures, PRC domestic

companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the

filing procedure with the CSRC and report relevant information.

The Overseas Listing Trial Measures provides that an overseas listing

or offering is explicitly prohibited, if any of the following:

(1) such securities offering and listing is explicitly prohibited by provisions

in laws, administrative regulations and relevant state rules;

(2) the intended securities offering and listing may endanger national security

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

(3) the domestic company intending

to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed relevant crimes

such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during

the latest three years;

(4) the domestic company intending to make the securities offering and listing is currently under investigations

for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof;

are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s)

that are controlled by the controlling shareholder(s) and/or actual controller.

The Overseas Listing Trial Measures also provides

that if the issuer meets both the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed

as indirect overseas offering by PRC domestic companies:

(1) 50% or more of any of the issuer’s operating revenue, total profit,

total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted

for by domestic companies;

and (2) the issuer’s main business activities are conducted in China, or its main place(s) of business

are located in China, or the majority of senior management staff in charge of its business operations and management are PRC citizens

or have their usual place(s) of residence located in China.

Where an issuer submits an application for initial public offering to competent

overseas regulators, such issuer must file with the CSRC within three business days after such application is submitted.

the Overseas Listing Trial Measures provide that the direct or indirect overseas listings of the assets of domestic companies through

one or more acquisitions, share swaps, transfers or other transaction arrangements shall be subject to filing procedures in accordance

with the Overseas Listing Trial Measures.

The Overseas Listing Trial Measures also requires subsequent reports to be filed with the CSRC

on material events, such as change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings

and listings.

At a press conference held for these new regulations

(“Press Conference”), officials from the CSRC clarified that the domestic companies that have already been listed overseas

on or before March 31, 2023 shall be deemed as existing issuers (the “Existing Issuers”).

Existing Issuers are not required

to complete the filling procedures immediately, and they shall be required to file with the CSRC upon occurrences of certain subsequent

matters such as follow-on offerings of securities.

According to the Overseas Listing Trial Measures and the Press Conference, the existing

domestic companies that have completed overseas offering and listing before March31, 2023, such as us, shall not be required to perform

filing procedures for the completed overseas securities issuance and listing.

However, from the effective date of the regulation, any

of our subsequent securities offering in the same overseas market or subsequent securities offering and listing in other overseas markets

shall be subject to the filing requirement with the CSRC within three working days after the offering is completed or after the relevant

application is submitted to the relevant overseas authorities, respectively.

If it is determined that any approval, filing or other administrative

procedures from other PRC governmental authorities is required for any future offering or listing, we cannot assure you that we can obtain

the required approval or accomplish the required filings or other regulatory procedures in a timely manner, or at all.

If we fail to fulfill

filing procedure as stipulated by the Trial Measures or offer and list securities in an overseas market in violation of the Trial Measures,

the CSRC may order rectification, issue warnings to us, and impose a fine of between RMB1,000,000 and RMB10,000,000.

Persons-in-charge

and other persons that are directly liable for such failure shall be warned and each imposed a fine from RMB500,000 to RMB5,000,000.

shareholders and actual controlling persons of us that organize or instruct such violations shall be imposed a fine from RMB1,000,000

and RMB10,000,000.

On February 24, 2023, the CSRC published the Provisions

on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises

(the “Provisions on Confidentiality and Archives Administration”), which came into effect on March 31, 2023.

The Provisions

on Confidentiality and Archives Administration requires that, in the process of overseas issuance and listing of securities by domestic

entities, the domestic entities, and securities companies and securities service institutions that provide relevant securities service

shall strictly implement the provisions of relevant laws and regulations and the requirements of these provisions, establish and improve

rules on confidentiality and archives administration.

Where the domestic entities provide with or publicly disclose documents, materials

or other items related to the state secrets and government work secrets to the relevant securities companies, securities service institutions,

overseas regulatory authorities, or other entities or individuals, the companies shall apply for approval of competent departments with

the authority of examination and approval in accordance with law and report the matter to the secrecy administrative departments at the

same level for record filing.

Where there is unclear or controversial whether or not the concerned materials are related to state secrets,

the materials shall be reported to the relevant secrecy administrative departments for determination.

However, there remain uncertainties

regarding the further interpretation and implementation of the Provisions on Confidentiality and Archives Administration.

As of the date of this annual report, we and our

PRC subsidiaries have obtain the requisite licenses and permits from the PRC government authorities that are material for the business

operations of our PRC subsidiaries.

In addition, as of the date of this annual report, we and our PRC subsidiaries are not required to

obtain approval or permission from the CSRC or the CAC or any other entity that is required to approve our PRC subsidiaries’ operations

or required for us to offer securities to foreign investors under any currently effective PRC laws, regulations, and regulatory rules.

If it is determined that we are subject to filing requirements imposed by the CSRC under the Overseas Listing Regulations or approvals

from other PRC regulatory authorities or other procedures, including the cybersecurity review under the revised Cybersecurity Review Measures,

for our future offshore offerings, it would be uncertain whether we can or how long it will take us to complete such procedures or obtain

such approval and any such approval could be rescinded.

Any failure to obtain or delay in completing such procedures or obtaining such

approval for our offshore offerings, or a rescission of any such approval if obtained by us, would subject us to sanctions by the CSRC

or other PRC regulatory authorities for failure to file with the CSRC or failure to seek approval from other government authorization

for our offshore offerings.

These regulatory authorities may impose fines and penalties on our operations in China, limit our ability

to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our

offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results

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

The CSRC or other PRC regulatory authorities also may

take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the securities

Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery,

they do so at the risk that settlement and delivery may not occur.

In addition, if the CSRC or other regulatory authorities later promulgate

new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for

our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established

to obtain such a waiver.

Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect

our business, prospects, financial condition, reputation, and the trading price of our common stock.

In addition, on December 28, 2021, the CAC, the

National Development and Reform Commission (“NDRC”), and several other administrations jointly issued the revised Measures

for Cybersecurity Review, or the Revised Review Measures, which became effective and has replaced the existing Measures for Cybersecurity

Review on February 15, 2022.

According to the Revised Review Measures, if an “online platform operator” that is in possession

of personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review.

on a set of Q&A published on the official website of the State Cipher Code Administration in connection with the issuance of the Revised

Review Measures, an official of the said administration indicated that an online platform operator should apply for a cybersecurity review

prior to the submission of its listing application with non-PRC securities regulators.

Given the recency of the issuance of the Revised

Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties exist with respect

to their interpretation and implementation.

For example, it is unclear whether the requirement of cybersecurity review applies to follow-on

offerings by an “online platform operator” that is in possession of personal data of more than one million users where the

offshore holding company of such operator is already listed overseas.

Furthermore, the CAC released the draft of the Regulations on Network

Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor listed overseas

must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security

review report for a given year to the municipal cybersecurity department before January 31 of the following year.

If the draft Regulations

on Network Data Security Management are enacted in the current form, we, as an overseas listed company, will be required to carry out

an annual data security review and comply with the relevant reporting obligations.

Because the majority of our operations are

in mainland China and our auditor has been located in mainland China, a jurisdiction where the U.S.

Public Company Accounting Oversight

Board (“PCAOB”) is currently unable to conduct inspections without the approval of Chinese authorities, there have been concerns

regarding oversight of the audits of our financial statements filed with the SEC.

If the PCAOB continues to be unable to inspect our audit

firm in the PRC for three consecutive years, the HFCAA requires the SEC to prohibit the trading of our securities on a national securities

exchange, including Nasdaq, or on over-the-counter markets in the United States.

In addition, the U.S.

Senate and U.S.

Representatives have each passed bills, which, if enacted, would decrease the number of non-inspection years from three consecutive years

to two, thus reducing the time period before our securities may be prohibited from trading on a U.S.

securities exchange or delisted from

The foregoing could adversely affect the market price of our securities and our ability to raise capital effectively.

Auditors of companies that are registered with

the SEC and traded publicly in the United States, including our independent registered public accounting firm, are required to be registered

with the PCAOB and to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and applicable

professional standards.

Because our current auditor is located in mainland China, a jurisdiction where the PCAOB is currently unable to

conduct inspections without the approval of Chinese authorities, our auditor is not currently inspected by the PCAOB.

PCAOB inspections of auditors located outside

of mainland China and Hong Kong have at times identified deficiencies in those auditors’ audit procedures and quality control procedures,

which may be addressed as part of the PCAOB’s inspection process to improve future audit quality.

The lack of PCAOB inspections

of audit work undertaken in mainland China and Hong Kong prevents the PCAOB from regularly evaluating our auditor’s audits and its

quality control procedures.

As a result, investors are deprived of the benefits of PCAOB inspections, which could result in limitations

or restrictions on our access to the U.S.

capital markets.

Furthermore, in recent years, the U.S.

and regulatory authorities have continued to express concerns about challenges in their oversight of financial statement audits of U.S.-listed

companies with significant operations in China.

As part of this continued focus on access to audit and other information currently protected

by national law, in particular under Chinese law, the United States enacted the HFCAA in December 2020.

The HFCAA requires the SEC to

identify issuers that have 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 has determined it is unable to inspect or investigate completely because of a restriction imposed

by a non-U.S.

authority in the auditor’s local jurisdiction (a “Commission-Identified Issuer”).

Under the HFCAA, if

the SEC conclusively identifies an issuer as a Commission-Identified Issuer for three consecutive years, the SEC is required to prohibit

the trading of the issuer’s securities on a national securities exchange or through any other method that is within the jurisdiction

of the SEC to regulate, including over-the counter markets in the United States.

Our securities may be prohibited from trading on the

Nasdaq or other U.S.

stock exchanges if our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could

result in our securities being delisted.

Furthermore, in June 2021, the U.S.

Senate passed

the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”),which, if enacted, 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

for two consecutive years (as opposed to the three years under the HFCAA).

In February 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 (the “America

COMPETES Act”), which similarly would amend the HFCAA to shorten the number of non-inspection years from three years to two years.

The America COMPETES Act, however, includes a broader range of legislation than the AHFCA Act in response to the U.S.

Innovation and Competition

Act passed by the U.S.

Senate in 2021.

House of Representatives and the U.S.

Senate will need to agree on amendments to these

respective bills to allow the legislature to pass their amended bills before the President can sign the bill into law.

It is unclear if

or when either of these bills will be signed into law.

In September 2021, the PCAOB adopted PCAOB Rule

6100, Board Determinations Under the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining

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

because of a position taken by one or more authorities in that jurisdiction for the purposes of the HFCAA.

PCAOB Rule 6100 establishes

the manner of the PCAOB’s determinations; the factors the PCAOB will evaluate and the documents and information it will consider

when assessing whether a determination is warranted; the form, public availability, effective date, and duration of such determinations;

and the process by which the PCAOB will reaffirm, modify or vacate any such determinations.

In November 2021, the SEC announced that it

had approved Rule6100.

In December 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements

int he HFCAA for Commission-Identified Issuers, which became effective on January 10, 2022.

In addition, the PCAOB issued a Determination

Report, pursuant to PCAOB Rule 6100, which found that the PCAOB is unable to inspect or investigate completely registered public accounting

firms headquartered in mainland China and Hong Kong because of positions taken by Chinese authorities in those jurisdictions.

began to identify Commission- Identified Issuers for fiscal years beginning after December 18, 2020.

A Commission-Identified Issuer will

be required to comply with the submission and disclosure requirements in the annual report for each year in which it was so identified.

If an issuer is identified as a Commission-Identified Issuer based on its annual report for the fiscal year ended December 31, 2021, the

issuer will be required to comply with the submission or disclosure requirements in its annual report for the fiscal year ended December

If we are identified as a Commission-Identified Issuer that uses an auditor not subject to PCAOB inspection for three consecutive

years, or, if the AHFCAA or the America COMPETES Act is passed, two consecutive years, our securities may be delisted from Nasdaq as a

Delisting of our securities would force holders of our securities to sell their securities.

Further, we may be prohibited from

listing our securities on another U.S.

securities exchange, making our shares harder to trade for the investors, potentially reducing

demand and lowering our share price.

The market price of our securities could be adversely affected as a result of anticipated negative

impacts of such legislative or executive actions upon, as well as negative investor sentiment toward, companies with significant operations

in mainland China and Hong Kong that are listed in the United States, regardless of whether such actions are implemented and regardless

of our actual operating performance.

Our auditor, GGF CPA LTD., Certified Public Accountants,

is a China-based accounting firm registered with the PCAOB, and 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 headquartered in the China and

is subject to inspection by the PCAOB on a regular basis.

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

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 in the future may determine that it is

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

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.

Unregistered Sale of Equity Securities and Use of Proceeds

3 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-Q

Item 1A. Risk Factors