What changed in this filing

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Item 1. Legal Proceedings

2024-05-14 compared with 2024-02-14 · 21 added, 28 removed, 1 unchanged (98% of the section changed)

LEGAL PROCEEDINGS

Our former placement agent,

Boustead Securities LLC ("Boustead”), has brought a legal action against us following our communication to Boustead to unilaterally

terminate an engagement agreement under which we and Boustead had originally intended for Boustead to be engaged to act as an exclusive

underwriter in our initial public offering.

To date, we have been unable to reach a settlement with Boustead.

On April 30, 2021, Boustead

filed a statement of claim with FINRA demanding to arbitrate the dispute, and is seeking, among other things, monetary damages against

the Company and D.A.

Davidson & Co.

The matter is presently scheduled to hold its evidentiary hearing before a FINRA arbitration panel

during the first two weeks of March 2024.

The actual FINRA arbitration, however, has been postponed and, as a result, a date for the FINRA

arbitration hearing has not yet been set.

The Company and its special litigation counsel are in the process of preparing for the hearing.

We believe that we have meritorious defenses to any claims that Boustead may assert, and we do not believe that such claims will have

a material adverse effect on our business, financial condition, or operating results.

However, we have agreed to indemnify D.A.

and the other underwriters who participated in our initial public offering against any liability or expense they may incur or

be subject to arising out of the Boustead dispute.

In addition, Chenlong Tan, our Chairman, President, and Chief Executive Officer and

a beneficial owner of more than 5% of our common stock, has agreed to reimburse us for any judgments, fines and amounts paid or actually

incurred by us or an indemnitee in connection with such legal action or in connection with any settlement agreement entered into by us

or an indemnitee up to a maximum of $3.5 million in the aggregate, with the sole source of funding for such reimbursement to come from

sales of shares then owned by Mr.

Other than the above, we are

not presently party to any pending or other threatened legal proceedings or claims that we believe will have a material adverse effect

on our business, financial condition, or operating results, although from time to time, we may become involved in legal proceedings in

the ordinary course of business.

described in Note 19 to our financial statements above, on April 3, 2024, the Company and the underwriter of our initial public offering,

Davidson & Co (“D.A.

Davidson”), entered into a settlement agreement and mutual release (the “Settlement Agreement”)

with Boustead Securities, LLC (“BSL”) and its current and former employees, officers, directors, partners, agents and affiliates,

pursuant to which all parties agreed to release all claims in exchange for the Company’s payment of $1.3 million (the “Settlement

Amount”) to BSL.

The Settlement Agreement was entered into for purposes of settling in full the FINRA Arbitration (FINRA Case No.

22-01133) which had been brought by BSL against the Company and D.A.

Davidson after the Company opted not to complete its initial public

offering with BSL but instead engaged and completed its initial public offering with D.A.

In entering into the Settlement Agreement,

the Company is required to pay the Settlement Amount in four equal installments of $325,000 on each of April 3, 2024, May 3, 2024, June

3, 2024 and July 3, 2024, with the April and May payments having been completed on or about April 3 and May 3, 2024.

Within five days

of its receipt of the final payment, or by July 8, 2024, BSL will be obligated to dismiss the FINRA Arbitration against the Company, with

prejudice, after which time the Company will be required to dismiss, with prejudice, all counterclaims brought by the Company against

Other than the above settlement,

we are not presently a party to any pending or other threatened legal proceedings or claims against us that we believe will have a material

adverse effect on our business, financial condition, or operating results.

Nonetheless, we may from time to time become involved in legal

proceedings in the ordinary course of business.

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 1. Legal Proceedings