What changed in this filing

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Item 1A. Risk Factors

2023-03-31 compared with 2022-03-31 · 404 added, 321 removed, 1077 unchanged (40% of the section changed)

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dependence on key suppliers puts us at risk of interruptions in the availability of our products, which could reduce our revenue

and adversely affect our results of operations.

and adversely affect the results of operations.

business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global

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the health of our new e-commerce ecosystem, may negatively affect our margins and our net income, if any.

Concentration

of ownership by our principal stockholders may result in control by such stockholders of the composition of our board of directors.

concentration of ownership by our principal stockholders may result in control by such stockholders of the composition of our board

of directors.

will become subject to a broad range of laws and regulations, and future laws and regulations may impose additional requirements

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and materially and adversely affect the price of our common stock.

there has been limited precedent set for financial accounting for digital assets, the determinations that we have made for how to

account for digital assets transactions may be subject to change.

development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in digital assets

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provide digital asset-related services or that accept digital assets as payment.

may face risks of Internet disruptions, which could have a material adverse effect on the price of digital assets.

a particular non-fungible token (NFT) or other digital or “crypto” asset is a “security” is subject to a

high degree of uncertainty, and if we are unable to properly characterize an NFT or other digital asset, we may be subject to regulatory

scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and

financial condition.

are subject to payments-related regulations and risks.

uncertain application of a myriad of state and federal laws to our NextPlat Digital business may expose us to regulatory enforcement

and civil or criminal sanction should a legal authority determine that our approach to compliance is inadequate or inappropriate.

transaction of digital asset business involving the use of crypto wallets and cryptocurrencies may expose us to allegations of violation

of applicable KYC, AML and CFT and other compliance requirements.

of digital assets is pseudonymous, and the supply is often unknown.

Individuals or entities with substantial holdings may engage

in large-scale sales or distributions, either on non- market terms or in the ordinary course, which could disproportionately and

negatively affect the market, result in a reduction in the price of the digital asset and materially and adversely affect the price

of our common stock.

there has been limited precedent set for financial accounting for digital assets, the determinations that we have made for how to

account for digital assets transactions may be subject to change.

Related to Doing Business in China

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price of our securities.

in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

in exchange rates could have a material and adverse effect on the results of operations and the value of your investment.

control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.

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For the years ended December 31, 2022, 2021, and 2020, we have incurred net

losses of $8.1 million, $2.8 million, and $1.4 million, respectively.

As of December 31, 2021, we had an accumulated deficit of $21,986,215.

losses of approximately $9.2 million, $8.1 million, and $2.8 million, respectively.

As of December 31, 2022, we had an accumulated deficit

of approximately $31.1 million.

If our revenue grows more slowly than currently anticipated, or if operating expenses are higher than

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could decline.

Even if we are successful increasing our sales, we may incur losses in the foreseeable future as we continue to develop

Even if we are successful in increasing our sales, we may incur losses in the foreseeable future as we continue to develop

and market our products.

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secure financing for prolonged periods of time, we may need to temporarily cease operations and, possibly, shut them down altogether.

Furthermore, even if we are able to achieve profitability, we may be unable to sustain or increase such profitability on a quarterly

or annual basis, which would adversely impact our financial condition and significantly reduce the value of our common stock.

operations have been affected by the COVID-19 pandemic.

March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) a global pandemic prompting

government-imposed quarantines, suspension of in-person attendance of academic programs, and cessation of certain travel and business

Although we expect the availability of vaccines and various treatments with respect to COVID-19 to have an overall positive

impact on business conditions in the aggregate over time, the exact timing of these positive developments is uncertain.

In December 2020,

the United States began distributing two vaccines that, in addition to other vaccines under development, are expected to help to reduce

the spread of the coronavirus that causes COVID-19 once they are widely distributed.

If the vaccines prove less effective than currently

understood by the scientific community and the United States Food and Drug Administration, or if there are problems with the acceptance,

availability, timing or other difficulties with widely distributing the vaccines, the pandemic may last longer, and could continue to

impact our business for longer, than we currently expect.

In response to COVID-19, governmental authorities have implemented numerous

measures to try to contain the virus, such as travel bans and restrictions, prohibitions on group events and gatherings, shutdowns of

certain businesses, curfews, shelter in place orders and recommendations to practice social distancing.

Although many governmental measures

have had specific expiration dates, some of those measures have already been extended more than once, and there is considerable uncertainty

regarding the duration of such measures and the implementation of any potential future measures, especially if cases increase again across

the United States, with the potential for additional challenges resulting from the emergence of new variants of COVID-19, some of which

may be more transmissible than the initial strain.

Such measures have impacted, and may continue to affect, our workforce, operations,

suppliers and customers.

We reduced the size of our workforce following the onset of COVID-19 and may need to take additional actions

to further reduce the size of our workforce in the future;

such reductions incur costs, and we can provide no assurance that we will

be able to rehire our workforce in the event our business experiences a subsequent recovery.

We took steps to curtail our operating expenses

and conserve cash.

We may elect or need to take additional remedial measures in the future as the information available to us continues

to develop, including with respect to our workforce, relationships with our third-party vendors, and our customers.

There is no certainty

that the remedial measures we have implemented to date, or any additional remedial steps we may take in the future, will be sufficient

to mitigate the risks posed by COVID-19.

Further, such measures could potentially materially adversely affect our business, financial

condition and results of operations and create additional risks for us.

Any escalation of COVID-19 cases across many of the markets we

serve could have a negative impact on us.

Specifically, we could be adversely impacted by limitations on our employees to perform their

work due to illness caused by the pandemic or local, state, or federal orders requiring our stores to close or employees to remain at

limitation of carriers to deliver our product to customers;

product shortages;

limitations on the ability of our customers to conduct

their business and purchase our products and services;

and limitations on the ability of our customers to pay us in a timely manner.

These events could have a material, adverse effect on our results of operations, cash flows and liquidity.

ultimate magnitude of COVID-19, including the full extent of the material negative impact on our financial and operational results, will

depend on future developments.

The resumption of our normal business operations may be delayed or constrained by lingering effects of

COVID-19 on our customers, suppliers and/or third-party service providers.

Furthermore, the extent to which our mitigation efforts are

successful, if at all, is not currently ascertainable.

Due to the daily evolution of the COVID-19 pandemic and the responses to curb

its spread, we cannot predict the full impact of the COVID-19 pandemic on our business and results of operations, but our business, financial

condition, results of operations and cash flows have already been materially adversely impacted, and we anticipate they will continue

to be adversely affected by the COVID-19 pandemic and its negative effects on global economic conditions.

Any recovery from the COVID-19

pandemic and related economic impact may also be slowed or reversed by a variety of factors, such as any increase in COVID-19 infections.

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of its national

and, to some extent, global economic impact, including the current recession and any recession that may occur in the future.

success of our business depends on our global operations, including our supply chain and consumer demand, among other things.

of COVID-19, we have experienced shortages in inventory due to manufacturing and logistics issues, a reduction in the volume of sales

in some parts of our business, such as rental sales and direct website sales, and a reduction in personnel.

Our results of operations

for the year ended December 31, 2021 reflect this impact;

however, we expect that this trend may continue, and the full extent

of the impact is unknown.

In recent months, some governmental agencies in the US and Europe, where we produce the largest percentage

of our sales, have lifted certain restrictions.

However, if customer demand continues to be low, our future equipment sales, subscriber

activations and sales margin will be impacted.

occurrence of a widespread health epidemic or other outbreaks or natural disasters could have a material adverse effect on our business,

financial condition and results of operations.

business could be materially and adversely affected by the outbreak of a widespread health epidemic, such as swine flu, avian influenza,

severe acute respiratory syndrome, or SARS, Ebola, Zika or COVID-19;

natural disasters, such as snowstorms, earthquakes, fires or floods;

or other events, such as wars, acts of terrorism, environmental accidents, power shortages or communication interruptions.

The occurrence

of a disaster or a prolonged outbreak of an epidemic illness or other adverse public health developments could materially disrupt our

industry and our business and operations, and have a material adverse effect on our business, financial condition and results of operations.

For example, these events could cause a temporary closure of the facilities we use for our operations or severely impact consumer behaviors

and the operations of merchants, business partners and other participants in our ecosystem.

Our operations could also be disrupted if

any of our employees or employees of our business partners were suspected of contracting an epidemic disease, since this could require

us or our business partners to quarantine some or all of these employees or disinfect the facilities used for our operations.

our revenue and profitability could be materially reduced to the extent that a natural disaster, health epidemic or other outbreak harms

the global economy in general.

Furthermore, even if we can achieve profitability, we may be unable to sustain or increase such profitability on a quarterly or annual

basis, which would adversely impact our financial condition and significantly reduce the value of our common stock.

continuing effects of the COVID-19 pandemic and its impact are highly unpredictable and could be significant, and could harm our business,

financial condition, and operating results.

business, operations and financial performance have been, and may continue to be, affected by the macroeconomic impacts resulting from

COVID-19, and as a result, our revenue growth rate and expenses as a percentage of our revenues in future periods may differ significantly

from our historical rates, and our future operating results may fall below expectations.

The extent to which our business will continue

to be affected will depend on a variety of factors, many of which are outside of our control, including the persistence of the pandemic,

impacts on economic activity, and the possibility of recession or continued financial market instability.

outside of our control, including those relating to public health crises, supply-chain disruptions, geopolitical conflicts, including

acts of war, and inflation, could negatively affect our Company and our results of operations and financial condition.

of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our control.

types of events may adversely affect operating results for us.

For example, the COVID-19 pandemic has led to, and for an unknown period

of time will continue to lead to, disruptions in local, regional, national and global markets and economies affected thereby, including

the United States.

With respect to U.S.

and global credit markets and the economy in general, this outbreak has resulted in, and until

fully resolved is likely to continue to result in, the following (among other things):

(i) restrictions on travel and the temporary closure

of many corporate offices, retail stores, and manufacturing facilities and factories, resulting in significant disruption to the business

of many companies, including supply chains and demand, as well as layoffs of employees;

(ii) increased draws by borrowers on lines of

(iii) increased requests by borrowers for amendments or waivers of their credit agreements to avoid default, increased defaults

by borrowers and/or increased difficulty in obtaining refinancing;

(iv) volatility in credit markets, including greater volatility in

pricing and spreads;

and (v) evolving proposals and actions by state and federal governments to address the problems being experienced

by markets, businesses and the economy in general, which may not adequately address the problems being facing such persons.

countries, including the United States, have relaxed or eliminated the early public health restrictions adopted in response to the COVID-19

pandemic, the outbreak of new, worsening strains of COVID-19 may result in a resurgence in the number of reported cases and hospitalizations.

Such increases in cases could lead to the reintroduction of restrictions and business shutdowns in certain states, counties and cities

in the United States and globally.

In addition to these developments having adverse consequences for us and our portfolio companies,

the operations of the Company have been, and could continue to be, adversely impacted, including through quarantine measures and travel

restrictions imposed on its personnel or service providers based or temporarily located in affected countries, or any related health

issues of such personnel or service providers.

the future impact of COVID-19 and its variants is difficult to predict, the extent to which they could negatively affect our operating

results or the duration of any potential business or supply-chain disruption is uncertain.

Any potential impact to our results of operations

will depend to a large extent on future developments and new information that could emerge regarding the duration and severity of the

COVID-19 pandemic and the actions taken by authorities and other entities to contain the spread of COVID-19 and its variants or treat

its impact, all of which are beyond our control.

These potential impacts, while uncertain, could adversely affect our operating results

and financial condition.

pandemic has also caused, and may continue to cause, disruption to our global supply chain and business operations.

In particular, shortages

in commodities and materials, including shortages and reductions in allocations of electronic and other components from key suppliers,

labor shortages and elevated levels of employee absenteeism, freight delays and other supply chain constraints and disruptions have significantly

delayed or disrupted, and may continue to adversely impact, both our suppliers and third party vendors and our ability to deliver products

and/or services to our end-users and customers.

We have also experienced a significant increase in parts and material component inflation

from pre-pandemic levels, as well as inflation in other costs, such as labor, packaging, freight, and energy prices.

Continued supply

chain disruptions and delays, as well as continued heightened inflation, could lead to continued periodic delivery interruptions and

other inefficiencies that could negatively impact our productivity, margin performance and results of operations, which could result

in a material adverse effect on our financial condition, results of operations and cash flows.

are currently operating in a period of capital markets disruption and economic uncertainty.

capital markets are currently experiencing extreme volatility and disruption following the global outbreak of COVID-19 and other

global events described above.

Disruptions in the capital markets in the past have resulted in illiquidity in parts of the capital markets.

Future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results

of operations and cash flows.

Unfavorable economic conditions also would be expected to increase our funding costs, limit our access

to the capital markets or result in a decision by lenders, including existing lenders, not to extend credit to us.

These events have

limited and could continue to limit our investment considerations, limit our ability to grow and have a material negative impact on our

operating results.

chain and shipping disruptions have resulted in shipping delays, a significant increase in shipping costs, and could increase product

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Additionally, the impact that supply chain disruptions

have on our manufacturers and suppliers are not within our control.

have on our manufacturers and suppliers is not within our control.

It is not currently possible to predict how long it will take for

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dependence on key suppliers puts us at risk of interruptions in the availability of our products, which could reduce our revenue and

adversely affect our results of operations.

adversely affect the results of operations.

In addition, increases in prices for components used in our products could adversely affect

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Any material shortage, constraint or delay may result in delays in shipments of our products, which could materially adversely affect

our results of operations.

the results of operations.

Increases in prices for materials and components used in our products could also materially adversely affect

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of the above-mentioned factors could affect our business, prospects, financial condition, and operating results.

The extent and

duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.

such disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K.

The extent and duration

of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.

Any such disruptions

may also magnify the impact of other risks described in this Annual Report on Form 10-K.

United Kingdom’s departure from the EU could adversely affect us.

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The future consequences of Brexit

are unknown at this time, but Brexit has created additional administrative burden and legal, regulatory, and currency risk that may have

a materially adverse impact on our business.

Furthermore, this uncertainty could negatively impact the economies of other countries in

which we operate.

decision by British voters to exit the European Union may negatively impact our operations, pricing and profitability.

June 2016 referendum by British voters to exit the European Union adversely impacted global markets and resulted in a sharp decline in

the value of the British pound, as compared to the U.S.

dollar and other currencies.

Following the U.K.’s departure from the European

Union on December 31, 2020 volatility in exchange rates and in U.K.

interest rates may continue.

In the near term, a weaker British pound

compared to the U.S.

dollar during a reporting period causes local currency results of our U.K.

operations to be translated into fewer

a weaker British pound compared to other currencies increases the cost of goods imported into our U.K.

operations and may

decrease the profitability of our U.K.

and a higher U.K.

interest rate may have a dampening effect on the U.K.

the longer term, any impact from Brexit on our U.K.

operations will depend, in part, on the effect of the trade and regulatory terms

of the Brexit agreement announced on December 23, 2020 and which took effect on January 1, 2021.

exchange rate fluctuations may affect our results of operations.

are unknown at this time, but Brexit has created additional administrative burdens and legal, regulatory, and currency risk that may

have a materially adverse impact on our business.

Furthermore, this uncertainty could negatively impact the economies of other countries

in which we operate.

exchange rate fluctuations may affect the results of operations.

the extent that we are successful in broadening the reach of our online e-commerce marketing into other countries we will have transactions

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There can be no assurance that currency exchange rate fluctuations will not

adversely affect our results of operations, financial condition and cash flows.

adversely affect the results of operations, financial condition and cash flows.

While the use of currency hedging instruments may provide

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to business challenges, including developing or enhancing new or existing products.

As of December 31, 2021, we had cash on hand of $17,267,978.

As of December 31, 2022, we had cash on hand of approximately $18.9 million.

If cash on hand, cash generated from operations, and the net proceeds from prior offerings are not sufficient to meet our cash and liquidity

needs, we may need to seek additional capital, potentially through debt or equity financings.

To the extent that we raise additional

capital through the sale of additional equity or convertible securities, your ownership interest may be diluted, and the terms of these

securities may include liquidation or other preferences that adversely affect your rights as a stockholder.

Debt financing, if available,

would result in increased fixed payment obligations and a portion of our operating cash flows, if any, being dedicated to the payment

of principal and interest on such indebtedness.

In addition, debt financing may involve agreements that include restrictive covenants

that impose operating restrictions, such as restrictions on the incurrence of additional debt, the making of certain capital expenditures

or the declaration of dividends.

Any additional fundraising efforts may divert our management from their day-to-day activities, which

may adversely affect our ability to develop and commercialize our products.

Even if we believe we have sufficient funds for our current

or future operating plans, we may seek additional capital if market conditions are favorable or in light of specific strategic considerations.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of

our research or product candidate development programs or the commercialization of any product candidate or be unable to expand our operations

or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, operating results and

prospects and cause the price of the common stock to decline.

needs, we may need to seek additional capital, potentially through debt or equity financing.

To the extent that we raise additional capital

through the sale of additional equity or convertible securities, your ownership interest may be diluted, and the terms of these securities

may include liquidation or other preferences that adversely affect your rights as a stockholder.

Debt financing, if available, would

result in increased fixed payment obligations and a portion of our operating cash flows, if any, being dedicated to the payment of principal

and interest on such indebtedness.

In addition, debt financing may involve agreements that include restrictive covenants that impose

operating restrictions, such as restrictions on the incurrence of additional debt, the making of certain capital expenditures or the

declaration of dividends.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely

affect our ability to develop and commercialize our products.

Even if we believe we have sufficient funds for our current or future operating

plans, we may seek additional capital if market conditions are favorable or considering specific strategic considerations.

unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research

or product candidate development programs or the commercialization of any product candidate or be unable to expand our operations or

otherwise capitalize on our business opportunities, as desired, which could materially affect our business, operating results and prospects

and cause the price of the common stock to decline.

investment in our business, strategic acquisitions and investments, as well as our focus on long-term performance, and on maintaining

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we expect in connection with these investments and acquisitions.

to maintain or improve our technology infrastructure could harm our business and prospects.

to maintain or improve our technological infrastructure could harm our business and prospects.

are in the process of upgrading our platforms to provide increased scale, improved performance, additional capacity and additional built-in

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of operations and prospects, as well as our reputation and brand, could be materially and adversely affected.

addition, our technology infrastructure and services incorporate third-party developed software, systems and technologies, as well

as hardware purchased or commissioned from third-party and overseas suppliers.

As our technology infrastructure and services expand

and become increasingly complex, we face increasingly serious risks to the performance and security of our technology infrastructure

and services that may be caused by these third-party developed components, including risks relating to incompatibilities with these

components, service failures or delays or difficulties in integrating back-end procedures on hardware and software.

We also need to

continuously enhance our existing technology.

Otherwise, we face the risk of our technology infrastructure becoming unstable and

susceptible to security breaches.

This instability or susceptibility could create serious challenges to the security and

uninterrupted operation of our platforms and services, which would materially and adversely affect our business and

addition, our technology infrastructure and services incorporate third-party developed software, systems and technologies, as well as

hardware purchased or commissioned from third-party and overseas suppliers.

As our technology infrastructure and services expand and

become increasingly complex, we face increasingly serious risks to the performance and security of our technology infrastructure and

services that may be caused by these third-party developed components, including risks relating to incompatibilities with these components,

service failures or delays or difficulties in integrating back-end procedures on hardware and software.

We also need to continuously

enhance our existing technology.

Otherwise, we face the risk of our technology infrastructure becoming unstable and susceptible to security

This instability or susceptibility could create serious challenges to the security and uninterrupted operation of our platforms

and services, which would materially and adversely affect our business and reputation.

development is a long, expensive and uncertain process.

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of ownership by our principal stockholders may result in control by such stockholders of the composition of our board of directors.

of March 28, 2022, our existing principal stockholders, executive officers, directors and their affiliates beneficially own approximately

39.5% of our outstanding shares of common stock, and our Executive Chairman and Chief Executive Officer, Charles M.

Fernandez received

a restricted stock award of 600,000 shares of our common stock on May 27, 2021 (which will vest in three equal installments over

three years).

In addition, such parties may acquire additional control by purchasing stock that we may issue in connection with our future

fundraising efforts.

As a result, these stockholders may now and in the future be able to exercise a significant level of control over

all matters requiring stockholder approval, including the election of directors.

This control could have the effect of delaying or preventing

a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible

without the support of these stockholders.

of March 30, 2023, our existing principal stockholders, executive officers, directors and

their affiliates beneficially own approximately 57.7% of our outstanding shares of common stock, and our Executive Chairman and Chief

Executive Officer, Charles M.

Fernandez will receive upon vesting, 400,000 shares of our common stock, which vests in two equal installments

over the next two years starting on June 2, 2023.

In addition, such parties may acquire additional control by purchasing stock that we

may issue in connection with our future fundraising efforts.

As a result, these stockholders may now and in the future be able to exercise

a significant level of control over all matters requiring stockholder approval, including the election of directors.

This control could

have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain

transactions difficult or impossible without the support of these stockholders.

technical development of our products does not guarantee successful commercialization.

may successfully complete the technical development for one or all of our product development programs, but still fail to develop a commercially

successful product for a number of reasons, including among others the following:

may successfully complete the technical development for one or all our product development programs, but still fail to develop a commercially

successful product for several reasons, including among others the following:

to obtain the required regulatory approvals for their use;

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As a result, it may be more difficult for us to attract and

retain qualified persons to serve on our Board of Directors or as executive officers.

retain qualified people to serve on our Board of Directors or as executive officers.

companies may claim that we infringe their intellectual property, which could materially increase our costs and harm our ability to generate

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In addition, any such litigation, even if without merit, could be expensive and disruptive to our ability to generate revenue or enter

into new market opportunities.

If any of our products were found to infringe other parties’ proprietary rights and we are unable

to come to terms regarding a license with such parties, we may be forced to modify our products to make them non-infringing, to pay substantial

new market opportunities.

If any of our products were found to infringe other parties’ proprietary rights and we are unable to

come to terms regarding a license with such parties, we may be forced to modify our products to make them non-infringing, to pay substantial

damages to our end users to discontinue their use of or replace infringing technology sold to them with non-infringing technology, or

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time-consuming and costly and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property.

In the event that we resort to litigation to enforce our intellectual property rights, this litigation could result in substantial costs

and a diversion of our managerial and financial resources.

If we resort to litigation to enforce our intellectual property rights, this litigation could result in substantial costs and a diversion

of our managerial and financial resources.

can be no assurance that we will prevail in any litigation.

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requires the time and attention of our Board of Directors and management and increases our expenses.

We estimate the Company will

incur approximately $200,000 to $300,000 annually in connection with being a public company.

We estimate the Company will incur

approximately $200,000 to $300,000 annually in connection with being a public company.

other things, we are required to:

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volumes of data, especially consumer data.

In particular, we face a number of challenges relating to data from transactions and other

activities on our platforms, including:

We face several challenges relating to data from transactions and other activities on our

platforms, including:

the data in and hosted on our system, including against attacks on our system or unauthorized use by outside parties or fraudulent

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We also rely on services provided by Amazon’s fulfillment

platform which provides for expedited shipping to the consumer, an important aspect in the buying decision for consumers.

Any inability

to market our products for sale with delivery could have a material impact on our business, results of operations, financial condition

and prospects.

Failure to remain compliant with the fulfillment practices on Amazon’s platform could have a material impact

on our business, results of operations, financial condition and prospects.

platform which provides expedited shipping to the consumer, an important aspect in the buying decision for consumers.

Any inability to

market our products for sale with delivery could have a material impact on our business, results of operations, financial condition and

Failure to remain compliant with the fulfillment practices on Amazon’s platform could have a material impact on our

business, results of operations, financial condition and prospects.

sales may be impacted should there be a disruption of service to our Amazon or Alibaba online storefronts.

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In July 2021 we commenced sales through the Alibaba storefront.

We anticipate that these marketplaces will

represent a significant portion of our sales for the foreseeable future.

Should there be a disruption of Amazon or Alibaba services or

our ability to maintain storefronts with Amazon or Alibaba, our sales will likely decrease and we would have to seek other distribution

methods to sell our products online, which may be costly.

In addition, if and to the extent the cost structure of the Amazon marketplace

listing changes, such increase could have a material adverse effect on the Company’s sales through this platform.

These marketplaces will represent a significant

portion of our sales in the foreseeable future.

Should there be a disruption of Amazon or Alibaba services or our ability to maintain

storefronts with Amazon or Alibaba, our sales will likely decrease, and we would have to seek other distribution methods to sell our

products online, which may be costly.

In addition, if and to the extent the cost structure of the Amazon marketplace listing changes,

such an increase could have a material adverse effect on the Company’s sales through this platform.

and maintaining a trusted status of our online marketing presence or ecosystem will be critical to our viability and growth, and any

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property holders and other participants reducing their levels of activity, which could materially reduce our revenue and profitability,

Our ability to maintain trust in our online capabilities will based in large part upon:

Our ability to maintain trust in our online capabilities will be based in large part upon:

quality, value and functionality of products and services offered;

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Increased investments made and lower prices offered by our competitors may require us to divert significant managerial, financial and

human resources in order to remain competitive, and ultimately may reduce our market share and negatively impact the profitability of

our business.

ability to compete depends on a number of factors, some of which may be beyond our control, including alliances, acquisitions or consolidations

human resources to remain competitive, and ultimately may reduce our market share and negatively impact the profitability of our business.

ability to compete depends on several factors, some of which may be beyond our control, including alliances, acquisitions or consolidations

within our industries that may result in stronger competitors, technological advances, shifts in customer preferences and changes in

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business operations and financial position may be materially and adversely affected by any economic slowdown.

revenue and net income are impacted to a significant extent by economic conditions in globally, as well as economic conditions specific

revenue and net income are impacted to a significant extent by economic conditions globally, as well as economic conditions specific

to our business.

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our business may be severely disrupted, and our prospects could suffer.

size and scope of our ecosystem also require us to hire and retain a wide range of capable and experienced personnel who can adapt to

size and scope of our ecosystem also requires us to hire and retain a wide range of capable and experienced personnel who can adapt to

a dynamic, competitive and challenging business environment.

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which would materially and adversely affect our business operations, customer relationships, reputation and the trading price of our

logistics service providers used by our merchants fail to provide reliable logistics services, our business and prospects, as well as

our financial condition and results of operations, may be materially and adversely affected.

the logistics service providers used by our merchants fail to provide reliable logistics services, our business and prospects, as well

as our financial condition and results of operations, may be materially and adversely affected.

Interruptions

to or failures in logistics services could prevent the timely or proper delivery of products to consumers, which would negatively

impact our competitive position as well as harm the reputation of our ecosystem and the businesses we operate.

These interruptions

or failures may be due to events that are beyond the control of any of these logistics service providers, such as inclement weather,

natural disasters, the COVID-19 pandemic, other pandemics or epidemics, accidents, transportation disruptions, including special or

temporary restrictions or closings of facilities or transportation networks due to regulatory or political reasons, or labor unrest

or shortages.

These logistics services could also be affected or interrupted by business disputes, industry consolidation,

insolvency or government shut downs.

The merchants in our ecosystem may not be able to find alternative logistics service providers

to provide logistics services in a timely and reliable manner, or at all.

If the products sold by merchants in our ecosystem are not

delivered in proper condition, on a timely basis or at shipping rates that are commercially acceptable to marketplace participants,

our business and prospects, as well as our financial condition and results of operations could be materially and adversely

to or failures in logistics services could prevent the timely or proper delivery of products to consumers, which would negatively impact

on our competitive position as well as harm the reputation of our ecosystem and the businesses we operate.

These interruptions or failures

may be due to events that are beyond the control of any of these logistics service providers, such as inclement weather, natural disasters,

the COVID-19 pandemic, other pandemics or epidemics, accidents, transportation disruptions, including special or temporary restrictions

or closings of facilities or transportation networks due to regulatory or political reasons, or labor unrest or shortages.

These logistics

services could also be affected or interrupted by business disputes, industry consolidation, insolvency or government shutdowns.

merchants in our ecosystem may not be able to find alternative logistics service providers to provide logistics services in a timely

and reliable manner, or at all.

If the products sold by merchants in our ecosystem are not delivered in proper condition, on a timely

basis or at shipping rates that are commercially acceptable to marketplace participants, our business and prospects, as well as our financial

condition and results of operations could be materially and adversely affected.

to deal effectively with any fraud perpetrated and fictitious transactions conducted in our ecosystem, and other sources of customer

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affect the attractiveness of our marketplaces and other businesses we operate to consumers or merchants.

In addition, merchants on our

In addition, merchants in our

marketplaces contribute to a fund to provide consumer protection guarantees.

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amounts in the fund are not sufficient, we may choose to compensate consumers for losses, although currently we are not legally obligated

If, as a result of regulatory developments, we are required to compensate consumers, we would incur additional expenses.

If, as a result of regulatory developments, we are required to compensate consumers, we will incur additional expenses.

we have recourse against our merchants for any amounts we incur, there can be no assurance that we would be able to collect these amounts

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of our brand, and materially and adversely affect our business, financial condition and results of operations.

control deficiencies in our internal control over financial reporting may, until remedied, cause errors in our financial statements or

cause our filings with the SEC to not be timely.

of the end of the period ended December 31, 2021, our certifying officers have concluded that the Company’s disclosure controls

and procedures were not effective due to our limited internal audit functions and lack of ability to have multiple levels of transaction

We believe our disclosure controls and procedures were and remain not effective due to our limited internal audit functions and

lack of ability to have multiple levels of transaction review in our internal control over financial reporting as of December 31, 2021,

including those related to (i) a lack of segregation of duties within accounting functions, and (ii) the need for a new accounting system

to effectively manage our increased volume of transactions.

If we do not remedy our internal control over financial reporting or disclosure

controls and procedures, there may be errors in our financial statements that could require a restatement or our filings may not be timely

made with the SEC.

We intend to implement additional corporate governance and control measures to strengthen our control environment

as we are able, but we may not achieve our desired objectives.

Moreover, no control environment, no matter how well designed and operated,

can prevent or detect all errors or fraud.

We may identify material weaknesses and control deficiencies in our internal control over

financial reporting in the future that may require remediation and could lead investors to lose confidence in our reported financial

information, which could lead to a decline in our stock price.

e-commerce platforms could be disrupted by network interruptions.

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In addition, if we do not take appropriate remedial action against merchants or service

providers for actions they engage in that we know, or should have known, would infringe upon the rights and interests of consumers, we

may be held jointly liable for infringement alongside the merchant or service provider.

providers for actions, they engage in that we know, or should have known, would infringe upon the rights and interests of consumers,

we may be held jointly liable for infringement alongside the merchant or service provider.

may also face increasing scrutiny from consumer protection regulators and activists, as well as increasingly become a target for litigation,

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other periods.

of March 28, 2022, our Chief Executive Officer and Chairman and our President and Chief Executive Officer of Global Operations together

held approximately 29.3% of our Company, which could create conflicts of interest between them and our other stockholders.

Fernandez’s and Phipps’ ownership of Company common stock may create conflicts of interest or require judgments that are

disadvantageous to our stockholders.

The Board’s Audit Committee must review and pre-approve related party transactions.

we cannot provide assurance that the policy will be successful in eliminating conflicts of interest.

Related to Digital Assets

may lose our private keys to our digital wallets, causing a loss of all of our digital assets.

may lose our private keys to our digital wallets, causing a loss of all our digital assets.

assets, such as cryptocurrencies, are stored in a so-called “digital wallet”, which may be accessed to exchange a holder’s

digital assets and is controllable by the processor of both the public key and the private key relating to this digital wallet

in which the digital assets are held, both of which are unique.

We will publish the public key relating to digital wallets in use when

we verify the receipt of transfers and disseminate such information into the network, but we will need to safeguard the private keys

relating to such digital wallets.

digital assets and is controllable by the processor of both the public key and the private key relating to this digital wallet in which

the digital assets are held, both of which are unique.

We will publish the public key relating to digital wallets in use when we verify

the receipt of transfers and disseminate such information into the network, but we will need to safeguard the private keys relating to

such digital wallets.

If the private key is lost, destroyed, or otherwise compromised, we may be unable to access our cryptocurrencies

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also be subject to cybersecurity breaches and adverse software events.

In order to minimize risk, we plan to establish processes to manage

wallets, or software programs where assets are held, that are associated with our digital asset holdings.

To minimize risk, we plan to establish processes to manage wallets,

or software programs where assets are held, that are associated with our digital asset holdings.

“hot wallet” refers to any cryptocurrency wallet that is connected to the Internet.

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Cold storage is generally more

secure than hot storage, but is not ideal for quick or regular transactions and we may experience lag time in our ability to respond

to market fluctuations in the price of our digital assets.

generally plan to hold the majority of our digital assets in cold storage to reduce the risk of malfeasance;

however we may also use

third-party custodial wallets and, from time to time, we may use hot wallets or rely on other options that may develop in the future.

If we use a custodial wallet, there can be no assurance that such services will be more secure than cold storage or other alternatives.

Human error and the constantly evolving state of cybercrime and hacking techniques may render present security protocols and procedures

ineffective in ways which we cannot predict.

secure than hot storage but is not ideal for quick or regular transactions and we may experience lag time in our ability to respond to

market fluctuations in the price of our digital assets.

generally plan to hold most of our digital assets in cold storage to reduce the risk of malfeasance;

however, we may also use third-party

custodial wallets and, from time to time, we may use hot wallets or rely on other options that may develop in the future.

custodial wallet, there can be no assurance that such services will be more secure than cold storage or other alternatives.

and the constantly evolving state of cybercrime and hacking techniques may render present security protocols and procedures ineffective

in ways which we cannot predict.

of the storage method, the risk of damage to or loss of our digital assets cannot be wholly eliminated.

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digital assets may be subject to loss, theft, hacking, fraud risks and restriction on access.

is a risk that some or all of our digital assets could be lost or stolen.

Hackers or malicious actors may launch attacks to steal or

compromise cryptocurrencies, such as by attacking the network source code, exchange miners, third-party platforms, cold and hot storage

locations or software, or by other means.

Digital asset transactions and accounts are not insured by any type of government program and

cryptocurrency transactions generally are permanent by design of the networks.

is a risk that some or all our digital assets could be lost or stolen.

Hackers or malicious actors may launch attacks to steal or compromise

cryptocurrencies, such as by attacking the network source code, exchange miners, third-party platforms, cold and hot storage locations

or software, or by other means.

Digital asset transactions and accounts are not insured by any type of government program and cryptocurrency

transactions generally are permanent by the design of the networks.

Certain features of digital asset networks, such as decentralization,

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may be in control and possession of one of the more substantial holdings of digital assets.

As we increase in size, we may become a

more appealing target of hackers, malware, cyber-attacks or other security threats.

Cyber-attacks may also target our miners or

third parties and other services on which we depend.

Any potential security breaches, cyber-attacks on our operations and any other

loss or theft of our digital assets, which could expose us to liability and reputational harm and could seriously curtail the

utilization of our services.

As we increase in size, we may become a more

appealing target of hackers, malware, cyber-attacks or other security threats.

Cyber-attacks may also target our miners or third parties

and other services on which we depend.

Any potential security breaches, cyber-attacks on our operations and any other loss or theft of

our digital assets, which could expose us to liability and reputational harm and could seriously curtail the utilization of our services.

or fraudulent digital asset transactions may be irreversible.

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of a majority of processing power on the network, we do not now, nor is it feasible that we could in the future, possess sufficient processing

power to effect this reversal.

power to affect this reversal.

a transaction has been verified and recorded in a block that is added to a blockchain, an incorrect transfer of a digital asset or a

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accounts of businesses distributing digital assets, providing digital asset- related services or accepting digital assets as payment.

This could occur as a result of compliance risk, cost, government regulation or public pressure.

The risk applies to securities firms,

clearance and settlement firms, national stock and commodities exchanges, the over-the-counter market and the Depository Trust

Such factors would have a material adverse effect on our business, prospects, financial condition, and operating results.

This could occur because of compliance risk, cost, government regulation or public pressure.

The risk applies to securities firms, clearance

and settlement firms, national stock and commodities exchanges, the over-the-counter market and the Depository Trust Company.

would have a material adverse effect on our business, prospects, financial condition, and operating results.

may face risks of Internet disruptions, which could have a material adverse effect on the price of digital assets.

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financial condition, and operating results.

a particular non-fungible token (NFT) or other digital or “crypto” asset is a “security” is subject to a high

degree of uncertainty, and if we are unable to properly characterize an NFT or other digital asset, we may be subject to regulatory scrutiny,

inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.

SEC and its staff have taken the position that certain digital or “crypto” assets (which includes NFTs) fall within the definition

of a “security” under the U.S.

federal securities laws.

The legal test for determining whether any given digital asset is

a security is a highly complex, fact-driven analysis that evolves over time, and the outcome is difficult to predict.

The SEC generally

does not provide advance guidance or confirmation on the status of any digital asset as a security.

Furthermore, the SEC’s views

in this area have evolved over time and it is difficult to predict the direction or timing of any continuing evolution.

It is also possible

that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views of the

SEC and its staff.

foreign jurisdictions have taken a broad-based approach to classifying digital assets as “securities,” while certain other

foreign jurisdictions have adopted a narrower approach.

As a result, certain digital assets may be deemed to be a “security”

under the laws of some jurisdictions but not others.

Various foreign jurisdictions may, in the future, adopt additional laws, regulations,

or directives that affect the characterization of digital assets as “securities.”

classification of a digital asset as a security under applicable law has wide-ranging implications for the regulatory obligations that

flow from the offer and sale of such assets.

For example, a digital asset that is a security in the United States may generally only

be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for

an exemption from registration.

Persons that effect transactions in digital assets that are securities in the United States may be subject

to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers

to trade digital assets that are securities in the United States are generally subject to registration as national securities exchanges,

or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system (ATS) in compliance

with rules for ATSs.

Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing

Foreign jurisdictions may have similar licensing, registration, and qualification requirements.

respect to the securities status of an NFT that we propose to post to our platform, we will follow an internally developed model that

will permit us to make a risk-based assessment regarding the likelihood that a particular NFT could be deemed a “security”

within the meaning of the U.S.

federal and/or state securities laws in determining if and how an NFT can be posted on our platform.

process will involve employees trained to identify the indicia of a “security” who will also work with outside legal counsel

experienced in crypto asset regulatory matters to make a determination with respect to each NFT, or category of NFT, proposed to be posted

on our platform.

These processes and procedures are risk-based assessments and are not a legal standard or binding on regulators or courts.

In the event an NFT or other digital asset is deemed by us, pursuant to the above analysis, to possess a reasonable likelihood of being

deemed a security, we will (a) comply with applicable laws and regulations by forming, acquiring or engaging a licensed broker-dealer

authorized to act as an trading system for those digital assets, or (b) transact in such digital assets offshore in a way that complies

with applicable laws and regulations;

or (c) not transact in the subject NFT.

Regardless of our conclusions, we could be subject to legal

or regulatory action in the event the SEC, a state or foreign regulatory authority, or a court were to determine that an NFT posted and

sold on our platform is a “security” under applicable laws.

Because our platform is not registered or licensed with the SEC

or foreign authorities as a broker-dealer, national securities exchange, or ATS (or foreign equivalents), and we do not seek to register

or rely on an exemption from such registration or license to facilitate the offer and sale of NFTs on our platform, we will only permit

posting on our platform of those NFTs for which we determine there are reasonably strong arguments to conclude that the NFT is not a

We believe that our process reflects a comprehensive and thoughtful analysis and is reasonably designed to facilitate consistent

application of available legal guidance to digital assets to facilitate informed risk-based business judgment.

However, we recognize

that the application of securities laws to the specific facts and circumstances of digital assets may be complex and subject to change,

and that a posting determination does not guarantee any conclusion under the U.S.

federal securities laws.

We expect our risk assessment

policies will continuously evolve to consider developments in case law, applicable facts, developments in technology, and changes in

applicable regulatory schemes.

can be no assurances that we will properly characterize any given NFT as a security or non-security for purposes of determining whether

our platform will allow the posting of such NFT, or that the SEC, foreign regulatory authority, or a court, if the question was presented

to it, would agree with our assessment.

If the SEC, state or foreign regulatory authority, or a court were to determine that NFTs offered

or sold on our platform are securities, we would not be able to offer such NFTs until we are able to do so in a compliant manner.

A determination

by the SEC, a state or foreign regulatory authority, or a court that an NFT posted and sold on our platform was a security may also result

in us determining that it is advisable to remove NFTs from our platform that have similar characteristics to the NFT that was determined

to be a security.

In addition, we could be subject to judicial or administrative sanctions for failing to offer or sell the NFT in compliance

with the registration requirements, or for acting as a broker, dealer, or national securities exchange without appropriate registration.

Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal

liability, and reputational harm.

Customers that purchased such NFTs on our platform and suffered losses could also seek to rescind a

transaction that we facilitated on the basis that it was conducted in violation of applicable law, which could subject us to significant

We may also be required to cease facilitating transactions in other similar NFTs, which could negatively impact our business,

operating results, and financial condition.

are subject to payment-related regulations and risks.

may provide regulated services in certain jurisdictions because we enable customers to keep account balances with us and transfer money

to third parties, and because we may provide services to third parties to facilitate payments on their behalf.

In these jurisdictions,

we may be subject to requirements for licensing, regulatory inspection, bonding and capital maintenance, the use, handling, and segregation

of transferred funds, consumer disclosures, and authentication.

We are also subject to, or voluntarily comply with, several other laws

and regulations relating to payments, money laundering, international money transfers, know-your-customer requirements (KYC), privacy

and information security, and electronic fund transfers.

If we were found to be in violation of applicable laws or regulations, we could

be subject to additional requirements and civil and criminal penalties or forced to cease providing certain services.

uncertain application of a myriad of state and federal laws to our NextPlat Digital business may expose us to regulatory enforcement

and civil or criminal sanction should a legal authority determine that our approach to compliance is inadequate or inappropriate.

legal status of NFTs under a myriad of state and federal laws and regulatory regimes (including without limitation, securities, banking,

and commodities laws) is highly uncertain and unresolved, and the applicability of various of those regimes to any NFTs that we may propose

to post on our platform is also unresolved.

Our creation and operation of NextPlat Digital will present several new regulatory and legal

compliance obligations for the Company, including the potential need to comply with “Know Your Customer” (“KYC”)

rules and custom and practice, as well as with the applicable Anti-Money Laundering laws and regulations (“AML”) and Combating

the Financing of Terrorism (“CFT”), among others.

As a result of the uncertain legal status of digital assets we may have

legal exposure for our failure to adequately comply with legal regimes that are known to us.

In addition, governmental agencies may seek

to apply laws to our NextPlat Digital business that we believe are inapplicable and may seek sanctions relating to our alleged failure

to comply with those laws.

transaction of digital asset business involving the use of crypto wallets and cryptocurrencies may expose us to allegations of violation

of applicable KYC, AML and CFT and other compliance requirements.

onboarding new users, we intend to utilize third-party tools to proactively screen for high-risk crypto wallets, including explicitly

sanctioned addresses and addresses associated with sanctioned entities.

The applicable legal requirements and our compliance obligations

will vary depending on the nature of the client, the service or product provided and jurisdiction.

For example, if we engage, form or

acquire a broker dealer to post, trade or sell NFTs or other digital assets that are securities, we will attempt to fully comply with

all applicable KYC, AML and CFT compliance requirements.

Given the substantial legal uncertainties that may presented by those laws and

given the informational constraints presented by crypto wallets we may be exposed to regulatory enforcement and civil or criminal sanction,

as well as to claims asserting civil liability.

of digital assets is pseudonymous, and the supply is often unknown.

Individuals or entities with substantial holdings may engage in large-scale

sales or distributions, either on non- market terms or in the ordinary course, which could disproportionately and negatively affect the

market, result in a reduction in the price of the digital asset and materially and adversely affect the price of our common stock.

there is no registry showing which individuals or entities own a digital asset or the quantity that is owned by any person or entity.

There are no regulations in place that would prevent a large holder of a digital asset from selling it.

To the extent such large holders

engage in large-scale sales or distributions, either on non-market terms or in the ordinary course, it could negatively affect the market

for the digital asset and result in a reduction in the price.

This, in turn, could materially and adversely affect the price of our stock,

our business, prospects, financial condition, and operating results.

there has been limited precedent set for financial accounting for digital assets, the determinations that we have made for how to account

for digital assets transactions may be subject to change.

there has been limited precedent set for the financial accounting for digital assets and related revenue recognition and no official

guidance has yet been provided by the Financial Accounting Standards Board or the SEC, it is unclear how companies may in the future

be required to account for cryptocurrency transactions and assets and related revenue recognition.

A change in regulatory or financial

accounting standards could result in the necessity to change the accounting methods we currently intend to employ in respect of our anticipated

revenues and assets and restate any financial statements produced based on those methods.

Such a restatement could adversely affect our

business, prospects, financial condition and results of operation.

Related to Doing Business in China

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by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential

treatment to particular industries or companies.

treatment to industries or companies.

the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and in various

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Some of these measures may benefit the overall Chinese economy but may have a negative effect on us.

For example, our

financial condition and results of operations may be adversely affected by government control over capital investments or changes in

tax regulations.

For example, our financial

condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations.

growth rate of the Chinese economy has gradually slowed since 2010.

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with respect to the PRC legal system could adversely affect us.

Peoples Republic of China (“PRC” or “China”) legal system is a civil law system based on written statutes, where prior court

decisions have limited precedential value.

The PRC legal system is evolving rapidly, and the interpretations of many laws, regulations

and rules may contain inconsistencies and enforcement of these laws, regulations and rules involves uncertainties.

Although we have taken

measures to comply with the laws and regulations applicable to our business operations and to avoid conducting any non-compliant activities

under these laws and regulations, the PRC governmental authorities may promulgate new laws and regulations regulating our business.

developments in our industry may lead to changes in PRC laws, regulations and policies or in the interpretation and application of existing

laws, regulations and policies.

As a result, we may be required by the regulators to upgrade the licenses or permits we may obtain, to

obtain additional licenses, permits, approvals, to complete additional filings or registrations for the services we provide, or to modify

our business practices.

Any failure to upgrade, obtain or maintain such licenses, permits, filings or approvals or requirement to modify

our business practices may subject us to various penalties, including, among others, the confiscation of revenues and imposition of fines.

We cannot assure you that our business operations would not be deemed to violate any existing or future PRC laws or regulations, which

in turn may limit or restrict us, and could materially and adversely affect our business and operations.

Peoples Republic of China (“PRC” or “China”) legal system is a civil law system based on written statutes, where

prior court decisions have limited precedential value.

The PRC legal system is evolving rapidly, and the interpretations of many laws,

regulations and rules may contain inconsistencies and enforcement of these laws, regulations and rules involves uncertainties.

we have taken measures to comply with the laws and regulations applicable to our business operations and to avoid conducting any non-compliant

activities under these laws and regulations, the PRC governmental authorities may promulgate new laws and regulations regulating our

Moreover, developments in our industry may lead to changes in PRC laws, regulations and policies or in the interpretation and

application of existing laws, regulations and policies.

As a result, we may be required by the regulators to upgrade the licenses or

permits we may obtain, to obtain additional licenses, permits, approvals, to complete additional filings or registrations for the services

we provide, or to modify our business practices.

Any failure to upgrade, obtain or maintain such licenses, permits, filings or approvals

or requirement to modify our business practices may subject us to various penalties, including, among others, the confiscation of revenues

and imposition of fines.

We cannot assure you that our business operations would not be deemed to violate any existing or future PRC

laws or regulations, which in turn may limit or restrict us, and could materially and adversely affect our business and operations.

time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.

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These uncertainties

may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business and results

may impede our ability to enforce the contracts we have entered and could materially and adversely affect our business and the results

of operations.

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As a result, we may not always be aware of any potential violation of these policies

Such unpredictability towards our contractual, property (including intellectual property) and procedural rights could adversely

Such unpredictability regarding our contractual, property (including intellectual property) and procedural rights could adversely

affect our business and impede our ability to continue our operations.

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us to incur expenses in defending ourselves against rumors, and increase the premiums we pay for director and officer insurance.

in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

in exchange rates could have a material and adverse effect on the results of our operations and the value of your investment.

conversion of Renminbi, the official currency of China, into foreign currencies, including U.S.

dollars, is based on rates set

by the People’s Bank of China.

dollars, is based on rates set by the

People’s Bank of China.

The Renminbi has fluctuated against the U.S.

dollar, at times significantly and unpredictably.

value of Renminbi against the U.S.

dollar and other currencies is affected by changes in China’s political and economic conditions

and by China’s foreign exchange policies, among other things.

of Renminbi against the U.S.

dollar and other currencies is affected by changes in China’s political and economic conditions and

by China’s foreign exchange policies, among other things.

We cannot assure you that Renminbi will not appreciate or depreciate

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create downward pressure on the trading price of the common stock.

will experience future dilution as a result of future equity offerings.

will experience future dilution because of future equity offerings.

may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock.

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do not anticipate paying dividends on our common stock, and investors may lose the entire amount of their investment.

dividends have never been declared or paid on our common stock, and we do not anticipate such a declaration or payment for the foreseeable

dividends have never been declared or paid on our common stock, and we do not anticipate such a declaration or payment in the foreseeable

We expect to use future earnings, if any, to fund business growth.

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their shares, nor can we assure that stockholders will not lose the entire amount of their investment.

ability of our Board of Directors to issue additional stock may prevent or make more difficult certain transactions, including a sale

ability of our Board of Directors to issue additional stock may prevent or make certain transactions more difficult, including a sale

or merger of the Company.

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Shares of voting or convertible preferred stock could be issued, or rights to purchase such shares could be issued, to create voting

impediments or to frustrate persons seeking to effect a takeover or otherwise gain control of the Company.

impediments or to frustrate persons seeking to affect a takeover or otherwise gain control of the Company.

The ability of the Board of

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Should we fail to satisfy the Nasdaq continued listing standards, the trading price of our common stock could suffer and

the trading market for our common stock and warrants may be less liquid and our common stock price and warrant price may be subject to

increased volatility, making it difficult or impossible to sell shares of our common stock and warrants.

of our Nasdaq listed Warrants could discourage an acquisition of us by a third party .

the trading market for our common stock and warrants may be less liquid, and our common stock price and warrant price may be subject

to increased volatility, making it difficult or impossible to sell shares of our common stock and warrants.

provisions of our Nasdaq listed Warrants could discourage the acquisition of us by a third party .

provisions of our Nasdaq listed Warrants could make it more difficult or expensive for a third party to acquire us.

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addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the

operating performance of particular companies.

These market fluctuations may also materially and adversely affect the market price of

our common stock.

operating performance of companies.

These market fluctuations may also materially and adversely affect the market price of our common

or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

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The existence

of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing

of an overhang, whether sales have occurred or are occurring, also could make more difficult our ability to raise additional financing

through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

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