Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
On July 27, 2023, Daqi Cui,
a former employee, filed a complaint against the Company in Queens County, the Supreme Court of the State of New York, asserting claims
of breach of employment contract, seeking $609,145.05 in damages as well as attorneys’ fees and costs. On November 6, 2023, the
Company filed a motion to move the case to the United States District Court, Eastern District of New York for an Order to dismiss with
prejudice. On July 29, 2024, Complaint was dismissed by the Eastern District of New York. However, Plaintiff was granted leave to file
an amended complaint within 30 days after entry of the order. Subsequently, the Plaintiff filed an amended complaint against the Company
and the Company has moved to dismiss the amended complaint.
On July 8, 2024, China Supply
and Marketing Agricultural Products Co., Ltd. (“China Supply and Marketing”)filed a lawsuit against Shandong Yunchu, Li Honghu,
the legal representative of Shandong Yunchu International Trade Co., Ltd. (“Qingdao Sirun”), and Jiayi Technologies. Shandong
Yunchu and Qingdao Sirun entered into two entrusted import contracts with China Supply and Marketing in 2021 and 2022, respectively. China
Supply and Marketing made phased payments to the foreign suppliers, while Shandong Yunchu and Qingdao Sirun paid China Supply and Marketing
and collected part of the goods. However, an outstanding amount of RMB 7,012,335.38 (equivalent to $960,686) remained, consisting of unpaid
balances and uncollected goods. It is claimed that, on September 13, 2023, Shandong Yunchu, Qingdao Sirun, and China Supply and Marketing
entered into a debt transfer agreement, under which Shandong Yunchu assumed all remaining debt obligations of Qingdao Sirun, including
outstanding payments and uncollected goods. Li Honghu, the legal representative of Shandong Yunchu, signed the debt transfer agreement
as a guarantor and affixed his fingerprint. Jiayi Technology, as the sole shareholder of Shandong Yunchu, was included in the lawsuit
under corporate law, with China Supply and Marketing seeking joint liability from Jiayi Technology for Shandong Yunchu’s debts.
Shandong Yunchu contended that it never agreed to assume Qingdao Sirun’s debt obligations and never signed any debt transfer agreement.
It further argued that the debt transfer agreement presented by the plaintiff contained a forged signature and fingerprint of Li Honghu,
and requested a forensic examination to verify the authenticity of the document. Jiayi Technology claimed that it had already fulfilled
its capital contribution to Shandong Yunchu and should not bear any joint liability.
Yongan Construction Engineering
Co., Ltd. filed a lawsuit against Xianning Bozhuang over outstanding construction project payments. On April 22, 2024, the court ruled
that Xianning Bozhuang must pay RMB 867,326 (equivalent to $118,823) in construction project fees along with interest calculated at an
annual rate of 3.8% from January 1, 2022, until the full amount is settled. The judgment took effect on May 7, 2024, and Xianning Bozhuang
is currently in the process of making payments toward the outstanding debt.
Jianfa Logistics (Fuzhou)
Co., Ltd. sued Shandong Yunchu for failing to pay RMB 2,817,441.28 (equivalent to $385,988) under an agency import contract, along with
a penalty of RMB 375,294.16 (equivalent to $51,415). Additionally, Jianfa Logistics sought to hold Shandong Yunchu’s shareholder,
Xianning Jiayi, jointly liable for the debt. On November 11, 2024, the court ruled that Shandong Yunchu is responsible for repaying the
outstanding amount, with Xianning Jiayi assuming joint liability. However, Xianning Jiayi argued that it had already fulfilled its capital
contribution obligations and should not bear any joint liability. As a result, it has filed an appeal with the higher court.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II