What changed in this filing

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Item 1A. Risk Factors

2026-01-20 compared with 2025-01-14 · 445 added, 392 removed, 633 unchanged (57% of the section changed)

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We operate in an emerging market, which

make it difficult to evaluate our business and prospects.

If markets for service robotics develop more slowly than we expect, or long-term end-customer adoption

rates and demand are slower than we expect, our operating results and growth prospects could be harmed.

makes it difficult to evaluate our business and prospects.

If markets for service robotics develop more slowly than we expect, or long-term

end-customer adoption rates and demand are slower than we expect, our operating results and growth prospects could be harmed.

While robots have been applied

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Our product offerings compete

in a broad competitive landscape that include incumbent actors, and emerging players in the service robotics space, particularly in the

in a broad competitive landscape that includes incumbent actors, and emerging players in the service robotics space, particularly in the

cleaning and indoor delivery automation.

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Future capital needs may require us to sell additional equity or debt securities that may dilute its stockholders.

While we are near profitability

today, we intend to expand operations outside the United States and continue to invest in the research and development of our AI

Cloud Platform.

We anticipate that we will continue to incur expenses for the foreseeable future as we continue to advance our products

and services, expand our corporate infrastructure, including the costs associated with being a public company and further our research

and development initiatives for our products.

We are subject to all of the risks typically related to the development of robotics, and

we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

We believe that our existing cash will fund our current operating plans through at least the next twelve months.

We anticipate that

we will need additional funding in connection with our continuing operations after twelve months.

Until we can generate a sufficient amount

of revenue from the commercialization of our products and services, if ever, we expect to finance our future cash needs through public

or private equity or debt financings, third-party (including government) funding and marketing and distribution arrangements, as

well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.

While we are near

profitability today, we intend to expand operations outside the United States and continue to invest in the research and development

of our products We anticipate that we will continue to incur expenses for the foreseeable future as we continue to advance our

products and services, expand our corporate infrastructure, including the costs associated with being a public company and further

our research and development initiatives for our products.

We are subject to all of the risks typically related to the development

of robotics, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may

adversely affect our business.

Until we can generate a sufficient amount of revenue from the commercialization of our products and

services, if ever, we expect to finance our future cash needs through public or private equity or debt financings, third-party

(including government) funding and marketing and distribution arrangements, as well as other collaborations, strategic alliances and

licensing arrangements, or any combination of these approaches.

We have limited experience in operating

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will be adversely affected.

Several of our customers

and potential customers are large, multinational corporations with substantial negotiating power relative to us.

These large, multinational

corporations are also aware of competitor products and are actively engaging with competitors to determine which products they like better.

Meeting the requirements and securing contracts with any of these companies will require a substantial investment of our time and resource.

We cannot assure you that our products will be the one these companies will choose, or that we will generate meaningful revenue from the

sales of our products to these key potential customers.

If our products are not selected by these large corporations or if these corporations

decide to go with a competitor, it will have an adverse effect on our business.

of our customers and potential customers are large, multinational corporations with substantial negotiating power relative to us.

large, multinational corporations are also aware of competitor products and are actively engaging with competitors to determine which

products they like better.

Meeting the requirements and securing contracts with any of these companies will require a substantial investment

of our time and resource.

We cannot assure you that our products will be the one these companies will choose, or that we will generate

meaningful revenue from the sales of our products to these key potential customers.

If our products are not selected by these large corporations

or if these corporations decide to go with a competitor, it will have an adverse effect on our business.

We must successfully manage product introductions

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or to do so on acceptable terms.

Even if we are able to establish agreements with third-party manufacturers/suppliers, reliance on

third-party manufacturers/suppliers entails additional risks, including:

Even if we are able to establish agreements with third-party manufacturers/suppliers, reliance on third-party

manufacturers/suppliers entails additional risks, including:

failure of third-party manufacturers/suppliers to comply with regulatory requirements and maintain quality assurance;

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and competitive basis.

Our products incorporate certain components

from sole source suppliers, and if our contract manufacturers are unable to source these components on a timely basis, due to fabrication

capacity issues or other material supply constraints, or if there are interruptions in our, or our contract manufacturers’, relationships

with these third-party suppliers, we may not be able to deliver our products to our distributors and customers, which may adversely impact

our business.

Some of our products incorporate certain

components from sole source suppliers, and if our contract manufacturers are unable to source these components on a timely basis, due

to fabrication capacity issues or other material supply constraints, or if there are interruptions in our, or our contract manufacturers’,

relationships with these third-party suppliers, we may not be able to deliver our products to our distributors and customers, which may

adversely impact our business.

We depend on sole source

suppliers for certain components in our products, such as batteries and touchscreens.

suppliers for certain components in our products, such as batteries and robotic arm.

We have strategically chosen to sole source some

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delays in, or the inability to execute on, a supplier roadmap for components and technologies.

We have a global supply chain

and global pandemics, the military conflicts in Ukraine and in the Middle East and other macroeconomic factors may adversely affect

our ability to source components in a timely or cost-effective manner from our third-party suppliers due to, among other things, work

stoppages or interruptions.

In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities

and delivery schedules.

We have in the past experienced, and may in the future experience, component shortages and price fluctuations

of key components and materials, and the predictability of the availability and pricing of these components may be limited.

shortages or pricing fluctuations could be material in the future.

In the event of a component shortage, supply interruption, or a material

pricing change from suppliers of these components, we may not be able to develop alternate sources in a timely manner, or at all, especially

in the case of sole or limited source items.

Developing alternate sources of supply for these components may be time-consuming, difficult,

and costly and we may not be able to source these components on terms that are acceptable to us, or at all, which may undermine our ability

to meet our requirements or to fill customer orders in a timely manner.

Any interruption or delay in the supply of any parts or components,

or the inability to obtain parts or components from alternate sources at acceptable prices and within a reasonable amount of time, would

adversely affect our ability to meet our scheduled product deliveries to our customers.

This could adversely affect our relationships

with our customers and partners and could cause delays in shipment of our products and adversely affect our operating results.

have a global supply chain and global pandemics, the military conflicts in Ukraine and in the Middle East and other macroeconomic factors

may adversely affect our ability to source components in a timely or cost-effective manner from our third-party suppliers due to, among

other things, work stoppages or interruptions.

In addition, the lead times associated with certain components are lengthy and preclude

rapid changes in quantities and delivery schedules.

We have in the past experienced, and may in the future experience, component shortages

and price fluctuations of key components and materials, and the predictability of the availability and pricing of these components may

Component shortages or pricing fluctuations could be material in the future.

In the event of a component shortage, supply

interruption, or a material pricing change from suppliers of these components, we may not be able to develop alternate sources in a timely

manner, or at all, especially in the case of sole or limited source items.

Developing alternate sources of supply for these components

may be time-consuming, difficult, and costly and we may not be able to source these components on terms that are acceptable to us, or

at all, which may undermine our ability to meet our requirements or to fill customer orders in a timely manner.

Any interruption or delay

in the supply of any parts or components, or the inability to obtain parts or components from alternate sources at acceptable prices and

within a reasonable amount of time, would adversely affect our ability to meet our scheduled product deliveries to our customers.

could adversely affect our relationships with our customers and partners and could cause delays in shipment of our products and adversely

affect our operating results.

Components used in our sensors may fail

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and retaining key personnel and if we fail to do so, it may be more difficult for us to execute our business strategy.

The economy is

currently experiencing a labor shortage and we will need to hire additional qualified personnel to effectively implement our strategic

plan, and if we are unable to attract and retain highly qualified employees, we may not be able to continue to grow our business.

to hire additional qualified personnel to effectively implement our strategic plan, and if we are unable to attract and retain highly

qualified employees, we may not be able to continue to grow our business.

Our ability to compete and

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on our business, financial condition and results of operations.

The Company’s business can be impacted

by political events, trade and other international disputes, geopolitical

tensions, conflicts, and other business

interruptions.

Political events, trade restrictions, tariffs,

international disputes, geopolitical tensions, armed conflict, and other business disruptions may have a material adverse effect on the

Company and its customers, employees, suppliers, contract manufacturers, logistics providers, distributors, and other channel partners.

A significant portion of the Company’s operations depends on the importation of manufactured components from China.

Heightened geopolitical

tensions, tariffs and other trade disputes between the United States and China could adversely impact component availability, manufacturing

capacity, procurement costs, and delivery timelines for the Company’s robotic products.

In the event of an armed conflict involving

China or a material escalation of trade restrictions or tariffs, trade between the United States and China could be severely limited or

suspended, which could prevent the Company from delivering products to customers for a prolonged period or indefinitely if suitable alternative

suppliers are not available.

Any such disruption to international trade could result in substantial recovery time, increased operating

costs to reestablish supply chains, and the loss of significant sales.

Risks Related to Our Intellectual Property

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We seek to protect our confidential proprietary information, in part, by entering into confidentiality agreements and invention

assignment agreements with all our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information

or technology.

However, we cannot be certain that we have executed such agreements with all parties who may have helped to develop our

intellectual property or who had access to our proprietary information, nor can we be certain that our agreements will not be breached.

Any party with whom we have executed such an agreement could potentially breach that agreement and disclose our proprietary information,

including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

We cannot guarantee that our trade

secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our

trade secrets or independently develop substantially equivalent information and techniques.

assignment agreements with all our employees, consultants, advisors and any third parties who have access to our proprietary know-how,

information or technology.

However, we cannot be certain that we have executed such agreements with all parties who may have helped to

develop our intellectual property or who had access to our proprietary information, nor can we be certain that our agreements will not

Any party with whom we have executed such an agreement could potentially breach that agreement and disclose our proprietary

information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

We cannot guarantee that

our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access

to our trade secrets or independently develop substantially equivalent information and techniques.

Detecting the disclosure or misappropriation

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do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.

As a result, we may

encounter significant problems in protecting and defending our intellectual property or proprietary rights both in the United States

If we are unable to prevent the disclosure of our trade secrets to third parties, or if our competitors independently develop

any of our trade secrets, we may not be able to establish or maintain a competitive advantage in our market, which could harm our business.

As a result, we may encounter

significant problems in protecting and defending our intellectual property or proprietary rights both in the United States and abroad.

If we are unable to prevent the disclosure of our trade secrets to third parties, or if our competitors independently develop any of our

trade secrets, we may not be able to establish or maintain a competitive advantage in our market, which could harm our business.

We have three approved technology

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Patent laws, and scope of coverage afforded by

them, have recently been subject to significant changes, such as the change to “first-to-file” from “first-to-invent” resulting

from the Leahy-Smith America Invents Act.

This change in the determination of inventorship may result in inventors and companies having

to file patent applications more frequently to preserve rights in their inventions, which may favor larger competitors that have the resources

to file more patent applications.

Another change to the patent laws may incentivize third parties to challenge any issued patent in the

United States Patent and Trademark Office (the “USPTO”), as opposed to having to bring such an action in U.S.

Any invalidation of a patent claim could have a significant impact on our ability to protect the innovations contained within our

devices and could harm our business.

them, have recently been subject to significant changes, such as the change to “first-to-file” from “first-to-invent”

resulting from the Leahy-Smith America Invents Act.

This change in the determination of inventorship may result in inventors and companies

having to file patent applications more frequently to preserve rights in their inventions, which may favor larger competitors that have

the resources to file more patent applications.

Another change to the patent laws may incentivize third parties to challenge any issued

patent in the United States Patent and Trademark Office (the “USPTO”), as opposed to having to bring such an action in U.S.

federal court.

Any invalidation of a patent claim could have a significant impact on our ability to protect the innovations contained

within our devices and could harm our business.

The USPTO and various foreign

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We may fail to take the necessary actions and to pay the applicable fees to obtain or maintain

Non-compliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting

in partial or complete loss of patent rights in the relevant jurisdiction.

Non-compliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting in

partial or complete loss of patent rights in the relevant jurisdiction.

In such an event, competitors might be able to use our technologies

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of our domain names, trademarks and service marks in the United States and in certain locations outside the United States.

are seeking to protect our trademarks, patents and domain names in an increasing number of jurisdictions, a process that is expensive

and time-consuming and may not be successful or which we may not pursue in every location.

We are seeking

to protect our trademarks, patents and domain names in an increasing number of jurisdictions, a process that is expensive and time-consuming

and may not be successful or which we may not pursue in every location.

Litigation may be necessary

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We rely on proprietary information

(such as trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or

subject to copyright, trademark, trade dress or service mark protection, or that we believe is best protected by means that do not require

public disclosure.

We generally seek to protect this proprietary information by entering into confidentiality agreements, or consulting,

services or employment agreements that contain non-disclosure and non-use provisions with our employees, consultants,

contractors and third parties.

However, we may fail to enter into the necessary agreements, and even if entered into, these agreements

may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of our proprietary information,

may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information.

We have limited control over the protection of trade secrets used by our current or future manufacturing partners and suppliers and could

lose future trade secret protection if any unauthorized disclosure of such information occurs.

In addition, our proprietary information

may otherwise become known or be independently developed by our competitors or other third parties.

To the extent that our employees,

consultants, contractors, advisors and other third parties use intellectual property owned by others in their work for us, disputes may

arise as to the rights in related or resulting know-how and inventions.

Costly and time-consuming litigation could be necessary

to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection for our proprietary information

could adversely affect our competitive business position.

Furthermore, laws regarding trade secret rights in certain markets where we

operate may afford little or no protection to its trade secrets.

(such as trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or subject

to copyright, trademark, trade dress or service mark protection, or that we believe is best protected by means that do not require public

We generally seek to protect this proprietary information by entering into confidentiality agreements, or consulting, services

or employment agreements that contain non-disclosure and non-use provisions with our employees, consultants, contractors and third parties.

However, we may fail to enter into the necessary agreements, and even if entered into, these agreements may be breached or may otherwise

fail to prevent disclosure, third-party infringement or misappropriation of our proprietary information, may be limited as to their term

and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information.

We have limited control

over the protection of trade secrets used by our current or future manufacturing partners and suppliers and could lose future trade secret

protection if any unauthorized disclosure of such information occurs.

In addition, our proprietary information may otherwise become known

or be independently developed by our competitors or other third parties.

To the extent that our employees, consultants, contractors, advisors

and other third parties use intellectual property owned by others in their work for us, disputes may arise as to the rights in related

or resulting know-how and inventions.

Costly and time-consuming litigation could be necessary to enforce and determine the scope of our

proprietary rights, and failure to obtain or maintain protection for our proprietary information could adversely affect our competitive

business position.

Furthermore, laws regarding trade secret rights in certain markets where we operate may afford little or no protection

to its trade secrets.

We also rely on physical

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governmental regulations relating to the design, manufacturing, marketing, distribution, servicing, or use of its products, and a failure

to comply with such regulations could lead to withdrawal or recall of our products from the market, delay our projected revenues,

increase cost, or make our business unviable if it is unable to modify its products to comply.

to comply with such regulations could lead to withdrawal or recall of our products from the market, delay our projected revenues, increase

cost, or make our business unviable if it is unable to modify its products to comply.

We may become subject to

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Capital and operating expenses needed to comply with laws

and regulations can be significant, and violations may result in substantial fines and penalties, third-party damages, suspension

of production or a cessation of our operations.

Any failure to comply with such laws or regulations could lead to withdrawal or recall

of our products from the market.

and regulations can be significant, and violations may result in substantial fines and penalties, third-party damages, suspension of production

or a cessation of our operations.

Any failure to comply with such laws or regulations could lead to withdrawal or recall of our products

from the market.

We may become involved in legal and regulatory

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We are subject to U.S.

anti-corruption and anti-money laundering laws and regulations.

We can face criminal liability and other serious consequences for violations,

which can harm our business.

and foreign anti-corruption

and anti-money laundering laws and regulations.

We can face criminal liability and other serious consequences for violations, which can

harm our business.

We are subject to the U.S.

Corrupt Practices Act, the U.S.

Foreign Corrupt Practices Act, the U.S.

domestic bribery statute contained in 18 U.S.C.

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Control Act 18 U.S.C.

§§ 1956 and 1957, and other anti-bribery and anti-money laundering laws in countries in which we

conduct activities.

Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors and other

collaborators from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value

to recipients in the public or private sector, and require that we keep accurate books and records and maintain internal accounting controls

designed to prevent any such actions.

We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors

and other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities.

§§ 1956 and 1957, and other anti-bribery and anti-money laundering laws in countries in which we conduct

Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors and other collaborators

from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value to recipients

in the public or private sector, and require that we keep accurate books and records and maintain internal accounting controls designed

to prevent any such actions.

We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors and

other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities.

As we increase our international

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political, regulatory and economic conditions, such as the military conflict involving Russia and Ukraine and the sanctions imposed by

the United States, United Kingdom, European Union, and other jurisdictions on Russia in response to such conflict, or in laws and

policies governing import/export control, economic sanctions, manufacturing, development and investment in the territories or countries

where we currently purchase our components, sell our products, or conduct our business could result in the decreased use of our products

by, or in our decreased ability to export or sell our products to, existing or potential end-customers.

Any decreased use of

our products or limitation on our ability to export or sell our products would adversely affect our business, results of operations and

growth prospects.

The United States has recently instituted or proposed changes in trade policies that include the negotiation or

termination of trade agreements, the imposition of higher tariffs on imports into the United States, economic sanctions on individuals,

corporations or countries, and other government regulations affecting trade between the United States and other countries where we

conduct our business.

A number of other nations have proposed or instituted similar measures directed at trade with the United States

As a result of these developments, there may be greater restrictions and economic disincentives on international trade that

could adversely affect our business.

It may be time-consuming and expensive for us to alter our business operations to adapt to or comply

with any such changes, and any failure to do so could have a material adverse effect on our business, financial condition and results

of operations.

the United States, United Kingdom, European Union, and other jurisdictions on Russia in response to such conflict, or in laws and policies

governing import/export control, economic sanctions, manufacturing, development and investment in the territories or countries where we

currently purchase our components, sell our products, or conduct our business could result in the decreased use of our products by, or

in our decreased ability to export or sell our products to, existing or potential end-customers.

Any decreased use of our products or

limitation on our ability to export or sell our products would adversely affect our business, results of operations and growth prospects.

The United States has recently instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements,

the imposition of higher tariffs on imports into the United States, economic sanctions on individuals, corporations or countries, and

other government regulations affecting trade between the United States and other countries where we conduct our business.

other nations have proposed or instituted similar measures directed at trade with the United States in response.

As a result of these

developments, there may be greater restrictions and economic disincentives on international trade that could adversely affect our business.

It may be time-consuming and expensive for us to alter our business operations to adapt to or comply with any such changes, and any failure

to do so could have a material adverse effect on our business, financial condition and results of operations.

Failures, or perceived failures, to comply

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For example, the European Commission has adopted the General Data Protection Regulation

and California enacted the California Consumer Privacy Act of 2018, both of which provide for potentially material penalties

for non-compliance.

These regimes may, among other things, impose data security requirements, disclosure requirements, and restrictions

on data collection, uses, and sharing that may impact our operations and the development of our business.

While, generally, we do not

have access to, collect, store, process, or share information collected by our solutions unless our customers choose to proactively provide

such information to us, our products may evolve both to address potential customer requirements or to add new features and functionality.

Therefore, the full impact of these privacy regimes on our business is rapidly evolving across jurisdictions and remains uncertain at

and California enacted the California Consumer Privacy Act of 2018, both of which provide for potentially material penalties for non-compliance.

These regimes may, among other things, impose data security requirements, disclosure requirements, and restrictions on data collection,

uses, and sharing that may impact our operations and the development of our business.

While, generally, we do not have access to, collect,

store, process, or share information collected by our solutions unless our customers choose to proactively provide such information to

us, our products may evolve both to address potential customer requirements or to add new features and functionality.

Therefore, the full

impact of these privacy regimes on our business is rapidly evolving across jurisdictions and remains uncertain at this time.

We may also be affected by

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By engaging in business activities

in the United States, we become subject to various state laws and regulations, including requirements to collect sales tax from our

sales within those states, and the payment of income taxes on revenue generated from activities in those states.

A successful assertion

by one or more states that we were required to collect sales or other taxes or to pay income taxes where we did not could result in substantial

in the United States, we become subject to various state laws and regulations, including requirements to collect sales tax from our sales

within those states, and the payment of income taxes on revenue generated from activities in those states.

A successful assertion by one

or more states that we were required to collect sales or other taxes or to pay income taxes where we did not could result in substantial

tax liabilities, fees and expenses, including substantial interest and penalty charges, which could harm our business.

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In particular, each of our Chief Executive Officer and co-founder,

Zhenwu Huang, Chief Financial Officer and co-founder, Zhenqiang Huang, and Chief Operations Officer, Phil Zheng, President,

Matt Casella, is critical to our overall management, as well as the continued development of our robotics technology, our culture and

our strategic direction.

All of our executive officers are at will employees, and we do not maintain any key person life insurance policies.

The loss of any member of our senior management team could harm our business.

Zhenwu Huang, Chief Financial Officer and co-founder, Zhenqiang Huang, and Chief Operations Officer, Phil Zheng is critical to our overall

management, as well as the continued development of our robotics technology, our culture and our strategic direction.

All of our executive

officers are at will employees, and we do not maintain any key person life insurance policies.

The loss of any member of our senior management

team could harm our business.

We may pursue acquisitions, which involve

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business operations in the United States, Europe, Asia and elsewhere.

These diversified, global operations place increased demands

on our limited resources and require us to substantially expand the capabilities of our administrative and operational resources and to

attract, train, manage and retain qualified management, technical, manufacturing, engineering, sales and other personnel.

As our operations

expand domestically and internationally, we will need to continue to manage multiple locations and additional relationships with various

customers, partners, suppliers and other third parties across several markets.

These diversified, global operations place increased demands on

our limited resources and require us to substantially expand the capabilities of our administrative and operational resources and to attract,

train, manage and retain qualified management, technical, manufacturing, engineering, sales and other personnel.

As our operations expand

domestically and internationally, we will need to continue to manage multiple locations and additional relationships with various customers,

partners, suppliers and other third parties across several markets.

We are an “emerging growth company,”

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parachute payments not previously approved.

We could be an “emerging growth company” for up to five years, or until the

earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (ii) the

date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur

if the market value of our Class B common stock that is held by non-affiliates exceeds $700 million as of the last business day

of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible

debt during the preceding three year period.

We could be an “emerging growth company” for up to five years, or until the earliest

of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (ii) the date that we become a

“large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange

Act”), which would occur if the market value of our Class B common stock that is held by non-affiliates exceeds $700 million as

of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1

billion in non-convertible debt during the preceding three year period.

We intend to take advantage

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will find our Class B common stock less attractive if we choose to rely on these exemptions.

If some investors find our Class B

common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our

Class B common stock and the price of our Class B common stock may be more volatile.

If some investors find our Class B common

stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our Class

B common stock and the price of our Class B common stock may be more volatile.

We are a “controlled company”

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company” as defined under the Nasdaq Stock Market Rules, as our co-founder and Chief Executive Officer, Zhenwu (Wayne) Huang, beneficially

owns over 50% of the total voting power of our issued and outstanding shares of common stock as of the date of this Report.

as we remain a “controlled company” under that definition, we are permitted to elect to rely on, and may rely on, certain

exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must be independent

As a result, you may not have the same protection afforded to stockholders of companies that are subject to these corporate

governance requirements.

We incur significantly increased costs as

a result of and devote substantial management time to operating as a public company.

As a public company, we incur

significant legal, accounting and other expenses that we did not incur as a private company.

For example, we are subject to the reporting

requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank

Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently implemented by the SEC, including the establishment

and maintenance of effective disclosure and financial controls, changes in corporate governance practices and required filing of annual,

quarterly and current reports with respect to our business and operating results.

These requirements have increased our legal and financial

compliance costs and make some activities more time-consuming and costly.

In addition, our management and other personnel need to divert

attention from operational and other business matters to devote substantial time to these public company requirements.

We may also need

to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and will

need to maintain an internal audit function.

Operating as a public company means it is more expensive for us to maintain director and

officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintain coverage.

This could also make it more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees

or as executive officers.

In addition, after we no longer qualify as an “emerging growth company,” as defined under the JOBS

ACT we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies

that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404

of the Sarbanes-Oxley Act.

We are in the process of compiling the system and processing documentation needed to comply with such requirements.

owns over 50% of the total voting power of our issued and outstanding shares of common stock as of the date of the Original Report.

so long as we remain a “controlled company” under that definition, we are permitted to elect to rely on, and may rely on,

certain exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must

be independent directors.

As a result, you may not have the same protection afforded to stockholders of companies that are subject to

these corporate governance requirements.

We have identified a material weakness in

our internal control over financial reporting as of September 30, 2025.

If we are unable to develop and maintain an effective system of

internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may

adversely affect investor confidence in us and materially and adversely affect our business and operating results.

We have identified a material weakness in our

internal controls over financial reporting as of September 30, 2025 relating to the design and consistent operation of certain entity-level

and process-level controls supporting complex accounting judgments and transaction processing.

These controls support, among other areas,

inventory accounting, revenue recognition, investments, intangible assets, and certain payroll-related processes.

A material weakness

is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility

that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely

Effective internal controls are necessary for

us to provide reliable financial reports and prevent fraud.

Measures to remediate material weaknesses may be time-consuming and costly

and there is no assurance that such initiatives will ultimately have the intended effects.

If we are unable to develop and maintain an

effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely

manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent

or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial

In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic

reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and adversely

affect our business and operating results.

We cannot assure you that the measures we have taken to date, or any measures we may take in

the future, will be sufficient to avoid potential future material weaknesses.

We incur significantly increased costs

as a result of and devote substantial management time to operating as a public company.

As a public company, we

incur significant legal, accounting and other expenses that we did not incur as a private company.

For example, we are subject to the

reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and

the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently implemented by the SEC,

including the establishment and maintenance of effective disclosure and financial controls, changes in corporate governance practices

and required filing of annual, quarterly and current reports with respect to our business and operating results.

These requirements have

increased our legal and financial compliance costs and make some activities more time-consuming and costly.

In addition, our management

and other personnel need to divert attention from operational and other business matters to devote substantial time to these public company

requirements.

We may also need to hire additional accounting and financial staff with appropriate public company experience and technical

accounting knowledge and will need to maintain an internal audit function.

Operating as a public company means it is more expensive for

us to maintain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher

costs to maintain coverage.

This could also make it more difficult for us to attract and retain qualified people to serve on our board

of directors, our board committees or as executive officers.

In addition, after we no longer qualify as an “emerging growth company,”

as defined under the JOBS ACT we expect to incur additional management time and cost to comply with the more stringent reporting requirements

applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation

requirements of Section 404 of the Sarbanes-Oxley Act.

We are in the process of compiling the system and processing documentation needed

to comply with such requirements.

We may not be able to complete our evaluation, testing and any required remediation in a timely fashion.

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Our business is subject to the risks of

earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such

as network security breaches, computer viruses or terrorism.

Material disruptions of our business or information systems resulting from

these events could adversely affect our operating results.

earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such as network

security breaches, computer viruses or terrorism.

Material disruptions of our business or information systems resulting from these events

could adversely affect our operating results.

We and some of the third-party

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Furthermore, integral parties

in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and

severe adverse events, such as a global pandemic.

in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen

and severe adverse events, such as a global pandemic.

If such an event were to affect our supply chain, it could have a material adverse

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carryforwards may be limited.

As of September 30, 2024, we had $6,780 thousand U.S.

As of September 30, 2025,

we had $18,694 thousand U.S.

federal net operating loss carryforwards.

legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act (the “TCJA”) as modified in 2020 by the Coronavirus

Aid, Relief, and Economic Security Act (the “CARES Act”), unused U.S.

federal net operating losses generated in tax years

beginning after December 31, 2017, will not expire and may be carried forward indefinitely, but the deductibility of such federal

net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income.

is uncertain if and to what extent various states will conform to the TCJA or the CARES Act.

In addition, our ability to utilize any federal

net operating loss carryforwards may be limited under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).

The limitations apply if we experience an “ownership change,” which is generally defined as a greater than 50 percentage point

change (by value) in the ownership of our equity by certain stockholders or groups of stockholders over a rolling three-year period.

provisions of state tax law may also apply to limit the use of any state net operating loss carryforwards.

We have not yet completed a

Section 382 analysis, and therefore, there can be no assurances that any previously experienced ownership changes have not materially

limited our utilization of affected net operating loss carryforwards.

Future changes in our stock ownership, which may be outside of our

control, may trigger an ownership change that materially impacts our ability to utilize any pre-change net operating loss carryforwards.

In addition, there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited.

Under legislation enacted in 2017, informally titled the Tax Cuts

and Jobs Act (the “TCJA”) as modified in 2020 by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES

Act”), unused U.S.

federal net operating losses generated in tax years beginning after December 31, 2017, will not expire and may

be carried forward indefinitely, but the deductibility of such federal net operating loss carryforwards in taxable years beginning after

December 31, 2020, is limited to 80% of taxable income.

It is uncertain if and to what extent various states will conform to the TCJA

or the CARES Act.

In addition, our ability to utilize any federal net operating loss carryforwards may be limited under Section 382 of

the Internal Revenue Code of 1986, as amended (the “Code”).

The limitations apply if we experience an “ownership change,”

which is generally defined as a greater than 50 percentage point change (by value) in the ownership of our equity by certain stockholders

or groups of stockholders over a rolling three-year period.

Similar provisions of state tax law may also apply to limit the use of any

state net operating loss carryforwards.

We have not yet completed a Section 382 analysis, and therefore, there can be no assurances that

any previously experienced ownership changes have not materially limited our utilization of affected net operating loss carryforwards.

Future changes in our stock ownership, which may be outside of our control, may trigger an ownership change that materially impacts our

ability to utilize any pre-change net operating loss carryforwards.

In addition, there may be periods during which the use of net operating

loss carryforwards is suspended or otherwise limited.

Our management has limited experience in

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We may not be able to maintain adequate personnel with the appropriate level of knowledge, experience and

training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States.

It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public

company, which will increase our operating costs in future periods.

Risks Related to Ownership of Our Class B

An active trading market for our Class B

common stock may not develop or be sustained.

training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United

It is possible that we will be required to expand our employee base and hire additional employees to support our operations as

a public company, which will increase our operating costs in future periods.

Risks Related to Ownership

of Our Class B Common Stock

An active trading market for our Class

B common stock may not develop or be sustained.

If an active trading market

for our Class B common stock does not develop, you may not be able to sell your shares quickly or at the market price.

to raise capital to continue to fund operations by selling shares of our Class B common stock and our ability to acquire other companies

Our ability to

raise capital to continue to fund operations by selling shares of our Class B common stock and our ability to acquire other companies

or technologies by using shares of our Class B common stock as consideration may also be impaired.

The market price and trading volume of our

Class B common stock may continue to be highly volatile, which could lead to a loss of all or part of a stockholder’s investment.

The market price and trading volume of

our Class B common stock may continue to be highly volatile, which could lead to a loss of all or part of a stockholder’s investment.

The market price and trading

volume of our Class B common stock has fluctuated widely since the beginning of the calendar year.

During the period from January 1, 2024

to the date of this Report, the trading price of our Class B common stock has fluctuated from an intra-day high of $12.29 on January 24,

2024 to an intra-day low of $0.30 on August 6, 2024.

The market price of our Class

B common stock is affected by a variety of factors, including but not limited to:

● analyst reports that may be published about our company or

our industry;

● our ability to execute our anticipated business plans and

● actual or anticipated fluctuations in our quarterly or annual

operating results;

● our ability to obtain additional capital which will be necessary

to continue our business and operations;

volume of our Class B common stock has fluctuated widely.

During the fiscal year of 2025, the trading price of our Class B common stock

has fluctuated from an intra-day high of $7.43 on October 7, 2025 to an intra-day low of $0.52 on November 15, 2024.

The market price of our

Class B common stock is affected by a variety of factors, including but not limited to:

analyst reports or short seller reports that may be

published about our company or our industry;

our ability to execute our anticipated business plans and strategy;

actual or anticipated fluctuations in our quarterly or annual operating

our ability to obtain additional capital which will be necessary to

continue our business and operations;

changes in financial or operational estimates or projections;

● changes in the economic performance or market valuations

of companies similar to ours;

● the impact of pandemics, inflation, war, other hostilities

and other disruptive events on our business or that of our customers, partners, and supply chain or on the global economy;

● our ability to comply with the continued listing requirements of The

Nasdaq Stock Market LLC (“Nasdaq”) and maintain our listing on Nasdaq.

changes in the economic performance or market valuations of companies

similar to ours;

the impact of pandemics, inflation, war, other hostilities and other

disruptive events on our business or that of our customers, partners, and supply chain or on the global economy;

our ability to comply with the continued listing requirements of Nasdaq

and maintain our listing on Nasdaq.

In addition, the trading

price and trading volume of our Class B common stock has very recently and at certain other times in the past exhibited, and may continue

to exhibit, extreme volatility, including within a single trading day.

Such volatility could cause purchasers of our Class B common stock

to incur substantial losses.

For example, on July 22, 2024, the trading price of our Class B common stock ranged from an intra-day high

of $2.59 to an intra-day low of $1.31, on trading volume of approximately 100 million shares, and on August 7, 2024, the trading price

of our Class B common stock ranged from an intra-day high of $0.728 to an intra-day low of $0.5413, on trading volume of approximately

188 million shares.

With respect to certain such instances of trading volatility, we are not aware of any material changes in our financial

condition or results of operations that would explain such price volatility or trading volume, which we believe reflect market and trading

dynamics unrelated to our operating business or prospects and outside of our control.

We are thus unable to predict when such instances

of trading volatility will occur or how long such dynamics may last.

Under these circumstances, we would caution you against investing

in our Class B common stock unless you are prepared to incur the risk of incurring substantial losses.

price and trading volume of our Class B common stock has at certain other times in the past exhibited, and may continue to exhibit, extreme

volatility, including within a single trading day.

Such volatility could cause purchasers of our Class B common stock to incur substantial

For example, on July 22, 2024, the trading price of our Class B common stock ranged from an intra-day high of $2.59 to an intra-day

low of $1.31, on trading volume of approximately 100 million shares, and on August 7, 2024, the trading price of our Class B common stock

ranged from an intra-day high of $0.728 to an intra-day low of $0.5413, on trading volume of approximately 188 million shares.

to certain such instances of trading volatility, we are not aware of any material changes in our financial condition or results of operations

that would explain such price volatility or trading volume, which we believe reflect market and trading dynamics unrelated to our operating

business or prospects and outside of our control.

We are thus unable to predict when such instances of trading volatility will occur

or how long such dynamics may last.

Under these circumstances, we would caution you against investing in our Class B common stock unless

you are prepared to incur the risk of incurring substantial losses.

A proportion of our Class

B common stock may be traded by short sellers which may put pressure on the supply and demand for our Class B common stock, creating further

price volatility.

In particular, a possible “short squeeze” due to a sudden increase in demand of our Class B common stock

that largely exceeds supply may lead to sudden extreme price volatility in our Class B common stock.

Investors may purchase our Class

B common stock to hedge existing exposure in our Class B common stock or to speculate on the price of our Class B common stock.

on the price of our Class B common stock may involve long and short exposures.

To the extent aggregate short exposure exceeds the number

of shares of common stock available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase

our Class B common stock for delivery to lenders of our Class B common stock.

Those repurchases may in turn dramatically increase the

price of our Class B common stock until investors with short exposure are able to purchase additional common stock to cover their short

This is often referred to as a “short squeeze.” Following such a short squeeze, once investors purchase the shares

necessary to cover their short position, the price of our Class B common stock may rapidly decline.

A short squeeze could lead to volatile

price movements in our shares that are not directly correlated to the performance or prospects of our company and could cause purchasers

of our common shares to incur substantial losses.

The dual-class structure of our common stock

has the effect of concentrating voting power, which may limit your ability to influence the outcome of important transactions, including

a change in control.

B common stock may be traded by short sellers which may put pressure on the supply and demand for our Class B common stock, creating

further price volatility.

In particular, a possible “short squeeze” due to a sudden increase in demand of our Class B common

stock that largely exceeds supply may lead to sudden extreme price volatility in our Class B common stock.

Investors may purchase our

Class B common stock to hedge existing exposure in our Class B common stock or to speculate on the price of our Class B common stock.

Speculation on the price of our Class B common stock may involve long and short exposures.

To the extent aggregate short exposure exceeds

the number of shares of common stock available for purchase in the open market, investors with short exposure may have to pay a premium

to repurchase our Class B common stock for delivery to lenders of our Class B common stock.

Those repurchases may in turn dramatically

increase the price of our Class B common stock until investors with short exposure are able to purchase additional common stock to cover

their short position.

This is often referred to as a “short squeeze.” Following such a short squeeze, once investors purchase

the shares necessary to cover their short position, the price of our Class B common stock may rapidly decline.

A short squeeze could

lead to volatile price movements in our shares that are not directly correlated to the performance or prospects of our company and could

cause purchasers of our common shares to incur substantial losses.

The dual-class structure of our common

stock has the effect of concentrating voting power, which may limit your ability to influence the outcome of important transactions,

including a change in control.

Our Class B common stock

has one (1) vote per share, and our Class A common stock has ten (10) votes per share.

Our issued and outstanding share

capital consisted of 39,934,846 shares of Class A common stock and 72,117,398 shares of Class B common stock as of January 10,

Our Chief Executive Officer and co-founder, Zhenwu Huang, and our Chief Financial Officer and co-founder, Zhenqiang Huang,

beneficially own an aggregate of approximately 81.02% of the voting power of our outstanding shares of common stock as of September 30,

2024, and as such, these stockholders, individually or together, may be able to significantly influence matters submitted to our stockholders

for approval, including the election of directors, amendments of our articles of incorporation, as amended, and any merger or other major

corporate transactions that require stockholder approval.

See “Principal Stockholders” Our existing stockholders, including

Zhenwu Huang and Zhenqiang Huang, individually or together, may vote in a way with which you disagree and which may be adverse to your

This concentrated voting power may, by changing the directors of the Company, have the ultimate effect of delaying, preventing

or deterring a change in control of our Company, could deprive our stockholders of an opportunity to receive a premium for their shares

of common stock as part of a sale of our company and might ultimately materially and adversely affect the market price of our Class B

common stock.

Future transfers by the holders

of shares of Class A common stock may result in those shares converting into shares of Class B common stock.

Each share of Class A

common stock is convertible into one share of Class B common stock at any time at the option of the holder, but Class B common

stock shall not be convertible into Class A common stock under any circumstances.

However, as long as at least 7,211,740 shares of

Class A common stock remain outstanding, and without giving effect to any future issuances, the holders of our Class A common

stock will hold a majority of the outstanding voting power and will continue to control the outcome of matters submitted to stockholders’

Our second amended and restated articles of incorporation will generally not prohibit us from issuing additional shares of Class A

common stock, and any future issuance of shares of Class A common stock may be dilutive to holders of Class B common stock.

The dual-class structure of our common stock

may adversely affect the trading market for our Class B common stock.

Our issued and outstanding share capital consisted

of 39,934,846 shares of Class A common stock and 175,161,127 shares of Class B common stock as of January 20, 2026.

Our Chief Executive

Officer and co-founder, Zhenwu Huang, and our Chief Financial Officer and co-founder, Zhenqiang Huang, beneficially own an aggregate of

approximately 66% of the voting power of our outstanding shares of common stock as of January 20, 2026, and as such, these stockholders,

individually or together, may be able to significantly influence matters submitted to our stockholders for approval, including the election

of directors, amendments of our articles of incorporation, as amended, and any merger or other major corporate transactions that require

stockholder approval.

See “ ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .”

Our existing stockholders, including Zhenwu Huang and Zhenqiang Huang, individually or together, may vote in a way with which you disagree

and which may be adverse to your interests.

This concentrated voting power may, by changing the directors of the Company, have the ultimate

effect of delaying, preventing or deterring a change in control of our Company, could deprive our stockholders of an opportunity to receive

a premium for their shares of common stock as part of a sale of our company and might ultimately materially and adversely affect the market

price of our Class B common stock.

Future transfers by the

holders of shares of Class A common stock may result in those shares converting into shares of Class B common stock.

Each share of Class

A common stock is convertible into one share of Class B common stock at any time at the option of the holder, but Class B common stock

shall not be convertible into Class A common stock under any circumstances.

However, as long as at least 17,516,113 shares of Class A

common stock remain outstanding, and without giving effect to any future issuances, the holders of our Class A common stock will hold

a majority of the outstanding voting power and will continue to control the outcome of matters submitted to stockholders’ approval.

Our second amended and restated articles of incorporation will generally not prohibit us from issuing additional shares of Class A common

stock, and any future issuance of shares of Class A common stock may be dilutive to holders of Class B common stock.

The dual-class structure of our common

stock may adversely affect the trading market for our Class B common stock.

We cannot predict whether

our dual-class structure will result in a lower or more volatile market price of our Class B common stock or in adverse publicity

or other adverse consequences.

our dual-class structure will result in a lower or more volatile market price of our Class B common stock or in adverse publicity or

other adverse consequences.

For example, certain index providers have announced restrictions on companies with dual-class or multi-class

share structures in their indices.

In July 2017, S&P Dow Jones and FTSE Russell announced changes to their eligibility criteria

for the inclusion of shares of public companies on certain indices, including the Russell 2000, the S&P 500, the S&P MidCap 400

and the S&P SmallCap 600, to exclude companies with multiple classes of shares from being added to these indices.

In July 2017, S&P Dow Jones and FTSE Russell announced changes to their eligibility criteria for

the inclusion of shares of public companies on certain indices, including the Russell 2000, the S&P 500, the S&P MidCap 400 and

the S&P SmallCap 600, to exclude companies with multiple classes of shares from being added to these indices.

Beginning in 2017,

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The trading market for our

Class B common stock will depend in part on the research and reports that securities or industry analysts publish about us or our

Class B common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.

If no securities or industry analysts cover our company, the trading price for our stock would be negatively impacted.

obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate

or unfavorable research about our business, our stock price would likely decline.

If one or more of these analysts ceases coverage of

us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume

Future sales of our Class B common

stock or securities convertible into our Class B common stock may depress our stock price.

If we obtain securities

or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable

research about our business, our stock price would likely decline.

If one or more of these analysts ceases coverage of us or fails to

publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

Future sales of our Class B common stock

or securities convertible into our Class B common stock may depress our stock price.

Sales of a substantial number

of shares of our Class B common stock or securities convertible into our Class B common stock in the public market could occur

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce

the market price of our Class B common stock.

For example, we have registered an aggregate of 14,311,215 shares of Class B common

stock issuable under our Amended and Restated 2023 Stock Option Plan on a Registration Statement on Form S-8, filed with the SEC on December

of shares of our Class B common stock or securities convertible into our Class B common stock in the public market could occur at any

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the

market price of our Class B common stock.

For example, we have registered an aggregate of 14,311,215 shares of Class B common stock issuable

under our Amended and Restated 2023 Stock Option Plan on a Registration Statement on Form S-8, filed with the SEC on December 11, 2023,

as amended by Post-Effective Amendment No.

1 to Form S-8, filed with the SEC on November 7, 2023, and such shares can be freely

sold in the public market upon issuance (unless issued to an affiliate of the Company).

If a large number of shares of our Class B

common stock or securities convertible into our Class B common stock are sold in the public market after they become eligible for

sale, the sales could reduce the trading price of our Class B common stock and impede our ability to raise future capital.

There can be no assurance that we will continue

to be able to comply with the continued listing standards of Nasdaq.

Our continued

eligibility to maintain the listing of our Class B common stock on Nasdaq depends on a number of factors, including the price of our

Class B common stock.

On October 25, 2024, the Company received a notice from Nasdaq notifying the Company that, because the closing

bid price for the Company’s Class B common stock had fallen below $1.00 per share for 30 consecutive business days, the

Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Rule

5550(a)(2) of Nasdaq Listing Rules.

Nasdaq’s notice had no immediate effect on the listing of the Company’s Class B

common stock on the Nasdaq Capital Market.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial

compliance period of 180 calendar days, or until April 23, 2025, to regain compliance with the minimum bid price requirement.

regain compliance, the closing bid price of the Company’s Class B common stock must meet or exceed $1.00 per share for a

minimum of 10 consecutive business days prior to April 23, 2025.

On January 6, 2024, the Company received a notice from Nasdaq that the Company has regained compliance with the

minimum bid price requirement and the matter is closed.

However, there is no guarantee that the Company will be able to remain

in compliance with the continued listing standards of Nasdaq.

If Nasdaq delists our securities from trading on its exchange for failure

to meet its listing standards, and we are not able to list such securities on another national securities exchange, then our Common Stock

could be quoted on an over-the-counter market.

If this were to occur, we and our stockholders could face significant material adverse

consequences, including:

● a limited availability of market quotations for our securities;

1 to Form S-8, filed with the SEC on November 7, 2023, and such shares can be freely sold

in the public market upon issuance (unless issued to an affiliate of the Company).

If a large number of shares of our Class B common

stock or securities convertible into our Class B common stock are sold in the public market after they become eligible for sale, the

sales could reduce the trading price of our Class B common stock and impede our ability to raise future capital.

There can be no assurance that we will

continue to be able to comply with the continued listing standards of Nasdaq.

Our continued eligibility

to maintain the listing of our Class B common stock on Nasdaq depends on a number of factors, including the price of our Class B common

On October 25, 2024, the Company received a notice from Nasdaq notifying the Company that, because the closing bid price for the

Company’s Class B common stock had fallen below $1.00 per share for 30 consecutive business days, the Company no longer complies

with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Rule 5550(a)(2) of Nasdaq Listing Rules.

Nasdaq’s notice had no immediate effect on the listing of the Company’s Class B common stock on the Nasdaq Capital Market.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial compliance period of 180 calendar days, or until April

23, 2025, to regain compliance with the minimum bid price requirement.

To regain compliance, the closing bid price of the Company’s

Class B common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to April 23, 2025.

6, 2024, the Company received a notice from Nasdaq that the Company has regained compliance with the minimum bid price requirement and

the matter is closed.

However, there is no guarantee

that the Company will be able to remain in compliance with the continued listing standards of Nasdaq.

If Nasdaq delists our securities

from trading on its exchange for failure to meet its listing standards, and we are not able to list such securities on another national

securities exchange, then our Common Stock could be quoted on an over-the-counter market.

If this were to occur, we and our stockholders

could face significant material adverse consequences, including:

limited availability of market quotations for our securities;

reduced liquidity for our securities;

● a determination that our Class B common stock is a “ penny

stock, ” which will require brokers trading our Class B common stock

to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares

of our Class B common stock;

a determination that our Class B common stock is a “penny stock,”

which will require brokers trading our Class B common stock to adhere to more stringent rules, possibly resulting in a reduced level

of trading activity in the secondary trading market for shares of our Class B common stock;

a limited amount of news and analyst coverage;

● a decreased ability for us to issue additional securities

or obtain additional financing in the future.

a decreased ability for us to issue additional securities or obtain

additional financing in the future.

Our directors, executive officers and principal

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control the management and affairs of our company.

Accordingly, this concentration of ownership could harm the market price of our Class B

common stock by:

delaying, deferring or preventing a change of control of us;

impeding a merger, consolidation, takeover or other business combination involving us;

discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of us.

Accordingly, this concentration of ownership could harm the market price of our Class

B common stock by:

deferring or preventing a change of control of us;

impeding a merger, consolidation, takeover or other business combination

involving us;

discouraging a potential acquiror from making a tender offer or otherwise

attempting to obtain control of us.

See “Security Ownership

11 unchanged sentences

classifying our board of directors into three classes;

authorizing “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our Class B common stock;

limiting the liability of, and providing indemnification to, our directors and officers;

limiting the ability of our stockholders to call and bring business before special meetings;

requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;

controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;

providing our board of directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings.

These provisions, alone or

together, could delay or prevent hostile takeovers and changes in control or changes in our management.

authorizing “blank check” preferred stock, which could

be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights

superior to our Class B common stock;

limiting the liability of, and providing indemnification to, our directors

and officers;

limiting the ability of our stockholders to call and bring business

before special meetings;

requiring advance notice of stockholder proposals for business to be

conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;

controlling the procedures for the conduct and scheduling of board

of directors and stockholder meetings;

providing our board of directors with the express power to postpone

previously scheduled annual meetings and to cancel previously scheduled special meetings.

These provisions, alone

or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

Nevada law, Nevada Revised

Statutes (“NRS”) Sections 78.411 through 78.444, regulate business combinations with interested stockholders.

Nevada law defines

an interested stockholder as a beneficial owner (directly or indirectly) of 10% or more of the voting power of the outstanding shares

of the corporation.

Pursuant to Sections NRS 78.411 through 78.444, combinations with an interested stockholder remain prohibited for

three years after the person became an interested stockholder unless (i) the transaction is approved by the board of directors

or the holders of a majority of the outstanding shares not beneficially owned by the interested party, or (ii) the interested stockholder

defines an interested stockholder as a beneficial owner (directly or indirectly) of 10% or more of the voting power of the outstanding

shares of the corporation.

Pursuant to Sections NRS 78.411 through 78.444, combinations with an interested stockholder remain prohibited

for three years after the person became an interested stockholder unless (i) the transaction is approved by the board of directors or

the holders of a majority of the outstanding shares not beneficially owned by the interested party, or (ii) the interested stockholder

satisfies certain fair value requirements.

3 unchanged sentences

78.3793 regulates the acquisition of a controlling interest in an issuing corporation.

An issuing corporation is defined as a Nevada corporation

with 200 or more stockholders of record, of which at least 100 stockholders have addresses of record in Nevada and does business in Nevada

directly or through an affiliated corporation.

An issuing corporation is defined as a Nevada

corporation with 200 or more stockholders of record, of which at least 100 stockholders have addresses of record in Nevada and does business

in Nevada directly or through an affiliated corporation.

NRS Section 78.379 provides that an acquiring person and those acting in association

5 unchanged sentences

of incorporation or bylaws may provide that these sections do not apply to the corporation.

Our second amended and restated articles of

incorporation provide that these sections do not apply.

Our second amended and restated articles

of incorporation provide that these sections do not apply.

We have never paid dividends on our capital

10 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-K

Item 1A. Risk Factors