CN Healthy Food Tech Group Corp. 10-K

ITEM 1. BUSINESS BUSINESS Our Holding Company Structure and China Business Operations The figure below illustrates our corporate structure, including our major subsidiaries and other subsidiaries as of the reporting date of this annual report. CN Healthy Tech Group Corp.is a holding company without substantive operations, with the Group’s core business being managed by its domestic wholly-owned subsidiaries (together, the “Group”). These entities focus on developing, manufacturing, and marketing premium health foods driven by AI-powered biotechnology and biotech innovation. By integrating modern biotechnology with traditional Chinese medicine principles, the Group addresses the market’s growing demand for safe, high-quality nutritional products. The group’s wholly-owned subsidiaries within China are as follows: ● Heilongjiang Zhongnengliangke Agricultural Technology Co., Ltd. (a wholly-owned subsidiary of Grain Science Innovation Biotechnology (BVI) Limited (“CFI HK”)), a limited liability company established under the laws of the People’s Republic of China, hereinafter referred to as “Operating Company 1”) ● Harbin Kangliang Kechuang Co., Ltd. (a wholly-owned subsidiary of Operating Company 1, a limited liability company established in accordance with the laws of the People’s Republic of China, hereinafter referred to as “Operating Company 2”) ● Heilongjiang Beikang Biotechnology Co., Ltd. (a wholly-owned subsidiary of Operating Company 1, a limited liability company established in accordance with the laws of the People’s Republic of China, hereinafter referred to as “Operating Company 3”) 1 ● Harbin Nongke Internet Technology Co., Ltd. (a wholly-owned subsidiary of Operating Company 1, a limited liability company established in accordance with the laws of the People’s Republic of China, abbreviated as “Operating Company 4”), and ● Zhuhai Liangke Biotechnology Co., Ltd. (a wholly-owned subsidiary of Operating Company 1, a limited liability company established in accordance with China law, abbreviated as “Operating Company 5”). On September 30, 2025 (the “Closing Date”), Iron Horse Acquisition Corp. (“Iron Horse)” consummated the merger transactions contemplated by the business combination agreement (the “Initial BCA”) executed during September 2024 with Zhong Guo Liang Tou Group Limited, a company incorporated and existing under the laws of the British Virgin Islands (“Legacy CFI”), and Rosy Sea, the owner of 100% of the issued and outstanding capital stock of Legacy CFI. On September 30, 2025 (the “Closing Date”), Iron Horse Acquisition Corp. (“Iron Horse)” consummated the merger transactions contemplated by the business combination agreement (the “Initial BCA”) executed during September 2024 with Zhong Guo Liang Tou Group Limited, a company incorporated and existing under the laws of the British Virgin Islands (“Legacy CFI”), and Rosy Sea Holdings Limited, a company incorporated and existing under the laws of the British Virgin Islands (“Rosy Sea” or the “Seller”) and the owner of 100% of the issued and outstanding capital stock of Legacy CFI. On October 1, 2025, the newly merged company was renamed CN Healthy Food Tech Group Corp. and began trading on the Nasdaq market on October 1, 2025, under the stock codes “UCFI” and “UCFIW”. Following its listing on Nasdaq on October 1, 2025, the Company was notified by Nasdaq that it had received a notification from personnel at the China Securities Regulatory Commission (the “CSRC”) informing Nasdaq that the CSRC had not yet completed its process of review of the Company’s U.S. listing. As a result, Nasdaq has halted trading of the Company’s common stock and warrants while it seeks clarification of these matters from the Company. The Company has provided Nasdaq with additional documentation and is awaiting further information at this time. The main administrative office of CFI Group is located at Rooms 1901-1930, T3 Office Building, Hengqin Huafa Commercial City, No.128 Rong ‘ao Road, Hengqin Guangdong-Macao In-depth Cooperation Zone, Zhuhai City, Guangdong Province, People’s Republic of China. Contact number: (+86) 0756-8300080. Our business operations in China face various risks and uncertainties. Our business operations are primarily conducted in China and are subject to complex and evolving Chinese laws and regulations. For example, we face risks related to regulatory approvals for overseas issuances, antitrust regulatory actions, as well as cybersecurity and data privacy regulations, which may affect our ability to conduct specific businesses, accept foreign investments, or list and issue securities on exchanges in the United States or other foreign jurisdictions. These risks may lead to significant adverse changes in our operations and common stock value, severely limit or completely hinder our ability to continue issuing securities to investors, or cause such securities to experience substantial declines in value or even become worthless. For a detailed description of risks associated with conducting business in China, please refer to “ Item 1A: Risk Factors .” Overview The Group is a leading enterprise integrating R&D, production, and sales of high-end technological bio-health foods. It specializes in green ecological products derived from bio-extraction of whole grains and cereals, with the corporate vision of “AI Technology, Bio-Innovation for a Healthy World.” Our products advocate for green, healthy, international, and mass-market consumption concepts, earning widespread market popularity. Through strategic deployment of official online e-commerce platforms and social media channels, the Group implements targeted traffic diversion for distributors’ offline physical stores, achieving synergistic sales across both online and offline channels. Concurrently, the Group regularly organizes large-scale offline promotional conferences to continuously drive steady growth in product sales. 2 The group has established business bases in Daqing City and Harbin Mulan in Heilongjiang Province, as well as Zhuhai City in Guangdong Province, forming a “north-south” layout structure. It has achieved effective market coverage across China and is progressively expanding into overseas markets. Building on its successful progress in the capital market, the group is committed to achieving its strategic goal of becoming a global leader in high-end health food innovation, leveraging comprehensive advantages across the entire AI technology and biotech innovation value chain, encompassing research, production, and sales. Our Products The group specializes in premium health foods derived from natural grains, providing safe and reliable nutritional support for health-conscious consumers. Below are several flagship products with high sales performance: Cordyceps Peptide Selenium Powder : This product is formulated with high-quality Cordyceps as raw material and refined through bio-enzymatic hydrolysis technology, featuring a scientifically balanced ratio of peptides and selenium elements. The product combines high absorption characteristics with nutritional supplementation advantages, making it suitable for consumer groups that prioritize the efficiency of nutritional supplementation. Baofei Granule Extract Plant Beverage : This product is formulated with eight traditional Chinese medicinal ingredients—Angelica dahurica, Citrus aurantium, Alpinia oxyphylla, Buddha’s Hand, Ganoderma lucidum, Astragalus membranaceus, Lonicera japonica, and Agastache rugosa—extracted through micro-nano technology for Chinese herbal medicine. It serves as a primary product beneficial for pulmonary health management. Yanxu Peptide Selenium Premium Powder : This product is a small-molecule active peptide complex refined from bird’s nest through bio-enzymatic hydrolysis technology, rich in key nutrients of bird’s nest such as sialic acid and supplemented with selenium. The product combines the advantages of small molecule size for easy absorption and high bioavailability, facilitating efficient nutritional supplementation, gentle gastrointestinal care, while providing nutritional support for skin health, daily sleep, and energy levels. Ganoderma and Matsutake Peptide Selenium Powder : This product is a small-molecule active peptide complex refined through bio-enzymatic technology, with Ganoderma lucidum and Matsutake as core ingredients with medicinal and edible properties, supplemented with selenium. It combines the nutritional advantages of raw materials, the high absorption characteristics of small molecules, and the synergistic effects of selenium, thereby enhancing nutrient utilization efficiency and supporting metabolic balance in the body. It is suitable for daily nutritional supplementation scenarios. Panax Ginseng Peptide Selenium Concentrate Powder : This product is a small-molecule active peptide complex refined from ginseng powder and American ginseng powder through directed bio-enzymatic hydrolysis technology. It is enriched with active ingredients such as ginsenosides and polysaccharides, with scientifically formulated selenium content. Utilizing bio-enzymatic hydrolysis technology, the small-molecule structure enhances bioavailability and reduces gastrointestinal metabolic burden. Ginsenosides, as the core active component, have been scientifically proven to alleviate physical fatigue and assist in improving symptoms of physical weakness and fatigue. This product is suitable for consumer groups with high blood pressure, susceptibility to fatigue, and those requiring daily nutritional supplementation. Collagen Peptide Prebiotic Beverage : This product is a plant-based oral beverage formulated with ingredients such as black truffle and ginseng, supplemented with collagen peptides and prebiotic components. It is positioned in the field of intestinal health maintenance and nutritional supplementation, suitable for consumer groups who prioritize daily nutritional management. Plant Essential Oils : This product is a sprayable skin essential oil that integrates ancient Traditional Chinese Medicine formulas with modern technology. It is formulated using over 28 natural herbal ingredients including ginseng, salvia miltiorrhiza, and gastrodia elata, refined through advanced extraction processes. All ingredients in the formulation are selected from the “List of Approved Cosmetic Ingredients” and contain no hormonal substances. The product is positioned in the field of skin soothing care. 3 Shangshan Literacy Congee : This product was jointly developed by the National Mixed Cereals Research Center and is a natural, non-GMO, additive-free composite grain congee. It is formulated with a carefully selected blend of 78 ingredients, rich in 30 trace elements and 18 amino acids, without the addition of artificial flavorings, colorants, preservatives, or sucrose. The aim is to provide consumers with a nutritionally balanced and convenient dietary option. Nattokinase Special Dietary Food : This product is a special dietary food primarily composed of nattokinase, earthworm protein, and red yeast rice, refined through optimized formulation systems and manufacturing processes. The product development was inspired by the classic experiments leading to the discovery of nattokinase. Our Research and Development The Group has established a robust R&D system and engages in in-depth collaboration with multiple authoritative domestic research institutions. The R&D team comprises high-level professionals from the industry, focusing on the innovative development and quality enhancement of advanced biotechnology health products, continuously providing the market with natural and premium health product solutions. Intellectual Property We believe that our patents, trademarks, service marks, domain names, trade secrets, and similar intellectual property rights are crucial to our success. We rely on patent, copyright, and trademark laws, as well as confidentiality and non-disclosure agreements, to protect our intellectual property. We also regularly monitor any infringement or unauthorized use of our intellectual property rights. As of December 31, 2025, we have registered 13 patents, 85 trademarks, and 6 registered copyrights in the Chinese mainland, and there are still some patents and licenses under application. Our Manufacturing, Suppliers and Quality Control Since our in-house production facility commenced operations in October 2025, we have progressively achieved self-sufficiency in core product manufacturing and distribution, with the self-production ratio expected to continue increasing. Currently, certain products remain outsourced through OEM partnerships or sourced from external suppliers. We regard our collaborating manufacturers and suppliers as critical partners in product development, playing a vital role in maintaining the group’s supply chain and delivering essential products for sustainable operations and growth. The procurement department conducts rigorous supplier evaluations through on-site assessments of facility scale, technical capabilities, production capacity, and delivery timelines to ensure compliance with our quality standards. Our Production Base To ensure large-scale and standardized operations of core business activities, the Group has established its own production base in Taikang Industrial Park, Duerbote Mongolian Autonomous County, Daqing City, Heilongjiang Province, covering an area of 18,000 square meters. The factory features a rational functional layout designed to meet modern production requirements, comprising four key zones: 1) An 879.50-square-meter office space with ample natural lighting and organized layout, integrating R&D design, project management, quality control, and administrative functions; 2) A 785.00-square-meter hybrid workshop suitable for precision operations; 3) A 1,540.20-square-meter steel structure workshop with spacious layout and excellent load-bearing capacity, housing large-scale automated production equipment and assembly lines; 4) An 821.66-square-meter warehouse serving as raw material storage, finished product temporary storage, and logistics hub, achieving integrated closed-loop operations for production, warehousing, and logistics to significantly enhance operational efficiency. The production base officially commenced operations in October 2025, providing solid hardware infrastructure for the company’s long-term stable development. 4 To further enhance production efficiency and align with industry trends, the Group will implement comprehensive upgrades at existing production bases, prioritizing automated production lines, precision testing equipment, and intelligent warehouse management systems while optimizing manufacturing processes. Upon completion, these upgrades are expected to significantly increase core product output capacity. Digital management solutions will boost productivity, reduce energy consumption per unit, effectively control production costs, and ensure consistent product quality. The office facilities will also undergo modernization with newly established R&D laboratories, sample display areas, and remote collaboration systems, providing integrated support for technological innovation, team management, and client engagement. This initiative aims to build a state-of-the-art production base that meets industry benchmarks while integrating large-scale operations with smart technologies. Our manufacturing facilities currently specialize in producing flagship products including Yan Cui Peptide Selenium Premium Powder, Ganoderma and Matsutake Peptide Selenium Powder, and Panax Ginseng Peptide Selenium Concentrate. Since commencing operations in October 2025, these products have contributed 13% to the group’s annual revenue. This self-sufficient production model for core products has significantly strengthened the group’s control over product quality, cost management, and supply chain efficiency. Suppliers The group’s relationship with suppliers is formally established through structured OEM agreements lasting one to three years, which incorporate key provisions from the Supplier Agreement. These agreements clearly define responsibilities regarding product specifications, production standards, delivery obligations, and quality assurance. Each supplier must provide essential certifications including business licenses, tax registration certificates, food production licenses, and product inspection certificates to verify compliance with regulatory and quality standards. Under the supplier agreement, suppliers process orders in accordance with specifications issued by the Group, including product types, quantities, quality standards, and delivery requirements. This approach ensures that every order meets the Group’s stringent expectations. Suppliers are responsible for product packaging, labeling, and logistics arrangements for delivering goods to designated locations, where the Group conducts final inspection and acceptance. Product quality is ensured by compliance with national safety and quality regulations, as detailed in the Supplier Agreement. Suppliers must immediately notify the Group of any non-compliance with packaging or quality requirements and assume full responsibility for any defects resulting from production defects or failure to adhere to approved formulations. In the event of non-compliance with regulations, the agreement specifies corrective measures, including penalties for recurring quality issues and potential contract termination. Additionally, both parties shall have rights and obligations regarding order modifications, confidentiality obligations, and dispute resolution. In the event of unresolved disputes, jurisdiction shall be vested in the court where the supplier is located. Our Brand and Marketing System Strong brand recognition is a key decision-making factor for consumers of biotech health products. The UCFI Group currently leads in the high-end biotech health food sector in China. The goal is to capture over 15% market share in the natural grain and processed health food markets. The group has developed a series of multi-dimensional strategies to enhance brand reputation and consumer trust. Our marketing strategy emphasizes transparent communication with consumers to strengthen brand reputation. We conduct consumer engagement activities, such as educational campaigns and community events, to highlight the health benefits and quality of our products. Additionally, we actively monitor brand reputation and promptly address any potential issues, ensuring swift correction of any misinformation. By maintaining transparency and integrity in marketing efforts, we are committed to building long-term loyalty and establishing ourselves as a trustworthy brand. As of December 31, 2025, our offline marketing channels have over 10,000 physical specialty stores and distributor clients. For online channels, we also conduct sales and promotional activities through e-commerce and social platforms such as Douyin, Kuaishou, and Meituan. During the reporting period, we launched the “Kebixin” self-operated live streaming room and introduced AI digital employee anchors. In the future, we will further establish a multi-account live streaming system combining the main brand account with vertical sub-accounts to precisely target high-end customer segments. Meanwhile, we utilize a data middle platform to centrally track key metrics for product popularity, providing data support for operational strategy optimization. 5 An AI-powered Marketing System Online Leveraging e-commerce platforms and social media, the group employs digital marketing strategies to drive omnichannel sales across online and offline channels. The platform integrates AI-powered digital human technology, enabling regular live-streaming sales on social media platforms. Virtual digital hosts facilitate round-the-clock interactive engagement and product demonstrations, bridging physical and virtual environments to strengthen direct customer connections. This approach delivers end-to-end services that seamlessly transition from interactive experiences to transactional conversions. Offline Channel Strategies, Emphasizing Refined Operations and Capability Iteration Amid the accelerating globalization and aging population trends, public health awareness has significantly increased, leading to growing consumer demand for healthy foods. The pursuit of high-quality lifestyles has further driven consumption upgrades in the health food sector. Based on increasingly segmented consumer profiles and needs, the group continues to strengthen brand channel matrix development and implement in-depth, refined operations across all distribution channels. Whether in traditional specialized channels with established strengths, highly dynamic online platforms, or steadily expanding emerging scenarios, the group consistently adheres to long-term strategies to drive continuous iteration, enhance efficiency, and leverage precise consumer insights and targeted marketing operations, thereby solidifying the foundation for brand and business growth. Our Technology All operating subsidiaries employ advanced technologies in multiple areas including product development, supply chain management, research and development (R&D), and marketing. Our sustained investment in technology applications has enhanced product quality, optimized supply chain management, and improved marketing effectiveness, thereby laying a solid foundation for long-term growth and sustainable development. Product Development Technology The Group adheres to the standards of systematization, technological advancement, and internationalization, focusing on the non-GMO agricultural sector and committed to the manufacturing and service of high-end products. Research and development (R&D) serves as the core driving force for new product innovation, with emphasis on non-GMO grain-based high-value-added foods. Relevant technological achievements are transferred from the National Research Center for Mixed Cereals. The Group has established a deep research collaboration with Professor Xu Liran, Dean of the Zhongjing Medical Research Institute at Henan University of Chinese Medicine, and his team. Professor Xu Liran is an expert recipient of the State Council Special Government Allowance. He served consecutively as the Chief Scientist for major scientific research projects on AIDS during the 11th, 12th, and 13th Five-Year Plans, led multiple key projects funded by the National Natural Science Foundation of China, and has accumulated over 20 research achievement awards. His team comprises more than 20 researchers, including postdoctoral fellows, PhD holders, and master’s degree holders. Nutritional Formula Design The group leads nutritional formula development through a team of senior nutritionists and food scientists, leveraging cutting-edge nutritional research findings to customize health food formulations tailored to the specific needs of diverse populations such as the elderly, children, and athletes. This ensures precise alignment with consumers’ health and wellness objectives. Raw Material Selection and Source Control The Group implements end-to-end quality control across the entire industrial chain, covering all process stages including planting bases, crop cultivation, raw material screening, non-GMO testing, formulation development, product manufacturing, and packaging. This ensures comprehensive quality control from source to end-user, providing consumers with high-quality products. 6 Product Process Innovation and Quality Control The Group strictly adheres to national standards, industry standards, and corporate standards in production organization, establishing a dual management quality control system. The quality control line comprises three-tier positions: quality control officers, quality supervisors, and quality managers. The laboratory line features three-tier roles: laboratory technicians, laboratory supervisors, and laboratory managers. This structure creates an independent yet coordinated quality assurance mechanism between production and testing processes, ensuring product safety and stability. Supply Chain Management Technology Logistics Tracking: Through collaboration with logistics suppliers, we employ tracking systems to monitor real-time cargo status. This technology ensures accurate and timely product delivery, thereby enhancing customer satisfaction. Cloud Warehouse Management System: Utilizing advanced inventory management software, we monitor inventory levels in real-time to ensure stable product supply. Data analysis and forecasting tools optimize procurement and production planning, preventing inventory overstocking or stockouts. Quality Assurance We are committed to delivering high-quality products and services to our customers in alignment with our core values and commitments. We believe quality assurance is fundamental to ensuring premium product and service delivery, while also being crucial for reducing waste and enhancing operational efficiency. Quality management practices are prioritized across all business functions, including product development, manufacturing, supplier quality control, procurement, customer experience, service delivery, and logistics operations. Our dedicated quality management team oversees the formulation of comprehensive quality strategies, quality systems and processes, quality culture development, and the implementation of holistic quality management initiatives. Customer Service Pre-sales Service Product Consultation: Customers may inquire about detailed product information, including ingredients, efficacy, and target population, through telephone calls, in-person visits at physical stores, or online consultations with customer service representatives. Customer service personnel should possess comprehensive product knowledge to provide accurate responses to customer inquiries. Personalized recommendations: Based on the customer’s age, gender, health status, and dietary preferences, we provide customized product recommendations to meet diverse customer needs. In-sales Service Order Processing: Ensure fast and accurate handling of customer orders, including order confirmation, payment guidance, and logistics tracking. Customer service representatives should promptly communicate order status with customers to ensure timely updates on order progress. Payment guidance: Offers customers multiple payment options and provides detailed instructions on completing payment transactions to ensure secure and convenient transactions. After-sales Service Product Usage Guidelines: Provide customers with detailed instructions and precautions for product use to ensure correct and safe operation. 7 Problem Resolution: Customer service personnel shall promptly and patiently provide answers and guidance to any issues or inquiries encountered by customers during product usage. Complaint Handling: Customer service personnel should attentively listen to, document, and promptly address customer complaints. Through effective communication and coordination, disputes should be resolved to ensure customer satisfaction. Return and exchange procedures: Establish and improve the return and exchange management system, clearly defining the conditions, processes, and processing timelines for returns and exchanges. For cases that comply with the return and exchange policies, respond promptly and handle them efficiently to ensure the protection of customers’ legitimate rights and interests. Customer Relationship Management Customer Follow-up: Conduct regular follow-ups with customers to gather their usage experiences and feedback, enabling continuous improvement of product and service quality. Health literacy promotion: By delivering health information and organizing health lectures, provide customers with health knowledge and dietary recommendations to assist them in better managing their own health. Customer Care Program: Develop customer care initiatives such as holiday greetings and birthday gifts to enhance customer loyalty, encourage referrals, and drive repeat purchases. In summary, the company’s customer service is designed to provide comprehensive and high-quality service experiences. Through professional pre-sales consultation, convenient in-sales services, robust after-sales support, and close customer relationship maintenance, we continuously enhance customer satisfaction and loyalty. Environment, Society, and Governance In line with UCFI’s established principles, the company strictly complies with environmental protection laws and regulations such as the Environmental Protection Law of the People’s Republic of China during its production and operations. It adheres to fundamental environmental principles and systems—including prioritizing protection, emphasizing prevention, implementing comprehensive management, fostering public participation, and assuming liability for damages—to ensure that its production and business activities do not cause environmental harm. Competition The biotechnology high-end health food sector is marked by intense competition and innovation-driven growth, fueled by consumers’ increasing demand for healthy and sustainable products. Operating in a dynamic market environment, the group competes with established domestic and international players who leverage substantial resources in technology, branding, and marketing to capture market share. As consumer expectations evolve alongside technological advancements, companies continuously adapt their strategies to meet the growing demand for personalized, eco-friendly, and easily accessible health solutions. The field of biotechnology-based high-end health foods is a complex domain composed of various competitors, each possessing unique advantages and facing distinct challenges: ● Traditional health food companies: These companies benefit from strong brand recognition, diverse product lines, and mature sales channels, although they may lag in innovation speed and market responsiveness. ● Emerging brands: Renowned for innovation, precise market positioning, and flexible strategies, emerging brands exhibit agile operations but may face challenges in brand influence and financial capacity. ● Foreign enterprises: With advanced R&D capabilities, strong brand reputation, and extensive international experience, foreign enterprises possess competitive advantages, but often face challenges in localized operations and market insights into China. 8 To address potential competitive impacts, the group has implemented a series of multidimensional strategies to consolidate its market position and enhance resilience. Continuous Innovation and R&D Investment: We fully recognize that product differentiation is crucial for attracting consumers. Therefore, we consistently invest in research and development to create health and wellness products that meet evolving consumer needs. This includes developing customized nutritional formulations and employing advanced processing technologies to enhance product quality and health benefits. By fostering an innovation-driven culture, we strive to accelerate new product launches, meet market demands, and maintain competitive advantages. Enhancing Product Quality Control: We implement rigorous quality control measures throughout the entire production process to ensure products meet the highest safety and efficacy standards. These measures include regular supplier audits, comprehensive testing of raw materials, and adherence to industry standards for food safety and compliance. Our focus on quality assurance helps build consumer trust and reduces risks that could impact competitors due to product recalls or quality issues. Enhancing Brand Reputation and Consumer Trust: Our marketing strategy prioritizes transparent communication with consumers to strengthen brand reputation. We conduct consumer engagement initiatives such as educational campaigns and community events to highlight the health benefits and quality of our products. Additionally, we actively monitor brand reputation and promptly address any potential issues, ensuring swift correction of misinformation. By maintaining transparency and integrity in marketing efforts, we strive to build long-term customer loyalty and establish ourselves as a trustworthy brand. Optimizing Supply Chain and Logistics: To ensure supply chain sustainability, we have established robust partnerships with multiple trusted suppliers to secure critical raw material supplies. We conduct comprehensive supply chain risk assessments to identify and mitigate potential disruptions such as price fluctuations or shortages of key components. Our logistics framework is designed with flexibility in mind, enabling rapid adaptation to supply-demand fluctuations. By maintaining stable and resilient supply chains, we enhance cost control capabilities while delivering consistent product availability to consumers. Expanding Market Channels and Consumer Engagement: Our distribution strategy focuses on broadening both online and offline market channels to enhance product accessibility and market penetration. By leveraging e-commerce platforms, social media, and digital marketing tools, we reach wider audiences and engage directly with consumers. Additionally, we strive to elevate in-store shopping experiences through seamless integration of physical stores and digital touchpoints, creating a cohesive omnichannel shopping journey. These initiatives position us to capture a larger share of the health-conscious consumer market. The Group also plans to establish a chain network of Traditional Chinese Medicine (TCM) health centers (starting from 2025) to integrate TCM practices, supporting our mission in producing health foods and delivering personalized wellness solutions. Concurrently, targeted research initiatives are being implemented to boost customer engagement. Key initiatives include developing advanced digital tools such as AI-powered marketing solutions to optimize distribution efficiency, alongside establishing an AI-driven customer service system to enhance satisfaction levels. Adapting market strategies to align with consumer trends: We closely monitor consumer preferences and market dynamics to optimize product offerings and pricing strategies. Our methodology incorporates frequent market analysis and consumer feedback evaluations, enabling rapid response to demand shifts and refined positioning in the healthcare sector. Through continuous market strategy optimization, we strive to maintain relevance and attract diverse consumer demographics. Ensuring robust compliance and risk management: To mitigate regulatory risks, we have established a comprehensive compliance framework that ensures all operational activities comply with applicable laws and regulations. This includes regular compliance audits, employee training programs on regulatory standards, and a proactive approach to identifying and addressing potential legal challenges. Our steadfast commitment to compliance helps protect the group from regulatory fines while strengthening consumer confidence in our brand integrity. In summary, while competitors’ development may impact our group in various aspects, our proactive strategies in product innovation, quality control, brand enhancement, supply chain resilience, market expansion, adaptive strategies, and compliance management have established a solid foundation for addressing competitive dynamics and achieving sustainable growth. 9