UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, ~~2023~~2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38474

~~Gushen,~~Zhuoxun Hongtu Inc.

(Exact name of registrant as specified in its charter)

Nevada		47-3413138
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Room 1312-13, 14^th Floor, Building No. 2, 1 Hangfeng Road,

Fengtai District, Beijing, China

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: +8613949778662

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		N/A		N/A

Securities registered pursuant to Section 12(g) of the Act:

Common Stock

(Title of Class)

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒☐ Accelerated filer ☐ Non-accelerated filer ☐☒ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

~~The~~As of ~~aggregate~~March ~~market~~31, ~~value~~2024, of the ~~voting~~Company’s ~~and non-voting~~ common ~~equity held~~stock byhad ~~non-affiliates~~been ~~computed~~removed byfrom ~~reference~~quotation toin the ~~price~~OTC atmarket, ~~which~~as ~~the~~such ~~common~~there ~~equity~~ was ~~last~~no ~~sold,~~principal market orfor the ~~average~~Company’s ~~bid~~common ~~and~~stock ~~asked~~on ~~price of~~March ~~such~~31, ~~common~~2024. ~~equity~~Accordingly, asthere ofis ~~the~~no ~~last~~aggregate ~~business~~market ~~day~~value of the ~~registrant’s~~voting ~~most~~and ~~recently completed second fiscal quarter was $ 920,183,733.3.~~non-voting ~~This~~common ~~value~~equity isheld ~~calculated~~ by ~~reference~~non-affiliates ~~to the closing price of $22.10~~ as of ~~March 31, 2023,~~ the last ~~trading~~business day of the registrant’s most recently completed second ~~quarter~~fiscal ~~ended on March 31, 2023, and 41,637,273 shares of common stock held by non-affiliates as of March 31, 2023~~quarter.

As of ~~May~~the ~~24,~~date ~~2024~~hereof, there were 423,237,273 shares of the registrant’s common stock outstanding and 1,000,000 shares of preferred stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

N/A

Table of Contents

		Page
PART I		1
Item 1.	Business	1
Item 1A.	Risk Factors	31
Item 1B.	Unresolved Staff Comments	60
Item 2.	Properties	60
Item 1C.	Cybersecurity	60
Item 3.	Legal Proceedings	60
Item 2.	Properties	61
Item 4.	Mine Safety Disclosure	60
Item 3.	Legal Proceedings	61
PART II		61
Item 4.	Mine Safety Disclosure	61
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	61
PART II		62
Item 6.	[Reserved]	64
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	62
Item 6.	[Reserved]	63
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	64
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	7271
Item 8.	Financial Statements and Supplementary Data	F-1
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	7372
Item 9A.	Controls and Procedures	7372
Item 9B.	Other Information	7574
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	7574
PART III		7675
Item 10.	Directors, Executive Officers and Corporate Governance	7675
Item 11.	Executive Compensation	7978
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	8682
Item 13.	Certain Relationships and Related Transactions, and Director Independence	8783
Item 14.	Principal Accounting Fees and Services	8783
PART IV		8884
Item 15.	Exhibit and Financial Statement Schedules	8884
Item 16.	Form 10-K Summary	8884
Signatures		8985

PART I

Item 1. Business.

Overview

~~Gushen,~~Zhuoxun Hongtu Inc., ~~a Nevada corporation,~~ (“we”, “us” or “the “Company”) was incorporated ~~under~~on ~~the~~March ~~laws~~9, of2015, in the ~~State~~state of Nevada. The name of the Company was changed from “Gushen, Inc.” to “Zhuoxun Hongtu Inc.” on ~~March~~August 923, ~~2015~~2024 to align with the Company’s operations and brands for its subsidiaries.

The Company was originally set up as a holding company operating through its wholly owned subsidiary, Gushen Holding Limited, to provide managerial and IT support to start-ups as well as SME (small and medium enterprises) in Hong Kong and Malaysia to assist them in their early stages of operations as they expand and grow their own company. On August 5, 2016, the Company acquired a Hong Kong company, Gushen Credit Limited, with a money lender license registered according to Cap163 Money Lenders Ordinance of Hong Kong. Due to the keen competition and high rental expense in Hong Kong, on April 27, 2017, the Company decided to dispose of the asset for a consideration of $105,000 and ceased the business in Hong Kong. Thereafter, the Company did not open for business or generate any revenue from November 2017 to March 2020, making it dormant.

On March 27, 2020, as a result of a custodianship in Clark County, Nevada, Custodian Ventures, LLC was appointed custodian of Gushen Inc. David Lazar, a private investor and managing member of Custodian Ventures, LLC (together with David Lazar, the “Custodian”), was appointed as the Company’s Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer and Chairman of the Board of Directors. The Custodian was tasked to solicit investment on behalf of the Company.

On December 9, 2020, the Company, Custodian, and certain investors (“Purchasers”) entered into a Stock Purchase Agreement (the “SPA”), pursuant to which the Purchasers acquired 30 million shares of Series A preferred stock (the “Preferred A Shares”), each convertible into 10 shares of ~~Common~~common ~~Stock~~stock, from Custodian for an aggregate purchase price of $525,000. In connection with the SPA, the Company, Custodian, and Gushen Holding Limited entered into a spin-off agreement, pursuant to which the Custodian acquired all issued and outstanding stock of Gushen Holdings Limited at a minimal purchase price of $1. Thereafter, the Company no longer retains any interest in Gushen Holding Limited.

On July 30, 2021, the Company and Dyckmanst Limited, a British Virgin Islands company (“Dyckmanst Limited”), and all shareholders of Dyckmanst Limited entered into a share exchange agreement (the “Share Exchange Agreement”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of Dyckmanst Limited in exchange for 381,600,000 shares of common stock, par value $0.0001 per share (the “Common Stock”) of the Company (the “Share Exchange”). Immediately prior to the closing of the Share Exchange, two existing holders of aggregated 30,000,000 shares of Series A preferred stock of the Company, par value $0.0001 per share (the “Preferred Stock”) delivered 29,000,000 shares of Preferred Stock to the Company for cancellation (“the “Cancellation of Certain Preferred Stock”), each Preferred Stock is convertible into 10 shares of Common Stock. As a result, shareholders of Dyckmanst Limited collectively control 90.72% voting power of the Company on as converted basis, with respect to all of the shares of ~~common~~Common ~~stock~~Stock and preferred stock, voting as a single class, with each share of ~~common~~Common ~~stock~~Stock entitles to 1 vote and each share of preferred stock entitles to 10 votes.

As a result of the Share exchange, the Company assumes the business of Dyckmanst Limited. Through certain overseas subsidiaries and contractual arrangements, the Company is able to consolidate the financial results of Beijing Zhuoxun Century Culture Communication Co., Ltd. (“Zhuoxun Beijing”) and its subsidiary in accordance with US GAAP as the primary beneficiary. Zhuoxun Beijing is a PRC company that provides family education resources to promote all-around education onsite in local communities organized by our regional collaborative education agency and offer parents easy access to a wide variety of courses online through our application.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

In assessing the Company’s liquidity, the Company monitors and analyzes its cash and cash equivalents and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. As of September 30, ~~2023~~2024, the Company’s current liabilities exceeded the current assets by $1316,~~873~~655,~~583~~539, its accumulated deficit was $1517,~~288~~544,~~351~~858 and the Company has incurred losses during the year ended September 30, ~~2023~~2024 and ~~2022~~2023. None of the Company’s stockholders, officers or directors, or third parties, are under any obligation to advance us funds, or to invest in us. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.

In evaluating if there is substantial doubt about the ability to continue as a going concern, the Company is trying to alleviate the going concern risk through (1) increasing cash generated from operations by controlling operating expenses and increasing more online and offline training sessions to bring in more training revenue, (2) financing from domestic banks and other financial institutions, and (3) equity or debt financing. The Company has certain plans to mitigate these adverse conditions and to increase the liquidity.

On an on-going basis, the Company will also receive financial support commitments from the Company’s related parties.

These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Organizational Structure

The Company is a holding company organized in Nevada in March 2015. The Asname of the ~~date of this annual report, the~~ Company ~~has~~was ~~the~~changed ~~following~~from ~~wholly owned subsidiaries: (i) Dyckmanst Limited~~“Gushen, ~~an entity formed under the laws of British Virgin Islands, (ii) Edeshler Limited (“Edeshler Limited~~Inc.”~~), an~~ ~~entity~~to ~~formed under the laws of Hong Kong Special Administrative Region of the People’s Republic of China (~~“~~Hong~~Zhuoxun ~~Kong” or~~Hongtu ~~“HK~~Inc.”) ~~and~~since aAugust ~~wholly owned subsidiary of Edeshler Limited~~23, ~~(iii)~~2024 ~~Beijing~~to ~~Fengyuan Zhihui Education Technology Co., Ltd. (“Fengyuan~~align ~~Beijing”),~~with ~~an entity formed under~~ the ~~laws of People~~Company’s ~~Republic~~operations ~~of China (“PRC”) as a wholly foreign owned enterprise~~ and abrands ~~wholly~~for ~~owned~~its ~~subsidiary of Edescher Limited~~subsidiaries.

~~In addition, Fengyuan Beijing~~As ~~has entered into a series~~ of ~~contractual arrangement (~~the ~~“VIE~~date ~~Agreements”)~~of ~~with~~this ~~Zhuoxun~~annual ~~Beijing~~report, ~~which~~the isCompany ~~commonly~~has ~~known a~~the ~~variable~~following ~~interest~~wholly ~~entity~~owned subsidiaries: (~~“VIE”~~i) Dyckmanst Limited, an entity formed under the laws of ~~PRC,~~British ~~pursuant~~Virgin toIslands, ~~which~~(ii) ~~Fengyuan~~Edeshler ~~Beijing~~Limited ~~and~~(“Edeshler ~~the~~Limited”), ~~Company are~~an ~~able~~entity toformed ~~consolidate~~under the ~~financial~~laws ~~results~~ of ~~Zhuoxun~~Hong ~~Beijing~~Kong Special ~~and~~Administrative ~~its~~Region ~~subsidiary~~of ~~in accordance with US GAAP as~~ the ~~primary~~People’s ~~beneficiary. The~~Republic ~~VIE~~of ~~Agreements~~China ~~executed~~(“Hong inKong” ~~February~~or ~~2021 include (i~~“HK”) and a ~~Consulting~~wholly ~~Service~~owned subsidiary ~~Agreement,~~of ~~(ii)~~Edeshler ~~a Busieness Operation Agreement~~Limited, (iii) ~~a Proxy~~Beijing ~~Agreement,~~Fengyuan ~~(iv)~~Zhihui anEducation ~~Equity~~Technology ~~Disposal~~Co., ~~Agreement and (v) an Equity Pledge Agreement~~Ltd. ~~Although~~ (“Fengyuan Beijing”), ~~does~~an ~~not~~entity formed ~~own~~under the ~~equity interests~~laws of ~~Zhuoxun~~People’s ~~Beijing,~~Republic ~~Mr.~~of ~~Yulong~~China Yi (“~~Mr. Yi~~PRC”), ~~our~~as ~~chairman,~~a ~~chief~~wholly ~~executive~~foreign ~~officer,~~owned ~~president,~~enterprise ~~treasurer,~~ and a ~~significant~~ ~~stockholder,~~wholly isowned subsidiary ~~also a director~~ of ~~Zhuoxun~~Edescher ~~Beijing and controls all decision-making for Zhuoxun Beijing along with our other significant stockholder, Mr~~Limited. ~~Shaowei Peng (“Mr. Peng”), who has the ability to control Zhuoxun Beijing’s technology matters.~~

2In addition, Fengyuan Beijing has entered into a series of contractual arrangement (the “VIE Agreements”) with Zhuoxun Beijing, which is commonly known a variable interest entity (“VIE”), an entity formed under the laws of PRC, pursuant to which Fengyuan Beijing and the Company are able to consolidate the financial results of Zhuoxun Beijing and its subsidiary in accordance with US GAAP as the primary beneficiary. The VIE Agreements executed in February 2021 include (i) a Consulting Service Agreement, (ii) a Business Operation Agreement, (iii) a Proxy Agreement, (iv) an Equity Disposal Agreement and (v) an Equity Pledge Agreement. Although Fengyuan Beijing does not own the equity interests of Zhuoxun Beijing, Mr. Yulong Yi (“Mr. Yi”), our chairman, chief executive officer, president, treasurer, and a significant stockholder, is also a director of Zhuoxun Beijing and controls all decision-making for Zhuoxun Beijing along with our other significant stockholder, Mr. Shaowei Peng (“Mr. Peng”), who controls Zhuoxun Beijing’s technology matters.

~~This chart reflects our current organizational structure:~~2

~~Edeshler Limited was established~~This inchart ~~Hong~~reflects ~~Kong on January 9, 2019 and operates as a holding company for~~ our ~~shares~~current inorganizational ~~Fengyuan Beijing.~~structure:

~~Fengyuan~~Edeshler Limited ~~Beijing~~ was established in ~~PRC~~Hong Kong on ~~June~~January 169, 2019 and operates as ~~our~~a ~~onshore~~ holding company infor ~~PRC~~our ~~and~~shares ain ~~party~~Fengyuan ~~to the VIE Agreements~~Beijing.

~~Zhuoxun~~ Fengyuan Beijing was established in PRC on ~~August~~June 2216, ~~2013~~2019 and operates as ~~the~~our ~~VIE~~onshore ~~under~~holding ~~the~~company ~~VIE Agreements. Zhuoxun Beijing provides family education resources to promote all-around education onsite~~ in ~~local~~PRC ~~communities organized by our regional collaborative education agency~~ and ~~offer~~a ~~parents~~party ~~easy access~~ to athe ~~wide~~VIE ~~variety of courses online through our application~~Agreements.

~~Beijing Zhuoxin Education~~Zhuoxun ~~Technology Co., Ltd. (“Zhuoxin~~ Beijing”) was established in PRC on ~~December~~August 2422, ~~2020.~~2013 ~~Zhuoxun~~and ~~Beijing~~operates ~~owns~~as ~~70%~~the ofVIE ~~equity~~under ~~interests in Zhuoxin Beijing, with~~ the ~~remaining~~VIE ~~30% belonging to Guoxinzhengye Company Management Co~~Agreements., ~~Ltd.,~~Zhuoxun aBeijing ~~subsidiary~~provides offamily ~~CITIC Group Corporation~~education ~~Ltd.,~~resources ato ~~major~~promote ~~PRC state~~all-~~owned~~around ~~investment~~education ~~company.~~onsite ~~Zhuoxin Beijing is primarily engaged~~ in ~~establishing~~local ~~facilities~~communities ~~to,~~organized ~~among~~by ~~the~~our ~~others, provide~~regional ~~family~~collaborative education ~~consulting~~agency ~~services,~~and ~~sell~~offer parents ~~and~~easy ~~rent~~access ~~book,~~to ~~organize~~a ~~book~~wide ~~clubs,~~variety ~~and~~of ~~sell~~courses ~~educational~~online ~~electronic~~through ~~devices~~our application.

3Beijing Zhuoxin Education Technology Co., Ltd. (“Zhuoxin Beijing”) was established in PRC on December 24, 2020. Zhuoxun Beijing owns 70% of equity interests in Zhuoxin Beijing, with the remaining 30% belonging to Guoxinzhengye Company Management Co., Ltd., a subsidiary of CITIC Group Corporation Ltd., a major PRC state-owned investment company. Zhuoxin Beijing is primarily engaged in establishing facilities to, among the others, provide family education consulting services, sell and rent book, organize book clubs, and sell educational electronic devices.

~~Industry Focus~~3

~~Zhuoxun Beijing’s primary~~Industry business is in the family education industry, integrated with online and onsite classes, which it believes fulfills increasing needs for parents to enhance their family education. In China, many educational companies for students aged from 3 to 16 years old currently offer K-12 education and interest classes, emphasizing on helping students on their K-12 school study or providing professional courses to develop students’ after-class interest. Its family educational services offer well-designed courses for both parents and students, focusing on children’s all-around development and parenting methods, with a goal to enable effective and efficient communications among children and parents, to promote science-based parenting methods, and to assist with children’s full skill growth.Focus

~~The~~Zhuoxun Beijing’s ~~PRC~~primary ~~Family~~business ~~Education~~is ~~Promotion Law~~in ~~went~~the ~~into~~family ~~effect~~education ~~on January 1~~industry, ~~2022,~~integrated ~~setting~~with ~~forth~~online ~~specific~~and ~~regulatory~~onsite ~~requirements~~classes, ~~for~~which ~~the~~it ~~family~~believes ~~education~~fulfills increasing ~~industry~~needs ~~and~~for ~~clarifying that~~ parents ~~are~~to ~~the~~enhance ~~main~~their ~~body of responsibility for~~ family education. ToIn ~~raise~~China, ~~more~~many ~~awareness~~educational oncompanies ~~the~~for ~~importance~~students ofaged ~~family~~from ~~education~~3 ~~and the~~to ~~health~~16 ~~and~~years old ~~growth~~currently ofoffer ~~children,~~K-12 ~~the~~education ~~law~~and ~~officially~~interest ~~names~~classes, ~~the~~emphasizing ~~week~~on ofhelping ~~May~~students 15on ~~(the~~their ~~International~~K-12 ~~Family~~school ~~Day)~~study ~~every~~or ~~year~~providing asprofessional courses ~~the~~to ~~National Family~~develop ~~Education~~students’ ~~Awareness~~after-class ~~Week~~interest. InIts ~~April~~family ~~2022,~~educational 11services ~~departments~~offer ~~including~~well-designed ~~the~~courses ~~Ministry~~for ofboth ~~Education~~parents and ~~jointly~~students, ~~issued~~focusing ~~the~~on ~~“Five~~children’s all-~~Year Plan~~around ondevelopment ~~Guiding~~ and ~~Promoting~~parenting ~~Family~~methods, ~~Education~~with ~~(2021-2025)”,~~a ~~emphasizing~~goal ~~the~~to ~~importance~~enable ofeffective ~~uniting~~and ~~governmental~~efficient communications among children and ~~social~~parents, ~~forces~~ to ~~work~~promote ~~together~~science-based inparenting ~~the~~methods, ~~deliveries~~and ofto ~~family~~assist ~~education~~with children’s full skill growth.

~~These~~The PRC ~~measures~~Family ~~clarify~~Education Promotion Law went into effect on January 1, 2022, setting forth specific regulatory requirements for the family ~~regulatory~~education ~~framework~~industry and ~~signals~~clarifying ~~government~~that ~~support~~parents ~~for~~are the ~~development~~main body of responsibility for family education. To raise more awareness on the importance of family education ~~industry~~and the health and growth of children, the law officially names the week of May 15 (the International Family Day) every year as the National Family Education Awareness Week. In April 2022, 11 departments including the Ministry of Education jointly issued the “Five-Year Plan on Guiding and Promoting Family Education (2021-2025)”, emphasizing the importance of uniting governmental and social forces to work together in the deliveries of family education.

~~The Chinese family education~~These ~~industry~~measures ~~has~~clarify ~~significant~~the ~~growth~~regulatory ~~potential.~~framework ~~At present, there are about 200 million preschool children~~ and ~~primary~~signals ~~and~~government ~~secondary~~support school students in China, and about 340 million parents (parents), 50% of whose families have spent an average of more than 10,000 RMB annually (or approximately 1,408 USD) on education. China’s home education market totaled 2 trillion RMB (or approximately 282 billion USD), with out-of-school education spending accounted for ~~one-third of household expenditures (16.6% in rural areas; 42.2% in urban areas). Additionally,~~ the ~~country~~development ~~currently has 367 million people under the age~~ of ~~18, accounting for 28% of~~ the ~~total~~family ~~population~~education industry.

~~Recently,~~The Chinese family education industry has significant growth potential. According to the ~~PRC~~National ~~government~~Education Industry Development ~~continues~~Statistics toReport ~~put~~of ~~more~~2023, ~~emphasis~~published onby the ~~implementation~~PRC Ministry of ~~the~~Education ~~“three-child”~~in ~~family~~October ~~planning~~2024, ~~policy~~at present, ~~improved~~there ~~level~~are ofabout ~~prenatal~~200 million ~~and~~preschool ~~postnatal~~children ~~care~~and ~~services,~~primary ~~development~~and insecondary ~~the~~school ~~nursery~~students ~~service~~in ~~system~~China, and ~~reduced~~about ~~cost~~340 million parents (parents), 50% of ~~child~~whose families ~~care~~have ~~and~~spent ~~education.~~an Inaverage ~~particular,~~of ~~within the~~more 2than ~~trillion~~10,000 RMB annually (or approximately ~~282~~1,408 ~~billion~~ USD) ~~national~~on education. ~~service~~China’s ~~industry,~~home education ~~which~~market ~~accounts~~totaled ~~for~~ 2% oftrillion ~~the~~RMB ~~annual~~(or ~~GDP~~approximately 282 billion USD), ~~the~~ with out-of-school ~~training~~education ~~sector~~spending accounted for one-third ~~primary~~of ~~and~~household ~~secondary~~expenditures ~~school~~(16.6% ~~students~~in ~~accounts~~rural ~~for~~areas; 4042.2% ofin ~~the~~urban ~~market opportunities~~areas). ~~In addition~~Additionally, the ~~industry~~ ~~continues~~country tocurrently ~~experience~~has ~~significant~~367 million ~~growth~~people ~~from~~under the 10age ~~million~~of ~~jobs~~18, ~~that~~accounting ~~the~~for ~~industry~~28% ~~current~~of ~~provides~~the total population.

~~From~~Recently, the ~~2021~~PRC togovernment ~~2025,~~continues ~~the~~to ~~average growth~~put ~~rate~~more ofemphasis on the ~~size~~implementation of the ~~out~~“three-~~of-school~~child” ~~training~~family ~~market~~planning ~~will~~policy, ~~remain~~improved level ~~stable~~of atprenatal ~~around~~and ~~15%.~~postnatal Itcare isservices, ~~estimated~~development ~~that~~in bythe ~~2025~~nursery service system, ~~the~~and ~~size~~ reduced cost of ~~China’s~~child care and education. In ~~market~~particular, ~~will~~according ~~reach~~to 7reports by iResearch Consulting Group and ChinaIRN.5com, as of 2022, within the 2 trillion RMB (or approximately ~~1,056~~282 billion USD). Itnational iseducation ~~expected~~service ~~that~~industry, ~~the~~which ~~market~~accounts ~~will~~for 2% ~~continue~~of tothe ~~experience~~annual ~~supply~~GDP, ~~shortage~~the inout-of-school training sector for primary and secondary school students accounts for 40% of the ~~next~~market 30opportunities. In ~~years~~addition, ~~furnishing~~the ~~new~~industry ~~growth~~continues ~~space~~to ~~for~~experience significant growth from the ~~family~~10 ~~education~~million ~~service~~jobs ~~providers~~that the industry current provides.

~~Zhuxun~~Going ~~Beijing~~forward, ~~provides~~according ~~online~~to ~~family~~the ~~education~~Report ~~through~~on ~~onsite~~the ~~educational activities~~Education and ~~mobile~~Training Industry ~~application~~of 2024, aspublished ~~well~~by asChinaIRN.com, ~~establishes~~the orglobal ~~markets~~education ~~offline~~and ~~education~~training ~~facilities~~market ~~for~~expect ~~providing~~to grow at a composition annual rate of 6% per year to reach around 10 trillion USD by 2027. China’s education ~~consulting~~and ortraining industry expect to move forward steadily at a compound ~~library~~annual ~~services~~growth rate of 9%, and the market size expect to exceed 3.5 trillion RMB (or approximately 487 billion USD) by 2025.

~~Products~~Zhuoxun Beijing provides online family education through onsite educational activities and mobile application, as well as establishes or markets offline education facilities for providing education consulting or library services.

~~Onsite Educational Activities~~Products

~~Zhuoxun Beijing’s customers~~Onsite ~~are~~Educational parents who desire to acquire various family education resources. Zhuoxun Beijing delivers onsite educational services to parents through its nationwide physical network of regional collaborative education agencies. Zhuoxun Beijing’s onsite educational services include programs such as individual development, youth leadership development, and parenting schools, enabling in-person guidance and interactions in classes. It has developed long term collaboration relationships with 12 regional collaborative education agencies, who are responsible for organizing, management and logistics while we provide classes. As of the date hereof, it has onsite educational activities in 30 cities, including but not limited to, Luoyang, Hohhot, Luohe, Yinchuan, Changde, Ruzhou, Xinxiang, Zhoukou, Sanmenxia, Lingbao, Zhengzhou and Chengdu.Activities

4Zhuoxun Beijing’s customers are parents who desire to acquire various family education resources. Zhuoxun Beijing delivers onsite educational services to parents through its nationwide physical network of regional collaborative education agencies. Zhuoxun Beijing’s onsite educational services include programs such as individual development, youth leadership development, and parenting schools, enabling in-person guidance and interactions in classes. It has developed long term collaboration relationships with 14 regional collaborative education agencies, who are responsible for organizing, management and logistics while we provide classes. As of the date hereof, it has onsite educational activities in 32 cities, including but not limited to, Luoyang, Hohhot, Luohe, Zhumadian, Mengjin, Yinchuan, Changde, Ruzhou, Xinxiang, Zhoukou, Sanmenxia, Lingbao, Zhengzhou and Chengdu.

~~Wisdom Lighthouse (“睿智灯塔”) Application (Formerly known as “ZhuoXun App”)~~4

~~Zhuoxun Beijing’s online family educational services offer parents~~Wisdom aLighthouse ~~convenient~~(“睿智灯塔”) ~~platform~~Application to(Formerly ~~access~~known toas ~~courses.~~“ZhuoXun Users of its mobile applications are encouraged to become registered members. A registered member can, among others, track their study records, participate in discussion in the designated sections and post their study takeaways. It offers first class for each course for free. After taking first class, users can decide whether to purchase the whole course. As of the date hereof, Zhuoxun Beijing has around 56,000 active users on the Wisdom Lighthouse app.App”)

~~Courses~~Zhuoxun Beijing’s ~~available~~online ~~through Widsom~~family ~~Lighthouse~~educational ~~App~~services ~~include~~offer ~~but~~parents a convenient platform to access to courses. Users of its mobile applications are ~~not~~encouraged ~~limited~~to become registered members. A registered member can, among others, track their study records, participate in discussion in the designated sections and post their study takeaways. It offers first class for each course for free. After taking first class, users can decide whether to purchase the ~~followings:~~whole course. As of the date hereof, Zhuoxun Beijing has around 52,000 active users on the Wisdom Lighthouse app.

●Courses available ~~“Good~~through ~~Parenting”~~Widsom ~~(“教子有方”),~~Lighthouse ~~focused~~App oninclude ~~child~~but ~~development,~~are ~~provides~~not ~~courses~~limited ~~including emotional intelligence (EQ) training, learning habits, learning ability, parents-children communication, stages of puberty, etc.~~ to ~~help~~the ~~parents promote children’s mental and psychological health.~~followings:

● “~~Wise~~Good ~~Parents~~Parenting” (“~~智慧父母~~教子有方”), ~~introduces~~focused ~~general~~on ~~strategies~~child ofdevelopment, ~~family~~provides ~~education~~courses toincluding ~~parents~~emotional tointelligence ~~help~~(EQ) ~~them~~training, ~~better~~learning ~~understand~~habits, ~~and~~learning ~~support~~ability, ~~their~~ parents-children’s ~~growth and needs~~communication, ~~whereby~~stages ~~courses~~of ~~such~~puberty, asetc. ~~traditional~~to ~~family~~help ~~values,~~parents ~~improvement~~promote ~~of parents~~children’s ~~qualifications,~~mental and psychological ~~analysis are provided~~health.

● “~~Lifelong~~Wise ~~Journey~~Parents” (“人生智库慧父母”) ~~provides~~introduces general strategies of family education to parents ~~with~~to ~~self-improvement~~help ~~content,~~them ~~with~~better ~~focus~~understand onand ~~different~~support ~~aspects~~their ofchildren’s ~~Chinese~~growth ~~Studies~~and needs, ~~emotional~~whereby ~~intelligence~~courses ~~(EQ)~~such as traditional family values, ~~etiquette~~improvement of parents’ qualifications, and ~~social~~psychological ~~interaction~~analysis ~~skills~~are provided.

~~Through Zhuoxun~~● ~~Beijing’s~~“Lifelong ~~mobile~~Journey” ~~application,~~(“人生智库”) ~~Zhuoxun~~provides ~~Beijing’s~~parents ~~users~~with ~~can~~self-improvement content, ~~based~~with focus on ~~their~~different ~~own~~aspects ~~interest~~of ~~and~~Chinese ~~needs~~Studies, ~~select~~emotional ~~courses~~intelligence ~~that are~~(EQ), ~~suitable~~etiquette ~~for them~~ and ~~obtain~~social ~~valuable~~interaction ~~knowledge and~~ skills ~~provided by Zhuoxun Beijing’s courses~~. ~~Zhuoxun Beijing’s users on mobile platform can use iPhone, Android, iPad and other tablets to review the courses anywhere and anytime.~~

~~Zhuoxun~~Through Zhuoxun Beijing’s ~~online~~mobile ~~family~~application, ~~education~~Zhuoxun ~~mobile~~Beijing’s ~~platform~~users ~~monetizes~~can, ~~through~~based ~~in-app~~on ~~purchases.~~their ~~Zhuoxun~~own ~~Beijing~~interest ~~provides~~and ~~one~~needs, ~~free~~select ~~trial class~~courses ofthat ~~each~~are ~~course~~suitable for ~~all~~them ~~the~~and ~~users.~~obtain ~~The~~valuable ~~remaining~~knowledge ~~classes~~and ~~are~~skills ~~available~~provided ~~for~~by ~~purchase~~Zhuoxun Beijing’s courses. ~~Users~~Zhuoxun ~~are~~Beijing’s users ~~able~~on tomobile ~~view~~platform ~~the~~can ~~first~~use ~~class~~iPhone, ~~for~~Android, ~~free~~iPad ~~before determining~~and ifother tablets to ~~purchase~~review the ~~remaining~~courses ~~classes~~anywhere and anytime.

Zhuoxun ~~Anti~~Beijing’s online family education mobile platform monetizes through in-~~Addiction~~app ~~Cellphone~~purchases. Zhuoxun Beijing provides one free trial class of each course for all the users. The remaining classes are available for purchase. Users are able to view the first class for free before determining if to purchase the remaining classes.

Zhuoxun ~~Beijing’s product Zhuoxun~~ Anti-Addiction Cellphone (“Zhuoxun Cellphone”) is an intelligent terminal device. Dami Zhilian Information Technology Group Co., Ltd, a technology company that develops and produces smartphones (“Dami Zhilian”), customizes and produces Zhuoxun Cellphone according to the design requirements set by Zhouxun Beijing. Zhuoxun Beijing does not own any intellectual property in connection with Zhuoxun Cellphones. Zhuoxun Beijing sells Zhuoxun Cellphones through regional collaborative education agencies. Zhuoxun Cellphone has primarily four functions including anti-addiction, myopia prevention, security, and study assistance, for the purpose of managing elementary and middle school students. Parents are able to personalize and monitor their children’s use of Zhuoxun Cellphone by setting screen auto-lock, monitoring internet surfing, monitoring mobile application usage, monitoring physical locations, etc.

~~Household~~Zhuoxun Beijing’s ~~Products~~product Zhuoxun Anti-Addiction Cellphone (“Zhuoxun Cellphone”) is an intelligent terminal device. Dami Zhilian Information Technology Group Co., Ltd, a technology company that develops and produces smartphones (“Dami Zhilian”), customizes and produces Zhuoxun Cellphone according to the design requirements set by Zhouxun Beijing. Zhuoxun Beijing does not own any intellectual property in connection with Zhuoxun Cellphones. Zhuoxun Beijing sells Zhuoxun Cellphones through regional collaborative education agencies. Zhuoxun Cellphone has primarily four functions including anti-addiction, myopia prevention, security, and study assistance, for the purpose of managing elementary and middle school students. Parents are able to personalize and monitor their children’s use of Zhuoxun Cellphone by setting screen auto-lock, monitoring internet surfing, monitoring mobile application usage, monitoring physical locations, etc.

~~Starting~~Education inStations the third quarter of fiscal year 2023, the Company sells household products via the Company’s app in a small scale, and the amount of sales was immaterial compared to the total revenue of the corresponding period.(“教育驿站”)

~~Education~~The Company ~~Stations~~has started establishing offline education event spaces, or “education stations”, which serve as the medium for organizing (extracurricular expansion activities for students, such as summer and winter camps, as well as weekend research or education programs. In addition, we also provide branding authorization for outside institutions to use our “~~教育驿站~~education station”) concepts and branding for soliciting and promoting student activities.

~~The~~Community ~~Company~~Health ~~has started establishing offline education event spaces,~~Stations or (“~~education stations~~健康驿站”, which serve as the medium for organizing extracurricular expansion activities for students, such as summer and winter camps, as well as weekend research or education programs. In addition, we also provide branding authorization for outside institutions to use our “education station” concepts and branding for soliciting and promoting student activities.)

~~Other~~Zhuoxun ~~Product~~Beijing ~~Development~~provides branding authorization, with the store location ~~Initiatives~~selection, store opening support, operation services and training, etc., for helping our partners to establish offline “health stations” (“健康驿站”) and “Zhuoxun Youxuan stores” (“卓训优选”), which serve as the medium for group purchase of community daily necessities and healthy foods for community life. In addition, with the further development of the business, we will charge for additional operating service fees from the operation of the stores in the future.

InOther ~~order~~Product toDevelopment develop new products, the company is actively cooperating with the China Worker’s Electronic Education Center, an organization affiliated with the All-China Federation of Trade Unions. It has also jointly established an international internet education research group with Peking University to conduct academic research and discussion on online education for family education. Additionally, it is exploring other product offering by discussing with potential private education institutions on a broader set of education products and services.Initiatives

5In order to develop new products, the Company is actively cooperating with the China Worker’s Electronic Education Center, an organization affiliated with the All-China Federation of Trade Unions. It has also jointly established an international internet education research group with Peking University to conduct academic research and discussion on online education for family education. Additionally, it is exploring other product offering by discussing with potential private education institutions on a broader set of education products and services.

~~Sales and Marketing~~5

~~Zhuoxun Beijing engages in~~Sales ~~a variety of marketing activities, integrating onsite~~ and online methods, intended to introduce its products and services to prospective users. For onsite marketing, it (i) primarily works with regional education agencies in different areas where the regional education agencies are responsible for organizing, management, promotion and logistics and it is responsible for providing courses; (ii) promote family education by conferences, salons, lectures, free classes to raise people’s awareness of the significance of family education and promote its services; and (iii) benefit from its current users’ referrals by ensuring their use experience. For online marketing, Zhuoxun Beijing holds live broadcasting and carry out promotion events. It also holds various online community marketing activities on WeChat, a Chinese multi-purpose messaging and social media application to attract new users. It has held activities such as “VIP Membership Experience”, “Invite New Users to Get Your Rewards”, “Happy Spring Festival”, and “Large Turntable” and exchange of course points for in-kind prizes.Marketing

ItZhuoxun Beijing ~~has~~engages ~~built~~in upa ~~long-term~~variety ~~business~~of ~~relationships~~marketing activities, integrating onsite and online methods, intended to introduce its products and services to prospective users. For onsite marketing, it (i) primarily works with regional education agencies in different ~~cities.~~areas Aswhere ofthe ~~September~~regional education 30agencies are responsible for organizing, ~~2023~~management, wepromotion ~~have~~and ~~engaged~~logistics ~~with~~and 12it ~~service~~is ~~providers~~responsible for providing courses; (ii) promote family education by conferences, 8salons, oflectures, ~~which~~free ~~have~~classes ~~worked~~to ~~with~~raise uspeople’s ~~for~~awareness of the significance of family ~~more~~education ~~than~~and 3promote ~~years.~~its ~~These~~services; ~~agencies~~and ~~are~~(iii) ~~widely~~benefit ~~distributed~~from inits ~~different~~current ~~regions~~users’ ofreferrals ~~China,~~by ~~including~~ensuring ~~Provinces~~their ofuse ~~Shanxi,~~experience. ~~Fujian,~~For ~~Jiangsu~~online marketing, Zhuoxun Beijing holds live broadcasting and carry out promotion events. It also holds various online community marketing activities ~~Inner~~on ~~Mongolia~~WeChat, ~~Zhejiang,~~a ~~Hainan~~Chinese multi-purpose messaging and social media application to attract new users. It has held activities such as “VIP Membership Experience”, ~~Henan~~“Invite New Users to Get Your Rewards”, ~~Sichuan~~“Happy Spring Festival”, ~~Hunan~~and “Large Turntable” and ~~Ningxia~~exchange of course points for in-kind prizes.

~~Zhuoxun Beijing formulates~~It ~~marketing~~has ~~strategies,~~built ~~introduce~~up ~~teachers~~long-term ~~and~~business ~~lecturers,~~relationships ~~and~~with ~~provide systematic training to~~ regional education agencies. ~~Regional~~in ~~education agencies,~~different ~~strictly~~cities. ~~pursuant~~As toof ~~its~~September ~~guidance~~30, ~~conduct~~2024, ~~marketing~~we tohave engaged ~~sign~~with up14 ~~new~~service ~~customers~~providers, ~~organize~~8 ~~educational~~of ~~activities,~~which ~~and~~have ~~provide customer~~worked ~~services~~with ~~before,~~us ~~during,~~for ~~and~~more ~~after~~than ~~classes,~~4 soyears. asThese toagencies ~~ensure~~are ~~the~~widely ~~high-quality~~distributed ofin ~~our~~different regions ~~educational~~of ~~services.~~China, ~~All~~including ~~the~~Provinces ~~activities conducted~~of byShanxi, ~~the~~Fujian, ~~regional~~Jiangsu, ~~education~~Inner ~~agencies~~Mongolia, ~~are~~Zhejiang, ~~using~~Hainan, ~~Zhuoxun~~Henan, ~~Beijing’s~~Sichuan, ~~logo~~Hunan and ~~visual identity system to create its brand influence~~Ningxia.

~~Customer~~Zhuoxun Beijing ~~Base~~formulates marketing strategies, introduce teachers and lecturers, and provide systematic training to regional education agencies. Regional education agencies, strictly pursuant to its guidance, conduct marketing to sign up new customers, organize educational activities, and provide customer services before, during, and after classes, so as to ensure the high-quality of our educational services. All the activities conducted by the regional education agencies are using Zhuoxun Beijing’s logo and visual identity system to create its brand influence.

~~The main customers of Zhuoxun~~Customer Beijing’s family educational services are its registered users who are parents interested in learning more about marriage, parent-child relationships, children’s habit formation, and children’s healthy growth. The majority of the customers have income at the middle to upper level in their local regions and are willing to invest in self-improvement and family education.Base

~~Seasonality~~The main customers of Zhuoxun Beijing’s family educational services are its registered users who are parents interested in learning more about marriage, parent-child relationships, children’s habit formation, and children’s healthy growth. The majority of the customers have income at the middle to upper level in their local regions and are willing to invest in self-improvement and family education.

Seasonal fluctuations have traditionally affected, and may affect our business in the future, especially between school academic years and summer and winter holidays. Seasonal fluctuations affected our business when we focused on family education products and services for parents with children of school age in China, and may continue to affect our business as we shift to new business models. Due to our limited operating history and the fact that we are shifting our focus from family education to new business models and service offerings, the seasonal trends that we have experienced in the past may not be indicative of our future operating results.Seasonality

~~However,~~Seasonal fluctuations ~~due~~have ~~to COVID-19~~traditionally affected, ~~the~~and ~~family~~may ~~education~~affect ~~industry~~our ~~has~~business ~~encountered~~in ~~marketing~~the ~~difficulties.~~future, ~~The~~especially ~~traditional~~between school ~~year-summer/winter~~academic ~~holiday~~years and summer and ~~weekday-weekend~~winter ~~distinctions~~holidays. ~~have~~Seasonal ~~been~~fluctuations ~~disrupted,~~affected ~~giving~~our ~~way~~business towhen ~~continuous~~we ~~school~~focused ~~shutdowns~~on family education products and ~~remote~~services ~~learning.~~for ~~These~~parents ~~activities~~with ~~have~~children ~~impacted~~of ~~our~~school ~~course~~age ~~scheduling~~in ~~patterns~~China, and ~~in-person~~may ~~marketing~~continue ~~activities.~~to Weaffect ~~are~~our ~~moving~~business ~~away~~as ~~from~~we ~~traditional~~shift to new business models. Due to our limited ~~weekend~~operating history and ~~holiday-based~~the ~~scheduling,~~fact ~~and~~that we are ~~balancing~~shifting our ~~in-person~~focus ~~and~~from ~~online~~family ~~marketing~~education ~~and~~to ~~education~~new ~~initiatives.~~business ~~Our~~models ~~financial~~and service offerings, the ~~condition~~seasonal ~~and~~trends ~~results~~that ofwe ~~operations~~have ~~for~~experienced ~~future~~in ~~periods~~the past may ~~continue~~not tobe ~~fluctuate~~indicative of our future operating results.

Technology

Zhuoxun Beijing’s internal product teams are focused on the development and maintenance of product in addition to building and managing our software and hardware infrastructure. It intends to continue investing in the development of new products, such as mobile applications, and enhancing the efficiency and functionality of its existing products and infrastructure.

In addition to building and managing our software and hardware infrastructure, the product team also focuses on product development and maintenance. Zhuoxun Beijing intends to invest in the development of new products, such as course selection options, which helps students to find courses, assists institutions to recruit students and facilitates transactions between students and institutions by creating a fair and transparent localized third-party matching trading platform. Course selection is also beneficial to provide more choices and solutions for our diversified family education services. It also improves the efficiency and function of existing products and infrastructure.

Employees

We strive to foster a collaborative and team-oriented culture and view our human capital resources as an ongoing priority. As of September 30, ~~2023~~2024, we employ 149 employees, all of which are full-time employees. None of our employees are subject to collective bargaining agreements, and we have had no labor-related work stoppages. We believe we offer competitive terms and incentives to attract and retain employees, including pension, medical insurance, unemployment insurance, maternity insurance, worker’s compensation insurance, housing provident fund, bonus programs and training opportunities.

Intellectual Property

Zhuoxun Beijing has registered the following intellectual property under the name of Zhuoxun Beijing:

Copyrights: In China, the term of copyrights related to published software is from the date of the publishing to December 31 of the 50th year of ~~the~~ the publishing.

Computer Software	Registered Area	Registration Number	Description	Registering Authority	Registration Date
Zhuoxun Education Application V1.0	China	2019SR0024304	Mobile education application	National Copyright Administration of the People’s Republic of China (“NCAC”)	1/8/2019
Zhuoxun Education Software V1.0	China	2018SR823347	Education platform	NCAC	10/16/2018
Zhuoxn Shangjia Application V1.0	China	2020SR0048604	Mobile education application	NCAC	1/10/2020
Wisdom Lighthouse Application (Android) V1.0	China	2019SR0669066	Mobile education application	NCAC	6/28/2019
Wisdom Lighthouse Application (iOS) V1.0	China	2019SR0669412	Mobile education application	NCAC	6/28/2019
Ruizhi Lighthouse Application (Android) V1.0	China	2020SR0380970	Mobile education application	NCAC	4/26/2020
Ruzhi Lighthouse (iSO) V1.0	China	2020SR0380965	Mobile education application	NCAC	4/26/2020
Zhuoxn Shangcheng Application (Android) 1.0	China	2021SR1183720	E-commerce platform	NCAC	8/11/2021
Zhuoxun Education Application (Tablet PC) 1.0	China	2021SR1183894	Mobile education application	NCAC	8/11/2021
Ruizhi Lighthouse Application (Android) V4.0	China	2021SR1305659	Mobile education application	NCAC	9/1/2021
Ruzhi Lighthouse Application (iSO) V4.0	China	2021SR1305660	Mobile education application	NCAC	9/1/2021
Course Selection Youdao ApplicationV1.0	China	2022SR0019232	Mobile education application	NCAC	1/5/2022

Trademarks: In China, the term of a registered trademark is 10 years. The owner can apply extension with the trademark office within six months before or after the expiration. The review process of a trademark application usually takes about one year in China.

Trademarks	Registered Area	Trademark Number	Category Description	Term	Registering Authority
	China	18990205	Category 42	02/282017 - 02/27/2027	Trademark Office of The State Administration for Industry & Commerce of the People’s Republic of China (the “Trademark Office”)
	China	32138964	Category 9	12/14/2019-12/13/2029	Trademark Office
	China	32139796	Category 35	12/14/2019-12/13/2029	Trademark Office
	China	32830528	Category 41	04/14/2020-04/13/2030	Trademark Office
	China	36092361	Category 9	2019/9/21-2029/9/20	Trademark Office
	China	53124131	Category 38	09/07/2021-09/06/2031	Trademark Office
	China	53096118	Category 25	09/07/2021-09/06/2031	Trademark Office
	China	53105013	Category 26	09/14/2021-09/13/2031	Trademark Office
	China	53108379	Category 45	09/07/2021-09/06/2031	Trademark Office
	China	53100877	Category 18	09/07/2021-09/06/2031	Trademark Office
	China	53122459	Category 28	09/07/2021-09/06/2031	Trademark Office
	China	53109314	Category 39	09/07/2021-09/06/2031	Trademark Office
	China	37811174	Category 9	2019/12/28-2029/12/27	Trademark Office
	China	37832156	Category 16	2019/12/28-2029/12/27	Trademark Office
	China	37816846A	Category 35	2020/2/7-2030/2/6	Trademark Office
	China	37832166	Category 41	01/14/2020-01/13/2030	Trademark Office
	China	37816447	Category 9	2019/12/14-2029/12/13	Trademark Office
	China	37806792	Category 16	2019/12/21-2029/12/20	Trademark Office
	China	37823110	Category 35	2019/12/21-2029/12/20	Trademark Office
	China	37819581	Category 41	2019/12/14-2029/12/13	Trademark Office
	China	37832169	Category 9	2020/4/7-2030/4/6	Trademark Office
	China	37818362	Category 16	2020/5/28-2030/5/27	Trademark Office
	China	37819610	Category 35	2020/4/14-2030/4/13	Trademark Office
	China	37823107	Category 41	08/07/2021-08/06/2031	Trademark Office
	China	38881941	Category 9	2020/8/28-2030/8/27	Trademark Office
	China	38871734	Category 16	2020/6/21-2030/6/20	Trademark Office
	China	38892456	Category 41	2020/8/28-2030/8/27	Trademark Office
	China	45269917	Category 9	2020/12/21-2030/12/20	Trademark Office
	China	45248201	Category 41	2020/12/21-2030/12/20	Trademark Office
	China	57562173	Category 16	2021/07/08-2032/01/13	Trademark Office
	China	57536072	Category 35	2021/07/08-2032/01/13	Trademark Office
	China	45373919	Category 9	2020/11/28-2030/11/27	Trademark Office
	China	45382746	Category 41	2020/11/28-2030/11/27	Trademark Office
	China	57562180	Category 35	2021/07/08-2032/01/13	Trademark Office
	China	57542202	Category 16	2021/07/08-2032/01/13	Trademark Office
	China	47571347	Category 9	2021/3/7-2031/3/6	Trademark Office
	China	47549318	Category 16	2021/3/7-2031/3/6	Trademark Office
	China	47554839	Category 35	2021/3/7-2031/3/6	Trademark Office
	China	47571429	Category 41	2021/3/7-2031/3/6	Trademark Office
	China	53094682	Category 16	09/07/2021-09/06/2031	Trademark Office
	China	53100878	Category 18	09/07/2021-09/06/2031	Trademark Office
	China	53100883	Category 25	09/07/2021-09/06/2031	Trademark Office
	China	53109340	Category 41	09/07/2021-09/06/2031	Trademark Office
	China	53116539	Category 39	09/07/2021-09/06/2031	Trademark Office
	China	53108389	Category 9	09/07/2021-09/06/2031	Trademark Office
	China	53105382	Category 42	09/07/2021-09/06/2031	Trademark Office
	China	53108354	Category 26	09/07/2021-09/06/2031	Trademark Office
	China	53099158	Category 35	12/14/2021-12-13/2031	Trademark Office
	China	53108361	Category 28	09/07/2021-09/06/2031	Trademark Office
	China	53108381	Category 45	09/07/2021-09/06/2031	Trademark Office
	China	53094524	Category 38	09/07/2021-09/06/2031	Trademark Office

(1) Category 9 (Scientific Instruments) includes: speakers, downloadable mobile phone application software, copiers (photography, static electricity and heat), navigation instruments, glasses, electronic dictionaries, neon billboards, measuring tools, downloadable computer application software and electronic notepads;8

8(1) Category 9 (Scientific Instruments) includes: speakers, downloadable mobile phone application software, copiers (photography, static electricity and heat), navigation instruments, glasses, electronic dictionaries, neon billboards, measuring tools, downloadable computer application software and electronic notepads;

(2)	Category 16 (Office Supplies) includes: lithographic arts and crafts, paper handkerchiefs, writing tools, notebooks, office punchers, paper packaging boxes, stationery, teaching materials (except instruments), books, billboards made of paper or paperboard;

(3)	Category 18 (Leather Goods) includes: schoolbags, backpacks, walking sticks, suitcases, office bags, umbrella rings, harness accessories, animal skin products, travel bags, (women’s) wallets;

(4)	Category 25 (Clothing, Shoes & Hats) includes: infant clothing, shoes (footwear), clothing, scarf, clothing, socks, sleep goggles, hats (outwear), belts, driver’s clothing, gloves (clothing);
(5)	Category 26 (Lace, Ribbons, Embroidery & Fancy Goods) includes: wigs, corded crafts, lace accessories, buttons, linen markings, clothing decorations, collar holders, needles, artificial flowers, thermal adhesive patches for repairing textiles;
(6)	Category 28 (Sporting Goods) includes: swimming pools (for entertainment purposes), chess, archery equipments, sports nets, toys, toy statues, exercise equipments, game equipments, fishing equipments and dolls;
(7)	Category 35 (Advertising & Sales) includes: marketing for others, accounting, photocopying services, human resource management, online marketing for buyers and sellers of goods and services, business management of franchises, retail or wholesale services of sanitary preparations, soliciting sponsorship, providing industry information through websites, advertising;
(8)	Category 38 (Communication Services) includes: wired transmission of sound, image, signal and data, radio broadcasting, provision of online forum, provision of database access service, video conference service, provision of Internet chat room, data streaming transmission, podcast video transmission, video on-demand transmission, and broadcasting of programs through the Internet;
(9)	Category 39 (Transportation & Storage) includes: transportation, ride-sharing services, courier services (letters or commodities), travel reservation, travel arrangement, ship transportation, storage, automobile transportation, air transportation, coordination of travel arrangements for individuals and groups;
(10)	Category 41 (Education & Entertainment) includes: tutoring services, arranging and organizing training courses, entertainment services, publishing, lottery issuance, mobile library, zoo services, arranging and organizing educational meetings, training, club services (entertainment or education);
(11)	Category 42 (Design & Research) includes: graphic art design, software as a service (SaaS), web design, platform as a service (PAAS), art appraisal, interior design, research and development of new products for others, industrial product appearance design, fashion design and material testing;
(12)	Category 45 (Social Service) includes: planning and arranging wedding services, dating services, online social network services, social companionship, dating services, arranging funerals, physical security consulting, personal clothing matching consulting, and providing legal information service through website.

Domains: In China, the registration of domains can be extended by annual renewal or periodic renewal by paying the annual or periodic registration fee. If renewal registration fee is not paid timely, the domain will become available to the public. Zhuoxun Beijing has effectively ~~maintained~~ maintained the following domains:

Names	Registration Date	Current Expiration Date	Registering Authority
zhuoxuncn.com	October 4, 2012	October 4, ~~2024~~2025	Internet Corporation for Assigned Names and Numbers
zhuoxuncn.cn	August 10, 2018	August 10, ~~2024~~2025	Internet Corporation for Assigned Names and Numbers

Competition

Zhuoxun Beijing operates in a highly competitive environment. It believes the primary competitive factors in providing family educational services are high-quality, systemization, reputation, recognized lecturers, and accessibility. Family education industry is still at the early stage in China, where Zhuoxun Beijing believes there is no dominating company yet. Zhuoxun Beijing competes with a number of large and small companies, including integrated online virtue education platforms and onsite educational service companies.

Zhuoxun Beijing believes its ability to compete depends upon many factors both within and beyond its control, including the following:

●

high-quality and numbers of courses, meetings the needs of the parents with different aged children;

●

courses research and development ability;

●

professional software, applications, and webpage R&D team;

●

recognized teachers, professors, and lecturers;

●

nationwide strong network of regional service providers under systematic training guidance;

●

marketing efforts; and

●

our brand strength in the marketplace relative to our competitors.

Government Regulations

Zhuoxun Beijing’s business is regulated by diverse and evolving laws and governmental authorities in China. It is subject to laws and regulations related to Internet communications, privacy, consumer protection, security and data protection, intellectual property rights, commerce, taxation, entertainment, recruiting and advertising. These laws and regulations are becoming more prevalent, and new laws and regulations are under consideration by the Chinese governments. Any failure by it to comply with existing laws and regulations may subject it to liabilities. New laws and regulations governing such matters could be enacted or amendments may be made to existing regulations at any time that could adversely impact our services. Plus, legal uncertainties surrounding Chinese government regulations could increase Zhuoxun Beijing’s costs of doing business, require it to revise its services, prevent it from delivering its services over the Internet or slow the growth of the Internet, any of which could materially adversely affect its business, financial condition and results of operations.

Foreign Investment

On March 15, 2019, the National People’s Congress (“NPC”) approved the Foreign Investment Law of the PRC, or the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law of the PRC and the Wholly Foreign-invested Enterprise Law of the PRC, together with their implementation rules and ancillary regulations. The organization form, organization and activities of foreign-invested enterprises shall be governed, among others, by the PRC Company Law and the PRC Partnership Enterprise Law. Foreign-invested enterprises established before the implementation of the Foreign Investment Law may retain the original business organization and so on within five years after the implementation of this Law.

The Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights and interests of foreign investors. According to the Foreign Investment Law, foreign investments are entitled to pre-entry national treatment and are subject to negative list management system. The pre-entry national treatment means that the treatment given to foreign investors and their investments at the stage of investment access shall not be less favorable than that of domestic investors and their investments. The negative list management system means that the state implements special administrative measures for access of foreign investment in specific fields. The Foreign Investment Law does not mention the relevant concept and regulatory regime of VIE structures. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation.

Foreign investors’ investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises. Among others, the state guarantees that foreign-invested enterprises participate in the formulation of standards in an equal manner and that foreign-invested enterprises participate in government procurement activities through fair competition in accordance with the law. Further, the state shall not expropriate any foreign investment except under special circumstances. In special circumstances, the state may levy or expropriate the investment of foreign investors in accordance with the law for the needs of the public interest. The expropriation and requisition shall be conducted in accordance with legal procedures and timely and reasonable compensation shall be given. In carrying out business activities, foreign-invested enterprises shall comply with relevant provisions on labor protection.

On December 26, 2019, the State Council issued the Implementing Regulation of the Foreign Investment Law (the “Implementing Regulation”), which went into effect on January 1, 2020, delegating the authority to the Ministry of Commerce, or MOFCOM, and the National Development and Reform Commission, or the NDRC, the authority to determine the limitation of foreign investment activities in certain industries under a Foreign Investment Access Negative List. Further, it delegated the authority for registration and licensure of foreign invested businesses to the State Administration for Market Regulation, or SAMR. On August 4, 2020, the Beijing Municipal Market Regulatory Bureau and all of its district-level counterparts were authorized by the SAMR to directly oversee the registration and licensure of foreign invested businesses.

As indicated in the Implementing Regulation, investment activities in the PRC by foreign investors are principally governed by the Foreign Investment Access Negative List (the “Negative List”), which replaces its predecessor, the Guidance Catalog of Industries for Foreign Investment. The Negative List is promulgated and as amended from time to time by the MOFCOM and National Development and Reform Commission (the “NDRC”). In June 2020, the MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2020 Version), or the Negative List, which became effective on July 23, 2020. In December 2021, the MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), which became effective on January 1, 2022. The 2021 version of the Negative list will replace the 2020 version of the Negative list. Industries listed in the Negative List are divided into two categories: restricted and prohibited. Industries not listed in the Negative List are generally deemed as constituting a third “permitted” category. Establishment of wholly foreign-owned enterprises is generally allowed in permitted industries. Some restricted industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category projects are subject to higher-level government approvals. Foreign investors are not allowed to invest in industries in the prohibited category. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other PRC regulations.

Pursuant to the 2021 Negative List, the business engaged by Zhuoxun Beijing and its subsidiary of Radio and TV program production fall within prohibited industries for foreign investors and can only be carried out by Zhuoxun Beijing.

In addition, the provision of value-added telecommunications services falls in the restricted category and, with a few exceptions, the percentage of foreign ownership cannot exceed 50%. However, according to the Notice of the Ministry of Industry and Information Technology (MIIT) on Opening the Limitation of Foreign Shareholding Ratios in Online Data Processing and Transaction Processing Business (Business E-commerce), issued on June 19, 2015, foreign ownership of online data processing and transaction processing businesses (B21) can reach as high as 100%. Zhuoxun Beijing operates as a value-added, e-commerce knowledge service provider, and complies with the MIIT Notice. Zhuoxun Beijing also has acquired a value-added telecommunication service provider license to conduct online data processing and transaction processing business.

Value-added Telecommunications Services

Licenses for Value-Added Telecommunications Services

On September 25, 2000, the State Council issued the Regulations on Telecommunications of China, or the Telecommunications Regulations, to regulate telecommunications activities in China. The Telecommunications Regulations, revised on February 6, 2016, divide the telecommunications services into two categories, namely “infrastructure telecommunications services” and “value-added telecommunications services.” Pursuant to the Telecommunications Regulations, operators of value-added telecommunications services must first obtain a Value-added Telecommunications Business Operating License, or VTB License, from the Ministry of Industry and Information Technology, or MIIT, or its provincial level counterparts. On July 3, 2017, the MIIT promulgated the Administrative Measures on Telecommunications Business Operating Licenses, which set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses.

According to the Catalog of Classification of Telecommunications Businesses effective from April 1, 2003, internet information services, also called internet content services, or ICP services, are deemed as a type of value-added telecommunications services. On December 28, 2015, the MIIT published a revised Catalog of Classification of Telecommunication Businesses, or the 2016 MIIT Catalog, which took effect on March 1, 2016 and the 2016 MIIT Catalog was recently amended on June 6, 2019. According to the latest MIIT Catalog, internet information services, which include information release and delivery services, information search and query services, information community platform services, ~~information~~ information real-times interactive services, and information protection and processing services, continues to be classified as a category of value-added telecommunication services. The Administrative Measures on Internet Information Services, or ICP Measures, also promulgated by the PRC State Council on September 25, 2000 and most recently amended on January 8, 2011, set forth more specific rules on the provision of ICP services. According to ICP Measures, any company that engages in the provision of commercial ICP services shall obtain a sub-category VTB License for Internet Information Services, or ICP License, from the relevant government authorities before providing any commercial internet content services within the PRC, and when the ICP services involve areas of news, publication, education, medical treatment, health, pharmaceuticals and medical equipment, and if required by law or relevant regulations, specific approval from the respective ~~regulatory~~ regulatory authorities must be obtained prior to applying for the ICP License from the MIIT or its provincial level counterpart. Pursuant to the above-mentioned regulations, “commercial ICP services” generally refers to provision of specific information content, ~~online~~ online advertising, web page construction and other online application services through internet for profit making purpose.

Operating our online platform to provide information and services to our users is classified as commercial ICP services. Zhuoxun Beijing hold an ICP License, which is valid until ~~March~~July 1316, ~~2024~~2029.

Foreign Investment in Value-Added Telecommunication Services

The Regulations on Administration of Foreign-Invested Telecommunications Enterprises, or the FITE Regulations, which took effect on January 1, 2002 and were amended on September 10, 2008 and February 6, 2016, respectively, are the key regulations that regulate foreign direct investment in telecommunications companies in China. The FITE Regulations stipulate that the foreign investor of a telecommunications enterprise is prohibited from holding more than 50% of the equity interest in a foreign-invested enterprise that provides value-added telecommunications services. In addition, for a foreign investor to acquire any equity interest in a business providing value-added telecommunications services in China, it must demonstrate a positive track record and experience in providing such services.

On July 13, 2006, the MIIT issued the Circular on Strengthening the Administration of Foreign Investment in Value-added Telecommunications Services, or the MIIT Circular 2006, which requires that (i) foreign investors can only operate a telecommunications business in China through establishing a telecommunications enterprise with a valid telecommunications business operation license; (ii) domestic license holders are prohibited from leasing, transferring or selling telecommunications business operation licenses to foreign investors in any form, or providing any resource, sites or facilities to foreign investors to facilitate the unlicensed operation of telecommunications business in China; (iii) value-added telecommunications services providers or their shareholders must directly own the domain names and registered trademarks they use in their daily operations; (iv) each value-added telecommunications services provider must have the necessary facilities for its approved business operations and maintain such facilities in the geographic regions covered by its license; and (v) all value-added telecommunications services providers should improve network and information security, enact relevant information safety administration regulations and set up emergency plans to ensure network and information safety. The provincial communications administration bureaus, as local authorities in charge of regulating telecommunications services, (i) are required to ensure that existing qualified value-added telecommunications service providers will conduct a self-assessment of their compliance with the MIIT Circular 2006 and submit status reports to the MIIT before November 1, 2006; and (ii) may revoke the value-added telecommunications business operation licenses of those that fail to comply with the above requirements or fail to rectify such non-compliance within specified time limits. Due to the lack of any additional interpretation from the regulatory authorities, it remains unclear what impact MIIT Circular 2006 will have on us or the other PRC internet companies with similar corporate and contractual structures. After the MOFCOM and NDRC amended the FIE Catalog in March 2015, MIIT also issued the Circular on Removing the Restrictions on Shareholding Ratio Held by Foreign Investors in Online Data Processing and Transaction Processing (Operating E-commerce) Business on June 19, 2015, which amended the relevant provision in FITE Regulations by allowing foreign investors to own more than 50% of the equity interest in an operator of e-commerce business. However, foreign investors continue to be prohibited from holding more than 50% of the equity interest in a provider of other category of value-added telecommunications services except for e-commerce, domestic multi-party communications, store-and-forward and call center. The aforementioned restrictions remain applicable pursuant to the Negative List. Based on the Notice regarding the Strengthening of Ongoing and Post Administration of Foreign Investment Telecommunications Enterprises issued by MIIT on October 15, 2020, the MIIT will not issue Examination Letter for Foreign Investment in Telecommunications Business. Still, foreign invested enterprises need to submit relevant foreign investment materials to MIIT for initial applications and changes of telecommunications operating permits.

To comply with the above-mentioned foreign ownership restrictions, all of the shareholders of Zhuoxun Beijing are PRC domestic residents, and Fengyuan Beijing, our PRC subsidiary, have entered into the VIE Agreements with Zhuoxun Beijing (together with Fengyun Beijing and Zhuoxin Beijing, the “PRC operating entities”) so that we are able to consolidate the financial results of Zhuoxun Beijing and its subsidiary in accordance with US GAAP as the primary beneficiary of the arrangements. Zhuoxun Beijing is the holders of the domain names, trademarks and facilities necessary for daily operations of our online platforms in compliance with the MIIT Circular 2006.

Internet Culture Activities

On February 17, 2011, the Ministry of Culture, or MOC, promulgated the Interim Administrative Provisions on Internet Culture, or the Internet Culture Provisions, which became effective on April 1, 2011 and amended on December 15, 2017. The Internet Culture Provisions require ICP services providers engaging in commercial “internet culture activities” to obtain an Internet Culture Business Operating License from the MOC. “Internet cultural activities” is defined in the Internet Culture Provisions as an act of provision of internet cultural products and related services, which includes (i) the production, duplication, importation, and broadcasting of the internet cultural products; (ii) the online dissemination whereby cultural products are posted on the internet or transmitted via the internet to end-users, such as computers, fixed-line telephones, mobile phones, television sets and games machines, for online users’ browsing, use or downloading; and (iii) the exhibition and comparison of the internet cultural products. In addition, “internet cultural products” is defined in the Internet Culture Provisions as cultural products produced, broadcast and disseminated via the Internet, which mainly include internet cultural products specially produced for the Internet, such as online music entertainment, online games, online shows and plays (programs), online performances, online works of art and online cartoons, and internet cultural products produced from cultural products such as music entertainment, games, shows and plays (programs), performances, works of art, and cartoons through certain techniques and duplicating those to internet for dissemination. On May 14, 2019, the Office of the Ministry of Culture and Tourism issued the Notice Regarding the Adjustment of the Approval Scope of “Internet Culture Business Operation License” and Further Standardizing the Approval Work, or the No.81 Notice, the scope of examination and approval of the “Internet Culture Business Operation License” includes network music, network performances (programs), network performances, network artwork, network animation and exhibitions, and competition activities. For units that do not meet the scope of approval to engage in other Internet business activities, the “Internet Culture Business Operation License” will not be issued.

Zhuoxun Beijing previously held an Internet Culture Business Operation License, which was valid until October 23, 2021, to conduct business involving internet music entertainment products and services. However, since Zhuoxun Beijing no longer conducts or intends to conduct any business involving such products or services, and it currently only operates in activities involving internet cultural communication, education consulting and e-commerce which are exempted from the application of the Internet Culture Business Operation License under the No. 81 Notice, Zhuoxun Beijing currently does not hold and is required to hold such license.

Television Program Industry

Television program productions and distribution businesses are mainly regulated by Regulations on Administration of Radio and Television, which came in to effect on August 11, 1997 and was recently amended on November 29, 2020, and the Administrative Regulations on Production and Operation of Radio and Television Program, which came into effect on August 20, 2004 and was recently amended on October 29, 2020. Pursuant to these regulations, television programs can only be produced by television stations at the municipal level or above or entities with a License for the Production and Operation of Radio and Television Program. Any entity producing and operating radio and television program without the License for the Production and Operation of Radio and Television Program will be subject to the confiscation of tools, equipment of producing radio and television program and a fine of more than 10 thousand RMB and less than 50 thousand RMB by competent local branch of SAPPRFT.

Zhuoxun Beijing holds a License for the Production and Operation of Radio and Television Program, which is valid until September 1620, ~~2024~~2026. According to this license, the mode of operation is production and distribution, and the approved business scope includes animation, feature films, TV variety shows (current affairs news, similar topics or columns and other radio and TV programs are not allowed).

Online Audio-Visual Programs

The Measures for the Administration of Publication of Audio-Visual Programs through Internet or Other Information Network, or the Audio-Visual Measures, promulgated by the SAPPRFT, on July 6, 2004 and put into effect on October 11, 2004, apply to the activities relating to the opening, broadcasting, integration, transmission or download of audio-visual programs using internet or other information network. Under the Audio-Visual Measures, to engage in the business of transmitting audio-visual programs, a license issued by SAPPRFT is required, and “audio-visual programs (including audio-visual products of films and televisions)” are defined as the audio-visual programs consisting of movable pictures or sounds that can be listened to continuously, which are shot and recorded using video cameras, vidicons, recorders and other audio-visual equipment for producing programs. Foreign invested enterprises are not allowed to carry out such business. On April 13, 2005, the State Council promulgated the Certain Decisions on the Entry of the Non-state-owned Capital into the Cultural Industry. On July 6, 2005, five PRC governmental authorities, including the SAPPRFT, jointly adopted the Several Opinions on Canvassing Foreign Investment into the Cultural Sector. According to these regulations, non-state-owned capital and foreign investors are not allowed to engage in the business of transmitting audio-visual programs through information networks. However, the Audio-Visual Measures have been repealed according to the Administrative Provisions on Audio-Visual Program Service through Special Network and Directed Transmission that promulgated by the SAPPRFT on April 25, 2016, effective as of June 1, 2016 and last amended on March 23, 2021.

To further regulate the provision of audio-visual program services to the public via the internet, including through mobile networks, within the territory of the PRC, the SAPPRFT and the MIIT jointly promulgated the Administrative Provisions on Internet Audio-Visual Program Service, or the Audio-Visual Program Provisions, on December 20, 2007, which came into effect on January 31, 2008 and were amended on August 28, 2015. Under the Audio-Visual Program Provisions, “internet audio-visual program services” is defined as activities of producing, redacting and integrating audio-visual programs, providing them to the general public via internet, and providing services for other people to upload and transmit audio-visual programs, and providers of internet audio-visual program services are required to obtain a License for Online Transmission of Audio-Visual Programs issued by SAPPRFT, or complete certain registration procedures with SAPPRFT. In general, providers of internet audio-visual program services must be either state-owned or state-controlled entities, and the business to be carried out by such providers must satisfy the overall planning and guidance catalog for internet audio-visual program services determined by SAPPRFT. In a press conference jointly held by SAPPRFT and MIIT to answer questions relating to the Audio-Visual Program Provisions in February 2008, SAPPRFT and MIIT clarified that providers of internet audio-visual program services who engaged in such services prior to the promulgation of the Audio-Visual Program Provisions are eligible to re-register with the relevant authorities and continue their operation of internet audio-visual program services so long as those providers did not violate the relevant laws and regulations in the past. On May 21, 2008, SAPPRFT issued a Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission of Audio-Visual Programs, as amended on August 28, 2015, which further sets out detailed provisions concerning the application and approval process regarding the License for Online Transmission of Audio-Visual Programs. The notice also states that providers of internet audio-visual program services that engaged in such services prior to the promulgation of the Audio-Visual Program Provisions are eligible to apply for the license so long as their violation of the laws and regulations is minor in scope and can be rectified in a timely manner and they have no records of violation during the last three months prior to the promulgation of the Audio-Visual Program Provisions. Further, on March 30, 2009, SAPPRFT promulgated the Notice on Strengthening the Administration of the Content of Internet Audio-Visual Programs, which reiterates the pre-approval requirements for the audio-visual programs transmitted via the internet, including through mobile networks, where applicable, and prohibits certain types of internet audio-visual programs containing violence, pornography, gambling, terrorism, superstition or other similarly prohibited elements.

According to the Tentative Categories of Internet Audio-Visual Program Services, or the Categories, promulgated on March 17, 2010 and amended on March 10, 2017, there are four categories of internet audio-visual program services which are further divided into seventeen sub-categories. The third sub-category to the second category covers the making and editing of certain specialized audio-video programs concerning, among ~~other~~ other things, educational content, and broadcasting such content to the general public online. However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of “internet audio-video programs.”

At present, the licenses for online audio-visual program are mainly required for radio stations, TV station services, and current affairs audiovisual news services; as well as interviews, news reports, online dramas and such other forms of radio and television media programs available on the Internet. The main purpose of the license is to regulate and guide the dissemination of radio and television programs that affect public opinions. Beijing Zhuoxun’s programs are mainly knowledge-based content and does not involve content regulated by the regulations. In addition, under Section 8 of the Audio-Visual Program Provisions, only state-owned or state-controlled business may apply for the license. Zhuoxun Beijing is not a state-owned or state-controlled entity and as such cannot apply for such a license.

Accordingly, Beijing Zhuoxun does not need to apply for nor owns such license. However, if the government tightens control in the future, it may issue such new requirements for licensing and certifications, which may bring uncertainty to Beijing Zhuoxun’s business.

Cybersecurity

On November 7, 2016, the Standing Committee of the National People’s Congress (“SCNPC”) promulgated the Cybersecurity Law. The Cybersecurity Law regulates network operators and others from the following perspectives: the principle of cyberspace sovereignty, security obligations of network operators and providers of network products and services, protection of personal information, protection of critical information infrastructure, data use and cross-border transfers, network interoperability and standardization. Under the Cybersecurity Law, network operators are generally obligated to protect their networks against disruption, damage or unauthorized access, and to prevent data leakage, theft or tampering. In addition, network operators will also be subject to specific rules depending on their classification under the multi-level network security protection scheme. Providers of network products and services must comply with national standards and ensure the security of their products. Personal information and important data collected and generated by a critical information infrastructure operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases internet products and services that affects or may affect national security, it should be subject to cybersecurity review by the Cyberspace Administration of China, or the CAC.

Measures for Cybersecurity Supervision, which became effective on June 1, 2020, provide more detailed rules relating to cyber security inspections. On July 10, 2021, the Cyberspace Administration of China (“CAC”) publicly issued the Measures for Cybersecurity Censorship (Revised Draft for Comments) aiming to, upon its enactment, replace the existing Measures for Cybersecurity Censorship. The draft measures extend the scope of cybersecurity reviews to data processing operators engaging in data processing activities that affect or may affect ~~national~~ national security, including listing in a foreign country. There still exists uncertainty how the enacted version would have any substantial ~~changes~~ changes from this draft and whether clearance of cybersecurity review and other specific actions shall be completed by companies like us.

On June 14, 2022, the CAC promulgated the Administrative Provisions on Mobile Internet Applications Information Services, or the APP Provisions, which became effective on August 1, 2022. The APP Provisions replaced the former Administrative Provisions on Mobile Internet Applications Information Services promulgated on June 28, 2016. Under the APP Provisions, mobile application providers are prohibited from engaging in any activity that may endanger national security, disturb the social order, or infringe the legal rights of third parties. The APP Provisions also require application providers to procure approval of the relevant competent departments or the relevant licenses required by laws and regulations to provide services through such applications.

On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC, or the Data Security Law, which will come into effect on September 1, 2021. The Data Security Law provides for data security and privacy obligations on entities and individuals engaged in data activities. The Data Security Law also introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, as well as the degree of harm it may cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, or illegally acquired or used. The appropriate level of protection measures is required for each category of data. For example, a processor of important data must have designated personnel and internal supervision body responsible for data security, carry out risk assessments for data processing activities and file the risk assessment reports with the competent government authorities. In addition, the Data Security Law provides a national security review procedure for data activities which may affect national security and imposes export restrictions on certain data and information.

The Cybersecurity Review Measures, or the “Review Measures”, which were promulgated on April 13, 2020, and were amended on December 28, 2021 and became effective on February 15, 2022, provide online platform operator holding more than one million users/users’ individual information shall be subject to cybersecurity review before listing abroad. Cybersecurity Review Measures do not provide a definition of “online platform operator”, therefore, we cannot assure you that the VIE and its subsidiary will not be deemed as an “online platform operator”. On November 14, 2021, the CAC promulgated the Data Security Management Regulations Draft to solicit public opinion and comments, which provides that an overseas initial public offering to be conducted by a data processor processing the personal information of more than one million individuals shall apply for a cybersecurity review. Data processor means an individual or organization that independently make decisions on the purpose and manner of processing in data processing activities.

We may be deemed as a data processor under the Data Security Management Regulations Draft. Notwithstanding the foregoing, even if we are deemed as an online platform operator under the Cybersecurity Review Measures or a data processor under the Data Security Management Regulations Draft, we do not expect to be subject to the cybersecurity review in connection with our status as a U.S. company, because the VIE and its subsidiary do not hold more than one million users’ individual information.

The Cybersecurity Review Measures also provide that if a critical information infrastructure operator (“CIIO”) purchases internet products and services that affect or may affect national security, it should be subject to cybersecurity review by the CAC. Due to the lack of further interpretations, the exact scope of what constitutes a “CIIO” remains unclear. We do not expect to be a CIIO, since (i) we do not hold a large amount of individual information, and (ii) data processed in our business is less likely to have a bearing on national security, thus it may not be classified as core or important data by the authorities. As of the date of this Annual Report, we have not received any notice from any authorities identifying us as a CIIO or requiring us to undertake a cybersecurity review by the CAC. Further, as of the date of this Annual Report, we have not been subject to any penalties, fines, suspensions, or investigations from any competent authorities for violation of the regulations or policies that have been issued by the CAC.

Privacy Protection

The PRC Constitution states that PRC law protects the freedom and privacy of communications of citizens and prohibits infringement of these rights. In recent years, PRC government authorities have enacted laws and regulations on internet use to protect personal information from any unauthorized disclosure. According to the Law on the Protection of Consumer Rights and Interests promulgated in 1993 and last amended in 2013, business operators shall collect and use the personal information of consumers in a lawful and proper manner by following the principle that information collection or use is genuinely necessary. They shall expressly state the purposes, methods and scope of information collection or use, and obtain the consent of the consumers whose information is to be collected. To collect or use the personal information of consumers, business operators shall disclose their information collection or use rules, and shall not collect or use information in violation of laws or regulations, or in breach of the agreements between the parties concerned. Business operators and their staff members shall strictly keep confidential the personal information of consumers collected, and shall not divulge, sell or illegally provide others with the same. According to the PRC Cybersecurity Law promulgated On November 7, 2016 and became effective from June 1, 2017, network operators shall strictly keep confidential users’ personal information that they have collected, and establish and improve the users’ information protection system. To collect and use personal information, network operators shall follow the principles of legitimacy, rightfulness and necessity, disclose their rules of data collection and use, clearly express the purposes, means and scope of collecting and using the information, and obtain the consent of the persons whose data is gathered. Pursuant to the Decision on Strengthening the Protection of Online Information issued by the SCNPC on December 28, 2012 and the Order for the Protection of Telecommunication and Internet User Personal Information issued by the MIIT in July 16, 2013, any collection and use of user personal information must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified purposes, methods and scopes. “Personal information” is defined in these regulations as information that identifies a citizen, the time or location for his/her use of telecommunication and internet services, or involves privacy of any citizen such as his birth date, ID card number, and address. An ICP service provider must also keep information collected strictly confidential, and is further prohibited from divulging, tampering or destroying of any such information, or selling or providing such information to other parties. Any violation of the above decision or order may subject the ICP service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, closedown of websites or even criminal liabilities. Pursuant to the Ninth Amendment to the Criminal Law issued by the SCNPC in August 2015, which became effective in November 2015, any internet service provider that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders, shall be subject to criminal penalty for the result of (i) any dissemination of illegal information in large scale; (ii) any severe effect due to the leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other severe situation, and any individual or entity that (i) sells or provides personal information to others in a way violating the applicable law, or (ii) steals or illegally obtains any personal information, shall be subject to criminal penalty in severe situation. According to the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Infringing Personal Information of Citizens promulgated on May 8, 2017 and became effective from June 1, 2017, if a business operator collects personal information of citizens by purchasing, accepting or exchanging, or collects personal information of citizens in the course of performing their duties and providing services in violation of relevant provisions of the State (including Law on the Protection of Consumer Rights and Interests) and meet one of the following standards, such operator shall be considered breaching criminal law and such operator and its responsible personnel shall undertake the criminal liabilities: (i) illegal acquisition, sale or provision of more than 50 pieces of track information, communication content, credit information, property information; (ii) illegal acquisition, sale, or provision of more than 500 pieces of accommodation information, communication records, health, physiological information, trading information, and other personal information may affect the safety of personal and property; (iii) illegal acquisition, sale, or provision of more than 5000 pieces of personal information other than the information mentioned in the preceding (i) and (ii); (iv) the profits generated from using the illegally collected and acquired personal information is more than fifty thousand RMB; and (v) resale of the personal information collected in the course of performing their duties and providing service and the amount of resold personal information reaches 50% of the prescribed standard mentioned in (i) or (ii), as applicable.

On August 20, 2021, the Standing Committee of the National People’s Congress (“SCNPC”) promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which became effective on November 1, 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the Personal Information Protection Law provides, among others, that (i) an individual’s consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking, (ii) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and impact on the individual’s rights, and (iii) where personal information operators reject an individual’s request to exercise his or her rights, the individual may file a lawsuit with a People’s Court.

On July 7, 2022, the CAC promulgated the Outbound Data Transfer Security Assessment Measures, which became effective on September 1, 2022. According to the Outbound Data Transfer Security Assessment Measures, to provide data abroad under any of the following circumstances, a data processor shall declare security assessment for its outbound data transfer to the CAC through the local cyberspace administration at the provincial level: (i) where the data processor will provide important data abroad; (ii) where CIIO or the data processor processing the personal information of more than one million individuals will provide personal information abroad; (iii) where the data processor who has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals in total abroad since January 1 of the previous year, will provide personal information abroad; and (iv) other circumstances where the security assessment is required as prescribed by the CAC. Prior to declaring security assessment for outbound data transfer, the data processor shall conduct self-assessment on the risks of the outbound data transfer. For outbound data transfers that have been carried out before the effectiveness of the Outbound Data Transfer Security Assessment Measures, if it is not in compliance with these measures, rectification shall be completed within six months starting from September 1, 2022.

Zhuoxun Beijing applies certain technical adjustment to its user privacy information in accordance with regulatory regulations. The relevant cyber securities regulator has also continued to provide oversight on Zhuoxun Beijing’s information security and privacy protection features, and has not flagged any issue as of the date of this report. Therefore, the Company’s current privacy protection practices comply with laws and regulations.

Private Education

Education Law of the PRC

On March 18, 1995, the PRC NPC promulgated the Education Law of the PRC, or the Education Law, which was last amended on April 29, 2021 and became effective on April 30, 2021. The Education Law stipulates that the government formulates plans for the development of education, establishes and operates schools and other types of educational institutions, and in principle, enterprises, institution, social organizations and individuals are encouraged to operate schools and other types of educational organizations. It is provided in the Education Law that no organization or individual may establish or operate a school or any other educational institution for commercial purposes, which has been narrowed down by the SCNPC in the amendment on December 27, 2015 as only restricting a school or other educational institution founded with governmental funds or donated assets.

The Law for Promoting Private Education and its Implementing Rules

On December 28, 2002, SCNPC promulgated the Law for Promoting Private Education, or the Private Education Law and was last amended on December 29, 2018, the amendment of which also took effect on December 29, 2018. On March 5, 2004, the PRC State Council promulgated the Implementation Rules for the Law for Promoting Private Education, which became effective on April 1, 2004, or the PE Implementation Rules. On April 7, 2021, the State Council promulgated the Amended Implementation Rules for the Private Education Law, or the Amended PE Implementation Rules, which became effective on September 1, 2021. The Private Education Law and the Amended PE Implementation Rules provide rules for social organizations or individuals, other than state-owned entities, to establish schools or other educational organizations using non-government funds in PRC, such schools or educational organizations established using non-government funds are referred to as “private school.”

According to the Private Education Law, establishment of private schools for academic education, pre-school education, self-taught examination support and other cultural education shall be subject to approval by the authorities in charge of education, while establishment of private schools for vocational qualification training and vocational skill training shall be subject to approvals from the authorities in charge of labor and social welfare, A duly approved private school will be granted a private school operating permit, and shall be registered as a legal person at the competent registration authorities. Sponsors of private schools may set up, at their sole discretion, non-profit or commercial private schools. Nonetheless, sponsors may not establish commercial private schools providing compulsory education.

According to the Amended PE Implementation Rules, social organizations and individuals are prohibited from controlling a private school that provides compulsory education or a non-profit private school that provides pre-school education through mergers and acquisitions and control agreements. A private school providing compulsory education is prohibited from conducting transactions with its related party. Relevant government authorities shall enhance the supervision on the agreements entered into between non-profit private schools and its related party and shall review such transaction on an annual basis; online education activities using internet technology are encouraged by the regulatory authorities and shall comply with laws and regulations related to internet management. A private school engaging in online education activities using internet technology shall obtain the relevant private school operating permit. It shall also establish and implement internet security management systems and take technical security measures. Upon discovery of any information whose release or transmission is prohibited by applicable laws or regulations, the private school shall immediately cease the transmission of that information and take further remedial actions, such as deleting that information, to prevent it from spreading. Records pertaining to the situation shall be kept and reported to the appropriate authorities.

Under the Private Education Law and Amended PE Implementation Rules, private education is deemed as a public welfare undertaking, and entities and individuals who establish private schools are commonly referred to as “sponsors” instead of “investors” or “shareholders.” Sponsors of non-profit private schools may not obtain proceeds from running the schools, and all school-running balances shall be used for running schools. Sponsors of commercial private schools may obtain proceeds from running the schools, and the school-running balances shall be disposed of in accordance with the provisions of the Company Law and other relevant laws and administrative regulations. Private schools shall enjoy property rights of the legal persons in respect of the assets provided by sponsors to private schools, state-owned assets, donated property and school accumulation. The items and rates of fees to be collected by private schools shall be determined based on the school-running costs, market demand and other factors, made available to the general public, and subject to the supervision by the related competent departments. The specific charging measures for non-profit private schools shall be developed by the relevant governments, while the charging standards for commercial private schools shall be subject to market regulation and determined by the schools at their sole discretion. The fees collected by private schools shall be used mainly for educational and teaching activities, the improvement of schools’ conditions and the protection of the benefits of teachers and staff members. The use and the financial management of the assets for private schools shall be subject to supervision by the examination and approval authority and relevant departments. ~~Private~~ Private schools shall prepare their financial and accounting statements towards the end of each fiscal year, entrust public accounting firms to audit the statements according to law, and publish the audit results.

Regulations Relating to Online Commercial Private Training

Under the Private Education Law, private education institutions will be classified as either “non-profit private schools” or “commercial ~~private~~ private schools”, and both nonprofit private schools and commercial private schools are required to obtain a private school operating ~~permit~~ permit prior to its registration with applicable registry agency as legal entities. Pursuant to the Implementation Rules for the Classification Registration of Private Schools jointly issued by the Ministry of Education, or the MOE, and several other government authorities on ~~December~~ December 30, 2016, a commercial private school shall first obtain a private school operating permit prior to its registration with the SAMR or its local counterparts. Pursuant to the Implementation Rules for the Supervision and Administration of Commercial Private Schools ~~jointly~~ jointly issues by the MOE, the SAIC and Ministry of Human Resources and Social Security on December 30, 2016, commercial private training ~~institutions~~ institutions shall also be treated by reference to the requirements applicable to commercial private schools. Therefore, we may be required to apply for a private school operating permit and may be prohibited from continuing operating our English training business before obtaining ~~the~~ the said permit.

According to the Amended PE Implementation Rules, a private school providing online education for academic qualifications by using Internet technology shall obtain the school operating permit that shall be obtained for education for academic qualifications at the same level and of the same type, as well as the Internet operating license. A private school carrying out online training and education activities and occupational ~~qualification~~ qualification training and occupational skills training activities by using Internet technology, or an Internet technology service platform ~~providing~~ providing services for the aforementioned online activities, shall obtain the corresponding Internet operating license, and shall apply to the educational administrative department and human resources and social security department of the people’s government at the provincial level at the place where it is located for record-filing, and shall not carry out the education and teaching activities for which a school operating permit shall be obtained.

On January 2, 2018, Beijing Municipal Education Commission promulgated Several Opinions on Strengthening the Administration of Private Non-degree Education Institutions in Beijing, where the VIE and its subsidiary are incorporated, providing that private training institutions carrying out non-academic qualifications educations without obtaining required school operating permit shall be handled in accordance with the Private Education Law, and the total amount of newly established private non-academic qualifications training institutions shall be limited.

According to Online After-School Training Opinions, online after-school training institutions shall file with the competent provincial education regulatory authorities, see “Item 4. Information on the Company—B. Business Overview—Government Regulations—Private Education—Regulations Relating to After-School Tutoring”. Furthermore, specific administration measures regarding the institutions offering training service only via internet have been promulgated by the above-mentioned local government in Beijing as of this annual report. On October 8, 2019, the Municipal Education Commissions of Beijing promulgated Rules of Beijing Municipality for the Implementation of Online After-school Training Filing, providing specific administrative measures for institutions offering after-school training service only via internet to put on record.

However, given that a pure online commercial training institution like us does not have any school premises, which are generally required in the process of applying for the private school operating permit pursuant to the currently effectively Private Education Law and its relevant implementation rules, we would not be able to obtain the private school operating permit had we applied for it. The Amended PE Implementation Rules stimulates that a private school providing online education for academic qualifications by using internet technology shall obtain the private school operating permit. However, after consulting with the local competent governmental authorities, we were advised that any institution offering training service on academic subjects shall obtain the private school operating permit which in practice would not be issued to such institutions after the end of 2021, and that prior to any specific rules on online commercial private training, they will not grant private school operating permits to the institutions offering training service on non-academic subjects only via internet like us or request such institutions to hold such permits.

Regulations Relating to After-School Tutoring

On February 13, 2018, the MOE and three other government authorities jointly promulgated the Circular on Special Enforcement Campaign concerning After-school Tutoring Institutions to Alleviate Extracurricular Burden on Students of Elementary Schools and Middle Schools, or Circular 3. Pursuant to Circular 3, the government authorities seek to alleviate after- school burden on elementary and secondary school students by carrying out a series of inspections on after-school training institutions and order those identified with potential or actual material safety risks to suspend business for self-inspection and rectification, and those without proper establishment licenses or school operating permits to apply for relevant qualifications and certificates under the guidance of competent government authorities if those after-school training institutions meet the required application conditions of the proper establishment licenses or school operating permits. If the after-school training institutions, which does not hold the establishment licenses nor school operating permits, does not meet the required application conditions for the aforesaid licenses and permits, they will be ordered to cease the operation. If the after-school training institutions, which does not hold the school operating permits but does hold the establishment licenses, does not meet the required application ~~conditions~~ conditions for the school operating permits, they will be ordered to cease to provide after-school training.

On August 6, 2018, the General Office of the State Council issued an Opinion on Supervising the Development of After-school Tutoring Institutions (“State Council Circular 80”) with a view to encourage primary and secondary school students’ training in interests, hobbies, innovation and practice ability, and to standardize the subject-matter of traditional disciplines (i.e., disciplines taught in schools, such as Chinese language, mathematics, foreign languages, geography, chemistry, biology, the “traditional disciplines”) such that the level and degree of content taught by after-school tutoring institutions for primary and secondary school students (“tutoring institution(s)”) in these traditional disciplines are aligned, and consistent, with the content being taught to the same students at school (e.g., to prohibit content of after-school tutoring beyond that student’s year level or what that student is being taught at school). The State Council Circular 80 is aimed at supervising after-school tutoring institutions providing primary and secondary school students’ after-school tutoring services.

State Council Circular 80 sets out a number of operating standards for after-school tutoring institutions to adhere, including, among others, that: (i) the average area per student used for any specific training time slot within an after-school tutoring institution shall not be less than three square-meter; (ii) no in-service primary and secondary teachers may be employed in an after-school tutoring institution and any teachers employed by an after-school tutoring institution for primary and secondary school subjects shall hold relevant teaching qualifications; (iii) all content, classes and subject enrolment, progress and school hours information in connection with tutoring of traditional disciplines shall be filed with the local administration of education, and viewable by the public, and the content taught to a student must not exceed the ordinary level of the student’s studies at school (i.e., primary school or secondary school); (iv) tutoring must not run past 20:30 in the evening and no homework can be given; (v) fees of more than three months’ tuition cannot be collected as a lump-sum; and (vi) there shall not be any levied charging or forced fundraising, in any name, by tutoring institutions.

In relation to online education service providers, State Council Circular 80 provides that regulatory authorities of networking, culture, information technology, radio and television industries shall cooperate with the education department in supervising online education within their relevant industry.

On November 20, 2018, the General Office of the MOE, the General Office of the State Administration for Market Regulation of the PRC and the General Office of the Ministry of Emergency Management of the PRC jointly issued the Circular 10, which provides that the online after-school education institutions shall file the information of their courses, such as names, contents, target students, syllabi and schedules with the provincial education departments and shall publish the name, photo, class schedule and certificate number of the teacher qualification of each teacher on their websites.

The MOE, jointly with other certain PRC government authorities, promulgated the Implementation Opinions on Regulating Online After-School Training, or the Online After-School Training Opinions, which became effective on July 12, 2019. The Online After-School Training Opinions are intended to regulate academic after-school training involving internet technology provided to students in primary and secondary schools. Among other things, the Online After-School Training Opinions requires that online after-school training institutions shall file with the competent provincial education regulatory authorities and such education regulatory authorities shall, jointly with other provincial government authorities, review such filings and the qualification of the online after-school training institutions submitting such filings.

With respect to the filing requirements, the Online After-School Training Opinions provides, among others: (i) an online after-school training institution shall file with the competent provincial education regulatory authorities at the place of its domicile after it has obtained the ICP License and the certificate and the grade evaluation report for the graded protection of cyber security, and furthermore, shall file before October 31, 2019 if it has already conducted online after-school training; (ii) the online after-school training institutions shall file, among others, (a) the materials related to the institution itself, including the information on their respective ICP License and other relevant licenses and the materials related to certain management systems regarding the protection of personal information and cyber security, (b) the materials related to the training content, and (c) the materials related to the training personnel; and (iii) the competent provincial education regulatory authorities shall promulgate local implementing rules about the filing requirements, focusing on the training institutions, training content and training personnel.

The Online After-School Training Opinions further provides that the competent provincial education regulatory authorities shall, jointly with other provincial government authorities, review such filings and the qualification of the online after-school training institutions submitting such filings before the end of December 2019, focusing on the following matters: (i) the training content shall not include online games or other content or links irrelevant with the training, and shall not be beyond the relevant national school syllabus. No illegal publications may be published, printed, reproduced or distributed, and no infringement or piracy activities may be conducted during the training. And the training content and data shall be stored for more than one year, among which, the live streaming teaching videos shall be stored for more than 6 months; (ii) each class shall not last longer than 40 minutes and shall be taken at intervals of not less than 10 minutes, and the training time shall not conflict with the teaching time of primary and secondary schools. Each live-streaming class provided to students receiving compulsory education shall not end later than 9:00 p.m., and shall not leave homework for primary school students in Grade 1 and Grade 2. The online after-school training platforms shall have eye protection and parental supervision functions; (iii) the online after-school training institutions shall not hire any teacher who is currently working at primary or secondary schools. Training personnel of academic subjects are required to obtain necessary teacher qualification licenses. The online after-school training institutions’ training platforms and course interfaces shall publicize the names, photos and teacher qualification licenses of training personnel, and the learning, working and teaching experiences of foreign training personnel; (iv) with the consent of students and their respective parents, online after-school training institutions shall verify the identification information of each student, and shall not illegally sell or provide such information to third parties. User behavior logs must be kept for more than one year; (v) the charge items and standard and refund policy shall be specifically publicized on the training platforms. The prepaid fees can only be used for education and training purpose, and shall not be used for other investment activities; where fees are charged based on the number of classes, fees are not allowed to be collected in a lump sum for more than 60 class-hours, and where fees are charged based on the length of the course, the fees shall not be collected for a course length of more than three months; and (vi) the online after-school training institutions found to have problems after reviewing by the competent provincial education regulatory authorities shall complete the rectification before the end of June 2020, and will be subject to fines, regulatory order to suspend operations or other regulatory and disciplinary sanctions if they fail to complete the rectification in time. As of the date of annual report, we have completed the filing required.

On March 30, 2021, the MOE promulgated the Guiding Opinions of the Ministry of Education on Vigorously Promoting the Scientific Connection of Kindergartens and Primary Schools, which prohibits after-school tutoring institutions from providing training for pre-school children in violation of regulations and provides that after-school tutoring institutions in violation of regulations above shall be included in the blacklist.

On April 8, 2021, the General Office of the MOE enacted the Notice of Strengthening the Management of Homework for Compulsory Education, which requires that the local governments shall implement prohibition measures on leaving homework as an important part of the daily supervision on after-school tutoring institutions in accordance with relevant regulations, and in order to avoid reducing the burden in schools but increasing the burden after-school, after-school tutoring institutions shall not leave homework to primary and secondary school students.

On July 24, 2021, the General Office of State Council and the General Office of Central Committee of the Communist Party of China jointly promulgated the Alleviating Burden Opinion, which provides that, among other things, (i) local government authorities shall no longer approve new after-school tutoring institutions providing tutoring services on academic subjects for students in compulsory education, or the Academic AST Institutions, and the existing after-school tutoring institutions providing tutoring services on academic subjects shall be registered as non-profit; (ii) online Academic AST Institutions that have filed with the local education administration authorities providing tutoring services on academic subjects shall be subject to review and re-approval procedures by competent government authorities, and any failure to obtain such approval will result in the cancellation of its previous filing and ICP license; (iii) Academic AST Institutions are prohibited from raising funds by listing on stock markets or conducting any capitalization activities and listed companies are prohibited from investing in Academic AST Institutions through capital markets fund raising activities, or acquiring assets of Academic AST Institutions by paying cash or issuing securities; and (iv) foreign capital is prohibited from controlling or participating in any Academic AST Institutions through mergers and acquisitions, entrusted operation, joining franchise or variable interest entities.

Any violation of the foregoing shall be rectified. Moreover, the Alleviating Burden Opinion specifies a series of operating requirements that after-school tutoring institutions must meet, including, among other things, (i) after-school tutoring institutions shall not provide tutoring services on academic subjects during national holidays, weekends and school breaks; (ii) for online tutoring, each session shall be no more than thirty minutes and the training shall end no later than 9:00 p.m.; (iii) no advertisements for after-school tutoring shall be published or broadcasted in the network platforms and billboards displayed in the mainstream media, new media, public place and residential areas; (iv) the provision of overseas education courses is strictly prohibited; (v) fees charged for academic subjects tutoring in compulsory education shall be included into government-guided price management, and excessive high fees and excessive profit-seeking behaviors will be suppressed; (vi) government authorities will implement risk management and control for the pre-collection of fees by after-school tutoring institutions with requirements such as setting up third-party custodians and risk reserves, and strengthen supervision over loans regarding tutoring services; (vii) online tutoring for preschool-age children is prohibited, and offline academic subjects (including foreign language) tutoring services for preschool-age children is also strictly prohibited; (viii) no more approval of new after-school tutoring institutions providing tutoring services on academic subjects for pre-school-age children and students on grade ten to twelve will be granted; and (ix) administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the relevant provisions of the Alleviating Burden Opinion.

On July 28, 2021, the General Office of MOE promulgated the Notice on Further Clarifying the Scope of Academic Subjects and Non-Academic Subjects of After-School Tutoring in the Compulsory Education, which specifies that according to the national curriculum on compulsory education, when after-school institutions carry out tutoring, morality and rule of law, Chinese, history, geography, mathematics, foreign language (including English, Japanese, Russian), physics, chemistry and biology are classified as academic subjects, while sports (or sports and health), art (or music, art), and comprehensive practical activities (including information technology education, labor and technology education) are classified as non-academic subjects.

Furthermore, on November 8, 2021, the General Office of MOE promulgated the Guidance of Identification of the Classification of Subjects of After-School ~~Tutoring~~ Tutoring in the Compulsory Education, or the Identification Guidance. It is provided as indicators of the identification of an academic ~~subject~~ subject that (i) the purpose of the tutoring is mainly to boost the grades of academic subjects and guided by academic knowledge and skill training; (ii) the content of the tutoring is mainly the academic subject knowledge of morality and rule of law, Chinese, history, geography, mathematics, foreign language (including English, Japanese, Russian), physics, chemistry and biology; (iii) the form of the tutoring primarily consists of lectures, demonstrations, interaction, or other ways of the teachers (including virtual persons, artificial intelligence, etc.), focusing on the explanation of academic knowledge, listening, speaking, reading, writing, arithmetic, and other academic subject skills trainings; and (iv) the result review of the tutoring is materially based on grades, outcomes of examinations or other factors, focusing on the selection of the students. The Identification Guidance establishes a classification guiding mechanism in which the lower education administration authorities shall consult with the higher education administration authorities to conduct further research before making any decision if a situation is in great controversy or difficult to classification. Local education administration authorities can form a panel of expert or commission a professional institution, when needed, to make opinions on the identification of tutoring program which the local education administration authorities are unable to determine directly.

On August 14, 2021, the Beijing Municipality Government and the Beijing Municipal Committee of the Communist Party of China jointly published the full text of the Beijing Municipality’s Measures to Further Reduce the Burden of Homework and After-School Tutoring on Students in Compulsory Education in Beijing, or the Beijing Measures, to implement the Alleviating Burden Opinion. The Beijing Measures provide, among others, that (i) no new Academic AST Institutions will be approved, while existing Academic AST Institutions will be subject to review and re-registration aimed at reducing their numbers by phases; the remaining Academic AST Institutions shall all be registered as non-profit; (ii) online Academic AST Institutions previously filed with the local education administration authorities will be subject to review and re-approval; the registration and ICP license of any disqualifying online Academic AST Institutions will be rescinded; (iii) after-school tutoring institutions are strictly prohibited from providing tutoring services on academic subjects during any national holiday, weekend, winter and summer break period; (iv) Academic AST Institutions are prohibited from (a) offering classes over contents outside of or in advance of the school curriculum, (b) offering classes based on any foreign curriculum, (c) soliciting and recruiting school teacher by offering excessive compensation, or (d) employing foreign personnel abroad to carry out training activities; non-Academic AST Institutions providers are prohibited from offering tutoring services on academic subjects; (v) prices for Academic AST Institutions will need to follow the guidelines from the government to prevent any excessive charging or excessive profit-seeking activity; (vi) Academic AST Institutions are prohibited from financing by way of listing its securities or conducting other capital market activities; listed companies may not invest in Academic AST Institutions through capital markets fundraising activities, and may not acquire assets of Academic AST Institutions by paying cash or issuing securities; foreign capital is prohibited from controlling or participating in Academic AST Institutions through merger and acquisitions, entrusted operations, joining franchise or using variable interest entities.

On August 25, 2021, the General Office of MOE issued the Administrative Measures for After-School Tutoring Materials for Primary and Secondary School Students (for Trial Implementation), which provide that, among others, (i) after-school tutoring materials for primary and secondary school students and staff preparing such tutoring materials shall meet certain requirements specified in such measures, which include, among others, tutoring materials shall follow the national curriculum standard and shall not provide contents in advance of the school curriculum; (ii) after-school tutoring institutions shall establish internal management system for the tutoring materials and the staff preparing such tutoring materials; (iii) after-school tutoring institutions shall conduct internal review of the tutoring materials and the local education administrations shall conduct external review of the tutoring materials; (iv) after-school tutoring institutions may only use tutoring materials that have been internally and externally reviewed or if the materials have been officially published; (v) after school tutoring institutions shall file with the relevant education administrations the tutoring materials and the staff preparing such materials; (vi) after-school tutoring institutions in violation of the measures will be subject to rectification and shall not use the relevant tutoring materials during the rectification period; if the after-school tutoring institution refuses to rectify within the time limit or if the violation is severe, its private school operating permit may be revoked by the local education administration.

On August 30, 2021, the MOE published on its official website that the MOE, together with two other government authorities, issued a circular requiring all Academic AST Institutions to complete registration as non-profit by the end of 2021, and all Academic AST Institutions shall, before completing such registration, suspend enrollment of students and charging fees.

On September 2, 2021, the NDRC, the MOE and the SAMR jointly promulgated a Circular on Strengthening the Supervision over Fees for After-School Tutoring on Academic Subjects in Compulsory Education Stage, which provides that fees charged for online and offline after-school tutoring on academic subjects in compulsory education are subject to government-guided prices determined by local education administrations. The circular further provides that by the end of June each year, after-school tutoring institutions shall file with the local education administration, ~~development~~ development and reform administration and market regulation administration the enrollment brochures, fee standards, teacher qualifications and other materials, along with incomes, costs, profits, related-party transactions and policy implementation information for the previous year.

On September 9, 2021, the General Office of MOE and the General Office of the Ministry of Human Resources and Social Welfare jointly issued the Administrative Measures for Practitioners of the After-School Tutoring Institutions (for Trial Implementation), which set out a series of requirements for the after-school tutoring institutions with respect to their employed teachers, research staff and teaching assistants of Chinese nationality. Recruitment and employment of non-Chinese nationals shall comply with relevant applicable regulations of China. After-school tutoring institutions in violation of such requirements will be subject to rectification. If an after-school tutoring institution violates the requirements several times or violates several requirements, such after-school tutoring institution is prohibited from enrollment of students and shall not conduct tutoring activities during the rectification period; and if the after-school tutoring institution refuses to rectify within the time limit or if the violation is severe, its private school operating permit may be revoked by the local education administration.

On September 10, 2021, the MOE and five other authorities jointly issued the Notice on Effectively Carrying out Change from Record-filing to Approval of Existing Online Curriculum-subject Tutoring Institutions, which specifies the review and re-approval procedures of online Academic AST Institutions that have filed with the local education administration authorities required under the Alleviating Burden Opinion.

On November 3, 2021, the SAMR and seven other authorities jointly issued the Notice on Advertisement Control of the After-School Tutoring, which prohibits online and offline after-school advertisements targeting primary and secondary school (including kindergarten) students, regardless of academic subjects or non-academic subjects of the tutoring.

On October 21, 2021, the MOE and six other authorities jointly issued the Notice on Enhancing the Regulation of the Pre-Payment of Fees Collected by After-School Tutoring Institutions, which requires the thorough utilization of the Form of Service Contract for After-school Training Provided to Primary and Secondary School Students and prohibits infringements of students’ legal rights and interests by means of standard terms. The Notice provides, among others, that (i) it is forbidden to induce parents of primary and secondary school students to use installment loans to pay for tuition fees; (ii) tuition fees collected by an after-school tutoring institution shall not be collected in a lump sum for more than 60 course sessions when charged based on the number of classes, or for a course length of more than three months when charged based on the length of the course; and (iii) an after-school tutoring institution shall set up an escrow bank account for pre-payment tuition fees it collects and the bank will provide escrow services without charging from the after-school tutoring institution and students.

Intellectual Properties

The SCNPC adopted the Copyright Law in 1990 and amended it in 2001, 2010 and 2020, respectively. The latest amended Copyright Law became effective from June 1, 2021. The Copyright Law extends copyright protection to Internet activities, products disseminated over the Internet and software products. In addition, there is a voluntary registration system administered by the China Copyright Protection Center. The Copyright Law also requires registration of a copyright pledge. To address the problem of copyright infringement related to the content posted or transmitted over the Internet, the National Copyright Administration and the MIIT jointly promulgated the Measures for Administrative Protection of Copyright Related to Internet on April 29, 2005. This measure became effective on May 30, 2005.

In order to further implement the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001, and most recently amended on January 30, 2013 and taking into effect on March 1, 2013, the State Copyright Bureau issued the Computer Software Copyright Registration Procedures on February 20, 2002, which applies to software copyright registration, license contract registration and transfer contract registration. The National Copyright Administration of the PRC shall be the competent authority for the nationwide administration of software copyright registration and the Copyright Protection Center of China or the CPCC, is designated as the software registration authority. The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which conforms to the provisions of both the Computer Software Copyright Registration Procedures and the Computer Software Protection Regulations (Revised in 2013).

Patents

The SCNPC adopted the Patent Law of the People’s Republic of China in 1984 and amended it in 1992, 2000, 2008 and 2020, respectively. A patentable invention, utility model or design must meet three conditions: novelty, inventiveness and practical applicability. Patents cannot be granted for scientific discoveries, rules and methods for intellectual activities, methods used to diagnose or treat diseases, animal and plant breeds or substances obtained by means of nuclear transformation. The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and approving patent applications. A patent is valid for a twenty-year term for an invention and a ten-year term for a utility model or design, starting from the application date. Except under certain specific circumstances provided by law, any third party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder.

Domain Name

Pursuant to the Administrative Measures for Internet Domain Names, which was promulgated by the Ministry of Industry and Information Technology of the PRC on August 24, 2017 and became effective on November 1, 2017, domain names are registered on a “first-come, first-served” basis. The domain names registered or used by an organization or individual shall not contain any contents prohibited by laws and administrative regulations. A domain name registration applicant shall provide the domain name registration service agency with truthful, accurate and complete identity information on the domain name holder.

Trademark

Trademarks are protected by the PRC Trademark Law which was adopted in 1982 and subsequently amended in 1993, 2001, 2013 and 2019 as well as the Implementation Regulation of the PRC Trademark Law adopted by the State Council in 2002 and amended in 2014. The Trademark Office under the SAIC handles trademark registrations and grants a term of ten years to registered trademarks which may be renewed for consecutive ten-year periods upon request by the trademark owner. Trademark license agreements must be filed with the Trademark Office for record. The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration. Where a trademark for which a registration has been made is identical or similar to another trademark which has already been registered or been subject to a preliminary examination and approval for use on the same kind of or similar commodities or services, the application for registration of such trademark may be rejected. Any person applying for the registration of a trademark may not prejudice the existing right first obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.

Foreign Currency Exchange

Pursuant to the Foreign Currency Administration Rules, as amended, and various regulations issued by SAFE and other relevant PRC government authorities, RMB is freely convertible to the extent of current account items, such as trade related receipts and payments, interest and dividends. Capital account items, such as direct equity investments, loans and repatriation of investment, unless expressly exempted by laws and regulations, still require prior approval from SAFE, its local counterparts or designated banks for conversion of RMB into a foreign currency, such as U.S. dollars, and remittance of the foreign currency outside of the PRC. Payments for transactions that take place within the PRC must be made in RMB. Foreign currency revenues received by PRC companies may be repatriated into China or retained outside of China in accordance with requirements and terms specified by SAFE.

Dividend Distribution

Pursuant the FIL, foreign investors may, according to the present law, freely remit into or out of China, in RMB or any other foreign currency, their capital contributions, profits, capital gains, income from asset disposal, intellectual property royalties, lawfully acquired compensation, indemnity or liquidation income and so on within the territory of China. In addition, pursuant to the Company Law of PRC, a foreign invested enterprise in China is required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until its cumulative total reserve funds reach 50% of its registered capital. These reserve funds, however, may not be distributed as cash dividends.

Foreign Exchange Registration of Overseas Investment by PRC Residents

SAFE Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or Circular 37, issued by SAFE and effective in July 4, 2014, regulates foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing and conduct round trip investment in China. Under Circular 37, a SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or entities for the purpose of seeking offshore financing or making offshore investment, using legitimate domestic or offshore assets or interests, while “round trip investment” refers to the direct investment in China by PRC residents or entities through SPVs, namely, establishing foreign-invested enterprises to obtain the ownership, control rights and management rights. Circular 37 requires that, before making contribution into an SPV, PRC residents or entities are required to complete foreign exchange registration with the SAFE or its local branch. SAFE Circular 37 further provides that option or share-based incentive tool holders of a non-listed SPV can exercise the options or share incentive tools to become a shareholder of such non-listed SPV, subject to registration with SAFE or its local branch.

PRC residents or entities who have contributed legitimate domestic or offshore interests or assets to SPVs but have yet to obtain SAFE registration before the implementation of Circular 37 shall register their ownership interests or control in such SPVs with SAFE or its local branch. An amendment to the registration is required if there is a material change in the SPV registered, such as any change of basic information (including change of such PRC residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions. Failure to comply with the registration procedures set forth in Circular 37, or making misrepresentation on or failure to disclose controllers of foreign-invested enterprise that is established through round-trip investment, may result in restrictions on the foreign exchange activities of the relevant foreign-invested enterprises, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations. On February 13, 2015, SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, which took effect on June 1, 2015 and partially abolished on December 30, 2019. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.

Loans to and Direct Investment in the PRC Entities by Offshore Holding Companies

We are permitted under PRC laws and regulations as an offshore holding company to provide funding to the PRC operating entities through loans or capital contributions, subject to satisfaction of applicable government registration, approval and filing requirements.

In the event of subsequent changes in the capital of the FIE such as increase in capital, such FIE shall complete change registration formalities with competent administrations for market regulation, and change reporting formalities with competent administrations for commerce in accordance with relevant regulations, and registration change formalities shall also be completed with the competent administration of foreign exchange according to the Provisions on Foreign Exchange Control on Direct Investments in China by Foreign Investors.

Pursuant to the Provisional Measures on Administration of Foreign Debt or the Foreign Debt Measures, issued by the State Development Planning Commission (now the NDRC), Ministry of Finance and SAFE on January 8, 2003 and became effective on March 1, 2003, any loans provided by us to PRC operating entities in foreign currencies shall be classified as foreign debt under the Foreign Debt Measures. According to the Foreign Debt Measures, the sum of cumulative accrued amounts of medium-term to long-term foreign loans and balance amounts of short-term foreign loans taken by a foreign investment enterprise shall be limited to the difference between the total project investment amount approved by the government and the amount of registered capital. Foreign investment enterprises may take foreign loans freely within the scope of difference.

On January 12, 2017, the PBOC issued the Notice of People’s Bank of China on Matters Concerning Macro-prudential Management on All-round Cross-border Financing or the No.9 Notice, which improved the policy framework of the cross-border financing. The No.9 Notice clarifies the new calculation methods of the upper limit of the risk-weighted balance for all types of cross-border financing, in particular, the upper limit for risk-weighted balance for cross-border financing equals to the capital or the net assets multiplied by the leverage rate of cross-border financing and the macro-prudential adjustment parameters. In the case of PRC operating entities, the capital or the net assets is calculated at the net assets of each subsidiary, the leverage rate for cross-border financing for an enterprise is 2, and the macro-prudential adjustment parameter is 1 (the “All-Round Mode”). On March 11, 2020, the PBOC and SAFE promulgated the Circular on Adjusting the Macro-prudential Regulation Parameter for Full-covered Cross-border Financing, which provides that based on the current macro economy and international balance of payments, the macro-prudential regulation parameter as set forth in the Notice 9 is updated from 1 to 1.25. On January 7, 2021, the PBOC and SAFE issued a new circular which adjusted the macro-prudential regulation parameter from 1.25 to 1. Currently, the implementation of the foregoing methodologies in cross-border financing have not been formally determined by the PBOC and the SAFE. In the practice, it is still uncertain whether FIEs shall apply the Investment Difference Mode or the All-round Mode. Based on the current registered capital and total project investment amount, if we would provide funding to PRC operating entities through loans and use the Investment Difference Mode, PRC operating entities will be required to increase its registered capital and total project investment amount. Alternatively, if we choose to use the All-Round Mode, the amount of loans we can make to PRC operating entities as calculated according to the foregoing macro-prudential regulation parameter will not be more than 2 times of the net assets of such entities.

Moreover, as the debtors of cross-border financing, the PRC operating entities are also required to comply with certain registration formalities for execution of foreign debt contracts with the foreign exchange bureau at the locality within fifteen working days after signing the contracts according to the Notice of State Administration of Foreign Exchange on Promulgation of the Administrative Measures on Registration of Foreign Debt which was promulgated by the SAFE on April 48, 2013 and revised in May 2015.

Pursuant to the Circular of the National Development and Reform Commission on Promoting the Administrative Reform of the Record-filing and Registration System for the Issuance of Foreign Debts by Enterprises promulgated on September 14, 2015, or the Circular 2044, before the issuance of foreign debts, enterprises shall first apply to the National Development and Reform Commission for the handling of the record-filing and registration procedures and shall report the information on the issuance to NDRC within 10 working days of completion of each issuance. The term “foreign debts” shall mean yuan-denominated or foreign currency-denominated debt instruments with a maturity of one year or above which are issued overseas by domestic enterprises and their controlled overseas enterprises or branches and for which the principal and interest are repaid as agreed, including bonds issued overseas and long- and medium-term international commercial loans, etc. In February 2020, the NDRC circulated the Guide to the Registration of Foreign Debt Issued by Enterprises on its official website, according to which, domestic companies (and their controlled overseas companies or branches) who borrowed from foreign companies (including overseas shareholders) for more than one year need to apply to the NPRC.

PRC Enterprise Income Tax

On January 1, 2008, the PRC Enterprise Income Tax Law, or PRC EIT Law, took effect. The PRC EIT Law applies a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where tax incentives are granted to special industries and projects. Enterprises qualified as “High and New Technology Enterprises” are entitled to a 15% enterprise income tax rate rather than the 25% uniform statutory tax rate. The preferential tax treatment continues as long as an enterprise can retain its “High and New Technology Enterprise” status. Under the PRC EIT Law and its implementation regulations, dividends generated from the business of a PRC subsidiary after January 1, 2008 and payable to its foreign investor may be subject to a withholding tax rate of 10% if the PRC tax authorities determine that the foreign investor is a non-resident enterprise, unless there is a tax treaty with China that provides for a preferential withholding tax rate. Distributions of earnings generated before January 1, 2008 are exempt from PRC withholding tax.

Under the PRC EIT Law, an enterprise established outside China with “de facto management bodies” within China is considered a “resident enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. A circular issued by the State Administration of Taxation in April 2009 regarding the standards used to classify certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese enterprise groups and established outside of China as “resident enterprises” clarified that dividends and other income paid by such PRC “resident enterprises” will be considered PRC-source income and subject to PRC withholding tax, currently at a rate of 10%, when paid to non-PRC enterprise shareholders. This circular also ~~subjects~~ subjects such PRC “resident enterprises” to various reporting requirements with the PRC tax authorities. Under the implementation ~~regulations~~ regulations to the PRC EIT Law, a “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise. In addition, the tax circular mentioned above specifies that certain PRC-invested overseas enterprises controlled by a Chinese enterprise or a Chinese enterprise group in the PRC will be classified as PRC resident enterprises if the following are located or resided in the PRC: (i) senior management personnel and departments that are responsible for daily production, operation and management; (ii) financial and personnel decision making bodies; (iii) key properties, accounting books, the company seal, and minutes of board meetings and shareholders’ meetings; and (iv) half or more of the senior management or directors who have the voting rights.

PRC Value-added Tax (“VAT”)

Pursuant to the Provisional Regulations on Business Tax which was promulgated by the State Council in December 1993 and revised in November 2008, organizations and individuals engaging in provision of labor services stipulated in these regulations, transfer of intangible assets or sale of immovables in China shall be taxpayers of business tax and shall pay business tax and the applicable business rate for service industry is 5%. The Provisional Regulations on Business Tax was abolished in November 2017. In accordance with Circular on Comprehensively Promoting the Pilot Program of the Collection of Value-added Tax in Lieu of Business Tax (Caishui [2016] No. 36), which was promulgated on March 23, 2016 and came into effect on May 1, 2016 and has been partially abolished, upon approval of the State Council, the pilot program of the collection of value-added tax (the “VAT”) in lieu of business tax shall be promoted nationwide in a comprehensive manner starting from May 1, 2016, and all business tax payers engaged in the building industry, the real estate industry, the financial industry and the life service industry shall be included in the scope of the pilot program with regard to payment of value-added tax instead of business tax. For educational service income, the application VAT tax rate is 6% unless otherwise provided by the circular.

According to Provisional Regulations on Value-added Tax of the PRC or the VAT Regulations, which was promulgated by the State Council on December 13, 1993, came into effect on January 1, 1994, and was amended on November 10, 2008, February 6, 2016 and November 19, 2017, and The Detailed Rules for the Implementation of the Provisional Regulations of the People’s Republic of China on Value-added Tax (Revised in 2011), which was promulgated by the Ministry of Finance and was last amended on October 28, 2011 and came into effect on November 1, 2011, organizations and individuals engaging in sale of goods or processing, repair and assembly services, sale of services, intangible assets, immovables and importation of goods in the PRC shall be taxpayers of VAT, and shall pay VAT pursuant to these Regulations. The amount of VAT payable is calculated as “output VAT” minus “input VAT.” Pursuant to the VAT Regulations, the rate of VAT is 17% for those engaging in the sale of goods or labor services or tangible personal property leasing services or importation of goods except as otherwise provided by the VAT Regulations. The tax rate of VAT is 11% for the sales of the service of transportation, posting, basic telecommunications, construction and leasing real estate, the sale of real estate and the transfer of land use right, or sell or import the goods listed in the VAT Regulations.

On April 4, 2018, MOF and SAT jointly promulgated the Circular of the Ministry of Finance and the State Administration of Taxation on Adjustment of Value-Added Tax Rates, or Circular 32, according to which for VAT taxable sales acts or importation of goods originally subject to value-added tax rates of 17% and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively. Circular 32 became effective on May 1, 2018 and shall supersede existing provisions which are inconsistent with Circular 32. On March 20, 2019, MOF, SAT and GAC jointly promulgated the Announcement on Policies for Deepening the VAT Reform, or Circular 39, according to which for general VAT payers’ sales activities or imports that are subject to VAT at an existing applicable rate of 16% or 10%, the applicable VAT rate is adjusted to 13% or 9% respectively. This Announcement came into force on April 1, 2019.

Dividend Withholding Tax

Pursuant to the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Tax on Income or the Double Tax Avoidance Arrangement, and other applicable mainland Chinese laws, if a Hong Kong resident enterprise is determined by the competent tax authority in mainland China to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5% upon receiving approval from in-charge tax authority. However, based on the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the Notice No. 81, issued on February 20, 2009 by the SAT, if the relevant Chinese tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such Chinese tax authorities may adjust the preferential tax treatment. Based on Notice of the State Administration of Taxation on How to Understand and Determine the “Beneficial Owners” in Tax Agreements, or the Notice No. 601, issued on October 27, 2009 by the SAT, conduit companies, which are established for the purpose of evading or reducing tax, or transferring or accumulating profits, shall not be recognized as beneficial owners and thus are not entitled to the above-mentioned reduced income tax rate of 5% under the Double Tax Avoidance Arrangement. On February 3, 2018, the SAT issued the Announcement of the State Administration of Taxation on Issues Relating to “Beneficial Owner” in Tax Treaties, or the Circular 9, which became effective on April 1, 2018 and the Notice 601 was repealed simultaneously. The Announcement of the State Administration of Taxation on Issues Relating to “Beneficial Owner” in Tax Treaties stipulates issues relating to determination of “beneficial owner” status in clauses of tax treaties on dividends, interest and royalties.

Accordingly, Edeshler HK may be able to benefit from the 5% withholding tax rate for the dividends it receives from Fengyuan Beijing, if it satisfies the conditions prescribed under the Notice No. 81 and other relevant tax rules and regulations. However, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.

Employment and Social Insurance

We are subject to laws and regulations governing our relationship with our employees, including wage and hour requirements, working and safety conditions, and social insurance, housing funds and other welfare. The compliance with these laws and regulations may require substantial resources.

Pursuant to the PRC Labor Law effective from January 1, 1995 (as amended on December 29, 2018) and the PRC Labor Contract Law effective as of January 1, 2008 (as amended on December 28, 2012), a written labor contract shall be executed by employer and an employee when the employment ~~relationship~~ relationship is established, and an employer is under an obligation to sign an unlimited-term labor contract with any employee who has worked for the employer for ten consecutive years. Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unlimited term, with certain exceptions. The employer must also pay severance to an employee in nearly all instances where a labor contract, including a contract with an unlimited term, is ~~terminated~~ terminated or expires. All employers must compensate their employees equal to at least the local minimum wage standards. All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and standards and provide employees with appropriate workplace safety training. In addition, the government has continued to introduce various new labor-related regulations after the Labor Contract Law. Among other things, new annual leave requirements mandate that annual leave ranging from 5 to 15 days is available to nearly all employees and further require that the employer compensate an employee for any annual leave days the employee is unable to take in the amount of three times his daily salary, subject to certain exceptions. Moreover, all PRC enterprises are generally required to implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard working time system is not appropriate due to the nature of the job or the characteristics of business operation, the enterprise may implement a flexible working time system or comprehensive working time system after obtaining approvals from the relevant authorities. In addition, employers in China are obliged to pay contributions to the social insurance plan and the housing fund plan for their employees, and such contribution amount payable shall be calculated based on the employee actual salary in accordance with the relevant regulations.

M&A Rules and Overseas Listing

The Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rule, were jointly adopted by six PRC regulatory authorities, including China Securities Regulatory Commission, or CSRC, on August 8, 2006 and became effective as of September 8, 2006, and were later amended on June 22, 2009. The M&A Rules require that a foreign investor is required to obtain necessary approvals when (1) a foreign investor acquires equity in a domestic non-foreign invested enterprise thereby converting it into a foreign-invested enterprise, or subscribes for new equity in a domestic enterprise via an increase of registered capital thereby converting it into a foreign-invested enterprise; or (2) a foreign investor establishes a foreign-invested enterprise which purchases and operates the assets of a domestic enterprise, or which purchases the assets of a domestic enterprise and injects those assets to establish a foreign-invested enterprise. According to Article 11 of the M&A Rules, where a domestic company or enterprise, or a domestic natural person, through an overseas company established or controlled by it/him/her, acquires a domestic company which is affiliated with it/him/her, an approval from the MOFCOM is required.

This M&A Rules purport to require, among other things, offshore SPVs, formed for listing purposes through acquisition of PRC domestic companies and controlled by PRC companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. We believe that CSRC approval is not required as we are not a special purpose vehicle formed for listing purpose through acquisition of domestic companies that are controlled by our PRC individual shareholders, as we acquired contractual control rather than equity interests in the VIE.

However, we cannot assure you that the relevant PRC government authority, including the CSRC, would reach the same conclusion as we do. If the CSRC or other PRC regulatory authority subsequently determines that we need to obtain the CSRC’s approval or if CSRC or any other PRC government authorities will promulgate any interpretation or implementing rules before the Share Exchange that would require CSRC or other governmental approvals for the Share Exchange, we may face sanctions by the CSRC or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines and penalties on the VIE’s operations in the PRC, limit VIE’s operating privileges in the PRC, delay or restrict the repatriation of the proceeds from any future offerings into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, and prospects, as well as the trading price of our shares.

Available Information

Our website address is https://www.zhuoxuncn.com/. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are filed with the SEC. Such reports and other information filed or furnished by us with the SEC are available on our website at https://www.zhuoxuncn.com/sec.html. However, we will make available, such reports and information filed or furnished by us with the SEC, by electronic copies free of charge upon request. In addition, while we are not required to provide an annual report our stockholders, our consolidated financial statements on our Annual Report on Form 10-K contains financial information that has been examined and reported on, with an opinion expressed by an independent public accountant, ~~WWC,~~GGF ~~P.C.~~CPA LTD, and are provided to to our stockholders free of charge upon request.

Information contained in, or accessible through, the websites referred to in this Annual Report on Form 10-K is not incorporated into this filing. Further, our references to website addresses are only as inactive textual references.

Item 1A. Risk Factors.

The following are factors that could have a significant impact on our operations and financial results and could cause actual results or outcomes to differ materially from those discussed in any forward-looking statements.

Risks Related to Our Business and Our Industry

~~Our~~We depend ~~onsite~~on ~~business~~the ~~could~~education beindustry ~~affected~~for ~~by the~~a ~~spread~~significant portion of ~~COVID-19~~our revenues.

IfOur revenues could seriously decrease if there iswere ~~new~~adverse ~~COVID~~developments in the education industry. Our near-19term ~~cases~~and long-term prospects ~~discovered~~depend ~~inside~~upon ~~the~~selling ~~mainland~~our ~~border,~~educational ~~the~~services. ~~PRC~~Our ~~government~~success ~~would~~is ~~impose~~highly ~~strict~~dependent ~~regulations~~on ~~about~~the ~~social~~sales ~~distancing~~and ormarketing ~~prohibitions~~expenditures onof ~~social~~our local distributors ~~gatherings,~~and ~~making~~our itability ~~very~~to ~~hard~~attract ~~for~~these usexpenditures. toSome ~~develop~~of ~~offline~~the ~~meetings~~adverse ~~and~~developments ~~courses.~~in the education industry that could affect our revenues would be:

~~However,~~● onA ~~the~~reduction ~~other~~in ~~hand, this~~sales ~~could~~and bemarketing aexpenditures ~~good opportunity for our online educational services. Because students are not allowed to go to school while there are still new cases~~ of ~~COVID-19, they have more time to study at home. Thus, there is a bigger possibility that they will use our online courses and other online~~ educational services.;

We● ~~depend~~Public onor private market initiatives or reforms designed to regulate the ~~education~~manner ~~industry~~in ~~for a~~which ~~significant~~educational ~~portion~~enterprises ofpromote ~~our~~their ~~revenues.~~products;

~~Our~~● ~~revenues~~Regulatory ~~could~~or ~~seriously decrease~~legislative ~~if there were adverse~~ developments inthat ~~the~~discourage ~~education~~or ~~industry.~~prohibit ~~Our~~private ~~near-term~~enterprises’ ~~and~~activities ~~long-term~~in ~~prospects depend upon selling our~~ educational ~~services.~~ ~~Our success is highly dependent on the sales and marketing expenditures of our local distributors and our ability to attract these expenditures. Some of the adverse developments in the education~~ industry ~~that could affect our revenues would be:~~;

● A ~~reduction~~decrease in ~~sales~~the ~~and~~number ~~marketing~~of ~~expenditures~~new ofcourses ~~educational~~being ~~services~~developed; or

● ~~Public~~The oradoption ~~private~~of ~~market~~current ~~initiatives~~legislative orand ~~reforms~~regulatory ~~designed~~proposals to ~~regulate~~control ~~the manner in which~~ educational ~~enterprises~~costs ~~promote~~for ~~their products;~~families.

~~● Regulatory or legislative developments that discourage or prohibit private enterprises’ activities in educational industry;~~31

●We face Aintense ~~decrease~~competition infrom ~~the~~education ~~number~~and oftraining ~~new~~services ~~courses~~companies, ~~being~~and, ~~developed;~~if orwe are unable to compete effectively, we may lose customers and our revenues may decline.

● The market ~~adoption~~for educational services is highly competitive and we expect competition to persist and intensify. We believe that the principal competitive factors in our markets are industry expertise, breadth and depth of ~~current~~service ~~legislative~~offerings, quality of the services offered, reputation and ~~regulatory~~track ~~proposals~~record, marketing and selling skills, scalability of infrastructure and price. In addition, the trend towards offshore outsourcing, international expansion by foreign and domestic competitors and continuing technological changes will result in new and different competitors entering our markets. Our ability to compete also depends in part on a number of factors beyond our control, ~~educational~~including ~~costs~~the ~~for~~ability ~~families~~of our competitors to recruit, train, develop and retain highly skilled professionals, the price at which our competitors offer comparable services and our competitors’ responsiveness to client needs. Therefore, we cannot assure you that we will be able to retain our customers while competing against such competitors. Increased competition, our inability to compete successfully against competitors, pricing pressures or loss of market share could harm our business, financial condition and results of operations.

31Our success depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if we lose their services.

WeOur future ~~face~~success ~~intense~~heavily ~~competition~~depends ~~from~~upon ~~education~~the continued services of our senior executives and other key employees. If one or more of our senior executives or key employees are unable or unwilling to continue in their present positions, it could disrupt our business operations, and ~~training~~we ~~services~~may ~~companies~~not be able to replace them easily or at all. In addition, competition for senior executives and key personnel in our industry is intense, ifand we ~~are~~may be unable to ~~compete~~retain ~~effectively~~our senior executives and key personnel or attract and retain new senior executive and key personnel in the future, in which case our business may be severely disrupted, and our financial condition and results of operations may be materially and adversely affected. If any of our senior executives or key personnel joins a competitor or forms a competing company, we may lose customers, suppliers, know-how and key professionals and staff members to them. Also, if any of our ~~revenues~~distributors, who generally keep a close relationship with our customers, joins a competitor or forms a competing company, we may ~~decline~~lose customers, and our revenues may be materially and adversely affected.

~~The~~Additionally, there ~~market~~could ~~for~~be ~~educational services~~unauthorized isdisclosure ~~highly~~or ~~competitive~~use ~~and~~of weour ~~expect~~technical ~~competition~~knowledge, topractices ~~persist~~or ~~and~~procedures ~~intensify~~by such personnel. WeMost ~~believe~~of our executives and key personnel have entered into employment agreements with us that ~~the~~contain ~~principal~~non-competition ~~competitive~~provisions, ~~factors~~non-solicitation inand nondisclosure covenants. However, if any dispute arises between our ~~markets~~executive ~~are~~officers ~~industry~~and ~~expertise~~key personnel and us, ~~breadth~~such non-competition, non-solicitation and ~~depth~~our offuture ~~service~~success ~~offerings,~~heavily ~~quality~~depends ofupon the continued services ~~offered,~~of ~~reputation~~our senior executives and ~~track~~other ~~record,~~key employees. If one or more of ~~marketing~~our ~~and~~senior ~~selling~~executives ~~skills~~or key employees are unable or unwilling to continue in their present positions, ~~scalability~~it ofcould ~~infrastructure~~disrupt our business operations, and ~~price~~we may not be able to replace them easily or at all. In addition, ~~the~~competition ~~trend~~for ~~towards~~senior ~~offshore~~executives ~~outsourcing,~~and ~~international~~key personnel ~~expansion~~in byour ~~foreign~~industry is intense, and ~~domestic~~we ~~competitors~~may be unable to retain our senior executives and ~~continuing~~key ~~technological~~personnel ~~changes~~or ~~will~~attract ~~result~~and inretain new senior executive and ~~different~~key ~~competitors~~personnel ~~entering our~~in ~~markets.~~the ~~Our~~future, ~~ability~~in towhich ~~compete~~case ~~also~~our ~~depends~~business inmay ~~part~~be onseverely adisrupted, ~~number~~and our financial condition and results of ~~factors~~operations may ~~beyond~~be ~~our~~materially ~~control,~~and ~~including~~adversely ~~the~~affected. ~~ability~~If any of our ~~competitors~~senior executives or key personnel joins a competitor or forms a competing company, towe ~~recruit~~may lose customers, ~~train~~suppliers, ~~develop~~know-how and ~~retain~~key ~~highly~~professionals ~~skilled~~and ~~professionals,~~staff ~~the~~members ~~price~~to atthem. ~~which~~Also, if any of our ~~competitors~~business ~~offer~~development managers, ~~comparable~~who ~~services~~generally ~~and~~keep a close relationship with our ~~competitors’~~ ~~responsiveness~~customers, tojoins ~~client~~a ~~needs.~~competitor ~~Therefore~~or forms a competing company, we ~~cannot~~may ~~assure~~lose ~~you~~customers, and ~~that~~our werevenues ~~will~~may be ~~able~~materially toand ~~retain~~adversely ~~our~~affected. ~~customers~~Additionally, ~~while~~there could be unauthorized disclosure or use of our technical ~~competing~~knowledge, ~~against~~practices or procedures by such ~~competitors~~personnel. ~~Increased~~Most of our executives and key personnel have entered into employment agreements with us that contain non-competition provisions, non-solicitation and nondisclosure covenants. However, if any dispute arises between our ~~inability~~executive toofficers ~~compete~~and ~~successfully~~key ~~against~~personnel ~~competitors~~and us, ~~pricing~~such ~~pressures or~~non-competition, ~~loss~~non-solicitation ofand ~~market~~non-disclosure ~~share~~provisions ~~could~~might ~~harm~~not ~~our~~provide effective ~~business~~protection to us, ~~financial~~especially ~~condition~~in China, where most of these executive officers and ~~results~~key employees reside, in light of ~~operations~~the uncertainties with China’s legal system.

~~Our success depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if we lose their services.~~32

~~Our future success heavily depends upon the continued services of our senior executives and other key employees.~~ If ~~one or more of our senior executives or key employees~~ ~~are~~we ~~unable~~fail ~~or unwilling~~ to ~~continue~~provide inhigh-quality ~~their~~and ~~present~~reliable ~~positions~~content, ~~it could disrupt our business operations, and~~ we may not be able to ~~replace them easily or at all. In addition, competition for senior executives and key personnel in our industry is intense, and we may be unable to retain our senior executives and key personnel or~~ attract and retain ~~new~~users senior executive and key personnel in the future, in which case our business may be severely disrupted, and our financial condition and results of operations may be materially and adversely affected. If any of our senior executives or key personnel joins a competitor or forms a competing company, we may lose customers, suppliers, know-how and key professionals and staff members to ~~them.~~remain Also, if any of our distributors, who generally keep a close relationship with our customers, joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially and adversely affectedcompetitive.

~~Additionally, there could~~Our besuccess ~~unauthorized~~depends ~~disclosure~~on ~~or use of~~ our ~~technical~~ability ~~knowledge,~~to ~~practices~~maintain orand ~~procedures~~grow byuser ~~such~~engagement ~~personnel.~~on ~~Most of~~ our ~~executives and key personnel have entered into employment agreements with us that contain non-competition provisions, non-solicitation and nondisclosure covenants~~platform. ~~However,~~To ifattract ~~any dispute arises between our executive officers~~ and ~~key~~retain ~~personnel~~users and ~~us,~~compete ~~such non-competition, non-solicitation~~against ~~and~~ our ~~future~~competitors, ~~success~~we ~~heavily~~must ~~depends~~continue ~~upon~~to ~~the~~offer ~~continued~~high-quality ~~services of our senior executives~~ and ~~other~~reliable ~~key~~content ~~employees. If one or more of our senior executives or key employees are unable or unwilling~~ to ~~continue~~provide ~~in their present positions, it could disrupt~~ our ~~business~~users ~~operations, and~~with wea ~~may~~superior ~~not~~educational ~~be able to replace them easily or at all~~experience. To Inthis ~~addition~~end, ~~competition for senior executives and key personnel in our industry is intense, and~~ we ~~may~~must becontinue ~~unable~~ to ~~retain~~produce ~~our~~original ~~senior~~content ~~executives~~ and ~~key~~source ~~personnel~~new orprofessional ~~attract~~ and ~~retain~~user-generated ~~new~~content. ~~senior~~Given ~~executive~~that ~~and~~we ~~key~~operate ~~personnel~~ in ~~the~~a ~~future,~~rapidly inevolving ~~which~~industry, ~~case~~we ~~our~~need ~~business~~to ~~may~~anticipate beindustry ~~severely~~changes ~~disrupted,~~ and ~~our~~respond ~~financial~~to ~~condition~~such ~~and~~changes ~~results~~timely ~~of operations may be materially~~ and ~~adversely affected~~effectively. If ~~any~~we ~~of our senior executives or key personnel joins a competitor or forms a competing company,~~fail weto ~~may~~continue ~~lose~~to ~~customers,~~offer ~~suppliers, know~~high-~~how~~quality and ~~key~~reliable ~~professionals~~content ~~and staff members~~ to ~~them. Also, if any of~~ our ~~business development managers~~users, ~~who~~ ~~generally keep a close relationship with our customers, joins a competitor or forms a competing company,~~ we may ~~lose~~suffer ~~customers,~~from ~~and our~~reduced ~~revenues~~user ~~may~~traffic ~~be materially~~ and ~~adversely affected. Additionally~~engagement, ~~there could be unauthorized disclosure or use of our technical knowledge, practices or procedures by such personnel. Most of our executives~~ and ~~key personnel have entered into employment agreements with us that contain non-competition provisions, non-solicitation and nondisclosure covenants. However, if any dispute arises between~~ our ~~executive~~ ~~officers and key personnel and us~~business, ~~such~~financial ~~non-competition,~~condition ~~non-solicitation~~ and ~~non-disclosure~~results ~~provisions might not provide effective protection to us, especially in China, where most~~ of ~~these~~operations ~~executive~~may ~~officers~~be materially and ~~key~~adversely ~~employees reside, in light of the uncertainties with China’s legal system~~affected.

32In addition to content generated by our users and content partners, we rely on our research and development team to create original content and to edit, manage, and supervise the original content origination and production process, and we intend to continue to invest resources in content production. We face competition for qualified personnel in a limited pool of high-quality creative talent. If we are not able to compete effectively for talents or attract and retain top talents at reasonable costs, our original content production capabilities would be negatively impacted. Any deterioration in our in-house content production capability, inability to attract creative talents at reasonable costs or losses in personnel may materially and adversely affect our business and operating results.

IfWe expect wecompetition ~~fail~~ to ~~provide~~increase ~~high-quality~~significantly ~~and~~in ~~reliable content,~~the wefuture ~~may~~which ~~not~~could bereduce ~~able~~our torevenues, ~~attract~~potential profits and ~~retain~~overall ~~users~~market ~~to remain competitive~~share.

~~Our success depends on our~~The ~~ability~~market tofor ~~maintain~~traditional and ~~grow~~online ~~user~~education ~~engagement~~is ~~on our platform~~competitive. ToBarriers ~~attract~~to ~~and~~entry ~~retain~~on ~~users~~the ~~and~~Internet ~~compete~~are ~~against~~relatively ~~our competitors~~low, ~~we must continue to offer high-quality~~ and ~~reliable~~we ~~content~~expect competition to ~~provide~~increase ~~our~~significantly ~~users~~in ~~with~~the ~~a superior educational experience~~future. ToWe ~~this~~face ~~end,~~competitive wepressures ~~must continue~~from tocertain ~~produce~~actual ~~original content~~ and ~~source~~potential ~~new~~competitors, ~~professional~~both onsite and online, ~~user-generated~~many ~~content.~~of ~~Given~~which ~~that~~have welonger ~~operate~~operating ~~in a rapidly evolving industry~~histories, wegreater ~~need~~brand toname ~~anticipate~~recognition, ~~industry~~larger ~~changes~~user bases and ~~respond~~significantly togreater ~~such~~financial, technical ~~changes timely~~ and ~~effectively.~~marketing Ifresources than we ~~fail~~do. toWe ~~continue~~cannot toassure ~~offer~~you ~~high-quality and~~that ~~reliable~~educational ~~content~~services tomaintained by our ~~users,~~existing ~~we may suffer from reduced user traffic~~ and ~~engagement,~~potential competitors ~~and~~will ~~our~~not ~~business,~~be ~~financial~~perceived ~~condition~~by ~~and~~the ~~results of~~education ~~operations~~community ~~may~~as bebeing ~~materially~~superior ~~and~~to ~~adversely affected~~ours.

~~In addition to content generated~~We bymay ~~our~~be ~~users~~subject ~~and~~to ~~content~~various ~~partners~~approvals, ~~we rely on our research and development team to create original content and to edit~~licenses, ~~manage~~permits, ~~and~~ ~~supervise~~registrations ~~the original content origination~~ and ~~production~~filings ~~process,~~for ~~and~~our weeducation ~~intend~~services toin ~~continue~~the toPRC ~~invest resources~~ in ~~content~~the ~~production.~~future Weif ~~face~~our ~~competition~~interpretation ~~for~~and ~~qualified~~understanding ~~personnel in a limited pool~~ of ~~high-quality~~the ~~creative~~laws ~~talent.~~and Ifregulations we are ~~not~~incorrect ~~able to compete effectively for talents~~ or ~~attract~~the ~~and~~laws retain top talents at reasonable costs, our original content production capabilities would be negatively impacted. Any deterioration in our in-house content production capability, inability to attract creative talents at reasonable costs or ~~losses~~ inregulations ~~personnel~~change ~~may materially and adversely affect our business and operating results~~significantly.

WePursuant to ~~expect~~PRC ~~competition~~law, to ~~increase~~establish ~~significantly~~and operate a school, it requires a private school operation permit from the local education bureau and registration inwith the ~~future~~local ~~which~~civil ~~could~~affairs ~~reduce~~bureau ~~our~~to ~~revenues~~obtain a certificate of registration for a privately operated non-enterprise entity for not-for-profit private schools, ~~potential~~or ~~profits~~registration with the local administration for industry and ~~overall~~commerce ~~market~~for ~~share~~for-profit private schools. However, Zhuoxun Beijing’s activities qualify as cultural communication or education consulting under PRC law, and does not qualify as private education under the PRC Education Law and relevant regulations, and therefore we believe it is not required to make such filings or obtain such permits with the education or human resources and social security regulators in PRC.

~~The~~However, given ~~market~~the ~~for~~significant ~~traditional and~~amount ~~online~~of ~~education~~discretion isthe ~~competitive.~~local ~~Barriers~~PRC toauthorities ~~entry~~may onhave ~~the~~in ~~Internet~~interpreting, ~~are~~implementing ~~relatively~~and ~~low~~enforcing relevant rules and regulations, as well as other factors beyond our control, if our interpretation and weunderstanding ~~expect~~of ~~competition~~the tolaws ~~increase~~and ~~significantly~~regulations are inincorrect or the ~~future.~~laws Weor ~~face~~regulations ~~competitive~~change ~~pressures~~significantly, ~~from~~we ~~certain~~may ~~actual~~be required to obtain and ~~potential~~maintain ~~competitors~~various approvals, ~~both~~licenses ~~onsite~~and permits and ~~online,~~to ~~many~~fulfill ofregistration ~~which~~and ~~have longer~~filing ~~operating~~requirements ~~histories,~~in ~~greater~~order ~~brand~~to ~~name~~conduct ~~recognition,~~our ~~larger~~business. ~~user~~While ~~bases~~we intend to use our best efforts to obtain all requisite permits and ~~significantly~~complete ~~greater~~all ~~financial~~necessary filings, ~~technical~~renewals and ~~marketing resources~~registrations ~~than~~on a timely basis if we are required to do. Weso in the future, we cannot assure you that ~~educational~~we ~~services~~will ~~maintained~~be byable ~~our~~to ~~existing~~obtain ~~and~~all ~~potential~~required ~~competitors~~permits. ~~will~~If ~~not~~we fail to receive any required permit, if applicable, in a timely manner or obtain or renew any permits and certificates, we may be subject to fines, confiscation of the gains ~~perceived~~derived from our noncompliant operations, suspension of our non-compliant operations, compensation payments for any economic loss suffered by ~~the~~our ~~education~~students ~~community~~or asother ~~being~~relevant ~~superior~~parties, towhich ~~ours~~may materially and adversely affect our business, financial condition and results of operations.

We may be subject to various approvals, licenses, permits, registrations and filings for our education services in the PRC in the future if our interpretation and understanding of the laws and regulations are incorrect or the laws or regulations change significantly.33

~~Pursuant~~We may tobe ~~PRC~~unable ~~law,~~ to ~~establish and~~adequately ~~operate~~develop aour ~~school~~systems, itprocesses ~~requires a private school operation permit from the local education bureau~~ and ~~registration~~support ~~with~~in ~~the local civil affairs bureau to obtain~~ a ~~certificate~~manner ofthat ~~registration~~will ~~for~~enable aus ~~privately~~to ~~operated~~meet ~~non-enterprise entity for not-for-profit private schools, or registration with~~ the ~~local~~demand ~~administration~~ for ~~industry~~our ~~and commerce for for-profit private schools~~services. However, Zhuoxun Beijing’s activities qualify as cultural communication or education consulting under PRC law, and does not qualify as private education under the PRC Education Law and relevant regulations, and therefore we believe it is not required to make such filings or obtain such permits with the education or human resources and social security regulators in PRC.

~~However, given the significant~~We ~~amount of discretion the local PRC authorities may~~ have ininitiated ~~interpreting, implementing and enforcing relevant rules and regulations, as well as other factors beyond~~ our ~~control,~~online ifoperations ~~our~~in ~~interpretation~~the ~~and~~recent ~~understanding~~several ofyears ~~the laws~~ and ~~regulations~~ are ~~incorrect~~developing orour ~~the~~ability ~~laws or regulations change significantly, we may be required~~ to ~~obtain~~provide ~~and~~our ~~maintain~~courses ~~various approvals, licenses~~ and ~~permits and to fulfill~~education ~~registration~~systems ~~and~~on ~~filing~~a ~~requirements~~transactional inbasis ~~order~~over tothe ~~conduct our business~~Internet. ~~While~~Our wefuture ~~intend~~success towill ~~use~~depend on our ~~best~~ability ~~efforts~~ to ~~obtain~~develop ~~all~~the ~~requisite~~infrastructure effectively, ~~permits~~including ~~and~~additional ~~complete~~hardware ~~all~~and ~~necessary filings~~software, ~~renewals~~ and ~~registrations~~implement onthe aservices, ~~timely~~including ~~basis~~customer ifsupport, wenecessary ~~are required~~ to domeet ~~so in~~ the ~~future,~~demand wefor ~~cannot~~our ~~assure~~services. ~~you~~In ~~that~~the weevent ~~will be able to obtain all required permits. If~~ we ~~fail~~are tonot ~~receive~~successful ~~any required permit, if applicable,~~ in ~~a timely~~developing ~~manner~~the ornecessary ~~obtain~~systems ~~or renew any permits~~ and ~~certificates,~~implementing ~~we may be subject to fines, confiscation of~~ the ~~gains~~necessary ~~derived~~services ~~from~~on ~~our noncompliant~~a ~~operations~~timely basis, ~~suspension of~~ our ~~non-compliant~~revenues ~~operations,~~could ~~compensation~~be ~~payments~~adversely ~~for any economic loss suffered by our students or other relevant parties~~affected, which ~~may~~would ~~materially~~have ~~and~~a ~~adversely~~material ~~affect~~adverse ~~our~~effect ~~business,~~on our financial condition ~~and results of operations~~.

33We may lose business if we are unable to keep up with rapid technological or other changes.

WeIf we are unable to keep up with changing technology and other factors related to our market, we may be unable to ~~adequately~~attract ~~develop~~and retain users and advertisers, which would reduce our revenues. The markets in which we compete are characterized by rapidly changing technology, evolving ~~systems~~technological standards in the industry, ~~processes~~frequent new service and ~~support~~product inannouncements aand ~~manner~~changing ~~that~~consumer demands. Our future success will ~~enable~~depend uson our ability to ~~meet~~adapt to these changes and to continuously improve the ~~demand~~performance, ~~for~~features and reliability of our service in response to competitive services and product offerings and the evolving demands of the marketplace. In addition, the widespread adoption of new Internet, networking or telecommunications technologies or other technological changes could require us to incur substantial expenditures to modify or adapt our services or infrastructure, which might impact our ability to become or remain profitable.

~~We have initiated our online~~The ~~operations~~growth ~~in the recent several years~~ and ~~are~~success ~~developing~~of our ~~ability~~business todepends ~~provide our courses and education systems~~ on ~~a transactional basis over the Internet. Our future success will depend on~~ our ability to ~~develop~~anticipate ~~the~~and ~~infrastructure~~develop ~~effectively,~~new ~~including~~services ~~additional hardware~~ and ~~software,~~enhance ~~and~~existing ~~implement the~~ services, ~~including~~in ~~customer support, necessary~~ order to ~~meet~~keep ~~the~~pace ~~demand~~with ~~for~~rapid ~~our~~changes ~~services. In the event we are not successful~~ in ~~developing~~technology ~~the necessary systems~~ and ~~implementing~~in the ~~necessary~~industries ~~services~~we onfocus ~~a timely basis, our revenues could be adversely affected, which would have a material adverse effect~~ on ~~our financial condition~~.

The market for our services is characterized by rapid technological change, evolving industry standards, changing client preferences and new product and service introductions. Our future growth and success depend significantly on our ability to anticipate developments in educational services, and develop and offer new product and service lines to meet our customers’ and end-users’ evolving needs. We may ~~lose~~not ~~business~~be successful in anticipating or responding to these developments in a timely manner, or if we ~~are~~do respond, the services or technologies we develop may not be successful in the marketplace. The development of some of the services and technologies may involve significant upfront investments and the failure of these services and technologies may result in our being unable to recover these investments, ~~keep~~in uppart ~~with~~or ~~rapid~~in ~~technological~~full. Further, services or ~~other~~technologies ~~changes~~that are developed by our competitors may render our services uncompetitive or obsolete. In addition, new technologies may be developed that allow our customers to more cost-effectively perform the services that we provide, thereby reducing demand for our services. Should we fail to adapt to the rapidly changing educational services market or if we fail to develop suitable services to meet the evolving and increasingly sophisticated requirements of our customers in a timely manner, our business and results of operations could be materially and adversely affected.

If ~~we are unable to keep up~~ ~~with changing technology and other factors related to our market,~~ we ~~may~~do benot ~~unable~~succeed ~~to attract and retain users and advertisers, which would reduce our revenues. The markets~~ in ~~which~~attracting ~~we compete are characterized by rapidly changing technology, evolving technological standards in the industry, frequent~~ new ~~service~~customers ~~and~~for ~~product announcements and changing consumer demands. Our future success will depend on~~ our ~~ability to~~services ~~adapt~~or togrowing ~~these~~revenues ~~changes~~from ~~and~~existing ~~to continuously improve the performance~~customers, ~~features~~we ~~and~~may ~~reliability~~not ofachieve our ~~service in response to competitive~~revenue ~~services~~growth ~~and product offerings and the evolving demands of the marketplace~~goals. In addition, the widespread adoption of new Internet, networking or telecommunications technologies or other technological changes could require us to incur substantial expenditures to modify or adapt our services or infrastructure, which might impact our ability to become or remain profitable.

~~The~~We plan to significantly expand the number of customers we serve to diversify our client base and grow our revenues. Obtaining new customers is important for us to achieve rapid revenue growth. We also plan to grow revenues from our existing customers by identifying and ~~success~~selling additional ofservices to them. Our ability to attract new customers, as well as our ~~business~~ability to grow revenues from existing customers, depends on a number of factors, including our ability to ~~anticipate~~offer high quality services at competitive prices, the strength of our competitors and the ~~develop~~capabilities ~~new~~of ~~services~~our sales and ~~enhance~~marketing ~~existing~~teams. ~~services~~If inwe ~~order~~are not able to ~~keep~~continue ~~pace~~to ~~with~~attract ~~rapid~~new ~~changes~~customers inor ~~technology~~to grow revenues from our ~~and~~existing customers in the ~~industries~~future, we ~~focus~~may onnot be able to grow our revenues as quickly as we anticipate or at all.

The market for our services is characterized by rapid technological change, evolving industry standards, changing client preferences and new product and service introductions. Our future growth and success depend significantly on our ability to anticipate developments in educational services, and develop and offer new product and service lines to meet our customers’ and end-users’ evolving needs. We may not be successful in anticipating or responding to these developments in a timely manner, or if we do respond, the services or technologies we develop may not be successful in the marketplace. The development of some of the services and technologies may involve significant upfront investments and the failure of these services and technologies may result in our being unable to recover these investments, in part or in full. Further, services or technologies that are developed by our competitors may render our services uncompetitive or obsolete. In addition, new technologies may be developed that allow our customers to more cost-effectively perform the services that we provide, thereby reducing demand for our services. Should we fail to adapt to the rapidly changing educational services market or if we fail to develop suitable services to meet the evolving and increasingly sophisticated requirements of our customers in a timely manner, our business and results of operations could be materially and adversely affected.34

IfAs wea doresult ~~not~~of ~~succeed~~significant changes in ~~attracting~~our business ~~new~~model ~~customers for~~and focus, evaluating our ~~services~~business orand ~~growing~~prospects ~~revenues~~may ~~from~~be ~~existing~~difficult ~~customers,~~and weour past results may not ~~achieve~~be ~~our~~indicative ~~revenue~~of ~~growth~~our ~~goals~~future performance.

WeOur ~~plan~~future success depends on our ability to significantly ~~expand the~~increase ~~number~~revenue ofand ~~customers~~maintain weprofitability ~~serve~~from toour ~~diversify~~operations. ~~our~~Our ~~client~~business ~~base~~has ~~and~~grown ~~grow~~significantly before ~~our~~COVID-19 ~~revenues.~~but ~~Obtaining~~we ~~new~~had ~~customers~~to isadapt ~~important~~and ~~for~~evolve usdue to ~~achieve rapid~~the ~~revenue~~macroeconomic ~~growth.~~and Weindustrial ~~also~~changes ~~plan~~in torecent ~~grow~~years, ~~revenues~~which ~~from~~had ~~our~~resulted ~~existing~~in significant ~~customers~~change byin ~~identifying~~our business and ~~selling~~focus. ~~additional~~As ~~services~~we toshift ~~them. Our~~our ~~ability~~focus, todiversify ~~attract~~our ~~new~~revenue ~~customers~~base, asor ~~well~~explore asnew business segments, our historical ~~ability~~performance tomay ~~grow~~not ~~revenues~~be ~~from~~indicative ~~existing~~of ~~customers,~~our ~~depends~~current onbusiness, and a ~~number~~period-to-period comparison of ~~factors,~~our historical operating results ~~including~~may ~~our~~not ~~ability~~be meaningful. We may not be able to ~~offer~~achieve ~~high~~a ~~quality~~similar ~~services~~growth atrate ~~competitive~~or ~~prices~~maintain profitability in future periods. Therefore, ~~the~~you should ~~strength~~not ofrely on our ~~competitors~~past ~~and~~results ~~the~~as ~~capabilities~~an indication of our ~~sales~~ ~~and~~future ~~marketing teams~~performance. IfYou weshould ~~are~~consider ~~not~~our ~~able~~future toprospects ~~continue~~in tolight ~~attract~~of ~~new~~the risks ~~customers~~and orchallenges encountered by a company seeking to grow ~~revenues~~and ~~from~~expand ~~our~~in ~~existing~~a ~~customers~~competitive ~~in the~~industry ~~future,~~that weis ~~may~~characterized ~~not~~by berapid ~~able~~technological change, toevolving ~~grow~~industry ~~our~~standards, ~~revenues~~changing asclient ~~quickly~~preferences asand wenew ~~anticipate~~product orand atservice ~~all~~introductions. These risks and challenges include, among others:

34● The uncertainties associated with our ability to continue our growth and maintain profitability;

As● aPreserving ~~result of~~ our ~~significant~~ ~~recent~~competitive ~~growth,~~position ~~evaluating~~in ~~our~~the ~~business~~educational ~~and~~industry ~~prospects~~in ~~may be difficult and our past results may not be indicative of our future performance.~~China;

~~Our~~● ~~future~~Offering ~~success~~consistent ~~depends on our ability to significantly increase revenue~~ and maintain profitability from our operations. Our business has grown and evolved significantly in recent years. Our growth in recent years makes it difficult to evaluate our historical performance and make a periodhigh-~~to-period~~quality ~~comparison of~~educational ~~our~~services ~~historical operating results less meaningful. We may not be able~~ to ~~achieve~~retain a similar growth rate or maintain profitability in future periods. Therefore, you should not rely on our past results or our historic rate of growth as an indication of our future performance. You should consider our future prospects in light of the risks and ~~challenges~~attract encountered by a company seeking to grow and expand in a competitive industry that is characterized by rapid technological change, evolving industry standards, changing client preferences and new product and service introductions. These risks and challenges include, among others:customers;

● ~~The~~Implementing ~~uncertainties~~our ~~associated~~strategy ~~with~~and ~~our~~modifying ~~ability~~it from it from time to ~~continue~~time ~~our~~to ~~growth~~respond effectively to competition and ~~maintain~~changes ~~profitability~~in client preferences;

● ~~Preserving~~Managing our ~~competitive~~expanding ~~position~~operations inand ~~the~~successfully ~~educational~~expanding ~~industry~~our insolution ~~China~~and service offerings;

● ~~Offering~~Responding ~~consistent~~in ~~and~~a ~~high-quality~~timely ~~educational~~manner ~~services~~ to ~~retain~~technological ~~and~~or ~~attract~~other ~~customers~~changes in the educational industry;

● ~~Implementing~~Recruiting, ~~our~~training, ~~strategy~~developing and ~~modifying~~retaining itqualified ~~from~~managerial ~~it from time to time to respond effectively to competition~~ and ~~changes~~other ~~in client preferences;~~personnel.

●If we ~~Managing~~are ~~our~~unsuccessful ~~expanding~~in ~~operations~~addressing ~~and~~any ~~successfully~~of ~~expanding~~these risks or challenges, our ~~solution~~business may be materially and ~~service~~adversely ~~offerings;~~affected.

●Our profitability ~~Responding~~will insuffer aif ~~timely~~we ~~manner~~are not able to ~~technological~~maintain our resource utilization levels or ~~other~~continue ~~changes~~to inimprove ~~the~~our ~~educational~~productivity ~~industry;~~levels.

●Our gross ~~Recruiting~~margin and profitability are significantly impacted by our utilization of human resources as well as other resources, ~~training~~such as computers, IT ~~developing~~infrastructure and ~~retaining~~office ~~qualified~~space, ~~managerial~~and our ability to increase our productivity levels. We may face difficulties maintaining high levels of utilization, especially for our newly established businesses and resources. The framework agreements with some of our customers typically do not impose a minimum or maximum purchase amount and allow our customers to place service orders from time to time at their discretion. Customers demand is varied and it may fall to zero or surge to a level that we cannot cost-effectively satisfy. Although we try to use all commercially reasonable efforts to accurately estimate service orders and resource requirements from our customers, we may overestimate or underestimate, which may result in unexpected cost and strain or redundancy of our human capital and adversely effects on our utilization ability. Our ability to continually increase our productivity levels depends significantly on our ability to recruit, train, develop and retain high-performing professionals, staff projects appropriately and optimize our mix of services and delivery methods. If we experience a slowdown or stoppage of work for any client or on any project for which we have dedicated professionals or facilities, we may not be able to efficiently reallocate these professionals and facilities to other ~~personnel~~customers and projects to keep their high utilization and productivity levels. If we are not able to maintain high resource utilization levels without corresponding cost reductions or price increases, our profitability will suffer.

IfIncreases in wewages ~~are~~for ~~unsuccessful~~professionals in ~~addressing~~ ~~any~~China ofcould ~~these~~prevent ~~risks~~us orfrom ~~challenges,~~sustaining our ~~business~~competitive ~~may~~advantage beand ~~materially~~could ~~and~~reduce ~~adversely~~our ~~affected~~profit margins.

~~Our~~Part of ~~profitability~~our ~~will~~most ~~suffer~~significant ifcosts weare the salaries and other compensation expenses for our educational professionals and other employees. Because of rapid economic growth, increased productivity levels, and increased competition for skilled employees and consultants in China, wages for highly skilled employees in China, in particular middle- and senior-level managers, are increasing at a faster rate than in ~~not~~the ~~able~~past. toWe ~~maintain~~may ~~our~~need ~~resource~~to ~~utilization~~increase the levels orof ~~continue~~employee and consultant compensation more rapidly than in the past to ~~improve~~remain competitive in retaining the quality and attracting number of employees that our business requires. Increases in the wages and other compensation we pay our employees and consultants in China could reduce our competitive advantage unless we are able to increase the efficiency and productivity of our professionals as well as the prices we can charge for our services. In addition, any appreciation in the value of the Renminbi relative to U.S. dollar will cause an increase in the relative wage levels in China, which could further reduce our competitive advantage and adversely impact our profit margin.

Our gross margin and profitability are significantly impacted by our utilization of human resources as well as other resources, such as computers, IT infrastructure and office space, and our ability to increase our productivity levels. We may face difficulties maintaining high levels of utilization, especially for our newly established businesses and resources. The framework agreements with some of our customers typically do not impose a minimum or maximum purchase amount and allow our customers to place service orders from time to time at their discretion. Customers demand is varied and it may fall to zero or surge to a level that we cannot cost-effectively satisfy. Although we try to use all commercially reasonable efforts to accurately estimate service orders and resource requirements from our customers, we may overestimate or underestimate, which may result in unexpected cost and strain or redundancy of our human capital and adversely effects on our utilization ability. Our ability to continually increase our productivity levels depends significantly on our ability to recruit, train, develop and retain high-performing professionals, staff projects appropriately and optimize our mix of services and delivery methods. If we experience a slowdown or stoppage of work for any client or on any project for which we have dedicated professionals or facilities, we may not be able to efficiently reallocate these professionals and facilities to other customers and projects to keep their high utilization and productivity levels. If we are not able to maintain high resource utilization levels without corresponding cost reductions or price increases, our profitability will suffer.35

~~Increases~~We must incontinue ~~wages~~to ~~for~~upgrade ~~professionals~~our ~~in China~~technology ~~could~~infrastructure, ~~prevent~~or uswe ~~from~~will ~~sustaining~~be ~~our~~unable ~~competitive~~to ~~advantage~~effectively ~~and~~meet ~~could~~demand ~~reduce~~for our ~~profit margins~~services.

~~Part of our most significant~~We ~~costs~~must ~~are~~continue ~~the~~to ~~salaries~~add ~~and~~hardware ~~other compensation expenses for our educational professionals~~ and ~~other~~enhance ~~employees.~~software ~~Because~~to ofaccommodate ~~rapid~~the economic growth, increased productivity levels, and increased competition for skilled employees and consultants in China, wages for highly skilled employees in China, in particular middle- and senior-level managers, are increasing atcontent ~~a faster rate than~~ in ~~the~~our ~~past~~courses. WeIn ~~may~~order ~~need~~ to ~~increase~~ ~~the~~make ~~levels~~timely ofdecisions about ~~employee~~hardware and ~~consultant~~software ~~compensation~~enhancements, ~~more~~we ~~rapidly~~must ~~than~~be inable ~~the past~~ to ~~remain~~accurately ~~competitive~~forecast ~~in retaining~~ the ~~quality and~~growth ~~attracting~~in ~~number~~demand offor ~~employees that~~ our ~~business requires~~services. ~~Increases~~This growth in demand ~~the~~for ~~wages~~our ~~and~~services ~~other~~could ~~compensation~~be wedifficult ~~pay~~to ~~our~~forecast ~~employees~~ and ~~consultants~~ inthe ~~China~~potential ~~could~~audience ~~reduce~~of our ~~competitive~~services ~~advantage~~is ~~unless~~large. If we are ~~able~~unable to increase the ~~efficiency~~data storage and ~~productivity~~processing capacity of our ~~professionals~~ systems at least as ~~well~~fast as the ~~prices~~growth wein ~~can~~demand, ~~charge for~~ our ~~services.~~systems Inmay ~~addition,~~become ~~any~~unstable ~~appreciation~~and may infail ~~the~~to ~~value~~operate offor ~~the~~unknown ~~Renminbi~~periods ~~relative~~of ~~to U~~time.S. ~~dollar will~~Unscheduled ~~cause~~downtime ancould ~~increase~~harm inour ~~the~~business ~~relative~~and ~~wage~~also ~~levels in China, which~~ could ~~further~~discourage ~~reduce~~current ~~our~~and ~~competitive~~potential end ~~advantage~~users and ~~adversely~~reduce ~~impact our~~future ~~profit margin~~revenues.

35Our data and web server systems may negatively interrupt in working or work improperly due to natural disasters, failure of third-party services and other unexpected problems.

We use ~~must~~Alibaba ~~continue~~Cloud tofor ~~upgrade~~ our ~~technology~~data which is backed-up on regular basis and one on-site local server used for data backup and simulation test. ~~infrastructure~~When unlikely, an unexpected event like a power or telecommunications outage, fire, flood or earthquake at our Internet service providers’ facilities and at our on-site data facility could cause the loss of certain data which is not backed-up and interrupt with our services. Currently we ~~will~~don’t behave ~~unable~~any tobusiness ~~effectively~~interruption ~~meet~~insurance ~~demand~~to compensate us for losses that may occur. In addition, we rely on third parties to securely store our archived data, house our Web server and network systems and connect us to the Internet. The failure by any of these third parties to provide these services satisfactorily and our inability to find suitable replacements would impair our ability to access archives and operate our systems.

~~We must continue to add hardware~~Our ~~and~~computer ~~enhance~~networks ~~software~~may ~~to accommodate the increasing content in our courses. In order to make timely decisions about hardware and software enhancements, we must~~ be ~~able~~vulnerable to ~~accurately~~security ~~forecast~~risks ~~the~~that ~~growth in demand for our services. This growth in demand for our services~~ could be ~~difficult~~disrupt ~~to forecast and the potential audience of~~ our services ~~is large. If we are unable to increase the data storage~~ and ~~processing capacity~~adversely ofaffect our ~~systems~~results ~~at least as fast as the growth in demand, our systems may become unstable and may fail to operate for unknown periods~~ of ~~time~~operations. ~~Unscheduled downtime could harm our business and also could discourage current and potential end users and reduce future revenues.~~

Our computer ~~data~~networks may be vulnerable to unauthorized access, computer hackers, computer viruses and ~~web~~other ~~server~~security problems caused by unauthorized access to, or improper use of, systems ~~may~~by ~~negatively~~third parties or employees. A hacker who circumvents security measures could misappropriate ~~interrupt~~proprietary ininformation ~~working~~or cause interruptions or ~~work~~malfunctions ~~improperly~~in ~~due~~our operations. Although we intend to ~~natural~~continue ~~disasters~~to implement security measures, ~~failure~~computer attacks or disruptions may jeopardize the security of ~~third-party~~information ~~services~~stored in and ~~other~~transmitted ~~unexpected~~through our computer systems. Actual or perceived concerns that our systems may be vulnerable to such attacks or disruptions may deter our customers from using our platforms or services. As a result, we may be required to expend significant resources to protect against the threat of these security breaches or to alleviate problems caused by these breaches.

~~We use Alibaba Cloud for our~~Data ~~data~~networks ~~which~~are isalso ~~backed-up~~vulnerable onto ~~regular~~attacks, ~~basis~~unauthorized ~~and~~access ~~one on-site local server used for data backup~~ and ~~simulation test~~disruptions. ~~When~~For ~~unlikely~~example, anin ~~unexpected event like~~ a ~~power~~number orof ~~telecommunications~~public ~~outage~~networks, ~~fire,~~hackers ~~flood or earthquake at our Internet service providers’ facilities and at~~have ~~our~~bypassed ~~on-site~~firewalls ~~data facility could cause the loss of certain data which is not backed-up~~ and ~~interrupt~~misappropriated ~~with~~confidential ~~our services~~information. ~~Currently~~It weis ~~don’t have~~possible ~~any business interruption insurance to compensate us for losses~~ that, ~~may~~despite ~~occur.~~existing ~~In addition~~safeguards, wean ~~rely~~employee oncould misappropriate ~~third~~our ~~parties~~customers’ toproprietary ~~securely store~~information ~~our~~or ~~archived~~ data, ~~house~~exposing ~~our Web server and network systems and connect~~ us to ~~the~~a ~~Internet.~~risk ~~The~~of ~~failure~~loss byor ~~any~~litigation ofand ~~these~~possible ~~third parties~~liability. toLosses ~~provide~~or ~~these~~liabilities ~~services~~that ~~satisfactorily~~are ~~and~~incurred ~~our~~as ~~inability~~a toresult ~~find~~of ~~suitable~~any ~~replacements~~of ~~would~~the ~~impair~~foregoing ~~our~~could ~~ability~~have toa ~~access~~material ~~archives~~adverse ~~and operate~~effect on our ~~systems~~business.

~~Our computer networks~~ We may belose ~~vulnerable to~~users ~~security~~and ~~risks~~lose ~~that~~revenues ~~could~~if ~~disrupt~~ our ~~services~~cyber ~~and~~security ~~adversely~~measures ~~affect our results of operations~~fail.

~~Our computer networks may~~If bethe ~~vulnerable~~security tomeasures ~~unauthorized~~that ~~access,~~we ~~computer~~use ~~hackers,~~to ~~computer~~protect ~~viruses~~personal ~~and~~information ~~other~~are ~~security~~ineffective, ~~problems~~we ~~caused~~may bylose ~~unauthorized~~users ~~access~~of ~~to, or~~our ~~improper use of~~services, ~~systems~~which bycould ~~third~~reduce our ~~parties or employees~~revenues. AWe ~~hacker~~rely ~~who~~on ~~circumvents~~ security ~~measures~~and ~~could~~authentication ~~misappropriate~~technology ~~proprietary information~~licensed orfrom ~~cause~~third ~~interruptions or malfunctions in our operations~~parties. ~~Although~~We wecannot ~~intend~~predict towhether ~~continue~~these ~~to implement~~ security measures, ~~computer attacks~~could orbe ~~disruptions~~circumvented ~~may~~by ~~jeopardize~~new ~~the~~technological ~~security~~developments. ofIn ~~information~~addition, ~~stored in and transmitted through~~ our ~~computer~~software, ~~systems.~~databases ~~Actual~~and orservers ~~perceived concerns that our systems~~ may be vulnerable to ~~such~~computer ~~attacks~~viruses, physical or ~~disruptions~~electronic ~~may~~break-ins ~~deter~~and ~~our~~similar ~~customers from using our platforms or services~~disruptions. As aWe ~~result, we~~ may beneed ~~required~~ to ~~expend~~spend significant resources to protect against ~~the threat of these~~ security breaches or to alleviate problems caused by ~~these~~any breaches. We cannot assure you that we can prevent all cyber security breaches.

Data networks are also vulnerable to attacks, unauthorized access and disruptions. For example, in a number of public networks, hackers have bypassed firewalls and misappropriated confidential information. It is possible that, despite existing safeguards, an employee could misappropriate our customers’ proprietary information or data, exposing us to a risk of loss or litigation and possible liability. Losses or liabilities that are incurred as a result of any of the foregoing could have a material adverse effect on our business.36

WeOur future ~~may~~growth ~~lose~~depends ~~users~~significantly ~~and~~on ~~lose~~the ~~revenues~~strength ifof our brand and reputation. Any failure to maintain and enhance, or any damage to, ~~cyber~~our ~~security~~brand ~~measures~~image ~~fail~~or reputation could materially and adversely affect our business, results of operations, financial condition and prospects.

IfOur reputation ~~the~~and ~~security~~brand ~~measures~~recognition, ~~that we~~which ~~use~~depend toon ~~protect~~cultivating ~~personal~~awareness, ~~information~~trust ~~are~~and ~~ineffective,~~confidence weamong ~~may~~our ~~lose~~current or potential users, is critical to the success of our ~~services,~~business. ~~which~~We ~~could~~believe ~~reduce~~a well-recognized brand is crucial to increasing our ~~revenues.~~user Webase ~~rely~~and, onin turn, facilitating ~~security~~our effort to monetize our services and ~~authentication~~enhancing ~~technology~~our ~~licensed~~attractiveness ~~from~~to ~~third~~our ~~parties.~~users Weand ~~cannot~~service ~~predict~~providers. ~~whether~~As ~~these~~we ~~security~~are ~~measures~~growing ~~could~~to be ~~circumvented~~known byin ~~new~~family ~~technological~~education ~~developments.~~in ~~In addition~~China, our ~~software,~~reputation ~~databases~~ and ~~servers~~brand ~~may~~are be vulnerable to ~~computer~~many ~~viruses,~~threats ~~physical~~that can be difficult or ~~electronic~~ ~~break-ins~~impossible to control, and ~~similar~~costly ~~disruptions.~~or Weimpossible ~~may~~to ~~need~~remediate. toRegulatory ~~spend~~inquiries ~~significant~~or ~~resources~~investigations, tolawsuits ~~protect~~and ~~against~~other ~~security~~claims ~~breaches~~in orthe toordinary ~~alleviate~~course of our ~~problems~~business, ~~caused~~perceptions of conflicts of interest and rumors, including complaints made by ~~any~~our ~~breaches.~~competitors, Weamong ~~cannot~~other ~~assure~~things, ~~you~~could ~~that~~substantially damage weour ~~can~~reputation, ~~prevent~~even ~~all~~if ~~cyber~~they ~~security~~are ~~breaches~~baseless or satisfactorily addressed.

36In addition, any perception that the quality of our educational services may not be the same as or better than that of other platforms of educational services can damage our reputation. Any negative media publicity about any of the services available on our platform or product or service quality problems at other educational services platforms, including at our competitors, may also negatively impact our reputation and brand. Negative perceptions of educational services, or the industry in general, may reduce the number of users coming to our platform and the number of transactions conducted through our platform, which would adversely impact our revenues and liquidity position.

~~Our future growth depends significantly~~We onmay ~~the~~not ~~strength~~be ofable ~~our~~to ~~brand~~prevent ~~and~~others ~~reputation.~~from ~~Any~~unauthorized ~~failure~~use toof ~~maintain~~our ~~and~~intellectual ~~enhance~~property, orwhich ~~any~~could ~~damage~~cause ~~to,~~a ~~our~~loss ~~brand~~of ~~image~~customers, orreduce ~~reputation could~~our ~~materially~~revenues and ~~adversely~~harm ~~affect~~ our ~~business,~~competitive ~~results of operations, financial condition and prospects~~position.

~~Our~~We rely ~~reputation~~on ~~and~~a ~~brand~~combination ~~recognition~~of copyright, ~~which~~ ~~depend~~trademark, onsoftware ~~cultivating~~registration, ~~awareness~~anti-unfair competition and trade secret laws, ~~trust~~as well as confidentiality agreements and ~~confidence~~other ~~among~~methods to protect our ~~current~~intellectual orproperty ~~potential~~rights. ~~users~~To protect our trade secrets and other proprietary information, employees, isconsultants ~~critical~~and collaborators are required to ~~the~~enter ~~success~~into ofconfidentiality ~~our~~agreements ~~business.~~or other relevant agreements which include Weconfidentiality ~~believe~~provisions atherein. ~~well-recognized~~These ~~brand~~agreements ismight ~~crucial~~not toprovide ~~increasing~~effective ~~our~~protection ~~user~~for ~~base~~the ~~and~~trade secrets, know-how or other proprietary information in ~~turn,~~the ~~facilitating~~event ~~our~~of ~~effort~~any tounauthorized ~~monetize~~use, ~~our~~misappropriation ~~services and~~or ~~enhancing~~disclosure ~~our~~of ~~attractiveness~~such totrade ~~our~~secrets, ~~users~~know-how ~~and~~or ~~service~~other proprietary ~~providers~~information. AsImplementation weof ~~are~~intellectual ~~growing~~property-related tolaws bein ~~known~~China has historically been lacking, primarily because of ambiguities in ~~family~~the ~~education~~PRC laws and difficulties in ~~China~~enforcement. Accordingly, ~~our~~intellectual ~~reputation~~ property rights and ~~brand~~confidentiality ~~are~~protections in ~~vulnerable~~China tomay ~~many~~not ~~threats~~be ~~that~~as ~~can~~effective beas ~~difficult~~those in the United States or ~~impossible~~other todeveloped ~~control~~countries, and ~~costly~~infringement orof ~~impossible~~intellectual property rights continues to ~~remediate~~pose a serious risk of doing business in China. ~~Regulatory inquiries~~Policing orunauthorized ~~investigations,~~use ~~lawsuits~~of proprietary technology is difficult and ~~other~~expensive. ~~claims~~The insteps ~~the~~we ~~ordinary~~have ~~course~~taken may be inadequate to prevent the misappropriation of our ~~business~~proprietary technology. Unauthorized copying, ~~perceptions~~other ofmisappropriation, ~~conflicts~~or negligent or accidental leakage of ~~interest~~our ~~and~~proprietary technologies could enable third parties to benefit ~~rumors,~~from ~~including~~our ~~complaints~~technologies ~~made~~without byobtaining our ~~competitors,~~consent ~~among~~or ~~other~~paying ~~things~~us for doing so, which could ~~substantially~~harm ~~damage~~ our ~~reputation,~~business ~~even~~and ifcompetitive ~~they~~position. Though we are not currently involved in any litigation with respect to intellectual property, we may need to enforce our intellectual ~~baseless~~property orrights ~~satisfactorily~~through ~~addressed~~litigation. Litigation relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources and management attention.

~~In addition, any perception~~We ~~that the quality of our educational services~~ may ~~not~~face beintellectual ~~the~~property ~~same~~infringement asclaims ~~or better than~~ that ofcould ~~other~~be ~~platforms~~time-consuming ofand ~~educational~~costly ~~services~~to ~~can damage our reputation~~defend. ~~Any~~If ~~negative~~we ~~media~~fail ~~publicity~~to ~~about~~defend ~~any of the services available on our platform or product or service quality~~ourselves ~~problems~~against atsuch ~~other educational services platforms~~claims, ~~including~~we ~~at our competitors,~~ may ~~also~~lose ~~negatively~~significant ~~impact~~intellectual ~~our~~property ~~reputation~~rights and ~~brand. Negative perceptions of educational services, or the industry in general,~~ may ~~reduce~~be ~~the~~unable ~~number of users coming~~ to ~~our~~continue ~~platform~~providing ~~and the number of transactions conducted through~~ our ~~platform,~~existing ~~which would adversely impact our revenues and liquidity position~~services.

Our success largely depends on our ability to use and develop our technology and services without infringing the intellectual property rights of third parties, including copyrights, trade secrets and trademarks. We may ~~not~~ be subject to risk related to potential infringement claims of the copyrights, as the copyrights of some of our educational courses developed by us. For example, pursuant to the Copyright Law of the PRC, providing the public with works by wired or wireless means, so as to make the public able to ~~prevent~~respectively ~~others~~obtain the works at the individually selected time and place, without permission from the owner of the copyrights therein shall constitute infringements ~~unauthorized~~of ~~use~~copyrights. The infringer shall, according to the circumstances of the case, undertake to cease the infringement, take remedial action, and offer an apology, pay damages, etc. We may be subject to litigation involving claims of violation of other intellectual property rights of third parties. We may be unaware of intellectual property registrations or applications relating to our services that may give rise to potential infringement claims against us. There may also be technologies licensed to and relied on by us that are subject to infringement or other corresponding allegations or claims by third parties which may damage our ability to rely on such technologies. We are subject to additional risks as a result of our hiring of new employees who may misappropriate intellectual property from their former employers. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or using technology involving the allegedly infringing intellectual property. Intellectual property litigation is expensive and time-consuming and could divert management’s attention from our business. A successful infringement claim against us, ~~which~~whether with or without merit, could, ~~cause~~among others things, require us to pay substantial damages, develop non-infringing technology, or re-brand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making, licensing or using products that have infringed a ~~loss~~third party’s intellectual property rights. Protracted litigation could also result in existing or potential customers deferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringement claims in certain instances. Any intellectual property claim or litigation in this area, ~~reduce~~whether we ultimately win or lose, could damage our ~~revenues~~reputation and ~~harm~~have a material adverse effect on our ~~competitive~~business, ~~position~~results of operations or financial condition.

We rely on a combination of copyright, trademark, software registration, anti-unfair competition and trade secret laws, as well as confidentiality agreements and other methods to protect our intellectual property rights. To protect our trade secrets and other proprietary information, employees, consultants and collaborators are required to enter into confidentiality agreements or other relevant agreements which include confidentiality provisions therein. These agreements might not provide effective protection for the trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Implementation of intellectual property-related laws in China has historically been lacking, primarily because of ambiguities in the PRC laws and difficulties in enforcement. Accordingly, intellectual property rights and confidentiality protections in China may not be as effective as those in the United States or other developed countries, and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Policing unauthorized use of proprietary technology is difficult and expensive. The steps we have taken may be inadequate to prevent the misappropriation of our proprietary technology. Unauthorized copying, other misappropriation, or negligent or accidental leakage of our proprietary technologies could enable third parties to benefit from our technologies without obtaining our consent or paying us for doing so, which could harm our business and competitive position. Though we are not currently involved in any litigation with respect to intellectual property, we may need to enforce our intellectual property rights through litigation. Litigation relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources and management attention.37

~~We may face intellectual property infringement~~Disruptions ~~claims~~in ~~that~~telecommunications ~~could~~or besignificant ~~time-consuming~~failure ~~and~~in ~~costly~~our toIT ~~defend.~~systems Ifcould weharm ~~fail~~our ~~to defend ourselves against such claims~~service, wewhich ~~may~~could ~~lose~~result ~~significant intellectual~~in ~~property~~a ~~rights~~reduction ~~and~~of ~~may be unable to continue providing~~ our ~~existing services~~revenue.

~~Our~~A significant ~~success~~element ~~largely~~of ~~depends on~~ our ~~ability~~business tostrategy ~~use~~is ~~and~~to ~~develop~~continue ~~our~~to ~~technology~~leverage and ~~services~~expand ~~without~~our ~~infringing~~branches ~~the~~strategically ~~intellectual~~located ~~property~~in ~~rights of third parties, including copyrights, trade secrets and trademarks~~China. We ~~may~~believe that bethe ~~subject~~use ~~to risk related to potential infringement claims~~ of ~~the~~a ~~copyrights,~~strategically aslocated ~~the copyrights~~network of ~~some~~branches ofwill ~~our~~provide ~~educational courses developed by~~ us. ~~For example, pursuant to the Copyright Law of the PRC, providing the public~~ with ~~works~~cost ~~by wired or wireless means~~advantages, ~~so as to make~~ the ~~public~~ability ~~able~~ to ~~respectively~~attract ~~obtain~~highly ~~the works at the individually selected time~~skilled ~~and~~personnel ~~place,~~in ~~without~~various ~~permission~~regions ~~from~~of the ~~owner~~country ofand the ~~copyrights therein shall constitute infringements of copyrights. The infringer shall~~world, ~~according~~ toand the ~~circumstances~~ability ~~of the case, undertake~~ to ~~cease~~serve ~~the~~customers ~~infringement,~~on ~~take~~a ~~remedial~~regional ~~action,~~ and ~~offer~~global ~~an apology, pay damages, etc~~basis. WePart ~~may be subject to litigation involving claims~~ of ~~violation of other intellectual property rights of third parties. We may be unaware~~ ~~of intellectual property registrations or applications relating to~~ our ~~services~~service ~~that~~model ~~may~~is ~~give rise~~ to ~~potential~~maintain ~~infringement~~active ~~claims~~voice ~~against us.~~and ~~There~~data ~~may~~communications, ~~also~~financial becontrol, ~~technologies~~accounting, ~~licensed~~customer toservice and ~~relied on by us that are subject to infringement or~~ other ~~corresponding allegations~~data orprocessing ~~claims~~systems bybetween ~~third~~our ~~parties~~main ~~which~~offices ~~may~~in ~~damage~~Beijing, our ~~ability~~customers’ tolocations, ~~rely~~and ~~on such technologies. We are subject to additional risks as a result of~~ our ~~hiring~~other ofbranches ~~new~~and ~~employees~~support ~~who may misappropriate intellectual property from their former employers~~facilities. Our ~~Parties~~business ~~making~~activities ~~infringement claims~~ may be ~~able~~materially todisrupted ~~obtain~~in anthe ~~injunction~~event toof ~~prevent~~a uspartial ~~from delivering our services~~ or ~~using~~complete ~~technology~~failure ~~involving~~of ~~the~~any ~~allegedly~~of ~~infringing intellectual~~these ~~property.~~IT ~~Intellectual~~or ~~property litigation is expensive and time-consuming and could divert management’s attention~~communication ~~from our business. A successful infringement claim against us~~systems, ~~whether~~which ~~with~~could orbe ~~without~~caused ~~merit~~by, ~~could,~~ among ~~others~~other things, ~~require~~software ~~us to pay substantial damages~~malfunction, ~~develop~~computer ~~non-infringing~~virus ~~technology~~attacks, orconversion ~~re-brand~~errors ~~our~~due ~~name~~to ~~or enter into royalty or license agreements that may~~system ~~not~~upgrading, bedamage ~~available~~from onfire, ~~acceptable terms~~earthquake, ifpower ~~at all~~loss, ~~and~~telecommunications ~~cease making~~failure, ~~licensing~~unauthorized entry or ~~using~~other ~~products~~events ~~that~~beyond ~~have~~our ~~infringed a third party’s~~control. ~~intellectual~~Loss ~~property~~of ~~rights.~~all ~~Protracted litigation could also result in existing~~ or ~~potential~~part ~~customers~~of ~~deferring~~the orsystems ~~limiting~~for ~~their~~a ~~purchase or~~period ~~use~~ of ~~our~~time ~~products~~could ~~until~~hinder ~~resolution~~our ofperformance ~~such litigation,~~ or ~~could~~our ~~require~~ability us to ~~indemnify~~complete ~~our~~client ~~customers~~projects ~~against~~on ~~infringement claims~~time which, in ~~certain~~turn, ~~instances.~~could ~~Any~~lead ~~intellectual~~to ~~property~~a ~~claim~~reduction orof ~~litigation~~our inrevenue ~~this~~or ~~area,~~otherwise ~~whether~~have wea ~~ultimately~~material ~~win~~adverse oreffect ~~lose,~~on ~~could damage~~ our ~~reputation~~ business and ~~have~~business areputation. We ~~material~~may ~~adverse~~also ~~effect~~be onliable to our ~~business,~~customers ~~results~~for breach of ~~operations~~contract orfor ~~financial~~interruptions ~~condition~~in service.

37We may need additional capital and any failure by us to raise additional capital on terms favorable to us, or at all, could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.

~~Disruptions~~We believe inthat ~~telecommunications~~our current cash and cash flow from operations should be sufficient to meet our anticipated cash needs for at least the next 12 months. We may, however, require additional cash resources due to changed business conditions or ~~significant~~other future developments, including ~~failure~~any ininvestments ~~our~~or ITacquisitions ~~systems~~we ~~could~~may ~~harm~~decide to pursue. If these resources are insufficient to satisfy our ~~service~~cash requirements, ~~which~~we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in adilution ~~reduction~~to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our ~~revenue~~operations. Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:

A● ~~significant~~Investors’ ~~element~~perception of our business strategy is to continue to leverage and expand our branches strategically located in China. We believe that the use of a strategically located network of branches will provide us with cost advantages, ~~the ability to attract highly skilled personnel in various regions of the country~~ and ~~the~~demand world, and the ability to serve customers on a regional and global basis. Part of our service model is to maintain active voice and data communications, financial control, accounting, customer service and other data processing systems between our main offices in Beijing, our customers’ locations, and our other branches and support facilities. Our business activities may be materially disrupted in the event of a partial or complete failure of any of these IT or communication systems, which could be caused by, among other things, software malfunction, computer virus attacks, conversion errors due to system upgrading, damage from fire, earthquake, power loss, telecommunications failure, unauthorized entry or other events beyond our control. Loss of all or part of the systems for ~~a period of time could hinder our performance or our ability to complete client projects on time which~~, insecurities ~~turn, could lead to a reduction~~ of ~~our revenue~~technology orservices ~~otherwise~~outsourcing ~~have a material adverse effect on our business and business reputation. We may also be liable to our customers for breach of contract for interruptions in service.~~companies;

We● ~~may~~Conditions ~~need~~of ~~additional~~the ~~capital~~U.S. and ~~any~~other ~~failure by us to raise additional~~ capital onmarkets ~~terms~~in ~~favorable~~which towe ~~us,~~may orseek ~~at all, could limit our ability~~ to ~~grow~~raise ~~our business and develop or enhance our service offerings to respond to market demand or competitive challenges.~~funds;

We● ~~believe~~Our that our current cash and cash flow from operations should be sufficient to meet our anticipated cash needs for at least the next 12 months. We may, however, require additional cash resources due to changed business conditions or other future ~~developments,~~results including any investments or acquisitions we may decide to pursue. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of ~~additional~~operations ~~equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations~~ and ~~could~~financial require us to agree to operating and financing covenants that would restrict our operations. Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:condition;

● ~~Investors’~~PRC ~~perception~~government ~~of,~~regulation ~~and demand for, securities~~ of ~~technology~~foreign ~~services~~investment ~~outsourcing~~in ~~companies~~China;

● ~~Conditions~~Economic, ofpolitical ~~the U.S.~~ and other ~~capital~~conditions ~~markets~~ in ~~which we may seek to raise funds~~China; and

● ~~Our~~PRC ~~future~~government ~~results~~policies ofrelating ~~operations~~to the borrowing and ~~financial~~remittance ~~condition;~~outside China of foreign currency.

●Financing may ~~PRC~~not ~~government~~be ~~regulation~~available ofin ~~foreign~~amounts ~~investment~~or inon ~~China;~~terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to grow our business and develop or enhance our product and service offerings to respond to market demand or competitive challenges.

~~● Economic, political and other conditions in China; and~~38

●We may ~~PRC~~incur ~~government~~losses ~~policies~~resulting ~~relating~~from tobusiness ~~the~~interruptions ~~borrowing~~resulting ~~and~~from ~~remittance~~occurrence ~~outside~~of ~~China~~natural ofdisasters, ~~foreign~~health ~~currency~~epidemics and other outbreaks or events.

~~Financing~~Our operational facilities may ~~not~~ be ~~available~~ damaged in ~~amounts~~natural disasters such as earthquakes, floods, heavy rains, sand storms, tsunamis and cyclones, or onother ~~terms~~events ~~acceptable~~such as fires. Such natural disasters or other events may lead to ~~us,~~disruption ifof atinformation ~~all~~systems and telephone service for sustained periods. ~~Any~~Damage ~~failure~~or bydestruction that interrupts our provision of outsourcing services could damage our relationships with our customers and may cause us to ~~raise~~incur substantial additional ~~funds~~expenses onto ~~terms~~repair ~~favorable~~or toreplace ~~us,~~damaged equipment or atfacilities. ~~all,~~We ~~could~~may ~~limit~~also ~~our~~be ~~ability~~liable to ~~grow~~ our ~~business~~customers ~~and~~for ~~develop~~disruption in service resulting from such damage or ~~enhance~~destruction. Prolonged disruption of our ~~product~~services as ~~and~~a ~~service~~result ~~offerings~~of tonatural ~~respond~~disasters or other events may also entitle our customers to ~~market~~terminate ~~demand~~their orcontracts ~~competitive~~with us. We currently do ~~challenges~~not have insurance against business interruptions.

38Fluctuation in the value of the Renminbi and other currencies may have a material adverse effect on the value of your investment.

WeOur financial ~~may~~statements ~~incur~~are ~~losses~~expressed ~~resulting~~in ~~from~~U.S. ~~business~~dollars. However, a majority of our revenues and expenses are denominated in Renminbi (RMB). ~~interruptions~~Our ~~resulting~~exposure ~~from~~to ~~occurrence~~foreign exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of ~~natural~~each ~~disasters,~~entity. ~~health~~We ~~epidemics~~do not believe that we currently have any significant direct foreign exchange risk and ~~other~~have ~~outbreaks~~not hedged exposures denominated in foreign currencies or ~~events~~any other derivative financial instruments. However, the value of your investment in our Common Stock will be affected by the foreign exchange rate between U.S. dollars and RMB because the primary value of our business is effectively denominated in RMB, while our Common Stock will be traded in U.S. dollars.

~~Our operational facilities~~The ~~may~~value beof ~~damaged~~the inRMB ~~natural~~against ~~disasters~~the ~~such~~U.S. asdollar ~~earthquakes,~~and ~~floods,~~other ~~heavy~~currencies ~~rains,~~is ~~sand~~affected ~~storms~~by, ~~tsunamis~~among ~~and~~other ~~cyclones~~things, orchanges ~~other~~in ~~events~~China’s ~~such~~political asand ~~fires.~~economic ~~Such~~conditions ~~natural disasters or other events may lead to disruption of information systems~~ and ~~telephone~~China’s ~~service~~foreign ~~for~~exchange ~~sustained periods~~policies. ~~Damage~~ orThe ~~destruction~~People’s ~~that~~Bank ~~interrupts our provision~~ of ~~outsourcing~~China ~~services~~regularly ~~could~~intervenes ~~damage~~in ~~our~~the ~~relationships with our customers and may~~foreign ~~cause~~exchange usmarket to ~~incur~~limit ~~substantial~~fluctuations ~~additional~~in ~~expenses~~RMB toexchange ~~repair~~rate orand ~~replace~~achieve ~~damaged~~certain ~~equipment~~exchange orrate ~~facilities.~~targets, Weand ~~may~~through ~~also be liable to our customers for disruption in service resulting from~~ such ~~damage~~intervention ~~or destruction. Prolonged disruption of our services as a result of natural disasters~~kept orthe ~~other events may also entitle our customers to terminate their contracts with us~~U.S. Wedollar-RMB ~~currently~~exchange dorate ~~not~~relatively ~~have insurance against business interruptions~~stable.

~~Fluctuation~~As we inmay rely on dividends paid to us by the ~~value~~PRC operating entities, any significant revaluation of the ~~Renminbi~~RMB may have a material adverse effect on our revenues and financial condition, and the value of any dividends payable on our Common Stock in foreign currency terms. For example, to the extent that we need to convert U.S. dollars we receive from any future offerings into for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our Common Stock or for other ~~currencies~~business ~~may~~purposes, appreciation of the U.S. dollar against the RMB would have a ~~material~~negative ~~adverse~~ effect on the U.S. dollar amount available to us. Furthermore, appreciation or depreciation in the value of ~~your~~the ~~investment~~RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. We cannot predict the impact of future exchange rate fluctuations on our results of operations and may incur net foreign exchange losses in the future. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert into foreign currencies.

~~Our financial statements are~~Fluctuations ~~expressed~~ in ~~U.S. dollars. However, a majority of our revenues and expenses are denominated in Renminbi (RMB). Our exposure to foreign~~ exchange ~~risk~~rates ~~primarily~~could ~~relates~~adversely toaffect the limited cash denominated in currencies other than the functional currencies of each entity. We do not believe that we currently have any significant direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial instruments. However, the value of your investment in our ~~Common~~business ~~Stock will be affected by the foreign exchange rate between U.S. dollars~~ and ~~RMB because~~ the ~~primary~~ value of our ~~business is effectively denominated in RMB, while our Common Stock will be traded in U~~securities.~~S. dollars.~~

~~The~~Changes in the value of the RMB against the U.S. dollar, euro and other foreign currencies isare affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of the RMB may have a material adverse effect on our revenues and financial ~~China’s~~condition, ~~foreign~~and ~~exchange~~the ~~policies.~~value ~~The~~of, ~~People’s~~and ~~Bank~~any ofdividends ~~China~~payable ~~regularly~~on ~~intervenes~~our shares in the ~~foreign~~U.S. ~~exchange~~dollar ~~market~~terms. For example, to ~~limit~~the extent that we need ~~fluctuations~~to inconvert ~~RMB~~U.S. ~~exchange~~dollar ~~rate~~we ~~and~~receive ~~achieve~~from ~~certain~~any ~~exchange~~future ~~rate~~offerings ~~targets~~into RMB for our operations, ~~and~~appreciation ~~through~~of ~~such~~the ~~intervention~~RMB ~~kept~~against the U.S. dollar- would have an adverse effect on the RMB ~~exchange~~amount we would receive from the conversion. Conversely, if we decide to convert our RMB into ~~rate~~U.S. ~~relatively~~dollar ~~stable~~for the purpose of paying dividends on our Common Stock or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.

As we may rely on dividends paid to us by the PRC operating entities, any significant revaluation of the RMB may have a material adverse effect on our revenues and financial condition, and the value of any dividends payable on our Common Stock in foreign currency terms. For example, to the extent that we need to convert U.S. dollars we receive from any future offerings into for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our Common Stock or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us. Furthermore, appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. We cannot predict the impact of future exchange rate fluctuations on our results of operations and may incur net foreign exchange losses in the future. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert into foreign currencies.39

~~Fluctuations~~Since July 2005, the RMB is no longer pegged to the U.S. dollar, although the People’s Bank of China regularly intervenes in the foreign exchange ~~rates~~market ~~could~~to ~~adversely affect~~prevent ~~our~~significant ~~business~~short-term ~~and~~fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value ofagainst ~~our~~the ~~securities~~U.S. dollar in the medium to long term. Moreover, it is possible that in future, PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

~~Changes in the value of the~~Very ~~RMB~~limited ~~against~~hedging ~~the~~transactions ~~U.S. dollar, euro and other foreign currencies~~ are ~~affected~~available ~~by, among other things, changes~~ in China ~~political~~to ~~and~~reduce ~~economic conditions.~~our ~~Any~~exposure ~~significant~~to ~~revaluation~~exchange ofrate ~~the~~fluctuations. ~~RMB~~To ~~may~~date, we have anot ~~material adverse effect on our revenues and financial condition, and the~~entered ~~value~~into ~~of, and~~ any ~~dividends~~hedging ~~payable on our shares in the U~~transactions.S. ~~dollar~~While ~~terms. For example, to the extent that~~ we ~~need~~may toenter ~~convert~~into ~~U.S.~~hedging ~~dollar we~~transactions ~~receive~~in ~~from~~the ~~any~~ future ~~offerings into RMB for our operations~~, ~~appreciation of~~ the ~~RMB~~availability ~~against~~and ~~the~~effectiveness ~~U.S.~~of ~~dollar would have an adverse~~these ~~effect~~transactions onmay ~~the~~be ~~RMB~~limited, ~~amount~~and we ~~would~~may ~~receive~~not ~~from~~be ~~the~~able ~~conversion. Conversely, if we decide~~ to ~~convert~~successfully hedge our ~~RMB~~exposure ~~into~~at Uall.S. ~~dollar~~In ~~for~~addition, ~~the~~our ~~purpose of~~foreign ~~paying~~currency ~~dividends~~exchange losses onmay ~~our~~be ~~Common~~magnified ~~Stock~~by orPRC ~~for~~exchange ~~other~~control ~~business~~regulations ~~purposes,~~that ~~appreciation~~restrict ofour ~~the~~ability ~~U.S.~~to ~~dollar~~convert ~~against the~~ RMB ~~would~~into ~~have~~foreign ~~a negative effect on the U~~currencies.~~S. dollar amount available to us.~~

39We have identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.

~~Since July 2005, the RMB is~~In noconnection ~~longer~~with ~~pegged~~audits ~~to the U.S. dollar, although the People’s Bank~~ of ~~China~~our ~~regularly~~financial ~~intervenes~~statements infor the ~~foreign~~fiscal ~~exchange~~years ~~market~~ended ~~to prevent~~September ~~significant~~30, ~~short-term~~2024 ~~fluctuations~~and ~~in the exchange rate~~2023, ~~the~~our ~~RMB~~management ~~may appreciate or depreciate significantly in value against~~identified ~~the~~a ~~U.S.~~few ~~dollar~~material inweaknesses ~~the medium to long term. Moreover, it is possible that~~ in ~~future, PRC authorities may lift restrictions on fluctuations in~~ the ~~RMB~~design ~~exchange rate~~ and ~~lessen~~operation ~~intervention~~of inour ~~the~~internal ~~foreign exchange market.~~controls:

~~Very~~(1) ~~limited~~Inadequate ~~hedging~~income ~~transactions are~~and ~~available~~cost inverification ~~China~~process toby ~~reduce~~the ~~our~~financial ~~exposure~~department: toThis ~~exchange~~weakness ~~rate~~increases ~~fluctuations. To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in~~ the ~~future,~~risk ~~the availability and effectiveness~~ of ~~these~~revenue ~~transactions~~recognition ~~may~~errors ~~be limited,~~ and we ~~may~~potential ~~not be able to successfully hedge our exposure at all~~fraud. ~~In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.~~

We(2) ~~have~~Ineffective ~~identified~~inventory ~~material~~management: ~~weaknesses~~This ~~in our~~weakness ~~internal~~increases ~~control~~the ~~over~~risk ~~financial~~of ~~reporting.~~errors Ifin weinventory ~~fail~~valuation ~~to develop~~ and ~~maintain~~potential anmisappropriation ~~effective system~~ of ~~internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud~~assets.

In(3) ~~connection~~Taxation ~~with~~discrepancies: ~~audits of~~The ~~our~~discrepancy ~~financial~~between ~~statements for~~ the ~~fiscal~~declared ~~years~~tax ~~ended~~revenue ~~September~~amount ~~30,~~and ~~2023~~the ~~and~~actual ~~2022,~~revenue ~~our~~amount ~~management~~increases ~~identified~~the arisk ~~few~~of ~~material~~penalties ~~weaknesses in~~for ~~the~~late ~~design~~payment and ~~operation~~potential ofnon-compliance ~~our~~with ~~internal~~tax ~~controls:~~regulations.

(14) ~~Inadequate~~Lack ~~income~~of ~~and~~an ~~cost~~effective ~~verification~~control ~~process~~environment: byThe control environment, which is the ~~financial~~responsibility ~~department:~~of ~~This~~senior ~~weakness~~management, ~~increases~~helps set the ~~risk~~tone of ~~revenue~~the ~~recognition~~organization, ~~errors~~influences the control consciousness of its officers and ~~potential~~employees, ~~fraud~~and is an important component affecting how the Company performs risk management, financial analysis, accounting, and financial reporting. The Company did not maintain an effective control environment primarily attributable to the following identified material weaknesses:

~~(2)~~- ~~Ineffective~~The ~~inventory~~Company’s management: ~~This~~does ~~weakness~~not ~~increases~~demonstrate ~~the~~a ~~risk~~strong ofcommitment ~~errors~~to ininternal ~~inventory~~controls, ~~valuation~~ and ~~potential~~there ~~misappropriation~~is a lack of ~~assets~~accountability for control deficiencies.

~~(3)~~- ~~Taxation~~There ~~discrepancies:~~is ~~The~~a ~~discrepancy~~risk ~~between~~of ~~the~~management ~~declared~~override ~~tax~~and ~~revenue~~inadequate ~~amount~~segregation ~~and~~of ~~the~~duties ~~actual~~due ~~revenue~~to ~~amount~~the ~~increases~~dual role of the ~~risk~~major ofshareholder ~~penalties~~as ~~for~~both ~~late~~CEO ~~payment~~and CFO. This arrangement grants one individual total authority and ~~potential~~control ~~non-compliance~~over ~~with~~financial ~~tax~~decisions ~~regulations~~and transactions.

~~(4)~~- ~~Lack~~Ineffective ~~of an effective~~ control environment: ~~The~~to ~~control~~provide ~~environment,~~employees ~~which~~with issufficient ~~the~~training ~~responsibility~~on ofinternal ~~senior~~control ~~management~~procedures, ~~helps~~and ~~set~~there ~~the~~is ~~tone~~a lack of ~~the~~communication ~~organization,~~regarding ~~influences~~ the ~~control~~importance ~~consciousness~~ of ~~its~~internal ~~officers~~controls ~~and~~within ~~employees, and is an important component affecting how~~ the Company. ~~performs~~This ~~risk~~resulted ~~management,~~in ~~financial~~communication ~~analysis,~~failures ~~accounting,~~of ~~and~~relevant ~~financial~~facts ~~reporting.~~necessary ~~The~~for ~~Company~~the ~~did~~accounting ~~not~~group ~~maintain~~to anproperly ~~effective~~conclude ~~control~~on ~~environment~~transactions ~~primarily~~which ~~attributable~~led to ~~the~~doubtful ~~following~~accounting ~~identified~~treatment ~~material~~of ~~weaknesses:~~certain revenue transactions.

- The Company’s ~~management~~did ~~does~~ not ~~demonstrate~~have asufficient ~~strong~~personnel ~~commitment~~with toan ~~internal~~appropriate ~~controls~~level of knowledge, experience, and ~~there~~training iscommensurate awith ~~lack~~the complexity of ~~accountability~~the ~~for~~transactions ~~control~~and ~~deficiencies~~the financial reporting requirements.

-(5) ~~There~~We isdid anot ~~risk~~hold ofany ~~management~~formal ~~override~~board ~~and~~meetings ~~inadequate~~or ~~segregation~~shareholders ofmeetings ~~duties~~during ~~due to~~ the ~~dual~~last ~~role~~fiscal ~~of the major shareholder as both CEO and CFO. This arrangement grants one individual total authority and control over financial decisions and transactions.~~year;

-(6) ~~Ineffective~~We ~~control~~do ~~environment~~not tohave ~~provide~~an ~~employees~~audit ~~with sufficient training on internal control procedures, and there is a lack of communication regarding the importance of internal controls within the Company~~committee. This resulted in communication failures of relevant facts necessary for the accounting group to properly conclude on transactions which led to doubtful accounting treatment of certain revenue transactions.

-As defined ~~The~~under standards established by the Public Company ~~did~~Accounting ~~not~~Oversight ~~have~~Board, ~~sufficient~~a ~~personnel~~material ~~with~~weakness anis ~~appropriate~~a ~~level~~deficiency, or a combination of ~~knowledge~~deficiencies, ~~experience~~in internal control over financial reporting, ~~and~~such ~~training~~that ~~commensurate~~there ~~with~~is ~~the~~a ~~complexity~~reasonable possibility that a material misstatement of the ~~transactions~~Company’s ~~and~~annual ~~the~~consolidated financial ~~reporting~~statements ~~requirements~~will not be prevented or detected on a timely basis.

~~(5) We did not hold any formal board meetings or shareholders meetings during the last fiscal year;~~40

~~(6)~~In addition, Wein doorder ~~not~~to address the material weakness in internal control over financial reporting of the Company, we have: (a) hired an experienced outside consultant with adequate experience with US GAAP and the SEC reporting and compliance requirements. (b) continued our efforts to provide ongoing training courses in US GAAP to existing personnel, including our Chief Financial Officer; (c) continued our efforts to set up the internal audit ~~committee~~department, and enhance the effectiveness of the internal control system; and (d) continued our efforts to implement necessary review and controls at related levels and all important documents and contracts will be submitted to the office of its chief executive officer for retention.

AsAll internal ~~defined~~control ~~under~~systems, ~~standards established~~no bymatter ~~the~~how ~~Public~~well ~~Company~~designed, ~~Accounting~~have ~~Oversight~~inherent ~~Board,~~limitations aincluding ~~material~~the ~~weakness~~possibility isof ahuman ~~deficiency,~~error orand athe ~~combination~~circumvention or overriding of ~~deficiencies~~controls. Further, because of changes in conditions, the effectiveness of internal ~~control~~controls may vary over ~~financial~~time. ~~reporting,~~Projections of ~~such~~any ~~that~~evaluation ~~there~~of iseffectiveness ato ~~reasonable~~future ~~possibility~~periods are subject to the risk that acontrols ~~material~~may ~~misstatement~~become inadequate because of ~~the~~changes ~~Company’s~~in ~~annual~~conditions, ~~consolidated~~or ~~financial~~that ~~statements~~the ~~will~~degree ~~not~~of becompliance ~~prevented~~with the policies or ~~detected~~procedures onmay adeteriorate. ~~timely~~Accordingly, ~~basis~~even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

40We cannot be certain that these measures will successfully remediate the material weakness or that other material weaknesses will not be discovered in the future. If our efforts are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our Common Stock to decline. In addition, it could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our securities. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

~~In addition, in order to address~~If ~~the~~major ~~material~~mobile ~~weakness~~application indistribution ~~internal~~channels ~~control~~change ~~over~~their ~~financial~~standard ~~reporting~~terms ofand ~~the~~conditions ~~Company,~~in ~~we have: (~~a) ~~hired~~manner anthat ~~experienced~~is ~~outside~~detrimental ~~consultant with adequate experience with US GAAP and the SEC reporting and compliance requirements. (b) continued our efforts~~ to ~~provide~~us, ~~ongoing~~or suspend ~~training~~or ~~courses~~terminate intheir USexisting ~~GAAP~~relationship towith ~~existing personnel~~us, ~~including~~ our ~~Chief~~business, ~~Financial~~financial ~~Officer;~~condition ~~(c) continued our efforts to set up the internal audit department,~~ and ~~enhance~~results ~~the effectiveness~~ of ~~the~~operations ~~internal~~may ~~control~~be ~~system;~~materially and ~~(d) continued our efforts to implement necessary review~~adversely ~~and controls at related levels and all important documents and contracts will be submitted to the office of its chief executive officer for retention~~affected.

~~All internal control systems,~~We nocurrently ~~matter~~cooperate ~~how~~of ~~well~~Apple’s ~~designed,~~app ~~have~~store ~~inherent~~and ~~limitations~~major ~~including~~PRC-based ~~the~~Android ~~possibility~~app ofstore ~~human~~to ~~error~~distribute ~~and~~ the ~~circumvention~~Wisdom orLighthouse ~~overriding~~App ~~of controls~~to users. As ~~Further~~such, ~~because~~the ~~of changes in conditions~~promotion, ~~the~~distribution ~~effectiveness~~and operation of ~~internal~~our ~~controls~~application ~~may~~are ~~vary~~subject ~~over~~to ~~time.~~such ~~Projections~~distribution ofplatforms’ ~~any~~standard ~~evaluation~~terms ofand ~~effectiveness~~policies tofor ~~future~~application ~~periods~~developers, which are subject to the ~~risk~~interpretation ~~that~~of, ~~controls~~and ~~may~~frequent ~~become~~changes ~~inadequate~~by, ~~because~~these ofdistribution ~~changes~~channels. If inthese third-party distribution platforms change their terms and conditions, orin ~~that the~~a ~~degree~~manner ofthat ~~compliance~~is ~~with~~detrimental ~~the~~to ~~policies~~us, or ~~procedures~~refuse ~~may~~to ~~deteriorate.~~distribute our ~~Accordingly~~application, ~~even~~or ~~those~~if ~~systems~~any ~~determined~~other major distribution channel with which we would like to beseek ~~effective~~collaboration ~~can~~refuses to collaborate with ~~provide~~us ~~only~~in ~~reasonable~~the ~~assurance~~future ~~with~~on ~~respect~~commercially tofavorable terms, our business, financial ~~statement~~condition ~~preparation~~and results of operations may be materially and ~~presentation~~adversely affected.

WeThe Internet ~~cannot~~is besubject ~~certain~~to ~~that these~~many ~~measures~~legal ~~will~~uncertainties ~~successfully~~and ~~remediate~~potential ~~the~~government ~~material~~regulations ~~weakness or~~ that ~~other~~may ~~material~~decrease ~~weaknesses~~demand ~~will~~for ~~not be discovered in the future. If~~ our ~~efforts are not successful or other material weaknesses or control deficiencies occur in the future~~services, ~~we may be unable to report~~increase our ~~financial~~cost ~~results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result in the loss~~ of ~~investor~~doing ~~confidence~~business or ~~delisting~~otherwise ~~and~~have ~~cause the market price of our Common Stock to decline. In addition, it could in turn limit our access to capital markets, harm our results of operations, and lead to~~ a ~~decline~~material inadverse ~~the~~effect ~~trading~~on ~~price of~~ our ~~securities.~~ ~~Additionally, ineffective internal control over~~ financial ~~reporting~~results ~~could expose us to increased risk of fraud~~ or ~~misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions~~prospects. ~~We may also be required to restate our financial statements from prior periods.~~

IfAny new ~~major~~law ~~mobile~~or ~~application~~regulation ~~distribution channels~~pertaining ~~change~~to ~~their~~the ~~standard~~Internet ~~terms~~or ~~and~~online ~~conditions~~publication, inor athe ~~manner~~application ~~that~~or isinterpretation ~~detrimental~~of toexisting uslaws, orcould decrease ~~suspend~~demand orfor ~~terminate~~our ~~their~~services, ~~existing~~increase ~~relationship with~~our ~~us,~~cost ~~our~~of doing business, ~~financial~~or ~~condition~~otherwise ~~and~~have ~~results~~a ofmaterial ~~operations~~adverse ~~may~~effect beon ~~materially~~our financial results and ~~adversely affected~~prospects.

WeNew laws ~~currently~~and ~~cooperate~~regulations or the application or interpretation of ~~Apple’s~~ ~~app~~existing ~~store~~laws and ~~major~~regulations ~~PRC-based~~pertaining ~~Android~~to ~~app~~the ~~store~~Internet toor ~~distribute~~online ~~the~~publication may ~~Wisdom~~be ~~Lighthouse~~adopted ~~App~~by toPRC ~~users.~~regulatory Asauthorities ~~such,~~in the ~~promotion, distribution~~future ~~and~~that ~~operation~~address ofInternet-related ~~our~~issues, ~~application~~including ~~are~~online ~~subject~~content, touser ~~such~~privacy, pricing ~~distribution~~and ~~platforms’~~quality ~~standard~~of ~~terms~~products and ~~policies~~services. ~~for~~For ~~application developers~~example, ~~which~~due ~~are subject~~ to the ~~interpretation~~ambiguity of, ~~and~~the ~~frequent~~definition ~~changes~~of by“online publishing service,” the ~~these~~online distribution ~~channels.~~of Ifcontent, ~~these~~including ~~third-party~~our ~~distribution platforms~~online ~~change~~services, ~~their~~the ~~terms~~courseware ~~and~~or ~~conditions~~audio-visual incontents auploaded ~~manner~~by ~~that~~the isusers ~~detrimental~~in toWisdom Lighthouse usApp, orthrough ~~refuse to distribute~~ our mobile application, ormay ifbe ~~any other~~regarded ~~major~~as ~~distribution~~“online ~~channel~~publishing ~~with~~service” ~~which~~and therefore we ~~would~~may ~~like~~be required to ~~seek~~obtain ~~collaboration~~an ~~refuses~~Online toPublishing ~~collaborate~~License ~~with us~~ in the future ~~on commercially favorable terms, our business, financial condition and results of operations may be materially and adversely affected~~.

The Internet is subject to many legal uncertainties and potential government regulations that may decrease demand for our services, increase our cost of doing business or otherwise have a material adverse effect on our financial results or prospects.41

~~Any~~Our future ~~new~~growth ~~law~~depends oron ~~regulation pertaining to~~ the ~~Internet~~further oracceptance ~~online~~of ~~publication, or~~ the ~~application~~Internet orand ~~interpretation~~particularly ofthe ~~existing~~mobile ~~laws,~~Internet ~~could~~as ~~decrease~~an ~~demand~~effective platform for ~~our~~assessing ~~services,~~educational ~~increase our cost of doing business or otherwise have a material adverse effect on our financial results and prospects~~services.

~~New~~While the ~~laws~~Internet and ~~regulations or~~ the ~~application~~mobile orInternet ~~interpretation~~have ofgained ~~existing~~increased ~~laws~~popularity ~~and~~in ~~regulations~~China ~~pertaining~~as toplatforms ~~the~~for ~~Internet~~online oreducational ~~online~~resources ~~publication~~sharing in ~~may~~recent beyears, ~~adopted~~many ~~by PRC~~users ~~regulatory~~have ~~authorities~~limited experience in ~~the~~accessing ~~future~~educational ~~that~~information ~~address~~online. ~~Internet-related~~For ~~issues~~example, ~~including~~users may not consider online content, ~~user~~to ~~privacy,~~be ~~pricing~~reliable ~~and~~sources ~~quality~~ of ~~products and services~~information. ~~For~~If ~~example,~~we ~~due~~fail to ~~the~~educate ~~ambiguity~~users ofabout the ~~definition~~value of ~~“online~~our ~~publishing service~~content,” ~~the~~our ~~online~~platform ~~distribution of~~and ~~content~~our services, ~~including~~ our ~~online~~growth ~~services~~may be limited and our business, ~~the~~financial ~~courseware~~performance orand ~~audio-visual~~prospects ~~contents~~may ~~uploaded~~be bymaterially and adversely affected. The further acceptance of the ~~users~~internet inand ~~Wisdom~~the ~~Lighthouse~~mobile ~~App,~~internet ~~through~~as an effective and efficient platform for information sharing and training ~~our~~content ~~mobile~~is ~~application~~also affected by factors beyond our control, ~~may~~including benegative ~~regarded~~publicity asaround “online ~~publishing~~educational ~~service”~~services and ~~therefore~~potential restrictive weregulatory ~~may~~measures betaken ~~required~~by tothe ~~obtain~~PRC angovernment. ~~Online Publishing~~If ~~License~~online and mobile networks do not achieve adequate acceptance in the market, ~~future~~our growth prospects, results of operations and financial condition could be harmed.

41The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Common Stock.

~~Our~~The Chinese ~~future~~government ~~growth~~has ~~depends~~exercised onand continues to exercise substantial control over virtually every sector of the ~~further~~Chinese economy through ~~acceptance~~regulation and state ownership. Zhouxun Beijing’s ability to operate in China may be harmed by changes in its laws and regulations, including those relating to securities regulation, data protection, cybersecurity and mergers and acquisitions and other matters. The central or local governments of ~~the~~these ~~Internet~~jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and ~~particularly~~efforts ~~the~~on ~~mobile~~our ~~Internet~~part asto anensure ~~effective~~our ~~platform~~compliance ~~for~~with ~~assessing~~such ~~educational~~regulations ~~services~~or interpretations.

~~While the Internet and the~~Government ~~mobile~~actions ~~Internet have gained increased popularity~~ in ~~China~~the asfuture ~~platforms~~could ~~for~~significantly ~~online~~affect ~~educational~~economic ~~resources~~conditions ~~sharing~~ in ~~recent~~China ~~years,~~or ~~many users~~particular ~~have~~regions ~~limited experience in accessing educational information online. For example~~thereof, ~~users~~and ~~may~~could ~~not~~require ~~consider~~us ~~online content~~ to ~~be reliable~~ ~~sources~~materially ofchange ~~information.~~our Ifoperating weactivities ~~fail~~or todivest ~~educate~~ourselves ~~users about the value~~ of ~~our~~any ~~content,~~interests ~~our~~we ~~platform~~hold ~~and~~in ~~our~~Chinese ~~services,~~assets. ~~our~~Zhouxun ~~growth~~Beijing’s business may be ~~limited and~~subject ~~our~~to ~~business,~~various ~~financial~~government ~~performance~~ and ~~prospects~~regulatory ~~may~~interference bein ~~materially~~the ~~and~~provinces ~~adversely~~in ~~affected~~which we operate. ~~The~~We ~~further~~may ~~acceptance~~incur ofincreased ~~the~~costs ~~internet~~necessary ~~and~~to ~~the~~comply ~~mobile~~with ~~internet~~existing ~~as an effective~~ and ~~efficient~~newly ~~platform~~adopted ~~for~~laws ~~information sharing~~ and ~~training~~regulations ~~content~~or ispenalties ~~also~~for ~~affected~~any byfailure ~~factors beyond~~to ~~our~~comply. ~~control,~~Zhouxun ~~including~~Beijing’s ~~negative~~operations could ~~publicity~~be ~~around~~adversely ~~online~~affected, ~~educational~~directly ~~services~~or ~~and~~indirectly, ~~potential restrictive regulatory measures taken~~ by ~~the~~existing ~~PRC~~or ~~government.~~future Iflaws ~~online~~ and ~~mobile~~regulations ~~networks~~relating doto ~~not achieve adequate acceptance in the market,~~ our ~~growth~~business ~~prospects,~~or ~~results of operations and financial condition could be harmed~~industry.

~~The~~Given recent ~~Chinese~~statements ~~government~~by ~~exerts~~the ~~substantial influence~~Chinese ~~over~~government ~~the~~indicating ~~manner~~an inintent ~~which~~to weexert ~~must~~more ~~conduct~~oversight ~~our~~and ~~business~~control ~~activities~~over ~~and~~offerings ~~may~~that ~~intervene~~are conducted overseas and/or ~~influence~~foreign ~~our~~investment ~~operations~~in atChina-based issuers, any ~~time, which~~such action could ~~result~~significantly inlimit aor ~~material~~completely ~~change~~hinder in our ~~operations~~ability to offer or continue to offer securities to investors and cause the value of ~~our~~such ~~Common~~securities ~~Stock~~to significantly decline or become worthless.

~~The~~Recently, the ~~Chinese~~General ~~government~~Office ~~has exercised~~of ~~and~~the ~~continues~~Central toCommittee ~~exercise~~of ~~substantial~~the ~~control~~Communist ~~over~~Party ~~virtually~~of ~~every~~China ~~sector~~and the General Office of the ~~Chinese~~State ~~economy~~Council ~~through~~jointly ~~regulation~~issued the ~~and~~Opinions ~~state ownership.~~on ~~Zhouxun~~Severely ~~Beijing’s~~Cracking ~~ability~~Down toon ~~operate~~Illegal inSecurities ~~China~~Activities ~~may~~According beto ~~harmed~~Law, byor ~~changes~~the inOpinions, ~~its~~which ~~laws~~was ~~and~~made ~~regulations~~available to the public on July 6, ~~including~~2021. ~~those~~The ~~relating~~ Opinions emphasized the need to strengthen the administration over illegal securities ~~regulation~~activities, and ~~data~~the ~~protection,~~need ~~cybersecurity~~to ~~and~~strengthen ~~mergers~~the ~~and~~supervision ~~acquisitions~~over ~~and~~overseas ~~other~~listings ~~matters~~by Chinese companies. ~~The~~Effective ~~central~~measures, orsuch ~~local~~as ~~governments~~promoting the construction of ~~these~~relevant ~~jurisdictions~~regulatory ~~may~~systems, ~~impose~~will ~~new,~~be ~~stricter~~taken ~~regulations~~to ordeal ~~interpretations~~with ofthe ~~existing~~risks ~~regulations~~and ~~that~~incidents ~~would~~of ~~require~~China-concept overseas ~~additional~~listed ~~expenditures~~companies. As ~~and~~of ~~efforts~~the ondate ~~our~~of ~~part~~this toAnnual ~~ensure~~Report, ~~our~~we ~~compliance~~or ~~with~~the ~~such~~VIE ~~regulations~~have not received any inquiry, notice, warning, or ~~interpretations~~sanctions from PRC government authorities in connection with the Opinions.

~~Government~~On June 10, ~~actions~~2021, inthe SCNPC, promulgated the ~~future~~ ~~could~~PRC ~~significantly~~Data ~~affect~~Security ~~economic~~Law, ~~conditions~~which took effect in ~~China~~September 2021. orThe ~~particular~~PRC ~~regions~~Data ~~thereof,~~Security Law imposes data security and ~~could~~privacy ~~require~~obligations uson toentities ~~materially~~and ~~change our~~individuals ~~operating~~carrying out data activities, orand ~~divest~~introduces ~~ourselves~~a ofdata ~~any~~classification and ~~interests~~hierarchical weprotection ~~hold~~system inbased ~~Chinese~~on ~~assets.~~the ~~Zhouxun~~importance ~~Beijing’s~~of ~~business~~data ~~may~~in beeconomic ~~subject to~~and ~~various~~social ~~government~~development, and ~~regulatory~~the ~~interference~~degree inof ~~the~~harm ~~provinces~~it inwill cause ~~which~~to wenational ~~operate.~~security, Wepublic ~~may~~interests, ~~incur~~or ~~increased~~legitimate ~~costs~~rights ~~necessary~~and tointerests ~~comply with~~of ~~existing~~individuals ~~and~~or ~~newly~~organizations ~~adopted~~when ~~laws~~such ~~and~~data ~~regulations~~is ortampered with, ~~penalties~~destroyed, ~~for~~leaked, ~~any~~illegally ~~failure~~acquired toor ~~comply~~used. ~~Zhouxun~~The ~~Beijing’s~~PRC ~~operations~~Data ~~could be~~Security ~~adversely~~Law ~~affected,~~also ~~directly~~provides orfor ~~indirectly,~~a bynational ~~existing~~security orreview ~~future~~procedure for ~~laws~~data activities that may affect national security and ~~regulations~~imposes ~~relating~~export torestrictions ~~our~~on ~~business~~certain ordata ~~industry~~an information.

Given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.42

~~Recently~~In early July 2021, ~~the~~regulatory ~~General~~authorities ~~Office of~~in ~~the~~China ~~Central~~launched ~~Committee~~cybersecurity ofinvestigations ~~the~~with ~~Communist~~regard ~~Party~~to ofseveral China-based companies that ~~and~~are listed in the ~~General~~United States. ~~Office~~The ofChinese ~~the~~cybersecurity ~~State~~regulator ~~Council~~announced ~~jointly~~on ~~issued~~July 2 ~~the~~that ~~Opinions~~it onhad ~~Severely~~begun an investigation ~~Cracking~~of ~~Down~~Didi onGlobal ~~Illegal~~Inc. ~~Securities~~(NYSE: DIDI) ~~Activities~~and ~~According~~two days tolater ~~Law,~~ordered orthat the ~~Opinions,~~company’s ~~which~~app ~~was~~be ~~made~~removed ~~available~~from tosmartphone ~~the~~app ~~public~~stores. On on July 65, 2021., ~~The~~the ~~Opinions~~Chinese ~~emphasized~~cybersecurity ~~the~~regulator ~~need~~launched tothe ~~strengthen~~same ~~the~~investigation ~~administration~~on ~~over~~two ~~illegal~~other ~~securities~~Internet ~~activities~~platforms, China’s Full Truck Alliance of Full Truck Alliance Co. Ltd. (NYSE: YMM) and ~~the~~Boss ~~need~~of toKANZHUN ~~strengthen~~LIMITED (Nasdaq: BZ). On July 24, 2021, the ~~supervision~~General ~~over~~Office ~~overseas~~of ~~listings~~the byCentral ~~Chinese~~Committee ~~companies.~~of ~~Effective~~the ~~measures,~~Communist ~~such~~Party asof ~~promoting~~China Central Committee and the ~~construction~~General Office of ~~relevant~~the ~~regulatory~~State Council ~~systems,~~jointly ~~will~~released bethe ~~taken~~Guidelines tofor ~~deal~~Further ~~with~~Easing the ~~risks~~Burden ~~and~~of ~~incidents~~Excessive ofHomework ~~China~~and Off-~~concept~~campus ~~overseas~~Tutoring ~~listed~~for ~~companies.~~Students Asat of the Stage ~~date~~ of ~~this~~Compulsory ~~Annual Report~~Education, wepursuant orto ~~the~~which ~~VIE~~foreign ~~have~~investment ~~not~~in ~~received~~such ~~any~~firms ~~inquiry,~~via ~~notice,~~mergers ~~warning~~and acquisitions, orfranchise ~~sanctions~~development, and ~~from~~variable ~~PRC~~interest ~~government~~entities ~~authorities~~are inbanned ~~connection~~from ~~with the~~this ~~Opinions~~sector.

On ~~June~~ November 1014, 2021, the ~~SCNPC,~~ ~~promulgated~~CAC released the ~~PRC~~Regulations on the Network Data Security ~~Law~~Management (Draft for Comments), ~~which~~or ~~took~~the ~~effect~~Data inSecurity Management ~~September 2021~~Regulations Draft, to solicit public opinion and comments. ~~The~~Pursuant ~~PRC~~to the Data Security ~~Law~~Management ~~imposes~~Regulations ~~data~~Draft, ~~security~~data ~~and~~processor ~~privacy~~holding ~~obligations~~more onthan ~~entities~~one ~~and~~million ~~individuals~~users/users’ ~~carrying~~individual ~~out~~information ~~data~~shall ~~activities,~~be ~~and~~subject ~~introduces~~to acybersecurity ~~data~~review ~~classification~~before ~~and hierarchical~~listing ~~protection~~abroad. ~~system~~Data ~~based~~processing onactivities ~~the~~refers ~~importance~~to ofactivities ~~data~~such inas ~~economic~~the ~~and~~collection, ~~social~~retention, ~~development~~use, ~~and~~processing, ~~the~~transmission, ~~degree~~provision, disclosure, ofor ~~harm~~deletion itof ~~will~~data. ~~cause~~According to ~~national security,~~the ~~public~~latest ~~interests~~amended Cybersecurity Review Measures, orwhich ~~legitimate~~was ~~rights~~promulgated on December 28, 2021 and ~~interests~~became ofeffective ~~individuals~~on orFebruary 15, ~~organizations~~2022, ~~when~~and ~~such~~replaced ~~data~~the isCybersecurity ~~tampered~~Review ~~with~~Measures promulgated on April 13, ~~destroyed~~2020, ~~leaked,~~online ~~illegally~~platform ~~acquired~~operator orholding ~~used.~~more ~~The~~than ~~PRC~~one ~~Data~~million ~~Security~~users/users’ ~~Law~~individual ~~also~~information ~~provides~~shall ~~for~~be asubject ~~national~~to ~~security~~cybersecurity review before ~~procedure~~listing ~~for~~abroad. ~~data~~Since ~~activities that~~the ~~may~~Cybersecurity ~~affect~~Review ~~national~~Measures ~~security~~is new, the implementation and ~~imposes~~interpretation ~~export~~thereof ~~restrictions~~is onnot ~~certain~~yet ~~data~~clear. As anof ~~information~~the date of this Annual Report, we have not been informed by any PRC governmental authority of any requirement that we file for review under the measure.

42On August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure, or the Regulations, which took effect on September 1, 2021. The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others, that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

~~In early July~~On August 20, 2021, ~~regulatory authorities~~the inSCNPC ~~China~~promulgated ~~launched~~the ~~cybersecurity~~Personal ~~investigations~~Information ~~with~~Protection ~~regard~~Law toof ~~several~~the ~~China-based companies~~PRC, ~~that~~or ~~are~~the ~~listed~~Personal inInformation ~~the United States.~~Protection ~~The~~Law, ~~Chinese~~which ~~cybersecurity~~took ~~regulator~~effect ~~announced~~in ~~on July~~November 22021. ~~that~~As itthe ~~had~~first ~~begun~~systematic ~~an investigation of Didi Global Inc. (NYSE: DIDI)~~ and ~~two days~~comprehensive ~~later~~law ~~ordered~~specifically ~~that~~for the ~~company’s~~protection ~~app~~of bepersonal information ~~removed~~in ~~from~~the ~~smartphone app stores. On July 5~~PRC, ~~2021,~~ the ~~Chinese cybersecurity~~Personal ~~regulator~~Information ~~launched~~Protection ~~the~~Law ~~same~~provides, ~~investigation~~among onothers, ~~two~~that ~~other~~(i) an ~~Internet platforms, China~~individual’s ~~Full~~consent ~~Truck~~shall be ~~Alliance~~obtained ofto ~~Full~~use ~~Truck Alliance~~sensitive ~~Co.~~personal ~~Ltd.~~information, ~~(NYSE: YMM)~~such ~~and~~as ~~Boss~~biometric ofcharacteristics ~~KANZHUN~~and ~~LIMITED~~individual ~~(Nasdaq:~~location ~~BZ).~~tracking, ~~On July~~(ii) ~~24,~~personal information ~~2021,~~operators ~~the~~using ~~General~~sensitive ~~Office~~personal ofinformation ~~the~~shall ~~Central Committee~~notify individuals of the ~~Communist~~necessity ~~Party~~ of ~~China~~such ~~Central~~use ~~Committee~~ and ~~the~~impact ~~General~~on ~~Office of~~ the ~~State Council jointly released the Guidelines~~individual’s ~~for~~rights, ~~Further Easing the Burden of Excessive Homework~~ and ~~Off-campus~~(iii) ~~Tutoring~~where ~~for~~personal ~~Students~~information atoperators ~~the~~reject ~~Stage~~an ofindividual’s ~~Compulsory~~request ~~Education, pursuant~~ to ~~which~~exercise ~~foreign~~his ~~investment~~or inher ~~such firms via mergers and acquisitions~~rights, ~~franchise~~the ~~development,~~individual may ~~and~~file ~~variable~~a ~~interest~~lawsuit ~~entities~~with ~~are~~a ~~banned from~~People’s ~~this sector~~Court.

On ~~November~~ July 147, ~~2021~~2022, the CAC ~~released~~promulgated the ~~Regulations~~Outbound onData ~~the~~Transfer ~~Network~~Security ~~Data~~Assessment ~~Security~~Measures, ~~Management~~which ~~(Draft~~became ~~for~~effective ~~Comments)~~on September 1, 2022. orAccording to the Outbound Data Transfer Security ~~Management~~Assessment ~~Regulations Draft~~Measures, to ~~solicit~~provide ~~public~~data ~~opinion~~abroad ~~and~~under ~~comments.~~any ~~Pursuant~~of to the ~~Data~~following ~~Security Management Regulations Draft~~circumstances, a data processor ~~holding~~shall ~~more than~~declare ~~one~~security ~~million~~assessment ~~users/users’~~for ~~individual~~its ~~information~~outbound ~~shall~~data betransfer ~~subject~~ to ~~cybersecurity~~the ~~review~~CAC ~~before~~through ~~listing~~the ~~abroad.~~local ~~Data~~cyberspace ~~processing~~administration ~~activities~~at ~~refers~~the toprovincial ~~activities~~level: ~~such~~(i) aswhere the ~~collection,~~data ~~retention,~~processor ~~use,~~will ~~processing,~~provide ~~transmission,~~important ~~provision,~~data ~~disclosure,~~abroad; (ii) where CIIO or ~~deletion~~the of data. ~~According~~processor to processing the ~~latest~~personal ~~amended~~information ~~Cybersecurity~~of ~~Review~~more ~~Measures,~~than ~~which~~one ~~was~~million ~~promulgated~~individuals onwill ~~December 28,~~provide ~~2021~~personal ~~and~~information ~~became~~abroad; ~~effective~~(iii) where the data processor onwho ~~February 15,~~has ~~2022,~~provided ~~and~~personal ~~replaced~~information ~~the~~of ~~Cybersecurity~~100,000 ~~Review~~individuals ~~Measures~~or ~~promulgated~~sensitive onpersonal ~~April 13,~~information ~~2020~~of 10,000 ~~online~~individuals ~~platform~~in ~~operator~~total abroad ~~holding~~since ~~more~~January ~~than~~1 ~~one~~of ~~million~~the ~~users/users’~~previous ~~individual~~year, will provide personal information ~~shall~~abroad; beand ~~subject~~(iv) toother ~~cybersecurity~~circumstances ~~review~~where ~~before~~the ~~listing~~security ~~abroad.~~assessment ~~Since~~is required as prescribed by the ~~Cybersecurity~~CAC. ~~Review~~Prior ~~Measures~~to isdeclaring ~~new~~security assessment for outbound data transfer, the ~~implementation~~data ~~and~~processor ~~interpretation~~shall ~~thereof~~conduct self-assessment on isthe ~~not~~risks ~~yet~~of ~~clear~~the outbound data transfer. AsFor outbound data transfers that have been carried out before the effectiveness of the ~~date~~Outbound ofData ~~this Annual~~Transfer ~~Report,~~Security weAssessment ~~have~~Measures, ~~not~~if ~~been~~it ~~informed~~is bynot ~~any~~in ~~PRC~~compliance ~~governmental~~with ~~authority~~these ofmeasures, ~~any~~rectification ~~requirement~~shall ~~that~~be wecompleted within ~~file~~six ~~for~~months ~~review~~starting ~~under~~from ~~the~~September 1, ~~measure~~2022.

OnAs of ~~August 17~~September 30, ~~2021~~2024, ~~the State~~we ~~Council~~have ~~promulgated~~not ~~the~~received ~~Regulations~~any onpenalty, ~~the~~investigation ~~Protection~~or ofwarning with respect to the ~~Security~~VIE’s ofbusiness ~~Critical~~operation from ~~Information~~the ~~Infrastructure~~CAC, nor have we received any notice or instructions from the ~~Regulations, which~~CAC ~~took~~requiring ~~effect~~us onor ~~September 1,~~the ~~2021~~VIE to declare a security assessment. Furthermore, ~~The~~as ~~Regulations~~of ~~supplement~~September ~~and~~30, ~~specify~~2024, ~~the~~implementation ~~provisions~~rules onfor the ~~security~~rectification ofrequirements ~~critical~~have ~~information~~not been issued and we have not started ~~infrastructure~~rectifications. asWe ~~stated~~will continually monitor our compliance status in accordance with the ~~Cybersecurity~~latest ~~Review~~developments ~~Measures~~in applicable regulatory requirements. ~~The~~If ~~Regulations~~it ~~provide,~~is ~~among~~determined ~~others,~~in the future that ~~protection~~we ~~department~~are ofrequired ~~certain industry~~to ordeclare ~~sector~~a ~~shall~~security ~~notify~~assessment, ~~the~~it ~~operator~~is ofuncertain ~~the~~whether ~~critical~~we ~~information~~can or ~~infrastructure~~how inlong ~~time~~it ~~after~~will ~~the~~take ~~identification~~us ofto ~~certain~~complete ~~critical information~~such ~~infrastructure~~declaration or rectification.

OnWe also ~~August 20,~~face ~~2021,~~risks ~~the SCNPC~~relating ~~promulgated~~to ~~the~~our ~~Personal~~previous ~~Information~~corporate ~~Protection~~structure. ~~Law~~If of the PRC, orgovernment ~~the~~deems ~~Personal~~that ~~Information~~our ~~Protection~~VIE ~~Law,~~Agreements ~~which~~with ~~took~~the ~~effect~~VIE indomiciled ~~November 2021.~~in AsChina ~~the~~did ~~first~~not ~~systematic~~comply ~~and~~with ~~comprehensive~~PRC ~~law~~regulatory ~~specifically~~restrictions ~~for~~on ~~the~~foreign ~~protection~~investment ~~of personal information~~ in the ~~PRC, the~~relevant ~~Personal Information Protection Law provides~~industries, ~~among~~or ~~others,~~if ~~that~~these ~~(i) an~~regulations ~~individual’s consent shall be obtained to use sensitive~~or ~~personal~~the ~~information,~~interpretation ~~such as biometric characteristics and individual location tracking, (ii) personal information operators using sensitive personal information shall notify individuals~~ of ~~the~~existing ~~necessity~~regulations ofchange ~~such~~or ~~use~~are ~~and~~interpreted ~~impact~~differently onin the ~~individual’s rights~~future, ~~and (iii) where~~we ~~personal~~could ~~information~~be ~~operators~~subject ~~reject an individual’s request~~ to ~~exercise~~severe ~~his or her rights, the individual may~~penalties ~~file a lawsuit with a People’s Court~~retroactively.

~~As of September 30, 2023,~~RISKS weRELATING ~~have~~TO ~~not~~OUR received any penalty, investigation or warning with respect to the VIE’s business operation from the CAC, nor have we received any notice or instructions from the CAC requiring us or the VIE to declare a security assessment. Furthermore, as of September 30, 2023, implementation rules for the rectification requirements have not been issued and we have not started rectifications. We will continually monitor our compliance status in accordance with the latest developments in applicable regulatory requirements. If it is determined in the future that we are required to declare a security assessment, it is uncertain whether we can or how long it will take us to complete such declaration or rectification.SECURITIES

~~We also face risks relating to our previous corporate structure.~~ If ~~the PRC government deems that our VIE Agreements with the VIE domiciled in China did not comply~~ ~~with~~we ~~PRC~~fail ~~regulatory~~to ~~restrictions~~maintain oneffective ~~foreign~~internal ~~investment~~controls inover ~~the~~financial ~~relevant industries~~reporting, ~~or if these regulations or~~ the ~~interpretation~~price of ~~existing regulations~~our ~~change~~Common orStock ~~are~~may ~~interpreted differently in the future, we could~~ be ~~subject~~adversely ~~to severe penalties retroactively~~affected.

43We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting. The standards that must be met for management to assess the internal control over financial reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.

~~RISKS~~In addition, ~~RELATING~~management’s TOassessment ~~OUR~~of ~~SECURITIES~~internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting, or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.

IfBecause of weour ~~fail~~lack toof ~~maintain~~operations ~~effective~~and ~~internal controls over financial reporting,~~ the ~~price~~nature of our ~~Common~~business, ~~Stock~~our ~~may~~securities beare ~~adversely~~considered ~~affected~~highly speculative.

~~We are required to establish~~Our ~~and~~securities ~~maintain~~must ~~appropriate~~be ~~internal~~considered ~~controls~~highly ~~over financial reporting. Failure to establish those controls~~speculative, orgenerally ~~any~~because ~~failure~~ of ~~those~~the ~~controls once~~nature ~~established,~~of ~~could adversely impact~~ our ~~public disclosures regarding our~~ business, ~~financial~~and ~~condition~~the orcurrent ~~results~~lack of ~~operations.~~substantial ~~Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds~~development. ~~Rules~~We ~~adopted~~have byonly ~~the~~generated ~~SEC~~modest ~~pursuant~~revenues to ~~Section~~date, ~~404~~and ofthere ~~the~~is ~~Sarbanes-Oxley~~little ~~Act~~likelihood ofthat ~~2002~~we ~~require~~will ~~annual~~realize ~~assessment~~any ofsignificant ~~our~~profits ~~internal~~in ~~control~~the ~~over~~short ~~financial reporting~~term. ~~The~~Since ~~standards~~we ~~that~~are ~~must~~still bea ~~met~~development ~~for~~stage ~~management to assess the internal control over financial reporting as effective are complex~~company, ~~and~~we ~~require~~will ~~significant~~have ~~documentation,~~to ~~testing~~raise ~~and~~monies ~~possible~~for ~~remediation~~our tooperations ~~meet~~through the ~~detailed~~sale ~~standards.~~of Weour ~~may~~equity ~~encounter~~securities ~~problems~~ or ~~delays~~debt in ~~completing~~order ~~activities necessary~~ to ~~make~~continue ~~an assessment of~~ our ~~internal~~business ~~control over financial reporting~~operations. ~~If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.~~

~~In addition, management’s~~We ~~assessment of internal controls over financial reporting~~ may, ~~identify weaknesses and conditions that need to be addressed~~ in ~~our~~the ~~internal controls~~future, ~~over~~issue ~~financial~~additional ~~reporting~~shares orof ~~other~~Common ~~matters~~Stock that ~~may~~would ~~raise~~reduce ~~concerns for~~ investors~~. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management~~’s ~~assessment~~percent of ~~our~~ownership ~~internal controls~~and ~~over~~may ~~financial~~dilute ~~reporting, or disclosure of~~ our ~~public accounting firm’s attestation to or report on management’s~~ ~~assessment~~share ~~of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock~~value.

~~Because~~The future issuance of preferred and/or Common Stock may result in substantial dilution in the percentage of our ~~lack~~Common Stock held by our then existing stockholders. We may value any shares of ~~operations~~Common ~~and~~Stock issued in the future on an arbitrary basis. The issuance of Common ~~nature~~Stock may have the effect of diluting the value of the Common Stock held by our ~~business~~investors, ~~our~~and ~~securities~~might ~~are~~have ~~considered~~an ~~highly~~adverse ~~speculative~~effect on any trading market for our Common Stock.

~~Our securities must be considered~~The ~~highly~~Market ~~speculative,~~for ~~generally~~Penny ~~because~~Stock ofhas ~~the~~suffered ~~nature~~in ofrecent ~~our~~years ~~business~~from ~~and~~patterns ~~the current lack~~ of ~~substantial~~fraud ~~development. We have only generated modest revenues to date,~~ and ~~there is little likelihood that we will realize any significant profits in the short term~~abuse. ~~Since we are still a development stage company, we will have to raise monies for our operations through the sale of our equity securities or debt in order to continue our business operations.~~

WeStockholders should ~~may~~be aware that, inaccording ~~the~~to ~~future~~SEC Release No. 34-29093, ~~issue~~the ~~additional~~market for penny stocks has suffered in recent years from patterns of ~~shares~~fraud and abuse. Such patterns include: (i) control of ~~Common~~the ~~Stock~~market for the security by one or a few broker-dealers that ~~would~~are ~~reduce~~often ~~investors’~~related to ~~percent~~the promoter or issuer; (ii) manipulation of ~~ownership~~prices through prearranged matching of purchases and ~~may~~sales ~~dilute~~and ~~our~~false ~~share~~and ~~value~~misleading press releases; (iii) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons; (iv) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and, (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequential investor losses.

The future issuance of preferred and/or Common Stock may result in substantial dilution in the percentage of our Common Stock held by our then existing stockholders. We may value any shares of Common Stock issued in the future on an arbitrary basis. The issuance of Common Stock may have the effect of diluting the value of the Common Stock held by our investors, and might have an adverse effect on any trading market for our Common Stock.44

~~The~~Our Common ~~Market~~Stock ~~for~~is subject to the “Penny Stock” ~~has~~Rules ~~suffered~~ of the SEC, which makes transactions in ~~recent~~our ~~years~~stock ~~from~~cumbersome ~~patterns~~and may reduce the value of ~~fraud~~an ~~and~~investment ~~abuse~~in our stock.

~~Stockholders should be aware~~The ~~that, according to~~ SEC ~~Release~~has ~~No.~~adopted ~~34-29093,~~regulations ~~the~~that ~~market~~generally ~~for~~define a “penny ~~stocks~~stock” ~~has~~to ~~suffered~~be inany ~~recent~~equity ~~years~~security ~~from~~other ~~patterns~~than ofa ~~fraud~~security ~~and abuse.~~excluded ~~Such~~from ~~patterns~~such ~~include:~~definition ~~(i) control of the market for the security~~ by ~~one~~Rule ~~or a few broker~~3a51-~~dealers~~1 ~~that~~under ~~are often related to~~ the ~~promoter or~~Securities ~~issuer;~~Exchange ~~(ii)~~Act ~~manipulation~~ of ~~prices~~1934, ~~through~~as ~~prearranged~~amended. ~~matching~~For ofthe ~~purchases~~purposes ~~and~~relevant ~~sales~~to ~~and~~our ~~false and misleading press releases; (iii)~~Company, ~~boiler~~it ~~room~~is ~~practices~~any ~~involving~~equity ~~high-pressure~~security ~~sales~~that ~~tactics~~has ~~and~~a ~~unrealistic~~market price ~~projections~~of byless ~~inexperienced~~than ~~salespersons;~~$5.00 ~~(iv)~~per ~~excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and~~share, ~~(v)~~subject ~~the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated~~ to acertain ~~desired level, along with the resulting inevitable collapse of those prices and with consequential investor losses~~exceptions.

44Our Common Stock, when and if a trading market develops, may fall within the definition of “penny stock” and be subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC, to provide a customer with additional information including current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer’s account, and to make a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.

~~Our~~To the ~~Common~~extent ~~Stock~~these isrequirements ~~subject~~may tobe ~~the~~applicable; ~~“Penny Stock”~~they ~~Rules~~will ofreduce the ~~SEC,~~level ~~which~~of ~~makes~~trading ~~transactions~~activity in ~~our~~the ~~stock~~secondary ~~cumbersome~~market for the Common Stock and may ~~reduce~~severely and adversely affect the ~~value~~ability of anbroker-dealers ~~investment~~to insell ~~our~~the ~~stock~~Common Stock.

~~The~~Our Common ~~SEC~~Stock ~~has~~is ~~adopted~~not ~~regulations that~~currently ~~generally~~quoted ~~define~~in athe ~~“penny~~OTC ~~stock”~~market. toWe beare ~~any~~currently ~~equity~~engaged ~~security~~in ~~other~~the ~~than~~process of preparing a ~~security~~Form ~~excluded~~211 ~~from~~with ~~such~~market ~~definition~~makers to byregain compliance with Rule ~~3a51~~ 15c2-111 ~~under~~of the ~~Securities~~ Exchange Act of 1934, asand ~~amended.~~to ~~For~~apply ~~the~~for ~~purposes~~resumption ~~relevant~~of tothe ~~our~~quotation ~~Company,~~of itour isCommon ~~any~~Stock ~~equity~~with the ~~security~~Financial ~~that has~~Industry aRegulatory ~~market~~Authority ~~price~~(FINRA) ofunder ~~less~~FINRA ~~than~~Rule $56432.00 ~~per~~There ~~share,~~is ~~subject~~no toguarantee ~~certain~~that ~~exceptions~~our Common Stock will resume quotation on the OTC Market.

~~Our~~Because ~~Common~~we ~~Stock,~~were ~~when~~not ~~and~~current ifin aour ~~trading~~annual ~~market~~and ~~develops,~~quarterly ~~may~~reports ~~fall~~pursuant ~~within~~to ~~the~~Section ~~definition~~13 and 15(d) of the Exchange Act (the “~~penny~~Reporting ~~stock~~Obligations”), ~~and~~our Common beStock ~~subject~~was transferred from OTC Pink to ~~rules~~OTC ~~that~~“Expert ~~impose~~Market”, ~~additional~~which has been associated with very little trading activity ~~sales~~and ~~practice~~a ~~requirements~~decrease onin ~~broker-dealers~~the ~~who~~share ~~sell~~price, in April 2023. As such, ~~securities~~it tocould ~~persons~~only ~~other~~be ~~than~~traded ~~established~~between ~~customers~~brokers and ~~accredited~~no ~~investors~~quote was published. On July ~~The~~12, ~~penny~~2024, ~~stock~~we ~~rules~~were ~~require~~notified aby ~~broker-dealer~~the toFinancial ~~deliver~~Industry Regulatory Authority (FINRA) that due to a ~~standardized~~lack ~~risk~~of ~~disclosure~~trading ~~document~~activities ~~prepared~~for more than 1 year, our Common Stock has been removed from quotation on the OTC marketplace operated by the ~~SEC~~OTC Markets Group, toInc. ~~provide~~Since athe ~~customer~~removal, we are currently engaged in the process of preparing a Form 211 with ~~additional~~market ~~information~~makers ~~including~~to ~~current~~regain ~~bid~~compliance ~~and~~with ~~offer~~Rule ~~quotations~~15c2-11 ~~for~~of the ~~penny~~Exchange Act ~~stock,~~of 1934 and to apply for resumption of the ~~compensation~~quotation of our Common Stock with the ~~broker-dealer~~Financial ~~and~~Industry Regulatory Authority (FINRA) ~~its~~under ~~salesperson~~FINRA Rule 6432. We cannot provide any assurance that we will be successful in resuming the ~~transaction~~quotation of our Common Stock on the OTC Market, ~~monthly~~or ~~account~~that ~~statements~~the ~~showing~~trading volume or price will increase if we become current in our Reporting Obligations in the ~~market~~future. ~~value~~Not being listed on an established securities exchange has an adverse effect on the liquidity of ~~each~~our ~~penny~~Common ~~stock~~Stock, ~~held~~not only in terms of the ~~customer’s~~number ~~account,~~of shares that can be bought and tosold ~~make~~at a ~~special~~given ~~written~~price, ~~determination~~but ~~that~~also through delays in the ~~penny~~timing ~~stock~~of istransactions aand ~~suitable~~reduction ~~investment~~in security analysts’ and the media’s coverage of our company. This may result in lower prices for our Common Stock than might otherwise be obtained and could also result in a larger spread between the ~~purchaser~~bid and asked prices for our Common Stock . Historically, our Common Stock has been thinly traded, and ~~receive~~there is no guarantee of the ~~purchaser’s~~ ~~written~~prices ~~agreement~~at towhich the ~~transaction~~shares will trade or of the ability of stockholders to sell their shares without having an adverse effect on market prices.

~~To the extent these requirements~~Because ~~may~~we bedo ~~applicable;~~not ~~they~~intend ~~will~~to ~~reduce~~pay ~~the~~any ~~level~~dividends ofon ~~trading~~our ~~activity~~shares, ininvestors ~~the~~seeking ~~secondary~~dividend ~~market~~income ~~for~~or ~~the~~liquidity ~~Common~~should ~~Stock~~not ~~and~~purchase ~~may~~our ~~severely and adversely affect the ability of broker-dealers to sell the Common Stock~~shares.

~~Our~~We have ~~common~~not ~~stock~~declared isor ~~thinly~~paid ~~traded~~any dividends on our shares since inception, and ~~there~~do not anticipate paying any such dividends for the foreseeable isfuture. noIf ~~guarantee~~payment of ~~the~~dividends ~~prices~~does occur at ~~which~~some point in the ~~shares~~future, it would be contingent upon our revenues and earnings, if any, capital requirements, and general financial condition. The payment of any Common Stock dividends will ~~trade~~be within the discretion of our Board of Directors. We presently intend to retain all earnings to promote our applications and develop new applications and add-on features to our existing applications; accordingly, we do not anticipate the declaration of any dividends for Common Stock in the foreseeable future. Investors seeking dividend income or liquidity should not invest in our shares.

~~Our common stock is quoted on the OTC marketplace operated by the OTC Markets Group, Inc.~~ Because ~~we are not current in our annual and quarterly reports pursuant~~ to Section 13 and 15(d) of the Exchange Act (the “Reporting Obligations”), our common stock has been transferred from OTC Pink to OTC “Expert Market”, which has been associated with very little trading activity and a decrease in the share price. As such, it can only be traded between brokers and no quote is published. We cannot provide any assurance that the trading volume or price will increase if we become current in our Reporting Obligations and are quoted on the OTC Pink tier in the future. Not being listed on an established securities exchange has an adverse effect on the liquidity of our common stock, not only in terms of the number of shares that can beissue ~~bought~~additional ~~and sold at a given price~~shares, ~~but~~purchasers ~~also through delays in the timing~~ of ~~transactions and reduction in security analysts’ and the media’s coverage of~~ our ~~company.~~shares ~~This~~ may ~~result~~incur inimmediate ~~lower~~dilution ~~prices for our common stock than might otherwise be obtained~~ and ~~could~~ ~~also~~may ~~result~~experience infurther ~~a larger spread between the bid and asked prices for our common stock~~dilution. Historically, our common stock has been thinly traded, and there is no guarantee of the prices at which the shares will trade or of the ability of stockholders to sell their shares without having an adverse effect on market prices.

~~Because~~We are weauthorized doto ~~not~~issue ~~intend~~up to ~~pay~~600,000,000 ~~any~~shares ~~dividends on~~of Common Stock and 200,000,000 shares of preferred stock. The board of directors of our company has the authority to cause us to issue additional shares of Common Stock, ~~investors~~and ~~seeking~~to ~~dividend~~determine ~~income~~the orrights, ~~liquidity~~preferences ~~should~~and ~~not~~privileges of ~~purchase~~such shares, without consent of any of our ~~shares~~stockholders. Consequently, our stockholders may experience more dilution in their ownership of our company in the future.

We have not declared or paid any dividends on our shares since inception, and do not anticipate paying any such dividends for the foreseeable future. If payment of dividends does occur at some point in the future, it would be contingent upon our revenues and earnings, if any, capital requirements, and general financial condition. The payment of any Common Stock dividends will be within the discretion of our Board of Directors. We presently intend to retain all earnings to promote our applications and develop new applications and add-on features to our existing applications; accordingly, we do not anticipate the declaration of any dividends for Common Stock in the foreseeable future. Investors seeking dividend income or liquidity should not invest in our shares.45

~~Because~~Our Common weStock ~~can~~may ~~issue~~experience ~~additional~~extreme ~~shares, purchasers~~rises ofor ~~our~~declines ~~shares~~in price, and you may ~~incur~~not ~~immediate~~be ~~dilution~~able ~~and~~to ~~may~~sell ~~experience~~your ~~further~~shares ~~dilution~~at or above the price paid.

WeIf and ~~are~~when ~~authorized~~we tocomplete ~~issue up~~the toForm ~~600,000,000~~211 ~~shares~~process and resume the quotation of our Common Stock ~~and~~on ~~200~~the OTC Market,~~000,000~~ ~~shares~~our ofCommon ~~preferred~~Stock ~~stock.~~may ~~The~~be ~~board~~highly volatile ofand ~~directors~~could be subject to extreme fluctuations in response to various factors, many of ~~our~~which ~~company~~are ~~has~~beyond ~~the~~our ~~authority~~control, including to(but ~~cause~~not usnecessarily limited to): ~~issue~~(i) ~~additional~~the trading volume of our shares; (ii) the number of securities analysts, market-makers and brokers following our Common Stock; (iii) changes in, ~~and~~or failure to ~~determine~~achieve, ~~the~~financial ~~rights,~~estimates ~~preferences~~by ~~and~~securities ~~privileges~~analysts; (iv) actual or anticipated variations in quarterly operating results; (v) conditions or trends in our business industries; (vi) announcements by us of ~~such~~significant contracts, ~~shares~~acquisitions, ~~without consent~~strategic partnerships, joint ventures or capital commitments; (vii) additions or departures of ~~any~~key personnel; (viii) sales of our ~~stockholders.~~Common ~~Consequently,~~Stock; ~~our~~and ~~stockholders~~(ix) ~~may~~general ~~experience~~stock ~~more~~market ~~dilution~~price inand ~~their~~volume ~~ownership~~fluctuations of ~~our~~publicly ~~company~~trading inand ~~the~~particularly, microcap ~~future~~companies.

45Investors may have difficulty reselling shares of our Common Stock, either at or above the price they paid for our stock, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our Common Stock is thinly traded it is particularly susceptible to such changes. These broad market changes may cause the market price of our Common Stock to decline regardless of how well we perform as a company. In addition, there is a history of securities class action litigation following periods of volatility in the market price of a company’s securities. Although there is no such shareholder litigation currently pending or threatened against the Company, such a suit against us could result in the incursion of substantial legal fees, potential liabilities and the diversion of management’s attention and resources from our business. Moreover, and as noted below, our shares are currently quoted on the OTC Expert Market and, further, are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to manipulation by market-makers, short-sellers and option traders.

~~Our Common Stock may experience extreme~~RISKS ~~rises~~RELATING orTO ~~declines~~OUR inCORPORATE ~~price, and you may not be able to sell your shares at or above the price paid.~~STRUCTURE

~~Our Common Stock may be highly~~We ~~volatile~~rely ~~and~~on ~~could~~VIE beAgreements ~~subject~~with tothe ~~extreme~~VIE ~~fluctuations~~and inthe ~~response~~shareholders ~~to various factors, many~~ of ~~which~~the ~~are~~VIE ~~beyond our control, including (but not necessarily limited~~ to): ~~(i)~~consolidate the ~~trading~~financial ~~volume~~results of ~~our shares; (ii)~~ the ~~number~~PRC ofoperating ~~securities analysts, market-makers and brokers~~entities. ~~following~~We ~~our~~do ~~Common~~not ~~Stock;~~have ~~(iii)~~an ~~changes~~equity ownership in, ordirect ~~failure~~foreign toinvestment ~~achieve~~in, ~~financial estimates by securities analysts; (iv) actual~~ or ~~anticipated variations~~control ~~in quarterly operating results; (v) conditions or trends in our business industries; (vi) announcements by us~~ of ~~significant contracts~~, ~~acquisitions,~~through ~~strategic~~such ~~partnerships,~~ownership ~~joint ventures~~ or ~~capital commitments; (vii) additions or departures of key personnel; (viii) sales of our Common Stock; and (ix) general stock market price and volume fluctuations of publicly trading and particularly~~investment, ~~microcap companies~~the VIE.

~~Investors may~~ We have ~~difficulty reselling~~relied ~~shares~~and ofexpect ~~our~~to ~~Common~~continue ~~Stock,~~to ~~either~~rely aton ~~or above~~ the ~~price~~VIE ~~they~~Agreements ~~paid~~with ~~for our stock, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to~~ the ~~operating~~VIE ~~performance of individual companies, and because our Common Stock is thinly traded it is particularly susceptible~~ to ~~such~~consolidate ~~changes. These broad market changes may cause~~ the ~~market~~financial ~~price of~~results ~~our Common Stock to decline regardless~~ of ~~how~~the ~~well~~PRC ~~we perform as a company~~operating entities. InFor ~~addition, there is~~ a ~~history~~description of ~~securities~~these ~~class~~contractual ~~action litigation~~arrangements, ~~following~~see ~~periods~~“Item of1 ~~volatility~~- inOrganizational ~~the market price of a company’s securities~~Structure.” ~~Although~~We ~~there~~do isnot nohave ~~such shareholder~~an ~~litigation~~equity ~~currently~~ownership ~~pending or threatened against the Company~~in, ~~such~~direct aforeign ~~suit~~investment ~~against us could result~~ in ~~the incursion of substantial legal fees~~, ~~potential~~or ~~liabilities~~control ~~and the diversion~~ of ~~management’s attention and resources from our business. Moreover~~, ~~and~~through assuch ~~noted below,~~ownership ~~our~~or ~~shares are currently quoted on the OTC Expert Market and~~investment, ~~further, are subject to~~ the ~~penny stock regulations~~VIE. ~~Price fluctuations in such shares are particularly volatile and subject to manipulation by market-makers, short-sellers and option traders.~~

~~RISKS~~If ~~RELATING~~we TOhad ~~OUR~~direct ~~CORPORATE~~ownership of ~~STRUCTURE~~the VIE, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current Contractual Arrangements, we rely on the performance by the VIE and its shareholders of their obligations under the contracts to consolidate financial results of the VIE. The shareholders of the VIE may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to consolidate the financial results of the PRC operating entities through the VIE Agreements with the VIE. Although we have the right to replace any shareholder of the VIE under the Contractual Arrangements, if any shareholder of the VIE is uncooperative or any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC laws and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. See “Risk Factors — Uncertainties with respect to the PRC legal system could have a material adverse effect on us.” Therefore, we do not have an equity ownership in, direct foreign investment in, or control of, through such ownership or investment, the VIE.

WeAny failure ~~rely~~by ~~on VIE Agreements with~~ the VIE ~~and the~~or its shareholders ~~of the VIE~~ to ~~consolidate~~perform ~~the~~their ~~financial~~obligations ~~results~~under ofour ~~the~~VIE ~~PRC~~Agreements ~~operating~~with ~~entities.~~them Wewould ~~do not~~ have ana ~~equity~~material ~~ownership in,~~adverse ~~direct~~effect ~~foreign~~on ~~investment~~our ~~in,~~results ~~or control~~ of, ~~through such ownership or investment, the VIE~~operation.

WeIf the ~~have~~VIE ~~relied~~or ~~and~~its ~~expect to~~shareholders ~~continue~~fail to ~~rely~~perform ontheir respective obligations under the VIE Agreements, ~~with~~we ~~the~~may ~~VIE~~have to ~~consolidate~~incur ~~the~~substantial ~~financial~~costs and ~~results~~expend ofadditional ~~the~~resources ~~PRC~~to ~~operating~~enforce ~~entities~~such arrangements. ~~For~~We amay ~~description~~also have to rely on legal remedies under PRC laws, including seeking ofspecific ~~these~~performance ~~contractual~~or ~~arrangements~~injunctive relief, ~~see~~and ~~“Item~~claiming 1damages, -which ~~Organizational~~we ~~Structure~~cannot assure you will be effective under PRC laws.” WeFor doexample, if ~~not~~the ~~have~~shareholders anof the VIE were to refuse to transfer their equity ~~ownership~~interest in, ~~direct~~the VIE to us or our designee if we exercise the purchase ~~foreign~~option ~~investment~~pursuant into these Contractual Arrangements, or ~~control~~if ~~of,~~they ~~through~~were ~~such~~otherwise ~~ownership~~to oract ~~investment~~in bad faith toward us, ~~the~~then ~~VIE~~we may have to take legal action to compel them to perform their contractual obligations.

If we had direct ownership of the VIE, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current Contractual Arrangements, we rely on the performance by the VIE and its shareholders of their obligations under the contracts to consolidate financial results of the VIE. The shareholders of the VIE may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to consolidate the financial results of the PRC operating entities through the VIE Agreementswith the VIE. Although we have the right to replace any shareholder of the VIE under the Contractual Arrangements, if any shareholder of the VIE is uncooperative or any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC laws and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. See “Risk Factors — Uncertainties with respect to the PRC legal system could have a material adverse effect on us.” Therefore, we do not have an equity ownership in, direct foreign investment in, or control of, through such ownership or investment, the VIE.46

~~Any~~All the ~~failure~~agreements under our VIE Agreements are governed by PRC laws and provide for the ~~VIE~~resolution orof ~~its~~disputes ~~shareholders~~through arbitration in China. toAccordingly, ~~perform~~these ~~their~~contracts ~~obligations~~would ~~under~~be ~~our~~interpreted ~~VIE~~in ~~Agreements~~accordance with ~~them~~PRC laws and any disputes would ~~have~~be resolved in accordance with PRC legal procedures. The legal system in the PRC is not as well established as in some other jurisdictions, such as in the United States. As a ~~material~~result, ~~adverse~~uncertainties ~~effect~~in onthe PRC legal system could limit our ~~results~~ability to enforce these Contractual Arrangements. Meanwhile, there are some regulations that are unfavorable to the PRC operating entities. There are also very few precedents and little formal guidance as to how VIE Agreements in the context of ~~operation~~a consolidated variable interest entity should be interpreted or enforced under PRC laws and there remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC laws, rulings by arbitrators are final and parties cannot appeal arbitration results in court unless such rulings are revoked or determined unenforceable by a competent court.

If the ~~VIE~~losing orparties ~~its shareholders~~ fail to ~~perform~~carry ~~their~~out ~~respective~~the ~~obligations~~arbitration ~~under~~awards ~~the~~within ~~VIE~~a ~~Agreements~~prescribed time limit, wethe prevailing parties may ~~have~~only toenforce ~~incur~~the arbitration ~~substantial~~awards ~~costs~~in ~~and~~PRC ~~expend~~courts ~~additional~~through ~~resources to~~arbitration ~~enforce~~award ~~such~~recognition ~~arrangements.~~proceedings, Wewhich ~~may~~would ~~also~~require ~~have~~additional toexpenses ~~rely~~and ondelay. In ~~legal~~the ~~remedies~~event ~~under~~that ~~PRC~~we ~~laws,~~are ~~including~~unable ~~seeking~~to ~~specific~~enforce ~~performance~~these orContractual ~~injunctive relief~~Arrangements, ~~and~~or ~~claiming~~if ~~damages,~~we ~~which~~suffer wesignificant ~~cannot~~delay ~~assure~~or ~~you~~other ~~will~~obstacles bein ~~effective~~the process ~~under~~of ~~PRC~~enforcing ~~laws.~~these ~~For~~Contractual ~~example~~Arrangements, ifwe ~~the~~may ~~shareholders~~not ofbe ~~the~~able ~~VIE were~~ to ~~refuse~~consolidate tothe ~~transfer~~financial ~~their~~results ~~equity~~of ~~interest in~~ the ~~VIE~~PRC tooperating usentities, and or our ~~designee~~results ifof weoperation ~~exercise~~may ~~the~~be ~~purchase~~negatively ~~option~~affected. ~~pursuant~~See to“Risk ~~these Contractual~~Factors — Risks ~~Arrangements,~~Related orto ifOur ~~they~~Corporate ~~were~~Structure — Uncertainties in ~~otherwise~~the tointerpretation ~~act~~and inenforcement ~~bad~~of ~~faith~~Chinese ~~toward~~laws ~~us,~~and ~~then~~regulations wecould ~~may~~limit ~~have~~the ~~to take~~ legal ~~action~~protections toavailable ~~compel them~~ to ~~perform their contractual obligations~~us.”

46Our Common Stock may decline in value or become worthless if we are unable to assert our contractual rights over the assets of the PRC operating entities that conduct all or substantially all of our operations.

~~All~~We ~~the agreements under our VIE Agreements~~ are ~~governed~~a byholding ~~PRC~~company ~~laws~~incorporated in ~~and provide for~~ the ~~resolution~~State of ~~disputes through arbitration in China~~Nevada. ~~Accordingly,~~As ~~these~~a ~~contracts would~~holding becompany ~~interpreted in accordance~~ with ~~PRC~~no ~~laws~~material ~~and~~operations ~~any~~of ~~disputes~~our ~~would~~own, bewe ~~resolved~~consolidate infinancial ~~accordance~~results ~~with~~of ~~PRC legal procedures. The legal system in~~ the PRC isoperating entities ~~not~~through asVIE ~~well~~Agreements ~~established~~with ~~as in some other jurisdictions, such as in~~ the ~~United States~~VIE. AsWe ahave ~~result,~~relied ~~uncertainties in~~and ~~the~~expect ~~PRC~~to ~~legal~~continue ~~system could limit our ability~~ to ~~enforce~~rely ~~these~~on ~~Contractual~~the ~~Arrangements.~~VIE ~~Meanwhile,~~Agreements ~~there~~with ~~are some regulations that are unfavorable to~~ the PRC operating entities., ~~There~~to ~~are~~operate ~~also~~our business. ~~very~~If ~~few~~the ~~precedents~~PRC ~~and~~government ~~little~~determines ~~formal~~that ~~guidance~~the ~~as to how~~ VIE Agreements in ~~the~~constituting ~~context~~part of athe ~~consolidated~~VIE ~~variable~~structure do ~~interest~~not ~~entity~~comply ~~should~~with bePRC ~~interpreted~~regulations, or ~~enforced~~if ~~under~~these ~~PRC~~regulations ~~laws~~change ~~and~~or ~~there~~are ~~remain~~interpreted ~~significant uncertainties~~differently ~~regarding~~in the ~~ultimate~~future, ~~outcome~~it ofwould ~~such~~likely ~~arbitration~~result in ~~should~~a ~~legal~~material ~~action~~change ~~become~~in ~~necessary.~~our Inoperations ~~addition,~~and ~~under~~our ~~PRC~~Common ~~laws,~~Stock ~~rulings by~~may ~~arbitrators~~decline ~~are~~in ~~final~~value ~~and~~or ~~parties~~become ~~cannot~~worthless ~~appeal~~if ~~arbitration~~we ~~results~~are inunable ~~court~~to ~~unless~~consolidate ~~such~~the financial ~~rulings~~results ~~are~~of ~~revoked~~the orPRC ~~determined~~operating ~~unenforceable by a competent court~~entities.

~~If the losing parties fail~~The toshareholders ~~carry~~of ~~out~~ the ~~arbitration~~VIE ~~awards within a prescribed time limit, the prevailing parties~~ may ~~only~~have ~~enforce~~actual the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay. In the event that we are unable to enforce these Contractual Arrangements, or ifpotential weconflicts ~~suffer significant delay or other obstacles in the process~~ of ~~enforcing these~~interest ~~Contractual~~with ~~Arrangements~~us, wewhich may ~~not~~materially beand ~~able~~adversely toaffect ~~consolidate the financial results of the PRC operating entities, and~~ our ~~results~~business ~~of operation may be negatively affected. See “Risk Factors — Risks Related to Our Corporate Structure — Uncertainties in the interpretation~~ and ~~enforcement~~financial ~~of Chinese laws and regulations could limit the legal protections available to us~~condition.”

~~Our~~The shareholders ~~Common~~of ~~Stocks~~the ~~may~~VIE ~~decline~~are incurrently ~~value~~controlling orshareholders of us with 86.72% equity interest. The shareholders of the VIE are Yulong ~~become~~Yi, ~~worthless~~our ifChairman weand CEO, Shaowei Peng, our Vice President and Chief Technology Officer, and Ru Zhang, Boyu Zhu, Zhenlei Li, Junwei Cao, Xiangle Sun, Wanwu Kang, Fengying Yu, Zhe Wang and Yue Wang, who holds 53%, 5%, 11%, 5%, 5%, 5%, 5%, 4%, 3%, 2.5%, and 1.5% of the equity interest, respectively, of the VIE. These shareholders of the VIE are ~~unable~~also shareholders of Zhuoxun Hongtu Inc. These shareholders may breach, or refuse to ~~assert~~renew, the existing VIE Agreements we have with them, which may have a material and adverse effect on our ~~contractual~~ability to ~~rights~~effectively ~~over~~consolidate ~~the~~financial ~~assets~~results of the PRC operating entities. We cannot assure you that ~~conduct~~when conflicts of interest arise any or all of these shareholders will act in the best interests of our company or ~~substantially~~such conflicts will be resolved in our favor. If we ~~all~~cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our ~~operations~~business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

We are a holding company incorporated in the State of Nevada. As a holding company with no material operations of our own, we consolidate financial results of the PRC operating entities through VIE Agreements with the VIE. We have relied and expect to continue to rely on the VIE Agreements with the PRC operating entities, to operate our business. If the PRC government determines that the VIE Agreements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, it would likely result in a material change in our operations and our Common Stocks may decline in value or become worthless if we are unable to consolidate the financial results of the PRC operating entities.47

~~The~~If the ~~shareholders~~custodians or authorized users of our controlling non-tangible assets, including chops and seals of the VIE, ~~may~~fail ~~have~~to ~~actual~~fulfill ortheir ~~potential~~responsibilities, ~~conflicts~~or ofmisappropriate ~~interest~~or ~~with~~misuse usthese assets, ~~which~~our ~~may~~business ~~materially~~ and ~~adversely~~operations ~~affect~~may ~~our~~be ~~business~~materially and ~~financial~~adversely ~~condition~~affected.

~~The shareholders of the VIE~~Under ~~are~~PRC ~~currently~~law, ~~controlling~~legal ~~shareholders~~documents offor uscorporate ~~with 86.72% equity interest. The shareholders of the VIE are Yulong Yi~~transactions, ~~our~~including ~~Chairman~~agreements and ~~CEO,~~ ~~Shaowei~~contracts ~~Peng,~~that our ~~Vice~~business ~~President~~relies ~~and Chief Technology Officer~~on, ~~and~~are Ruexecuted ~~Zhang, Boyu Zhu, Zhenlei Li, Junwei Cao, Xiangle Sun, Wanwu~~using ~~Kang,~~the ~~Fengying~~chop ~~Yu,~~or ~~Zhe~~seal ~~Wang~~of ~~and~~the ~~Yue~~signing ~~Wang,~~entity ~~who~~or ~~holds~~with ~~53%,~~the ~~5%,~~signature ~~11%,~~of ~~5%,~~a ~~5%,~~legal ~~5%,~~representative ~~5%,~~whose ~~4%,~~designation ~~3%,~~is ~~2.5%,~~registered and ~~1.5%~~filed ~~of the equity interest, respectively,~~with of the ~~VIE.~~relevant ~~These~~local ~~shareholders~~branch of the ~~VIE~~State ~~are~~Administration ~~also~~for ~~shareholders~~Market ofRegulation ~~Gushen~~(“SAMR”), ~~Inc.~~formerly ~~These~~known ~~shareholders~~as ~~may~~the ~~breach,~~State ~~or refuse to renew, the~~Administration ~~existing~~for ~~VIE~~Industry ~~Agreements we have with them, which may have a material~~ and ~~adverse effect on our ability to effectively consolidate financial results of the PRC operating entities~~Commerce. We ~~cannot~~generally ~~assure~~execute ~~you~~legal ~~that~~documents ~~when~~by ~~conflicts~~affixing ofchops ~~interest arise any~~ or ~~all~~seals, ofrather ~~these~~than ~~shareholders~~having ~~will act in~~ the ~~best~~designated ~~interests of our company or such conflicts will be resolved in our favor. If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on~~ legal ~~proceedings, which could result in disruption of our business~~representatives ~~and~~sign ~~subject us to substantial uncertainty as to~~ the ~~outcome of any such legal proceedings~~documents.

47We use two major types of chops: corporate chops and finance chops. Chops are seals or stamps used by a PRC company to legally authorize documents, often in place of a signature. We use corporate chops generally for documents to be submitted to government agencies, such as applications for changing business scope, directors or company name, and for legal letters. We use finance chops generally for making and collecting payments, including issuing invoices.

IfUse of ~~the~~corporate ~~custodians~~chops ormust ~~authorized~~be ~~users~~approved by department manager and office of ~~our~~ ~~controlling non-tangible assets~~the president, ~~including~~and use of finance chops ~~and~~must ~~seals~~be approved by our finance department. The chops of ~~the~~our subsidiary and consolidated VIE, ~~fail~~are togenerally ~~fulfill~~held ~~their~~by ~~responsibilities,~~the orrelevant ~~misappropriate~~entities so that documents can orbe ~~misuse~~executed ~~these~~locally. ~~assets~~Although we usually utilize chops to execute contracts, the registered legal representatives of our ~~business~~subsidiary and consolidated ~~operations~~VIE ~~may~~have bethe ~~materially~~apparent ~~and~~authority ~~adversely~~to ~~affected~~enter into contracts on behalf of such entities without chops, unless such contracts set forth otherwise.

~~Under~~In order ~~PRC~~to ~~law~~maintain the physical security of our chops, we generally have them stored in secured locations accessible only to the designated key employees of the office of the president or finance departments. Our designated legal ~~documents~~representatives generally do not have access ~~for~~to ~~corporate~~the ~~transactions~~chops. Although we have approval procedures in place and monitor our key employees, including ~~agreements~~the ~~and~~designated ~~contracts~~legal ~~that~~representatives of our ~~business~~subsidiary ~~relies~~and onthe VIE, ~~are~~the ~~executed~~procedures ~~using~~may ~~the~~not ~~chop~~be orsufficient ~~seal~~to prevent all instances of ~~the~~abuse or negligence. There is a risk ~~signing~~that ~~entity~~our key employees or designated legal representatives could abuse their authority, for example, by binding our subsidiary and consolidated VIE with contracts against our interests, as we would be obligated to honor these contracts if the ~~signature~~other contracting party acts in good faith in reliance on the apparent authority of aour chops or signatures of our legal representatives. If any designated legal representative obtains ~~whose~~control ~~designation~~of isthe ~~registered~~chop ~~and~~in ~~filed~~an ~~with~~effort to obtain control over the relevant ~~local~~entity, ~~branch~~we would need to have a shareholder or board resolution to designate a new legal representative to take legal action to seek the return of the ~~State~~chop, ~~Administration~~apply for ~~Market~~a ~~Regulation~~new ~~(“SAMR”),~~chop ~~formerly~~with ~~known~~the asrelevant ~~the~~authorities, or ~~State~~otherwise ~~Administration~~seek legal remedies for ~~Industry~~the ~~and~~legal ~~Commerce~~representative’s misconduct. We ~~generally~~If ~~execute~~any of the designated legal ~~documents~~representatives byobtains and ~~affixing~~misuses or misappropriates our chops orand seals or other controlling intangible assets for whatever reason, ~~rather~~we ~~than~~could ~~having~~experience ~~the~~disruption to ~~designated~~our normal business operations. We may have to take corporate or legal ~~representatives~~action, ~~sign~~which could involve significant time and resources to resolve the ~~documents~~matter, while distracting management from our operations, and our business operations may be materially and adversely affected.

~~We use two major types of~~VIE ~~chops:~~Agreements ~~corporate~~in ~~chops~~relation ~~and~~to ~~finance~~the ~~chops.~~VIE ~~Chops~~may ~~are~~be ~~seals~~subject orto ~~stamps~~scrutiny ~~used~~ by athe ~~PRC~~mainland ~~company~~China totax ~~legally~~authorities ~~authorize~~and ~~documents,~~they ~~often~~may indetermine ~~place of~~that awe ~~signature. We use corporate chops generally for documents to be submitted to government agencies, such as applications for changing~~or ~~business~~the ~~scope,~~VIE ~~directors~~owe oradditional ~~company name~~taxes, ~~and~~which ~~for~~could ~~legal~~negatively ~~letters.~~affect Weour ~~use~~financial ~~finance~~condition ~~chops generally for making~~ and ~~collecting~~the ~~payments,~~value ~~including issuing~~of ~~invoices~~your investment.

~~Use~~Under ofapplicable ~~corporate~~PRC ~~chops must~~laws and regulations, arrangements and transactions among related parties may be ~~approved~~subject to audit or challenge by ~~department~~the ~~manager~~mainland China tax authorities within ten years after the taxable year when the transactions are conducted. The mainland China enterprise income tax law requires every enterprise in mainland China to submit its annual enterprise income tax return together with a report on transactions with its related parties to the relevant tax authorities. The tax authorities may impose reasonable adjustments on taxation if they have identified any related party transactions that are inconsistent with arm’s length principles. We may face material and ~~office~~adverse oftax consequences if the ~~president~~mainland China tax authorities determine that the VIE Agreements among Fengyuan Beijing, the VIE, and ~~use~~the shareholders of ~~finance~~the ~~chops~~VIE were ~~must~~not beentered ~~approved~~into byon ~~our~~an ~~finance~~arm’s ~~department.~~length ~~The~~basis in such a way as to result in an impermissible reduction in taxes under applicable ~~chops~~PRC oflaws, ~~our~~rules ~~subsidiary~~and regulations, and ~~consolidated~~adjust the VIE’s ~~are~~income ~~generally~~in ~~held~~the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the ~~relevant~~VIE ~~entities~~for somainland ~~that~~China ~~documents~~tax ~~can~~purposes, bewhich ~~executed~~could in ~~locally~~turn increase its tax liabilities without reducing Fengyuan Beijing’s tax expenses. ~~Although~~In addition, if Fengyuan Beijing requests wethe ~~usually~~shareholders ~~utilize~~of ~~chops~~the VIE to ~~execute~~transfer ~~contracts,~~their equity interests in the ~~registered~~VIE ~~legal~~at ~~representatives~~nominal ofor ~~our~~no ~~subsidiary~~value pursuant to these Contractual Arrangements, such transfer could be viewed as a gift and ~~consolidated~~subject the Fengyuan Beijing and VIE ~~have~~to mainland China income tax. Furthermore, the ~~apparent~~mainland ~~authority~~China totax ~~enter~~authorities ~~into~~may ~~contracts~~impose late payment fees and other penalties on ~~behalf~~the ofVIE ~~such~~for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if our consolidated variable interest entities’ ~~without~~tax liabilities ~~chops,~~increase ~~unless~~or ~~such~~if ~~contracts~~it ~~set~~is ~~forth~~required ~~otherwise~~to pay late payment fees and other penalties.

In order to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to the designated key employees of the office of the president or finance departments. Our designated legal representatives generally do not have access to the chops. Although we have approval procedures in place and monitor our key employees, including the designated legal representatives of our subsidiary and the VIE, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our key employees or designated legal representatives could abuse their authority, for example, by binding our subsidiary and consolidated VIE with contracts against our interests, as we would be obligated to honor these contracts if the other contracting party acts in good faith in reliance on the apparent authority of our chops or signatures of our legal representatives. If any designated legal representative obtains control of the chop in an effort to obtain control over the relevant entity, we would need to have a shareholder or board resolution to designate a new legal representative to take legal action to seek the return of the chop, apply for a new chop with the relevant authorities, or otherwise seek legal remedies for the legal representative’s misconduct. If any of the designated legal representatives obtains and misuses or misappropriates our chops and seals or other controlling intangible assets for whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or legal action, which could involve significant time and resources to resolve the matter, while distracting management from our operations, and our business operations may be materially and adversely affected.48

If the VIE ~~Agreements~~goes inbankrupt ~~relation~~or tobecomes ~~the VIE may be~~ subject to ~~scrutiny~~a bydissolution ~~the~~or ~~mainland~~liquidation ~~China~~proceeding, ~~tax~~its ~~authorities~~ability ~~and~~to ~~they~~operate ~~may~~its ~~determine~~business ~~that~~might webe ormaterially and ~~the~~adversely ~~VIE owe additional taxes~~hindered, which could ~~negatively~~ ~~affect~~materially ~~our~~and ~~financial~~adversely ~~condition~~affect ~~and~~our ~~the~~results ~~value~~ of ~~your investment~~operations.

~~Under applicable PRC laws~~The ~~and~~VIE ~~regulations,~~holds ~~arrangements~~certain ~~and~~assets ~~transactions~~that ~~among~~are ~~related~~material ~~parties may be subject~~ to ~~audit or challenge by~~ the ~~mainland~~operation ~~China~~of ~~tax authorities within ten years after the taxable year when the transactions are conducted. The mainland China enterprise income tax law requires every enterprise in mainland China to submit~~ its ~~annual~~business, ~~enterprise~~including ~~income~~certain ~~tax~~licenses, ~~return~~permits, ~~together~~leases, ~~with~~and ~~a report on transactions with its related~~intellectual ~~parties to the relevant tax authorities~~properties. ~~The~~Under tax authorities may impose reasonable adjustments on taxation if they have identified any related party transactions that are inconsistent with arm’s length principles. We may face material and adverse tax consequences if the ~~mainland China tax authorities determine that the~~ VIE Agreements ~~among the WFOE~~, the VIE, ~~and~~may ~~the shareholders of the VIE were~~ not ~~entered~~cause ~~into~~it ~~on an arm’s length basis in such a way as~~ to, ~~result~~ in anany ~~impermissible~~manner, ~~reduction in taxes under applicable PRC laws~~sell, ~~rules and regulations~~transfer, ~~and~~mortgage ~~adjust~~or ~~the~~dispose ~~VIE’s income in the form~~ of aits ~~transfer~~assets ~~pricing adjustment. A transfer pricing adjustment~~or ~~could,~~its ~~among~~legal ~~other~~or ~~things,~~beneficial ~~result~~interests in ~~a reduction of expense deductions recorded by~~ the ~~VIE~~business ~~for mainland China tax purposes, which could in turn increase its tax liabilities~~ without ~~reducing~~our ~~the~~prior ~~Wholly Foreign-Owned Enterprise (WFOE)’s tax expenses~~consent. ~~In addition~~However, ifin the ~~WFOE~~event ~~requests~~ the shareholders of the VIE tobreach the ~~transfer~~VIE ~~their~~Agreements ~~equity~~and ~~interests~~voluntarily inliquidate the VIE ~~at nominal~~ or nothe ~~value~~VIE ~~pursuant~~declares tobankruptcy ~~these~~and ~~Contractual~~all ~~Arrangements,~~or ~~such~~part ~~transfer could~~of beits ~~viewed~~assets asbecome ~~a gift and~~ subject ~~the WFOE and VIE~~ to ~~mainland~~liens or ~~China~~rights ~~income~~of ~~tax. Furthermore~~third-party creditors, ~~the~~or ~~mainland~~are ~~China~~otherwise ~~tax~~disposed ~~authorities~~of ~~may impose~~without ~~late~~our ~~payment~~consent, ~~fees and other penalties on~~ the VIE ~~for~~may ~~the~~be ~~adjusted~~unable ~~but~~to ~~unpaid~~continue ~~taxes~~some ~~according~~or all toof ~~the~~its ~~applicable~~business ~~regulations.~~activities, ~~Our financial~~which ~~position~~ could be materially and adversely ~~affected~~affect if our ~~consolidated~~results ~~variable~~of ~~interest entities’ tax liabilities increase or if it is required to pay late payment fees and other penalties~~operations.

48RISKS RELATING TO DOING BUSINESS IN CHINA

~~If the VIE goes bankrupt or becomes subject~~Uncertainties towith arespect ~~dissolution or liquidation proceeding, its ability~~ to ~~operate~~the ~~its~~PRC ~~business~~legal ~~might~~system ~~be materially and adversely hindered, which~~ could ~~materially~~ ~~and~~have ~~adversely~~a ~~affect~~material ~~our~~adverse ~~results~~effect ofon ~~operations~~us.

The ~~VIE holds certain assets~~ ~~that~~PRC ~~are~~legal ~~material~~system tois ~~the~~a ~~operation~~civil oflaw ~~its~~system ~~business,~~based ~~including~~on ~~certain~~written ~~licenses, permits, leases, and intellectual properties~~statutes. ~~Under~~Unlike the ~~VIE~~ ~~Agreements,~~common ~~the~~law ~~VIE may not cause it to~~system, ~~in any manner, sell, transfer, mortgage or dispose of its assets or its legal or beneficial interests in the business without our~~ prior ~~consent.~~court ~~However,~~decisions inunder the ~~event the shareholders of the VIE breach the VIE Agreements and voluntarily~~civil ~~liquidate~~law ~~the~~system ~~VIE or the VIE declares bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without our consent, the VIE~~ may be ~~unable~~cited tofor ~~continue~~reference ~~some~~but orhave ~~all~~limited ofprecedential ~~its business activities, which could materially and adversely affect our results of operations~~value.

~~RISKS~~In 1979, ~~RELATING~~the TOPRC ~~DOING~~government ~~BUSINESS~~began INto ~~CHINA~~promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protection afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.

~~Uncertainties~~In addition, ~~with~~any ~~respect~~administrative toand ~~the~~court ~~PRC~~proceedings ~~legal system~~in ~~could~~China ~~have~~may abe ~~material~~protracted, ~~adverse~~resulting ~~effect~~in onsubstantial uscosts and diversion of resources and management attention.

~~The PRC legal system is a~~Uncertainties ~~civil~~in ~~law~~the ~~system~~interpretation ~~based~~and onenforcement ~~written~~of ~~statutes.~~Chinese ~~Unlike~~laws ~~the~~and ~~common~~regulations ~~law~~could ~~system,~~limit ~~prior court decisions under~~ the ~~civil~~legal ~~law~~protections ~~system~~available ~~may~~to ~~be cited for reference but have limited precedential value~~us.

~~In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.~~ The ~~overall effect of legislation~~ ~~over~~PRC ~~the past four decades has significantly enhanced the protection afforded to various forms of foreign investments in China. However, China has not developed a fully integrated~~ legal system, ~~and~~is ~~recently~~based ~~enacted~~on ~~laws~~written statutes and ~~regulations~~prior ~~may~~court ~~not~~decisions ~~sufficiently~~have ~~cover~~limited ~~all~~value ~~aspects of~~as ~~economic activities in China~~precedents. InSince ~~particular, the interpretation and enforcement of~~ these laws and regulations ~~involve uncertainties.~~ ~~Since~~are ~~PRC~~relatively ~~administrative~~new and ~~court~~the ~~authorities~~PRC ~~have~~legal ~~significant~~system ~~discretion~~continues into ~~interpreting~~rapidly ~~and implementing statutory provisions and contractual terms~~evolve, ~~it may be difficult to evaluate~~ the ~~outcome~~interpretations of ~~administrative~~many ~~and~~laws, ~~court~~regulations ~~proceedings~~ and ~~the~~rules ~~level of legal protection we enjoy.~~are ~~These~~not ~~uncertainties~~always ~~may~~uniform ~~affect~~and ~~our~~enforcement ~~judgment on the relevance~~ of ~~legal~~these ~~requirements and our ability to enforce our contractual rights or tort claims. In addition~~laws, ~~the~~regulations ~~regulatory~~and ~~uncertainties~~rules ~~may~~involves ~~be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us~~uncertainties.

InFrom time ~~addition~~to time, ~~any~~we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have significant discretion in ~~China~~interpreting and implementing statutory and contractual terms, it may be ~~protracted~~more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. Furthermore, ~~resulting~~the PRC legal system is based in ~~substantial~~part ~~costs~~on government policies and ~~diversion~~internal rules. As a result, we may not be able to keep ourselves updated with these policies and rules in time. Such uncertainties, including uncertainty over the scope and effect of ~~resources~~our contractual, property (including intellectual property) and ~~management~~procedural ~~attention~~rights, could materially and adversely affect our business and impede our ability to continue our operations.

~~Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us.~~49

~~The PRC legal system is based~~China’s oneconomic, ~~written~~political ~~statutes~~ and ~~prior~~social ~~court~~conditions, ~~decisions~~as ~~have~~well ~~limited~~as ~~value~~changes asin ~~precedents.~~any ~~Since~~government ~~these~~policies, laws and regulations ~~are~~may ~~relatively~~be ~~new~~quick ~~and~~with little ~~the~~advance ~~PRC~~notice ~~legal~~and ~~system~~could ~~continues~~have toa ~~rapidly~~material ~~evolve,~~adverse ~~the~~effect ~~interpretations~~on ofthe ~~many~~PRC ~~laws,~~operating ~~regulations~~entities’ business and ~~rules~~the ~~are~~value ~~not always uniform and enforcement~~ of ~~these~~our ~~laws,~~Common ~~regulations and rules involves uncertainties~~Stock.

~~From time to time, we may~~A ~~have~~substantial tomajority ~~resort~~of tothe ~~administrative~~operations ~~and~~of ~~court~~the ~~proceedings~~PRC tooperating ~~enforce~~entities ~~our~~are ~~legal~~conducted ~~rights.~~in ~~However~~China, ~~since PRC administrative~~ and ~~court~~a ~~authorities have~~ significant ~~discretion~~portion inof ~~interpreting~~our ~~and~~net ~~implementing statutory and contractual terms, it may be more difficult to evaluate the~~revenues ~~outcome~~are ofderived ~~administrative~~from ~~and~~customers ~~court~~where ~~proceedings and~~ the ~~level~~contracting ofentity ~~legal~~is ~~protection~~located ~~we enjoy than~~ in ~~more developed legal systems~~China. ~~Furthermore~~Accordingly, ~~the~~ ~~PRC~~our ~~legal~~business, ~~system~~financial iscondition, ~~based~~results of inoperations, ~~part~~prospects ~~on government policies~~ and ~~internal~~certain ~~rules.~~transactions ~~As a result,~~ we may ~~not~~undertake may be ~~able~~subject, to ~~keep~~a ~~ourselves~~significant ~~updated with these policies and rules in time. Such uncertainties~~extent, ~~including~~to ~~uncertainty over the scope and effect of our contractual~~economic, ~~property (including~~political ~~intellectual property)~~ and ~~procedural rights, could materially and adversely affect our business and impede our ability to~~ ~~continue~~legal ~~our~~developments ~~operations~~in China.

49China’s economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While the PRC economy has experienced significant growth in the past two to three decades, growth has been uneven, both geographically and among various sectors of the economy. Demand for the products of the PRC operating entities depends, in large part, on economic conditions in China. Any slowdown in China’s economic growth may cause the potential customers of the PRC operating entities to delay or cancel their plans to purchase the PRC operating entities’ products, which in turn could reduce our net revenues.

Although China’s economy has been transitioning from a planned economy to a more market oriented economy since the late 1970s, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over China’s economic growth through allocating resources, ~~political~~controlling the incurrence and ~~social~~payment of foreign ~~conditions~~currency-denominated obligations, assetting ~~well~~monetary aspolicy ~~changes~~and providing preferential treatment to particular industries or companies. Changes in any ~~government~~of these policies, laws and regulations may be quick with little advance notice and could ~~have~~adversely affect the economy in China and could have a material adverse effect on ~~the~~our ~~PRC operating entities’~~ business and the value of our Common Stock.

AThe PRC ~~substantial~~government ~~majority~~has ~~of the~~implemented ~~operations~~various ofmeasures ~~the~~to ~~PRC~~encourage ~~operating~~foreign ~~entities~~investment ~~are~~and ~~conducted~~sustainable ineconomic ~~China,~~growth and ato ~~significant~~guide ~~portion~~the allocation of ~~our~~financial ~~net~~and ~~revenues~~other ~~are~~resources. ~~derived~~However, ~~from~~we ~~customers where~~cannot assure you that the ~~contracting~~PRC ~~entity~~government iswill ~~located~~not inrepeal ~~China.~~or ~~Accordingly,~~alter ~~our~~these ~~business,~~measures ~~financial~~or ~~condition,~~introduce new ~~results~~measures ofthat ~~operations~~will have a negative effect on us, ~~prospects~~or ~~and certain~~more ~~transactions~~specifically, we ~~may~~cannot ~~undertake~~assure ~~may~~you bethat ~~subject,~~the toPRC agovernment ~~significant~~will ~~extent,~~not initiate possible governmental actions or scrutiny to ~~economic~~us, ~~political~~which could substantially affect our operation and ~~legal~~the ~~developments~~value inof ~~China~~our Common Stock may depreciate quickly.

~~China’s economy differs~~We ~~from~~may ~~the~~be ~~economies~~subject ofto ~~most~~litigation ~~developed~~and ~~countries~~regulatory ininvestigations ~~many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange~~ and ~~allocation of resources. While the PRC economy has experienced significant growth in the past two to three decades~~proceedings, ~~growth has been uneven, both geographically~~ and ~~among~~may ~~various~~not ~~sectors~~always ofbe ~~the~~successful ~~economy. Demand for the products of the PRC operating entities depends,~~ in ~~large~~defending ~~part,~~ourselves ~~on economic conditions in China. Any slowdown in China’s economic growth may~~against ~~cause~~such ~~the~~claims ~~potential customers of the PRC operating entities to delay~~ or ~~cancel their plans to purchase the PRC operating entities’ products, which in turn could reduce our net revenues~~proceedings.

~~Although~~Our ~~China’s~~business ~~economy~~operations entail ~~has~~substantial ~~been~~litigation ~~transitioning~~and ~~from~~regulatory arisks, ~~planned~~including ~~economy~~the risk of lawsuits and other legal actions relating to afraud ~~more~~and ~~market~~misconduct, labor ~~oriented~~disputes ~~economy~~of ~~since~~employees, ~~the~~sales ~~late~~and ~~1970s~~customer services and control procedures deficiencies, as well as the ~~PRC~~protection ~~government~~of ~~continues~~personal toand ~~play~~confidential ainformation ~~significant~~of ~~role~~our inusers ~~regulating~~and ~~industry~~business ~~development~~partners, byamong ~~imposing~~others. ~~industrial~~We ~~policies.~~may ~~The~~be ~~PRC~~subject ~~government~~to ~~also~~claims ~~exercises~~and ~~significant~~lawsuits in the ordinary course ~~control~~of ~~over~~our ~~China’s~~business. ~~economic~~We ~~growth~~may ~~through~~also ~~allocating~~be ~~resources~~subject to inquiries, ~~controlling~~inspections, ~~the~~investigations ~~incurrence~~and proceedings by relevant regulatory and ~~payment~~other ofgovernmental agencies. ~~foreign~~Actions ~~currency-denominated obligations~~brought against us may result in settlements, ~~setting~~ ~~monetary~~injunctions, ~~policy~~fines, ~~and~~penalties ~~providing~~or ~~preferential~~other ~~treatment~~results adverse to ~~particular~~us ~~industries~~that orcould harm ~~companies~~our business, financial condition, results of operations and reputation. ~~Changes~~Even if we are successful in ~~any~~defending ofourselves against these ~~policies~~actions, ~~laws~~ ~~and~~the ~~regulations~~costs of such defense may be ~~quick~~significant ~~with~~to ~~little~~us. ~~advance~~A ~~notice~~significant ~~and~~judgement ~~could~~or ~~adversely~~regulatory ~~affect~~action ~~the~~against ~~economy~~us or a material disruption in ~~China~~our ~~and~~business ~~could~~arising from adverse adjudications in proceedings against our directors, officers or employees would have a ~~material~~ material adverse effect on our liquidity, business, ~~and~~financial ~~the~~condition, ~~value~~results of ~~our~~operations, ~~Common~~reputation ~~Stock~~and prospects.

~~The PRC government has implemented~~Any ~~various~~failure ~~measures~~ to ~~encourage~~comply ~~foreign~~with ~~investment~~relevant ~~and~~regulations ~~sustainable~~relating ~~economic growth and~~ to ~~guide~~social ~~the~~insurance ~~allocation of financial~~ and ~~other~~housing ~~resources. However,~~provident wefund ~~cannot~~may ~~assure~~subject ~~you that the PRC government will not repeal or alter these measures or introduce new measures that will have a negative effect on~~ us, orto ~~more~~penalty ~~specifically,~~and ~~we cannot assure you that the PRC government will not initiate possible governmental actions~~materially orand ~~scrutiny~~adversely ~~to us, which could substantially~~ affect our ~~operation~~business, ~~and~~financial ~~the~~condition ~~value~~and results of ~~our Common Stock may depreciate quickly~~operations.

WeIn accordance ~~may~~with bethe ~~subject~~PRC toSocial ~~litigation~~Insurance Law and ~~regulatory~~the ~~investigations~~Regulations on the Administration of Housing Fund and other relevant laws and regulations, China has established a social insurance system and ~~proceedings~~other employee benefits including basic pension insurance, basic medical insurance, work-related injury insurance, unemployment insurance, maternity insurance, housing fund, and ~~may~~a ~~not~~handicapped ~~always~~employment besecurity ~~successful~~fund, or collectively the Employee Benefits. An employer shall pay the Employee Benefits for its employees in ~~defending~~accordance ~~ourselves~~with ~~against~~the ~~such~~rates ~~claims~~provided under relevant regulations and shall withhold the social insurance and other Employee Benefits that should be assumed by the employees. For example, an employer that has not made social insurance contributions at a rate and based on an amount prescribed by the law, or at ~~proceedings~~all, may be ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee of up to 0.05% per day. If the employer still fails to ratify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine ranging from one to three times of the amount overdue.

Our business operations entail substantial litigation and regulatory risks, including the risk of lawsuits and other legal actions relating to fraud and misconduct, labor disputes of employees, sales and customer services and control procedures deficiencies, as well as the protection of personal and confidential information of our users and business partners, among others. We may be subject to claims and lawsuits in the ordinary course of our business. We may also be subject to inquiries, inspections, investigations and proceedings by relevant regulatory and other governmental agencies. Actions brought against us may result in settlements, injunctions, fines, penalties or other results adverse to us that could harm our business, financial condition, results of operations and reputation. Even if we are successful in defending ourselves against these actions, the costs of such defense may be significant to us. A significant judgement or regulatory action against us or a material disruption in our business arising from adverse adjudications in proceedings against our Directors, officers or employees would have a material adverse effect on our liquidity, business, financial condition, results of operations, reputation and prospects.50

~~Any~~Under the ~~failure~~Social toInsurance ~~comply~~Law ~~with~~and ~~relevant~~the ~~regulations relating~~Regulations toon ~~social~~the Administration of Housing Fund, our PRC subsidiary shall register with local social insurance agencies and ~~housing~~register ~~provident~~with applicable housing fund ~~may~~management ~~subject~~centers usand toestablish ~~penalty~~a ~~and~~special ~~materially~~housing ~~and~~fund ~~adversely~~account ~~affect~~in an entrusted bank. Both our ~~business,~~PRC ~~financial condition~~subsidiary and ~~results~~their ofemployees ~~operations~~are required to pay the Employee Benefits.

InWe did ~~accordance~~not ~~with~~make contributions in full for the ~~PRC Social~~social ~~Insurance~~insurance ~~Law~~fund and ~~the~~housing ~~Regulations~~provident onfund ~~the~~for ~~Administration~~our ofemployees ~~Housing~~as ~~Fund~~required ~~and~~under ~~other~~the relevant PRC laws and regulations. In September 2020, ~~China~~we ~~has~~received ~~established~~ a ~~social~~rectification ~~insurance~~opinion ~~system~~from ~~and~~the ~~other~~local ~~employee~~authorities ~~benefits~~for ~~including~~the ~~basic~~underpaid ~~pension~~ social insurance, ~~basic~~premiums ~~medical~~for ~~insurance,~~several ~~work-related~~employees ~~injury insurance,~~and ~~unemployment~~we ~~insurance,~~were ~~maternity~~required ~~insurance,~~to ~~housing~~pay ~~fund,~~up ~~and~~the aunderpaid ~~handicapped~~premiums. ~~employment~~Although ~~security~~we ~~fund,~~have ormade ~~collectively~~supplementary ~~the~~payment ~~Employee~~on ~~Benefits.~~time Anas ~~employer~~required ~~shall~~by ~~pay~~ the ~~Employee~~rectification ~~Benefits~~opinion, ~~for~~we ~~its~~cannot ~~employees~~assure inyou ~~accordance~~that ~~with~~we ~~the~~will ~~rates~~not ~~provided~~be ~~under~~subject ~~relevant regulations~~to ~~and~~any ~~shall~~order ~~withhold~~to rectify non-compliance in the ~~social~~future, ~~insurance~~nor ~~and~~can ~~other~~we ~~Employee~~assure ~~Benefits~~you that ~~should~~there beare ~~assumed~~no, byor ~~the~~will ~~employees.~~not ~~For~~be ~~example~~any, an ~~employer~~employee ~~that~~complaints ~~has~~regarding ~~not made~~ social insurance ~~contributions~~payment ator housing aprovident ~~rate~~fund ~~and~~contributions ~~based~~against onus, anor ~~amount~~that ~~prescribed~~we bywill ~~the~~not ~~law,~~receive orany atclaims ~~all,~~in ~~may~~respect ~~be ordered~~of tosocial ~~rectify~~insurance ~~the~~payment ~~non-compliance~~or ~~and~~housing provident ~~pay~~fund ~~the required~~ contributions ~~within~~under athe ~~stipulated~~PRC ~~deadline~~laws and beregulation. ~~subject~~In toaddition, awe ~~late~~may ~~fee~~incur ~~of up~~additional costs to ~~0.05%~~comply ~~per~~with ~~day.~~such Iflaws and regulations by the ~~employer~~PRC ~~still~~Government ~~fails~~or torelevant ~~ratify~~local ~~the~~authorities. ~~failure~~Any tosuch ~~make~~development ~~social~~could ~~insurance~~materially ~~contributions~~and ~~within~~adversely ~~the~~affect ~~stipulated~~our ~~deadline~~business, itfinancial ~~may~~condition beand ~~subject~~results ~~to a fine ranging from one to three times~~ of ~~the amount overdue~~operations.

50Non-compliance with labor-related laws and regulations of the PRC may have an adverse impact on our financial condition and results of operation.

~~Under~~We have ~~the~~been ~~Social~~subject ~~Insurance~~to stricter regulatory requirements in terms of entering into labor contracts with our employees. Pursuant to the PRC Labor Contract Law, ~~and~~or the ~~Regulations~~Labor onContract ~~the~~Law, ~~Administration~~that ofbecame ~~Housing~~effective ~~Fund~~in January 2008 and amended in December 2012 and its implementing rules that became effective in September 2008, ~~our~~employers ~~PRC~~are ~~subsidiary~~subject ~~shall~~to ~~register~~stricter ~~with~~requirements ~~local~~in ~~social~~terms ~~insurance~~of ~~agencies~~signing labor contracts, minimum ~~and~~wages, ~~register~~paying ~~with~~remuneration, ~~applicable~~determining ~~housing~~the ~~fund~~term ~~management~~of ~~centers~~employees’ probation and ~~establish~~unilaterally aterminating ~~special~~labor ~~housing~~contracts. ~~fund~~In ~~account~~the inevent that anwe ~~entrusted~~decide ~~bank.~~to ~~Both~~terminate some of our ~~PRC~~ ~~subsidiary~~employees or otherwise change our employment or labor practices, the Labor Contract Law and ~~their~~its implementation ~~employees~~rules ~~are~~may ~~required~~limit our ability to ~~pay~~affect ~~the~~those ~~Employee~~changes ~~Benefits~~in a desirable or cost-effective manner, which could adversely affect our business and results of operations.

~~We did not make contributions~~As ~~in full for~~ the ~~social~~interpretation ~~insurance fund~~ and ~~housing~~implementation ~~provident~~of ~~fund~~labor-related ~~for our employees as required under the relevant PRC~~ laws and regulations~~. In~~ ~~September~~are ~~2020,~~still we received a rectification opinion from the local authorities for the underpaid social insurance premiums for several employees and we were required to pay up the underpaid premiums. Although we have made supplementary payment on time as required by the rectification opinionevolving, we cannot assure you that weour ~~will~~employment practice does not beand ~~subject~~will tonot ~~any~~violate ~~order~~labor-related tolaws ~~rectify~~and ~~non-compliance~~regulations in ~~the future~~China, ~~nor~~which ~~can we~~may ~~assure~~subject ~~you~~us ~~that~~to ~~there~~labor ~~are~~disputes ~~no,~~ or ~~will not be any, employee complaints regarding social insurance payment or housing provident fund~~government ~~contributions~~investigations. ~~against~~If ~~us, or that~~ we ~~will~~are ~~not~~deemed ~~receive~~to ~~any~~have ~~claims~~violated inrelevant ~~respect~~labor ~~of social insurance payment or housing provident fund contributions under the PRC~~ laws and ~~regulation. In addition~~regulations, we ~~may~~could ~~incur~~be ~~additional~~required ~~costs~~ to ~~comply~~provide ~~with~~additional ~~such laws and regulations by the PRC Government~~compensation orto ~~relevant~~our ~~local~~employees ~~authorities. Any such development could materially~~ and ~~adversely affect~~ our business, financial condition and results of operations could be materially and adversely affected.

~~Non-compliance~~Some of ~~with~~the ~~labor-related~~lease ~~laws~~agreements ~~and regulations~~ of our leased properties have not been registered with the relevant PRC ~~may~~government ~~have~~authorities anas ~~adverse~~required ~~impact~~by PRC onlaw, ~~our~~which ~~financial~~may ~~condition~~expose ~~and~~us ~~results~~to ofpotential ~~operation~~fines.

WeUnder PRC ~~have~~law, ~~been~~we ~~subject~~are required to ~~stricter regulatory~~register ~~requirements~~our inlease ~~terms~~agreements ofwith ~~entering~~the ~~into~~local ~~labor~~land ~~contracts~~and ~~with~~real ~~our~~estate ~~employees~~administration bureau. ~~Pursuant~~Although failure to ~~the~~do ~~PRC~~so ~~Labor~~does ~~Contract~~not ~~Law,~~in oritself invalidate the ~~Labor Contract Law~~leases, ~~that~~the ~~became~~lessees ~~effective~~may innot ~~January~~be ~~2008~~able ~~and~~to ~~amended~~defend inthese ~~December~~leases ~~2012~~against ~~and~~bona ~~its~~fide ~~implementing~~third ~~rules~~parties and ~~that~~may ~~became~~also ~~effective~~be inexposed ~~September 2008,~~to ~~employers~~potential ~~are~~fines ~~subject~~if they fail to ~~stricter~~ratify ~~requirements~~such innon-compliance ~~terms~~within ofthe ~~signing~~prescribed ~~labor~~time ~~contracts,~~frame ~~minimum~~after ~~wages~~receiving notice from the relevant PRC government authorities. The penalty ranges from RMB1,000 ~~paying~~(approximately ~~remuneration~~$[ ]) to RMB10,000 ~~determining~~(approximately ~~the~~$[ ]) ~~term~~for ofeach ~~employees’~~unregistered ~~probation~~lease, ~~and~~at ~~unilaterally~~the ~~terminating~~discretion ~~labor~~of ~~contracts.~~the Inrelevant ~~the~~authority. ~~event~~As ~~that~~of wethe ~~decide~~date toof ~~terminate~~this report, some of the lease agreements for our ~~employees~~leased orbuilding ~~otherwise~~in ~~change~~China ~~our~~has ~~employment~~not orbeen ~~labor~~registered ~~practices,~~with the ~~Labor~~relevant ~~Contract~~PRC ~~Law~~government ~~and~~authorities. ~~its~~In ~~implementation~~the ~~rules~~event ~~may~~that ~~limit~~any ~~our~~fine is ~~ability~~imposed toon ~~affect~~us ~~those~~for ~~changes~~our infailure ato ~~desirable~~register orour ~~cost-effective~~lease ~~manner~~agreements, ~~which~~we ~~could~~may ~~adversely~~not ~~affect~~be ~~our~~able ~~business~~to ~~and~~recover ~~results~~such oflosses ~~operations~~from the lessors.

~~As the interpretation and~~Our ~~implementation~~rights ofto ~~labor-related~~use ~~laws and regulations are still evolving, we cannot assure you that~~ our ~~employment~~leased ~~practice~~properties ~~does~~could ~~not~~be ~~and will~~challenged ~~not~~by ~~violate~~property ~~labor-related~~owners ~~laws~~or ~~and~~other ~~regulations~~third ~~in China~~parties, which may ~~subject~~disrupt ~~us to labor disputes or government investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to~~ our ~~employees and our business, financial condition and results of~~ operations ~~could be materially~~ and incur ~~adversely~~relocation ~~affected~~costs.

~~Some~~ As of the ~~lease~~date ~~agreements~~of this report, some of the lessors of our leased properties in China have ~~not~~failed ~~been~~to ~~registered~~provide us with valid property ownership certificates or authorizations from the property owners for the lessors to sublease the properties. There is a risk that such lessors may not have the relevant ~~PRC~~property ~~government~~ownership ~~authorities~~certificates asor ~~required~~the byright ~~PRC~~to ~~law~~lease or sublease such properties to us, in which case the relevant lease agreements and the sublease agreements may ~~expose~~be deemed invalid and we may be forced to vacate these properties. In addition, our usage of the leased properties may be inconsistent with the designated usage, in which case we may not be able to continue to use the leased properties. The above risks could interrupt our business operations and result in relocation costs. Moreover, if our lease agreements are challenged by third parties, it could result in diversion of management attention and cause us to ~~potential~~incur costs associated ~~fines~~with defending such actions, even if such challenges are ultimately determined in our favor.

Under PRC law, we are required to register our lease agreements with the local land and real estate administration bureau. Although failure to do so does not in itself invalidate the leases, the lessees may not be able to defend these leases against bona fide third parties and may also be exposed to potential fines if they fail to ratify such non-compliance within the prescribed time frame after receiving notice from the relevant PRC government authorities. The penalty ranges from RMB1,000 (approximately $154.40) to RMB10,000 (approximately $1,544.00) for each unregistered lease, at the discretion of the relevant authority. As of the date of this report, some of the lease agreements for our leased building in China has not been registered with the relevant PRC government authorities. In the event that any fine is imposed on us for our failure to register our lease agreements, we may not be able to recover such losses from the lessors.51

~~Our~~We may ~~rights~~rely toon ~~use~~dividends ~~our~~and ~~leased~~other ~~properties could~~distributions beon ~~challenged~~equity paid by ~~property~~the ~~owners~~PRC oroperating ~~other~~entities ~~third~~to ~~parties,~~fund ~~which~~any cash and financing requirements we may ~~disrupt~~have, ~~our~~and ~~operations~~any limitation on the ability of the PRC operating entities to make payments to us could have a material and ~~incur~~adverse effect ~~relocation~~on ~~costs~~our ability to conduct our business.

~~As of the date of this report,~~We ~~some~~are of the lessors of our leased properties in China have failed to provide us with valid property ownership certificates or authorizations from the property owners for the lessors to sublease the properties. There is a ~~risk~~Nevada ~~that~~holding ~~such~~company ~~lessors may not have the relevant property ownership certificates or the right to lease or sublease such properties to us, in which case the relevant lease agreements~~ and ~~the~~we ~~sublease agreements~~rely ~~may~~principally beon ~~deemed~~dividends ~~invalid~~ and weother ~~may~~distributions beon ~~forced~~equity tofrom ~~vacate these properties. In addition, our usage of~~ the ~~leased~~PRC ~~properties~~operating ~~may be~~entities ~~inconsistent with the designated usage, in which case we may not be able to continue to use the leased properties. The above risks~~for ~~could interrupt~~ our ~~business~~cash ~~operations and result in relocation costs. Moreover~~requirements, ifincluding ~~our~~for ~~lease~~services ~~agreements are challenged by third parties, it could result in diversion~~ of ~~management~~any ~~attention~~debt ~~and~~we ~~cause~~may ~~us to~~ incur ~~costs associated with defending such actions, even if such challenges are ultimately determined in our favor~~.

51The PRC operating entities’ ability to distribute dividends is based upon its distributable earnings. Current PRC regulations permit the PRC operating entities to pay dividends to its shareholder only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiary, the VIE and its subsidiaries are required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. The reserve is not distributable as cash dividends. If the PRC operating entities incur debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of the PRC operating entities to distribute dividends or other payments to its shareholder could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends or otherwise fund and conduct our business.

WeIn addition, ~~may~~the ~~rely~~Enterprise onIncome ~~dividends~~Tax Law and ~~other~~its ~~distributions on~~implementation ~~equity~~rules ~~paid~~provide bythat ~~the~~a ~~PRC~~withholding ~~operating~~tax ~~entities~~rate toof ~~fund~~up ~~any~~to ~~cash~~10% ~~and~~will ~~financing~~be ~~requirements~~applicable to wedividends ~~may~~payable ~~have,~~by ~~and~~Chinese ~~any~~companies ~~limitation~~to onnon-PRC-resident ~~the~~enterprises ~~ability of~~unless ~~the~~otherwise ~~PRC~~exempted ~~operating~~or ~~entities~~reduced according to ~~make~~treaties or ~~payments~~arrangements tobetween usthe ~~could~~PRC ~~have~~central agovernment ~~material~~ and ~~adverse~~governments ~~effect~~of onother ~~our~~countries ~~ability~~or toregions ~~conduct~~where ~~our business~~the non-PRC resident enterprises are incorporated.

WeIf the ~~are~~custodians aor ~~British~~authorized ~~Virgin~~users ~~Islands holding~~of ~~company~~our ~~and~~controlling wenon-tangible ~~rely~~assets, ~~principally~~including onchops ~~dividends~~ and ~~other~~seals, ~~distributions~~fail onto ~~equity~~fulfill ~~from~~their ~~the~~responsibilities, or ~~PRC~~misappropriate ~~operating~~or ~~entities~~misuse ~~for~~these assets, our ~~cash~~business ~~requirements, including~~and ~~for~~operations ~~services~~could ofbe ~~any~~materially ~~debt~~and weadversely ~~may incur~~affected.

~~The PRC operating entities’~~Under ~~ability to distribute dividends is based upon its distributable earnings. Current~~ PRC ~~regulations~~law, ~~permit~~legal ~~the~~documents ~~PRC~~for ~~operating~~corporate ~~entities to pay dividends to its shareholder only out of its accumulated profits~~transactions, ifincluding ~~any,~~agreements ~~determined in accordance with PRC accounting standards~~ and ~~regulations.~~ Incontracts ~~addition,~~that ~~each of~~ our ~~PRC~~business ~~subsidiary~~relies on, ~~the VIE and its subsidiaries~~ are ~~required~~executed ~~to set aside at least 10% of its after-tax~~using ~~profits~~the ~~each~~chop ~~year,~~or ifseal ~~any, to fund a statutory reserve until such reserve reaches 50%~~ of ~~its registered capital. The reserve is not distributable as cash dividends. If~~ the ~~PRC~~signing ~~operating~~entity ~~entities incur debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends~~ or ~~make~~with ~~other payments to us. Any limitation on~~ the ~~ability~~signature of ~~the~~a ~~PRC~~legal ~~operating~~representative ~~entities~~whose todesignation ~~distribute dividends~~is orregistered ~~other payments to its shareholder could materially~~ and ~~adversely~~filed ~~limit our ability to grow, make investments or acquisitions~~with ~~that~~the ~~could~~relevant beAdministration ~~beneficial~~for toMarket ~~our businesses, pay dividends or otherwise fund and conduct our business~~Regulation.

In order ~~addition,~~to maintain the ~~Enterprise Income~~physical ~~Tax~~security ~~Law~~of ~~and~~our ~~its~~chops, ~~implementation~~we ~~rules~~generally ~~provide~~have ~~that~~them astored ~~withholding~~in ~~tax~~secured ~~rate~~locations ofaccessible uponly to ~~10%~~authorized employees. ~~will~~Although we monitor such authorized employees, the procedures may not be ~~applicable~~sufficient to ~~dividends~~prevent ~~payable~~all byinstances of abuse or negligence. ~~Chinese~~There ~~companies~~is a risk that our employees could abuse their authority, for example, by entering into a contract not approved by us or seeking to ~~non-PRC-resident~~gain ~~enterprises~~control ~~unless~~of ~~otherwise~~one ~~exempted~~of our subsidiaries or ~~reduced~~affiliated ~~according~~entities. toIf ~~treaties~~any employee obtains, misuses or ~~arrangements~~misappropriates ~~between~~our ~~the~~chops and ~~PRC~~seals ~~central~~or ~~government~~other ~~and~~controlling ~~governments~~intangible ofassets ~~other~~for ~~countries~~whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or ~~regions~~legal ~~where~~action, ~~the~~which ~~non-PRC~~could ~~resident~~involve ~~enterprises~~significant ~~are~~time ~~incorporated~~and resources to resolve while distracting management from our operations.

IfFluctuation in the ~~custodians~~currency orexchange ~~authorized~~rate ~~users~~ of ~~our~~ ~~controlling~~RMB ~~non-tangible~~may ~~assets,~~have ~~including~~a ~~chops~~material ~~and~~adverse ~~seals,~~effect ~~fail~~on ~~to fulfill their responsibilities, or misappropriate or misuse these assets,~~ our business, ~~and~~ operations ~~could be materially~~ and ~~adversely~~financial ~~affected~~position.

~~Under~~Our revenue ~~PRC~~and ~~law~~expenses have been and are expected to continue to be primarily denominated in RMB and we are exposed to the risks associated with the fluctuation in the currency exchange rate of RMB. Should RMB appreciate against other currencies, ~~legal~~any ~~documents~~future financings, which ~~for~~are ~~corporate~~to ~~transactions~~be converted from US dollar or other currencies into RMB, ~~including~~would ~~agreements~~be reduced and ~~contracts~~might ~~that~~accordingly hinder our business ~~relies~~development due ~~on,~~to ~~are~~the ~~executed~~lessened ~~using~~amount of funds raised. On the ~~chop~~other orhand, ~~seal~~in the event of the devaluation of RMB, the dividend payments of our Company, ~~signing~~which ~~entity~~are orto ~~with~~be paid in US dollars after the ~~signature~~conversion of the distributable profit denominated in RMB, would be reduced. Hence, substantial fluctuation in the currency exchange rate of RMB may have a ~~legal~~material ~~representative~~adverse ~~whose~~effect ~~designation~~on isour ~~registered~~business, operations and ~~filed~~financial ~~with~~position and the ~~relevant~~value ~~Administration for~~of ~~Market~~your ~~Regulation~~investment in the Shares.

In order to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to authorized employees. Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our employees could abuse their authority, for example, by entering into a contract not approved by us or seeking to gain control of one of our subsidiaries or affiliated entities. If any employee obtains, misuses or misappropriates our chops and seals or other controlling intangible assets for whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management from our operations.52

~~Fluctuation~~Governmental control inof ~~the~~ currency ~~exchange~~conversion ~~rate of RMB~~ may ~~have~~limit aour ~~material~~ability ~~adverse~~to ~~effect~~utilize on our ~~business,~~revenues ~~operations~~effectively and ~~financial~~affect ~~position~~the value of your investment.

~~Our~~The PRC ~~revenue~~government ~~and~~imposes ~~expenses~~controls ~~have been~~on ~~and~~the ~~are~~convertibility ~~expected~~of tothe ~~continue~~Renminbi tointo beforeign ~~primarily~~currencies ~~denominated~~and, in ~~RMB~~certain ~~and~~cases, wethe ~~are~~remittance ~~exposed~~of currency toout ~~the~~of ~~risks~~China. ~~associated~~We ~~with~~receive ~~the~~substantially ~~fluctuation~~all of our revenues in Renminbi. Under our current corporate structure, our Nevada holding ~~the~~company ~~currency~~may ~~exchange~~rely ~~rate~~on ofdividend ~~RMB.~~payments ~~Should~~from ~~RMB~~the ~~appreciate~~PRC ~~against~~operating ~~other~~entities ~~currencies,~~to fund any ~~future~~cash ~~financings,~~and ~~which~~financing ~~are~~requirements towe bemay ~~converted~~have. ~~from~~Under USexisting ~~dollar~~PRC orforeign ~~other~~exchange ~~currencies~~regulations, ~~into~~payments ~~RMB~~of current account items, ~~would~~including beprofit ~~reduced~~distributions, interest payments and ~~might~~trade and ~~accordingly~~service-related ~~hinder~~foreign ~~our~~exchange ~~business~~transactions, ~~development~~can ~~due~~be tomade in foreign currencies without prior approval of the ~~lessened~~State ~~amount~~Administration of ~~funds~~Foreign ~~raised~~Exchange, or SAFE, by complying with certain procedural requirements. OnSpecifically, under the ~~other~~existing ~~hand~~exchange restrictions, without inprior approval of SAFE, cash generated from the ~~event~~operations of the ~~devaluation~~PRC ofoperating ~~RMB,~~entities ~~the~~in ~~dividend~~China ~~payments~~may ofbe used to pay dividends to our ~~Company~~company. However, ~~which~~approval ~~are~~from or registration with appropriate government authorities is required where Renminbi is to be ~~paid~~converted ininto USforeign ~~dollars~~currency ~~after~~and ~~the~~remitted ~~conversion~~out of China to pay capital expenses such as the ~~distributable~~repayment ~~profit~~of loans denominated in ~~RMB~~foreign currencies. As a result, ~~would~~we bemay ~~reduced.~~need ~~Hence,~~to ~~substantial~~obtain ~~fluctuation~~SAFE ~~in the~~approval ~~currency~~or ~~exchange~~register ~~rate~~with SAFE to use cash generated from the operations of ~~RMB~~the ~~may~~PRC ~~have~~operating entities to pay off its debt in a ~~material~~currency ~~adverse~~other ~~effect~~than onRenminbi ~~our~~owed ~~business~~to entities outside China, ~~operations~~or ~~and~~to ~~financial~~make ~~position~~other ~~and~~capital ~~the~~expenditure ~~value~~payments ofoutside ~~your~~China ~~investment~~ in ~~the~~a ~~Shares~~currency other than Renminbi.

52In light of the flood of capital outflows of China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment. If any of our shareholders regulated by such policies fails to satisfy the applicable overseas direct investment filing or approval requirement timely or at all, it may be subject to penalties from the relevant PRC authorities. The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the Shares.

~~Governmental~~There are ~~control~~significant ofuncertainties ~~currency~~under ~~conversion may~~the ~~limit~~PRC ~~our~~Enterprise ~~ability~~Income Tax Law relating to ~~utilize~~the ~~our~~withholding ~~revenues~~tax ~~effectively~~liabilities of the PRC operating entities, and ~~affect~~dividends payable by the ~~value~~PRC ofoperating ~~your~~entities ~~investment~~to our offshore subsidiaries may not qualified to enjoy certain treaty benefits.

~~The PRC government imposes~~Under ~~controls on~~ the ~~convertibility~~PRC ofEnterprise ~~the~~Income ~~Renminbi~~Tax ~~into~~Law ~~foreign currencies~~ and, inits ~~certain~~implementation ~~cases~~rules, the ~~remittance~~profits of ~~currency~~a ~~out~~foreign-invested ofenterprise, ~~China. We~~or ~~receive~~FIE, ~~substantially~~generated ~~all~~through operations, ofwhich ~~our~~are ~~revenues~~distributed into ~~Renminbi.~~its ~~Under~~immediate ~~our~~holding ~~current~~company ~~corporate~~outside ~~structure~~China, ~~our~~will ~~British~~be ~~Virgin~~subject ~~Islands~~to ~~holding~~a ~~company may~~withholding ~~rely~~tax onrate ~~dividend~~of ~~payments~~10%. ~~from~~Pursuant to ~~the~~a ~~PRC~~special ~~operating~~arrangement ~~entities~~between toHong ~~fund~~Kong ~~any cash~~ and ~~financing~~China, ~~requirements~~such werate may ~~have.~~be ~~Under~~reduced ~~existing PRC~~to ~~foreign~~5% ~~exchange~~if ~~regulations,~~a ~~payments~~Hong ofKong ~~current~~resident ~~account~~enterprise ~~items,~~owns ~~including~~more ~~profit~~than 25% ~~distributions,~~of ~~interest~~the ~~payments~~equity ~~and~~interest ~~trade~~in ~~and~~the ~~service-related foreign~~PRC ~~exchange~~company ~~transactions,~~and ~~can~~fulfils beother ~~made~~conditions inset ~~foreign~~out ~~currencies~~under ~~without~~relevant ~~prior~~PRC ~~approval~~regulations. ofOur ~~the~~current ~~State~~PRC ~~Administration of Foreign Exchange~~subsidiary, orFengyuan ~~SAFE~~Beijing, is wholly owned by ~~complying~~our ~~with~~Hong ~~certain~~Kong ~~procedural~~subsidiary, ~~requirements.~~Edeshler ~~Specifically~~HK, ~~under~~which ~~the~~may ~~existing~~qualify ~~exchange~~for ~~restrictions,~~a ~~without~~5% ~~prior~~tax ~~approval of~~rate ~~SAFE,~~in ~~cash~~respect ~~generated~~of distributions from ~~the~~Fengyuan ~~operations~~Beijing. ofUnder the ~~PRC~~Notice ~~operating~~on ~~entities~~Certain inIssues ~~China~~with ~~may~~Respect beto ~~used~~the toEnforcement ~~pay~~of ~~dividends~~Dividend toProvisions ~~our~~in ~~company.~~Tax ~~However,~~Treaties promulgated ~~approval~~in ~~from~~2009, orthe ~~registration~~tax ~~with~~payer ~~appropriate~~needs ~~government~~to ~~authorities~~satisfy iscertain ~~required~~conditions ~~where~~to ~~Renminbi~~enjoy isthe tobenefits beunder ~~converted~~a ~~into~~tax ~~foreign~~treaty. ~~currency and~~These ~~remitted~~conditions ~~out~~include: of(i) ~~China~~the taxpayer tomust ~~pay~~be ~~capital~~the ~~expenses~~beneficial ~~such~~owner asof the ~~repayment~~relevant ofdividends, ~~loans~~and ~~denominated~~(ii) inthe ~~foreign~~corporate ~~currencies.~~shareholder Asto areceive ~~result,~~dividends wefrom ~~may~~the PRC ~~need~~subsidiary tomust ~~obtain~~have ~~SAFE~~met ~~approval~~the ordirect ~~register~~ownership ~~with~~thresholds ~~SAFE~~during tothe ~~use~~12 ~~cash~~consecutive ~~generated~~months ~~from~~preceding the ~~operations~~receipt of the ~~PRC~~dividends. ~~operating~~Further, in ~~entities~~February to2018, ~~pay~~the ~~off its~~State ~~debt~~Administration inof aTaxation ~~currency~~issued ~~other~~the ~~than~~Announcement ~~Renminbi~~of ~~owed~~the toState ~~entities~~Administration ~~outside~~of ~~China,~~Taxation oron Issues Relating to ~~make~~“Beneficial ~~other~~Owner” ~~capital~~in ~~expenditure~~Tax ~~payments~~Treaties, ~~outside~~which ~~China in~~sets aforth ~~currency~~certain ~~other~~detailed ~~than~~factors ~~Renminbi~~in determining “beneficial owner” status.

InEntitlement to ~~light~~a oflower tax rate on dividends according to tax treaties or arrangements between the ~~flood~~PRC ofcentral ~~capital outflows~~government and governments of ~~China~~other countries inor ~~2016~~regions ~~due~~is subject to the ~~weakening~~Administrative ~~Renminbi~~Measures on Entitlement of Non-resident Taxpayers to Treaty Benefits, ~~the~~which ~~PRC~~provides that ~~government~~entitlement ~~has~~to ~~imposed~~treaty ~~more~~benefits ~~restrictive~~for ~~foreign~~non-resident ~~exchange~~taxpayers ~~policies~~shall ~~and stepped~~be uphandled ~~scrutiny~~by means of ~~major~~“self-judgment ~~outbound~~of ~~capital~~eligibility, ~~movement~~declaration of ~~including~~entitlement, ~~overseas~~and ~~direct~~retention ~~investment.~~of Ifrelevant ~~any~~materials offor ~~our~~future ~~shareholders~~reference.” ~~regulated~~Where non-resident taxpayers judge by ~~such~~themselves that ~~policies~~they ~~fails~~meet tothe ~~satisfy~~conditions ~~the~~for ~~applicable~~entitlement ~~overseas~~to ~~direct~~treaty ~~investment~~benefits, ~~filing~~they ormay ~~approval~~obtain ~~requirement~~such ~~timely~~entitlement orthemselves at ~~all,~~the ittime ~~may~~of bemaking ~~subject~~tax declarations, toor ~~penalties~~at ~~from~~ the ~~relevant~~time ~~PRC~~of ~~authorities.~~making ~~The~~withholding ~~PRC~~declarations ~~government~~via ~~may~~withholding atagents. ~~its~~At ~~discretion~~the ~~further~~same ~~restrict~~time, ~~access~~they inshall ~~the~~collect, ~~future~~gather toand ~~foreign~~retain relevant ~~currencies~~materials for ~~current~~future ~~account~~reference ~~transactions.~~in Ifaccordance with the ~~foreign~~provisions ~~exchange~~of ~~control~~these ~~system~~Measures, ~~prevents~~and usshall ~~from~~accept ~~obtaining~~the ~~sufficient~~follow-up ~~foreign~~administration ~~currencies~~of totax ~~satisfy~~authorities. ~~our~~As ~~foreign~~a ~~currency demands~~result, we ~~may~~cannot ~~not~~assure you that we will be ~~able~~entitled to ~~pay~~any ~~dividends~~preferential inwithholding ~~foreign~~tax ~~currencies~~rate tounder ~~our~~treaties ~~shareholders,~~for dividends ~~including~~received ~~holders of~~from the ~~Shares~~PRC operating entities.

There are significant uncertainties under the PRC Enterprise Income Tax Law relating to the withholding tax liabilities of the PRC operating entities, and dividends payable by the PRC operating entities to our offshore subsidiaries may not qualified to enjoy certain treaty benefits. 53

~~Under the PRC Enterprise Income~~The ~~Tax~~M&A ~~Law~~Rules and ~~its~~certain implementation rules, the profits of a foreign-invested enterprise, or FIE, generated through operations, which are distributed to its immediate holding company outside China, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement between Hong Kong and China, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company and fulfils other ~~conditions set out under relevant~~ PRC regulations. ~~Our~~may ~~current~~make ~~PRC~~it ~~subsidiary,~~more ~~Fengyuan~~difficult ~~Beijing, is wholly owned by our Hong Kong subsidiary, Edeshler HK, which may qualify~~ for aus ~~5% tax rate in respect of distributions from Fengyuan Beijing. Under the Notice on Certain Issues with Respect~~ to ~~the~~pursue ~~Enforcement~~growth ofthrough ~~Dividend Provisions in Tax Treaties promulgated in 2009, the tax payer needs to satisfy certain conditions to enjoy the benefits under a tax treaty~~acquisitions. These conditions include: (i) the taxpayer must be the beneficial owner of the relevant dividends, and (ii) the corporate shareholder to receive dividends from the PRC subsidiary must have met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, in February 2018, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Issues Relating to “Beneficial Owner” in Tax Treaties, which sets forth certain detailed factors in determining “beneficial owner” status.

~~Entitlement~~The Regulations toon aMergers ~~lower~~and ~~tax rate~~Acquisitions onof ~~dividends~~Domestic ~~according~~Companies toby ~~tax~~Foreign ~~treaties~~Investors, or ~~arrangements~~the ~~between~~M&A ~~the~~Rules, adopted by six PRC ~~central~~regulatory agencies ~~government~~in 2006 and ~~governments~~amended ofin 2009, and some other ~~countries~~regulations orand ~~regions is~~rules ~~subject~~concerning tomergers ~~the~~and ~~Administrative~~acquisitions ~~Measures~~established oncomplex ~~Entitlement~~procedures and requirements for some acquisitions of ~~Non-resident~~Chinese ~~Taxpayers~~companies toby ~~Treaty~~foreign ~~Benefits~~investors, ~~which~~including ~~provides~~requirements in some instances that ~~entitlement~~MOFCOM, tobe ~~treaty~~notified ~~benefits~~in ~~for~~advance ~~non~~of any change-~~resident~~of-control ~~taxpayers~~transaction ~~shall~~in bewhich ~~handled~~a byforeign ~~means~~investor oftakes ~~“self-judgment~~control of ~~eligibility,~~a ~~declaration~~PRC ofdomestic ~~entitlement~~enterprise if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national ~~and~~economic ~~retention~~security, or (iii) such transaction will lead to a change in control of ~~relevant~~a ~~materials~~domestic ~~for~~enterprise ~~future~~which ~~reference~~holds a famous trademark or PRC time-honored brand.” ~~Where~~Moreover, ~~non~~the Anti-~~resident~~Monopoly ~~taxpayers~~Law ~~judge~~promulgated by ~~themselves~~the ~~that~~Standing ~~they~~Committee ~~meet~~of the ~~conditions for~~NPC ~~entitlement~~which tobecame ~~treaty~~effective ~~benefits,~~in 2008 ~~they~~requires ~~may~~that ~~obtain~~transactions ~~such~~which ~~entitlement~~are ~~themselves~~deemed atconcentrations ~~the~~and ~~time~~involve ofparties ~~making~~with ~~tax~~specified ~~declarations,~~turnover orthresholds atmust ~~the~~be ~~time~~cleared ofby ~~making~~MOFCOM ~~withholding~~before ~~declarations~~they ~~via~~can ~~withholding~~be ~~agents~~completed. AtIn addition, the ~~same~~Measures ~~time,~~for ~~they~~the ~~shall~~Security ~~collect~~Review of Foreign Investment issued by the National Development and Reform Commission, ~~gather~~or NDRC, and ~~retain~~MOFCOM ~~relevant~~and ~~materials~~became effective on 18 January 2021 specify that any foreign investment that ~~for~~has ~~future~~or ~~reference~~possibly has an impact on state security shall be subject to security review in accordance with the ~~provisions~~measures. Foreign investment in any of ~~these~~such ~~Measures~~fields as the military industry and military-supporting industry that concern state defense and security, military facilities and ~~shall~~areas ~~accept~~surrounding ~~the~~industrial ~~follow-up~~military ~~administration~~facilities, ofas ~~tax~~well ~~authorities.~~as foreign investment in any important agricultural product, important Asenergy aand ~~result~~resources, wemajor ~~cannot~~equipment ~~assure~~manufacturing, ~~you~~important infrastructure, important transportation services, important cultural products and services, important information technologies and internet products and services, important financial services, key technologies and other important fields that weconcern ~~will~~state besecurity ~~entitled~~while toobtaining ~~any~~the ~~preferential~~actual ~~withholding~~control ~~tax~~over ~~rate~~the ~~under~~enterprises ~~treaties~~invested ~~for~~in, ~~dividends~~shall ~~received~~take the initiative to make a declaration to and obtain approval from the ~~PRC~~working ~~operating~~mechanism ~~entities~~office for security review of foreign investment, which is established under NDRC and led by NDRC and MOFCOM, prior to making the investment.

53In the future, we may pursue potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

The approval ~~M&A~~of ~~Rules~~the ~~and~~China ~~certain~~Securities ~~other~~Regulatory Commission, or CSRC, or other PRC ~~regulations~~ regulatory agencies, may ~~make~~be itrequired ~~more~~in connection ~~difficult~~with ~~for~~the usshare toexchange ~~pursue~~transaction ~~growth~~that ~~through~~occurred ~~acquisitions~~in July 2021 or the publicly listing of our securities on an overseas stock exchange or trading in the over-the-counter market under PRC law, and if required, we cannot assure you that we will be able to obtain such approval.

The ~~Regulations~~M&A onRules ~~Mergers~~purport ~~and~~to ~~Acquisitions~~require ofoffshore ~~Domestic~~special ~~Companies~~purpose byvehicles ~~Foreign~~that ~~Investors,~~are orcontrolled ~~the M&A Rules, adopted~~ by ~~six~~ PRC ~~regulatory~~companies ~~agencies~~or inindividuals ~~2006~~ and ~~amended~~ inthat ~~2009,~~have ~~and~~been ~~some~~formed ~~other~~for ~~regulations~~the ~~and~~purpose of ~~rules~~seeking ~~concerning~~a ~~mergers~~public ~~and~~listing ~~acquisitions~~on ~~established~~an ~~complex~~overseas ~~procedures~~stock ~~and~~exchange ~~requirements for~~through ~~some~~ acquisitions of ~~Chinese~~PRC domestic companies byor ~~foreign~~assets ~~investors,~~by ~~including~~means ~~requirements~~of inoffering of ~~some~~its ~~instances~~shareholder’s ~~that~~or ~~MOFCOM,~~its beshare ~~notified~~to ~~in advance~~obtain ofCSRC ~~any~~approval ~~change-of-control~~prior ~~transaction~~to inpublicly ~~which~~listing atheir ~~foreign~~securities ~~investor~~on ~~takes~~an ~~control~~overseas ofstock aexchange. In ~~PRC~~September ~~domestic~~2006, ~~enterprise~~the ifCSRC ~~(i) any~~published ~~important industry~~a isnotice ~~concerned,~~on ~~(ii) such~~its ~~transaction~~official ~~involves~~website ~~factors~~specifying ~~that~~documents ~~have~~and ormaterials ~~may~~required ~~have~~to ~~impact~~be onsubmitted ~~the~~to it ~~national~~by ~~economic~~a ~~security,~~special ~~or (iii) such~~purpose ~~transaction~~vehicle ~~will~~seeking ~~lead~~CSRC toapproval aof ~~change~~its inoverseas ~~control~~listings. As of athe ~~domestic~~date ~~enterprise~~of ~~which~~this ~~holds~~report, awe ~~famous~~have ~~trademark~~not orreceived ~~PRC time-honored~~any ~~brand.~~requirement ~~Moreover,~~to ~~the~~obtain ~~Anti-Monopoly~~approval ~~Law~~of ~~promulgated~~CSRC byfor the ~~Standing~~share ~~Committee~~exchange oftransaction ~~the~~that ~~NPC~~we ~~which~~entered ~~became~~into ~~effective~~ in ~~2008~~July ~~requires~~2021 ~~that~~or ~~transactions which~~publicly ~~are~~listing ~~deemed~~of ~~concentrations~~our securities ~~and~~on ~~involve~~an ~~parties~~overseas ~~with~~stock ~~specified~~exchange ~~turnover~~or ~~thresholds~~trading ~~must~~in bethe ~~cleared~~over-the-counter bymarket. ~~MOFCOM~~However, ~~before~~given ~~they~~the ~~can~~current beregulatory ~~completed.~~environment Inin ~~addition~~the PRC, ~~the~~we ~~Measures~~are ~~for~~subject to the ~~Security~~uncertainty ~~Review~~ of ~~Foreign~~interpretation ~~Investment~~and ~~issued~~enforcement byof the ~~National~~rules ~~Development~~ and ~~Reform~~regulations ~~Commission,~~in orthe ~~NDRC~~PRC, ~~and~~ ~~MOFCOM~~which ~~and~~can ~~became~~change quickly ~~effective~~with onlittle 18advance ~~January~~notice. ~~2021~~If ~~specify~~CSRC ~~that~~or ~~any~~other ~~foreign~~PRC ~~investment~~regulatory ~~that~~agencies’ ~~has~~approval oris ~~possibly~~required, ~~has~~it anis ~~impact~~uncertain onwhether ~~state~~it ~~security~~would ~~shall~~ be ~~subject~~possible tofor ~~security~~us ~~review~~to inobtain ~~accordance with~~ the ~~measures.~~approval, ~~Foreign~~and ~~investment in~~ any offailure ~~such~~to ~~fields~~obtain asor ~~the~~delay ~~military~~in ~~industry and~~obtaining ~~military-supporting~~CSRC ~~industry~~approval ~~that~~for ~~concern~~the ~~state~~share ~~defense~~exchange ~~and~~transaction that ~~security,~~we ~~military~~entered ~~facilities~~into ~~and~~in ~~areas~~July ~~surrounding~~2021 ~~industrial~~or ~~military facilities,~~publicly aslisting ~~well~~of asour ~~foreign~~securities ~~investment~~on inan ~~any~~overseas ~~important~~stock ~~agricultural~~exchange ~~product,~~or ~~important~~trading ~~energy~~in ~~and~~the ~~resources, major equipment manufacturing,~~over-the-counter ~~important~~market ~~infrastructure,~~would ~~important~~subject ~~transportation~~us ~~services,~~to ~~important~~sanctions ~~cultural~~imposed ~~products~~by ~~and~~the ~~services,~~CSRC ~~important information technologies~~ and ~~internet~~other ~~products~~PRC ~~and~~regulatory ~~services,~~agencies. ~~important~~As ~~financial~~a ~~services~~result, ~~key~~we ~~technologies~~face ~~and~~uncertainty ~~other~~about ~~important fields that concern state security~~future ~~while~~actions ~~obtaining~~by the ~~actual~~PRC ~~control~~government ~~over~~that ~~the~~could ~~enterprises~~significantly ~~invested~~affect ~~in,~~our ~~shall~~ability ~~take~~to ~~the~~continue ~~initiative~~ to ~~make~~offer asecurities ~~declaration~~ to investors and ~~obtain~~cause ~~approval from~~ the ~~working mechanism office for security review~~ value of ~~foreign~~our ~~investment,~~Common ~~which~~Stock isto ~~established~~significantly ~~under~~decline ~~NDRC~~or ~~and~~be ~~led by NDRC and MOFCOM, prior to making the investment~~worthless.

In the future, we may pursue potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.54

~~The~~As ~~approval~~we ~~of the~~did ~~China~~not ~~Securities~~acquire ~~Regulatory~~any PRC ~~Commission,~~domestic company or ~~CSRC,~~asset orby ~~other PRC~~means ~~regulatory~~of ~~agencies, may~~offering beof ~~required~~our inshareholder’s ~~connection with~~or ~~the~~our share ~~exchange transaction that occurred~~ in ~~July~~the ~~2021~~share exchange or ~~the~~ publicly listing of our securities on an overseas stock exchange or trading in the over-the-counter market, ~~under~~we ~~PRC~~of ~~law,~~the ~~and~~understanding ifthat we are not be required to submit an application to the CSRC for the approval of the listing and trading of the Common Stock. However, wethere ~~cannot~~are ~~assure~~substantial ~~you~~uncertainty as ~~that~~to wehow the M&A Rules will be ~~able~~interpreted or implemented in the context of an overseas offering, and we are subject to ~~obtain~~any ~~such~~new ~~approval~~laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.

~~The~~PRC ~~M&A~~regulations ~~Rules~~relating ~~purport~~ to ~~require~~ offshore ~~special~~investment ~~purpose~~activities ~~vehicles that are controlled~~ by PRC ~~companies~~residents ormay ~~individuals~~limit ~~and that have been formed for~~ the ~~purpose of seeking a public listing on an overseas stock exchange through acquisitions of~~ PRC ~~domestic~~operating ~~companies or assets by means of offering of its shareholder~~entities’s orability ~~its share~~ to ~~obtain CSRC approval prior to publicly listing their securities on an~~change ~~overseas stock exchange. In September 2006, the CSRC published a notice on~~ its ~~official~~registered ~~website~~capital specifying documents and materials required to be submitted to it by a special purpose vehicle seeking CSRC approval of its overseas listings. As of the date of this report, we have not received any requirement to obtain approval of CSRC for the share exchange transaction that we entered into in July 2021 or ~~publicly listing~~distribute ofprofits ~~our securities on an overseas stock exchange or trading in the over-the-counter market. However, given the current regulatory environment in the PRC, we are subject~~ to ~~the~~us ~~uncertainty of interpretation and enforcement of the rules and regulations in the PRC, which can change quickly with little advance notice. If CSRC~~ or ~~other~~otherwise ~~PRC~~expose ~~regulatory agencies’ approval is required, it is uncertain whether it would be possible for~~ us ~~to obtain the approval, and any failure to obtain~~ or ~~delay in obtaining CSRC approval for the share exchange transaction that we entered into in July 2021 or publicly listing of~~ our ~~securities~~PRC onresident anbeneficial ~~overseas~~owners ~~stock exchange or trading in the over-the-counter market would subject us~~ to ~~sanctions~~liability ~~imposed by the CSRC~~ and ~~other PRC regulatory agencies. As a result, we face uncertainty about future~~penalties ~~actions~~under ~~by the~~ PRC ~~government that could significantly affect our ability to continue to offer securities to investors and cause the value of our common stock to significantly decline or be worthless~~laws.

54In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose) to register with SAFE or its local branches in connection with their direct or indirect investment activities. SAFE Circular 37 further requires an amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.

AsIf our weshareholders ~~did~~who ~~not~~are ~~acquire any~~ PRC ~~domestic~~residents ~~company~~fail to make the required registration or ~~asset~~to byupdate ~~means~~the ofpreviously ~~offering~~filed ofregistration, ~~our~~the ~~shareholder’s~~PRC operating orentities ~~our~~may ~~share~~be inprohibited from distributing its profits or the proceeds from any capital reduction, share ~~exchange~~transfer or ~~publicly~~liquidation to ~~listing~~us, ~~of our~~and ~~securities~~we onmay analso ~~overseas~~be ~~stock~~prohibited ~~exchange~~from ormaking ~~trading~~additional incapital ~~the~~contribution ~~over-~~into the~~-counter~~ ~~market~~PRC operating entities. In February 2015, weSAFE promulgated ofa ~~the~~Notice ~~understanding~~on ~~that~~Further weSimplifying ~~are~~and ~~not~~Improving beForeign ~~required to~~Exchange ~~submit~~Administration anPolicy ~~application~~on toDirect ~~the~~Investment, ~~CSRC~~or ~~for~~SAFE ~~the~~Notice 13, ~~approval~~effective offrom ~~the~~June ~~listing~~2015 and ~~trading~~partially ofrepealed ~~the~~on ~~common~~December ~~stock~~30, 2019. ~~However~~Under SAFE Notice 13, ~~there~~applications ~~are~~for ~~substantial~~foreign ~~uncertainty~~exchange registration asof toinbound ~~how~~foreign ~~the~~direct ~~M&A~~investments ~~Rules~~and ~~will~~outbound beoverseas ~~interpreted~~direct orinvestments, ~~implemented~~including inthose ~~the~~required ~~context~~under ofSAFE anCircular ~~overseas offering~~37, ~~and~~will be wefiled ~~are~~with ~~subject~~qualified tobanks ~~any~~instead ~~new~~of ~~laws, rules~~SAFE. ~~and~~The ~~regulations~~qualified orbanks ~~detailed~~will ~~implementations~~directly ~~and~~examine ~~interpretations~~the inapplications ~~any~~and ~~form~~accept ~~relating~~registrations to under the ~~M&A~~supervision ~~Rules~~of SAFE.

Our shareholders have completed the initial registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. However, we may not be informed of the identifies of all the PRC ~~regulations~~residents ~~relating~~holding todirect ~~offshore~~or ~~investment~~indirect interest in our company, and we cannot provide ~~activities~~any byassurance that these PRC residents will comply with our request to make or obtain any applicable registrations or continuously comply with all requirements under SAFE Circular 37 or other related rules. The failure or inability of the relevant shareholders to comply with the registration procedures set forth in these regulations may ~~limit~~subject us to fines and legal sanctions, such as restrictions on our cross-border investment activities, on the ability of the PRC operating entities’ ~~ability~~in China to ~~change~~distribute ~~its~~dividends ~~registered~~and the proceeds from any reduction in capital, share transfer or ~~distribute~~liquidation ~~profits~~ to us. orMoreover, ~~otherwise~~any ~~expose~~failure usto comply with the various foreign exchange registration requirements described above could result in liability under PRC law for circumventing applicable foreign exchange restrictions. Furthermore, as these foreign exchange regulations are still relatively new and their interpretation and implementation have been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. As a result, our ~~PRC~~business ~~resident~~operations ~~beneficial~~and ~~owners~~our ability to ~~liability~~distribute ~~and~~profits to ~~penalties~~you ~~under~~could ~~PRC~~be ~~laws~~materially and adversely affected.

In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose) to register with SAFE or its local branches in connection with their direct or indirect investment activities. SAFE Circular 37 further requires an amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.55

~~If our shareholders who are~~Any ~~PRC~~failure ~~residents fail~~ to ~~make~~comply ~~the~~with ~~required~~PRC ~~registration~~regulations orregarding ~~to update~~ the ~~previously filed~~ registration, ~~the~~requirements ~~PRC~~for ~~operating~~employee ~~entities~~stock ~~may~~incentive ~~be prohibited~~plans ~~from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to us, and we~~ may ~~also be~~subject ~~prohibited from making additional capital contribution into~~ the PRC ~~operating entities. In February 2015, SAFE promulgated a Notice~~ onplan ~~Further~~participants ~~Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment,~~ or ~~SAFE~~us ~~Notice~~to ~~13,~~fines ~~effective from June 2015~~ and ~~partially~~other ~~repealed~~legal onor ~~December~~administrative ~~30, 2019~~sanctions. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

~~Our shareholders~~In February 2012, ~~have~~SAFE ~~completed~~ promulgated the ~~initial~~Notices ~~registrations~~on ~~with~~Issues Concerning the ~~local~~Foreign ~~SAFE~~Exchange ~~branch~~Administration orfor ~~qualified~~Domestic ~~banks~~Individuals asParticipating in ~~required~~Stock byIncentive ~~SAFE~~Plans ~~Circular~~of ~~37.~~Overseas Publicly-Listed ~~However~~Companies, wereplacing ~~may~~earlier ~~not~~rules bepromulgated ~~informed~~in March 2007. Pursuant ofto ~~the~~these ~~identifies~~rules, ofPRC ~~all~~citizens ~~the~~and non-PRC citizens ~~residents~~who ~~holding~~reside ~~direct~~in orChina ~~indirect~~for ~~interest~~a incontinuous ~~our~~period ~~company,~~of ~~and~~not weless ~~cannot~~than ~~provide~~one ~~any~~year ~~assurance~~who ~~that~~participate ~~these~~in ~~PRC~~any ~~residents~~stock ~~will~~incentive ~~comply~~plan ~~with~~of ~~our~~an ~~request~~overseas topublicly ~~make~~listed orcompany, ~~obtain~~subject ~~any~~to ~~applicable~~a ~~registrations~~few orexceptions, ~~continuously~~are ~~comply~~required ~~with~~to ~~all~~register ~~requirements under~~with SAFE ~~Circular~~through a 37domestic orqualified ~~other~~agent, ~~related~~which ~~rules.~~could ~~The~~be ~~failure~~the orPRC ~~inability~~subsidiary of ~~the~~such ~~relevant~~overseas ~~shareholders~~listed tocompany, ~~comply~~and ~~with~~complete ~~the~~certain ~~registration~~other procedures. ~~set~~In ~~forth~~addition, inan ~~these~~overseas ~~regulations~~entrusted ~~may~~institution ~~subject~~must usbe retained to ~~fines~~handle ~~and~~matters ~~legal~~in ~~sanctions,~~connection ~~such~~with asthe ~~restrictions~~exercise onor ~~our~~sale ~~cross-border~~of ~~investment~~stock ~~activities,~~options onand the ~~ability~~purchase ofor ~~the~~sale ~~PRC~~of ~~operating~~shares ~~entities~~and ininterests. ~~China~~We toand ~~distribute~~our ~~dividends~~executive officers and ~~the~~other ~~proceeds~~employees ~~from~~who ~~any~~are ~~reduction~~PRC incitizens ~~capital,~~or ~~share~~who ~~transfer~~have orresided ~~liquidation~~in tothe ~~us.~~PRC ~~Moreover,~~for ~~any~~a ~~failure~~continuous toperiod ~~comply~~of ~~with~~not ~~the~~less ~~various~~than ~~foreign~~one ~~exchange~~year ~~registration~~and ~~requirements~~who ~~described~~are ~~above~~granted ~~could result~~options inor ~~liability~~other awards under ~~PRC~~the ~~law~~share ~~for~~compensation plan ~~circumventing~~will ~~applicable~~be ~~foreign~~subject ~~exchange~~to ~~restrictions.~~these ~~Furthermore,~~regulations aswhen ~~these~~our ~~foreign~~company ~~exchange~~becomes ~~regulations are~~an ~~still~~overseas ~~relatively~~listed ~~new~~company. ~~and~~Failure ~~their~~to ~~interpretation~~complete ~~and~~the ~~implementation~~SAFE ~~have~~registrations may ~~been~~subject ~~constantly~~them ~~evolving,~~to itfines isand ~~unclear~~legal ~~how~~sanctions ~~these regulations,~~ and ~~any~~may ~~future~~also ~~regulation~~limit ~~concerning~~our ~~offshore~~ability orto ~~cross-border~~contribute ~~transactions,~~additional ~~will~~capital beinto ~~interpreted,~~our ~~amended~~ and ~~implemented~~limit byour subsidiaries’ ~~the~~ability ~~relevant government~~to ~~authorities~~distribute dividends to us. AsWe aalso ~~result,~~face ~~our~~regulatory ~~business~~uncertainties ~~operations~~that ~~and~~could restrict our ability to ~~distribute~~adopt additional ~~profits~~incentive toplans ~~you~~for ~~could~~our bedirectors, ~~materially~~executive officers and ~~adversely affected~~employees under PRC law.

55Although the audit report included in this report was issued by U.S. auditors who are currently regularly inspected by the PCAOB, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors would be deprived of the benefits of such inspection and our Common Stock may be delisted or prohibited from trading.

~~Any~~The ~~failure~~audit report included in this report was issued by GGF CPA LTD, a China-based accounting firm that is registered with the PCAOB and can be inspected by the PCAOB. We have no intention of dismissing GGF CPA LTD, LLC in the future or of engaging any auditor not subject to ~~comply~~regular inspection by the PCAOB. As an auditor of companies that are registered with ~~PRC~~the ~~regulations~~SEC and publicly traded in the United States and a firm registered ~~regarding~~with the ~~registration~~PCAOB, ~~requirements~~our ~~for~~auditor ~~employee~~is ~~stock~~required ~~incentive~~under ~~plans~~the ~~may~~laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. If we were to engage a different auditor in the future, we would engage an auditor that is subject to full PCAOB inspection with all materials related to the ~~PRC~~audit ~~plan~~of ~~participants~~our orfinancial usstatements accessible to ~~fines~~the PCAOB. There is no guarantee, however, that any future auditor engaged by the Company would remain subject to full PCAOB inspection during the entire term of our engagement. In such case, we will engage a new qualified and ~~other~~fully inspected auditor, which may result in ~~legal~~us delaying or ~~administrative~~restating ~~sanctions~~our financial statements.

~~In February 2012, SAFE~~If ~~promulgated~~it ~~the~~is ~~Notices~~later ondetermined ~~Issues~~that ~~Concerning~~ the ~~Foreign~~PCAOB ~~Exchange~~is ~~Administration~~unable ~~for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed Companies, replacing earlier rules promulgated in March 2007. Pursuant~~ to ~~these~~inspect ~~rules,~~or ~~PRC citizens~~investigate ~~and~~our ~~non-PRC citizens~~auditor ~~who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company~~completely, ~~subject~~investors tomay ~~a few exceptions, are required to register with SAFE through a domestic qualified agent, which could~~ be ~~the~~deprived ~~PRC subsidiary~~ of ~~such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with~~ the ~~exercise or sale of stock options and the~~benefits ~~purchase or sale~~ of ~~shares~~such ~~and interests~~inspection. WeAny ~~and~~audit ~~our~~reports ~~executive~~not ~~officers~~issued ~~and~~by ~~other~~auditors ~~employees~~that ~~who~~ are ~~PRC~~completely ~~citizens~~inspected orby ~~who have resided in~~ the ~~PRC~~PCAOB, ~~for~~or a ~~continuous~~lack ~~period~~ of ~~not~~PCAOB ~~less~~inspections of ~~than~~audit ~~one~~work ~~year~~undertaken ~~and~~in ~~who~~China ~~are~~that ~~granted~~prevents ~~options or other awards under~~ the ~~share~~PCAOB ~~compensation~~from ~~plan will~~regularly beevaluating ~~subject to these regulations when~~ our ~~company~~auditors’ ~~becomes~~audits ~~an overseas listed company. Failure to complete the SAFE registrations may subject them to fines~~ and ~~legal~~their ~~sanctions~~quality ~~and may also limit our ability to contribute additional~~control ~~capital~~procedures, ~~into~~could ~~our~~result ~~and~~in ~~limit~~a ~~our~~lack ~~subsidiaries’~~of ~~ability~~assurance ~~to distribute dividends to us. We also face regulatory uncertainties~~ that ~~could restrict~~ our ~~ability~~financial tostatements ~~adopt~~and ~~additional~~disclosures ~~incentive~~are ~~plans~~adequate ~~for our directors, executive officers~~ and ~~employees under PRC law~~accurate.

~~The~~As ~~recent~~part ~~joint~~of ~~statement~~a bycontinued regulatory focus in the ~~SEC~~United States on access to audit and other information currently protected by national law, in particular mainland China’s, ~~the~~on ~~PCAOB~~May 20, ~~and~~2020, the ~~Holding~~U.S. ~~Foreign~~Senate ~~Companies~~passed ~~Accountable~~the HFCA Act, ~~all~~which ~~call~~includes requirements for ~~additional~~the ~~and~~SEC ~~more~~to ~~stringent~~identify ~~criteria~~issuers towhose beaudit ~~applied~~work ~~to emerging~~is ~~market~~performed ~~companies~~by ~~upon~~auditors ~~assessing~~that the ~~qualification~~PCAOB is unable to inspect or investigate completely because of ~~their~~a ~~auditors,~~restriction ~~especially~~imposed ~~the~~ by a non-U.S. ~~auditors~~ ~~who~~authority in ~~are~~the ~~not~~auditor’s ~~inspected by~~local jurisdiction. The U.S. House of Representatives passed the ~~PCAOB~~HFCA Act on December 2, 2020, and the HFCA Act was signed into law on December 18, 2020.

~~On April 21~~Additionally, in July 2020, ~~SEC~~ ~~Chairman~~the ~~Jay~~U.S. ~~Clayton~~President’s ~~and~~Working ~~PCAOB~~Group ~~Chairman~~on ~~William~~Financial ~~D. Duhnke III,~~Markets ~~along~~issued ~~with~~recommendations ~~other~~for ~~senior~~actions ~~SEC~~that ~~staff,~~can ~~released~~be ataken ~~joint~~by ~~statement~~the executive branch, ~~highlighting~~the SEC, the ~~risks~~PCAOB ~~associated~~or other federal agencies and department with ~~investing~~respect into Chinese companies ~~based~~listed inon orU.S. ~~have~~stock ~~substantial~~exchanges ~~operations~~and intheir audit ~~emerging~~firms, ~~markets~~in ~~including~~an ~~China. The~~effort ~~joint~~to ~~statement~~protect ~~emphasized~~investors in the ~~risks~~United ~~associated~~States. ~~with~~In ~~lack~~response, ofon ~~access~~November ~~for~~23, 2020, the ~~PCAOB~~SEC toissued ~~inspect~~guidance ~~auditors~~highlighting certain risks (and ~~audit~~their ~~work~~implications ~~papers~~to U.S. investors) associated with investments in China -based issuers and ~~higher~~summarizing ~~risks~~enhanced ofdisclosures the ~~fraud~~SEC inrecommends ~~emerging~~China-based ~~markets~~issuers make regarding such risks.

On ~~May 20~~December 2, ~~2020~~2021, the SEC ~~U.S. Senate~~adopted ~~passed~~final rules relating to the ~~HFCA~~implementation ~~Act~~of ~~requiring~~certain adisclosure ~~foreign~~and ~~company~~documentation torequirements ~~certify~~of itthe isHFCA ~~not~~Act. ~~owned~~We orwill ~~controlled~~be byrequired to acomply ~~foreign~~with ~~government~~these rules if the ~~PCAOB~~ isSEC ~~unable~~identifies tous ~~audit~~as ~~specified~~having ~~reports~~a ~~because~~“non-inspection” ~~the~~year ~~company~~(as ~~uses~~defined ain ~~foreign~~the ~~auditor~~interim ~~not~~final ~~subject~~rules) under a process to ~~PCAOB~~be ~~inspection.~~subsequently Ifestablished by the ~~PCAOB~~SEC. The SEC is ~~unable~~ assessing how to ~~inspect~~implement ~~the~~other ~~company’s~~requirements ~~auditors~~of ~~for~~the ~~three~~HFCA ~~consecutive years~~Act, including the ~~issuer’s~~listing ~~securities~~and ~~are~~trading ~~prohibited~~prohibition torequirements ~~trade on~~described aabove. ~~national~~Under ~~exchange.~~the OnHFCA ~~December 2~~Act, ~~2020,~~our securities may be prohibited from trading on the Nasdaq or other U.S. ~~House~~ ofstock ~~Representatives~~exchanges ~~approved~~if our auditor is not inspected by the ~~HFCA~~PCAOB ~~Act.~~for Onthree ~~December 18,~~consecutive ~~2020~~years, and this ultimately ~~the~~could ~~HFCA~~result ~~Act~~in ~~was~~our ~~signed~~Ordinary ~~into~~Shares ~~law~~being delisted.

On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence on, such a registrant.56

Furthermore, ~~the~~on ~~HFCA~~June ~~Act~~22, 2021, ~~which~~the ~~requires~~U.S. ~~that~~Senate passed the ~~PCAOB~~AHFCAA, bewhich ~~permitted~~amended tothe ~~inspect~~HFCA Act and requires the SEC to prohibit an issuer’s ~~public~~securities ~~accounting~~from ~~firm~~trading on ~~within~~any ~~three~~ U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years, ~~may~~instead ~~result~~of inthree. On September 22, 2021, the ~~delisting~~PCAOB ofadopted ~~our~~a ~~Company~~final inrule implementing the ~~future~~HFCA ifAct, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the Board is unable to inspect ~~our~~or investigate completely registered public accounting ~~firm~~firms located atin ~~such~~a ~~future~~foreign ~~time~~jurisdiction because of a position taken by one or more authorities in that jurisdiction.

InOn ~~addition~~August 26, ~~on June 22~~2022, the ~~2021~~CSRC, the ~~U.S. Senate~~Ministry ~~passed~~of Finance of the ~~AHFCAA~~PRC, ~~which,~~and ifPCAOB signed ~~into~~a ~~law,~~Statement ~~would~~of ~~amend~~Protocol, or the ~~HFCA~~Protocol, ~~Act~~governing inspections and ~~require~~investigations of audit firms based in China and Hong Kong. Pursuant to the ~~SEC~~Protocol, the PCAOB has independent discretion to ~~prohibit~~select anany issuer’s audits ~~securities~~for ~~from~~inspection ~~trading~~or oninvestigation ~~any~~and Uhas the unfettered ability to transfer information to the SEC.S However, uncertainties still exist whether this new framework will be fully complied with. ~~stock~~ ~~exchanges~~According ifto the PCAOB, its ~~auditor~~December is2021 ~~not~~determinations ~~subject~~under the HFCA Act remain in effect. The PCAOB is required to reassess these determinations by the end of 2022. Under the PCAOB’s rules, a reassessment of a determination under the HFCA Act may result in the PCAOB reaffirming, modifying or vacating the determination. However, if the PCAOB continues to be prohibited from conducting complete inspections ~~for~~and ~~two~~investigations ~~consecutive~~of PCAOB-registered ~~years~~public accounting firms in ~~instead~~mainland China and Hong Kong, the PCAOB is likely to determine by the end of ~~three~~2022 ~~consecutive years~~that positions taken by authorities in the PRC obstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely, then the companies audited by those registered public accounting firms would be subject to a trading prohibition on U.S. markets pursuant to the HFCA Act.

OnThe ~~November 5,~~lack ~~2021, the~~of ~~SEC~~access ~~approved~~to the PCAOB’s ~~Rule 6100,~~inspection ~~Board~~in ~~Determinations~~China ~~Under~~prevents the ~~Holding~~PCAOB ~~Foreign~~from ~~Companies~~fully ~~Accountable~~evaluating ~~Act.~~audits ~~Rule 6100 provides~~and aquality ~~framework~~control ~~for~~procedures ~~the~~of ~~PCAOB to use when determining, as contemplated under~~ the ~~HFCA~~auditors ~~Act,~~based ~~whether~~in ~~it is unable to inspect or investigate~~China. ~~completely~~As ~~registered~~a ~~public~~result, ~~accounting~~the ~~firms~~investors ~~located~~may inbe adeprived ~~foreign~~of ~~jurisdiction~~the ~~because~~benefits of asuch ~~position~~PCAOB ~~taken by one or more authorities in that jurisdiction~~inspections. OnThe ~~December 2,~~inability ~~2021,~~of the ~~SEC~~PCAOB ~~issued amendments~~ to ~~finalize~~conduct ~~rules implementing the submission and disclosure~~inspections ~~requirements~~of auditors in ~~the~~China ~~HFCA~~makes ~~Act.~~it ~~The~~more ~~rules~~difficult ~~apply~~ to ~~registrants~~evaluate ~~that~~ the ~~SEC~~effectiveness ~~identifies~~of asthese ~~having~~accounting ~~filed~~firms’ anaudit ~~annual~~procedures ~~report~~or ~~with~~quality control anprocedures ~~audit~~as ~~report issued~~compared byto aauditors ~~registered~~outside ~~public~~of ~~accounting~~China ~~firm~~ that isare ~~located~~subject into athe ~~foreign jurisdiction and that~~ PCAOB isinspections, ~~unable~~which tocould ~~inspect~~cause orexisting ~~investigate~~and ~~completely~~potential ~~because~~investors ofin a

Filing Compare · Zhuoxun Hongtu Inc.