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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, ~~2023~~2024

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

For the transition period from _______ to __________

Commission File Number: 001-41957

Wetouch Technology Inc.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		20-4080330
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

No. 29, Third Main Avenue Shigao Town, Renshou County Meishan, Sichuan, China		620500
(Address of Principal Executive Offices)		(Zip Code)

(86) 28-37390666

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock , par value $0.001 per share	WETH	The Nasdaq Stock Market LLC
Common Stock, par value $0.001 per share	WETH	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None.

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

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

Note – - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

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 small Reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller Reporting company” or an “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~~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 ☒

~~Yes~~The aggregate market value of the voting and non-voting ☐common Nostock ☒held by non-affiliates of the registrant as of June 28, 2024 (the last business date of the registrant’s most recently completed second fiscal quarter), based on the last sale price of the registrant’s common stock on such date, was $31,379,934.

~~The aggregate~~As ~~market value~~ of ~~the~~September ~~voting~~8, ~~and non-voting common stock held by non-affiliates of the registrant as of June 30~~2025, ~~2023~~there ~~(the last~~were ~~business~~11,931,534 ~~date~~shares of ~~the~~common ~~registrant’s~~stock ~~most recently completed second fiscal quarter), based on the last sale price~~ of the registrant~~’s common~~ ~~stock~~issued onand ~~such date, was $77 million~~outstanding.

As of April 15, 2024, there were 11,931,534 shares of common stock of the registrant issued and outstanding.

WETOUCH TECHNOLOGY INC.

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, ~~2023~~2024

TABLE OF CONTENTS

	~~Page~~	Page
COMMONLY USED DEFINED TERMS	ii	ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	~~iii~~	iii
PART I
ITEM 1. BUSINESS	1	1
ITEM 1A. RISK FACTORS	22	25
ITEM 1B. UNRESOLVED STAFF COMMENTS	44	51
ITEM 1C. CYBERSECURITY	44	51
ITEM 2. PROPERTIES	45	52
ITEM 3. LEGAL PROCEEDINGS	46	54
ITEM 4. MINE SAFETY DISCLOSURES	49	54
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	49	55
ITEM 6. [RESERVED]	50	55
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	50	56
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	64	70
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	64	70
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	64	70
ITEM 9A. CONTROLS AND PROCEDURES	65	71
ITEM 9B. OTHER INFORMATION	66	72
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	66	72
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	66	73
ITEM 11. EXECUTIVE COMPENSATION	70	77
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	73	81
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	74	83
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	75	84
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	75	85
ITEM 16. FORM 10–K SUMMARY	78
ITEM 16. FORM 10-K SUMMARY		88
SIGNATURES	79	89
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	~~F-1~~	F-1

COMMONLY USED DEFINED TERMS

Unless otherwise indicated or the context requires otherwise, references in this Annual Report on Form 10-K (the “Annual Report”) to:

	●	“China,” “Chinese,” or the “PRC” are to the People’s Republic of China, including the special administrative regions of Hong Kong and Macau, and, for the purposes of this annual report only, excluding Taiwan;

	●	“BVI” are to the British Virgin Islands;

	●	“BVI Wetouch” are to Wetouch Holding Group Limited, a limited company organized under the laws of British Virgin Islands and a wholly owned subsidiary of Wetouch;

	●	“Hong Kong Wetouch” are to Hong Kong Wetouch Electronics Technology Limited (香港偉易達電子科技有限公司), a limited company organized under the laws of Hong Kong and a wholly owned subsidiary of BVI Wetouch. On June 18, 2021, Hong Kong Wetouch submitted its application for dissolution and was dissolved on March 18, 2022.

	●	“HK Wetouch” are to Hong Kong Wetouch Technology Limited (香港偉易達科技有限公司), a limited company organized under the laws of Hong Kong and a wholly owned subsidiary of BVI Wetouch;

	●	“Mainland China” are to the mainland of the People’s Republic of China; excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes of this prospectus only;

	●	“PRC laws and regulations” or “PRC laws” are to the laws and regulations of Mainland China;

	●	“Sichuan Wetouch” are to Sichuan Wetouch Technology Co., Ltd (四川伟易达科技有限公司), a limited liability company organized under the PRC laws and prior wholly foreign owned subsidiary of Hong Kong Wetouch. Sichuan Wetouch’s business and operations have been assumed by Sichuan Vtouch;

	●	“Sichuan Vtouch” are to Sichuan Vtouch Technology Co., Ltd (四川伟大奇科技有限公司), a limited liability company organized under the PRC laws and a wholly foreign owned subsidiary of HK Wetouch;

	●	“Shares,” “shares” or “shares of common stock” are to the shares of common stock of Wetouch Technology Inc., with par value of $0.001 per share;

	●	“Renminbi,” “RMB” or “Chinese Yuan” are to the legal currency of Mainland China; and

	●	“U.S. dollars,” “dollars,” “USD” or “$” are to the legal currency of the United States.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report, including, without limitation, statements under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act (as defined below) and Section 21E of the Exchange Act (as defined below). ~~These forward~~Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements ~~can~~concerning, beamong ~~identified~~other bythings, financial results; business plans; future liabilities and other obligations; impairments and amortization; estimates of the ~~use~~financial impact of certain items, accounting treatment, events or circumstances; and capital allocation. Our actual results could differ materially from those anticipated in the forward-looking ~~terminology~~statements for many reasons, including the ~~words~~reasons described in our “~~believes~~Business,” “~~estimates~~Risk Factors,” and “Management Discussion and Analysis of Financial Condition and Result of Operations” sections, as well as those discussed elsewhere in this Annual Report. In some cases, you can identify these forward-looking statements by terms such as “~~anticipates~~anticipate,” “~~expects~~believe,” “~~intends~~continue,” “~~plans~~could,” “depends,” “estimate,” “expects,” “intend,” “may,” “~~will~~ongoing,” “~~potential~~plan,” “~~projects~~potential,” “~~predicts~~predict,” “~~continue~~project,” or “should,” or“will,” ~~in each case~~“would,” “assumption” ~~their negative~~ or ~~other~~“judgment” ~~variations~~ or ~~comparable~~the ~~terminology.~~negative ~~There~~of ~~can~~those beterms noor ~~assurance~~other ~~that~~similar ~~actual~~expressions, ~~results~~although ~~will~~ not ~~materially differ~~all ~~from expectations. These~~ forward-looking statements ~~are~~contain ~~based~~those ~~on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:~~words.

●These ~~Our reliance on our top customers is significant. Failure to attract new customers or retain existing ones cost~~forward-~~effectively~~looking ~~could~~statements present ~~materially and adversely impact~~ our ~~business,~~estimates ~~financial condition,~~ and ~~results~~assumptions ofonly ~~operations.~~as ~~● We hold a substantial amount~~ of ~~accounts receivable, which may become uncollectible. ● Our capacity to uphold~~ the ~~quality~~date ~~and safety standards~~ of ~~our~~this ~~products.~~Annual ●Report ~~Our~~and ~~ability~~are tosubject ~~compete effectively within the touchscreen display industry. ● Without substantial additional financing, our ability~~ to ~~execute~~several ~~our~~known ~~business plan will be compromised. ● Failure to secure a new parcel for constructing our new buildings~~ and ~~facilities,~~unknown ~~as well as acquiring and installing new production lines on the new parcel~~risks, ~~could materially and adversely affect our business~~uncertainties, ~~financial condition,~~ and ~~results of operations~~assumptions. ~~● Revocation or unavailability of preferential tax treatments and government subsidies~~ Accordingly, oryou ~~successful~~are ~~challenges~~cautioned not to ~~our~~place ~~tax~~undue ~~liability~~reliance ~~calculation~~on byforward-looking ~~PRC tax authorities~~statements, ~~may~~which ~~necessitate~~speak ~~payment~~only ofas ~~tax, interest, and penalties exceeding our tax provisions. ● Significant interruptions in the operations~~ of ~~our third-party suppliers could potentially disrupt our operations. ● Risks associated with fluctuations in~~ the dates ~~cost,~~on ~~availability,~~which ~~and~~they ~~quality~~are ~~of raw materials may adversely affect our results of operations~~made. ●There Wecan ~~are reliant on key executives and highly qualified managers, and retention cannot~~ be ~~assured.~~no ●assurance ~~Absence~~that ofactual ~~long-term~~results ~~contracts~~will ~~with~~not ~~our suppliers allows them to reduce order quantities or terminate sales to us at any time. ● Failure to adopt new technologies to evolving customer needs or emerging industry standards may~~ materially ~~and~~differ adversely affect our business. ● Lack of business liability or disruption insurance exposes us to significant costs and business disruption. ● Adverse regulatory developments in Mainland China may subject us to additional regulatory review, restrictions, disclosure requirements, and regulatory scrutiny by the SEC, increasing compliance costs and hindering future securities offerings. ● Our common stock may be prohibited from ~~trading in the U~~expectations.S. ~~under~~These ~~the~~statements are ~~Holding~~based ~~Foreign~~on ~~Companies Accountable Act if PCAOB inspection of our auditor is incomplete, leading to delisting or prohibition and potential decline in stock value. ● Changes in China~~management’s ~~economic,~~current ~~political~~expectations, orbut ~~social~~actual ~~conditions~~results ~~or government policies~~ may ~~adversely~~differ ~~affect~~materially ~~our~~due ~~business~~to ~~and~~various ~~operations. ● Uncertainties regarding the PRC legal system~~factors, including ~~enforcement and sudden changes in laws and regulations~~, ~~could~~but not ~~adversely~~limited ~~affect us and limit legal protections. ● Fluctuations in exchange rates could materially and adversely affect our results of operations and your investment value.~~to:

~~The forward-looking~~● ~~statements~~Our ~~contained~~reliance inon ~~this~~our ~~Annual~~top ~~Report~~customers ~~are~~is ~~based~~significant. onFailure ~~our~~to ~~current~~attract ~~expectations~~new ~~and~~customers ~~beliefs~~or ~~concerning~~retain ~~future~~existing ~~developments~~ ones cost-effectively could materially and ~~their~~adversely ~~potential~~impact ~~effects~~our onbusiness, usfinancial condition, and results of operations. ~~Future~~● ~~developments~~We ~~affecting~~hold usa ~~may~~substantial ~~not~~amount beof ~~those~~accounts ~~that~~receivable, wewhich ~~have~~may ~~anticipated~~become uncollectible. ~~These~~● ~~forward-looking statements~~Our ~~involve~~capacity ato ~~number~~uphold ofthe ~~risks,~~quality ~~uncertainties~~and ~~(some~~safety standards of ~~which~~our ~~are~~products. ~~beyond~~● ~~our~~Our ~~control)~~ability orto ~~other~~compete ~~assumptions~~effectively ~~that~~within ~~may~~the ~~cause~~touchscreen ~~actual results~~display orindustry. ~~performance~~● Without substantial additional financing, our ability to execute our business plan will be ~~materially~~compromised. ~~different~~● Failure to secure the certificate of land use right for a new parcel from ~~those~~the ~~expressed~~local orPRC ~~implied~~government, byas ~~these~~well ~~forward-looking~~as ~~statements.~~acquiring ~~Should~~and ~~one~~installing ~~or more~~new ofproduction ~~these~~lines ~~risks~~on orthe ~~uncertainties~~new ~~materialize~~parcel, orcould ~~should~~materially ~~any~~and ofadversely affect our ~~assumptions~~business, ~~prove~~financial ~~incorrect~~condition, ~~actual~~and results ~~may~~of ~~vary~~operations. in● ~~material respects~~Revocation ~~from~~or ~~those~~unavailability ~~projected~~of inpreferential ~~these~~tax ~~forward-looking~~treatments ~~statements.~~and Wegovernment ~~undertake~~subsidies, noor ~~obligation~~successful challenges to ~~update~~our ortax ~~revise~~liability ~~any~~calculation ~~forward-looking statements,~~by ~~whether~~PRC astax aauthorities, ~~result~~may necessitate payment of ~~new~~tax, ~~information~~interest, ~~future~~and ~~events~~penalties orexceeding ~~otherwise,~~our ~~except~~tax asprovisions. ~~may~~● beSignificant ~~required~~interruptions ~~under~~in ~~applicable~~the ~~securities laws~~operations of our third-party suppliers could potentially disrupt our operations.

iii

	●	Risks associated with fluctuations in the cost, availability, and quality of raw materials may adversely affect our results of operations.

	●	We are reliant on key executives and highly qualified managers, and retention cannot be assured.

	●	Absence of long-term contracts with our suppliers allows them to reduce order quantities or terminate sales to us at any time.

	●	Failure to adopt new technologies to evolving customer needs or emerging industry standards may materially and adversely affect our business.

	●	Lack of business liability or disruption insurance exposes us to significant costs and business disruption.

	●	Adverse regulatory developments in Mainland China may subject us to additional regulatory review, restrictions, disclosure requirements, and regulatory scrutiny by the SEC, increasing compliance costs and hindering future securities offerings.

	●	Our common stock may be prohibited from trading in the U.S. under the Holding Foreign Companies Accountable Act if PCAOB inspection of our auditor is incomplete, leading to delisting or prohibition and potential decline in stock value.

	●	Changes in China’s economic, political, or social conditions or government policies may adversely affect our business and operations.

	●	Uncertainties regarding the PRC legal system, including enforcement and sudden changes in laws and regulations, could adversely affect us and limit legal protections.

	●	Fluctuations in exchange rates could materially and adversely affect our results of operations and your investment value.

The forward-looking statements contained in this Annual Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

PART I

ITEM 1. BUSINESS.

Overview

Through our wholly-owned subsidiaries, we are engaged in the research, development, manufacturing, sales and servicing of medium- to large -sized projected capacitive touchscreens. We specialize in large-format touchscreens, which are developed and designed for a wide variety of markets and used in the financial terminals, automotive, Point of Sales, gaming, lottery, medical, Human-Machine Interface (“HMI”), and other specialized industries.

Our product portfolio comprises medium- to large -sized projected capacitive touchscreens ranging from 7.0 inch to 42 -inch screens. In terms of the structures of touch panels, we offer (i) Glass-Glass (“GG”), primarily used in GPS/car entertainment panels in mid-size and luxury cars, industrial HMI, financial and banking terminals, POS and lottery machines; (ii) Glass-Film-Film (“GFF”), mostly used in high-end GPS and entertainment panels, industrial HMI, financial and banking terminals, and the lottery and gaming industry; (iii) Plastic-Glass (“PG”), typically adopted by touchscreens in GPS/entertainment panels, motor vehicle GPS, smart home, robotics and charging stations; and (iv) Glass-Film (“GF”), mostly used in industrial HMI.

Maintaining the industry standards for product quality and sustainability is one of our core values. Touchscreens produced by us not only have long life span with low maintenance, but also have strong anti-interference and anti-corrosion solutions, coupled with multi-touch capability and high light-transmittance ratio and stability. As a ~~high~~ technology company, Sichuan Vtouch Technology Co., Ltd., our subsidiary in Mainland China (“Sichuan Vtouch”) has received certifications from domestic and international institutions, such as ISO9001 Quality Management Systems (QMS) Certification of Registration, ISO 14001 Environmental Management System (EMS) Certification of Registration, and RoHS SGS Certification (Restriction of Hazardous Substance Testing Certification).

We generate revenues through sales of our various touchscreen products. For the ~~year~~years ended December 31, ~~2023~~2024 and ~~2022~~2023, we recognized approximately $3942.73 million and $3739.97 million, respectively, in revenues.

We sell our touchscreen products both domestically in China and internationally, covering major areas in Mainland China, including but not limited to the eastern, southern, northern and southwest regions of Mainland China, Taiwan, South Korea, Germany and ~~Germany~~other countries. We believe that we have established a strong and diversified client base. For the ~~year~~years ended December 31, ~~2023~~2024 and ~~2022~~2023, our domestic sales accounted for 69approximately 64.67% and 69.7%, respectively, of our revenues, and our international sales accounted for 30approximately 35.43% and 30.3%, respectively, of our revenues.

Corporate History and Structure

We were originally incorporated under the laws of the state of Nevada on August 31, 1992 as Gulf West Investment Properties, Inc, and were dormant and had no operations for many years.

On February 26, 2019, the Eighth Judicial District Court in and for Clark County, Nevada, Case No. A-19-787151-B, appointed Custodian Ventures LLC, an affiliate of David Lazar, as custodian of the Company (the “Custodian”). Mr. Lazar was appointed as the sole officer and director of the Company. On March 11, 2019, 85,715 shares of common stock of the Company were issued to the Custodian in consideration for the payment of cash and the issuance of a promissory note by the Custodian to the Company. Effective as of June 11, 2019, the court discharged the Custodian’s duties.

On June 18, 2020, we consummated the transactions contemplated by a Stock Purchase Agreement among the Company, the Custodian, Qixun Technology (Samoa) Limited (“Qixun Samoa”) and Qihong Technology (Samoa) Limited (“Qihong Samoa”, Qixun Samoa and Qixun Samoa are referred to as the “Buyers”). Pursuant to the Stock Purchase Agreement, the Buyers acquired all of the 85,715 shares of the Company owned by the Custodian, representing 50.47% of the issued and outstanding shares of the Company. The Custodian and the Company agreed to indemnify the Buyers from any liabilities of the Company occurring prior to June 18, 2020, and the promissory note issued by the Custodian to the Company was canceled. Immediately following the closing, David Lazar resigned as the sole officer and director of the Company and Jiaying Cai was appointed as president, secretary and treasurer of the Company and as the sole director.1

1On June 18, 2020, we consummated the transactions contemplated by a Stock Purchase Agreement among the Company, the Custodian, Qixun Technology (Samoa) Limited (“Qixun Samoa”) and Qihong Technology (Samoa) Limited (“Qihong Samoa”, Qixun Samoa and Qixun Samoa are referred to as the “Buyers”). Pursuant to the Stock Purchase Agreement, the Buyers acquired all of the 85,715 shares of the Company owned by the Custodian, representing 50.47% of the issued and outstanding shares of the Company. The Custodian and the Company agreed to indemnify the Buyers from any liabilities of the Company occurring prior to June 18, 2020, and the promissory note issued by the Custodian to the Company was canceled. Immediately following the closing, David Lazar resigned as the sole officer and director of the Company and Jiaying Cai was appointed as president, secretary and treasurer of the Company and as the sole director.

Name Change

Effective September 30, 2020, we changed our name from Gulf West Investment Properties, Inc. to Wetouch Technology Inc. by filing an Amended and Restated Articles of Incorporation with the Nevada Secretary of State to give effect to a name change. As a result of the name change, we changed our trading symbol from “GLFW” to “WETH,” effective November 3, 2020.

The Amended and Restated Articles also effectuated a reverse split of our authorized, issued and outstanding shares of common stock on a 70 for 1 new basis whereby each 70 shares of outstanding common stock was exchanged for one (1) share of new common stock (the “Reverse ~~Split”~~ and, for avoidance of doubt, all share amounts set forth herein shall be post Reverse Split unless otherwise specified) and, consequently, our authorized common stock increased to 300,000,000 shares of common stock and 10,000,000 shares of preferred stock, and our then issued and outstanding common shares decreased from 11,887,103 to 169,820 shares, all with a par value of $0.001 per share.Merger

~~Reverse~~On October 9, 2020, we entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited, a British Virgin Islands company incorporated on August 14, 2020 under the laws of the British Virgin Islands (“BVI Wetouch”), and all the shareholders of BVI Wetouch (each a “BVI Wetouch Shareholder” and collectively the “BVI Wetouch Shareholders”), to acquire all the issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to the BVI Wetouch Shareholders an aggregate of 28 million shares of our common stock (the “Reverse Merger”). The Reverse Merger closed on October 9, 2020.

~~On October~~BVI ~~9, 2020, we entered into a share exchange agreement (the “Share Exchange Agreement”) with~~ Wetouch ~~Holding~~was ~~Group~~formed ~~Limited,~~to aacquire ~~British~~Hong ~~Virgin~~Kong ~~Islands company incorporated on August 14, 2020 under the laws of the British Virgin Islands (“BVI~~ Wetouch~~”), and~~ ~~all~~Electronics ~~the~~Technology ~~shareholders~~Limited ~~of BVI Wetouch~~ (~~each a~~ “~~BVI~~Hong ~~Wetouch~~Kong ~~Shareholder” and collectively the “BVI~~ Wetouch ~~Shareholders~~”), to ~~acquire~~which ~~all~~it ~~the~~acquired issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to the BVI Wetouch Shareholders an aggregate of 28 million shares of our common stock (the “Reverse Merger”). The Reverse Merger closed on ~~October~~September 911, 2020. ~~Immediately~~ ~~after the closing of the Reverse Merger, we had~~ As a ~~total of 31~~result,~~396,394~~ ~~issued~~Hong ~~and~~Kong ~~outstanding~~Wetouch ~~shares~~became ofa ~~common~~wholly ~~stock.~~owned Assubsidiary ~~a result~~ of ~~the Reverse Merger,~~ BVI Wetouch ~~is now our wholly-owned subsidiary~~.

~~On October~~Hong ~~12,~~Kong ~~2020,~~Wetouch ~~Guangde Cai~~ was ~~appointed~~incorporated on asMay an5, ~~additional~~2016 ~~director~~ and, ~~Chairman~~on ofJuly ~~the Company. On October 12~~19, ~~2020~~2016, ~~Mr.~~acquired ~~Zongyi~~all ~~Lian was~~the ~~appointed~~shares asof ~~president~~Sichuan ~~and~~Wetouch ~~chief~~Technology ~~executive officer of the Company~~Co., ~~and Mr~~Ltd., ~~Yuhua~~a ~~Huang~~PRC ~~was~~company ~~appointed~~established ason ~~chief~~May 6, ~~financial~~2011 ~~officer~~(“Sichuan ~~of the Company~~Wetouch”). OnAs ~~the~~a ~~same day~~result, ~~Jiaying~~Sichuan ~~Cai~~Wetouch ~~resigned~~became ~~from~~a ~~the~~wholly ~~capacity~~owned ofsubsidiary ~~president and treasurer~~ of ~~the~~Hong ~~Company~~Kong ~~but remains the secretary and director of the Company~~Wetouch.

Through BVI Wetouch’s ownership ~~was established under the laws~~ of ~~British Virgin Islands on August 14, 2020 to acquire all the shares of~~ Hong Kong Wetouch ~~Electronics Technology Limited~~ (~~“Hong~~later ~~Kong Wetouch”~~dissolved). Onand ~~September~~Sichuan 11Wetouch, ~~2020,~~we ~~BVI~~indirectly ~~Wetouch~~owned ~~acquired all~~ the ~~outstanding~~business ~~shares~~ of ~~Hong Kong~~Sichuan Wetouch. ~~from~~Following the ~~shareholders of Hong Kong Wetouch in consideration of HK$10,000 pursuant to instruments of transfer in accordance~~ ~~with~~Reverse ~~Hong Kong law. As a result of the acquisition~~Merger, ~~Hong~~Sichuan ~~Kong~~ Wetouch became aour indirect wholly- owned subsidiary ~~of BVI Wetouch~~. The shareholders of Hong Kong Wetouch became the shareholders of BVI Wetouch in said transaction, and therefore the shareholders who controlled Hong Kong Wetouch became the controlling shareholders of BVI Wetouch.

Hong Kong Wetouch was incorporated on May 5, 2016 under the laws of Hong Kong. On July 19, 2016, Hong Kong Wetouch acquired all the shares of Sichuan Wetouch Technology Co., Ltd, a PRC company established in Meishan, Sichuan on May 6, 2011 (“Sichuan Wetouch”). As a result of the acquisition, Sichuan Wetouch became a wholly owned subsidiary of Hong Kong Wetouch.2

~~As BVI~~Acquisition ~~Wetouch owns all the outstanding shares~~ of ~~Hong~~HK ~~Kong~~ Wetouch, which, in turn, owns all the outstanding shares of Sichuan Wetouch, the Company owns indirectly all the business of Sichuan Wetouch. As a result of the Reverse Merger, Hong Kong Wetouch and Sichuan Wetouch become our indirect wholly-owned subsidiaries.

~~Acquisition~~Hong Kong Wetouch Technology Limited, a limited company organized under the laws of Hong Kong (“HK Wetouch ”), was incorporated on December 3, 2020 to hold all the shares of Sichuan Vtouch Technology Co., Ltd., which was incorporated on December 30, 2020 in Chengdu, Sichuan, under the laws of The People’s Republic of China (“China,” or the “PRC”).

~~Hong Kong~~On ~~Wetouch~~March ~~Technology~~12, ~~Limited~~2021, aBVI ~~limited~~Wetouch, our ~~company~~wholly ~~organized~~owned ~~under~~subsidiary, acquired all the ~~laws~~shares of ~~Hong Kong (“~~HK Wetouch”) from its sole shareholder, ~~was~~Guangde ~~incorporated~~Cai on(our ~~December~~former 3Chairman and Director). As a result, ~~2020~~HK ~~under~~Wetouch ~~the~~became ~~laws~~a wholly-owned subsidiary of ~~Hong~~BVI ~~Kong~~Wetouch. Immediately following the acquisition of HK Wetouch, ~~was~~BVI ~~established~~Wetouch toowned ~~own~~(i) all the outstanding shares of ~~Sichuan~~Hong ~~Vtouch~~Kong ~~Technology Co.~~Wetouch, ~~Ltd.~~which, ~~which~~in ~~was~~turn, ~~incorporated~~owned onall ~~December~~the ~~30,~~outstanding ~~2020~~shares inof ~~Chengdu,~~ Sichuan~~, under~~ ~~the~~Wetouch ~~laws~~and (ii) all of ~~The~~the ~~People’s~~outstanding ~~Republic~~shares of ~~China~~HK ~~(“China~~Wetouch,” orwhich owned all the ~~“PRC”)~~shares of Sichuan Vtouch.

On March 122, 2021, ~~BVI~~HK Wetouch~~, the Company’s wholly owned subsidiary,~~ acquired all ~~the outstanding~~ shares of HKHong ~~Wetouch~~Kong ~~from the sole shareholder of HK~~ Wetouch,. ~~Guangde Cai, who was our former Chairman and Director in consideration of the payment of HK$10,000 pursuant to the instruments of transfer in accordance with~~ Hong Kong ~~law.~~Wetouch Aswas adissolved ~~result~~on ofMarch ~~the acquisition~~18, ~~HK Wetouch became a wholly-owned subsidiary of BVI Wetouch~~2022. ~~Immediately~~In ~~following the acquisition of HK Wetouch~~addition, ~~BVI~~as ~~Wetouch owned (i) all the outstanding shares~~ of ~~Hong~~March ~~Kong Wetouch~~31, ~~which,~~ ~~in turn~~2021, ~~owned all the outstanding shares of~~ Sichuan Wetouch’s business and ~~(ii)~~operations ~~all~~were ofassumed ~~the~~by ~~outstanding shares of HK Wetouch, which owned all the shares of~~ Sichuan Vtouch.

2On March 30, 2023, an independent third party acquired all the shares of Sichuan Wetouch for a nominal amount.

~~On March~~Corporate 2, 2021, HK Wetouch acquired all shares of Hong Kong Wetouch. On June 18, 2021, Hong Kong Wetouch submitted its application for dissolution and was dissolved on March 18, 2022. In addition, as of March 31, 2021, Sichuan Wetouch’s business and operations have been assumed by Sichuan Vtouch.Structure

~~On March~~The ~~30,~~diagram ~~2023,~~below ansets ~~independent~~forth our ~~third~~corporate ~~party~~structure ~~acquired~~as ~~all~~of the ~~shares~~date of ~~Sichuan~~this ~~Wetouch~~Annual ~~for a nominal amount~~Report.

~~Corporate Structure~~3

~~The diagram~~Private ~~below sets forth our corporate structure as of the date of this Annual Report.~~Placement

~~Recent~~On ~~Developments~~January 19, 2023, we entered into a securities purchase agreement with certain investors, pursuant to which we sold an aggregate of 160,000,000 shares of common stock of the Company for an aggregate purchase price of $40,000,000, or $0.25 per share. The net proceeds of the offering (after deducting legal and accounting fees and expenses) were used by the Company for working capital and general corporate purposes and the repayment of debt. The issuance of the shares in the private placement was exempted from registration pursuant to Section 4(a)(2) and/or Regulation S as promulgated by the U.S. Securities and Exchange Commission under the Securities Act. The securities are subject to transfer restrictions, and the certificates evidencing the shares will contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom.

Private Placement Consent Agreement

On ~~January~~March 1918, 2023, wethe Company entered into a ~~securities~~private ~~purchase~~placement consent agreement with ~~certain~~a ~~investors,~~third-party ~~pursuant~~investment tobank ~~which~~firm we(see ~~sold~~Note to10) ~~such investors~~on ~~an aggregate of 160,000,000 shares of~~ the ~~common~~agent ~~stock~~fees of ~~the Company for an aggregate purchase price of~~ US$~~40,000,000, or $0~~1.252 ~~per~~million, ~~share. The~~payable ~~net~~only ~~proceeds~~on of the ~~offering~~completion ~~(after~~of ~~deducting~~a ~~legal~~private ~~and accounting fees and expenses) shall be used by the Company for working capital and general corporate purposes and the repayment of debt~~placement. ~~The~~If ~~issuance of~~ the ~~shares in the~~ private placement ~~was~~is ~~exempted~~not ~~from~~completed ~~registration~~by ~~pursuant~~November to1, ~~Section~~2023, ~~4(a)(2) and/or Regulation S as promulgated by~~ the ~~U.S.~~representatives ~~Securities and Exchange Commission~~ under the ~~Securities~~agreement ~~Act.~~reserve ~~The~~their ~~securities~~rights ~~are subject~~ to ~~transfer~~pursue ~~restrictions,~~any and ~~the~~all ~~certificates~~claims, ~~evidencing~~actions ~~the~~or ~~shares~~remedies available ~~will~~to ~~contain~~them anunder ~~appropriate~~the ~~legend~~engagement ~~stating~~between ~~that such securities have not been registered under~~ the ~~Securities~~Company ~~Act~~ and ~~may~~the ~~not~~private beplacement ~~offered or~~representatives. ~~sold~~The ~~absent~~Company ~~registration~~made orthe ~~pursuant~~full topayment anin ~~exemption therefrom~~February 2024.

~~Private Placement~~Reverse ~~Consent~~Stock ~~Agreement~~Splits

OnSince ~~March~~our 18incorporation, ~~2023,~~we ~~the~~have ~~Company~~effected ~~entered~~two ~~into~~reverse astock ~~private~~splits ~~placement consent agreement with a third-party investment bank firm (see Note 10) on the agent fees~~ of ~~US$1.2~~our ~~million,~~common ~~payable only on the completion of a private placement~~stock. If the private placement is not completed by November 1, 2023, the representatives under the agreement reserve their rights to pursue any and all claims, actions or remedies available to them under the engagement between the Company and the private placement representatives. The Company made the full payment in February, 2024.

~~Reverse~~2020 Reverse Stock Split:

OnEffective ~~February~~September 1730, ~~2023~~2020, in connection with our ~~board~~name ofchange ~~directors~~from ~~(the~~Gulf ~~“Board”)~~West ~~authorized~~Investment Properties, Inc. to Wetouch Technology Inc., we effected a 1-for-70 reverse stock split of our common stock. atAs a ~~ratio~~result, ~~of not~~every ~~less~~70 ~~than~~shares ~~one~~of tooutstanding ~~five~~common ~~(1:5)~~stock ~~and~~were ~~not~~exchanged ~~more~~for ~~than~~ one toshare of ~~eighty~~new ~~(1:80),~~common ~~with~~stock. ~~the~~Our ~~exact~~issued ~~amount~~ and ~~the~~outstanding ~~timing~~shares ofdecreased ~~the~~from ~~reverse~~11,887,103 ~~stock split~~ to be169,820, aswhile ~~determined by~~ the ~~Chairman~~authorized ofcommon ~~the~~stock ~~Board.~~was ~~Upon~~adjusted to ~~effectiveness of such reverse stock split~~300,000,000 ~~the number of authorized~~ shares ~~of the~~and ~~common~~preferred stock ofto ~~the~~10,000,000 ~~Company~~shares, ~~will~~all ~~also~~with bea ~~decreased~~par invalue ~~the~~of ~~same~~$0.001 ~~ratio~~per share.

~~On July 16,~~ 2023~~, the Company’s board of directors approved the reverse stock split of the Company’s common stock at a ratio~~ ofReverse ~~1-for-20.~~Stock On July 16, 2023, the Company filed a certificate of change (with an effective date of July 16, 2023) with the Nevada Secretary of State pursuant to Section 78.209 of the Nevada Revised Statutes to effectuate a 1-for-20 reverse stock split of its common stock. On September 11, 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and took effect on September 12, 2023. All share information included in this annual report has been adjusted as if the reverse stock split occurred as of the earliest period presented. Split:

3On February 17, 2023, our board of directors (the “Board”) authorized a reverse stock split of our common stock at a ratio of not less than one to five (1:5) and not more than one to eighty (1:80), with the exact ratio and the timing of the reverse stock split to be determined by the Chairman of the Board. Upon effectiveness of such reverse stock split, the number of authorized shares of common stock of the Company will also be decreased in the same ratio.

~~Public~~On ~~Offering~~July 16, 2023, the Company’s board of directors approved the reverse stock split of the Company’s common stock at a ratio of 1-for-20. On July 16, 2023, the Company filed a certificate of change (with an effective date of July 16, 2023) with the Nevada Secretary of State pursuant to Section 78.209 of the Nevada Revised Statutes to effectuate a 1-for-20 reverse stock split of its common stock. On September 11, 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and took effect on September 12, 2023. All share information included in this annual report has been retroactively adjusted as if the reverse stock split had occurred as of the earliest period presented.

On February 20, 2024, we entered into an underwriting agreement with WestPark Capital, Inc. and Craft Capital Management LLC, as representatives (the “Public Offering Representatives”) of the underwriters listed in the underwriting agreement (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “Offering”) up to an aggregate of 2,484,000 shares of our common stock, par value $0.001 per share, at a public offering price of $5.00 per share. The Offering was conducted pursuant to a Registration Statement on Form S-1, as amended (SEC filed No. 333-270726), which was declared effective on February 14, 2024. In connection with the Offering, our common stock began trading on the Nasdaq Capital Market under the symbol WETH on February 21, 2024. The Offering closed on February 23, 2024 and generated gross proceeds of $10.8 million. We paid a total of approximately $0.8 million in underwriting discounts and commissions, and approximately $0.8 million for other costs and expenses related to the Offering. Our net proceeds from the Offering, after deducting the underwriting discount, the Underwriters’ fees and expenses, and our Offering expenses, were approximately $9.2 million. We also issued the Representatives’ Warrants (the “Public Offering Representatives’ Warrants”) to the Public Offering Representatives to purchase 43,200 shares of Common Stock at an exercise price equal to 125.0% of the public offering price.4

~~Our Products~~2024 Uplisting Offering

WeOn ~~offer~~February ~~medium~~20, to2024, ~~large~~we ~~sized~~entered ~~projected~~into ~~capacitive~~an ~~touchscreens~~underwriting agreement with WestPark Capital, Inc. and Craft Capital Management LLC, as representatives (the “2024 Uplisting Offering Representatives”) of the underwriters listed in the underwriting agreement (the “Underwriters”), pursuant to which ~~can~~we beagreed ~~categorized~~to sell to the Underwriters in a firm commitment underwritten public offering (the “2024 Uplisting Offering”) of an aggregate of 2,160,000 shares of our common stock, par value $0.001 per share, at a public offering price of $5.00 per share. The 2024 Uplisting Offering was conducted pursuant to a Registration Statement on Form S-1, as ~~set~~amended ~~forth~~(SEC ~~below:~~filed No. 333-270726), which was declared effective on February 14, 2024. In connection with the 2024 Uplisting Offering, our common stock began trading on the Nasdaq Capital Market under the symbol WETH on February 21, 2024. The 2024 Uplisting Offering closed on February 23, 2024 and generated gross proceeds of $10.8 million. We paid a total of approximately $0.8 million in underwriting discounts and commissions, and approximately $0.8 million for other costs and expenses related to the 2024 Uplisting Offering. Our net proceeds from the 2024 Uplisting Offering, after deducting the underwriting discount, the Underwriters’ fees and expenses, and our 2024 Uplisting Offering expenses, was approximately $9.2 million. We also issued the Representatives’ Warrants (the “2024 Uplisting Offering Representatives’ Warrants”) to the 2024 Uplisting Offering Representatives to purchase 43,200 shares of common stock at an exercise price equal to 125.0% of the public offering price.

~~Product~~Recent Type Description Application Product type GG This is a double glass layer product, with a solid clear adhesive (SCA) between a layer of conductive glass and a layer of tempered glass. This type of touch screen has the advantage of being able to be easily manufactured, with relatively low cost. However, products of this type in large sizes will require a greater degree of signal penetration and long distance transmission technology which will be more technically challenging to achieve. Medium and high end GPS/car entertainment, finance, POS and lottery machines. Product type GFF This product uses a double layer of conductive films, with an optically clear adhesive (OCA) between a layer of tempered glass. The product’s functionality comes from the interaction between the multiple layers of conductive film and glass, which does not require extensive coating, lithography and etching. This type of product is anti- explosive and has relatively low manufacturing cost. However, products of this type in large sizes will require greater degree of signal penetration and long distance transmission technology which will be more technically challenging to achieve. Financial, gaming and lottery, and medical industries Product type PG This product uses a layer of conductive glass, with an optically clear adhesive (OCA) between a layer of surface intensify PMMA (Poly Methyl methacrylate acid). The product’s functionality relies on the interaction between the layers of conductive glass. Like the GFF type, this product does not require extensive coating, lithography and etching and has relatively low manufacturing cost. Motor vehicle GPS, smart home, robots and charging stations Product type GF This product uses a layer of conductive film, with an optically clear adhesive (OCa) between a layer of tempered glass. The product’s functionality relies on the interaction between the layers of conductive glass. Like the GFF type, this product does not require extensive coating, lithography and etching and has relatively low manufacturing cost. Industrial HMIDevelopment

As Since of December 31, ~~2023~~2024, ~~product~~the ~~types~~Company ~~GFF~~has ~~and~~reported GGseveral ~~constitute~~material ~~our~~events ~~main~~in ~~stream~~Current ~~products,~~Reports ~~accounting~~on ~~for~~Form ~~approximately an average of 41.~~8%-K, ~~and~~including ~~51.7%,~~changes ~~respectively,~~to the management of ~~our~~the ~~total~~Company; ~~revenues,~~correspondence ~~with~~from ~~product~~Nasdaq ~~types~~regarding GFlate ~~and~~periodic PGfilings and ~~other~~the ~~raw~~acceptance ~~materials~~of ~~accounting~~our ~~for 2.0%,~~plan ~~2.4%~~to ~~and~~regain ~~2.1%,~~compliance; ~~respectively,~~a notice of ~~our~~deficiency ~~total~~with ~~revenues~~the $1.00 Asminimum ofbid ~~December~~price ~~31,~~requirement; ~~2022,~~and ~~product~~a ~~types~~change ~~GFF~~in ~~and GG constitute~~ our ~~main~~independent ~~stream~~registered ~~products,~~public accounting ~~for approximately an average of 38~~firm.5% ~~and~~The ~~52.68%,~~Company submitted ~~respectively,~~compliance ofplans ~~our~~to ~~total revenues,~~Nasdaq ~~with~~as ~~product~~requested ~~types~~and GFis ~~and~~working PGdiligently ~~and~~to ~~other~~rectify ~~raw~~the ~~materials~~deficiencies ~~accounting~~as ~~for~~promptly ~~2.55%,~~as ~~4.4%~~practicable ~~and~~to regain ~~1.87%,~~compliance ~~respectively,~~with ofthe ~~our~~Listing ~~total revenues~~Rule.

4The brief summaries that follow are qualified in their entirety by, and should be read together with, the Company’s Current Reports on Form 8-K filed since December 31, 2024.

~~Applications~~Board ofchanges. On April 29, 2025, Jing Chen resigned from the ~~Company’s~~Board ~~Products~~and its committees. Effective May 1, 2025, Jing Guo was appointed to the Board; committee roles were reconstituted as described in the Current Report on Form 8-K filed on May 2, 2025.

~~Our~~Nasdaq ~~products~~compliance ~~are~~- ~~used~~late ~~and~~filings. ~~applied~~On May 27, 2025, Nasdaq notified the Company that it was not in compliance with Listing Rule 5250(c)(1) due to the ~~production~~delayed ofForm a10-K ~~variety~~for ofthe ~~products~~year inended aDecember ~~wide~~31, ~~range~~2024 ofand ~~industries~~Form 10-Q for the quarter ended March 31, 2025. ~~Our~~On ~~products~~June 26, 2025, Nasdaq accepted the Company’s ~~areas~~plan of compliance and granted an exception through October 13, 2025 to file the outstanding Form ~~common~~10-K ~~application~~(FY ~~are~~2024) ~~set~~and ~~out~~Form ~~below~~10-Qs for the quarters ended March 31 and June 30, 2025.

~~Point~~Auditor changes. On June 27, 2025, the Audit Committee dismissed Enrome LLP as the Company’s independent registered public accounting firm. The Company disclosed there were no disagreements or reportable events within the meaning of ~~Sale~~Item ~~(“POS”)~~304. ~~Machines~~On June 27, 2025, the Company appointed ST & Partners PLT as its independent registered public accounting firm.

~~POS~~Nasdaq compliance ~~machines~~- ~~are~~bid-price ~~used~~notice. inOn aJuly ~~variety of retailers~~15, ~~including in department stores~~2025, ~~supermarkets,~~Nasdaq ~~convenience~~notified ~~stores, boutiques, restaurants, hotels, banks, logistics, telecommunication and other service industries. Due to~~ the ~~frequent~~Company ~~use~~that ofit ~~touchscreens~~was onnot ~~POS~~in ~~machines,~~compliance ~~Wetouch~~with ~~has adopted~~ the ~~use~~$1.00 ofminimum bid ~~high-end~~price ~~materials~~requirement ~~which~~and ~~give~~provided ~~its products’~~ a ~~competitive advantage through their anti~~180-~~scratch,~~day ~~high~~compliance ~~temperature~~period ~~resistance~~ending ~~and~~January ~~long~~12, ~~use life qualities~~2026.

~~Car~~For ~~Navigators~~additional details, see the Company’s Current Reports on Form 8-K filed May 2, 2025; May 30, 2025; June 26, 2025; June 30, 2025; and ~~Entertainment~~July ~~Systems~~15, 2025.

Touchscreen products for car navigation and entertainment systems take advantage of the popularity of touchscreen consoles in motor vehicles. Wetouch touchscreens are particularly suitable for motor vehicles GPS and entertainment systems, due to their resistance to temperature variation. These touchscreens may be used in both inbuilt and external car systems.5

~~ATM Machines~~Our ~~and Other Financial Machines~~Products

~~ATMs~~We offer ~~and~~medium- ~~other similar machines use touchscreens or have a touchscreen function. The touchscreens need~~ to ~~have high~~large-~~endurance~~sized ~~capacities~~projected ascapacitive ~~they are used by the general public and are often located outdoors~~touchscreens, ~~such~~which ~~that~~can ~~these~~be ~~screens~~categorized ~~must withstand weathering. Our products are particularly suited to use in these machines~~ as ~~they~~set ~~are~~forth ~~highly durable.~~below:

Product Type Description Application Product type GG This is a double glass layer product, with a solid clear adhesive (SCA) between a layer of conductive glass and a layer of tempered glass. This type of touchscreen has the advantage of being able to be easily manufactured, with relatively low cost. However, products of this type in large sizes will require a greater degree of signal penetration and long distance transmission technology which will be more technically challenging to achieve. Medium and high end GPS/car entertainment, finance, POS and lottery machines. Product type GFF This product uses a double layer of conductive films, with an optically clear adhesive (OCA) between a layer of tempered glass. The product’s functionality comes from the interaction between the multiple layers of conductive film and glass, which does not require extensive coating, lithography and etching. This type of product is anti- explosive and has relatively low manufacturing cost. However, products of this type in large sizes will require greater degree of signal penetration and long distance transmission technology which will be more technically challenging to achieve. Financial, gaming and lottery, and medical industries Product type PG This product uses a layer of conductive glass, with an optically clear adhesive (OCA) between a layer of surface intensify PMMA (Poly Methyl methacrylate acid). The product’s functionality relies on the interaction between the layers of conductive glass. Like the GFF type, this product does not require extensive coating, lithography and etching and has relatively low manufacturing cost. Motor vehicle GPS, smart home, robots and charging stations Product type GF This product uses a layer of conductive film, with an optically clear adhesive (OCa) between a layer of tempered glass. The product’s functionality relies on the interaction between the layers of conductive glass. Like the GFF type, this product does not require extensive coating, lithography and etching and has relatively low manufacturing cost. Industrial ~~Equipment~~ HMI

~~Touchscreens~~As of inDecember ~~the~~31, ~~industrial~~2024, ~~sector~~product ~~have~~types ~~broad~~GFF ~~application~~and GG constitute our main stream products, ~~and~~accounting ~~play~~for approximately an ~~important~~average ~~role~~of in38.5% ~~industrial HMI~~and 52.7%, ~~Industrial~~respectively, ~~HMI~~of ~~systems~~our total revenues, with product types GF and ~~equipment~~PG ~~often~~accounting ~~require~~for ~~touchscreen~~2.6%, ~~functions~~4.4% ~~These~~and ~~touchscreens~~1.9%%, ~~must~~respectively, beof ~~resistant~~our tototal revenues. ~~interference~~As of December 31, ~~stable~~2023, product types GFF and ~~have~~GG ~~good~~constitute ~~touch~~our ~~sensitivity.~~main ~~Our~~stream products, ~~fully~~accounting ~~meet~~for ~~these~~approximately ~~requirements~~an average of 41.8% and 51.7%, ~~being~~respectively, ~~temperature~~of ~~variation~~our ~~resistant~~total revenues, ~~dustproof~~with product types GF and ~~waterproof~~PG and other raw materials accounting for 2.0%, 2.4% and 2.1%, respectively, of our total revenues.

~~Gaming Machines~~Applications of the Company’s Products

~~The~~Our ~~new~~products ~~generation~~are ofused ~~gambling~~and applied ~~machines~~in ~~are~~the ~~commonly~~production ~~adopting~~of a ~~touchscreen~~variety ~~function.~~of ~~Gaming~~products ~~machines~~in ~~with~~ a ~~touchscreen~~wide ~~function~~range ~~provide~~of ~~an enhanced experience for uses via multi-touch sensory touch systems~~industries. Our products’ ~~are~~areas ~~therefore~~of ~~popular~~common ~~amongst~~application ~~gambling~~are set ~~machine~~out ~~manufacturers~~below.

~~Lottery~~ Point of Sale (“POS”) Machines

~~The~~POS ~~self-service~~machines ~~lottery~~are ~~ticket~~used ~~vending~~in ~~machine~~a isvariety ~~provided~~of ~~with~~retailers, anincluding ~~operator-oriented~~in ~~touch~~department ~~display~~stores, ~~device~~supermarkets, anconvenience ~~input~~stores, ~~device~~boutiques, arestaurants, ~~modem~~hotels, abanks, ~~cash register~~logistics, ~~printer~~telecommunication and ~~security~~other ~~authentication~~service ~~function~~industries. ~~The~~Due ~~touchscreen~~to ~~display~~the ~~facilitates~~frequent ~~easy~~use ~~and~~of ~~user-friendly~~touchscreens ~~operation~~on ofPOS machines, Wetouch has adopted the ~~lottery~~use ~~machine~~of high-end materials which give its products’ a competitive advantage through their anti-scratch, high temperature resistance and long use life qualities.

~~Ticket Machines~~Car Navigators and ~~Kiosks~~Entertainment Systems

~~Self-service~~Touchscreen ~~ticket~~products ~~machines~~for car navigation and ~~kiosks~~entertainment ~~contain~~systems ~~touchscreen~~take ~~interfaces~~advantage ~~which~~of ~~are~~the ~~durable~~popularity ~~and~~of ~~have~~touchscreen aconsoles ~~long~~in ~~use~~motor ~~life~~vehicles. ~~These~~Wetouch ~~self-service~~touchscreens ~~machines~~ are ~~used~~particularly insuitable ~~daily~~for ~~lives,~~motor ~~and~~vehicles asGPS ~~such~~and ~~there~~entertainment issystems, adue ~~continuous~~to ~~demand~~their ~~for~~resistance ~~high~~to ~~quality~~temperature ~~and~~variation. ~~effective~~These touchscreens. ~~Our~~may ~~products~~be ~~are widely~~ used in ~~these~~both ~~ticketing~~inbuilt ~~machines~~ and ~~kiosks~~external car systems.

~~For the~~ATM ~~year~~Machines ended December 31, 2023, we had approximately $9.8 million in revenues generated from the sales of automotive touchscreens, accounting for 24.6% of our total revenues, with industrial HMI touchscreens accounting for 19.9%, POS touchscreens for 16.7%, gaming touchscreens accounting for 14.2%, medical touchscreens for 14.6%, and ~~multi-functional~~Other ~~printer~~Financial touchscreens for 10.1%, of our total revenues. For the year ended December 31, 2022, we had approximately $9.3 million in revenues generated from the sales of automotive touchscreens, accounting for 24.5% of our total revenues, with industrial HMI touchscreens accounting for 21.1%, POS touchscreens for 6.6%, gaming touchscreens accounting for 5.2%, multi-functional printer touchscreens for 3.8%, of our total revenues.Machines

ATMs and other similar machines use touchscreens or have a touchscreen function. The touchscreens need to have high-endurance capacities as they are used by the general public and are often located outdoors, such that these screens must withstand weathering. Our ~~Customers~~ products are particularly suited to use in these machines as they are highly durable.

~~We have~~Industrial ~~six and six customers each accounting for more than 10% of our revenues for the year ended December 31, 2023 and 2022, respectively.~~Equipment

~~For~~ Touchscreens in the ~~year~~industrial ~~ended~~sector ~~December~~have ~~31,~~broad ~~2023~~application, ~~our~~and ~~top~~play ~~five~~an ~~customers,~~important ~~namely~~role ~~(1)~~in ~~Siemens~~industrial HMI. Industrial ~~Automation~~HMI ~~Products~~systems ~~(Chengdu)~~and ~~Co.,~~equipment ~~Ltd.,~~often ~~(2) Shanghai~~require ~~Sigang~~touchscreen ~~Electronics Co~~functions., ~~Ltd.,~~These ~~(3)~~touchscreens ~~E-Lead~~must ~~Electronic~~be ~~Co.~~resistant ~~Ltd.,~~to ~~(4) MultimediaLink Inc.~~interference, stable and ~~(5)~~have ~~Suzhou~~good ~~Weinview~~touch Cosensitivity., ~~Ltd., accounted~~Our ~~for~~products ~~approximately~~fully ~~22.5%,~~meet ~~16.5%,~~these ~~15.7%~~requirements, ~~14.1%~~being ~~and~~temperature ~~11.3%,~~variation ~~respectively~~resistant, ofdustproof ~~our~~and ~~total revenues~~waterproof.

~~For the~~Gaming year ended December 31, 2022, our top six customers, namely (1) Siemens Industrial Automation Products (Chengdu) Co., Ltd., (2) Shanghai Sigang Electronics Co., Ltd., (3) E-Lead Electronic Co. Ltd., (4) MultimediaLink Inc., (5) Suzhou Weinview Co., Ltd., and (6) Canon (Suzhou) Ltd. accounted for approximately 21.2%, 16.1%, 14.8%, 13.7%, 11.9% and 10.1%, respectively, of our total revenues.Machines

~~As Sichuan~~The ~~Wetouch’s~~new ~~business~~generation ~~and~~of ~~operations~~gambling ~~have~~machines ~~been~~are ~~assumed~~commonly byadopting ~~Sichuan~~a ~~Vtouch,~~touchscreen ~~Sichuan~~function. ~~Vtouch~~Gaming ~~entered~~machines ~~into~~with ~~sales~~a ~~framework agreements,~~touchscreen ~~which~~function ~~were~~provide ~~entered~~an ~~into~~enhanced byexperience ~~Sichuan~~for ~~Wetouch~~uses ~~previously,~~via ~~with~~multi-touch ~~our~~sensory ~~top~~touch ~~customers on December 31, 2021~~systems. ~~The~~Our ~~material terms~~products ofare ~~the~~therefore ~~sales~~popular ~~framework~~amongst ~~agreements~~gambling ~~with~~machine ~~our top five customers provide:~~manufacturers.

●Lottery The term of each sales framework agreement is four years, which may be renewed by a separate agreement upon expiration. ● The customer shall purchase an annual minimum purchase amount for period from January 1 to December 31 each year as specified in the agreement. If the customer fails to purchase the minimum purchase amount in the applicable agreement, the customer will be deprived of the most favorable price treatment for the following year and rebate rewards for the current year. ● We will send the price list to the customers at the beginning of each year. The specific execution price is subject to the order signed by the parties. ● We have the right to adjust the price due to the market or other factors. When there is any adjustment, we shall send a written notice of such adjustment with 30 days in advance. Upon receipt of this notice, the customer may choose to accept the price adjustment or terminate the sales frame agreement. ● For the first year, we grant the customers a credit limit of $1.5 million and a credit term of 3 months. During supply, the portion of payment that exceeds the credit line shall be paid before goods are delivered. In the next year, the credit will be increased according to the sales of the previous year, which shall be subject to the negotiation of both parties. ● The customers shall make payment in full and on time according to the payment method and time of the purchase order and shall not delay or refuse to pay. If the customers fail to make payment within the agreed period of the purchase order and still fail to make payment after being urged by us, we may stop the supply and have the right to demand payment of a late fee of 0.3% of the contract amount per day from the customers; If the customers still refuse to make payment after 30 days of notice from us, we have the right to file a lawsuit with the court. The customers shall bear the litigation costs, lawyer’s fees, and other debt recovery costs. ● We are required to provide products to customers pursuant to the delivery date and quantity, requirements included in the purchase orders and shall negotiate with customers if we are unable to so provide. ● The customers are entitled to compensation of losses due to our failure to provide after-sale services. ● Any violation of the terms of the agreements may result in the termination of the agreements and the breaching party shall be responsible for all business and economic losses and legal liabilities arising therefrom.Machines

7The self-service lottery ticket vending machine is provided with an operator-oriented touch display device, an input device, a modem, a cash register, printer and security authentication function. The touchscreen display facilitates easy and user-friendly operation of the lottery machine.

~~We do~~Ticket ~~not~~Machines ~~typically~~and ~~enter into sales framework agreements with other customers but sell products to them through purchase orders.~~Kiosks

~~The key~~Self-service ~~terms~~ticket ofmachines ~~our~~and ~~purchase~~kiosks ~~order~~contain ~~typically~~touchscreen ~~include~~interfaces ~~the~~which ~~following:~~are durable and have a long use life. These self-service machines are used in daily lives, and as such there is a continuous demand for high quality and effective touchscreens. Our products are widely used in these ticketing machines and kiosks.

○For ~~The~~the ~~product~~year ~~name,~~ended ~~specification~~December 31, ~~quantity~~2024, ~~price,~~we ~~order~~had ~~amount~~approximately ~~and~~$11.5 ~~delivery~~million ~~date~~in ~~are~~revenues ~~specified~~generated infrom ~~each~~the ~~order.~~sales ○of ~~Delivery~~automotive ~~method~~touchscreens, ~~and~~accounting ~~packaging~~for ~~requirements~~27.2% ~~are~~of our ~~specified~~total inrevenues, ~~each~~with ~~order~~industrial ○HMI ~~Payment~~touchscreens ~~terms~~accounting ~~are~~for ~~specified~~19.4%, ingaming ~~each~~touchscreens ~~order~~for 15.3%, ○medical ~~Breach~~touchscreens offor ~~order~~14.9%, POS ~~terms~~touchscreens byfor ~~customers~~14.8%, inand ~~some~~multi-functional ~~orders.~~printer ○touchscreens ~~Guaranty~~for ~~terms~~8.4%, inrespectively, ~~some~~of ~~orders~~our total revenues.

~~Sichuan~~For the year ended December ~~Vtouch~~31, is2023, ~~obligated~~we tohad ~~provide~~approximately 1)$9.8 ~~products~~million ~~per~~in revenues generated from the ~~specific~~sales ~~requirements~~of automotive touchscreens, accounting for 24.6% of ~~the~~our total ~~orders~~revenues, ~~and~~with 2)industrial ~~unconditional~~HMI ~~defect~~touchscreens ~~warranty~~accounting for ~~our products~~19.9%, ~~Any~~POS ~~violation~~touchscreens offor ~~the~~16.7%, ~~order~~gaming ~~terms~~touchscreens ~~may~~accounting ~~result~~for 14.1%, inmedical ~~termination~~touchscreens offor ~~the~~14.6%, ~~orders~~and ormulti-functional ~~replacement~~printer touchscreens for 10.1%, respectively, of our ~~products~~total revenues.

~~For the years ended December 31, 2023 and 2022, we did not provide any extended payment terms to any of our customers.~~ Our customers are required to make full payment within three to six months from the delivery date. As a result of the COVID-19 outbreak in January 2020, collection activities from some of our customers affected by the pandemic resulted in longer payment terms.Customers

~~Sales~~A sound customer base is critical to our success. We had five and ~~Marketing~~six customers, each accounting for more than 10% of our revenues, for the years ended December 31, 2024 and 2023, respectively.

~~We source~~For ~~our~~the ~~customers~~year ~~through~~ended ~~multiple channels: (i) from our own research through Search Engine Optimization (“SEO”) and~~December ~~outreach~~31, ~~(ii)~~2024, ~~through~~each ~~referrals~~of ~~from~~ our ~~present~~top five customers, ~~(iii)~~accounted ~~through~~for ~~our~~approximately ~~websites~~22.0%, ~~which~~19.1%, ~~provide product information for sale~~15.3%, as ~~well~~14.5% ~~as telephone~~ and ~~email~~11.5%of ~~contact~~our ~~information;~~total ~~and~~revenues, ~~(iv)~~representing 82.4% ~~through~~in ~~industry~~the ~~exhibitions/expos~~aggregate.

~~Our main~~For ~~target~~the ~~markets~~year ~~are~~ended ~~economically~~December 31, ~~developed~~2023, ~~countries~~each ~~and~~of ~~regions,~~our ~~including~~top ~~eastern,~~six ~~southern,~~customers ~~northern~~accounted ~~and~~for ~~southwest~~approximately ~~regions~~22.5%, ~~of Mainland~~16.5%, ~~China~~15.6%, ~~South Korea~~14.1%, 11.3% and ~~Germany~~10.1% Weof ~~believe~~our ~~that~~total ~~we have established a strong client base~~revenues, ~~including global well-known institutional~~ ~~customers.~~representing ~~Overseas sales were approximately $12~~90.1% ~~million~~ in ~~2023~~the ~~as compared to $11~~aggregate.~~5 million in 2022.~~

We target these overseas customers mainly via our online marketing efforts. In order to market our products, occupy more market share and secure more quality customers, we frequently participate in, and promote our products at, specific touchscreen technology exhibitions held internationally.8

~~Our~~As Sichuan Wetouch’s ~~products~~business ~~are~~and ~~produced~~operations tohave ~~order~~been ~~and~~assumed ~~are~~by ~~marketed~~Sichuan ~~directly~~Vtouch, Sichuan Vtouch entered into sales framework agreements, which were entered into by Sichuan Wetouch previously with our ~~own~~top ~~sales~~customers ~~personnel~~on December 31, 2021. WeThe domaterial ~~not~~terms ~~rely~~of onthe ~~distributors to~~sales ~~sell~~framework ~~our~~agreements with ~~products.~~our top customers provide:

8● The term of each sales framework agreement is four years, which may be renewed by a separate agreement upon expiration. ● The customer shall purchase an annual minimum purchase amount for period from January 1 to December 31 each year as specified in the agreement. If the customer fails to purchase the minimum purchase amount in the applicable agreement, the customer will be deprived of the most favorable price treatment for the following year and rebate rewards for the current year. ● We will send the price list to the customers at the beginning of each year. The specific execution price is subject to the order signed by the parties. ● We have the right to adjust the price due to the market or other factors. When there is any adjustment, we shall send a written notice of such adjustment with 30 days in advance. Upon receipt of this notice, the customer may choose to accept the price adjustment or terminate the sales frame agreement. ● For the first year, we grant the customers a credit limit of $1.5 million and a credit term of 3 months. During supply, the portion of payment that exceeds the credit line shall be paid before goods are delivered. In the next year, the credit will be increased according to the sales of the previous year, which shall be subject to the negotiation of both parties. ● The customers shall make payment in full and on time according to the payment method and time of the purchase order and shall not delay or refuse to pay. If the customers fail to make payment within the agreed period of the purchase order and still fail to make payment after being urged by us, we may stop the supply and have the right to demand payment of a late fee of 0.3% of the contract amount per day from the customers; If the customers still refuse to make payment after 30 days of notice from us, we have the right to file a lawsuit with the court. The customers shall bear the litigation costs, lawyer’s fees, and other debt recovery costs. ● We are required to provide products to customers pursuant to the delivery date and quantity, requirements included in the purchase orders and shall negotiate with customers if we are unable to so provide. ● The customers are entitled to compensation of losses due to our failure to provide after-sale services. ● Any violation of the terms of the agreements may result in the termination of the agreements and the breaching party shall be responsible for all business and economic losses and legal liabilities arising therefrom.

For the year ended December 31, 2023, the revenues generated from our domestic customers amounted to approximately $27.6 million, constituting approximately 69.6% of our total revenues, with overseas customers accounting for approximately $12.1 million, constituting approximately 30.4% of our total revenues, respectively. For the year ended December 31, 2022, the revenues generated from our domestic customers amounted to approximately $26.4 million, constituting approximately 69.7% of our total revenues, with overseas customers accounting for approximately $11.5 million, constituting approximately 30.3% of our total revenues, respectively.9

~~Our~~We do not typically enter into ~~Suppliers~~sales framework agreements with other customers but sell products to them through purchase orders.

~~Sichuan~~The ~~Vtouch~~key ~~does~~terms ~~not~~of ~~typically enter into supply agreements with~~ our ~~suppliers.~~purchase Weorder ~~can~~typically ~~utilize any supplier we determine and there are no minimum~~include ~~purchase~~the ~~requirements when we place orders with our suppliers.~~following:

~~We place~~● ~~purchase orders with suppliers of raw materials for the production of our products.~~ The ~~general terms of the purchase order include specifications for~~ product name, specification, quantity, price, order amount, and delivery date, asare ~~well~~specified asin ~~delivery~~each ~~methods,~~order. ~~packaging,~~● ~~inspection procedures,~~Delivery ~~breach~~method ~~terms,~~ and ~~dispute~~packaging ~~resolution,~~requirements ~~all~~are ~~tailored~~specified toin each order. ● Payment terms are ~~also~~ specified in each order. ~~Additionally, all~~● ~~products~~Breach ~~must~~of ~~meet nationally or industry-prescribed quality standards, with each~~ order ~~requiring~~terms aby ~~supplier’s~~customers ~~quality~~in ~~certification~~some orders. ~~The~~ ~~supplier~~● ~~must~~Guaranty ~~unconditionally~~terms ~~accept returns and either refund the purchase price~~ in ~~full~~some ~~or provide replacements if the products do not meet the required quality standards, are damaged, or significantly differ from what was ordered~~orders.

~~We do~~Sichuan ~~not~~Vtouch ~~consider~~is ~~any~~obligated to ofprovide ~~our~~1) ~~suppliers~~products toper bethe ~~material~~specific torequirements ~~our~~of ~~business~~the orders, and we2) ~~can~~unconditional ~~utilize~~defect ~~any~~warranty ~~supplier~~for weour ~~determine~~products atgenerally ~~our sole~~for ~~discretion.~~a ~~Although~~term weof ~~can~~one ~~utilize~~year. ~~any~~Any ~~supplier~~violation weof ~~determine,~~the weorder ~~believe~~terms ~~that~~may weresult ~~have~~in ~~established~~termination ~~healthy~~of ~~and~~the ~~stable~~orders ~~relationships with~~or ~~our~~replacement ~~significant~~of ~~suppliers~~our products.

WeFor ~~purchase~~the ~~our~~years ~~raw~~ended ~~materials~~December 31, ~~through~~2024 ~~various~~and ~~suppliers.~~2023, ~~Raw~~we ~~material~~did ~~purchases~~not ~~from~~provide ~~one~~any ~~and~~extended ~~four~~payment ~~suppliers,~~terms ~~each of~~to ~~which~~any ~~individually exceeded 10%~~ of ~~the~~our ~~Company’s~~customers. ~~total~~Our ~~raw~~customers ~~material~~are ~~purchases,~~required ~~accounted~~to ~~for~~make ~~approximately~~full ~~13.3% and 47.2% of~~payment ~~the~~within ~~Company’s~~three ~~total~~to ~~raw~~six ~~material~~months ~~purchases~~from ~~for~~ the ~~year~~delivery ~~ended December 31, 2023 and 2022, respectively~~date.

9Sales and Marketing

~~The general~~We ~~terms~~source ofour ~~the~~customers ~~purchase~~through multiple ~~order~~channels: ~~include~~(i) ~~specifications~~our ~~for~~own ~~product~~research ~~name,~~through ~~quantity,~~Search ~~price,~~Engine ~~order~~Optimization ~~amount,~~(“SEO”) and ~~delivery date~~outreach, as(ii) ~~well as~~referrals ~~delivery~~from ~~methods,~~our ~~packaging~~existing customers, ~~inspection~~(iii) ~~procedures,~~our ~~breach terms~~websites, ~~and~~which ~~dispute~~provide ~~resolution,~~product ~~all~~information ~~tailored~~for ~~to each order. Payment terms are also defined per order. Additionally~~sale, ~~all~~as ~~products~~well ~~must~~as ~~meet~~telephone ~~nationally~~and oremail ~~industry-prescribed~~contact ~~quality~~information; ~~standards, with each order requiring a supplier’s quality certification. The supplier must unconditionally accept returns~~ and ~~either refund the purchase price~~(iv) inindustry ~~full or provide replacements if the products do not meet the required quality standards, are damaged, or significantly differ from what was ordered~~exhibitions/expos.

~~Production~~Our main target markets are economically developed countries and ~~Quality~~regions, ~~Control~~including Eastern, Southern, Northern and Southwest Mainland China, Taiwan, South Korea, and Germany. We believe that we have established a strong client base, including globally well-known institutional customers. Overseas sales were approximately $14.9 million in 2024 as compared to $12.1 million in 2023.

~~The~~We target these overseas customers ~~Company~~mainly ~~has~~via ~~adopted~~our aonline ~~made-to-~~marketing efforts. In order ~~production~~to ~~model~~market asour ~~follows:~~products, increase our market share, and secure more quality customers, we frequently participate in, and promote our products at, specific touchscreen technology exhibitions held internationally.

~~This process~~Our isproducts ~~subject~~are produced to ~~continuous~~order ~~review~~ and ~~monitoring~~are bymarketed ~~the~~directly ~~management~~by ~~team~~our inown ~~consultation~~sales ~~with~~personnel. ~~engineers,~~We ~~electricians~~do ~~and~~not ~~other technical~~rely ~~experts~~on distributors to ~~ensure~~sell ~~that~~our ~~finished~~ products ~~are of the highest quality and meet customer requirements and ISO9001 Quality Management Systems (QMS) standard~~.

In order to maintain product safety and a high standard of product quality, the Company implements a strict set of quality control policies and inspection protocols. These policies and protocols are enforced by the Company’s senior management and officers along every step of the production to post-production process. Their management guidelines along with key company quality policies are set out below:10

~~The Company~~For ~~has~~the ~~strict~~year ~~production~~ended ~~standards~~December 31, in2024, ~~place~~the ~~that~~revenue ~~govern~~from ~~what~~our ~~constitutes~~domestic ~~acceptable~~customers ~~quality~~accounted for ~~its~~approximately ~~products~~64.7% ~~This~~of ~~ensures~~our ~~that the~~total ~~Company’s~~revenues, ~~products~~with ~~fulfill~~overseas ~~product~~customers ~~certification~~accounting for ~~standards~~approximately 35.3%of ~~The~~our ~~production~~total ~~team adheres to the following criteria when making its product standard assessment:~~revenues.

Item	Industry Standards	Our Standards
Reaction time	Less than or equal to 5 milliseconds	Less than or equal to 5 milliseconds
Surface hardness	6H	7H~9H
Operational temperature	0~70 degrees Celsius	-30~80 degrees Celsius
EsD requirement	6~12KV	8~15KV
Transparency	86%	88%
Touch conditions	Normal touch and ordinary conditions	Waterproof and anti-saline solution and anti-corrosion and Anti interference

For the year ended December 31, 2023, the revenue generated from our domestic customers accounted for approximately 69.7% of our total revenues, with overseas customers accounting for approximately 30.3% of our total revenues.

10Our Suppliers

~~The products~~Sichuan ~~are~~Vtouch ~~inspected~~does ~~before~~not ~~they~~typically enter ~~are~~into ~~delivered~~supply toagreements ~~our~~with ~~customers~~suppliers. ~~All~~We ~~products~~can ~~must~~utilize ~~pass~~any ~~the~~supplier ~~following~~we ~~inspections:~~choose, and there are no minimum purchase requirements for orders.

●We ~~Cosmetic~~place ~~inspection:~~purchase ~~conducted~~orders ~~under~~with suppliers ~~optimum~~of ~~temperatures~~raw ~~(20-22~~materials ~~degrees~~for ~~Celsius)~~the ~~and~~production ~~white~~of ~~fluorescent~~our ~~lighting~~products. The ~~product~~general isterms ~~observed~~of by the ~~naked~~purchase ~~eye~~order toinclude ~~spot~~specifications for ~~any~~product name, ~~defects~~quantity, ~~scratches and cracks~~price, ~~panel~~order ~~discoloration~~amount, ~~opacity, foreign fibers~~ and ~~spots.~~delivery ~~The~~date, ~~Company~~as ~~has~~well inas ~~place~~delivery ~~quantitative~~methods, ~~standards~~packaging, ~~with~~inspection ~~respect~~procedures, tobreach ~~each~~terms, ofand dispute ~~these~~resolution, ~~areas to determine the level of cosmetic acceptability. ● Function tests:~~ all ~~products~~tailored ~~undergo~~to ~~functionality~~each ~~testing~~order. ~~Touchscreen~~Payment ~~products~~terms are ~~connected~~also ~~electronically~~specified ~~via~~in ~~standard~~each ~~cabling~~order. ~~systems to computers~~Additionally, ~~to measure and test for effective functionality and to screen for any abnormalities. ● Stress testing:~~ all products ~~undergo~~must ~~product~~meet ~~stress~~nationally or ~~testing~~industry-prescribed byquality ~~being~~standards, ~~subject~~with toeach ~~humidity,~~order ~~temperature~~requiring ~~and~~a ~~corrosion~~supplier’s ~~stress~~quality ~~testing~~certification. The ~~products~~supplier ~~are~~must ~~tested~~unconditionally accept ~~for~~returns ~~their functionality in high~~ and ~~low~~either ~~humidity~~refund ~~environments~~the aspurchase ~~well~~price as in ~~extreme~~full ~~temperatures. The products are inspected to determine whether damage~~ or ~~physical~~provide ~~change~~replacements isif ~~caused~~the byproducts ~~exposure~~do tonot ~~high~~meet ~~and~~the ~~low~~required ~~temperatures.~~quality ~~● Internal teams will conduct independent testing for hazardous substances. The products~~ standards, are ~~also~~damaged, ~~tested~~or ~~for~~significantly ~~their~~differ ~~corrosive~~from ~~resistance~~what towas ~~saline solutions~~ordered.

~~Seasonality~~We do not consider any of our suppliers to be material to our business, and we can utilize any supplier we choose at our sole discretion. Although we can utilize any supplier, we believe that we have established healthy and stable relationships with our significant suppliers.

~~There~~We purchase our raw materials isthrough novarious ~~significant~~suppliers. ~~seasonality~~For inthe year ended December 31, 2024, our ~~business~~top three suppliers, the only suppliers from whom our purchases individually exceeded 10% of our total raw material purchases, accounted for approximately 15.5%, 12.2% and 11.5%, respectively. For the year ended December 31, 2023, our top one supplier, the only supplier from whom our purchases individually exceeded 10% of our total raw material purchases, accounted for approximately 13.3%.

~~Research~~The general terms of the purchase order include specifications for product name, quantity, price, order amount, and ~~Development~~delivery date, as well as delivery methods, packaging, inspection procedures, breach terms, and dispute resolution, all tailored to each order. Payment terms are also specified in each order. Additionally, all products must meet nationally or industry-mandated quality standards, with each order requiring a supplier’s quality certification. The supplier must unconditionally accept returns and either refund the purchase price in full or provide replacements if the products do not meet the required quality standards, are damaged, or significantly differ from what was ordered.

We are committed to our own research and development projects as well as partnership initiatives in order to continuously and systematically upgrade our touchscreen technology. As of the date of this Annual Report, we have 11 ~~employees in our R&D department.~~

~~Intellectual Property~~Production and Quality Control

~~Our business~~The isCompany ~~dependent~~has onadopted a ~~combination of trademarks, patents, domain names, trade names, trade secrets and other proprietary rights~~ in made-to-order toproduction ~~protect~~model ~~our~~as ~~intellectual property rights. As of the date of this Annual Report, Sichuan Vtouch has one registered trademark in Mainland China and five pending patent applications.~~follows:

11This process is subject to continuous review and monitoring by the management team in consultation with engineers, electricians and other technical experts to ensure that finished products are of the highest quality and meet customer requirements and ISO9001 Quality Management Systems (QMS) standards.

~~Trademarks~~In order to maintain product safety and a high standard of product quality, the Company implements a strict set of quality control policies and inspection protocols. These policies and protocols are enforced by the Company’s senior management and officers through every stage of the production to post-production process. Their management guidelines along with key company quality policies are set out below:

~~Set~~The Company has strict production ~~forth~~standards ~~below~~in isplace athat ~~detailed~~govern ~~description~~what ofconstitutes ~~our~~acceptable ~~current~~quality ~~trademark~~for its products. This ensures that the Company’s products meet product certification standards. The production team adheres to the following criteria when assessing product standards:

Country

Trademark

Application Date

Registration Number

Registration Date

Classes

Assignment Application Number

Owner

Status

Item

Industry Standards

Our Standards

China

WeTouch

09/28/2011

10019079

01/28/2013

20210000091399

Sichuan Vtouch

Registered

Reaction time

Less than or equal to 5 milliseconds

Surface hardness

7H~9H

Operational temperature

0~70 degrees Celsius

-30~80 degrees Celsius

EsD requirement

6~12KV

8~15KV

Transparency

86%

88%

Touch conditions

Normal touch and ordinary conditions

Waterproof and anti-saline solution and anti-corrosion and Anti interference

~~Patents~~12

~~Sichuan~~The ~~Vtouch~~products ~~has~~are ~~applied~~inspected before ~~for~~they ~~five~~are ~~patents~~delivered ~~with~~to ~~the~~our ~~Patent Office of China National Intellectual Property Administration~~customers. As ofAll ~~the~~products ~~date~~must ofpass ~~this Annual Report,~~ the ~~patent~~following ~~applications are still pending.~~inspections:

~~Set forth~~● ~~below~~Cosmetic inspection: conducted under optimum temperatures (20-22 degrees Celsius) and white fluorescent lighting. The product is aobserved ~~detailed~~by ~~description~~the naked eye to detect any defects, scratches and cracks, panel discoloration, opacity, foreign fibers and spots. The Company maintains quantitative standards with respect to each of ~~our~~these ~~pending~~areas ~~patent~~to ~~applications~~determine the level of cosmetic acceptability. ● Function tests: all products undergo functionality testing. Touchscreen products are connected electronically via standard cabling systems to computers, to measure functionality and identify abnormalities. ● Stress testing: all products undergo stress testing for humidity, temperature, and corrosion resistance The products are tested for functionality in high- and low-humidity environments as well as extreme temperatures to determine whether exposure causes damage or physical change. ● Hazardous substances testing: internal teams conduct independent testing for hazardous substances and for corrosive resistance to saline solutions.

Patent Application No.	Patent Name	Patent Application Date	Patent Type	Patent Applicant	Status
202120500187.7	Low cost anti-rupture projected capacitive touchscreen	03/09/2021	Utility Model	Sichuan Vtouch	Pending
202120500188.1	High performance and anti-electromagnetic radiation projected capacitive touchscreen	03/09/2021	Utility Model	Sichuan Vtouch	Pending
202120500155.7	Full-lamination projected capacitive touchscreen	03/09/2021	Utility Model	Sichuan Vtouch	Pending
202110256476.1	Anti-scratch glass structure capacitive touchscreen	03/09/2021	Invention	Sichuan Vtouch	Pending
202111206650.8	An enhanced anti-static projection capacitive screen	10/17/2021	Invention	Sichuan Vtouch	Pending

Seasonality

~~Patents registered~~There inis ~~Mainland~~no ~~China~~significant ~~cannot be enforced in other jurisdictions to which the Company supplies its products. We currently have~~seasonality ~~pending patent applications only~~ in ~~Mainland China. We plan to submit patent registration applications in~~ our ~~target market jurisdictions including United States, Europe, Australia, Japan, Korea, Taiwan, India and Russia by the end of 2024~~business.

~~Environmental Matters~~Research and Development (“R&D”)

~~Our business~~We inare ~~Mainland~~committed ~~China is subject~~ to ~~various~~both ~~pollution~~internal R&D ~~control~~projects ~~regulations~~and incollaborative ~~Mainland~~initiatives ~~China~~to ~~with~~continuously ~~respect~~upgrade toour ~~noise,~~touchscreen ~~water~~technology. ~~and~~As ~~air pollution~~of ~~and~~ the ~~disposal~~date of ~~waste.~~this ~~Specifically~~Annual Report, we ~~the~~have ~~major~~11 ~~environmental~~employees ~~regulations~~in ~~applicable~~our toR&D usdepartment, ~~include~~all ~~the~~of ~~PRC~~whom ~~Environmental Protection~~obtained ~~Law,~~at ~~the~~least ~~PRC~~a ~~Law~~bachelor’s degree, onwith ~~the~~average ~~Prevention~~R&D ~~and~~work ~~Control~~experience of ~~Water~~at ~~Pollution,~~least ~~the~~three ~~PRC~~years. ~~Law~~For on the ~~Prevention~~years ~~and~~ended ~~Control~~December ~~of Air Pollution~~31, ~~the~~ ~~PRC~~2024 ~~Law on the Prevention~~ and ~~Control of Solid Waste Pollution~~2023, ~~and~~our ~~the~~R&D ~~PRC~~expenses were ~~Law~~approximately on$nil ~~the Prevention~~ and ~~Control~~$84,551, ~~of Noise Pollution~~respectively.

~~Sichuan~~In ~~Vtouch originally received~~ the ~~Pollutant Discharge Permit from Renshou County environmental protection agency~~future, ~~which~~we ~~expired~~expect onR&D ~~May~~expenses ~~15, 2019. Pursuant~~ to aincrease ~~Statement~~as onwe ~~Change~~continue ~~of Pollutant Discharge Permit~~ to ~~Stationary~~accelerate ~~Pollution Source Registration Form dated September 1, 2020,~~ the ~~environmental~~development ~~protection~~of ~~system~~new inproducts ~~Renshou~~and ~~County~~functions, ~~Sichuan,~~and ~~was changed from permission~~ to ~~registration due to local administrative~~ ~~division~~enhancing ~~change.~~and ~~Sichuan~~upgrading ~~Vtouch~~existing isproducts ~~registered~~and ~~under the new system by the issuance of the Stationary Pollution Source Registration Form as of the date of this Annual Report~~functions.

~~The Company~~Intellectual is not aware of any investigations, prosecutions, disputes, claims or other proceedings in respect of environmental protection, nor has the Company been punished or can foresee any punishment to be made by any environmental administration authorities of the PRC.Property

~~Competition~~Our business relies on a combination of trademarks, patents, domain names, trade names, trade secrets and other proprietary rights to protect our intellectual property. As of the date of this Annual Report, Sichuan Vtouch has one registered trademark in Mainland China and five pending patent applications.

The markets for touchscreen products are highly competitive and subject to rapid technological change. The Company believes that the principal competitive factors in its markets are product characteristics such as touch performance, durability, optical clarity and price, as well as supplier characteristics such as quality, service, delivery time and reputation. The Company believes that it competes favorably with respect to these factors, although there can be no assurance that the Company will be able to continue to compete successfully in the future.13

12Trademarks

~~Despite that~~Set ~~touchscreen~~forth ~~products~~below ~~are~~is ~~highly competitive as~~ a ~~whole, we face fewer competitors, as we produce medium to large size touchscreens~~detailed ~~which~~description ~~are~~of ~~specially~~our ~~tailored~~current to certain industries, such as industrial HMI, gaming, financing, lottery, automotive, medical, and POS, among others, and require more stable supply and longer guaranty and life span, compared with small size touchscreens, which are characterized by shorter life cycles and guaranty but more demand in quantity.trademark:

We believe the following companies may be our competitors:

Country

Trademark

Application Date

Registration Number

Registration Date

Classes

Assignment Application Number

Owner

Status

China

WeTouch

09/28/2011

10019079

01/28/2013

20210000091399

Sichuan Vtouch

Registered

● Apex Material Technology Corp., founded in 1998, is committed to the development and innovation of resistive and projected capacitive (PCI or PCAP) total touch solutions. With its headquarters based in Keelung, Taiwan and a subsidiary located in Milwaukee, Wisconsin, it designs and manufactures advanced high-performance touch products for industrial and medical applications. Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens mostly applicable to the industrial HMI and medical industries, while our products are more widely used in a variety of industries. ● Elo Touch Systems Inc., based and headquartered in the United States, has a history of over 40 years in the production of touchscreens. Its product portfolio includes a broad selection of interactive touchscreen displays from 10-70 inches, all-in-one touchscreen computers, OEM touchscreens and touchscreen controllers and touchscreen monitors. Compared with us, although it has a longer history and geographical advantages when it comes to the competition for U.S. customers and other international customers, it recently started the production of capacitive touchscreens mostly applicable to POS and inquiry machines, while our products are more widely used in a variety of industries. ● AbonTouch System Inc, established in 2005, mainly focuses on manufacturing and sales of mid to large size (7”~86”) “Projective Capacitive Sensors,” (7”~21.5”) “Five-Wire Resistive Zero-Bezel Touch Panels” and (5”~21.5”) “Five-Wire Resistive Touch Panels.” Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens mostly applicable to POS, inquiry machines and industrial HMI, while our products are more widely used in a variety of industries.Patents

~~Industry~~Sichuan Vtouch has applied for five patents with the Patent Office of China National Intellectual Property Administration. As of the date of this Annual Report, the five patent applications are still pending. Patents registered in Mainland China cannot be enforced in other jurisdictions to which the Company supplies its products.

~~Since inception,~~Set weforth ~~have~~below ~~positioned ourselves in the professional touchscreen display industry. Touchscreen~~ is ana ~~input and output device and~~detailed ~~layered~~description ~~on top~~ of anour ~~electronic~~pending ~~visual~~patent display of an information processing system, allowing individuals to access information and interact with the device simply by touching the device’s screen with a finger or a specialized tool. Accordingly, the ease of use offered by touchscreen-based systems makes the systems well suited both for applications ~~for the general public and for specialized applications for institutional users and trained computer users.~~:

Although touchscreen has become mainstream only over the last decade, the concept of a touch-sensitive computer display was developed as early as 1965. Since the introduction of Apple’s iPhone in 2007, touchscreen technology has made rapid inroads into various electronics markets, with a number of other significant companies also incorporating this technology into their products (as opposed to using a mouse, keyboard, keypad or trackball). Viewed today as the most important tool to facilitate interaction between the individual and machine, touchscreen technology is now an integral part of a wide range of computing products.

Patent Application No.	Patent Name	Patent Application Date	Patent Type	Patent Applicant	Status
202120500187.7	Low cost anti-rupture projected capacitive touchscreen	03/09/2021	Utility Model	Sichuan Vtouch	Pending
202120500188.1	High performance and anti-electromagnetic radiation projected capacitive touchscreen	03/09/2021	Utility Model	Sichuan Vtouch	Pending
202120500155.7	Full-lamination projected capacitive touchscreen	03/09/2021	Utility Model	Sichuan Vtouch	Pending
202110256476.1	Anti-scratch glass structure capacitive touchscreen	03/09/2021	Invention	Sichuan Vtouch	Pending
202111206650.8	An enhanced anti-static projection capacitive screen	10/17/2021	Invention	Sichuan Vtouch	Pending

~~Regulations~~Environmental Matters

~~Overview~~Our business in Mainland China is subject to various pollution control regulations in Mainland China with respect to noise, water and air pollution and the disposal of waste. Specifically, the major environmental regulations applicable to us include the PRC Environmental Protection Law, the PRC Law on the Prevention and Control of Water Pollution, the PRC Law on the Prevention and Control of Air Pollution, the PRC Law on the Prevention and Control of Solid Waste Pollution, and the PRC Law on the Prevention and Control of Noise Pollution.

~~We operate~~Pursuant ~~our~~to ~~business~~a inStatement ~~Mainland~~on Change ~~China~~of ~~under~~Pollutant aDischarge ~~legal~~Permit ~~regime~~to ~~consisting~~Stationary ofPollution ~~the~~Source ~~National~~Registration ~~People’s~~Form ~~Congress,~~dated ~~which~~September is1, 2020, the ~~country’s~~environmental protection ~~highest~~system ~~legislative~~in ~~body~~Renshou County, ~~the State Council~~Sichuan, ~~which~~was ischanged ~~the~~from ~~highest~~permission ~~authority~~to ofregistration ~~the~~due ~~executive~~to ~~branch~~local ofadministrative ~~the~~division ~~PRC~~change. ~~central~~Sichuan ~~government, and~~Vtouch ~~several~~is ~~ministries~~currently ~~and~~registered ~~agencies~~ under ~~its authority, including~~ the ~~Ministry~~new ofsystem ~~Industry~~ and ~~Information~~holds ~~Technology,~~ the ~~State~~Stationary ~~Administration for~~Pollution ~~Market~~Source ~~Regulation~~Registration ~~(“SAMR”)~~Form ~~and~~as ~~their~~of ~~respective~~the ~~local~~date ~~offices~~of this Annual Report.

~~This section~~The ~~sets~~Company ~~forth~~is anot ~~summary~~aware of any investigations, prosecutions, disputes, claims or other proceedings relating to environmental protection, nor has the ~~most~~Company ~~significant~~been punished ~~rules~~or ~~and~~foresees ~~regulations~~any ~~that~~punishment ~~affect~~from ~~our~~any ~~business~~environmental ~~activities~~administration inauthorities ~~Mainland~~of ~~China~~the PRC.

13Competition

~~Regulations~~The ~~Relating~~markets for touchscreen products are highly competitive and subject to ~~Foreign~~rapid ~~Investment~~technological change. The Company believes that the principal competitive factors in ~~Mainland~~its ~~China~~markets are product characteristics such as touch performance, durability, optical clarity and price, as well as supplier characteristics such as quality, service, delivery time and reputation. The Company believes that it competes favorably with respect to these factors, although there can be no assurance that the Company will be able to continue to compete successfully in the future.

On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which came into effect on January 1, 2020 and replaced three existing laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law, and the Wholly Foreign-Owned Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected Mainland China regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign- and domestic-invested enterprises in Mainland China. The Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection, and administration of foreign investments in view of investment protection and fair competition.14

~~Pursuant to~~Despite ~~the~~touchscreen ~~Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one~~products orbeing ~~more~~highly ~~natural~~competitive ~~persons,~~as ~~business~~a ~~entities~~whole, orwe ~~otherwise~~face ~~organizations~~fewer ofcompetitors, abecause ~~foreign~~we ~~country~~produce ~~within~~medium- ~~Mainland~~to ~~China,~~large-sized ortouchscreens ~~foreign~~specially ~~investors,~~tailored ~~and~~to ~~the~~certain ~~investment~~industries, ~~activities~~such ~~include~~as ~~the~~industrial ~~following~~HMI, ~~situations:~~gaming, ~~(i)~~financial ~~a foreign investor~~services, ~~individually or collectively with other investors~~lottery, ~~establishes~~ ~~an Foreign Investment Entity (“FIE”) in Mainland China; (ii) a foreign investor acquires stock shares~~automotive, ~~equity shares~~medical, ~~shares~~and ~~in assets~~POS, oramong ~~other~~others, ~~similar rights~~ and ~~interests~~that require ofmore anstable ~~enterprise~~supply ~~within~~and ~~Mainland~~longer ~~China;~~guaranty ~~(iii)~~and alife ~~foreign investor~~span, ~~individually or~~compared ~~collectively~~ with ~~other~~small ~~investors~~size touchscreens, ~~invests~~which inare acharacterized ~~new~~by ~~project~~shorter life incycles ~~Mainland~~and ~~China;~~guaranty ~~and~~but ~~(iv)~~more ~~investments~~demand in ~~other means as provided by laws, administrative regulations, or the State Council~~quantity.

~~Investment activities~~We inbelieve ~~Mainland China by foreign investors are principally governed by~~ the ~~Guidance~~following ~~Catalogue of Industries for Foreign Investment,~~companies ormay ~~the~~be ~~Catalogue,~~our which was promulgated and is amended from time to time by the Ministry of Commerce, or the MOFCOM, and the National Development and Reform Commission, or the NDRC. Restricted and prohibited industries are listed in the Catalogue. The Catalogue sets out a unified basis for the special administrative measures for foreign investment access. Fields not mentioned in the list for foreign investment access, including touchscreen manufacturing, are administered under the principle of equal treatment for domestic and foreign capital.competitors:

~~Industries not~~● ~~listed~~Apex Material Technology Corp., founded in 1998, is committed to the ~~Catalogue~~development and innovation of resistive and projected capacitive (PCI or PCAP) total touch solutions. With its headquarters in Keelung, Taiwan and a subsidiary located in Milwaukee, Wisconsin, it designs and manufactures advanced high-performance touch products for industrial and medical applications. Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens primarily for the industrial HMI and medical industries, while our products are ~~generally~~more ~~deemed~~widely asused ~~constituting~~in a ~~“permitted”~~variety ~~category~~of industries. ~~According~~● toElo Touch Systems Inc., based and headquartered in the ~~Catalogue~~United States, has a history of over 40 years in the production of touchscreens. Its product portfolio includes a broad selection of interactive touchscreen displays from 10-70 inches, all-in-one touchscreen computers, OEM touchscreens and touchscreen controllers and touchscreen monitors. Compared with us, although it has a longer history and geographical advantages in competing for U.S. customers and other international customers, it recently started the production of capacitive touchscreens primarily for POS and inquiry machines, while our products are more widely used in a variety of industries. ● AbonTouch System Inc, established in 2005, mainly focuses on manufacturing isand ~~classified~~sales asof ~~industry~~mid ~~where~~to ~~foreign~~large ~~investments~~size (7“~86”) “Projective Capacitive Sensors,” (7“~21.5”) “Five-Wire Resistive Zero-Bezel Touch Panels” and (5“~21.5”) “Five-Wire Resistive Touch Panels.” Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens primarily for POS, inquiry machines and industrial HMI, while our products are ~~permitted~~more widely used in a variety of industries.

Furthermore, the Foreign Investment Law provides that FIEs established according to the existing laws regulating foreign investment may maintain their structure and corporate governance within five years after the implementation of the Foreign Investment Law.Industry

~~In addition~~Since inception, ~~the~~we ~~Foreign~~have positioned ~~Investment~~ourselves ~~Law~~in ~~also~~the ~~provides~~professional ~~several~~touchscreen ~~protective~~display ~~rules~~industry. ~~and~~A ~~principles~~touchscreen ~~for~~is ~~foreign~~an ~~investors~~input and ~~their~~output ~~investments in~~device ~~Mainland~~and ~~China,~~layered ~~including,~~on ~~among~~top of ~~others,~~an ~~that~~electronic ~~local~~visual ~~governments~~display ~~must~~of ~~abide~~an byinformation ~~their~~processing ~~commitments~~system, toallowing ~~the~~individuals ~~foreign investors; FIEs are allowed~~ to ~~issue~~access ~~stocks~~information and ~~corporate~~interact ~~bonds;~~with ~~expropriation or requisition of~~ the ~~investment of foreign investors is prohibited except~~ ~~for~~device ~~special~~simply ~~circumstances,~~by intouching ~~which~~the ~~case~~device’s ~~statutory~~screen ~~procedures~~with ~~must~~a befinger ~~followed~~or ~~and fair and reasonable compensation must be made in~~ a ~~timely~~ ~~manner;~~specialized ~~mandatory~~tool. ~~technology~~Accordingly, ~~transfer is prohibited; and~~ the ~~capital~~ease ~~contributions, profits, capital gains, proceeds out~~ of ~~asset disposal,~~use ~~licensing~~offered ~~fees~~by ~~of intellectual property rights, indemnity or compensation legally obtained, or proceeds received upon settlement~~touchscreen-based bysystems ~~foreign~~makes ~~investors~~them inwell ~~Mainland~~suited ~~China~~for ~~may~~both beapplications ~~freely~~for ~~remitted~~the ~~inward~~general public and ~~outward~~for inspecialized ~~Renminbi~~applications orfor ~~foreign~~institutional ~~currencies.~~users ~~Also, foreign investors~~and ortrained ~~FIEs~~computer ~~should be imposed legal liabilities for failing to report investment information in accordance with the requirements~~users.

~~On December~~Although ~~26,~~touchscreens ~~2019,~~have become ~~the~~mainstream ~~PRC~~only ~~State~~over ~~Council approved~~ the ~~Implementation~~last ~~Rules of Foreign Investment Law~~decade, ~~which~~the ~~came~~concept ~~into effect on January 1, 2020. The Implementation Rules~~ of ~~Foreign~~a ~~Investment~~touch-sensitive ~~Law~~computer ~~restates~~display ~~certain~~was ~~principles~~developed ofas ~~the~~early ~~Foreign~~as ~~Investment~~1965. ~~Law~~Since ~~and further provides~~the ~~that,~~introduction ~~among others, (i) if the legal form or the governing structure~~ of anApple’s ~~FIE~~iPhone ~~established~~in ~~prior~~2007, totouchscreen ~~the~~technology ~~effective~~has ~~date~~made ofrapid ~~the~~inroads ~~Foreign Investment~~into ~~Law~~various ~~does~~electronics ~~not~~markets, ~~comply~~ with ~~the~~a ~~compulsory provisions~~ number of ~~the~~other ~~PRC~~significant ~~Company~~companies ~~Law~~also orincorporating ~~the~~this ~~PRC~~technology ~~Partnership~~into ~~Enterprises~~their ~~Law,~~products ~~such~~(as ~~FIE should~~opposed ~~complete~~to ~~amendment~~using ~~registration~~a ~~accordingly no later than January 1~~mouse, ~~2025; if it fails to do so~~keyboard, ~~the~~keypad ~~enterprise registration authority~~or ~~will~~trackball). ~~not~~Viewed ~~process~~today ~~other~~as ~~registration~~the ~~matters~~most ofimportant ~~the~~tool ~~FIE~~to ~~and~~facilitate ~~may~~interaction ~~publicize~~between ~~such~~individuals ~~non-compliance;~~ and ~~(ii)~~machines, ~~the~~touchscreen ~~provisions regarding transfer~~technology ofis ~~equity~~now ~~interests,~~an ~~distribution~~integral part of ~~profits~~a ~~and~~wide ~~remaining~~range ~~assets as stipulated in the joint venture contracts~~ of ancomputing ~~existing FIE may survive the Foreign Investment Law during its joint venture term~~products.

14Regulations

~~Regulations on Environmental Protection~~Overview

~~Environmental~~We operate our business in ~~Protection~~Mainland ~~Law~~China under a legal regime consisting of the National People’s Congress, which is the country’s highest legislative body, the State Council, which is the highest authority of the executive branch of the PRC central government, and several ministries and agencies under its authority, including the Ministry of Industry and Information Technology, the State Administration for Market Regulation (“SAMR”) and their respective local offices.

The Environmental Protection Law of the PRC, or the Environmental Protection Law, was promulgated and effective on December 26, 1989, and most recently amended on April 24, 2014, which amendments became effective January 1, 2015. This ~~Environmental~~section ~~Protection~~sets ~~Law~~forth ~~has~~a ~~been~~summary ~~formulated for the purpose~~ of ~~protecting and improving both~~ the ~~living~~most ~~environment~~significant ~~and~~rules ~~the ecological environment, preventing~~ and ~~controlling~~ ~~pollution,~~regulations ~~other~~that ~~public~~affect ~~hazards~~our ~~and~~business ~~safeguarding~~activities ~~people’s~~in ~~health~~Mainland China.

According to the provisions of the Environmental Protection Law, in addition to other relevant laws and regulations of the PRC, the Ministry of Environmental Protection and its local counterparts take charge of administering and supervising said environmental protection matters. Pursuant to the Environmental Protection Law, the environmental impact statement on any construction project must assess the pollution that the project is likely to produce and its impact on the environment, and stipulate preventive and curative measures; the statement shall be submitted to the competent administrative department of environmental protection for approval. Installations for the prevention and control of pollution in construction projects must be designed, built and commissioned together with the principal part of the project.15

~~Permission to~~Regulations ~~commence~~Relating ~~production at or utilize any construction project shall not be granted until its installations for the prevention and control of pollution have been examined and confirmed~~ to ~~meet~~Foreign ~~applicable standards by the appropriate administrative department of environmental~~Investment ~~protection~~in ~~that~~Mainland examined and approved the environmental impact statement. Installations for the prevention and control of pollution shall not be dismantled or left idle without authorization. Where it is absolutely necessary to dismantle any such installation or leave it idle, prior approval shall be obtained from the competent local administrative department of environmental protection.China

~~The~~On March 15, 2019, the National ~~Environmental~~People’s ~~Protection~~Congress promulgated the Foreign Investment Law, ~~makes~~which itcame ~~clear~~into ~~that~~effect ~~the~~on ~~legal~~January ~~liabilities~~1, of2020 ~~any~~and ~~violation~~replaced ofthree ~~said~~existing laws ~~law~~on ~~include~~foreign ~~warning~~investments in China, ~~fine~~namely, ~~rectification within~~the aPRC ~~time~~Equity ~~limit~~Joint Venture Law, ~~compulsory~~the ~~cease~~PRC ~~operation~~Cooperative Joint Venture Law, ~~compulsory~~and ~~reinstallation~~the ofWholly Foreign-Owned ~~dismantled~~Enterprise ~~installations~~Law, oftogether with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected Mainland China regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the ~~prevention~~legislative efforts to unify the corporate legal requirements for both foreign- and ~~control~~domestic-invested enterprises in ofMainland ~~pollution~~China. orThe ~~compulsory~~Foreign ~~reinstallation~~Investment ofLaw ~~those~~establishes ~~left~~the ~~idle~~basic framework for the access to, ~~compulsory~~and ~~shutout~~the orpromotion, ~~closedown~~protection, orand ~~even~~administration of ~~criminal~~foreign ~~punishment~~investments in view of investment protection and fair competition.

~~Order~~Pursuant to the Foreign Investment onLaw, ~~Ecosystem~~“foreign investment” refers to investment activities directly or indirectly conducted by ~~The~~one ~~Ministry~~or more natural persons, business entities, or otherwise organizations of ~~Ecology~~a foreign country within Mainland China, or foreign investors, and ~~Environment~~the ~~2019~~investment ~~Classification-based~~activities include ~~Management~~the onfollowing ~~Fixed~~situations: ~~Pollutant~~(i) ~~Source~~a foreign investor, individually or collectively with other investors, establishes an Foreign Investment Entity (“FIE”) in Mainland China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other similar rights and interests of an enterprise within Mainland China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project in Mainland China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.

~~Pursuant~~Investment activities in Mainland toChina ~~the~~by ~~Order~~foreign oninvestors ~~Ecosystem~~are principally governed by ~~The~~the ~~Ministry~~Guidance Catalogue of ~~Ecology~~Industries ~~and~~for ~~Environment~~Foreign Investment, or the Catalogue, which was ~~issued~~promulgated onand ~~July~~is ~~28,~~amended ~~2017~~from ~~and~~time ~~most~~to ~~recently~~time ~~amended~~by ~~on December~~the 20Ministry of Commerce, ~~2019~~or the MOFCOM, ~~The~~and ~~Ministry~~the ofNational ~~Ecology~~Development and ~~Environment~~Reform Commission, ~~implements~~or athe ~~classification-based~~NDRC. ~~management~~Restricted onand prohibited industries are listed in the ~~environmental~~Catalogue. ~~impact~~The ~~assessment,~~Catalogue sets out a unified basis for orthe ~~EIA,~~special ofadministrative ~~pollutants~~measures ~~according~~for toforeign ~~pollutant~~investment ~~amount~~access. ~~and~~Fields ~~the~~not ~~impact~~mentioned ofin the ~~pollutants~~list onfor foreign investment access, including touchscreen manufacturing, are administered under the ~~environment~~principle asof ~~below~~equal treatment for domestic and foreign capital.

●Industries ~~For~~not ~~those~~listed ~~pollutant~~in ~~discharge~~the Catalogue ~~units~~are ~~with~~generally ~~large~~deemed ~~amount~~as ofconstituting ~~pollutants~~a ~~and~~“permitted” ~~significant~~category. ~~environmental~~According ~~impacts,~~to the ~~key management on a pollutant discharge permit is required; ● For those pollutant discharge units with small amount of pollutants and small environmental impacts~~Catalogue, ~~the~~touchscreen ~~simplified management on a pollutant discharge permit~~ manufacturing is ~~required;~~classified ~~and~~as ●industry ~~For~~where ~~those~~foreign ~~pollutant~~investments ~~discharge~~are ~~units with very small amount of pollutants and very small environmental impacts, the pollutant discharge registration form is required~~permitted.

The touchscreen manufacturing is classified as to fill in a Registration Form. Pursuant to a Statement on Change of Pollutant Discharge Permit to Stationary Pollution Source Registration Form by the local government dated September 1Furthermore, ~~2020,~~ the ~~environmental~~Foreign ~~protection system~~Investment inLaw ~~Renshou~~provides ~~County,~~that ~~Sichuan,~~FIEs ~~was~~established ~~changed~~according ~~from permission~~ to ~~registration~~the ~~due~~existing tolaws ~~local~~regulating ~~administrative~~foreign ~~division~~investment ~~change.~~may ~~Therefore,~~maintain ~~upon submission~~their ofstructure ~~all~~and ~~required~~corporate governance ~~documentation,~~within wefive ~~are~~years ~~registered~~after ~~under~~ the ~~new~~implementation ~~system~~of bythe ~~filling~~Foreign inInvestment ~~Stationary Pollution Source Registration Form~~Law.

15In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in Mainland China, including, among others, that local governments must abide by their commitments to the foreign investors; FIEs are allowed to issue stocks and corporate bonds; expropriation or requisition of the investment of foreign investors is prohibited except for special circumstances, in which case statutory procedures must be followed and fair and reasonable compensation must be made in a timely manner; mandatory technology transfer is prohibited; and the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors in Mainland China may be freely remitted inward and outward in Renminbi or foreign currencies. Also, foreign investors or FIEs should be imposed legal liabilities for failing to report investment information in accordance with the requirements.

~~Regulations~~On December 26, 2019, the PRC State Council approved the Implementation Rules of Foreign Investment Law, which came into effect on ~~Consumer~~January ~~Rights~~1, ~~Protection~~2020. The Implementation Rules of Foreign Investment Law restates certain principles of the Foreign Investment Law and further provides that, among others, (i) if the legal form or the governing structure of an FIE established prior to the effective date of the Foreign Investment Law does not comply with the compulsory provisions of the PRC Company Law or the PRC Partnership Enterprises Law, such FIE should complete amendment registration accordingly no later than January 1, 2025; if it fails to do so, the enterprise registration authority will not process other registration matters of the FIE and may publicize such non-compliance; and (ii) the provisions regarding transfer of equity interests, distribution of profits and remaining assets as stipulated in the joint venture contracts of an existing FIE may survive the Foreign Investment Law during its joint venture term.

Our business is subject to a variety of consumer protection laws, including the PRC Consumer Rights and Interests Protection Law, which was amended in 2013 and became effective on March 15, 2014. It imposes stringent requirements and obligations on business operators. Failure to comply with these consumer protection laws could subject us to administrative sanctions, such as the issuance of a warning, confiscation of illegal income, imposition of fines, an order to cease business operations, revocation of business licenses, and potential civil or criminal liabilities.16

AsRegulations ofon ~~the~~Environmental date of this Annual Report, we are not aware of any warning, investigations, prosecutions, disputes, claims or other proceedings in respect of customer rights protection, nor have we been punished or can foresee any punishment to be made by any government authorities of the PRC. Protection

~~Regulations on~~Environmental ~~Intellectual Property Rights~~Protection Law

~~Regulations~~The Environmental Protection Law of the PRC, or the Environmental Protection Law, was promulgated and effective on ~~Trademark~~December 26, 1989, and most recently amended on April 24, 2014, which amendments became effective January 1, 2015. This Environmental Protection Law has been formulated for the purpose of protecting and improving both the living environment and the ecological environment, preventing and controlling pollution, other public hazards and safeguarding people’s health.

~~Trademarks are~~According ~~protected~~to by the ~~PRC~~provisions of ~~Trademark Law adopted in 1982 and subsequently amended as well as~~ the ~~Implementation~~Environmental ~~Regulations~~Protection ~~for the Trademark~~ Law, ~~of the PRC~~ in ~~2002~~addition ~~and~~to ~~subsequently~~other ~~amended~~relevant inlaws ~~2014~~ and ~~2019.~~regulations ~~The Trademark Office~~ of the ~~SAMR~~PRC, ~~is responsible for~~ the ~~registration and~~Ministry ~~administration~~ of ~~trademarks~~Environmental Protection and ~~the~~its ~~Trademark~~local ~~Review~~counterparts ~~and~~take ~~Adjudication~~charge ~~Committee~~of ~~established~~administering byand ~~the~~supervising ~~SAMR~~said isenvironmental ~~responsible~~protection ~~for~~matters. ~~resolving~~Pursuant to ~~trademark~~the ~~disputes~~Environmental inProtection ~~Mainland~~Law, ~~China.~~the ~~Registered~~environmental ~~trademarks~~impact ~~are~~statement ~~valid~~on ~~for~~any ~~ten~~construction ~~years~~project ~~from~~must assess the ~~date~~pollution that the ~~registration~~project is ~~approved.~~likely ~~A registrant may apply~~ to ~~renew~~produce aand ~~registration~~its ~~within~~impact ~~twelve~~on ~~months before~~ the ~~expiration date of the registration. If the registrant fails to apply in a timely manner~~environment, aand ~~grace~~stipulate ~~period~~preventive ofand ~~six~~curative ~~additional~~measures; ~~months~~the ~~may~~statement shall be ~~granted.~~submitted ~~If the registrant fails~~ to ~~apply before~~ the ~~grace~~competent ~~period expires,~~administrative ~~the~~department ~~registered~~of ~~trademark~~environmental ~~shall~~protection befor ~~deregistered~~approval. ~~Renewed~~Installations ~~registrations are valid~~ for ~~ten years. In April 2014,~~ the ~~State~~prevention ~~Council~~and ~~issued~~control ~~the revised Implementation~~ of ~~the~~pollution ~~Trademark~~in ~~Law,~~construction ~~which~~projects ~~specified~~must ~~the~~be ~~requirements~~designed, ofbuilt ~~applying~~and ~~for~~commissioned ~~trademark~~together ~~registration~~with ~~and~~the ~~review. As~~principal part of the ~~date of this Annual Report, we had 1 registered trademark in Mainland China~~project.

~~Regulations~~Permission to commence production onat ~~Patent~~or ~~Law~~utilize any construction project shall not be granted until its installations for the prevention and control of pollution have been examined and confirmed to meet applicable standards by the appropriate administrative department of environmental protection that examined and approved the environmental impact statement. Installations for the prevention and control of pollution shall not be dismantled or left idle without authorization. Where it is absolutely necessary to dismantle any such installation or leave it idle, prior approval shall be obtained from the competent local administrative department of environmental protection.

~~According to~~The ~~the~~Environmental ~~PRC Patent~~ Protection Law, ~~which~~makes ~~was~~it ~~issued~~clear bythat the ~~Standing~~legal ~~Committee~~liabilities of ~~the~~any ~~National~~violation ~~People’s~~of ~~Congress~~said inlaw ~~1984~~include ~~and last amended on October 17~~warning, ~~2020~~fine, ~~effective~~rectification onwithin ~~June~~a 1,time ~~2021~~limit, ~~and Implementation Rules of the Patent Law of the People’s Republic of China, which~~ ~~were~~compulsory ~~promulgated~~cease ~~by the State Council in 2001 and last amended on January 9~~operation, ~~2010.~~compulsory ~~Draft~~reinstallation ~~amendments~~of todismantled ~~the~~installations ~~Implementation Rules~~ of the ~~Patent~~ ~~Law~~prevention ~~are currently under review. The Patent Law~~ and ~~its~~control ~~implementation rules provide for three types~~ of ~~patents:~~pollution ~~“invention,” “utility model” and “design.” “Invention” refers to any new technical solution relating to a product, a process~~ or ~~improvement thereof; “utility model” refers to any new technical solution relating to the shape, structure,~~compulsory orreinstallation ~~their combination,~~ of athose ~~product,~~left ~~which is suitable for practical use; and “design” refers to any new design of the whole or partial shape~~idle, ~~pattern,~~compulsory ~~color~~shutout or ~~the combination of any two of them~~closedown, of a product, that creates an aesthetical feeling and is suitable for industrial application. Invention patents are valid for 20 years, while design patents and utility model patents are valid for 15 years and 10 years, respectively, each calculated from the date of application. To be patentable, invention or ~~utility~~even ~~models~~criminal ~~must meet three criteria: novelty, inventiveness and practicability~~punishment. 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. Otherwise, the use constitutes an infringement of the patent rights. As of the date of this Annual Report, we had five pending patent applications.

~~Regulations~~Order on Ecosystem by The Ministry of Ecology and Environment 2019 Classification-based Management on ~~Foreign~~Fixed ~~Exchange~~Pollutant Source

~~General~~Pursuant to the Order on Ecosystem ~~Administration~~by The Ministry of ~~Foreign~~Ecology ~~Exchange~~and Environment, which was issued on July 28, 2017 and most recently amended on December 20, 2019, The Ministry of Ecology and Environment implements a classification-based management on the environmental impact assessment, or EIA, of pollutants according to pollutant amount and the impact of the pollutants on the environment as below

~~Under the~~● ~~PRC~~For ~~Foreign~~those ~~Currency~~pollutant ~~Administration~~discharge ~~Rules~~units ~~promulgated~~with onlarge ~~January~~amount ~~29,~~of ~~1996~~pollutants and ~~most~~significant ~~recently~~environmental ~~amended on August 5~~impacts, ~~2008 and various regulations issued by~~ the ~~SAFE,~~key ~~and~~management ~~other~~on ~~relevant~~a ~~PRC~~pollutant ~~government~~discharge ~~authorities,~~permit ~~Renminbi~~ is ~~convertible~~required; ~~into~~● ~~other~~For ~~currencies~~those ~~for~~pollutant ~~current account~~discharge ~~items,~~units ~~such~~with assmall ~~trade-related~~amount ~~receipts and payments and payment~~ of ~~interest~~pollutants and ~~dividends.~~small ~~The~~environmental ~~conversion~~impacts, ofthe ~~Renminbi~~simplified ~~into~~management ~~other currencies~~on ~~and~~a ~~remittance~~pollutant ofdischarge ~~the~~permit ~~converted~~is ~~foreign~~required; ~~currency~~and ~~outside~~● ~~Mainland~~For ~~China~~those ~~for~~pollutant ~~capital~~discharge ~~account~~units ~~items,~~with ~~such~~very assmall ~~direct~~amount ~~equity~~of ~~investments, loans,~~pollutants and ~~repatriation~~very ofsmall ~~investment~~environmental impacts, ~~requires~~ the ~~prior~~pollutant ~~approval~~discharge ~~from~~registration ~~the~~form ~~SAFE~~is ~~or its local office~~required.

~~Payments for~~The ~~transactions~~touchscreen ~~that~~manufacturing is ~~take~~classified ~~place~~as into ~~Mainland~~fill ~~China must be made~~ in ~~Renminbi.~~a ~~Unless~~Registration ~~otherwise approved, Mainland China companies may not repatriate foreign currency payments received from abroad or retain the same abroad~~Form. ~~FIEs~~Pursuant ~~may~~to ~~retain~~a ~~foreign~~Statement ~~exchange~~on inChange ~~accounts with~~of ~~designated~~Pollutant ~~foreign~~Discharge ~~exchange~~Permit ~~banks under the current account items subject~~ to aStationary ~~cap~~Pollution Source ~~set~~Registration Form by the ~~SAFE or its~~ local ~~branch.~~government ~~Foreign exchange~~dated ~~proceeds~~September ~~under~~1, 2020, the ~~current~~environmental ~~accounts~~protection ~~may~~system ~~be either retained or sold to a financial institution engaged~~ in ~~settlement~~Renshou ~~and~~County, ~~sale~~Sichuan, ofwas ~~foreign~~changed ~~exchange~~from ~~pursuant~~permission to ~~relevant~~registration ~~SAFE~~due ~~rules~~to ~~and~~local ~~regulations.~~administrative ~~For~~division ~~foreign~~change. ~~exchange~~Therefore, ~~proceeds~~upon ~~under~~submission ~~the~~of ~~capital~~all ~~accounts,~~required ~~approval~~documentation, ~~from~~we ~~the~~are ~~SAFE~~registered isunder ~~generally required for~~ the ~~retention~~new orsystem ~~sale~~by offilling ~~such proceeds to a financial institution engaged~~ in ~~settlement~~Stationary ~~and~~Pollution ~~sale of~~Source ~~foreign~~Registration ~~exchange~~Form.

Pursuant to the Circular of the SAFE on Notice of State Administration of Foreign Exchange on Further Improvements and Adjustments to Foreign Exchange Control Policies for Direct Investment, which was promulgated on November 19, 2012, became effective on December 17, 2012, and was further amended on May 4, 2015, October 10, 2018, and December 30, 2019, approval of the SAFE is not required for opening a foreign exchange account and depositing foreign exchange into the accounts relating to the direct investments. This circular also simplifies foreign exchange-related registration required for foreign investors to acquire equity interests of PRC companies and further improve the administration on foreign exchange settlement for FIEs.

~~The Notice~~Regulations ~~of the State Administration of Foreign Exchange~~ on ~~Further~~Consumer ~~Simplifying~~Rights and Improving the Foreign Exchange Management Policies for Direct Investment, or SAFE Circular 13, which became effective on June 1, 2015 and was amended on December 30, 2019, cancels the administrative approvals of foreign exchange registration of direct domestic investment and direct overseas investment and simplifies the procedure of foreign exchange-related registration. Pursuant to SAFE Circular 13, investors should register with banks for direct domestic investment and direct overseas investment.Protection

16Our business is subject to a variety of consumer protection laws, including the PRC Consumer Rights and Interests Protection Law, which was amended in 2013 and became effective on March 15, 2014. It imposes stringent requirements and obligations on business operators. Failure to comply with these consumer protection laws could subject us to administrative sanctions, such as the issuance of a warning, confiscation of illegal income, imposition of fines, an order to cease business operations, revocation of business licenses, and potential civil or criminal liabilities.

~~The Notice~~As of the ~~State~~date ~~Administration~~ of ~~Foreign~~this ~~Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested~~Annual ~~Enterprises~~Report, ~~which~~we ~~was~~are ~~promulgated~~not onaware ~~March~~of ~~30,~~any ~~2015~~warning, ~~became effective on June 1~~investigations, ~~2015~~prosecutions, ~~and was amended on December 30~~disputes, ~~2019,~~claims ~~provides that~~or another ~~FIE~~proceedings ~~may,~~in ~~according~~respect ~~to its actual business needs, settle with a bank the portion~~ of ~~the~~customer ~~foreign exchange capital in its capital~~rights ~~account~~protection, ~~for~~nor ~~which~~have ~~the~~we ~~relevant~~been ~~foreign~~punished ~~exchange administration has confirmed monetary capital contribution rights and interests (~~or ~~for which~~can ~~the~~foresee ~~bank~~any ~~has~~punishment ~~registered the injection of the monetary capital contribution into the account). Pursuant~~ to ~~this~~be ~~circular,~~made ~~for~~by ~~the time~~any ~~being,~~government ~~FIEs~~authorities ~~are allowed to settle 100%~~ of ~~their foreign exchange capital on a discretionary basis; an FIE should truthfully use its capital for its own operational purposes within~~ the scope of its business; where an ordinary FIE makes domestic equity investment with the amount of foreign exchanges settled, the FIE must first go through domestic re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange administration or the bank at the place where it is registeredPRC.

~~The Notice~~Regulations ~~of the State Administration of Foreign Exchange~~ on ~~Policies~~Intellectual ~~for~~Property Reforming and Regulating the Control over Foreign Exchange Settlement under the Capital Account, which was promulgated and became effective on June 9, 2016, provides that enterprises registered in Mainland China may also convert their foreign debts from foreign currency into Renminbi on a self-discretionary basis. This circular also provides an integrated standard for conversion of foreign exchange under capital account items (including, but not limited to, foreign currency capital and foreign debts) on a self-discretionary basis, which applies to all enterprises registered in Mainland China.Rights

~~On January~~Regulations ~~26, 2017, SAFE promulgated the Notice of State Administration of Foreign Exchange~~ on Improving the Check of Authenticity and Compliance to further Promote Foreign Exchange Control, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including: (i) banks should check board resolutions regarding profit distribution, the original version of tax filing records, and audited financial statements pursuant to the principle of genuine transactions; and (ii) domestic entities should hold income to account for previous years’ losses before remitting the profits. Moreover, pursuant to this circular, domestic entities should make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts, and other proof when completing the registration procedures in connection with an outbound investment.Trademark

OnTrademarks are protected by ~~October~~the ~~25,~~PRC ~~2019,~~Trademark Law adopted in 1982 and subsequently amended as well as the ~~SAFE~~Implementation ~~promulgated~~Regulations for the ~~Notice~~Trademark Law of the PRC ~~State~~in ~~Administration~~2002 and subsequently amended in 2014 and 2019. The Trademark Office of ~~Foreign~~the ~~Exchange~~SAMR onis ~~Further~~responsible ~~Promoting~~for the ~~Facilitation~~registration and administration of ~~Cross-border~~trademarks ~~Trade~~and the Trademark Review and ~~Investment,~~Adjudication ~~which,~~Committee ~~among~~established ~~other~~by ~~things,~~the ~~allows~~SAMR ~~all~~is ~~FIEs~~responsible tofor ~~use~~resolving ~~Renminbi~~trademark ~~converted~~disputes in Mainland China. Registered trademarks are valid for ten years from ~~foreign~~the ~~currency-denominated~~date the registration is approved. A registrant may apply to ~~capital~~renew ~~for~~a ~~equity~~registration ~~investments~~within twelve months before the expiration date of the registration. If the registrant fails to apply in ~~Mainland~~a ~~China~~timely manner, asa ~~long~~grace asperiod of six additional months may be granted. If the ~~equity~~registrant ~~investment~~fails isto ~~genuine,~~apply ~~does~~before ~~not~~the ~~violate~~grace ~~applicable~~period ~~laws~~expires, ~~and~~the ~~complies~~registered ~~with~~trademark ~~the~~shall ~~negative~~be ~~list~~deregistered. onRenewed ~~foreign~~registrations ~~investment~~are valid for ten years. ~~However~~In April 2014, ~~since~~the ~~this~~State ~~circular~~Council isissued ~~newly~~the revised ~~promulgated,~~Implementation itof isthe ~~unclear~~Trademark ~~how~~Law, which specified the ~~SAFE~~ requirements of applying for trademark registration and ~~competent~~review. ~~banks~~As ~~will~~of the ~~carry~~date itof ~~out~~this Annual Report, we had 1 registered trademark in ~~practice~~Mainland China.

~~According to the~~ Regulations ~~of the PRC~~ on ~~Administration of Company Registration, which were promulgated by the State Council on June 24, 1994,~~Patent became effective on July 1, 1994, and were amended on February 6, 2016, and other laws and regulations governing FIEs and company registrations, the establishment of an FIE and any capital increase and other major changes in an FIE should be registered with the State Administration for Market Regulation or its local counterparts and filed via the enterprise registration system.Law

~~Pursuant~~ According to ~~SAFE~~the ~~Circular~~PRC 13Patent Law, which was issued by the Standing Committee of the National People’s Congress in 1984 and ~~other~~last ~~laws~~amended on October 17, 2020, effective on June 1, 2021, and ~~regulations~~Implementation ~~relating~~Rules toof ~~foreign~~the ~~exchange~~Patent Law of the People’s Republic of China, ~~when~~which ~~setting~~were uppromulgated by athe ~~new~~State ~~FIE~~Council in 2001 and last amended on January 9, 2010. Draft amendments to the ~~enterprise~~Implementation ~~should~~Rules ~~register with~~of the ~~bank~~Patent ~~located~~Law atare currently under review. The Patent Law and its ~~registered~~implementation ~~place~~rules ~~after~~provide ~~obtaining~~for ~~the~~three ~~business~~types ~~license~~of patents: “invention,” “utility model” and if“design.” ~~there~~“Invention” isrefers to any ~~change~~new intechnical ~~capital~~solution orrelating ~~other~~to ~~changes~~a product, a process or ~~relating~~improvement thereof; “utility model” refers to ~~the~~any ~~basic~~new ~~information~~technical ofsolution relating to the ~~FIE~~shape, ~~including~~structure, ~~without~~or ~~limitation~~their combination, of a product, which is suitable for practical use; and “design” refers to any ~~increase~~new indesign ~~its~~of ~~registered~~the ~~capital~~whole or ~~total~~partial ~~investment~~shape, pattern, color or the ~~FIE~~combination ~~must~~of ~~register~~any ~~such~~two ~~changes~~of ~~with~~them, ~~the~~of ~~bank~~a ~~located~~product, atthat ~~its~~creates ~~registered~~an ~~place~~aesthetical ~~after~~feeling ~~obtaining~~and ~~approval~~is ~~from~~suitable orfor ~~completing~~industrial ~~the~~application. Invention ~~filing~~patents are valid for 20 years, while design patents and utility model patents are valid for 15 years and 10 years, respectively, ~~with~~each ~~relevant~~calculated ~~authorities~~from the date of application. ~~Pursuant~~To tobe ~~the~~patentable, ~~relevant~~invention ~~foreign~~or ~~exchange~~utility ~~laws~~models must meet three criteria: novelty, inventiveness and ~~regulations~~practicability. Except under certain specific circumstances provided by law, ~~such~~any ~~foreign~~third-party ~~exchange~~user ~~registration~~must ~~with~~obtain ~~the~~consent or a proper ~~banks~~license ~~will~~from ~~typically~~the ~~take~~patent ~~less~~owner ~~than~~to ~~four~~use ~~weeks~~the ~~upon~~patent. Otherwise, the ~~acceptance~~use constitutes an infringement of the ~~registration~~patent ~~application~~rights. As of the date of this Annual Report, we had five pending patent applications.

Based on the foregoing, if we intend to provide funding to our wholly foreign-owned subsidiaries through capital injection at or after their establishment, we must register the establishment of and any follow-on capital increase in our wholly foreign-owned subsidiaries with the State Administration for Market Regulation or its local counterparts, file such via the enterprise registration system, and register such with the local banks for the foreign exchange related matters.18

17Regulations on Foreign Exchange

~~Regulations~~General Administration onof ~~Offshore~~Foreign ~~Financing~~Exchange

Under ~~the~~ ~~Circular of~~ the ~~SAFE~~PRC ~~on Issues Concerning the~~ Foreign ~~Exchange~~ Currency Administration ~~over~~Rules ~~the~~promulgated ~~Overseas~~on ~~Investment~~January ~~and~~29, ~~Financing~~1996 and ~~Round-Trip Investment~~most byrecently ~~Domestic~~amended ~~Residents via Special Purpose Vehicles, or SAFE Circular 37, effective~~ on ~~July~~August 45, ~~2014,~~2008 ~~Mainland~~and ~~China~~various ~~residents are~~regulations ~~required~~issued toby ~~register with~~ the ~~local~~ SAFE, ~~branch~~and ~~prior~~other torelevant ~~the~~PRC ~~establishment~~government ~~or control of an offshore special purpose vehicle~~authorities, ~~which~~ Renminbi is ~~defined~~convertible asinto another ~~offshore~~currencies ~~enterprise directly established or indirectly controlled by Mainland China residents~~ for ~~investment~~current ~~and~~account ~~financing purposes~~items, ~~with~~such ~~the~~as trade-related ~~enterprise~~receipts ~~assets~~and orpayments ~~interests~~and ~~Mainland~~payment ~~China~~of ~~residents~~interest ~~hold~~and ~~in Mainland China or overseas~~dividends. The ~~term~~conversion ~~“control” means~~of toRenminbi ~~obtain~~into ~~the~~other ~~operation~~currencies ~~rights,~~and ~~right to proceeds, or decision-making power~~ remittance of athe ~~special~~converted ~~purpose~~foreign ~~vehicle~~currency ~~through~~outside ~~acquisition,~~Mainland ~~trust, holding~~China ~~shares~~for oncapital ~~behalf~~account ~~of others~~items, ~~voting~~such ~~rights,~~as ~~repurchase,~~direct ~~convertible~~equity ~~bonds~~investments, ~~or other means. At the same time~~loans, ~~the~~and ~~SAFE has issued~~repatriation ~~the~~of ~~Operation~~investment, ~~Guidance~~requires ~~for~~ the ~~Issues~~prior ~~Concerning~~approval ~~Foreign~~from ~~Exchange Administration over Round-Trip Investment regarding~~ the ~~procedures for~~ SAFE ~~registration~~or ~~under~~its ~~SAFE~~local ~~Circular 37, which became effective on July 4, 2014 as an attachment of SAFE Circular 37~~office.

~~The Mainland~~Payments ~~China~~for ~~residents~~transactions that ~~are~~take ~~also~~place ~~required~~in toMainland ~~amend~~China ~~the~~must ~~registration~~be ormade ~~filing~~in ~~with~~Renminbi. ~~the~~Unless ~~local~~otherwise ~~SAFE~~approved, ~~branch~~Mainland ~~any~~China ~~material~~companies ~~change~~may innot ~~the~~repatriate foreign ~~offshore~~currency ~~company,~~payments ~~such~~received asfrom ~~any~~abroad ~~change~~or ofretain ~~basic~~the ~~information~~same ~~(including~~abroad. ~~change~~FIEs ofmay ~~such~~retain ~~Mainland~~foreign ~~China~~exchange ~~residents,~~in ~~name~~accounts ~~and~~with ~~operation~~designated ~~term),~~foreign ~~increase~~exchange orbanks ~~decreases~~under inthe ~~investment~~current ~~amount,~~account ~~transfers~~items orsubject ~~exchanges~~to ofa ~~shares,~~cap orset ~~merger~~by orthe ~~divisions. On February 28, 2015,~~ SAFE ~~promulgated the~~or ~~Notice~~its onlocal ~~Further~~branch. ~~Simplifying~~Foreign ~~and~~exchange ~~Improving~~proceeds ~~Foreign~~under ~~Exchange~~the current ~~Administration~~accounts ~~Policy~~may onbe ~~Direct~~either ~~Investment,~~retained or ~~SAFE~~sold ~~Notice~~to ~~13,~~a ~~which became~~financial ~~effective~~institution onengaged ~~June~~in 1,settlement ~~2015.~~and ~~Pursuant~~sale ~~to SAFE Notice 13, instead~~ of ~~applying for approvals regarding~~ foreign exchange ~~registrations~~pursuant ofto ~~foreign~~relevant ~~direct~~SAFE ~~investment~~rules and ~~overseas~~regulations. ~~direct~~For ~~investment~~foreign ~~from~~exchange ~~SAFE~~proceeds ~~as required~~ under ~~current~~the ~~laws~~capital accounts, ~~entities~~approval ~~and~~from ~~individuals~~the ~~will~~SAFE beis generally required ~~to apply~~ for ~~such foreign exchange registrations, including those required under~~ the ~~SAFE~~retention ~~Circular~~or ~~37,~~sale ~~from~~of ~~qualified~~such ~~banks. The~~proceeds ~~qualified~~to ~~banks,~~a ~~under~~financial ~~the~~institution ~~supervision~~engaged ofin ~~SAFE,~~settlement ~~will directly examine the applications~~ and ~~conduct~~sale ~~the~~of ~~registration~~foreign exchange.

~~Failure~~ Pursuant to ~~comply with~~ the ~~registration~~Circular ~~procedures set forth in~~ of the SAFE ~~Circular 37, or making misrepresentation~~ on orNotice ~~failure~~of toState ~~disclose~~Administration ~~controllers~~ of ~~foreign-invested~~Foreign ~~enterprise~~Exchange ~~that~~on isFurther ~~established~~Improvements ~~through~~and ~~round-trip~~Adjustments ~~investment,~~to ~~may~~Foreign ~~result~~Exchange inControl ~~restrictions~~Policies for ~~being~~Direct ~~imposed~~Investment, onwhich ~~the~~was ~~foreign exchange~~promulgated ~~activities~~on ofNovember ~~the~~19, ~~relevant onshore company~~2012, ~~including~~became ~~the~~effective ~~increase~~on ofDecember ~~its~~17, ~~registered capital~~2012, ~~the~~and ~~payment~~was offurther ~~dividends~~amended ~~and~~on ~~other~~May ~~distributions~~4, to2015, ~~its~~October ~~offshore~~10, ~~parent~~2018, ~~or affiliate~~ and ~~the~~December ~~capital~~30, ~~inflow from the offshore entities~~2019, ~~and~~approval ~~may~~of ~~also~~the ~~subject~~SAFE ~~relevant~~is ~~Mainland China~~not ~~residents~~required tofor ~~penalties~~opening ~~under~~a ~~Mainland China~~ foreign exchange ~~administration~~account ~~regulations.~~and ~~Mainland China residents who directly~~depositing orforeign ~~indirectly~~exchange ~~hold~~into ~~any~~the ~~shares~~accounts inrelating ~~our company from time~~ to ~~time~~the ~~are~~direct ~~required to register with SAFE in connection with their~~ investments ~~in us~~. WeThis ~~have~~circular ~~requested~~also ~~Mainland~~simplifies ~~China~~foreign ~~residents~~exchange-related ~~holding~~registration required ~~direct~~for orforeign ~~indirect~~investors ~~interest in our company~~ to ~~our~~acquire ~~knowledge~~equity tointerests ~~make~~of ~~the~~PRC ~~necessary applications,~~companies ~~filings~~ and ~~amendments~~further asimprove ~~required under~~ the ~~SAFE~~administration ~~Circular~~on 37foreign ~~and~~exchange settlement ~~other~~for ~~related rules~~FIEs.

As The Notice of the ~~date~~State Administration of ~~this~~Foreign ~~Annual~~Exchange ~~Report,~~on Further Simplifying and Improving the ~~Mainland~~Foreign ~~China~~Exchange ~~residents~~Management ~~have~~Policies ~~either~~for ~~not~~Direct ~~completed~~Investment, or ~~have~~SAFE ~~not~~Circular 13, ~~applied~~which ~~for~~became effective on June 1, ~~foreign~~2015 ~~exchange registration~~and ~~under~~was amended on December 30, 2019, cancels the ~~SAFE~~administrative ~~Circular~~approvals 37of ~~and~~foreign ~~other~~exchange registration ~~related~~of ~~rules.~~direct ~~Although~~domestic ~~they~~investment ~~are~~and ~~either~~direct inoverseas investment and simplifies the ~~process~~procedure of ~~making~~ foreign exchange-related registration. orPursuant ~~plan~~ to ~~make~~SAFE ~~foreign~~Circular ~~exchange registrations~~13, ~~they~~investors ~~may~~should ~~still~~register ~~be faced~~ with ~~the~~banks ~~above~~for ~~possible~~direct ~~fines~~domestic ininvestment ~~accordance~~and ~~with~~direct ~~the~~overseas ~~PRC Laws~~investment.

~~Regulations~~The Notice of the State Administration of Foreign Exchange on ~~Dividend~~Reforming ~~Distribution~~the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, which was promulgated on March 30, 2015, became effective on June 1, 2015, and was amended on December 30, 2019, provides that an FIE may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account). Pursuant to this circular, for the time being, FIEs are allowed to settle 100% of their foreign exchange capital on a discretionary basis; an FIE should truthfully use its capital for its own operational purposes within the scope of its business; where an ordinary FIE makes domestic equity investment with the amount of foreign exchanges settled, the FIE must first go through domestic re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange administration or the bank at the place where it is registered.

The ~~principal~~ ~~laws~~Notice ~~and~~of ~~regulations regulating~~ the ~~distribution~~State Administration of ~~dividends~~Foreign byExchange ~~FIEs~~on inPolicies ~~Mainland~~for ~~China~~Reforming ~~include~~and Regulating the ~~PRC~~Control ~~Company~~over ~~Law,~~Foreign asExchange ~~amended in~~Settlement ~~2004,~~under ~~2005,~~the ~~2013,~~Capital ~~and 2018~~Account, ~~and~~which was ~~the~~promulgated ~~2019 PRC Foreign Investment Law~~ and ~~its~~became ~~Implementation~~effective ~~Rules.~~on ~~Under~~June ~~the~~9, ~~current~~2016, ~~regulatory~~provides ~~regime in~~that ~~Mainland~~enterprises ~~China,~~registered ~~FIEs~~ in Mainland China may ~~pay~~also ~~dividends~~convert ~~only out of~~ their ~~retained~~foreign debts ~~earnings,~~from ifforeign ~~any,~~currency ~~determined~~into inRenminbi ~~accordance~~on ~~with Mainland~~a ~~China~~self-discretionary ~~accounting standards and regulations~~basis. AThis ~~Mainland~~circular ~~China~~also ~~company~~provides isan ~~required~~integrated tostandard ~~set~~for ~~aside as statutory reserve funds at~~conversion ~~least 10%~~ of ~~its~~foreign ~~after-tax~~exchange ~~profit,~~under ~~until~~capital ~~the~~account ~~cumulative~~items ~~amount~~(including, ofbut ~~such~~not ~~reserve~~limited ~~funds~~to, ~~reaches~~foreign ~~50%~~currency ~~of its registered~~ capital ~~unless~~and ~~laws regarding~~ foreign ~~investment~~debts) ~~provide~~on ~~otherwise.~~a ~~A Mainland China company cannot distribute any profits until any losses from prior fiscal~~self-discretionary ~~years~~basis, ~~have~~which ~~been~~applies ~~offset.~~to ~~Profits~~all ~~retained~~enterprises ~~from~~registered ~~prior~~in ~~fiscal~~Mainland ~~years may be distributed together with distributable profits from the current fiscal year~~China.

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our common stock as a source for any future dividend income.19

~~Regulations~~On January 26, 2017, SAFE promulgated the Notice of State Administration of Foreign Exchange on ~~M&A~~Improving the Check of Authenticity and ~~Overseas~~Compliance ~~Listing~~to further Promote Foreign Exchange Control, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including: (i) banks should check board resolutions regarding profit distribution, the original version of tax filing records, and audited financial statements pursuant to the principle of genuine transactions; and (ii) domestic entities should hold income to account for previous years’ losses before remitting the profits. Moreover, pursuant to this circular, domestic entities should make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts, and other proof when completing the registration procedures in connection with an outbound investment.

~~In August~~On ~~2006~~October 25, ~~six~~2019, ~~PRC~~the ~~governmental~~SAFE promulgated ~~agencies~~the ~~jointly~~Notice ~~promulgated~~of the ~~Provisions~~State onAdministration of Foreign~~-funded~~ ~~Mergers~~Exchange ~~and~~on ~~Acquisitions~~Further ofPromoting ~~Domestic Enterprises, or~~ the ~~M&A~~Facilitation ~~Rule,~~of asCross-border ~~most~~Trade ~~recently~~and Investment, ~~amended~~which, inamong ~~2009.~~other ~~The~~things, ~~M&A~~allows ~~Rule~~all ~~requires~~FIEs ~~offshore~~to ~~special~~use ~~purpose~~Renminbi ~~vehicles~~converted ~~formed to~~from ~~pursue~~foreign ~~overseas~~currency-denominated ~~listing~~capital offor equity investments ~~interests~~ in Mainland China, ~~companies~~as ~~and~~long ~~controlled~~as ~~directly~~the orequity ~~indirectly~~investment byis ~~Mainland~~genuine, ~~China~~does ~~companies or~~not ~~individuals~~violate toapplicable ~~obtain~~laws, ~~the~~and ~~approval~~complies ofwith the ~~China~~negative list ~~Securities~~on ~~Regulatory~~foreign ~~Commission~~investment. ~~(“CSRC”)~~However, ~~prior~~since tothis ~~the~~circular ~~listing~~is ~~and~~newly ~~trading of~~promulgated, ~~such~~it ~~special~~is ~~purpose~~unclear ~~vehicle’s~~how ~~securities~~the onSAFE ~~any~~and ~~stock~~competent ~~exchange~~banks ~~overseas~~will carry it out in practice.

18According to the Regulations of the PRC on Administration of Company Registration, which were promulgated by the State Council on June 24, 1994, became effective on July 1, 1994, and were amended on February 6, 2016, and other laws and regulations governing FIEs and company registrations, the establishment of an FIE and any capital increase and other major changes in an FIE should be registered with the State Administration for Market Regulation or its local counterparts and filed via the enterprise registration system.

~~The~~Pursuant to SAFE Circular ~~M&A~~13 ~~Rule~~and ~~further~~other ~~requires~~laws ~~that~~and ~~the~~regulations ~~Ministry~~relating ofto ~~Commerce~~foreign exchange, orwhen ~~MOFCOM,~~setting beup ~~notified~~a innew ~~advance~~FIE, ofthe ~~any~~enterprise ~~change-of-control~~should ~~transaction~~register inwith the bank ~~which~~located aat ~~foreign~~its ~~investor~~registered ~~acquires~~place ~~control~~after ofobtaining athe ~~Mainland~~business ~~China~~license, ~~domestic~~and ~~enterprise~~if orthere ais ~~foreign~~any ~~company~~change ~~with~~in ~~substantial~~capital ~~Mainland~~or ~~China~~other changes relating ~~operations,~~to ifthe ~~certain~~basic ~~thresholds~~information ~~under~~of the ~~Provisions~~FIE, onincluding, ~~Thresholds~~without ~~for~~limitation, ~~Prior~~any ~~Notification~~increase ofin ~~Concentrations~~its ofregistered ~~Undertakings~~capital or total investment, ~~issued~~the FIE bymust register such changes with the ~~State~~bank ~~Council,~~located ~~are~~at ~~triggered.~~its ~~Moreover,~~registered ~~the~~place ~~Anti-Monopoly~~after ~~Law~~obtaining ~~promulgated~~approval byfrom or completing the ~~Standing~~filing ~~Committee~~with ofrelevant authorities. Pursuant to the ~~NPC~~relevant ~~requires~~foreign ~~that~~exchange ~~transactions which~~laws ~~are~~and ~~deemed~~regulations, ~~concentrations~~such ~~and~~foreign ~~involve~~exchange ~~parties~~registration with ~~specified~~the ~~turnover~~banks ~~thresholds~~will betypically take ~~cleared~~less bythan ~~the~~four ~~MOFCOM~~weeks ~~before~~upon ~~they~~the ~~can~~acceptance beof ~~completed~~the registration application.

~~On February~~Based ~~17,~~on ~~2023, with~~ the ~~approval of the State Council~~foregoing, ~~the CSRC released the Trial Administrative Measures of Overseas Securities~~if ~~Offering~~we ~~and~~intend ~~Listing~~to byprovide ~~Domestic~~funding ~~Companies, or the Trial Administrative Measures, and five supporting guidelines, which came into effect on March 31, 2023. According~~ to ~~the~~our ~~Trial~~wholly ~~Administrative~~foreign-owned ~~Measures,~~subsidiaries ~~(1)~~through ~~domestic~~capital ~~companies~~injection ~~that~~at ~~seek to offer~~ or ~~list~~after ~~securities~~their ~~overseas~~establishment, ~~both~~ ~~directly~~we ~~and~~must register ~~indirectly, should fulfill~~ the ~~filing~~establishment ~~procedure and report relevant information to the CSRC; (2) if the issuer meets both~~ of ~~the following conditions, the overseas offering~~ and ~~listing shall be determined as an indirect overseas offering and listing by a domestic company: (i)~~ any offollow-on ~~the~~capital ~~total~~increase ~~assets, net assets, revenues or profits of the domestic operating entities of the issuer~~ in ~~the~~our ~~most~~wholly ~~recent~~foreign-owned ~~accounting~~subsidiaries ~~year~~with ~~accounts for more than 50% of~~ the ~~corresponding~~State ~~figure in the issuer’s audited consolidated~~Administration ~~financial statements~~ for ~~the~~Market ~~same~~Regulation ~~period; (ii) its major operational activities are carried out in Mainland China~~ or its ~~main~~local ~~places of business are located in Mainland China~~counterparts, orfile ~~the~~such ~~senior~~via ~~managers in charge of operation and management of~~ the ~~issuer~~enterprise ~~are~~registration ~~mostly Chinese citizens or are domiciled in Mainland China; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market~~system, ~~the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC,~~ and ~~where~~register ~~an issuer makes an application for initial public offering and listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after~~ such ~~application is submitted. According to the relevant provisions of the Trial Administrative Measures and its supporting guidelines, the Company is required to fulfill the filing procedures~~ with the ~~CSRC~~local ~~within three days of the closing~~banks of the Offering. According to the Trial Administrative Measures, the Company has submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the Company’s lead underwriter for the ~~Offering,~~foreign ~~and~~exchange ~~the Company~~related ~~withdrew the filing from the CSRC~~matters. The Company will submit the filing materials again when the materials are ready. However, given that the Trial Administrative Measures were recently promulgated, there remain substantial uncertainties as to their interpretation, application, and enforcement and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion that we and our PRC counsel have reached. If the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measures or make a misrepresentation, misleading statement or material omission in the materials we submit to the CSRC, the CSRC would have the right to order rectification, issue a warning and impose a fine on us of between RMB 1 million and RMB 10 million and issuing a warning to the parties responsible for such failure, misrepresentation or material omission and impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 million.

OnRegulations ~~February 17, 2023, the CSRC held a press conference for the release of the Trial Administrative Measures and issued the Notice~~ on ~~Administration~~Offshore for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Trial Administrative Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges, such as completion of registration in the market of the United States, but have not completed the indirect overseas listing; and (2) domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges on or prior to the effective date of the Trial Administrative Measures, may reasonably arrange the timing for submitting their filing applications with the CSRC, and shall complete the filing before the completion of their overseas offering and listing.Financing

~~Regulations~~Under the Circular of the SAFE on ~~Taxation~~Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-Trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, effective on July 4, 2014, Mainland China residents are required to register with the local SAFE branch prior to the establishment or control of an offshore special purpose vehicle, which is defined as an offshore enterprise directly established or indirectly controlled by Mainland China residents for investment and financing purposes, with the enterprise assets or interests Mainland China residents hold in Mainland China or overseas. The term “control” means to obtain the operation rights, right to proceeds, or decision-making power of a special purpose vehicle through acquisition, trust, holding shares on behalf of others, voting rights, repurchase, convertible bonds, or other means. At the same time, the SAFE has issued the Operation Guidance for the Issues Concerning Foreign Exchange Administration over Round-Trip Investment regarding the procedures for SAFE registration under SAFE Circular 37, which became effective on July 4, 2014 as an attachment of SAFE Circular 37.

~~Enterprise Income Tax~~20

~~On March~~The ~~16,~~Mainland ~~2007,~~China ~~the~~residents are ~~National~~also ~~People’s~~required ~~Congress~~to ~~promulgated~~amend the ~~PRC~~registration ~~Enterprise~~or ~~Income~~filing ~~Tax~~with ~~Law,~~the ~~which~~local ~~was~~SAFE ~~amended~~branch onany ~~February~~material ~~24, 2017~~change ~~and~~in ~~December~~the ~~29,~~offshore ~~2018. On December 6~~company, ~~2007,~~such ~~the~~as any ~~State~~change ~~Council~~of ~~enacted~~basic ~~the~~information ~~Regulations~~(including ~~for~~change ~~the Implementation~~ of ~~the~~such ~~Enterprise~~Mainland ~~Income Tax~~China ~~Law~~residents, ~~which~~name ~~became effective on January 1, 2008~~ and ~~amended~~operation ~~on April 23~~term), ~~2019.~~increase ~~Under~~or ~~the~~decreases ~~Enterprise Income Tax Law and the relevant~~in ~~implementation~~investment ~~regulations~~amount, ~~both~~transfers ~~resident~~or ~~enterprises~~exchanges ~~and~~of ~~non-resident enterprises are subject to tax in Mainland China. Resident enterprises are defined as enterprises that are established in Mainland China in accordance with PRC laws~~shares, or ~~that~~merger ~~are established in accordance with the laws of foreign countries but are actually~~ or ~~in effect controlled from within Mainland China~~divisions. ~~Non-resident~~On ~~enterprises~~February ~~are defined~~28, as2015, ~~enterprises~~SAFE ~~that~~promulgated ~~are organized under~~ the ~~laws~~Notice ofon ~~foreign~~Further Simplifying ~~countries~~ and ~~whose~~Improving ~~actual~~Foreign ~~management~~Exchange isAdministration ~~conducted~~Policy ~~outside~~on ~~Mainland China~~Direct Investment, ~~but have established institutions~~ or ~~premises~~SAFE inNotice ~~Mainland China~~13, orwhich ~~have~~became noeffective ~~such~~on ~~established institutions or premises but have~~June ~~income~~1, ~~generated from inside Mainland China~~2015. ~~Under~~Pursuant ~~the~~to ~~Enterprise~~SAFE ~~Income~~Notice ~~Tax Law and relevant implementing regulations~~13, ainstead ~~uniform corporate income tax rate~~ of ~~25%~~applying isfor ~~applied.~~approvals ~~However,~~regarding ifforeign ~~non-resident~~exchange ~~enterprises~~registrations ~~have~~of ~~not~~foreign ~~formed~~direct ~~permanent establishments or premises in Mainland~~investment ~~China,~~and oroverseas ifdirect ~~they~~investment ~~have~~from ~~formed~~SAFE ~~permanent~~as ~~establishment~~required orunder ~~premises~~current inlaws, ~~Mainland~~entities ~~China~~and ~~but~~individuals ~~there~~will isbe norequired ~~actual~~to ~~relationship~~apply ~~between~~for ~~the~~such ~~relevant~~foreign ~~income~~exchange ~~derived~~registrations, inincluding ~~Mainland~~those ~~China~~required ~~and~~under the ~~established~~SAFE ~~institutions~~Circular ~~or premises set up by them~~37, ~~enterprise~~from ~~income~~qualified ~~tax~~banks. isThe ~~set~~qualified atbanks, under the ~~rate~~supervision of ~~10%~~SAFE, ~~with~~will ~~respect~~directly toexamine ~~their~~the ~~income~~applications ~~sourced~~and ~~from~~conduct ~~inside~~the ~~Mainland China~~registration.

19Failure to comply with the registration procedures set forth in the SAFE 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 being imposed on the foreign exchange activities of the relevant onshore company, including the increase of its registered capital, the payment of dividends and other distributions to its offshore parent or affiliate and the capital inflow from the offshore entities, and may also subject relevant Mainland China residents to penalties under Mainland China foreign exchange administration regulations. Mainland China residents who directly or indirectly hold any shares in our company from time to time are required to register with SAFE in connection with their investments in us. We have requested Mainland China residents holding direct or indirect interest in our company to our knowledge to make the necessary applications, filings and amendments as required under the SAFE Circular 37 and other related rules.

~~Value-Added~~As of the date of this Annual ~~Tax~~Report, the Mainland China residents have either not completed, or have not applied for, foreign exchange registration under the SAFE Circular 37 and other related rules. Although they are either in the process of making foreign exchange registration or plan to make foreign exchange registrations, they may still be faced with the above possible fines in accordance with the PRC Laws.

~~The PRC Provisional~~ Regulations on ~~Value-Added~~Dividend Tax were promulgated by the State Council on December 13, 1993, which became effective on January 1, 1994 and were subsequently amended from time to time. The Detailed Rules for the Implementation of the PRC Provisional Regulations on Value-Added Tax (2011 Revision) was promulgated by the Ministry of Finance on December 25, 1993 and subsequently amended on December 15, 2008 and October 28, 2011. On November 19, 2017, the State Council promulgated the Decisions on Abolishing the PRC Provisional Regulations on Business Tax and Amending the PRC Provisional Regulations on Value-Added Tax. Pursuant to these regulations, rules and decisions, all enterprises and individuals engaged in sale of goods, provision of processing, repair, and replacement services, sales of services, intangible assets, real property, and the importation of goods within Mainland China territory are VAT taxpayers. On March 21, 2019, the Ministry of Finance, the SAT, and the General Administration of Customs jointly issued the Announcement on Relevant Policies on Deepen the Reform of Value-Added Tax. Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17%, starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%.Distribution

~~Dividend~~The principal laws and regulations ~~Withholding~~regulating ~~Tax~~the distribution of dividends by FIEs in Mainland China include the PRC Company Law, as amended in 2004, 2005, 2013, and 2018, and the 2019 PRC Foreign Investment Law and its Implementation Rules. Under the current regulatory regime in Mainland China, FIEs in Mainland China may pay dividends only out of their retained earnings, if any, determined in accordance with Mainland China accounting standards and regulations. A Mainland China company is required to set aside as statutory reserve funds at least 10% of its after-tax profit, until the cumulative amount of such reserve funds reaches 50% of its registered capital unless laws regarding foreign investment provide otherwise. A Mainland China company cannot distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

~~The Enterprise~~We ~~Income~~currently ~~Tax~~intend ~~Law~~to ~~provides~~retain most, ~~that~~if ~~since~~not ~~January 1~~all, ~~2008, an income tax rate~~ of ~~10%~~our ~~will~~available ~~normally~~funds beand ~~applicable~~any tofuture ~~dividends~~earnings ~~declared~~ to ~~non-Mainland~~fund ~~China~~the ~~resident~~development ~~investors~~and ~~that~~growth ~~do not have an establishment or place~~ of our business. inAs ~~Mainland~~a ~~China~~result, orwe ~~that~~do not ~~have~~expect ~~such establishment~~to orpay ~~place~~any ofcash ~~business~~dividends ~~but~~in the ~~relevant~~foreseeable ~~income~~future. isTherefore, you should not ~~effectively~~rely ~~connected~~on ~~with~~an ~~the~~investment ~~establishment~~in orour ~~place~~common ofstock ~~business,~~as toa ~~the~~source ~~extent~~for ~~such~~any ~~dividends~~future ~~are~~dividend ~~derived from sources within Mainland China~~income.

~~Pursuant to~~Regulations ~~the Arrangement Between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes~~ on ~~Income~~M&A and ~~Capital,~~Overseas and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent Mainland China tax authority to have met the relevant conditions and requirements under this 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%. However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009, if the relevant Mainland China tax authorities determine, in their discretions, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such Mainland China tax authorities may adjust the preferential tax treatment. Pursuant to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the SAT and became effective on April 1, 2018, when determining the applicant’s status as the “beneficial owner” regarding tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors, including, without limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant any tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and such factors will be analyzed according to the actual circumstances of the specific cases. This circular further provides that an applicant who intends to prove his or her status as the “beneficial owner” must submit the relevant documents to the relevant tax bureau pursuant to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements.Listing

20In August 2006, six PRC governmental agencies jointly promulgated the Provisions on Foreign-funded Mergers and Acquisitions of Domestic Enterprises, or the M&A Rule, as most recently amended in 2009. The M&A Rule requires offshore special purpose vehicles formed to pursue overseas listing of equity interests in Mainland China companies and controlled directly or indirectly by Mainland China companies or individuals to obtain the approval of the China Securities Regulatory Commission (“CSRC”) prior to the listing and trading of such special purpose vehicle’s securities on any stock exchange overseas.

~~Regulations~~The M&A Rule further requires that the Ministry of Commerce, or MOFCOM, be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a Mainland China domestic enterprise or a foreign company with substantial Mainland China operations, if certain thresholds under the Provisions on ~~Employment~~Thresholds ~~Laws~~for Prior Notification of Concentrations of Undertakings, issued by the State Council, are triggered. Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the NPC requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds be cleared by the MOFCOM before they can be completed.

In accordance with the PRC National Labor Law, which became effective in January 1995 and amended from time to time, and the PRC Labor Contract Law, which became effective in January 2008, as amended subsequently, employers must execute written labor contracts with full-time employees in order to establish an employment relationship. 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, employers in Mainland China are obliged to pay contributions to the social insurance plan and the housing fund plan for employees.21

On ~~December~~ 28February 17, ~~2021~~2023, with the approval of the State Council, the CSRC released the Trial Administrative Measures ~~for~~of ~~Cybersecurity~~Overseas ~~Review~~Securities ~~(2021~~Offering ~~version)~~and ~~were~~Listing ~~promulgated~~by Domestic Companies, or the Trial Administrative Measures, and ~~became~~five ~~effective~~supporting guidelines, which came into effect on ~~February~~March 1531, ~~2022~~2023. ~~(the~~According “to the Trial Administrative Measures”), ~~which~~(1) ~~iterates~~domestic companies that ~~any~~seek ~~“online~~to ~~platform~~offer ~~operators”~~or ~~controlling~~list ~~personal~~securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC; (2) if the issuer meets both of ~~more~~the ~~than~~following conditions, ~~one~~the ~~million~~overseas ~~users~~offering ~~that~~and ~~seeks~~listing toshall ~~list~~be ondetermined as an indirect overseas offering and listing by a ~~foreign~~domestic ~~stock~~company: ~~exchange~~(i) ~~shall~~any ~~also~~of bethe total ~~subject~~assets, tonet ~~cybersecurity~~assets, ~~review.~~revenues Asor weprofits ~~are~~of ~~neither~~the andomestic operating entities of the issuer in the most recent accounting year accounts ~~“operator~~for more than 50% of ~~critical~~the ~~information~~corresponding ~~infrastructure”~~figure ~~nor~~in athe ~~“data~~issuer’s ~~processor”~~audited ~~carrying~~consolidated ~~out~~financial ~~data~~statements ~~processing~~for ~~activities~~the same period; (ii) ~~that~~its ~~affect~~major operational activities are carried out in Mainland China or ~~may~~its ~~affect~~main ~~national~~places ~~security~~of business are located in Mainland China, weor ~~believe~~the senior ~~that~~managers in charge of operation and management of the ~~Measures~~issuer are ~~not~~mostly ~~applicable~~Chinese citizens or are domiciled in Mainland China; and (3) where a domestic company seeks to usindirectly ~~even~~offer ~~after~~and ~~they~~list ~~take~~securities ~~effect~~in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for initial public offering and listing in ~~current~~an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is ~~form~~submitted. ~~The~~According ~~PRC~~to ~~government~~the isrelevant ~~increasingly~~provisions ~~focused~~of onthe ~~data~~Trial ~~security~~Administrative Measures and its supporting guidelines, ~~recently~~the ~~launching~~Company ~~cybersecurity~~is ~~review~~required to ~~against~~fulfill athe ~~number~~filing procedures with the CSRC within three days of ~~mobile~~the closing of the 2024 Uplisting Offering. According to the Trial ~~apps~~Administrative ~~operated~~Measures, bythe ~~several~~Company ~~US-listed~~has ~~Chinese~~submitted ~~companies~~the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the Company’s lead underwriter for the 2024 Uplisting Offering, and ~~prohibiting~~the ~~these~~Company ~~apps~~withdrew the filing from the ~~registering~~CSRC. ~~new~~The ~~users~~Company ~~during~~will submit the ~~review~~filing ~~period~~materials again when the materials are ready. However, given that the Trial Administrative ~~There~~Measures ~~are~~were ~~great~~recently promulgated, there remain substantial uncertainties ~~regarding~~as ~~the~~to their interpretation, application, and enforcement ofand there is no guarantee that the relevant PRC ~~laws~~government agencies, ~~rules~~including ~~and~~the ~~regulations~~CSRC, ~~regarding~~would ~~data~~reach the same conclusion that we and ~~privacy~~our PRC ~~security~~counsel have reached. WeIf ~~may~~the beCSRC ~~required~~has determined that we have failed to ~~change~~comply ~~our~~with ~~data~~the ~~and~~post-offering ~~other~~filing ~~business~~obligations ~~practices~~imposed ~~and~~by bethe Trial ~~subject~~Administrative toMeasures ~~regulatory~~or ~~investigations,~~make ~~penalties~~a misrepresentation, misleading statement or material omission in the materials we submit to the CSRC, the CSRC would have the right to order rectification, issue a warning and ~~increased~~impose ~~cost~~a fine on us of ~~operations~~between asRMB 1 million and RMB 10 million and issuing a ~~result~~warning ofto ~~these~~the ~~laws~~parties responsible for such failure, misrepresentation or material omission and ~~policies~~impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 million.

~~Employees~~On February 17, 2023, the CSRC held a press conference for the release of the Trial Administrative Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Trial Administrative Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges, such as completion of registration in the market of the United States, but have not completed the indirect overseas listing; and (2) domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges on or prior to the effective date of the Trial Administrative Measures, may reasonably arrange the timing for submitting their filing applications with the CSRC, and shall complete the filing before the completion of their overseas offering and listing.

~~As of~~Regulations ~~the~~on ~~date of this Annual Report, we had 131 employees. We have no part time employees or independent contractors.~~Taxation

~~As required~~Enterprise byIncome regulations in China, Sichuan Vtouch participates in various employee social security plans that are organized by local governments, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance. Sichuan Vtouch is required under Chinese law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time.Tax

~~Our~~On March 16, 2007, the National ~~employees~~People’s Congress promulgated the PRC Enterprise Income Tax Law, which was amended on February 24, 2017 and December 29, 2018. On December 6, 2007, the State Council enacted the Regulations for the Implementation of the Enterprise Income Tax Law, which became effective on January 1, 2008 and amended on April 23, 2019. Under the Enterprise Income Tax Law and the relevant implementation regulations, both resident enterprises and non-resident enterprises are ~~not~~subject ~~represented~~to bytax ain ~~labor~~Mainland ~~organization~~China. Resident enterprises are defined as enterprises that are established in Mainland China in accordance with PRC laws, or ~~covered~~that byare aestablished ~~collective~~in ~~bargaining~~accordance ~~agreement~~with the laws of foreign countries but are actually or in effect controlled from within Mainland China. WeNon-resident ~~believe~~enterprises are defined as enterprises that weare ~~maintain~~organized under athe laws of foreign countries and whose actual management is conducted outside Mainland China, but have established institutions ~~good~~or ~~working~~premises ~~relationship~~in ~~with~~Mainland ~~our~~China, ~~employees~~or have no such established institutions or premises but have income generated from inside Mainland China. Under the Enterprise Income Tax Law and torelevant ~~date~~implementing regulations, wea uniform corporate income tax rate of 25% is applied. However, if non-resident enterprises have not ~~experienced~~formed ~~any~~permanent ~~significant~~establishments ~~labor~~or ~~disputes~~premises in Mainland China, or if they have formed permanent establishment or premises in Mainland China but there is no actual relationship between the relevant income derived in Mainland China and the established institutions or premises set up by them, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside Mainland China.

2122

~~ITEM~~Value-Added ~~1A. RISK FACTORS~~Tax

~~Investing~~The PRC Provisional Regulations inon ~~our~~Value-Added ~~securities~~Tax ~~involves~~were apromulgated ~~high~~by ~~degree~~the ofState ~~risk.~~Council ~~You~~on ~~should~~December ~~carefully~~13, ~~consider~~1993, ~~the~~which ~~risks~~became ~~and~~effective ~~uncertainties~~on ~~described~~January ~~below~~1, ~~together~~1994 and were subsequently ~~with~~amended ~~all~~from time to time. The Detailed Rules for the Implementation of the ~~other~~PRC ~~information~~Provisional ~~contained~~Regulations inon ~~this~~Value-Added ~~Annual~~Tax ~~Report~~(2011 Revision) was promulgated by the Ministry of Finance on December 25, ~~before~~1993 ~~deciding~~and tosubsequently ~~invest~~amended inon ~~our~~December ~~securities~~15, 2008 and October 28, 2011. IfOn November ~~any~~19, of2017, the ~~following~~State Council promulgated the Decisions on Abolishing the PRC Provisional Regulations on Business Tax and Amending ~~risks~~the ~~materialize~~PRC Provisional Regulations on Value-Added Tax. Pursuant to these regulations, ~~our~~rules ~~business~~and decisions, ~~financial~~all ~~condition~~enterprises and individuals engaged in sale of goods, ~~results~~provision of ~~operation~~processing, repair, and ~~prospects~~replacement ~~will~~services, ~~likely~~sales beof ~~materially~~services, intangible assets, real property, and ~~adversely~~the ~~affected~~importation of goods within Mainland China territory are VAT taxpayers. In ~~that~~On ~~event~~March 21, 2019, the ~~market~~Ministry ~~price~~of Finance, the SAT, and the General Administration of ~~our~~Customs ~~common~~jointly ~~stock~~issued ~~could~~the ~~decline~~Announcement on Relevant Policies on Deepen the Reform of Value-Added Tax. Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and ~~you~~VAT ~~could~~rates ~~lose~~range ~~all~~up orto ~~part~~17%, ofstarting from ~~your~~May ~~investment~~1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%.

~~Summary of~~Dividend ~~Risks Affecting Our Company~~Withholding Tax

The Enterprise Income Tax ~~following~~Law ~~summarizes~~provides ~~key~~that ~~risks~~since ~~and~~January ~~uncertainties~~1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-Mainland China resident investors that ~~could~~do ~~materially~~not ~~adversely~~have ~~affect~~an ~~us.~~establishment ~~You~~or ~~should~~place ~~read~~of ~~this~~business ~~summary~~in ~~together~~Mainland ~~with~~China, or that have such establishment or place of business but the ~~more~~relevant ~~detailed~~income ~~description~~is not effectively connected with the establishment or place of ~~each~~business, ~~risk~~to ~~factor~~the ~~contained~~extent ~~below~~such dividends are derived from sources within Mainland China.

~~Risks~~Pursuant to the Arrangement ~~Related~~Between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to ~~Our~~Taxes ~~Business~~on Income and ~~Industry~~Capital, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent Mainland China tax authority to have met the relevant conditions and requirements under this 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%. However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009, if the relevant Mainland China tax authorities determine, in their discretions, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such Mainland China tax authorities may adjust the preferential tax treatment. Pursuant to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the SAT and became effective on April 1, 2018, when determining the applicant’s status as the “beneficial owner” regarding tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors, including, without limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant any tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and such factors will be analyzed according to the actual circumstances of the specific cases. This circular further provides that an applicant who intends to prove his or her status as the “beneficial owner” must submit the relevant documents to the relevant tax bureau pursuant to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements.

● Weaknesses identified in our financial reporting during audits could impair our ability to accurately report financial results. ● Dependency on major customers presents risks if we cannot retain or attract new customers effectively. ● Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates. ● Failure to secure new land for facilities could severely impact our operations and financial health. ● We are subject to risks related to construction of our factory in Sichuan Province, China. ● The COVID-19 pandemic and other crises could disrupt operations and negatively affect our business, financial condition, and results. ● Economic recessions could have a significant adverse impact on our business. ● Intellectual property infringement claims could be costly and disrupt business operations. ● A significant amount of accounts receivable could become uncollectible, affecting financial stability. ● Cyclical industry dynamics could lead to harmful price fluctuations. ● Failure to maintain product quality and safety could damage our reputation and financial standing. ● Intense competition in the touchscreen display industry could reduce market share and profitability. ● Inadequate financing could restrict our ability to execute our business plan. ● Adjustments in related party transaction pricing could lead to significant tax liabilities. ● Revocation of tax treatments or government subsidies could necessitate paying additional taxes. ● Interruptions from third-party suppliers could disrupt operations. ● Fluctuations in the cost and availability of raw materials could negatively affect results. ● Dependency on key executives and the lack of long-term supplier contracts pose risks. ● Failure to adopt new technologies might affect competitiveness. ● Liability claims or adverse publicity could impact customer confidence and business results. ● Losses on inventories and lack of business insurance could expose us to significant costs.23

~~Risks Related~~Regulations toon ~~Doing~~Employment ~~Business in China~~Laws

●In ~~Regulatory~~accordance ~~changes~~with inthe ~~China~~PRC National ~~could~~Labor ~~increase~~Law, ~~compliance~~which ~~costs~~became ~~and~~effective ~~complicate~~in ~~capital~~January ~~raising.~~1995 ●and ~~The~~amended ~~HFCAA~~from ~~could~~time ~~lead~~ to ~~delisting~~time, ofand ~~our~~the ~~common~~PRC ~~stock~~Labor ifContract ~~audits~~Law, ~~are~~which ~~not~~became effective ~~inspected~~in ~~properly.~~January ●2008, Weas ~~may~~amended besubsequently, ~~subject~~employers tomust ~~substantial~~execute ~~fine~~written iflabor ~~the~~contracts ~~CSRC has determined that we have failed to comply~~ with ~~the post~~full-~~offering~~time ~~filing~~employees ~~obligations. ● Changes~~ in ~~U.S.-China~~order ~~trade~~to establish ~~policies~~an ~~could~~employment ~~adversely impact our business operations~~relationship. ●All ~~PRC~~employers ~~regulation~~must ofcompensate ~~loans~~their ~~and~~employees ~~currency~~equal ~~conversion~~to ~~could~~at ~~delay~~least orthe ~~prevent~~local ~~capital~~minimum ~~usage,~~wage ~~affecting liquidity~~standards. All ●employers ~~Labor~~are ~~laws~~required into ~~the~~establish ~~PRC~~a ~~might~~system ~~negatively~~for ~~impact~~labor ~~our~~safety ~~operational flexibility~~ and ~~financial~~sanitation, ~~results.~~strictly ●abide ~~Liabilities~~by ~~under~~state ~~the~~rules ~~Foreign~~and ~~Corrupt~~standards ~~Practices Act~~ and ~~Chinese~~provide employees ~~anti-corruption~~with ~~law~~appropriate ~~could~~workplace ~~lead~~safety ~~to penalties~~training. ●In ~~Bankruptcy~~addition, oremployers ~~liquidation of our PRC subsidiary could significantly disrupt operations. ● Economic and policy changes~~ in Mainland China ~~could~~are ~~limit~~obliged ~~our ability~~ to ~~offer~~pay ~~securities.~~contributions ●to ~~Uncertainties in~~ the social ~~PRC~~insurance ~~legal~~plan ~~system could limit legal protections. ● Difficulties in enforcing foreign judgments in China could undermine contractual protections. ● Government control of currency conversion~~ and ~~fluctuations~~the inhousing ~~exchange~~fund ~~rates~~plan ~~could~~for ~~impact financial results and investments~~employees. ~~● The Chinese government’s substantial influence over business operations could lead to significant operational changes.~~

~~Risks~~On ~~Related~~December 28, 2021, the Measures for Cybersecurity Review (2021 version) were promulgated and became effective on February 15, 2022 (the “Measures”), which iterates that any “online platform operators” controlling personal information of more than one million users that seeks to ~~Our~~list ~~Common~~on ~~Stock~~a foreign stock exchange shall also be subject to cybersecurity review. As we are neither an “operator of critical information infrastructure” nor a “data processor” carrying out data processing activities that affect or may affect national security, we believe that the Measures are not applicable to us even after they take effect in current form. The PRC government is increasingly focused on data security, recently launching cybersecurity review against a number of mobile apps operated by several US-listed Chinese companies and prohibiting these apps from registering new users during the review period. There are great uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations regarding data and privacy security. We may be required to change our data and other business practices and be subject to regulatory investigations, penalties, and increased cost of operations as a result of these laws and policies.

● Volatility in the price of our common stock may not reflect our operating performance. ● By-laws limiting the judicial forum for disputes could restrict stockholder litigation options. ● Manipulative short selling could drive down our stock price. ● Direct exposure to negative publicity involving U.S.-listed Chinese companies could harm our business and reputation. ● Large volumes of our common stock being sold could negatively affect the market price. ● Non-payment of dividends means stockholders must rely on stock price appreciation for returns. ● Deteriorating U.S.-China relations could lower our stock price and complicate access to capital markets.Employees

22As of the date of this Annual Report, we had 131 employees. We have no part time employees or independent contractors.

~~Risks~~As required by regulations ~~Related~~in China, Sichuan Vtouch participates in various employee social security plans that are organized by local governments, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance. Sichuan Vtouch is required under Chinese law to ~~Our~~make ~~Business~~contributions to employee benefit plans at specified percentages of the salaries, bonuses and ~~Industry~~certain allowances of our employees, up to a maximum amount specified by the local government from time to time.

~~The COVID-19~~Our ~~pandemic,~~employees asare ~~well~~not asrepresented by ~~other~~a ~~epidemics,~~labor ~~natural~~organization ~~disasters,~~or ~~terrorist~~covered ~~activities,~~by ~~political~~a ~~unrest,~~collective ~~and~~bargaining ~~other~~agreement. ~~outbreaks~~We ~~could~~believe ~~disrupt our~~that ~~delivery~~we ~~and~~maintain ~~operations,~~a ~~which~~good ~~could~~working ~~materially~~relationship ~~and~~with our ~~adversely~~employees ~~affect~~and ~~our~~to ~~business~~date, ~~financial~~we ~~condition,~~have ~~and~~not ~~results~~experienced ofany ~~operations~~ significant labor disputes.

COVID-19 has had a global economic impact on the financial markets. The global spread of COVID-19 pandemic may result in global economic distress, and the extent to which it may affect our results of operations will depend on future developments, which are highly uncertain and cannot be predicted. We cannot assure you that the COVID-19 pandemic can be eliminated or contained in the near future, or at all, or a similar outbreak will not occur again. If the COVID-19 pandemic and the resulting disruption to our business were to extend over a prolonged period, it could materially and adversely affect our business, financial condition, and results of operations. 24

~~In addition,~~ITEM global pandemics, epidemics in Mainland China or elsewhere in the world, or fear of spread of contagious diseases, such as Ebola virus disease (EVD), Middle East respiratory syndrome (MERS), severe acute respiratory syndrome (SARS), H1N1 flu, H7N9 flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could also disrupt our business operations, reduce or restrict our supply of products and services, incur significant costs to protect our employees and facilities, or result in regional or global economic distress, which may materially and adversely affect our business, financial condition, and results of operations1A. ~~Actual~~ orRISK threatened war, terrorist activities, political unrest, civil strife, and other geopolitical uncertainty could have a similar adverse effect on our business, financial condition, and results of operations. Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which could materially and adversely affect our business, financial condition, and results of operations.FACTORS

~~We are~~Investing ~~also~~in ~~vulnerable~~our tosecurities involves ~~natural~~a ~~disasters~~high ~~and~~degree ~~other~~of ~~calamities~~risk. WeYou ~~cannot~~should ~~assure~~carefully ~~you~~consider ~~that~~the werisks ~~are~~and ~~adequately~~uncertainties ~~protected~~described ~~from~~below, ~~the~~together ~~effects of~~with ~~fire,~~all ~~floods,~~of ~~typhoons,~~the ~~earthquakes,~~other information ~~power~~contained ~~loss,~~in ~~telecommunications~~this ~~failures,~~Annual ~~break-ins~~Report, ~~war,~~before ~~riots,~~deciding ~~terrorist~~to ~~attacks,~~invest orin ~~similar events~~our securities. ~~Any~~If any of the ~~foregoing~~following ~~events~~risks ~~may give rise to interruptions~~materialize, ~~damage to~~ our ~~property~~ business, ~~delays~~financial ~~in production~~condition, ~~breakdowns,~~results ~~system failures,~~of ~~technology~~operation ~~platform~~and ~~failures,~~prospects orwill ~~internet~~likely ~~failures,~~be ~~which~~materially ~~could~~and ~~cause~~adversely ~~the~~affected. ~~loss~~In orthat ~~corruption~~event, ofthe market ~~data~~price ~~or malfunctions~~ of our ~~manufacturing~~ ~~facility~~common asstock ~~well~~could asdecline, ~~adversely~~and ~~affect~~you ~~our~~could ~~business,~~lose ~~financial~~all ~~condition,~~or ~~and~~part ~~results~~ of ~~operations~~your investment.

23Summary of Risks Affecting Our Company

~~In connection~~The ~~with~~following ~~the~~summarizes ~~audits~~key risks ~~of our consolidated financial statements as of~~ and ~~for~~uncertainties ~~the~~that ~~years~~could ~~ended~~materially ~~December~~adversely ~~31,~~affect ~~2022 and 2023, we identified certain material weaknesses in our internal control over financial reporting~~us. IfYou weshould ~~fail~~read tothis ~~develop~~summary ~~and~~together ~~maintain~~with anthe ~~effective~~more ~~system~~detailed description of ~~internal~~each ~~control~~risk ~~over~~factor ~~financial~~contained ~~reporting, we may be unable to accurately report our financial results or prevent fraud~~below.

~~The SEC,~~Risks asRelated ~~required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company~~ to ~~include~~Our aBusiness ~~management report~~and ~~on such company’s internal controls over financial reporting, which contains management’s assessment of the effectiveness of internal controls over financial reporting.~~Industry

~~Our~~ ● Weaknesses identified in our financial reporting ~~obligations~~during asaudits acould ~~public~~impair ~~company~~our ~~place~~ability ato ~~significant~~accurately ~~strain~~report financial results. ● Dependency on ~~our~~major ~~management~~customers ~~and~~presents ~~operational~~risks ~~and~~if we cannot retain or attract new customers effectively. ● Our operating history may not be indicative of our future growth or financial ~~resources~~results and ~~systems. Effective~~we ~~internal~~may ~~controls,~~not ~~particularly~~be ~~those~~able ~~related~~to sustain our historical growth rates. ● Failure to ~~revenue~~secure ~~recognition,~~the ~~are~~certificate ~~necessary~~of land use right for usa tonew ~~produce~~parcel ~~reliable~~from ~~financial~~the ~~reports~~ local PRC government could severely impact our operations and financial health. ● We are ~~important~~subject to ~~prevent~~risks ~~fraud~~related to construction of our factory in Sichuan Province, China. As● Economic recessions could have a ~~result,~~significant adverse impact on our ~~failure~~business. to● ~~achieve~~Intellectual property infringement claims could be costly and ~~maintain~~disrupt ~~effective~~business ~~internal~~operations. ~~controls~~● ~~over~~A significant amount of accounts receivable could become uncollectible, affecting financial ~~reporting may~~stability. ~~result~~● inCyclical ~~the~~industry ~~loss~~dynamics ofcould ~~investor~~lead ~~confidence~~to inharmful ~~the~~price ~~reliability~~fluctuations. of● Failure to maintain product quality and safety could damage our reputation and financial ~~statements,~~standing. ~~which~~● Intense competition in ~~turn~~the ~~may~~touchscreen ~~harm~~display ~~our~~industry ~~business~~could reduce market share and ~~negatively~~ ~~impact~~profitability. ~~the~~● ~~trading~~Inadequate ~~price~~financing ofcould restrict our ~~stock~~ability to execute our business plan. ~~Furthermore,~~● weAdjustments ~~anticipate~~in ~~that~~related weparty ~~will~~transaction ~~continue~~pricing could lead to ~~incur~~significant ~~considerable~~tax ~~costs~~liabilities. ● Revocation of tax treatments or government subsidies could necessitate paying additional taxes. ● Interruptions from third-party suppliers could disrupt operations. ● Fluctuations in the cost and ~~use significant~~availability ~~management~~of ~~time~~raw materials could negatively affect results. ● Dependency on key executives and ~~other~~the ~~resources~~lack inof anlong-term ~~effort~~supplier contracts pose risks. ● Failure to ~~comply~~adopt ~~with~~new ~~Section~~technologies ~~404~~might affect competitiveness. ● Liability claims or adverse publicity could impact customer confidence and ~~other~~business ~~requirements~~results. ● Losses on inventories and lack of ~~the~~business ~~Sarbanes-Oxley Act~~insurance could expose us to significant costs.

In connection with the auditing of our consolidated financial statements as of and for the years ended December 31, 2023 and 2022, we identified the following material weaknesses in our internal control over financial reporting:25

●Risks ~~Inadequate~~Related ~~segregation of duties consistent with control objectives; ● Lack of formal policies and procedures; ● Lack of risk assessment procedures on internal controls~~ to ~~detect~~Doing ~~financial~~Business ~~reporting~~in ~~risks on a timely manner.~~China

~~As defined~~● Regulatory changes in ~~the~~China ~~rules~~could increase compliance costs and ~~regulations~~complicate ~~adopted~~capital byraising. ● The HFCAA could lead to delisting of our common stock if audits are not inspected properly. ● We may be subject to substantial fine if the ~~SEC,~~CSRC ahas ~~“material~~determined ~~weakness”~~that iswe ahave ~~deficiency,~~failed orto ~~combination~~comply with the post-offering filing obligations. ● Changes in U.S.-China trade policies could adversely impact our business operations. ● PRC regulation of ~~deficiencies~~loans and currency conversion could delay or prevent capital usage, affecting liquidity. ● Labor laws in ~~internal~~the ~~control~~PRC ~~over~~might negatively impact our operational flexibility and financial ~~reporting,~~results. ~~such~~● ~~that~~Liabilities ~~there~~under isthe aForeign ~~reasonable~~Corrupt ~~possibility~~Practices ~~that~~Act aand ~~material~~Chinese ~~misstatement~~anti-corruption law could lead to penalties. ● Bankruptcy or liquidation of our PRC subsidiary could significantly disrupt operations. ● Economic and policy changes in China could limit our ability to offer securities. ● Uncertainties in the ~~annual or~~PRC ~~interim~~legal system could limit legal protections. ● Difficulties in enforcing foreign judgments in China could undermine contractual protections. ● Government control of currency conversion and fluctuations in exchange rates could impact financial ~~statements~~results ~~will~~and ~~not~~investments. be● ~~prevented~~The orChinese ~~detected~~government’s onsubstantial ainfluence ~~timely~~over ~~basis~~business operations could lead to significant operational changes.

~~Management has~~Risks ~~been~~Related ~~implementing and continues~~ to ~~implement~~Our ~~measures~~Common designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:Stock

● ~~Continue~~Volatility toin ~~search~~the price of our common stock may not reflect our operating performance. ● By-laws limiting the judicial forum for ~~and~~disputes ~~evaluate~~could ~~qualified~~restrict ~~independent~~stockholder ~~outside~~litigation ~~directors;~~options. ● ~~Identify~~Manipulative ~~gaps~~short inselling could drive down our ~~skills~~stock ~~base~~price. ● Direct exposure to negative publicity involving U.S.-listed Chinese companies could harm our business and ~~the~~reputation. ~~expertise~~● Large volumes of our ~~staff~~common ~~required~~stock tobeing ~~meet~~sold could negatively affect the ~~financial~~market ~~reporting~~price. ~~requirements~~● Non-payment of adividends ~~public~~means ~~company;~~stockholders must rely on stock price appreciation for returns. ● Deteriorating U.S.-China relations could lower our stock price and complicate access to capital markets. ● ~~Continue~~We may be subject to ~~develop~~delisting ~~policies~~from ~~and~~Nasdaq ~~procedures~~if onwe ~~internal~~fail ~~control~~to ~~over~~timely ~~financial~~file ~~reporting~~periodic ~~and~~reports ~~monitor~~with the ~~effectiveness~~SEC ofor ~~operations~~to onmaintain ~~existing~~Nasdaq’s ~~controls~~minimum bid price, which could materially and ~~procedures~~adversely affect the liquidity and value of our common stock.

We have also engaged with a third-party financial consulting firm during the year to assist with the preparation of SEC reporting. We are committed to maintaining a strong internal control environment, and believe that these remediation efforts will deliver improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.26

24Risks Related to Our Business and Industry

~~However, the~~COVID-19 ~~implementation~~as ofwell as ~~these~~other ~~measures~~epidemics, ~~may~~natural ~~not~~disasters, ~~fully~~terrorist ~~address~~activities, ~~these~~political ~~weaknesses in our internal control over financial reporting~~unrest, and ~~we cannot conclude that they have been fully remedied. Our failure to correct these weakness and deficiencies or our failure to discover and address any~~ other ~~weakness~~outbreaks ~~and deficiencies~~ could ~~result~~disrupt in our ~~inability~~delivery ~~to accurately report our financial results, prevent or detect fraud or provide timely~~ and ~~reliable financial and other information pursuant to the reporting obligations we have as a public company~~operations, which could ~~have~~materially aand ~~material~~adversely ~~adverse~~affect ~~effect on~~ our business, financial condition, and results of operations. ~~Further, it could cause our investors to lose confidence in the information we report, which could adversely affect the price of our shares~~.

WeThe ~~are~~COVID-19 ~~heavily~~pandemic ~~dependent~~had a significant global impact on ~~our~~businesses ~~top~~and ~~customers.~~financial Ifmarkets, weand ~~fail~~although toits ~~acquire~~most ~~new~~severe ~~customers~~effects have passed, future outbreaks of COVID-19 or ~~retain~~other ~~existing~~contagious ~~customers~~diseases could again disrupt economic activity and our operations. Epidemics in aMainland China ~~cost-effective~~or ~~manner~~elsewhere in the world, or the fear of such outbreaks, may disrupt our ~~business~~supply chain, ~~financial~~reduce ~~condition~~or restrict our ability to deliver products and ~~results~~services, ofincrease ~~operations~~costs ~~may~~to beprotect ~~materially~~employees and ~~adversely~~facilities, ~~affected~~or result in regional or global economic distress.

WeIn ~~are~~addition, ~~heavily~~natural ~~dependent~~disasters onsuch ~~our~~as ~~top~~hurricanes, ~~customers~~earthquakes, ~~each~~tsunamis, offloods, ~~which~~and ~~accounted~~typhoons, ~~for~~as ~~10%~~well oras ~~more~~actual ofor ~~our~~threatened ~~revenues.~~war, ~~We currently sell our products primarily~~terrorist toactivities, ~~customers~~political inunrest, ~~the~~civil ~~PRC~~strife, and toother ageopolitical ~~lesser extent~~events, ~~overseas~~could ~~customers~~also inmaterially ~~European~~disrupt ~~countries and~~our ~~East~~business ~~Asia~~operations. ~~such~~We ~~as South Korea and~~are ~~Taiwan.~~also ~~For~~vulnerable ~~the~~to ~~year~~other ~~ended~~calamities, ~~December~~including 31fire, ~~2023~~power loss, ~~four~~telecommunications ~~customers~~failures, ~~accounted for 31.7%~~break-ins, ~~16.2%~~riots, ~~15.8%~~ and ~~11.5%~~system ofor ~~the~~internet failures. ~~total~~Any ~~accounts~~of ~~receivable balance,~~these ~~respectively.~~events ~~For~~may ~~the~~cause ~~year~~interruptions, ~~ended~~damage ~~December~~to 31property, ~~2022~~production delays, ~~three~~or ~~customers~~loss ~~accounted~~of ~~for 32.2%~~data, ~~22.8%,~~which could materially and ~~14.0%~~adversely ofimpact ~~the total~~our ~~accounts~~business, ~~receivable~~financial ~~balance~~condition, ~~respectively~~and results of operations.

~~Our ability~~In toconnection ~~attract~~with the ~~new~~audits ~~customers~~of ~~and retain existing customers cost-effectively, especially~~ our ~~top~~consolidated ~~customers,~~financial isstatements ~~crucial~~as toof ~~driving net revenues growth~~ and ~~achieving~~for ~~profitability.~~the Weyears ~~have~~ended ~~invested~~December ~~significantly in branding~~31, ~~sales~~2024 and ~~marketing to acquire and retain customers since our inception. For example~~2023, we ~~attend~~identified ~~domestic~~certain ~~and~~material weaknesses ~~international~~in ~~expos and exhibitions to market~~ our ~~products~~internal ~~and~~control ~~attract new~~over ~~customers~~financial reporting. WeIf ~~also~~we ~~expect~~fail to ~~continue~~develop ~~to invest significantly to acquire new customers~~ and ~~retain~~maintain ~~existing~~an ~~ones,~~effective ~~especially our~~system ~~top customers. There can be no assurance that new customers will stay with us, or the net revenues from new customers we acquire will ultimately exceed the cost~~ of ~~acquiring~~internal ~~those customers. In addition, if our existing customers, especially our existing top customers~~control noover ~~longer~~financial ~~find our products appealing~~reporting, orwe ~~if our competitors offer more attractive products, prices, discounts or better customer services, our existing customers~~ may ~~lose~~be ~~interest in us, decrease their orders or even stop ordering from us. If we are~~ unable to ~~retain~~accurately ~~our~~report ~~existing customers, especially~~ our ~~top~~financial ~~customers~~results or toprevent ~~acquire new customers in a cost-effective manner, our revenues may decrease and our results of operations will be adversely affected~~fraud.

~~Our~~The ~~operating~~SEC, ~~history~~as ~~may~~required ~~not~~by beSection ~~indicative~~404 of ~~our~~the ~~future~~Sarbanes-Oxley ~~growth~~Act orof ~~financial~~2002, ~~results~~adopted ~~and~~rules werequiring ~~may~~every ~~not~~public becompany ~~able~~ to ~~sustain~~include ~~our~~a ~~historical~~management report ~~growth~~on such company’s internal controls over financial reporting, which contains management’s assessment of the effectiveness ~~rates~~of internal controls over financial reporting.

Our ~~operating~~reporting ~~history~~obligations ~~may~~as ~~not~~a bepublic ~~indicative~~company ofplace ~~our~~a ~~future~~significant ~~growth~~strain oron ~~financial~~our ~~results.~~management ~~There~~and isoperational noand ~~assurance~~financial ~~that~~resources weand ~~will~~systems. Effective beinternal ~~able~~controls, toparticularly ~~grow in~~those ~~future~~related ~~periods.~~to ~~Our~~revenue ~~growth~~recognition, ~~rates~~are ~~may~~necessary ~~decline~~ for ~~any~~us ~~number~~to ofproduce ~~possible~~reliable ~~reasons~~financial reports and ~~some of them~~ are ~~beyond~~important ~~our~~to ~~control,~~prevent ~~including decreasing~~fraud. ~~customer~~As ~~demand,~~a ~~increasing competition~~result, ~~declining~~our ~~growth~~failure ofto ~~the~~achieve ~~touchscreen~~and ~~display~~maintain ~~industry~~effective ininternal ~~general,~~controls ~~emergence~~over offinancial ~~alternative~~reporting ~~business~~may ~~models,~~result ~~or changes~~ in ~~government~~the ~~policies~~loss orof ~~general~~investor ~~economic~~confidence ~~conditions.~~in Wethe ~~will~~reliability ~~continue~~of ~~to expand~~ our ~~sales~~financial ~~network~~statements, ~~and~~which ~~product offerings~~in toturn ~~bring~~may ~~greater~~harm ~~convenience to~~ our ~~customers~~business and negatively toimpact ~~increase~~the ~~our~~trading ~~customer~~price ~~base and number~~ of ~~transactions~~our stock. ~~However~~Furthermore, ~~the~~we ~~execution of~~anticipate ~~our~~that ~~expansion~~we ~~plan~~will iscontinue ~~subject~~ to ~~uncertainty~~incur ~~and~~considerable ~~the~~costs ~~total number of items sold~~ and ~~number of transacting customers may not grow at~~use ~~the~~significant ~~rate~~management wetime ~~expect~~and ~~for~~other ~~the~~resources ~~reasons~~in ~~stated~~an ~~above.~~effort Ifto ~~our~~comply ~~growth~~with ~~rates~~Section ~~decline,~~404 ~~investors’ perceptions of our business~~ and ~~prospects may~~other berequirements ~~adversely~~of ~~affected and~~ the ~~market~~Sarbanes-Oxley ~~price of our common stock could decline~~Act.

~~Failure~~In toconnection ~~secure~~with athe ~~new~~auditing ~~parcel~~ of ~~land~~our ~~for~~consolidated ~~the~~financial ~~construction~~statements as of ~~our~~and ~~new~~for ~~buildings~~the ~~and~~years ~~facilities,~~ended ~~and~~December ~~failure~~31, to2024 ~~acquire~~ and ~~install~~2023, ~~new~~we ~~production~~identified ~~lines on~~ the ~~new~~following ~~parcel~~material ~~may~~weaknesses ~~materially~~in ~~and~~our ~~adversely~~internal ~~affect~~control ~~our~~over ~~business,~~ financial ~~condition and results of operations.~~reporting:

~~During the~~● ~~year~~Lack ~~ended~~of ~~December~~competent ~~31,~~financial ~~2021,~~reporting ~~our~~and ~~use~~accounting ~~right~~personnel towith ~~the~~appropriate ~~Property~~understanding ~~was~~of ~~withdrawn~~U.S. byGAAP ~~the~~and ~~local~~financial ~~government~~reporting requirements to design and ~~all~~implement ~~ownership~~key ~~certificates pertaining~~controls toover ~~the~~financial ~~buildings~~reporting onprocess ~~the~~● ~~Property~~Lack ~~were~~of ~~returned~~risk assessment procedures on internal controls to ~~the~~detect ~~local~~financial ~~government~~reporting ~~for~~risks ~~cancellation~~on a timely manner.

25As defined in the rules and regulations adopted by the SEC, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

In order to minimize the interruption of our business, Sichuan Vtouch entered into a Leaseback Agreement with Sichuan Renshou on March 16, 2021. The Leaseback Agreement entitles us to lease back the Properties commencing from April 1, 2021 until December 31, 2021, at a monthly rent of RMB300,000 (approximately $46,154), which period has been extended to October 31, 2022. On October 16, 2022, Sichuan Vtouch entered an extension to the Leaseback Agreement with Sichuan Renshou to extend the period it granted Sichuan Vtouch to lease back the Properties until October 31, 2023, then subsequently extended to October 31, 2024, at a monthly rent of RMB400,000 (approximately $59,941). The management believes that the Company can further renew the lease if necessary.27

OnManagement has ~~July~~been ~~23,~~implementing ~~2021,~~and ~~Sichuan~~continues ~~Vtouch~~to ~~entered~~implement ~~into~~measures adesigned ~~contract~~to ~~with~~ensure ~~the~~that ~~Chengdu~~control ~~Wenjiang~~deficiencies ~~District~~contributing ~~Planning~~to ~~and Natural Resources Bureau for~~ the ~~purchase~~material ofweakness are ~~a land use right for a parcel of land spanning 131~~remediated,~~010~~ ~~square~~such ~~feet,~~that ~~for~~these acontrols ~~consideration~~are ~~of RMB3~~designed,~~925,233 (equivalent~~ ~~to $537~~implemented,~~998)~~ ~~for~~and ~~the~~operating ~~Company’s new facility~~effectively. The ~~Company~~remediation ~~paid~~actions ~~the~~planned ~~consideration in full on November 18, 2021. The Company estimates receiving the certificate of land use right from the local government in the fourth quarter of 2024.~~ include:

~~As of~~● ~~the~~Identify ~~date~~gaps ofin ~~this~~our ~~Annual~~skills ~~Report,~~base weand ~~estimate to finish~~ the ~~building~~expertise ~~construction by the end~~ of ~~2024~~our ~~and~~staff ~~commence~~required ~~production~~to inmeet the ~~third~~financial ~~quarter~~reporting requirements of ~~2025,~~a ~~but~~public ~~there~~company; ~~is no assurance~~ and we● ~~may~~Continue ~~need extended time~~ to ~~achieve~~cooperate ~~our business~~with ~~plan.~~operation Ifteams ~~we fail~~ to ~~complete~~ensure ~~such~~control ~~construction~~environment ~~prior~~in toplace, ~~estimated period~~ and monitor the ~~extended~~effectiveness ~~period,~~of ifoperations ~~any,~~on weexisting ~~will~~controls ~~have~~and ~~to cease~~procedures. ~~all~~● orEstablish ~~part~~assessment of ~~our~~Sarbanes-Oxley ~~operations,~~Act ~~and~~of as2002 a(the ~~result,~~“Sarbanes-Oxley ~~our~~Act”) ~~business,~~compliance ~~financial~~requirements ~~condition~~ and ~~results~~improvement of ~~operations~~overall ~~may~~internal ~~be materially and adversely affected~~control.

We are ~~subject~~committed to ~~risks~~maintaining ~~related~~a strong internal control environment, and believe that these remediation efforts will deliver improvements in our control environment. Our management will continue to ~~construction~~monitor and evaluate the relevance of our ~~factory~~risk-based inapproach ~~Sichuan~~and ~~Province~~the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, ~~China~~as necessary and as funds allow.

We are ~~constructing~~heavily dependent ~~new~~on ~~facilities~~our ~~and~~top ~~office buildings, located in Sichuan Province, China~~customers. AsIf ~~of the date of this Annual Report,~~ we ~~estimates~~ ~~receiving~~fail ~~the~~to ~~certificate~~acquire ofnew ~~land~~customers ~~use~~or ~~right~~retain ~~from~~existing ~~the~~customers ~~local government~~ in ~~the~~a ~~fourth~~cost-effective ~~quarter~~manner, ofour ~~2024. We plan to finish the~~business, ~~building~~financial ~~construction~~condition byand ~~the~~results ~~end~~ of ~~2024~~operations ~~and~~may ~~commence~~be ~~production~~materially inand ~~the~~adversely ~~third quarter of 2025~~affected.

~~The construction could experience delays or other difficulties, and will require significant capital.~~ We ~~may~~are ~~not~~heavily ~~generate~~dependent ~~sufficient cash~~on ~~flow to satisfy~~ our ~~capital~~top ~~expenditure~~customers, ~~commitments.~~each ~~We may need to raise additional capital to fund a portion~~ of ~~our~~which ~~capital~~accounted ~~expenditures, and~~for ~~such~~10% ~~capital may not be available when needed~~ or onmore ~~terms~~of ~~favorable to~~ our ~~company~~revenues. ~~The~~We ~~construction~~currently ~~may~~sell ~~not~~our beproducts ~~completed~~primarily ~~on schedule due~~ to ~~various~~customers ~~reasons,~~in ~~such~~the PRC ~~as supply chain issues~~ and ~~increased~~to ~~difficulty~~a ~~for~~lesser ~~workforce recruitment~~extent, ~~which~~to ~~could~~overseas ~~result~~customers in ~~increased expenses~~Europe and ~~construction~~East ~~costs~~Asia, ~~and~~including ~~may~~South ~~result~~Korea ~~in reduced profitability of the project. Any failure to complete the construction plan on schedule~~ and ~~within budget could adversely affect our financial condition and results of operations~~Taiwan.

~~The construction~~For ~~may~~the beyear ~~subject~~ended toDecember 31, ~~legal claims and proceedings instituted by contractors~~2024, ~~workers~~our ~~and~~top ~~other~~five ~~parties~~customers ~~involved~~accounted infor ~~such~~approximately ~~project from~~22.0%, ~~time~~19.1%, to15.3%, ~~time~~14.5% ~~Such claims~~ and ~~proceedings~~11.5%, ~~may~~respectively, ~~include claims in respect~~ of ~~personal~~our ~~injuries~~total ~~and labor compensation in relation~~revenues. toFor the ~~construction~~year ~~project.~~ended ~~The~~December ~~construction~~31, of2023, aour ~~factory~~top issix ~~also~~customers ~~subject~~accounted tofor ~~risks~~approximately ~~related~~22.5%, to16.5%, ~~health~~15.6%, ~~and~~14.1%, ~~safety~~11.3% ~~incidents~~ and ~~site accidents and any non-compliance with building codes and other local regulations~~10.1%, ~~If any of the aforementioned incidents or accidents were to occur~~respectively, itof ~~could have a substantial negative impact on~~ our ~~success~~total ~~and result in a material adverse effect on our financial condition or results of operations~~revenues.

~~Economic~~Our ~~recessions~~ability ~~could~~to attract new customers and retain existing customers cost-effectively, especially our top customers, is crucial to driving net revenues growth and achieving profitability. We have invested significantly in branding, sales and marketing to acquire and retain customers since our inception. For example, we attend domestic and international expos and exhibitions to market our products and attract new customers. We also expect to continue to invest significantly to acquire new customers and retain existing ones, especially our top customers. There can be no assurance that new customers will stay with us, or that the net revenues from new customers we acquire will ultimately exceed the cost of acquiring those customers. In addition, if our existing customers, especially our top customers no longer find our products appealing, or if our competitors offer more attractive products, prices, discounts or better customer service, our existing customers may lose interest in us, decrease their orders or even stop ordering from us. If we are unable to retain our existing customers, especially our top customers or to acquire new customers in a ~~significant~~cost-effective manner, ~~adverse~~our ~~impact~~revenues onmay decrease and our ~~business~~results of operations may be adversely affected.

Our ~~revenues~~ ~~are~~operating ~~generated~~history may ~~from~~not ~~sales~~be indicative of our ~~capacitive~~future ~~touchscreen~~growth ~~products~~or ~~both~~financial ~~domestically~~results and ~~internationally and~~ we ~~anticipate~~may ~~that revenues~~not ~~from~~be ~~such~~able ~~sales will continue~~ to ~~represent~~sustain ~~the substantial portion of~~ our ~~total~~historical ~~revenues~~growth ~~in the near future~~rates. ~~Our sales and earnings can also be affected by changes in the general economy.~~

~~The~~Our ~~touchscreen~~operating ~~display~~history ~~industry~~may ~~historically~~not ~~has~~be ~~experienced~~indicative ~~cyclical~~of ~~fluctuations~~our infuture growth or financial results. ~~due~~There tois ~~economic~~no ~~recession,~~assurance ~~downturns~~that inwe will be able to grow ~~business~~in ~~cycles~~future ofperiods. ~~our~~Our ~~customers,~~growth ~~interest~~rates ~~rate~~may ~~fluctuations,~~decline for any number of possible reasons and ~~other~~some ~~economic~~of ~~factors~~them are beyond our control., ~~Deterioration~~including decreasing incustomer demand, increasing competition, declining growth of the ~~economic environment~~touchscreen ~~subjects~~display ~~our~~industry ~~business~~in togeneral, ~~various~~emergence ~~risks~~of alternative business models, ~~which~~or ~~may~~changes ~~have~~in agovernment ~~material~~policies ~~and~~or ~~adverse~~general ~~impact~~economic onconditions. We will continue to expand our ~~operating~~sales ~~results~~network and ~~cause us~~product offerings to ~~not~~bring ~~reach~~greater convenience to our ~~long-term~~customers ~~growth~~and ~~goals.~~to ~~For~~increase ~~example,~~our acustomer ~~downturn~~base inand number of transactions. However, the ~~economy~~execution of ~~could~~our ~~directly~~expansion ~~affect~~plan is subject to uncertainty and the ~~discretionary~~total ~~spending~~number ~~power~~of items sold and number of transacting customers may not grow at the rate we expect for the reasons stated above. If our growth rates decline, investors’ perceptions of our ~~customers~~business and inprospects may ~~turn,~~be ~~depress~~adversely affected and the ~~number~~market price of ~~orders~~our ~~for~~common ~~our~~stock ~~products~~could decline.

~~We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.~~28

~~We cannot~~Failure be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate intellectual property rights held by third parties. We have not but in the future may be, subject to ~~legal proceedings and claims relating to the~~secure intellectual property rights of others. There could also be existing intellectual property of which we are not aware that our products may inadvertently infringe. We cannot assure you that holders of intellectual property purportedly relating to some aspect of our technology or business, if any such holders exist, would not seek to enforce such intellectual property against us in China, or any other jurisdictions. If we are found to have violated the ~~intellectual~~certificate ~~property rights~~ of ~~others,~~land weuse ~~may~~right ~~be subject to liability~~ for ~~our~~a ~~infringement~~new ~~activities or~~parcel ~~may be prohibited~~ from ~~using~~the ~~such~~local ~~intellectual~~PRC ~~property,~~government ~~and~~for wethe ~~may~~construction ~~incur licensing fees or be forced to develop alternatives~~ of our ~~own.~~ Innew ~~addition,~~buildings weand ~~may incur significant expenses~~facilities, and ~~may~~failure ~~be forced~~ to ~~divert~~acquire ~~management’s time~~ and ~~other~~install ~~resources~~new ~~from~~production ~~our business~~lines ~~and~~on ~~operations~~the tonew ~~defend~~parcel ~~against these infringement claims, regardless of their merits. Successful infringement or licensing claims made against us~~ may ~~result in significant monetary liabilities and may~~ materially ~~disrupt our business~~ and ~~operations~~adversely byaffect ~~restricting or prohibiting~~ our ~~use of the intellectual property in question, and our~~ business, financial condition ~~position~~ and results of operations ~~could be materially and adversely affected~~.

~~Further~~On August 6, 2021, Sichuan Vtouch entered into a contract with the ~~application~~Chengdu Wenjiang District Planning and ~~interpretation~~Natural Resources Bureau for the purchase of ~~China~~a land use right for a parcel of land spanning 131,010 square feet, for a consideration of approximately RMB3,925,233 (equivalent to $537,755) for the Company’s ~~patent~~new ~~laws~~facility. ~~and~~The Company paid the ~~procedures~~consideration ~~and~~in ~~standards~~full ~~for~~on ~~granting~~November ~~patents~~18, in2021. ~~China~~We are ~~still~~in the process of obtaining ~~evolving~~the certificate of land use right for the new parcel and ~~are~~expect ~~uncertain~~to receive the certificate from the local government in the first quarter of 2026. However, ~~and~~there is no assurance that we ~~cannot~~will ~~assure~~be ~~you~~able ~~that~~to ~~PRC~~obtain ~~courts~~the required certificate of land use right in a timely manner, or at all. The failure of obtaining the certificate will adversely affect our business operations. Additionally, the development of this site is subject to various regulatory ~~authorities~~approvals, ~~would~~including ~~agree~~construction land planning permit (received in January 2022), construction project planning permit (received in January 2022), and construction engineering license (received July 2022). Failure to obtain additional approvals from the local government, if required, will subject us to fines or suspension of the projects in accordance with ~~our~~relevant ~~analysis~~PRC laws and regulations.

26In addition, our ability to install and operate new production lines on this parcel is contingent upon the successful acquisition and setup of equipment, compliance with applicable environmental, construction, and safety regulations, and the availability of sufficient financing and human resources. Any failure or significant delay in obtaining the land use rights, completing construction, or acquiring and installing production lines may materially and adversely affect our ability to expand our operations, meet growing customer demand, and achieve our strategic objectives. Such delays or failures could have a material adverse effect on our business, financial condition, and results of operations.

WeAs of the date of this Annual Report, we estimate to complete the building construction by the end of 2025 and commence production in the first quarter of 2026, assuming we have aobtained ~~significant~~the ~~amount~~land use right by then, but there is no assurance and we may need extended time to achieve our business plan. If we fail to complete such construction prior to estimated period and the extended period, if any, we will have to cease all or part of our ~~accounts~~operations, ~~receivable~~and as a result, ~~which~~our ~~could~~business, ~~become~~financial ~~uncollectible~~condition and results of operations may be materially and adversely affected.

~~As of~~We ~~December 31, 2023, we had approximately $7.5 million in accounts receivable. Our accounts receivable primarily include balance due from customers when our products~~ are ~~sold~~subject ~~and delivered~~ to ~~customers.~~risks ~~Our~~related ~~customers are required~~ to ~~make~~construction full payment within three to five months from delivery date, although our industry typical payment term is 180 days from delivery. For the years ended December 31, 2023 and 2022, we did not provide any extended payment terms to any of our ~~customers. Deteriorating conditions~~ factory in, ~~bankruptcies, or~~Sichuan ~~financial difficulties of a customer or within their industries generally may impair the financial condition of our customers and hinder their ability to pay us on a timely basis or at all~~Province, ~~and accounts receivable are written off against allowances only after exhaustive collection efforts~~China. ~~The failure or delay in payment by one or more of our customers could reduce our cash flows and adversely affect our liquidity and results of operations.~~

~~Our~~We are constructing new facilities ~~industry~~and isoffice ~~cyclical,~~buildings ~~with~~on ~~recurring~~the ~~periods~~new ofparcel ~~capacity~~located ~~increases~~in Sichuan Province, China. As aof ~~result~~the date of this Annual Report, ~~price~~we ~~fluctuations~~estimate receiving the certificate of land use right from the local government in ~~response~~the first quarter of 2026. We plan to ~~supply~~complete ~~and~~the ~~demand~~building construction ~~imbalances~~by ~~could~~the ~~harm~~end ~~our~~of ~~results~~2025 and commence production in the first quarter of ~~operations~~2026.

The ~~touchscreen~~ ~~display~~construction ~~industry~~could inexperience delays ~~general~~or isother ~~characterized~~difficulties, byand ~~cyclical~~will ~~market~~require ~~conditions~~significant capital. ~~From~~We ~~time~~may tonot ~~time,~~generate ~~the~~sufficient ~~industry~~cash ~~has~~flow ~~been subject~~ to ~~imbalances~~satisfy ~~between~~our ~~excess~~capital ~~supply~~expenditure commitments. ~~and~~We amay ~~slowdown~~need into ~~demand,~~raise ~~and~~additional incapital ~~certain~~to ~~periods,~~fund ~~resulting~~a inportion ~~declines~~of inour ~~selling~~capital ~~prices.~~expenditures, Inand ~~addition, capacity~~such ~~expansion~~capital ~~anticipated~~may innot ~~the~~be ~~touchscreen~~available when ~~display~~needed ~~industry~~or ~~may~~on ~~lead~~terms favorable to ~~excess~~our ~~capacity~~company. ~~Capacity~~The ~~expansion~~construction inmay ~~the~~not ~~industry may~~ be ~~due~~completed toon ~~scheduled~~schedule ~~ramp-up~~due ofto ~~new~~various ~~manufacturing facilities~~reasons, ~~and~~such ~~any large increases in capacity~~ as ~~a result of such expansion could~~supply ~~further~~chain ~~drive~~issues ~~down~~and ~~the~~increased ~~selling~~difficulty ~~prices~~for ofworkforce ~~our products~~recruitment, which ~~would~~could ~~affect~~result ~~our~~in ~~results~~increased ofexpenses ~~operations.~~and Weconstruction ~~cannot~~costs, ~~assure you that any continuing~~and ormay ~~further~~result ~~decrease~~ in ~~selling~~reduced ~~prices~~profitability orof ~~future~~the ~~downturns~~project. ~~resulting~~Any ~~from~~failure ~~excess~~to ~~capacity~~complete ~~or other factors affecting~~ the ~~industry~~construction ~~will not~~plan beon ~~severe~~schedule orand ~~that~~within ~~any~~budget ~~such~~could adversely ~~continuation,~~affect ~~decrease or downturn would not seriously harm~~ our ~~business,~~ financial condition and results of operations.

Our ability to maintain or increase our revenues will primarily depend upon our ability to maintain market share, increase unit sales of existing products and introduce and sell new products that offset the anticipated fluctuation and long-term declines in the selling prices of our existing products. We cannot assure you that we will be able to maintain or expand market share, increase unit sales, and introduce and sell new products, to the extent necessary to compensate for market oversupply. 29

~~Failure~~The construction may be subject to ~~maintain~~legal claims and proceedings instituted by contractors, workers and other parties involved in such project from time to time. Such claims and proceedings may include claims in respect of personal injuries and labor compensation in relation to the ~~quality~~construction project. The construction of a factory is also subject to risks related to health and safety incidents and site accidents and any non-compliance with building codes and other local regulations. If any of ~~our~~the ~~products~~aforementioned incidents or accidents were to occur, it could have a ~~material~~substantial negative impact on our success and result in a material adverse effect on our ~~reputation,~~ financial condition ~~and~~ or results of operations.

~~The quality~~Economic ~~and safety of our products are critical to our success. We pay close attention to quality control, monitoring each step in the~~recessions ~~process~~could ~~from~~have ~~procurement~~a ~~to production and from warehouse to delivery. Yet~~significant, ~~maintaining~~adverse ~~consistent~~impact ~~product quality depends significantly~~ on ~~the effectiveness of~~ our quality control system, which in turn depends on a number of factors, including but not limited to, the design of our quality control system, employee training to ensure that our employees adhere to and implement our quality control policies and procedures and the effectiveness of monitoring any potential violation of our quality control policies and proceduresbusiness. ~~There can be no assurance that our quality control system will always prove to be effective.~~

~~In addition,~~Our ~~the~~revenues ~~quality~~are ofgenerated from ~~the~~sales ~~products~~of ~~or services provided by~~ our ~~suppliers~~capacitive ortouchscreen ~~service~~products ~~providers~~both isdomestically ~~subject~~and tointernationally ~~factors beyond our control, including the effectiveness~~ and ~~the~~we ~~efficiency~~anticipate ofthat ~~their~~revenues ~~quality~~from ~~control~~such ~~system, among others. There can be no assurance that our suppliers~~sales orwill ~~service~~continue ~~providers may always be able~~ to ~~adopt~~represent ~~appropriate~~the ~~quality~~substantial ~~control~~portion ~~systems~~of ~~and meet~~ our ~~stringent~~total ~~quality~~revenues ~~control requirements~~ in ~~respect of~~ the ~~products~~near ~~or services they provide~~future. ~~Any~~Our ~~failure~~sales ~~of our suppliers or service providers to provide satisfactory products or services could harm our reputation~~ and ~~adversely~~earnings ~~impact~~can ~~our~~also ~~operations. In addition, we may~~ be ~~unable to receive sufficient compensation~~affected ~~from~~by ~~suppliers~~changes ~~and~~in ~~service providers for~~ the ~~losses~~general ~~caused by them~~economy.

27The touchscreen display industry historically has experienced cyclical fluctuations in financial results due to economic recession, downturns in business cycles of our customers, interest rate fluctuations, and other economic factors beyond our control. Deterioration in the economic environment subjects our business to various risks, which may have a material and adverse impact on our operating results and cause us to not reach our long-term growth goals. For example, a downturn in the economy could directly affect the discretionary spending power of our customers and in turn, depress the number of orders for our products.

We ~~face~~ ~~intense~~may ~~competition~~be insubject to ~~the~~intellectual ~~touchscreen~~property ~~display~~infringement ~~industry~~claims, inwhich ~~general.~~may Ifbe weexpensive ~~fail~~ to ~~compete~~defend ~~effectively,~~and we may ~~lose~~disrupt ~~market share and customers, and~~ our business, ~~financial condition~~ and ~~results of~~ operations ~~may be materially and adversely affected~~.

~~The~~We cannot be certain that ~~touchscreen~~our ~~display~~operations ~~industry~~or isany ~~intensely~~aspects ~~competitive~~of inour ~~general.~~business Wedo ~~face~~not ~~less~~or ~~competition~~will asnot weinfringe ~~produce~~upon ~~medium~~or tootherwise ~~large~~violate ~~size~~intellectual ~~capacitive~~property ~~touchscreens~~rights held ~~which~~by ~~are~~third ~~specially~~parties. ~~tailored~~We tohave ~~certain~~not ~~industries,~~but ~~such~~in asthe ~~industrial~~future ~~HMI,~~may ~~gaming~~be, ~~financing,~~subject ~~lottery,~~to ~~automotive,~~legal ~~medical,~~proceedings and ~~POS, and~~claims ~~requires~~relating ~~more~~to ~~stable~~the ~~supply,~~intellectual ~~longer~~property rights ~~guaranty~~of ~~and~~others. ~~life~~There ~~span,~~could ~~compared~~also ~~with~~be ~~small~~existing ~~size~~intellectual ~~touchscreens~~property of which we are ~~characteristic~~not ~~with~~aware ~~shorter~~that our products may inadvertently infringe. ~~life~~We ~~cycle~~cannot ~~and~~assure ~~guaranty~~you ~~but~~that ~~more~~holders ~~demand~~of inintellectual ~~quantity.~~property ~~However~~purportedly relating to some aspect of our technology or business, weif ~~still~~any ~~have~~such holders ~~some~~exist, ~~competitors~~would ~~competing~~not seek to enforce such intellectual property against us in China, ~~and~~or ~~globally~~any ~~with~~other usjurisdictions. ~~Our~~ ~~competitors~~If ~~may~~we are found to have ~~more~~violated ~~financial,~~the ~~technical,~~intellectual ~~geographical~~property ~~advantage~~rights of others, ~~marketing~~we ~~and~~may ~~other~~be ~~resources~~subject ~~than~~to weliability dofor our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be ~~more~~forced to develop alternatives of our own. In addition, we ~~experienced~~may incur significant expenses, and ~~able~~may be forced to ~~devote~~divert ~~greater~~management’s time and other resources from our business and operations to ~~the~~defend ~~development,~~against ~~promotion~~these ~~and~~infringement ~~support~~claims, regardless of their ~~business~~merits. ~~Some~~Successful ~~competitors~~infringement ~~are~~or ~~well-established~~licensing claims made against us may result in ~~China~~significant ~~and~~monetary ~~globally~~liabilities and ~~any~~may ~~defensive~~materially ~~measures~~disrupt ~~they~~our ~~take~~business inand ~~response~~operations toby restricting or prohibiting our ~~expansion~~use of ~~could~~the ~~hinder~~intellectual ~~our~~property ~~growth~~in question, and ~~adversely affect~~ our ~~sales~~business, financial position and results of operations could be materially and adversely affected.

~~Furthermore~~Further, ~~increased~~ ~~competition~~the ~~may~~application ~~reduce~~and interpretation ~~our~~of ~~market~~China’s ~~share~~patent ~~and~~laws ~~profitability~~ and ~~require~~the usprocedures ~~to increase our sales~~ and ~~marketing~~standards ~~efforts~~for ~~and~~granting ~~capital commitment~~patents in ~~the~~China ~~future,~~are ~~which~~still ~~could~~evolving ~~negatively~~and ~~affect our results of operations or force us to incur further losses. Although we have~~are ~~accumulated~~uncertain, ~~some~~ and ~~continuously~~we ~~growing~~cannot ~~our~~assure ~~customer~~you ~~base, there is no assurance~~ that wePRC ~~will~~courts ~~be able to continue to do so in the future against current~~ or ~~future~~regulatory ~~competitors,~~authorities ~~and~~would ~~such~~agree ~~competitive~~with ~~pressures may have a material adverse effect on~~ our ~~business, financial condition and results of operations~~analysis.

~~If we~~We dohave ~~not~~a ~~obtain~~significant amount ~~substantial~~of ~~additional~~accounts ~~financing~~receivable, ~~our~~which ~~ability~~could tobecome ~~execute our business plan may be impaired~~uncollectible.

~~Due~~As of December 31, 2024, we tohad ~~the~~approximately ~~withdrawal~~$7.5 ofmillion ~~the~~in ~~land~~accounts ~~use~~receivable. ~~right~~Our toaccounts ~~the~~receivable ~~Property~~primarily ~~and~~include ~~cancellation~~balance ofdue from customers when our ~~ownership~~products are ~~certificates~~sold ~~pertaining~~and delivered to ~~the~~customers. ~~buildings~~Our ~~on the~~customers ~~Property~~are byrequired ~~the~~to ~~local~~make ~~government~~full ~~pursuant~~payment towithin ~~the~~three ~~Guidelines~~to ~~and~~six ~~the~~months ~~Compensation~~from ~~Agreement~~delivery date, onalthough our ~~July~~industry ~~23,~~typical ~~2021,~~payment ~~Sichuan~~term ~~Vtouch~~is ~~entered into~~180 adays ~~contract~~from ~~with~~delivery. For the ~~Chengdu~~years ~~Wenjiang~~ended ~~District~~December ~~Planning~~31, 2024 and ~~Natural~~2023, ~~Resources~~we ~~Bureau~~did ~~for~~not ~~the~~provide ~~purchase~~any ofextended payment aterms ~~land~~to ~~use~~any ~~right~~of ~~for~~our acustomers. ~~parcel of~~Deteriorating ~~land~~conditions ~~spanning~~in, ~~131~~bankruptcies,~~010~~ ~~square~~or ~~feet,~~financial ~~for~~difficulties of a ~~consideration~~customer ofor ~~RMB3,925,233~~within ~~(equivalent~~their industries togenerally ~~$537,998)~~may ~~for~~impair the ~~Company’s~~financial ~~new~~condition ~~facility. The~~of ~~Company~~our ~~paid~~customers ~~the~~and ~~consideration~~hinder intheir ~~full~~ability to pay us on ~~November~~a 18timely basis or at all, and ~~2021~~accounts receivable are written off against allowances only after exhaustive collection efforts. The ~~Company~~failure ~~estimates~~or ~~receiving~~delay ~~the~~in ~~certificate~~payment by one or more of ~~land~~our ~~use~~customers ~~right~~could ~~from the~~reduce ~~local~~our ~~government~~cash inflows ~~the~~and ~~fourth~~adversely ~~quarter~~affect our liquidity and results of ~~2024~~operations.

As of the date of this Annual Report, we estimate to finish the building construction by the end of 2024 and commence production in the third quarter of 2025, but there is no assurance and we may need extended time to achieve our business plan. If we fail to complete such acquisition and construction within the estimated period, if any, we will have to cease all or part of our operations, and as a result, our business, financial condition and results of operations may be materially and adversely affected.30

~~In addition,~~Our ~~our~~industry ~~plans may call for significant new investments in research and development~~is cyclical, ~~marketing,~~with ~~expanded~~recurring ~~productions~~periods of capacity~~, and~~ ~~working capital for raw materials and other items~~increases. ~~Should~~As ~~our~~a ~~capital needs be higher than our estimation~~result, weprice ~~will~~fluctuations bein ~~required to~~response ~~seek additional investments, loans or debt financing~~ to ~~fully~~supply ~~pursue~~and ~~our~~demand ~~business~~imbalances ~~plans. Such additional investment may not be~~could ~~available~~harm ~~to us on terms which are favorable or acceptable. Should we be unable to meet~~ our ~~full~~results ~~capital~~of ~~needs, our ability to fully implement our business plan will be impaired~~operations.

~~Any~~The touchscreen display industry ~~adjustment~~in ofgeneral ~~related~~is ~~party~~characterized ~~transaction~~by ~~pricing~~cyclical ~~could~~market ~~lead~~conditions. From time to ~~additional~~time, ~~taxes~~the industry has been subject to imbalances between excess supply and a slowdown in demand, and ~~therefore~~in ~~substantially~~certain ~~reduce~~periods, ~~our~~resulting ~~consolidated~~in ~~net~~declines in selling prices. In addition, capacity expansion anticipated ~~income~~in the touchscreen display industry may lead to excess capacity. Capacity expansion in the industry may be due to scheduled ramp-up of new manufacturing facilities, and any large increases in capacity as a result of such expansion could further drive down the ~~value~~selling prices of ~~your~~our ~~investment~~products, which would affect our results of operations. We cannot assure you that any continuing or further decrease in selling prices or future downturns resulting from excess capacity or other factors affecting the industry will not be severe or that any such continuation, decrease or downturn would not seriously harm our business, financial condition and results of operations.

~~The tax~~Our ~~regime~~ability into ~~China~~maintain ~~is rapidly evolving and there is significant uncertainty for taxpayers in China as PRC tax laws may be interpreted~~or inincrease ~~significantly~~our ~~different~~revenues ~~ways.~~will ~~The~~primarily ~~PRC~~depend ~~tax~~upon ~~authorities may assert that we or~~ our ~~subsidiaries~~ability ~~owe and/or are required~~ to ~~pay~~maintain ~~additional taxes~~market ~~on previous or future revenue or income. In particular~~share, ~~under~~increase ~~applicable~~unit ~~PRC~~sales ~~laws,~~of ~~rules~~existing ~~and~~products ~~regulations, arrangements~~ and ~~transactions~~introduce ~~among~~and ~~related~~sell ~~parties~~new ~~may~~products bethat ~~subject~~offset tothe ~~audit~~anticipated orfluctuation ~~challenge~~and bylong-term ~~the~~declines ~~PRC~~in ~~tax authorities. If~~ the ~~PRC~~selling ~~tax~~prices ~~authorities~~of ~~determine~~our ~~that~~existing ~~any~~products. We ~~contractual~~cannot ~~arrangements~~assure ~~were~~you ~~not~~that ~~entered~~we ~~into~~will onbe anable ~~arm’s~~to ~~length~~maintain ~~basis~~or ~~and~~expand ~~therefore~~market ~~constitute a favorable transfer pricing~~share, ~~the~~ ~~PRC~~increase ~~tax~~unit ~~liabilities of the relevant subsidiaries could be increased~~sales, ~~which~~and ~~could~~introduce ~~increase~~and ~~our~~sell ~~overall~~new ~~tax liabilities. In addition~~products, to the ~~PRC~~extent ~~tax~~necessary ~~authorities~~to ~~may~~compensate ~~impose~~for ~~late~~market ~~payment interest~~oversupply. ~~Our net income may be materially reduced if our tax liabilities increase.~~

~~If our~~Failure ~~preferential~~to ~~tax~~maintain the ~~treatments~~quality and ~~government~~safety ~~subsidies are revoked or become unavailable or if the calculation~~ of our ~~tax~~products ~~liability is~~could ~~successfully~~have ~~challenged~~a bymaterial ~~the~~and ~~PRC~~adverse ~~tax~~effect ~~authorities,~~on weour ~~may be required to pay tax~~reputation, ~~interest~~financial condition and ~~penalties~~results ~~in excess~~ of ~~our tax provisions~~ operations.

The ~~Chinese~~quality ~~government~~and ~~has~~safety ~~provided~~of ~~tax incentives to~~ our ~~former~~products ~~subsidiary~~are incritical ~~Mainland~~to ~~China,~~our ~~Sichuan~~success. ~~Wetouch,~~We ~~including~~pay ~~reduced~~close ~~enterprise income~~attention ~~tax~~to ~~rates.~~quality ~~For example~~control, ~~under~~monitoring ~~the~~each ~~PRC~~step ~~Enterprise~~in ~~Income Tax Law and its implementation rules,~~ the ~~statutory enterprise income~~ ~~tax~~process ~~rate~~from isprocurement ~~25%.~~to ~~However,~~production ~~the~~and ~~income~~from ~~tax~~warehouse ~~of an enterprise that has been determined~~ to bedelivery. aYet, ~~qualified~~maintaining ~~enterprise~~consistent ~~located~~product inquality ~~western~~depends ~~region~~significantly ofon ~~Mainland~~the ~~China~~effectiveness ~~can be reduced to a preferential rate~~ of ~~15%.~~our ~~The~~quality ~~qualification~~control ofsystem, ~~preferential~~which ~~tax~~in ~~rate~~turn isdepends ~~effective~~on ~~for~~ a ~~renewable three-year~~number ~~permitted.~~of ~~As we have dissolved Sichuan Wetouch~~factors, ~~and~~including ~~its~~but ~~business~~not ~~and~~limited ~~operations have been assumed by Sichuan Vtouch~~to, ~~Sichuan Vtouch has reapplied for~~ the ~~preferential rate of 15% as a qualified enterprise. Such application is currently~~design ~~pending with the PRC tax authorities. If Sichuan Vtouch’s application for the qualification~~ of ~~preferential tax~~our ~~rate~~quality ~~benefit~~control ~~is not approved~~system, ~~our~~employee ~~PRC~~training ~~subsidiary will be subject~~ to ~~the~~ensure ~~statutory~~that ~~enterprise income tax rate of 25%. Further, in the ordinary course of~~ our ~~business,~~employees weadhere ~~are subject~~ to ~~complex income tax~~ and ~~other~~implement ~~tax~~our ~~regulations,~~quality ~~and~~control ~~significant~~policies ~~judgment is required~~and inprocedures and the ~~determination~~effectiveness of amonitoring ~~provision~~any ~~for~~potential ~~income~~violation ~~taxes.~~of ~~Although we believe~~ our ~~tax~~quality ~~provisions~~control ~~are~~policies ~~reasonable,~~and ifprocedures. ~~the~~There ~~PRC~~can ~~tax~~be ~~authorities~~no ~~successfully~~assurance ~~challenge~~that our ~~position~~quality ~~and~~control wesystem ~~are~~will ~~required~~always prove to ~~pay tax, interest, and penalties in excess of our tax provisions, our financial condition and results of operations would~~ be ~~materially and adversely affected~~effective.

28In addition, the quality of the products or services provided by our suppliers or service providers is subject to factors beyond our control, including the effectiveness and the efficiency of their quality control system, among others. There can be no assurance that our suppliers or service providers may always be able to adopt appropriate quality control systems and meet our stringent quality control requirements in respect of the products or services they provide. Any failure of our suppliers or service providers to provide satisfactory products or services could harm our reputation and adversely impact our operations. In addition, we may be unable to receive sufficient compensation from suppliers and service providers for the losses caused by them.

~~A significant~~We ~~interruption~~face intense competition in the ~~operations~~touchscreen ofdisplay ~~our~~industry ~~third-party~~in ~~suppliers~~general. ~~could~~If ~~potentially~~we ~~disrupt~~fail to compete effectively, we may lose market share and customers, and our business, financial condition and results of operations may be materially and adversely affected.

WeThe ~~have~~touchscreen ~~limited~~display ~~control~~industry ~~over~~is ~~the~~intensely ~~operations~~competitive ofin ~~our~~general. ~~third-party~~We ~~suppliers~~face ~~and~~less ~~other~~competition ~~business~~as ~~partners~~we ~~and~~produce ~~any~~medium- ~~significant~~to ~~interruption~~large-sized incapacitive ~~their~~touchscreens ~~operations~~which ~~may~~are ~~have~~specially antailored ~~adverse~~to ~~impact~~certain onindustries, ~~our~~such ~~operations.~~as ~~For~~industrial ~~example~~HMI, agaming, ~~significant~~financing, ~~interruption~~lottery, inautomotive, ~~the~~medical, and ~~operations~~POS, ofand ~~our~~requires ~~supplier’s manufacturing~~more ~~facilities~~stable ~~could~~supply, ~~cause~~longer ~~delays~~guaranty orand ~~termination~~life ofspan, ~~shipments~~compared ofwith ~~the~~small ~~raw~~size ~~materials~~touchscreens ~~to us,~~ which ~~may~~are ~~cause~~characteristic with ~~delays~~shorter orlife ~~termination of~~cycle ~~shipments~~and ofguaranty ~~our~~but ~~products~~more todemand ~~our~~in ~~customers~~quantity. However, ~~thus~~we ~~resulting~~still have some competitors competing in ~~penalties~~China orand ~~fines~~globally with ~~due~~us. toOur ~~our~~competitors ~~breach~~may ofhave ~~contract.~~more Iffinancial, technical, geographical advantage, marketing and other resources than we ~~could~~do ~~not~~and ~~solve~~may ~~the~~be ~~impact~~more ofexperienced and able to devote greater resources to the ~~interruptions~~development, ofpromotion ~~operations~~and support of ~~our~~their ~~third~~business. Some competitors are well-~~party~~established ~~suppliers,~~in ~~our~~China ~~business~~and ~~operations~~globally and ~~financial~~any ~~results~~defensive ~~may~~measures bethey ~~materially~~take in response to our expansion could hinder our growth and adversely affect our sales and ~~adversely~~results ~~affected~~of operations.

WeFurthermore, ~~face~~increased ~~the~~competition ~~risk~~may ofreduce ~~fluctuations~~our inmarket ~~the~~share ~~cost,~~and ~~availability~~profitability and ~~quality~~require ofus to increase our ~~raw~~sales ~~materials~~and marketing efforts and capital commitment in the future, which could ~~adversely~~negatively affect our results of operations or force us to incur further losses. Although we have accumulated some and continuously growing our customer base, there is no assurance that we will be able to continue to do so in the future against current or future competitors, and such competitive pressures may have a material adverse effect on our business, financial condition and results of operations.

The cost, availability and quality of the raw materials, such as indium tin oxide glasses and panels, are important to our operations. If the cost of raw materials increases due to large market price fluctuation or due to any other reason, our business and results of operations could be adversely affected. Lack of availability of these raw materials, whether due to shortages in supply, delays or interruptions in processing, failure of timely delivery or otherwise, could interrupt our operations and adversely affect our financial results.31

~~We are~~If ~~dependent~~we ~~upon~~do ~~key~~not ~~executives~~obtain substantial ~~and~~additional ~~highly~~financing, ~~qualified~~our ~~managers~~ability ~~and~~to weexecute ~~cannot~~our ~~assure~~business ~~their~~plan ~~retention~~may be impaired.

~~Our~~Due ~~success~~to ~~depends,~~the inwithdrawal ~~part,~~of ~~upon~~ the ~~continued~~land ~~services~~use ofright ~~key~~to ~~members~~the Property and cancellation of our ~~management.~~ownership ~~Our~~certificates ~~executives’~~pertaining ~~and~~to ~~managers’~~the ~~knowledge~~buildings on ofthe Property by the ~~market,~~local ~~our~~government ~~business~~pursuant to the Guidelines and ~~our~~the ~~Company~~Compensation ~~represents~~Agreement, on August 6, 2021, Sichuan Vtouch entered into a ~~key~~contract ~~strength~~with ofthe ~~our~~Chengdu ~~business,~~Wenjiang ~~which~~District ~~cannot~~Planning beand ~~easily~~Natural ~~replicated.~~Resources ~~The~~Bureau ~~success~~for the purchase of a land use right for a parcel of ~~our~~land ~~business~~spanning ~~strategy~~131,010 ~~and~~square ~~our~~feet, ~~future~~for ~~growth~~a ~~also~~consideration ~~depend~~of onapproximately ~~our~~RMB3,925,233 ~~ability~~(equivalent to ~~attract~~$537,755) ~~train,~~for ~~retain~~the ~~and~~Company’s new ~~motivate~~facility. ~~skilled~~The ~~managerial~~Company paid the consideration in full on November 18, 2021. We are in the process of obtaining the certificate of land ~~sales,~~use ~~administration,~~right ~~development~~for the new parcel and ~~operating~~expect ~~personnel~~to receive the certificate from the local government in the first quarter of 2026.

~~There~~As ~~can~~of bethe nodate ~~assurance~~of ~~that~~this ~~our~~Annual ~~existing~~Report, ~~personnel~~we ~~will~~estimate beto ~~adequate~~finish orthe ~~qualified~~building toconstruction ~~carry~~by ~~out~~the ~~our~~end ~~strategy~~of 2025 and ~~operations,~~commence orproduction ~~that~~in wethe ~~will~~first bequarter ~~able~~of to2026, ~~hire~~but orthere ~~retain~~is ~~experienced,~~no ~~qualified~~assurance ~~employees~~and towe ~~carry~~may ~~out~~need ~~our~~extended ~~strategy~~time ~~and~~to ~~operations.~~achieve ~~The~~our ~~loss~~business ofplan. ~~one~~If orwe ~~more~~fail ofto ~~our~~complete ~~key~~such acquisition ~~management~~and orconstruction ~~operating~~within ~~personnel~~the estimated period, orif ~~the~~any, ~~failure~~we will have to ~~attract~~cease ~~and~~all ~~retain~~or ~~additional~~part ~~key~~of ~~personnel~~our operations, ~~could~~and ~~have~~as a ~~material~~result, ~~adverse effect on~~ our business, financial condition and results of operations may be materially and adversely affected.

WeIn doaddition, ~~not~~our ~~have~~plans ~~long-term~~may ~~contracts~~call ~~with~~for ~~our~~significant ~~suppliers~~new investments in research and ~~they~~development, ~~can~~marketing, ~~reduce~~expanded ~~order~~productions ~~quantities~~capacity, orand working ~~terminate~~capital ~~their~~for ~~sales~~raw materials and other items. Should our capital needs be higher than our estimation, we will be required to seek additional investments, loans or debt financing to fully pursue our business plans. Such additional investment may not be available to us aton ~~any~~terms ~~time~~which are favorable or acceptable. Should we be unable to meet our full capital needs, our ability to fully implement our business plan will be impaired.

~~Our~~Any adjustment ~~PRC~~of ~~subsidiary does~~related ~~not~~party ~~have~~transaction ~~long~~pricing ~~term~~could ~~contracts~~lead ~~with~~to ~~our~~additional ~~suppliers. At any time~~taxes, ~~our~~and ~~suppliers~~therefore ~~can~~substantially reduce ~~the~~our ~~quantities~~consolidated ofnet ~~products they~~income ~~sell to us, or cease selling products to us altogether. Such reductions or terminations could have a material adverse impact on~~and ~~our~~the ~~revenues,~~value ~~profits~~of ~~and~~your ~~financial condition~~investment.

29The tax regime in China is rapidly evolving and there is significant uncertainty for taxpayers in China as PRC tax laws may be interpreted in significantly different ways. The PRC tax authorities may assert that we or our subsidiaries owe and/or are required to pay additional taxes on previous or future revenue or income. In particular, under applicable PRC laws, rules and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. If the PRC tax authorities determine that any contractual arrangements were not entered into on an arm’s length basis and therefore constitute a favorable transfer pricing, the PRC tax liabilities of the relevant subsidiaries could be increased, which could increase our overall tax liabilities. In addition, the PRC tax authorities may impose late payment interest. Our net income may be materially reduced if our tax liabilities increase.

If our preferential wetax ~~fail~~treatments toand ~~adopt~~government ~~new~~subsidies ~~technologies~~are torevoked ~~evolving~~or ~~customer~~become ~~needs~~unavailable or ~~emerging~~if ~~industry~~the ~~standards,~~calculation of our ~~business~~tax liability is successfully challenged by the PRC tax authorities, we may be ~~materially~~required to pay tax, interest and ~~adversely affected~~penalties in excess of our tax provisions.

ToThe ~~remain~~Chinese ~~competitive,~~government wehas ~~must~~provided ~~continue~~tax incentives to ~~stay~~our ~~abreast~~former ofsubsidiary in Mainland China, Sichuan Wetouch, including reduced enterprise income tax rates. For example, under the ~~constantly~~PRC ~~evolving~~Enterprise ~~industry~~Income ~~trends~~Tax Law and toits ~~enhance~~implementation ~~and~~rules, ~~improve~~the ~~our~~statutory ~~technology~~enterprise income tax ~~accordingly~~rate is 25%. ~~Our~~However, ~~success~~the ~~will~~income ~~depend,~~tax of an enterprise that has been determined to be a qualified enterprise located in ~~part,~~western onregion of ~~our~~Mainland ~~ability~~China can be reduced to ~~identify,~~a ~~develop,~~preferential ~~acquire~~rate orof ~~license~~15%. ~~leading~~The ~~technologies~~qualification ~~useful~~of inpreferential tax rate is effective for a renewable ~~our~~three-year permitted. As we have dissolved Sichuan Wetouch, and its business and operations have been assumed by Sichuan Vtouch, Sichuan Vtouch is planning to apply for the preferential rate of 15% as a qualified enterprise with the PRC tax authorities. ~~There~~As ~~can~~of bethe nodate ~~assurance~~of this ~~that~~Annual Report, we have not applied for the preferential rate of 15%. If Sichuan Vtouch later applies but its application for the qualification of preferential tax rate benefit is not approved, our PRC subsidiary will still be ~~able~~subject to ~~use~~the ~~new~~statutory ~~technologies~~enterprise ~~effectively~~income tax orrate ~~meet~~of ~~customer’s requirements~~25%. If Further, in the ordinary course of our business, we are ~~unable~~subject to ~~adapt~~complex inincome atax ~~cost-effective~~and other tax regulations, and significant ~~timely~~judgment ~~manner~~is required in ~~response~~the todetermination ~~changing~~of ~~market~~a ~~conditions~~provision orfor ~~customer~~income ~~preferences,~~taxes. ~~whether~~Although we believe our tax provisions are reasonable, ~~for~~if ~~technical~~the PRC tax authorities successfully challenge our position and we are required to pay tax, ~~legal~~interest, ~~financial~~and orpenalties ~~other~~in ~~reasons~~excess of our tax provisions, our ~~business~~financial ~~may~~condition and results of operations would be materially and adversely affected.

~~We may experience significant liability claims or complaints from customers, or adverse publicity involving our products and our services.~~32

~~We face~~A ansignificant ~~inherent~~interruption in ~~risk~~the operations of ~~liability~~our ~~claims~~third-party orsuppliers ~~complaints~~could ~~from~~potentially ~~our~~disrupt ~~customers. We take~~ our ~~customers’ complaints seriously and endeavor to reduce such complaints by implementing various remedial measures~~operations. ~~Nevertheless, we cannot assure you that we can successfully prevent or address all customer complaints.~~

~~Any~~We ~~complaints~~have orlimited ~~claims~~control ~~against~~over ~~us,~~the ~~even~~operations ifof ~~meritless~~our ~~and~~third-party ~~unsuccessful,~~suppliers ~~may~~and ~~divert~~other ~~management~~business ~~attention~~partners and ~~other~~any ~~resources~~significant ~~from~~interruption ~~our business~~in ~~and~~their ~~adversely~~operations ~~affect~~may ~~our~~have ~~business~~an ~~and~~adverse impact on our operations. ~~Customers~~For ~~may~~example, ~~lose~~a ~~confidence~~significant interruption in usthe ~~and~~operations of our ~~brand,~~supplier’s manufacturing ~~which~~facilities ~~may~~could ~~adversely~~cause ~~affect~~delays ~~our~~or ~~business and~~termination ~~results~~of shipments of ~~operations.~~the ~~Furthermore,~~raw ~~negative~~materials ~~publicity~~to ~~including~~us, ~~but~~which ~~not~~may ~~limited~~cause todelays ~~negative~~or ~~online~~termination of ~~reviews~~shipments onof ~~social~~our ~~media~~products ~~and~~to ~~crowd-sourced review~~our ~~platforms~~customers, ~~industry~~thus ~~findings~~resulting orin ~~media~~penalties ~~reports~~or ~~related~~fines due to ~~safety~~our ~~and~~breach ~~quality~~ of ~~our~~contract. ~~products,~~If ~~whether~~we orcould not ~~accurate,~~solve the ~~and~~impact ~~whether or~~of ~~not~~the ~~concerning~~interruptions ~~our~~of ~~products,~~operations ~~can~~of ~~adversely~~our ~~affect~~third-party suppliers, our business, operations and financial results ofmay ~~operations~~be materially and ~~reputation~~adversely affected.

We face the risk ~~may~~of ~~experience~~fluctuations ~~losses~~in onthe ~~inventories~~cost, availability and quality of our raw materials, which could adversely affect our results of operations.

~~Frequent~~The ~~new~~cost, ~~product~~availability ~~introductions~~and inquality of the ~~technology~~raw ~~industry~~materials, ~~can~~such ~~result~~as inindium atin ~~decline~~oxide inglasses ~~the~~and ~~selling~~panels, ~~prices~~are important to our operations. If the cost of raw materials increases due to large market price fluctuation or due to any other reason, our ~~products~~business and ~~the~~results ~~obsolescence~~ of ~~our~~operations could ~~existing~~be ~~inventory~~adversely affected. ~~This~~Lack ~~can~~of ~~result~~availability inof athese ~~decrease~~raw inmaterials, ~~the~~whether ~~stated~~due ~~value~~to ofshortages ~~our~~in ~~inventory~~supply, ~~which~~delays weor ~~value~~interruptions in atprocessing, ~~the~~failure ~~lower~~ of ~~cost~~timely delivery or ~~net~~ ~~realizable~~otherwise, ~~value~~could interrupt our operations and adversely affect our financial results.

We ~~manage~~ ~~our~~are ~~inventory~~dependent upon ~~based~~key onexecutives ~~our customers’~~ and ~~our~~highly ~~own~~qualified ~~forecasts.~~managers ~~Although~~and we ~~regularly~~cannot ~~make~~assure ~~adjustments~~their ~~based on market conditions, we typically deliver our goods to our customers several weeks after a firm order is placed~~retention. While we maintain open channels of communication with our top customers to avoid unexpected decreases in firm orders or subsequent changes to placed orders, and try to minimize our inventory levels, such actions by our customers may have a material adverse effect on our inventory management and our results of operations.

WeOur ~~have~~success nodepends, in part, upon the continued services of key members of our management. Our executives’ and managers’ knowledge of the market, our business ~~liability~~and orour ~~disruption~~Company ~~insurance~~represents a key strength of our business, which ~~could~~cannot ~~expose~~be useasily replicated. The success of our business strategy and our future growth also depend on our ability to ~~significant~~attract, ~~costs~~train, retain and ~~business~~motivate ~~disruption~~skilled managerial, sales, administration, development and operating personnel.

~~The~~There ~~insurance~~can ~~industry~~be inno ~~China~~assurance isthat ~~still~~our atexisting anpersonnel ~~early~~will ~~stage~~be ofadequate ~~development,~~or ~~and~~qualified ~~insurance~~to ~~companies~~carry inout ~~China~~our ~~currently~~strategy ~~offer~~and ~~limited~~operations, ~~business-related insurance~~or ~~products.~~that Wewe dowill be ~~not~~able ~~have~~to ~~any~~hire ~~business~~or ~~liability~~retain orexperienced, ~~disruption~~qualified ~~insurance~~employees to ~~cover~~carry out our strategy and operations. WeThe ~~have~~loss ~~determined that the costs~~ of ~~insuring~~one ~~for~~or ~~these~~more ~~risks~~of ~~and~~our ~~the~~key management ~~difficulties~~or ~~associated~~operating ~~with~~personnel, ~~acquiring~~or ~~such~~the ~~insurance~~failure onto ~~commercially~~attract ~~reasonable~~and ~~terms~~retain ~~make it~~additional ~~impractical~~key ~~for~~personnel, uscould to have ~~such~~a ~~insurance.~~material ~~Any~~adverse ~~uninsured~~effect on ~~risks~~our ~~may~~business, ~~result~~financial incondition ~~substantial costs~~ and ~~the diversion of resources, which could adversely affect our~~ results of operations ~~and financial condition~~.

30We do not have long-term contracts with our suppliers and they can reduce order quantities or terminate their sales to us at any time.

WeOur ~~may~~PRC ~~incur~~subsidiary ~~liabilities~~does ~~that~~not ~~are~~have ~~not~~long ~~covered~~term bycontracts ~~insurance~~with our suppliers. At any time, our suppliers can reduce the quantities of products they sell to us, or cease selling products to us altogether. Such reductions or terminations could have a material adverse impact on our revenues, profits and financial condition.

While we seek to maintain appropriate levels of insurance , not all claims are insurable and we may experience major incidents of a nature that are not covered by insurance. We do not have any insurance that cover, among other things, employee-related accidents and injuries, product or business liability and other property damage and liability deriving from our activities. Furthermore, insurance companies in China currently do not offer as extensive an array of insurance products as insurance companies in more developed economies. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. We maintain an amount of insurance protection that we believe is adequate, but there can be no assurance that such insurance will continue to be available on acceptable terms or that our insurance coverage will be sufficient or effective under all circumstances and against all liabilities to which we may be subject. If we were to incur substantial losses or liabilities due to fire, explosions, floods, other natural disasters or accidents or business interruption, our results of operations could be materially and adversely affected. We could, for example, be subject to substantial claims for damages upon the occurrence of several events within one calendar year. In addition, our insurance costs may increase over time in response to any negative development in our claims history or due to material price increases in the insurance market in general.33

~~We may~~If ~~not~~we befail ~~able~~to adopt new technologies to ~~adequately~~evolving ~~protect~~customer ~~and~~needs ~~maintain~~or emerging industry standards, our ~~intellectual~~business ~~property~~may be materially and adversely affected.

~~Our~~To ~~success~~remain ~~will~~competitive, ~~depend~~we onmust ~~our ability to~~ continue to ~~develop~~stay ~~and~~abreast ~~market our products. We have been have five pending patent applications as~~ of the ~~date~~constantly ofevolving ~~this~~industry ~~Annual~~trends ~~Report.~~and Noto ~~assurance~~enhance ~~can~~and beimprove ~~given~~our ~~that~~technology accordingly. ~~such~~Our ~~patents~~success will ~~not be challenged~~depend, ~~invalidated, infringed~~in ~~or circumvented~~part, oron ~~that~~our ~~such~~ability ~~intellectual property rights will provide a competitive advantage~~ to ~~us.~~identify, ~~Also~~develop, ~~litigation may~~acquire ~~be necessary to enforce our intellectual property rights~~ or ~~determine~~license ~~the~~leading ~~validity~~technologies ~~and~~useful ~~scope of the proprietary rights of~~in ~~others~~our business. ~~The~~There ~~outcome~~can ~~of such potential litigation may not~~ be inno ~~our~~assurance ~~favor~~that ~~and~~we ~~any~~will ~~success in litigation may not~~ be able to ~~adequately protect~~use ~~our~~new ~~rights.~~technologies ~~Such~~effectively ~~litigation~~or ~~may~~meet becustomer’s ~~costly~~requirements. If ~~and~~we ~~divert~~are ~~management~~unable ~~attention~~to ~~away~~adapt ~~from our business. An adverse determination~~ in ~~any~~a ~~such~~cost-effective ~~litigation~~and ~~would~~timely ~~impair~~manner ~~our~~in ~~intellectual~~response ~~property~~to ~~rights~~changing ~~and~~market ~~may~~conditions ~~harm~~or ~~our~~customer ~~business~~preferences, ~~prospects and reputation.~~whether ~~Enforcement~~for oftechnical, ~~judgments~~legal, infinancial ~~China~~or isother ~~uncertain~~reasons, ~~and~~our ~~even~~business ~~if we are successful in such litigation it~~ may ~~not~~be ~~provide~~materially usand ~~with~~adversely ~~an effective remedy~~affected.

~~Our introduction~~We ~~of new technologies and products~~ may ~~increase~~experience significant ~~the~~liability ~~likelihood~~claims ~~that~~or ~~third~~complaints ~~parties~~from ~~will~~customers, ~~assert~~or ~~claims~~adverse ~~that~~publicity involving our products ~~infringe upon~~and ~~their~~our ~~proprietary rights~~services.

~~The~~We ~~rapid~~face ~~technological~~an ~~changes~~inherent ~~that~~risk ~~characterize~~of ~~our~~liability ~~industry~~claims ~~require~~or ~~that~~complaints wefrom ~~quickly implement new processes and components with respect to~~ our ~~products~~customers. ~~Often~~We ~~with~~take ~~respect~~our tocustomers’ ~~recently~~complaints ~~developed~~seriously ~~processes~~ and ~~components, a degree of uncertainty exists as~~ endeavor to ~~who~~reduce ~~may rightfully claim ownership rights in~~ such ~~processes~~complaints ~~and~~by ~~components.~~implementing ~~Uncertainty~~various ofremedial ~~this type increases the risk that claims alleging that such components or processes infringe upon third party rights may be brought against us~~measures. ~~Although~~Nevertheless, we ~~take~~cannot ~~and~~assure ~~will~~you ~~continue to take steps to ensure~~ that ~~our~~ ~~new products do not infringe upon third party rights, if our products or manufacturing processes are found to infringe upon third party rights,~~ we ~~may~~can besuccessfully ~~subject to significant liabilities and be required to change our manufacturing processes~~ prevent or beaddress ~~prohibited~~all ~~from manufacturing~~customer ~~certain products, which could have a material adverse effect on our operations and financial condition~~complaints.

WeAny ~~may~~complaints beor ~~required~~claims ~~to defend~~ against ~~charges~~us, ofeven ~~infringement~~if ofmeritless ~~patent or other proprietary rights of third parties. Although patent~~ and ~~other~~ ~~intellectual property disputes in our industry have often been settled through licensing or similar arrangements~~unsuccessful, ~~such~~may ~~defense could~~divert ~~require~~management usattention ~~to incur substantial expense~~ and toother ~~divert significant~~ resources offrom our ~~technical~~ business and ~~management~~adversely ~~personnel,~~affect ~~and could result in~~ our ~~loss~~business ofand ~~rights~~operations. toCustomers ~~develop~~may orlose ~~make~~confidence ~~certain~~in ~~products or require~~ us toand ~~pay~~our ~~monetary~~brand, ~~damages~~which ormay ~~royalties~~adversely toaffect ~~license~~our ~~proprietary~~business ~~rights~~and ~~from~~results ~~third~~of ~~parties~~operations. Furthermore, wenegative ~~cannot~~publicity beincluding ~~certain~~but ~~that~~not ~~the~~limited ~~necessary~~to ~~licenses~~negative ~~would~~online bereviews ~~available~~on tosocial usmedia onand ~~acceptable terms,~~crowd-sourced ifreview ~~at all. Accordingly~~platforms, anindustry ~~adverse~~findings ~~determination in a judicial~~ or ~~administrative~~media ~~proceeding~~reports orrelated ~~failure~~ to ~~obtain~~safety ~~necessary licenses could prevent us from manufacturing~~ and ~~selling~~quality ~~certain~~ of our products~~. Any such litigation~~, whether ~~successful~~ or ~~unsuccessful~~not accurate, ~~could~~and ~~result~~whether inor ~~substantial~~not ~~costs~~concerning toour usproducts, ~~and~~can ~~diversions~~adversely ofaffect our ~~resources~~business, ~~either~~results of ~~which~~operations ~~could~~and ~~adversely affect our business~~reputation.

31We may experience losses on inventories.

~~Risks~~Frequent ~~Related~~new toproduct ~~Doing~~introductions ~~Business~~in the technology industry can result in ~~China~~a decline in the selling prices of our products and the obsolescence of our existing inventory. This can result in a decrease in the stated value of our inventory, which we value at the lower of cost or net realizable value.

~~Adverse~~We ~~regulatory~~manage ~~developments~~our ininventory ~~China~~based ~~may~~on ~~subject~~our uscustomers’ toand ~~additional~~our ~~regulatory~~own ~~review~~forecasts. ~~and~~Although ~~expose~~we usregularly tomake ~~government~~adjustments ~~restrictions,~~based ~~and~~on ~~additional~~market conditions, ~~disclosure~~we ~~requirements~~typically ~~and~~deliver ~~regulatory~~our ~~scrutiny~~goods to beour ~~adopted~~customers byseveral ~~the~~weeks ~~SEC~~after ina ~~response~~firm toorder ~~risks~~is ~~related~~placed. toWhile ~~recent~~we ~~regulatory~~maintain ~~developments in~~open ~~China~~channels ~~may~~of ~~impose~~communication with ~~additional~~our ~~compliance~~top ~~requirements~~customers ~~for~~to ~~companies~~avoid ~~with~~unexpected ~~significant~~decreases ~~China-based~~in ~~operations,~~firm ~~all~~orders ofor ~~which~~subsequent ~~could~~changes ~~increase our~~to ~~compliance~~placed ~~costs~~orders, ~~subject~~and ustry to ~~additional~~minimize ~~disclosure~~our ~~requirements~~inventory levels, ~~and/or~~such ~~suspend~~actions orby ~~terminate~~our customers may have a material adverse effect on our ~~future~~inventory ~~securities~~management ~~offerings, making~~and ~~capital-raising~~our ~~more~~results ~~difficult~~of operations.

~~As substantially~~We all of our operations are based in China, we are subject to a wide range of relevant PRC laws. The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore and the government-led cybersecurity reviews of certain companies, may lead to additional regulatory review in China over our financing and capital raising activities in the United States. In addition, we may become subject to industry-wide regulations that may be adopted by the relevant PRC authorities, which may have ~~the~~no ~~effect of limiting our product and service offerings, restricting the scope of our operations in China, or causing~~business ~~the~~liability ~~suspension~~ or ~~termination~~disruption ~~of our business operations in China entirely~~insurance, ~~all of~~ which ~~will~~could ~~materially~~expose ~~and~~us ~~adversely~~to ~~affect~~significant ~~our~~costs ~~business, financial condition~~ and ~~results of operations. We may have to adjust, modify, or completely change our~~ business operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial action adopted by us can be completed in a timely, cost-efficient, or liability-free manner or at alldisruption.

OnThe ~~July~~insurance 6,industry ~~2021, the relevant PRC government authorities published the Opinions on Strictly Cracking Down Illegal Securities Activities~~ in ~~Accordance~~China ~~with~~is ~~the~~still ~~Law.~~at ~~These~~an ~~opinions~~early ~~call~~stage ~~for~~of ~~strengthened~~development, ~~regulation over illegal securities activities~~ and ~~supervision~~insurance oncompanies ~~overseas listings~~in by China~~-based~~ ~~companies~~currently ~~and~~offer ~~propose~~limited tobusiness-related insurance ~~take~~products. ~~effective~~We ~~measures,~~do ~~such~~not ashave ~~promoting~~any ~~the~~business ~~construction~~liability ofor ~~relevant~~disruption ~~regulatory~~insurance ~~systems~~ to ~~deal~~cover ~~with~~our ~~the risks and incidents faced by China-based overseas-listed companies~~operations. OnWe ~~December~~have ~~24,~~determined ~~2021,~~that the ~~CSRC released the Administrative~~ ~~Provisions~~costs of ~~the~~insuring ~~State Council Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises (Draft~~ for ~~Comments) (the~~these ~~“Draft~~risks ~~Administrative Provisions”)~~ and the ~~Measures~~difficulties ~~for~~associated ~~the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the “Draft Filing Measures”, together~~ with ~~the~~acquiring ~~Draft~~such ~~Administrative~~insurance ~~Provisions, the~~on ~~“Draft~~commercially ~~Rules”).~~reasonable ~~The~~terms ~~Draft Rules lay out the filing regulations for both direct and indirect overseas listings and clarify~~make ~~the~~it ~~determination~~impractical ~~criteria~~ for ~~indirect~~us ~~overseas~~to ~~listings~~have insuch ~~overseas markets~~insurance. ~~Among~~Any ~~other~~uninsured ~~requirements,~~risks ifmay aresult ~~domestic~~in ~~enterprise~~substantial ~~intends to~~costs ~~indirectly offer~~ and ~~list securities in an overseas market,~~ the ~~record-filing~~diversion ~~obligation~~of ~~shall be completed within three working days after the overseas listing application is submitted. On February 17~~resources, ~~2023, the CSRC promulgated the Trial Administrative Measures,~~ which ~~took effect on~~ ~~March~~could ~~31,~~adversely ~~2023.~~affect ~~The~~our ~~Trial~~results ~~Administrative~~of ~~Measures~~operations ~~further stipulate the rules~~ and ~~requirements~~financial ~~for overseas offering and listing conducted by PRC domestic companies~~condition. Upon the effectiveness of the Trial Administrative Measures, we could be required to go through the filing procedure. If required, we cannot assure you that we will be able to complete such process on time or at all.

On July 10, 2021, the Cyberspace Administration of China issued the Measures for Cybersecurity Review (Revision Draft for Comments), or the Measures, for public comments, which propose to authorize the relevant government authorities to conduct cybersecurity review on a range of activities that affect or may affect national security, including listings in foreign countries by companies that possess the personal data of more than one million users. On December 28, 2021, the Measures for Cybersecurity Review (2021 version) were promulgated and became effective on February 15, 2022 (the “Measures”), which iterates that any “online platform operators” controlling personal information of more than one million users that seeks to list on a foreign stock exchange shall also be subject to cybersecurity review. As we are neither an “operator of critical information infrastructure” nor a “data processor” carrying out data processing activities that affect or may affect national security, we believe that the Measures are not applicable to us even after they take effect in current form. The PRC government is increasingly focused on data security, recently launching cybersecurity review against a number of mobile apps operated by several US-listed Chinese companies and prohibiting these apps from registering new users during the review period. There are great uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations regarding data and privacy security. We may be required to change our data and other business practices and be subject to regulatory investigations, penalties, and increased cost of operations as a result of these laws and policies.34

32We may incur liabilities that are not covered by insurance.

OnWhile ~~July~~we ~~30,~~seek ~~2021,~~to inmaintain ~~response~~appropriate tolevels ~~the~~of ~~recent~~insurance, ~~regulatory~~not ~~developments~~all inclaims ~~China~~are insurable and ~~actions~~we ~~adopted~~may byexperience ~~the~~major ~~PRC~~incidents ~~government,~~of ~~the~~a ~~Chairman~~nature ofthat ~~the~~are ~~SEC~~not ~~issued~~covered aby ~~statement~~insurance. ~~asking~~We ~~the~~do ~~SEC~~not ~~staff~~have toany ~~seek~~insurance ~~additional~~that ~~disclosures~~cover, ~~from~~among ~~offshore~~other ~~issuers~~things, ~~associated~~employee-related ~~with~~accidents ~~China-based~~and ~~operating~~injuries, product ~~companies~~or ~~before~~business ~~their~~liability ~~registration~~and ~~statements~~other ~~will~~property bedamage ~~declared~~and ~~effective,~~liability ~~including~~deriving ~~whether~~from ~~the~~our ~~China-based~~activities. ~~operating~~Furthermore, ~~company~~insurance ~~and~~companies ~~the~~in China ~~issuer,~~currently ~~when~~do ~~applicable,~~not ~~received~~offer oras ~~were~~extensive ~~denied~~an ~~permission~~array ~~from~~of ~~Chinese~~insurance ~~authorities~~products toas ~~list~~insurance oncompanies ~~U.S.~~in ~~exchanges~~more ~~and~~developed ~~the~~economies. ~~risks~~We ~~that~~have ~~such~~determined ~~approval~~that ~~could~~the becosts ~~denied~~of orinsuring ~~rescinded.~~for Onthese ~~August~~risks 1,and ~~2021,~~ the ~~China~~difficulties ~~Securities~~associated ~~Regulatory~~with ~~Commission~~acquiring ~~stated~~such ininsurance aon ~~statement~~commercially ~~that~~reasonable terms make it ~~had taken~~impractical ~~note~~for ofus ~~the~~to ~~new~~have ~~disclosure~~such ~~requirements~~insurance. ~~announced~~We bymaintain ~~the~~an ~~SEC~~amount ~~regarding~~of ~~the~~insurance ~~listings~~protection ofthat ~~Chinese~~we ~~companies~~believe ~~and~~is ~~the~~adequate, ~~recent~~but ~~regulatory~~there ~~development~~can inbe ~~China,~~no ~~and~~assurance that ~~both~~such ~~countries~~insurance ~~should~~will ~~strengthen~~continue ~~communications~~to be available on ~~regulating~~acceptable ~~China-related~~terms ~~issuers.~~or Wethat ~~are~~our ~~subject~~insurance tocoverage will be sufficient aor ~~variety~~effective ofunder ~~PRC~~all ~~laws~~circumstances and against all liabilities to which we may be subject. If we were to ~~tightened~~incur ~~regulatory~~substantial ~~review~~losses ~~and~~or liabilities ~~exposed~~due to ~~government~~fire, ~~restrictions~~explosions, infloods, ~~China.~~other Innatural ~~light~~disasters ~~of the~~or ~~recent~~accidents ~~regulatory~~or ~~and~~business ~~policy~~interruption, ~~developments~~our inresults ~~China~~of ~~and~~operations could ~~government~~be ~~actions~~materially ~~taken~~and byadversely ~~the~~affected. ~~PRC~~We ~~government~~could, ~~including~~for ~~possible~~example, ~~imposition of~~be ~~restrictions~~subject ~~and/or~~to ~~approval~~substantial ~~requirements~~claims onfor ~~China-based~~damages ~~companies~~upon ~~raising~~the ~~capital~~occurrence ~~offshore,~~of several ~~the~~events ~~offering~~within ofone calendar year. In addition, our ~~securities~~insurance costs may ~~be subject~~increase toover ~~additional~~time ~~disclosure~~in ~~requirements~~response ~~and~~to ~~review~~any ~~that~~negative ~~the~~development in ~~SEC~~our orclaims ~~other~~history ~~regulatory~~or ~~authorities~~due into ~~the~~material ~~United~~price ~~States~~increases ~~may~~in ~~adopt for~~the ~~companies~~insurance ~~with~~market ~~China-based~~in ~~operations~~general.

We ~~are~~ ~~subject~~may tonot the Trial Administrative Measures, as the Company has: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by PRC domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; and, if required, we cannot assure you that we will be able to ~~complete~~adequately ~~such process~~protect onand ~~time~~maintain orour atintellectual ~~all~~property.

OnOur ~~February~~success ~~17,~~will ~~2023,~~depend ~~the~~on ~~CSRC~~our ~~promulgated~~ability ~~the~~to ~~Trial~~continue ~~Administrative~~to ~~Measures~~develop ~~of Overseas Securities Offering~~ and ~~Listing~~market byour ~~Domestic Companies (the “Trial Administrative Measures”), which took effect on March 31, 2023~~products. ~~Compared~~We tohave ~~the~~five ~~Draft~~pending ~~Rules,~~patent ~~the~~applications ~~Trial~~as ~~Administrative Measures further clarified and emphasized several aspects, including: (i) comprehensive determination~~ of the ~~“indirect overseas~~ ~~offering~~date ~~and listing by Mainland China domestic companies” in compliance with the principle~~ of ~~“substance~~this ~~over~~Annual ~~form” and~~Report. ~~particularly,~~No anassurance ~~issuer~~can ~~will~~ be ~~required~~given tothat gosuch ~~through~~patents ~~the~~will ~~filing~~not ~~procedures~~be ~~under the Trial Administrative Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue~~challenged, ~~total profit~~invalidated, ~~total~~infringed ~~assets~~ or ~~net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by Mainland China domestic companies~~circumvented, ~~and b) the main parts of the issuer’s business activities are conducted in Mainland China, or its main places of business~~ ~~are located in Mainland China,~~ or ~~the~~that ~~senior~~such ~~managers~~intellectual inproperty ~~charge~~rights ofwill ~~its~~provide ~~business operation and management are mostly Chinese citizens or domiciled in Mainland China; (ii) exemptions from immediate filing requirements for issuers that~~ a) ~~have~~competitive ~~already~~advantage ~~been~~to ~~listed or registered but not yet listed in foreign securities markets, including U~~us.S. ~~markets~~Also, ~~prior~~litigation tomay ~~the~~be ~~effective~~necessary ~~date of the Trial Administrative Measures, and b) are not required~~ to ~~re-perform~~enforce ~~the regulatory procedures with the relevant overseas regulatory authority or the overseas stock~~our ~~exchange,~~intellectual c)property ~~whose~~rights ~~such overseas securities offering~~ or ~~listing~~determine shall be completed before September 30, 2023. However, such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the ~~CSRC;~~ ~~(iii)~~validity ~~a negative list of types of issuers banned from listing overseas, such as issuers under investigation for bribery~~ and ~~corruption; (iv)~~scope ~~regulation~~ of ~~issuers in specific industries; (v) issuers’ compliance with national security measures and~~ the ~~personal~~proprietary ~~data protection~~rights ~~laws;~~of ~~and~~others. ~~(vi)~~The ~~certain~~outcome ~~other~~of ~~matters~~ such ~~as:~~potential ~~an issuer must file with the CSRC within three business days after it submits~~litigation anmay ~~application~~not ~~for initial public offering to competent overseas regulators; and subsequent reports shall~~ be ~~filed~~in ~~with~~our ~~the~~favor ~~CSRC on material events, including change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings~~ and ~~listings. Our~~any ~~PRC~~success ~~counsel has advised that because our common stock currently trades~~ in ~~the~~litigation ~~U.S.,~~may ~~we were~~ not ~~required~~be toable ~~submit filings~~ to ~~the CSRC~~adequately ~~before~~protect ~~the~~our ~~Offering was completed and the Offering was not conditioned on CSRC approval~~rights. ~~Rather,~~Such ~~within~~litigation ~~three~~may ~~days~~be ~~of the closing~~costly ofand ~~the~~divert ~~Offering,~~management weattention ~~are~~away ~~required~~from toour ~~submit~~business. ~~filings~~An toadverse ~~the~~determination ~~CSRC~~ in ~~accordance~~any ~~with~~such ~~the~~litigation ~~Trial~~would ~~Administrative~~impair ~~Measures.~~our ~~According to the~~intellectual ~~relevant~~property ~~provisions~~rights ~~of the Trial Administrative Measures~~ and ~~its~~may ~~supporting~~harm ~~guidelines,~~our ~~the Company is required to fulfill the filing procedures with the CSRC within three days of the closing of the Offering. According to the Trial Administrative Measures~~business, ~~the~~prospects ~~Company has submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the lead underwriter for the Offering,~~ and ~~the Company withdrew the filing from the CSRC~~reputation. ~~The~~Enforcement ~~Company~~of ~~will~~judgments ~~submit~~in ~~the~~China filing materials again when the materials are ready. However, given that the Trial Administrative Measures were recently promulgated, there remain substantial uncertainties as to their interpretation, application, and enforcement and there is nouncertain ~~guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion that we~~ and ~~our~~even ~~PRC~~if ~~counsel have reached. If the CSRC has determined that~~ we ~~have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measures or make a misrepresentation,~~are ~~misleading~~successful ~~statement or material omission~~ in ~~the~~such ~~materials~~litigation weit ~~submit~~may tonot ~~the~~provide ~~CSRC, the CSRC would have the right to order rectification, issue a warning and impose a fine on~~ us ofwith ~~between~~an ~~RMB~~effective 1 million and RMB 10 million and issuing a warning to the parties responsible for such failure, misrepresentation or material omission and impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 millionremedy.

33Our introduction of new technologies and products may increase the likelihood that third parties will assert claims that our products infringe upon their proprietary rights.

~~Our~~The ~~common~~rapid ~~stock~~technological ~~will~~changes bethat ~~prohibited~~characterize ~~from~~our ~~trading~~industry inrequire ~~the~~that ~~United~~we ~~States~~quickly ~~under~~implement ~~the~~new ~~Holding~~processes ~~Foreign~~and ~~Companies~~components ~~Accountable~~with ~~Act,~~respect to orour ~~the~~products. ~~HFCAA~~Often with respect to recently developed processes and components, a degree of uncertainty exists as to who may rightfully ifclaim itownership isrights ~~later~~in ~~determined~~such ~~that~~processes and components. Uncertainty of this type increases the ~~PCAOB~~risk isthat ~~unable~~claims toalleging ~~inspect~~that ~~and~~such ~~investigate~~components or ~~completely~~processes ~~our~~infringe ~~auditor~~upon third party rights may be brought against us. ~~The~~Although ~~delisting~~we oftake and ~~prohibition from~~will ~~trading~~continue ofto take steps to ensure that our ~~common~~new ~~stock~~products do not infringe upon third party rights, orif ~~the~~our ~~threat~~products ofor ~~their~~manufacturing ~~being~~processes ~~delisted~~are ~~and~~found ~~prohibited~~to ~~from~~infringe ~~trading~~upon third party rights, we may ~~cause~~be ~~the~~subject ~~value~~to ofsignificant ~~our~~liabilities ~~common stock~~and be required to ~~significantly~~change ~~decline~~our manufacturing processes or be ~~worthless~~prohibited from manufacturing certain products, which could have a material adverse effect on our operations and financial condition.

~~Pursuant~~We may be required to ~~the~~defend ~~HFCAA,~~against ifcharges ~~the~~of ~~SEC~~infringement ~~determines~~of ~~that~~patent weor ~~have~~other ~~filed~~proprietary ~~audit~~rights ~~reports~~of ~~issued~~third byparties. aAlthough ~~registered~~patent ~~public~~and other ~~accounting~~intellectual ~~firm~~property ~~that~~disputes ~~has~~in ~~not~~our industry have often been settled through licensing or similar arrangements, such defense could ~~subject~~require us to ~~inspections~~incur bysubstantial ~~the~~expense ~~PCAOB~~and ~~for~~to ~~two~~divert ~~consecutive~~significant ~~years,~~resources ~~the~~of ~~SEC~~our ~~will~~technical ~~prohibit~~and management personnel, and could result in our ~~shares~~loss of rights to develop or make certain products or require us to pay monetary damages or royalties to license proprietary rights from ~~being~~third ~~traded~~parties. Furthermore, we cannot be certain that the necessary licenses would be available to us on acceptable terms, if at all. Accordingly, an adverse determination in a ~~national~~judicial ~~securities~~or administrative proceeding or failure to obtain necessary licenses could prevent ~~exchange~~us from manufacturing and selling certain of our products. Any such litigation, whether successful or unsuccessful, could result in ~~the~~substantial costs ~~over-the-counter~~to ~~trading~~us ~~market~~and indiversions ~~the~~of ~~United~~our ~~States~~resources, either of which could adversely affect our business.

On December 18, 2020, the HFCAA was signed into law. The HFCAA has since then been subject to amendments by the U.S. Congress and interpretations and rulemaking by the SEC. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), which proposes to reduce the period of time for foreign companies to comply with PCAOB audits from three to two consecutive years, thus reducing the time period before the securities of such foreign companies may be prohibited from trading or delisted. On December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law, which contained, among other things, an identical provision to the AHFCAA, and reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.35

~~On December~~Risks ~~16,~~Related ~~2021, the PCAOB issued a report~~ to ~~notify the SEC of its determination relating to the PCAOB’s inability to inspect~~ orDoing ~~investigate~~Business ~~completely registered public accounting firms headquartered~~ in ~~mainland~~ China and Hong Kong. The inability of the PCAOB to conduct inspections of auditors in China made it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause existing and potential investors in issuers operating in China to lose confidence in such issuers’ procedures and reported financial information and the quality of financial statements.

OnAdverse regulatory ~~December~~developments ~~15,~~in ~~2022,~~China ~~the~~may ~~PCAOB~~subject ~~released~~us ato ~~statement~~additional ~~confirming~~regulatory itreview ~~has~~and ~~secured~~expose ~~complete~~us ~~access~~ to ~~inspect~~government restrictions, and ~~investigate~~additional ~~registered public~~disclosure ~~accounting~~requirements ~~firms~~and ~~headquartered~~regulatory inscrutiny ~~mainland~~to ~~China~~be ~~and~~adopted ~~Hong~~by ~~Kong,~~the ~~and~~SEC itin ~~issued~~response ~~the~~to ~~2022~~risks ~~HFCAA~~related ~~Determination~~to ~~Report~~recent toregulatory ~~vacate~~developments ~~its~~in ~~precious~~China ~~determinations~~may toimpose ~~the~~additional ~~contrary.~~compliance ~~The~~requirements ~~PCAOB~~for iscompanies ~~continuing~~with tosignificant ~~demand~~China-based ~~complete access~~operations, ~~and~~all itof ~~will~~which ~~act~~could ~~immediately~~increase toour ~~reconsider~~compliance costs, ~~such~~subject ~~determinations should~~us ~~China~~to ~~obstruct~~additional disclosure requirements, and/or ~~otherwise~~suspend ~~fail~~or toterminate ~~facilitate~~our ~~the~~future ~~PCAOB’s~~securities ~~access~~offerings, atmaking ~~any~~capital-raising more ~~time~~difficult.

~~Our~~As ~~auditor,~~substantially ~~the~~all ~~independent~~of ~~registered~~our ~~public~~operations ~~accounting~~are ~~firm~~based ~~that~~in ~~issues~~China, ~~the~~we ~~audit~~are ~~report,~~subject asto ana ~~auditor~~wide range of ~~companies~~relevant ~~that~~PRC ~~are~~laws. ~~traded~~The ~~publicly~~recent regulatory developments in ~~the~~China, ~~United~~in ~~States~~particular ~~and~~with arespect ~~firm~~to ~~registered~~restrictions ~~with~~on China-based companies raising capital offshore and the ~~PCAOB~~government-led cybersecurity reviews of certain companies, ismay ~~subject~~lead to ~~laws~~additional regulatory review in ~~the~~China over our financing and capital raising activities in the United States. In addition, ~~pursuant~~we may become subject to ~~which~~industry-wide regulations that may be adopted by the ~~PCAOB~~relevant ~~conducts~~PRC authorities, which ~~regular~~may ~~inspections~~have tothe ~~assess~~effect ~~its~~of ~~compliance~~limiting ~~with~~our product and service offerings, restricting the ~~applicable~~scope ~~professional~~of ~~standards.~~our ~~Our~~operations ~~auditor~~in isChina, ~~headquartered~~or causing the suspension or termination of our business operations in ~~Lakewood~~China entirely, ~~Colorado~~all of which will materially and adversely affect our business, financial condition and ~~has~~results ~~been~~of ~~inspected~~operations. We may have to adjust, modify, or completely change our business operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial action adopted by ~~the~~us ~~PCAOB~~can onbe completed in a ~~regular~~timely, cost-efficient, ~~basis~~or liability-free manner or at all.

~~Further~~On ~~developments~~July ~~related~~6, to2021, the ~~HFCAA~~relevant ~~could~~PRC ~~add~~government ~~uncertainties~~authorities topublished ~~our~~the ~~offering.~~Opinions Weon ~~cannot~~Strictly ~~assure~~Cracking ~~you~~Down ~~what~~Illegal ~~further~~Securities ~~actions~~Activities ~~the~~in Accordance ~~SEC,~~with the ~~PCAOB or~~Law. ~~the~~These ~~stock~~opinions ~~exchanges~~call ~~will~~for ~~take~~strengthened toregulation ~~address~~over ~~these~~illegal ~~issues~~securities activities and ~~what~~supervision ~~impact~~on ~~such~~overseas listings ~~actions~~by ~~will~~China-based ~~have~~companies onand ~~companies~~propose ~~that~~to ~~have~~take ~~significant~~effective ~~operations~~measures, such as promoting the construction of relevant regulatory systems into deal with the ~~PRC~~risks and ~~have~~incidents ~~securities~~faced ~~listed~~by onChina-based aoverseas-listed Ucompanies.S. ~~stock~~Pursuant ~~exchange~~to ~~(including~~the aOpinions, ~~national~~Chinese ~~securities~~regulators ~~exchange~~are required orto ~~over-~~accelerate rulemaking related to the~~-counter~~ ~~stock~~overseas ~~market). In~~issuance ~~addition,~~and ~~any~~listing ~~additional~~of ~~actions~~securities, ~~proceedings,~~and orupdate ~~new~~the ~~rules~~existing ~~resulting~~laws ~~from~~and ~~these~~regulations related ~~efforts~~ to ~~increase~~data Usecurity, cross-border data flow, and management of confidential information.S. ~~regulatory~~Numerous ~~access~~regulations, toguidelines ~~audit~~and other ~~information~~measures ~~could~~are ~~create~~expected ~~uncertainty~~to ~~for~~be ~~investors,~~adopted under the ~~market~~umbrella ~~price~~ of ~~our~~or ~~common~~in ~~stock~~addition ~~could~~to bethe ~~adversely~~Cybersecurity ~~affected~~Law, ~~and~~Data weSecurity ~~could~~Law beand Personal Information ~~delisted~~Protection ifLaw. weAs ~~and~~of ~~our~~the ~~auditor~~date ~~are~~of ~~unable~~this toReport, ~~meet~~no ~~the~~official ~~PCAOB~~guidance ~~inspection~~or ~~requirement.~~related ~~Such~~implementation arules have ~~delisting~~been ~~would~~issued ~~substantially~~yet ~~impair~~and ~~your~~the ~~ability~~interpretation toof ~~sell~~these oropinions ~~purchase~~remains ~~our~~unclear ~~common~~at ~~stock~~this ~~when~~stage. ~~you~~On ~~wish~~February to17, ~~do so~~2023, ~~and~~the ~~would~~CSRC ~~have~~promulgated athe ~~negative~~Trial ~~impact~~Administrative Measures, which took effect on March 31, 2023. The Trial Administrative Measures further stipulate the ~~price~~rules ofand ~~our~~requirements ~~shares~~for overseas offering and listing conducted by PRC domestic companies.

34On July 10, 2021, the Cyberspace Administration of China issued the Measures for Cybersecurity Review (Revision Draft for Comments), or the Measures, for public comments, which propose to authorize the relevant government authorities to conduct cybersecurity review on a range of activities that affect or may affect national security, including listings in foreign countries by companies that possess the personal data of more than one million users. On December 28, 2021, the Measures for Cybersecurity Review (2021 version) were promulgated and became effective on February 15, 2022 (the “Measures”), which iterates that any “online platform operators” controlling personal information of more than one million users that seeks to list on a foreign stock exchange shall also be subject to cybersecurity review. As we are neither an “operator of critical information infrastructure” nor a “data processor” carrying out data processing activities that affect or may affect national security, we believe that the Measures are not applicable to us even after they take effect in current form. The PRC government is increasingly focused on data security, recently launching cybersecurity review against a number of mobile apps operated by several US-listed Chinese companies and prohibiting these apps from registering new users during the review period. There are great uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations regarding data and privacy security. We may be required to change our data and other business practices and be subject to regulatory investigations, penalties, and increased cost of operations as a result of these laws and policies.

~~We may be subject to substantial fine if the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measure.~~36

On ~~February~~July 1730, ~~2023~~2021, in response to the ~~CSRC~~recent ~~promulgated~~regulatory developments in China and actions adopted by the ~~Trial~~PRC ~~Administrative~~government, ~~Measures~~the ~~that~~Chairman ~~require~~of ~~issuers~~the SEC issued a statement asking the SEC staff to ~~carry~~seek ~~out~~additional ~~filing~~disclosures ~~procedures~~from asoffshore ~~required~~issuers associated with China-based operating ifcompanies ~~they~~before ~~conduct~~their ~~refinancing~~registration orstatements ~~are~~will ~~involved~~be indeclared ~~other~~effective, ~~circumstances~~including ~~that~~whether ~~require~~the ~~filing~~China-based ~~with~~operating company and the issuer, ~~CSRC;~~when ~~(iii)~~applicable, areceived ~~negative~~or were denied permission from Chinese authorities to list ofon ~~types of~~U.S. ~~issuers~~exchanges ~~banned~~and ~~from~~the ~~listing~~risks ~~overseas,~~that such approval ascould ~~issuers~~be ~~under~~denied ~~investigation~~or ~~for~~rescinded. ~~bribery~~On ~~and~~August ~~corruption;~~1, ~~(iv)~~2021, ~~regulation~~the ofChina ~~issuers~~Securities Regulatory Commission stated in a statement that it had ~~specific~~taken ~~industries;~~note ~~(v)~~of ~~issuers’~~the ~~compliance~~new ~~with~~disclosure ~~national~~requirements ~~security~~announced ~~measures~~by ~~and~~the SEC regarding the ~~personal~~listings ~~data~~of ~~protection~~Chinese ~~laws;~~companies and ~~(vi)~~the ~~certain~~recent regulatory ~~other~~development ~~matters~~in ~~such~~China, ~~as:~~and anthat ~~issuer~~both ~~must~~countries ~~file~~should ~~with~~strengthen ~~the~~communications ~~CSRC~~on ~~within~~regulating ~~three~~China-related ~~business~~issuers. ~~days~~We ~~after~~are itsubject ~~submits~~to a anvariety ~~application~~of ~~for~~PRC ~~initial~~laws ~~public offering~~and may be subject to ~~competent~~tightened ~~overseas~~regulatory ~~regulators;~~review and ~~subsequent~~exposed ~~reports~~to ~~shall~~government berestrictions ~~filed~~in ~~with~~China. In light of the recent ~~CSRC~~regulatory onand ~~material~~policy ~~events~~developments in China and government actions taken by the PRC government, including ~~change~~possible imposition of ~~control~~restrictions and/or ~~voluntary~~approval orrequirements ~~forced~~on ~~delisting~~China-based companies raising capital offshore, the offering of our securities may be subject to additional disclosure requirements and review that the ~~issuer(s)~~SEC ~~who~~or ~~have~~other ~~completed~~regulatory ~~overseas~~authorities ~~offerings~~in the United States may adopt for companies with China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements, and/or suspend ~~listings~~or terminate our future securities offerings, making capital-raising more difficult.

~~Our PRC~~We counsel has advised that because our common stock currently trades in the U.S., we were not required to submit filings to the CSRC before the Offering was completed and the Offering was not conditioned on CSRC approval. Rather, within three days of the closing of the Offering, we are ~~required~~ subject to ~~submit filings to~~ the ~~CSRC in accordance with the~~ Trial Administrative Measures~~. We have submitted the filing materials to the CSRC~~, ~~but~~as the ~~materials~~Company ~~were~~has: ~~not~~(i) ~~complete~~50% ~~due~~or tomore ~~lack~~ of ~~a commitment letter from~~ the ~~lead~~issuer’s ~~underwriter~~operating ~~for the Offering~~revenue, ~~and~~total ~~we withdrew the filing from the CSRC. We will submit the filing materials again when the materials are ready. However~~profit, total ~~given~~assets ~~that~~or ~~the~~net ~~Trial~~assets ~~Administrative Measures were recently promulgated, there remain substantial uncertainties~~ as todocumented ~~their~~in ~~interpretation, application,~~its ~~and~~audited ~~enforcement~~consolidated ~~and~~financial ~~there~~statements isfor ~~no guarantee that~~ the ~~relevant~~most ~~PRC~~recent ~~government~~accounting ~~agencies,~~year ~~including~~is ~~the~~accounted ~~CSRC, would reach the~~for ~~same~~by ~~conclusion~~PRC ~~that~~domestic wecompanies; and ~~our~~(ii) ~~PRC counsel have reached. If~~ the ~~CSRC~~main ~~has~~parts ~~determined~~of ~~that we have failed to comply with~~ the ~~post-offering~~issuer’s ~~filing~~business ~~obligations~~activities ~~imposed~~are byconducted ~~the~~in ~~Trial~~mainland ~~Administrative~~China, ~~Measures~~ or ~~make~~its amain places ~~misrepresentation,~~of ~~misleading~~business ~~statement~~are orlocated ~~material omission~~ in ~~the~~mainland ~~materials we submit to the CSRC~~China, ~~the~~or ~~CSRC would have~~ the ~~right~~ tosenior ~~order~~managers ~~rectification,~~in ~~issue~~charge ~~a warning and impose a fine on us~~ of ~~between~~its ~~RMB~~business 1operation ~~million~~ and ~~RMB~~management 10are ~~million and issuing a warning~~mostly toChinese ~~the~~citizens ~~parties~~or ~~responsible~~domiciled ~~for~~in ~~such~~mainland ~~failure,~~China; ~~misrepresentation or material omission~~ and, ~~impose~~if ~~a fine on each of such individuals ranging from RMB 500~~required,~~000~~ towe ~~RMB~~cannot 5assure ~~million.~~you ~~Our~~that ~~operations~~we ~~may~~will be ~~negatively~~able ~~affected,~~to ~~which~~complete ~~could~~such ~~materially and adversely affect our liquidity~~process ~~and~~on ~~our~~time ~~ability~~or toat ~~fund and expand our business~~all.

~~Changes~~On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures”), which took effect on March 31, 2023. Compared to the Draft Rules, the Trial Administrative Measures further clarified and emphasized several aspects, including: (i) comprehensive determination of the “indirect overseas offering and listing by Mainland China domestic companies” in compliance with the principle of “substance over form” and particularly, an issuer will be required to go through the filing procedures under the Trial Administrative Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by Mainland China domestic companies, and b) the main parts of the issuer’s business activities are conducted in Mainland China, or its main places of business are located in Mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in Mainland China; (ii) exemptions from immediate filing requirements for issuers that a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Administrative Measures, and ~~international~~b) ~~trade~~are ~~policies~~not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, ~~particularly~~c) whose such overseas securities offering or listing shall be completed before September 30, 2023. However, such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with ~~regard~~the CSRC; (iii) a negative list of types of issuers banned from listing overseas, such as issuers under investigation for bribery and corruption; (iv) regulation of issuers in specific industries; (v) issuers’ compliance with national security measures and the personal data protection laws; and (vi) certain other matters such as: an issuer must file with the CSRC within three business days after it submits an application for initial public offering to ~~China~~competent overseas regulators; and subsequent reports shall be filed with the CSRC on material events, ~~may~~including ~~adversely~~change ~~impact~~of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings and listings.Our PRC counsel has advised that because our ~~business~~common stock currently trades in the U.S., we were not required to submit filings to the CSRC before the Offering was completed and ~~operating~~the ~~results~~Offering was not conditioned on CSRC approval. Rather, within three days of the closing of the Offering, we are required to submit filings to the CSRC in accordance with the Trial Administrative Measures. According to the relevant provisions of the Trial Administrative Measures and its supporting guidelines, the Company is required to fulfill the filing procedures with the CSRC within three days of the closing of the 2024 Uplisting Offering. According to the Trial Administrative Measures, the Company has submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the lead underwriter for the Offering, and the Company withdrew the filing from the CSRC. The Company will submit the filing materials again when the materials are ready. However, given that the Trial Administrative Measures were recently promulgated, there remain substantial uncertainties as to their interpretation, application, and enforcement and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion that we and our PRC counsel have reached. If the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measures or make a misrepresentation, misleading statement or material omission in the materials we submit to the CSRC, the CSRC would have the right to order rectification, issue a warning and impose a fine on us of between RMB 1 million and RMB 10 million and issuing a warning to the parties responsible for such failure, misrepresentation or material omission and impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 million.

The U.S. government has recently made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies, including recently-imposed tariffs affecting certain products manufactured in China. It is unknown whether and to what extent new tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry and customers. Although cross-border business may not be an area of our focus, if we plan to sell our products internationally in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact the competitive position of our products or prevent us from being able to sell products in certain countries. If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition, results of operations.37

~~PRC regulation~~Our ofcommon ~~loans~~stock towill ~~and~~be ~~direct~~prohibited ~~investment~~from trading in ~~PRC~~the ~~entities~~United byStates ~~offshore~~under ~~holding~~the ~~companies~~Holding ~~and~~Foreign ~~governmental~~Companies ~~control~~Accountable ofAct, ~~currency~~or ~~conversion may~~the ~~delay~~HFCAA, oras ~~prevent~~amended, usif ~~from~~it ~~using~~is later determined that the ~~proceeds~~PCAOB ofis ~~any~~unable ~~offerings~~to orinspect ~~financings~~and toinvestigate ~~make~~completely ~~loans~~our orauditor. ~~additional~~The ~~capital~~delisting ~~contributions~~of toand prohibition from trading of our ~~Chinese~~ ~~subsidiaries~~common stock, ~~which~~or ~~could~~the ~~materially~~threat of their being delisted and ~~adversely~~prohibited ~~affect~~from ~~our~~trading, ~~liquidity~~may ~~and~~cause the value of our ~~ability~~common stock to ~~fund~~significantly ~~and~~decline or ~~expand~~be ~~our business~~worthless.

~~We conduct~~Pursuant ~~substantially all of our operations in China. We may make loans~~ to ~~our PRC subsidiary, subject to~~ the ~~approval~~HFCAA, ~~registration,~~if ~~and~~the ~~filing~~SEC ~~with~~determines ~~governmental~~that ~~authorities and limitation of amount, or~~ we ~~may~~have ~~make~~filed ~~additional~~audit ~~capital~~reports ~~contributions~~issued toby ~~our~~a ~~wholly~~registered ~~foreign-owned subsidiary~~public inaccounting ~~China.~~firm ~~Any~~that ~~loans~~has tonot ~~our~~been ~~wholly foreign-owned subsidiary in China, which is treated as a foreign-invested enterprise under PRC law, are~~ subject to ~~foreign exchange loan registrations. In addition, a foreign invested enterprise shall use its capital pursuant~~inspections toby the ~~principle~~PCAOB ~~of authenticity and self-use within its business scope. The capital of a foreign invested enterprise shall not be used~~ for ~~the~~two ~~following~~consecutive ~~purposes:~~years, ~~(i) directly or indirectly used for payment beyond~~ the ~~business~~SEC ~~scope~~will ofprohibit ~~the~~our ~~enterprises~~shares orfrom ~~the~~being ~~payment~~traded ~~prohibited by~~on ~~relevant~~a ~~laws~~national ~~and~~securities ~~regulations;~~exchange ~~(ii) directly~~ or ~~indirectly used for investment~~ in ~~securities or investments other than banks’~~the ~~principal~~over-~~secured products unless otherwise provided by relevant laws and regulations; (iii)~~ the ~~granting of loans to non~~-~~affiliated enterprises,~~counter ~~except~~trading ~~where~~market ~~it is expressly permitted~~ in the ~~business~~United ~~license; and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises)~~States.

~~In light~~On ofDecember ~~the~~18, ~~various~~2020, ~~requirements~~the HFCAA ~~imposed~~was bysigned ~~PRC~~into ~~regulations~~law. onThe ~~loans~~HFCAA tohas ~~and~~since ~~direct~~then ~~investment~~been insubject ~~PRC~~to ~~entities~~amendments by ~~offshore~~the ~~holding~~U.S. ~~companies, we~~Congress ~~cannot~~and ~~assure~~interpretations ~~you~~and ~~that~~rulemaking by wethe ~~will~~SEC. beOn ~~able~~June to22, ~~complete~~2021, the ~~necessary~~U.S. ~~government~~Senate ~~registrations~~passed ~~or obtain~~ the ~~necessary~~Accelerating ~~government~~Holding ~~approvals or~~Foreign ~~filings~~Companies onAccountable aAct ~~timely~~(the ~~basis~~“AHFCAA”), which ifproposes atto ~~all,~~reduce ~~with~~the ~~respect~~period toof ~~future~~time ~~loans~~for byforeign uscompanies to ~~our~~comply ~~PRC subsidiary or~~ with ~~respect to~~PCAOB ~~future~~audits ~~capital~~from ~~contributions~~three ~~by us~~ to ~~our~~two ~~PRC~~consecutive ~~subsidiary. If we fail to complete such registrations or obtain such approvals~~years, thus ~~our~~reducing ~~ability to use~~ the ~~proceeds~~time ~~from~~period before the ~~Offering~~securities ~~and~~of tosuch ~~capitalize~~foreign orcompanies ~~otherwise fund our Chinese operations~~ may be ~~negatively~~prohibited ~~affected, which~~from ~~could~~trading ~~materially~~or ~~and adversely affect our liquidity and our ability to fund and expand our business~~delisted.

~~PRC~~On December 16, 2021, the ~~regulations~~PCAOB ~~relating~~issued a report to notify the ~~establishment~~SEC of ~~offshore~~its ~~special~~determination ~~purpose~~relating ~~companies~~to bythe ~~PRC~~PCAOB’s ~~residents~~inability ~~may~~to ~~subject~~inspect ~~our~~or ~~PRC~~investigate ~~resident~~completely registered ~~beneficial~~public accounting firms headquartered in mainland China and Hong Kong. The inability of the PCAOB to conduct inspections of ~~owners~~auditors orin ~~our~~China ~~PRC~~made ~~subsidiary~~it more difficult to ~~liability~~evaluate the effectiveness of these accounting firms’ audit procedures or ~~penalties,~~quality ~~limit~~control procedures ~~our~~as ~~ability~~compared to ~~inject~~auditors ~~capital~~outside ~~into~~of ~~our~~China ~~PRC~~that ~~subsidiary~~are subject to the PCAOB inspections, ~~limit~~which ~~our~~could ~~PRC~~cause ~~subsidiary’~~existing and potential ~~ability~~investors in issuers operating in China to ~~increase~~lose ~~their~~confidence ~~registered~~in ~~capital~~such orissuers’ ~~distribute~~procedures ~~profits~~and toreported ~~us,~~financial orinformation ~~may~~and ~~otherwise~~the quality ~~adversely~~of ~~affect~~financial usstatements.

35On December 15, 2022, the PCAOB released a statement confirming it has secured complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong, and it issued the 2022 HFCAA Determination Report to vacate its precious determinations to the contrary. The PCAOB is continuing to demand complete access, and it will act immediately to reconsider such determinations should China obstruct, or otherwise fail to facilitate the PCAOB’s access, at any time.

~~In July~~Our ~~2014~~auditor, ~~SAFE~~ST ~~promulgated~~& ~~the~~Partners PLT ~~Circular~~(“STP”), onis ~~Relevant~~headquartered ~~Issues~~in ~~Concerning~~Malayia, ~~Foreign~~subject ~~Exchange~~to ~~Control~~PCAOB oninspection. ~~Domestic~~Our ~~Residents’~~auditor ~~Offshore Investment~~was ~~and~~not ~~Financing~~subject ~~and~~to ~~Roundtrip~~the ~~Investment~~determinations ~~Through~~announced by ~~Special~~the ~~Purpose~~PCAOB ~~Vehicles~~on December 16, ~~or SAFE Circular 37~~2021, towhich ~~replace~~were ~~the~~vacated ~~Notice~~ on ~~Relevant Issues~~December 15, ~~Concerning~~2022. ~~Foreign~~Our ~~Exchange~~auditor, ~~Administration~~the ~~for~~independent ~~Domestic~~registered ~~Residents’~~public ~~Financing and Roundtrip Investment Through Offshore Special~~accounting ~~Purpose~~firm ~~Vehicles,~~that orissues ~~SAFE~~the ~~Circular~~audit 75report, ~~which~~as ~~ceased~~an toauditor ~~be effective upon the promulgation~~ of ~~SAFE~~companies ~~Circular~~that ~~37.~~are ~~SAFE~~traded ~~Circular~~publicly 37in ~~requires PRC~~the ~~residents~~United ~~(including~~States ~~PRC individuals~~ and ~~PRC~~a ~~corporate~~firm ~~entities)~~registered ~~to register~~ with ~~SAFE or its local branches in connection with their~~ ~~direct~~the orPCAOB, ~~indirect offshore investment activities. SAFE Circular 37~~ is ~~applicable~~subject to ~~our~~laws ~~shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make~~ in the ~~future~~United States.

~~Under~~On December 29, ~~SAFE~~2022, ~~Circular~~the 37Consolidated Appropriations Act, ~~PRC~~2023, ~~residents~~was ~~who~~signed ~~make~~into law, orwhich ~~have~~amended ~~prior~~the HFCAA (i) to reduce the ~~implementation~~number of ~~SAFE~~consecutive non-inspection years ~~Circular~~required 37for ~~made,~~triggering ~~direct~~the orprohibitions ~~indirect~~under ~~investments in~~the ~~offshore~~HFCAA ~~special~~from ~~purpose~~three years ~~vehicles~~to two, orand ~~SPVs,~~(ii) so ~~will~~that any beforeign ~~required~~jurisdiction tocould ~~register~~be ~~such~~the ~~investments~~reason ~~with~~why ~~SAFE~~the orPCAOB ~~its~~does ~~local~~not ~~branches.~~have Incomplete ~~addition, any~~access ~~PRC~~to ~~resident~~inspect ~~who~~or isinvestigate a ~~direct~~company’s orauditor. As ~~indirect~~it ~~shareholder~~was oforiginally anenacted, ~~SPV~~the isHFCAA ~~required~~applied toonly ~~update~~if ~~its~~the ~~filed~~PCAOB’s ~~registration~~inability ~~with~~to ~~the~~inspect ~~local~~or ~~branch of~~investigate ~~SAFE~~was ~~with~~due ~~respect~~ to ~~that~~a ~~SPV,~~position totaken by ~~reflect~~an ~~any~~authority ~~material~~in ~~change.~~the ~~Moreover,~~foreign ~~any~~jurisdiction ~~subsidiary~~where ofthe ~~such~~relevant ~~SPV~~public inaccounting ~~China~~firm is ~~required~~located. toAs ~~urge~~a result of the Consolidated Appropriations ~~PRC~~Act, ~~resident~~2023, ~~shareholders~~the toHFCAA ~~update~~now ~~their~~also ~~registration~~applies ~~with~~if the ~~local~~PCAOB’s ~~branch~~inability ofto ~~SAFE.~~inspect Ifor ~~any~~investigate ~~PRC~~the ~~shareholder~~relevant ofaccounting ~~such~~firm ~~SPV~~is ~~fails~~due to ~~make~~ ~~the~~a ~~required~~position ~~registration~~taken orby toan ~~update~~authority ~~the~~in ~~previously~~any ~~filed~~foreign ~~registration,~~jurisdiction. ~~the~~The ~~subsidiary~~denying ofjurisdiction ~~such~~does ~~SPV~~not inneed ~~China~~to ~~may~~ be ~~prohibited~~where ~~from distributing~~the ~~its~~accounting ~~profits~~firm oris located. If the ~~proceeds~~PCAOB ~~from~~determines ~~any~~in ~~capital~~the ~~reduction,~~future ~~share~~that ~~transfer~~it oris ~~liquidation~~unable to ~~the~~completely ~~SPV,~~inspect ~~and~~or ~~the~~investigate ~~SPV~~our ~~may~~auditor ~~also~~and ~~be prohibited~~we ~~from~~continue ~~making~~to ~~additional~~use such ~~capital~~auditor ~~contributions~~to ~~into~~issue ~~its~~an ~~subsidiary~~audit inreport ~~China.~~on Onour ~~February~~financial ~~13,~~statements ~~2015,~~filed with the ~~SAFE~~SEC, ~~promulgated~~our asecurities ~~Notice on~~will ~~Further~~be ~~Simplifying~~delisted ~~and~~from ~~Improving~~the ~~Foreign~~stock ~~Exchange~~exchange. The ~~Administration~~delisting ~~Policy~~of onour ~~Direct~~common ~~Investment,~~stock or ~~SAFE~~the ~~Notice~~threat ~~13,~~of ~~which~~their ~~became~~being ~~effective on~~delisted, ~~June~~may 1,materially ~~2015.~~and ~~Under~~adversely ~~SAFE~~affect ~~Notice~~the ~~13,~~value ~~applications~~of ~~for~~your ~~foreign~~investment. These ~~exchange~~risks ~~registration~~could ofresult ~~inbound~~in ~~foreign~~a ~~direct~~material ~~investments~~adverse ~~and~~change ~~outbound overseas~~in ~~direct~~our ~~investments,~~operations ~~including~~and ~~those~~the ~~required~~value ~~under~~of ~~SAFE~~our ~~Circular~~common 37stock, ~~will~~significantly belimit ~~filed~~or ~~with~~completely hinder ~~qualified~~our ~~banks~~ability ~~instead~~to ofoffer ~~SAFE.~~or ~~The qualified~~continue ~~banks~~to ~~will~~offer ~~directly~~securities ~~examine~~to investors, or cause the ~~applications~~value ~~and~~of ~~accept~~such ~~registrations~~securities ~~under~~to ~~the~~significantly ~~supervision~~decline or ofbecome ~~SAFE~~worthless.

WeFurther ~~may~~developments ~~not~~related beto ~~fully~~the ~~informed~~HFCAA ofcould ~~the~~add ~~identities~~uncertainties ofto ~~all~~ our ~~beneficial~~future ~~owners~~offerings. ~~who~~We ~~are~~cannot ~~PRC~~assure ~~residents.~~you ~~For~~what ~~example,~~further ~~because~~actions the ~~investment in~~SEC, orthe ~~trading~~PCAOB ofor ~~our~~the ~~shares~~stock exchanges will ~~happen~~take into anaddress ~~overseas~~these ~~public~~issues orand ~~secondary~~what ~~market~~impact ~~where~~such ~~shares~~actions ~~are~~will ~~often~~have ~~held~~on ~~with~~companies ~~brokers~~that inhave ~~brokerage~~significant ~~accounts,~~operations itin isthe ~~unlikely~~PRC ~~that~~and wehave ~~will~~securities ~~know~~listed ~~the~~on ~~identity~~a ofU.S. ~~all~~stock ofexchange ~~our~~(including ~~beneficial~~a ~~owners~~national ~~who~~securities ~~are~~exchange ~~PRC~~or ~~residents~~over-the-counter stock market). ~~Furthermore~~In addition, weany ~~have~~additional noactions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory ~~control~~access ~~over~~to ~~any~~audit information could create uncertainty for investors, the market price of our ~~future~~common ~~beneficial~~stock ~~owners~~could be adversely affected, and we ~~cannot~~could ~~assure~~be ~~you~~delisted ~~that~~if ~~such~~we ~~PRC~~and ~~residents~~our ~~will~~auditor beare ~~able~~unable to ~~complete~~meet the ~~necessary~~PCAOB inspection requirement. Such a delisting would substantially ~~approval~~impair ~~and~~your ~~registration~~ability ~~procedures~~to ~~required~~sell byor ~~the~~purchase ~~Administrative~~our ~~Measures~~common stock when you wish to do so, and would have a negative impact on ~~Individual~~the ~~Foreign~~price ~~Exchange~~of our shares.

Some of our shareholders that we are aware of are subject to SAFE regulations, and we expect all of these shareholders will have completed all necessary registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. We cannot assure you, however, that all of these shareholders may continue to make required filings or updates in a timely manner, or at all. We can provide no assurance that we are or will in the future continue to be informed of identities of all PRC residents holding direct or indirect interest in our company. Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiary’ ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected.38

~~Furthermore, as~~We 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. For example, we may be subject to asubstantial ~~more~~fine stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. In addition, if ~~we decide to acquire a PRC domestic company,~~ wethe ~~cannot~~CSRC ~~assure~~has ~~you~~determined that we orhave ~~the~~failed ~~owners of such company, as the case may be, will be able~~ to ~~obtain~~comply ~~the~~with ~~necessary approvals or complete~~ the ~~necessary~~post-offering ~~filings~~filing ~~and~~obligations ~~registrations~~imposed ~~required~~ by the ~~foreign~~Trial ~~exchange~~Administrative ~~regulations~~Measure. ~~This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.~~

AsOn ofFebruary 17, 2023, the ~~date~~CSRC ofpromulgated ~~this~~the ~~Annual~~Trial ~~Report,~~Administrative Measures that require issuers to carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the ~~PRC~~CSRC; ~~residents have~~(iii) ~~either~~a ~~not~~negative ~~completed~~list of types of issuers banned from listing overseas, orsuch ~~have~~as ~~not~~issuers ~~applied~~under investigation for, ~~foreign~~bribery ~~exchange~~and ~~registration~~corruption; (iv) regulation of issuers in specific ~~under~~industries; (v) issuers’ compliance with national security measures and the ~~SAFE~~personal ~~Circular~~data 37protection laws; and (vi) certain other matters ~~related~~such ~~rules.~~as: ~~Although~~an ~~they~~issuer ~~are~~must ~~either~~file inwith the ~~process~~CSRC ofwithin ~~making~~three ~~foreign~~business ~~exchange~~days ~~registration~~after ~~or plan~~it submits an application for initial public offering to ~~make~~competent ~~foreign~~overseas ~~exchange~~regulators; ~~registrations,~~and ~~they~~subsequent ~~may~~reports ~~still~~shall ~~face~~be filed with the ~~above~~CSRC ~~said~~on ~~possible~~material ~~fines~~events, inincluding ~~accordance~~change ~~with~~of control or voluntary or forced delisting of the ~~PRC~~issuer(s) ~~Laws~~who have completed overseas offerings and listings.

~~Labor~~Our ~~laws~~PRC counsel has advised that because our common stock currently trades in the U.S., we were not required to submit filings to the CSRC before our 2024 Uplisting Offering was completed and the 2024 Uplisting Offering was not conditioned on CSRC approval. However, within three days of the closing of the 2024 Uplisting Offering, we are required to submit filings to the CSRC in accordance with the Trial Administrative Measures. We have submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the lead underwriter for the 2024 Uplisting Offering, and we withdrew the filing from the CSRC. We will submit the filing materials again when the materials are ready. However, given that the Trial Administrative Measures were recently promulgated, there remain substantial uncertainties as to their interpretation, application, and enforcement and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion that we and our PRC counsel have reached. If the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measures or make a misrepresentation, misleading statement or material omission in the materials we submit to the CSRC, the CSRC would have the right to order rectification, issue a warning and impose a fine on us of between RMB 1 million and RMB 10 million and issuing a warning to the parties responsible for such failure, misrepresentation or material omission and impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 million. Our operations may be negatively affected, which could materially and adversely affect our ~~results~~liquidity ofand ~~operations~~our ability to fund and expand our business.

~~The PRC~~Changes ~~National~~in People’s Congress promulgated the Labor Contract Law which became effective on January 1, 2008 and was amended on December 28, 2012 (the “Labor Contract Law”), and the State Council promulgated implementing regulations for the labor contract law on September 18, 2008U. ~~The Labor Contract Law and the implementing regulations impose requirements concerning, among others, the~~S. ~~execution of written contracts between employers~~ and ~~employees,~~international ~~the~~trade ~~time limits for probationary periods~~policies, ~~and~~particularly ~~the~~with ~~length~~regard ofto ~~employment contracts. The interpretation and implementation of these regulations are still evolving~~China, ~~our employment practices~~ may ~~violate~~adversely ~~the~~impact Labor Contract Law and related regulations and we could be subject to penalties, fines or legal fees as a result. If we are subject to severe penalties or incur significant legal fees in connection with labor law disputes or investigations, our business, ~~financial condition~~ and ~~results~~operating ~~of operations may be adversely affected~~results.

~~Further,~~There ~~the~~have ~~Labor~~recently ~~Contract~~been ~~Law~~significant ~~requires~~changes ~~certain~~to ~~terminations~~international betrade ~~based~~policies ~~upon seniority~~ and ~~not~~tariffs ~~merit.~~affecting Inimports ~~the~~and ~~event~~exports. ~~that~~Any wesignificant ~~decide to significantly~~increases ~~change~~in ortariffs ~~decrease~~on ~~our~~goods ~~workforce,~~or ~~the~~materials ~~Labor~~or ~~Contract~~other ~~Law could adversely affect our ability to enact such~~ changes in atrade ~~manner~~policy ~~that~~could ~~is most~~negatively ~~advantageous~~affect to our ~~business~~search orfor in a ~~timely~~target and/or ~~cost-effective manner, thus materially and adversely affecting~~ our ~~financial~~ability ~~condition~~to ~~and~~complete ~~results~~our ofinitial ~~operations~~business combination.

36Recently, the U.S. has implemented a range of new tariffs and increases to existing tariffs. In response to the tariffs announced by the U.S., other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tariffs. and we cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future.

WeTariffs, ~~may~~or bethe ~~exposed~~threat of tariffs or increased tariffs, could have a significant negative impact on certain businesses (either due to ~~liabilities~~domestic businesses’ ~~under~~reliance on imported goods or dependence on access to foreign markets, or foreign businesses’ reliance on sales into the ~~Foreign~~United ~~Corrupt~~States). ~~Practices~~In ~~Act~~addition, retaliatory tariffs could have a significant negative impact on foreign businesses that rely on imports from the United States, and ~~Chinese~~domestic ~~anti-corruption~~businesses ~~law~~that rely on exporting goods internationally. Among other things, historical financial performance of companies affected by trade policies and/or tariffs may not provide useful guidance as to the future performance of such companies, because future financial performance of those companies may be materially affected by new U.S. tariffs or foreign retaliatory tariffs, or other changes to trade policies.

We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. We have operations, agreements with third parties, and make sales in China, which may experience corruption. Our activities in China may create the risk of unauthorized payments or offers of payments by one or more of the employees of our company, because such employees might act against our policies, outside of our control. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.39

~~Our~~Trade tensions between China ~~business~~and the United States may beintensify ~~materially~~in ~~and~~the ~~adversely~~future, ~~affected~~resulting in the imposition of more tariffs or other trade restrictions. Although cross-border business is currently not an area of our focus, if we plan to sell products internationally in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our ~~PRC~~products ~~subsidiary~~and ~~declares~~services, impact ~~bankruptcy~~the competitive position of our products or ~~becomes~~prevent ~~subject~~us from being able to asell ~~dissolution~~products in certain countries. If any new tariffs, legislation and/or ~~liquidation~~regulations are implemented, or if existing trade agreements are renegotiated, such changes could have an adverse effect ~~proceeding~~on our business, financial condition, or results of operations. In addition, future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our business.

~~The~~In addition, recent economic ~~Enterprise~~and ~~Bankruptcy~~trade ~~Law~~sanctions threatened and/or imposed by the U.S. government on a number of China-based companies have raised concerns as to whether, in the ~~PRC~~future, there may be additional regulatory challenges or ~~the~~enhanced ~~Bankruptcy~~restrictions ~~Law,~~involving ~~came~~other ~~into~~China-based ~~effect~~companies in onareas ~~June~~such 1as data security, ~~2007.~~information ~~The~~technology ~~Bankruptcy~~or ~~Law~~other ~~provides~~business ~~that~~activities. anSimilar ~~enterprise~~or more expansive restrictions, including ~~will~~relating beto ~~liquidated~~export ifcontrols, ~~the~~that ~~enterprise~~may ~~fails~~be toimposed ~~settle~~by ~~its~~the ~~debts~~United States asor ~~and~~other ~~when~~jurisdictions ~~they~~in ~~fall~~the ~~due~~future, may materially and ifadversely affect ~~the~~our ~~enterprise’s~~ability ~~assets~~to ~~are~~acquire technologies, systems or ~~are~~ ~~demonstrably,~~products ~~insufficient~~that may be important to ~~clear~~our ~~such~~technology ~~debts~~infrastructure, product and service offerings and business operations.

~~Our~~Furthermore, we may also face ~~PRC~~export ~~subsidiary~~controls ~~holds~~or sanctions-related or other trade-related restrictions on transactions with certain customers, ~~assets~~business partners and other persons. The Entity List maintained by the U.S. Department of Commerce identifies foreign parties that are ~~important~~prohibited tofrom ~~our~~acquiring ~~business~~— ~~operations~~whether by export, reexport, or transfer in-country — some or all items subject to the U.S. Export IfAdministration ~~our~~Regulations ~~PRC~~(“EAR”), ~~subsidiary~~unless ~~undergoes~~the exporter secures a ~~voluntary~~license. Licenses, and exceptions to the license requirement, are rarely granted to exporters. Exporting, reexporting or ~~involuntary~~transferring items subject to the EAR in violation ~~liquidation~~of ~~proceeding~~licensing requirements could result in criminal and/or civil penalties. These restrictions, ~~unrelated~~and ~~third-party~~similar ~~creditors~~or more expansive restrictions or sanctions that may ~~claim~~be ~~rights~~imposed toby ~~some~~the United States or ~~all~~other ofjurisdictions ~~these~~in ~~assets~~the future, ~~thereby~~may ~~hindering~~adversely affect our ability to ~~operate~~work with ~~our~~certain future customers and business partners, which ~~could~~would ~~materially~~harm ~~and~~our ~~adversely~~business. ~~affect~~Furthermore, our association with customers or business partners that are or become subject to U.S. regulatory scrutiny or export controls- or sanctions-related restrictions could subject us to actual or perceived reputational harm among current or prospective investors, ~~financial~~suppliers ~~condition~~or ~~and~~customers, ~~results~~other parties doing business with us, or the general public. Any such reputational harm could result in the loss of ~~operations~~investors, suppliers or customers, which could harm our business, financial conditions or prospects.

~~According to~~PRC ~~the SAFE’s Notice~~ regulation of ~~the~~loans ~~State~~to ~~Administration of Foreign Exchange on Further Improving~~ and ~~Adjusting~~direct ~~Foreign~~investment ~~Exchange~~in ~~Administration Policies~~PRC ~~for~~entities ~~Direct~~by ~~Investment,~~offshore ~~effective~~holding oncompanies ~~December 17, 2012,~~ and ~~the~~governmental ~~Provisions~~control ~~for Administration~~ of ~~Foreign~~currency ~~Exchange~~conversion ~~Relating~~may todelay ~~Inbound~~or ~~Direct~~prevent ~~Investment~~us byfrom ~~Foreign~~using ~~Investors,~~the ~~effective~~proceeds ~~May~~of ~~13,~~any ~~2013,~~offerings ifor ~~our~~financings ~~PRC~~to ~~subsidiary~~make ~~undergoes~~loans ~~a voluntary~~ or ~~involuntary~~additional ~~liquidation proceeding,~~capital ~~prior~~contributions ~~approval from the SAFE for remittance of foreign exchange~~ to our ~~shareholders abroad is no longer required~~Chinese subsidiaries, ~~but~~which ~~we still~~could ~~need~~materially toand ~~conduct~~adversely aaffect ~~registration~~our ~~process~~liquidity ~~with~~and ~~the~~our ~~SAFE~~ability ~~local~~to ~~branch.~~fund ~~It is not clear whether “registration” is a mere formality or involves the kind of substantive review process undertaken by SAFE~~ and ~~its~~expand ~~relevant~~our ~~branches in the past~~business.

~~Changes~~We conduct substantially all of our operations in China’s. ~~economic~~We may make loans to our PRC subsidiary, ~~political~~subject orto ~~social~~the ~~conditions~~approval, orregistration, and ~~government~~filing ~~policies~~with ~~could~~governmental ~~have~~authorities aand ~~material~~limitation ~~adverse~~of ~~effect~~amount, onor we may make additional capital contributions to our ~~business~~wholly foreign-owned ~~and~~subsidiary ~~operations~~in China. ~~The~~Any ~~PRC~~loans ~~government~~to ~~has~~our ~~recently~~wholly ~~indicated~~foreign-owned ansubsidiary ~~intent~~in China, which is treated as a foreign-invested enterprise under PRC law, are subject to ~~exert~~foreign ~~more~~exchange ~~oversight~~loan ~~and~~registrations. ~~control~~In ~~over~~addition, ~~overseas~~a ~~securities~~foreign ~~offerings and~~invested ~~other~~enterprise shall use its capital ~~markets~~pursuant to ~~activities~~the ~~and~~principle ~~foreign~~of ~~investment~~authenticity inand ~~China~~self-~~based~~use ~~companies~~within ~~like~~its usbusiness scope. ~~Any~~The ~~such~~capital ~~action,~~of ~~once~~a ~~taken~~foreign byinvested ~~the~~enterprise ~~PRC~~shall not be used ~~government,~~for ~~could~~the ~~significantly~~following ~~limit~~purposes: (i) directly or ~~completely~~indirectly ~~hinder~~used ~~our~~for ~~ability~~payment tobeyond ~~offer~~the business scope of the enterprises or ~~continue~~the topayment ~~offer~~prohibited by relevant laws and regulations; (ii) directly or indirectly used for investment in securities toor ~~investors~~investments ~~and~~other ~~cause~~than banks’ principal-secured products unless otherwise provided by relevant laws and regulations; (iii) the ~~value~~granting of ~~such~~loans ~~securities~~ to ~~significantly~~non-affiliated ~~decline~~enterprises, except orwhere it is expressly permitted in ~~extreme~~the ~~cases,~~business ~~become~~license; ~~worthless~~and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises).

~~Substantially~~In ~~all~~light of ~~our~~the ~~assets~~various ~~and~~requirements ~~operations~~imposed ~~are~~by ~~located~~PRC inregulations ~~China.~~on ~~Accordingly,~~loans ~~our~~to ~~business, financial condition, results of operations~~ and ~~prospects may~~direct beinvestment ~~influenced~~in toPRC aentities ~~significant~~by ~~degree~~offshore byholding ~~political~~companies, we ~~economic~~cannot ~~and~~assure ~~social~~you ~~conditions~~that inwe ~~China~~will ~~generally.~~be ~~The~~able ~~Chinese~~to ~~economy~~complete ~~differs from~~ the ~~economies~~necessary ofgovernment ~~most~~registrations ~~developed~~or ~~countries~~obtain inthe ~~many~~necessary ~~respects,~~government ~~including~~approvals or ~~the~~filings ~~level~~on ofa ~~government~~timely ~~involvement~~basis, ~~level~~if ofat ~~development~~all, ~~growth~~ ~~rate,~~with ~~control~~respect ofto ~~foreign~~future ~~exchange~~loans ~~and~~by ~~allocation~~us ofto ~~resources.~~our ~~Although~~PRC ~~the~~subsidiary ~~Chinese~~or ~~government~~with ~~has~~respect ~~implemented~~to ~~measures~~future ~~emphasizing~~capital contributions ~~the~~by ~~utilization~~us ofto ~~market~~our ~~forces~~PRC ~~for~~subsidiary. ~~economic~~If ~~reform,~~we ~~the~~fail ~~reduction~~to ofcomplete ~~state~~such ~~ownership~~registrations ofor ~~productive~~obtain ~~assets~~such approvals, ~~and~~our ~~the~~ability ~~establishment~~to ~~of improved~~use ~~corporate~~the ~~governance~~proceeds infrom any ~~business~~future ~~enterprises,~~offerings aand ~~substantial~~to ~~portion~~capitalize ofor ~~productive~~otherwise ~~assets~~fund inour ~~China~~Chinese isoperations ~~still~~may ~~owned~~be bynegatively ~~the government. In addition~~affected, ~~the~~which ~~Chinese~~could ~~government~~materially ~~continues~~and adversely toaffect ~~play~~our aliquidity ~~significant~~and ~~role~~our inability ~~regulating~~to ~~industry~~fund ~~development~~and byexpand ~~imposing~~our ~~industrial policies~~business.

3740

~~The~~ PRC ~~government~~regulations relating ~~has significant authority~~ to ~~exert influence on~~ the ~~ability~~establishment of ~~a China-based company, such as us, to conduct its business, accept foreign investments or list on an U.S. or other foreign exchanges. For example, we face risks associated with regulatory approvals of~~ offshore ~~offerings,~~special ~~anti-monopoly~~purpose ~~regulatory~~companies ~~actions, as well as oversight on cybersecurity and data privacy. Such risks or any actions~~ by ~~the~~ PRC ~~government~~residents tomay ~~exert~~subject ~~more~~our ~~oversight~~PRC ~~and~~resident ~~control~~beneficial ~~over~~owners ~~offerings that are conducted overseas and/~~or ~~foreign investment in China-based~~ ~~issuers could result in a material change in~~ our ~~operations~~PRC ~~and/or~~subsidiary ~~the~~to ~~value~~liability ~~of our common stock~~ or ~~could~~penalties, ~~significantly~~ limit ~~or completely hinder~~ our ability to ~~offer~~inject orcapital ~~continue~~into ~~to offer~~ our ~~common stock and/or other securities to investors and cause the value of such securities to significantly decline or be worthless. The~~ PRC ~~government has significant authority~~subsidiary, ~~oversight~~limit ~~and~~our ~~discretion~~PRC ~~over the conduct of~~subsidiary’ ~~our~~ability ~~business~~to ~~and~~increase ~~may~~their ~~intervene~~registered ~~with~~capital or ~~influence~~distribute ~~our~~profits ~~operations as the government deems appropriate~~ to ~~further regulatory~~us, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or ~~policies regarding~~may ~~our~~otherwise ~~industry that could~~ adversely affect our business, financial condition and results of operations. Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies like us. Any such action, once taken by the PRC government, 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 in extreme cases, become worthless.

~~The~~In ~~Chinese~~July ~~government~~2014, ~~also~~SAFE ~~exercises~~promulgated ~~significant~~the ~~control~~Circular ~~over~~on ~~China~~Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’s ~~economic~~Offshore Investment ~~growth~~and ~~through~~Financing ~~allocating~~and ~~resources~~Roundtrip Investment Through Special Purpose Vehicles, ~~controlling~~or ~~payment~~SAFE Circular 37, to replace the Notice on Relevant ofIssues ~~foreign~~Concerning ~~currency-denominated~~Foreign ~~obligations~~Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, ~~setting~~or ~~monetary~~SAFE ~~policy~~Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and ~~providing~~PRC ~~preferential~~corporate ~~treatment~~entities) to ~~particular~~register ~~industries~~with SAFE or its local branches in connection with their ~~companies~~direct or indirect offshore investment activities. 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.

~~While~~Under ~~the~~SAFE ~~Chinese~~Circular ~~economy~~37, ~~has~~PRC ~~experienced~~residents ~~significant~~who ~~growth~~make, ~~over~~or have prior to the ~~past~~implementation ~~decades~~of SAFE Circular 37 made, ~~growth~~direct ~~has~~or ~~been~~indirect ~~uneven~~investments in offshore special purpose vehicles, ~~both~~or ~~geographically~~SPVs, ~~and~~will ~~among~~be ~~various sectors~~required ofto ~~the~~register ~~economy.~~such ~~Any~~investments ~~adverse~~with ~~changes~~SAFE inor ~~economic~~its ~~conditions~~local inbranches. ~~China~~In addition, any inPRC ~~the~~resident ~~policies~~who is a direct or indirect shareholder of ~~the~~an ~~Chinese~~SPV ~~government~~is orrequired into update its filed registration with the ~~laws~~local branch ~~and~~of ~~regulations~~SAFE inwith ~~China~~respect ~~could~~to ~~have~~that aSPV, ~~material~~to ~~adverse~~reflect ~~effect~~any onmaterial ~~the~~change. ~~overall~~Moreover, ~~economic~~any ~~growth~~subsidiary of such SPV in China. ~~Such~~is ~~developments~~required ~~could~~to ~~adversely~~urge the ~~affect~~PRC ~~our~~resident ~~business~~shareholders ~~and~~to ~~operating~~update ~~results,~~their ~~lead~~registration towith ~~reduction~~the inlocal ~~demand~~branch ~~for~~of ~~our~~SAFE. ~~services~~If ~~and~~any ~~adversely~~PRC ~~affect~~shareholder ~~our~~of ~~competitive~~such ~~position. The~~SPV ~~Chinese~~fails ~~government~~to ~~has~~make the ~~implemented~~required ~~various~~registration ~~measures~~or to ~~encourage~~update ~~economic~~the ~~growth~~previously ~~and~~filed ~~guide~~registration, the ~~allocation~~subsidiary of ~~resources.~~such ~~Some~~SPV ofin ~~these measures~~China may ~~benefit~~be prohibited from distributing its profits or the ~~overall~~proceeds ~~Chinese~~from ~~economy~~any capital reduction, ~~but~~share transfer or liquidation to the SPV, and the SPV may ~~have~~also abe ~~negative~~prohibited ~~effect~~from making onadditional uscapital contributions into its subsidiary in China. ~~For~~On ~~example~~February 13, ~~our~~2015, ~~financial~~the ~~condition~~SAFE ~~and~~promulgated ~~results of~~a ~~operations~~Notice ~~may~~on beFurther ~~adversely~~Simplifying and ~~affected~~Improving byForeign ~~government~~Exchange ~~control~~Administration ~~over~~Policy ~~capital~~on ~~investments~~Direct Investment, or ~~changes~~SAFE inNotice ~~tax~~13, ~~regulations.~~which Inbecame ~~addition~~effective on June 1, in2015. ~~the~~Under ~~past~~SAFE ~~the~~Notice ~~Chinese~~13, ~~government~~applications ~~has~~for ~~implemented~~foreign ~~certain~~exchange ~~measures~~registration of inbound foreign direct investments and outbound overseas direct investments, including ~~interest~~those ~~rate~~required ~~adjustment~~under SAFE Circular 37, towill ~~control~~be ~~the~~filed ~~pace~~with ofqualified ~~economic growth.~~banks ~~These~~instead ~~measures~~of ~~may~~SAFE. ~~cause~~The ~~decreased~~qualified ~~economic~~banks will ~~activity~~directly inexamine ~~China,~~the ~~which~~applications ~~may~~and ~~adversely~~accept ~~affect~~registrations ~~our~~under ~~business~~the ~~and~~supervision ~~operating~~of ~~results~~SAFE.

~~Uncertainties~~We ~~with~~may ~~respect~~not tobe fully informed of the identities of all our beneficial owners who are PRC ~~legal~~residents. ~~system~~For example, ~~including~~because ~~uncertainties~~the ~~regarding~~investment ~~the~~in or ~~enforcement~~trading of ~~laws~~our ~~and~~shares ~~sudden~~will ~~and~~happen ~~unexpected~~in ~~changes~~an overseas public or secondary market where shares are often held with brokers in brokerage accounts, ~~laws~~it ~~and~~is ~~regulations~~unlikely inthat ~~China~~we will know the identity of all of our beneficial owners who are PRC residents. Furthermore, ~~could~~we ~~adversely~~have ~~affect~~no uscontrol over any of our future beneficial owners and ~~limit~~we ~~the~~cannot ~~legal~~assure ~~protections~~you ~~available~~that such PRC residents will be able to ~~you~~complete the necessary approval and registration usprocedures required by the Administrative Measures on Individual Foreign Exchange.

~~Our~~Some ~~operations~~of inour ~~China~~shareholders that we are ~~governed~~aware byof ~~PRC~~are ~~laws~~subject ~~and~~to SAFE regulations., ~~Our~~and ~~wholly~~we ~~foreign-owned~~expect ~~PRC~~all ~~operating~~of ~~subsidiary~~these ~~Sichuan~~shareholders ~~Vtouch~~will ishave ~~subject~~completed toall ~~laws~~necessary ~~and~~registrations ~~regulations~~with ~~applicable~~the tolocal ~~foreign~~SAFE ~~investment~~branch inor ~~China~~qualified banks as required by SAFE Circular 37. ~~The~~We ~~PRC~~cannot ~~legal~~assure ~~system~~you, ishowever, that aall ~~civil~~of ~~law~~these ~~system~~shareholders ~~based~~may oncontinue ~~written~~to ~~statutes. Unlike~~make ~~the~~required ~~common~~filings ~~law~~or ~~system~~updates in a timely manner, ~~prior~~or ~~court~~at ~~decisions~~all. ~~under~~We ~~the~~can ~~civil~~provide ~~law~~no ~~system~~assurance that ~~may~~we are or will in the future continue to be ~~cited~~informed ~~for~~of ~~reference~~identities ~~but~~of ~~have~~all ~~limited~~PRC ~~precedential~~residents holding direct or indirect interest in our ~~value~~company. InAny ~~addition,~~failure ~~any~~or ~~new~~inability by such shareholders to comply with SAFE regulations may subject us to fines or ~~changes~~legal insanctions, such as restrictions on our cross-border investment activities or our PRC ~~laws~~subsidiary’ ~~and~~ability ~~regulations~~to ~~related~~distribute dividends to, or obtain foreign exchange-denominated ~~investment~~loans infrom, ~~China~~our ~~could~~company ~~affect~~or ~~the~~prevent us from making distributions or paying dividends. As a result, our business ~~environment~~operations and our ability to ~~operate~~make ~~our~~distributions ~~business~~to inyou ~~China~~could be materially and adversely affected.

~~Since~~Furthermore, ~~the~~as ~~PRC~~these ~~legal~~foreign ~~system~~exchange ~~continues to evolve rapidly, the interpretations of many laws,~~ regulations ~~and rules~~ are ~~not~~still ~~always~~relatively ~~uniform~~new and ~~enforcement~~ oftheir ~~these~~interpretation ~~laws, regulations~~ and ~~rules~~implementation ~~involves~~have ~~uncertainties,~~been ~~which~~constantly ~~may limit legal protections available to us. Uncertainties~~evolving, ~~due~~it tois ~~evolving~~unclear ~~laws~~how ~~and~~these regulations, ~~could~~and ~~also~~any ~~impede~~future ~~the~~regulation ~~ability~~concerning ofoffshore aor ~~China~~cross-~~based~~border ~~company~~transactions, ~~such~~will asbe ~~our company~~interpreted, ~~to obtain or maintain~~ ~~permits~~amended orand ~~licenses~~implemented ~~required~~by ~~to conduct business in China. In~~ the ~~absence~~relevant ofgovernment ~~required permits or licenses, governmental~~ authorities ~~could impose material sanctions or penalties on us~~. InFor ~~addition~~example, ~~some~~we ~~regulatory requirements issued by certain PRC government authorities~~ may ~~not~~ be ~~consistently~~subject ~~applied~~to bya ~~other~~more ~~PRC~~stringent ~~government~~review ~~authorities~~and ~~(including~~approval process ~~local~~with ~~government~~respect ~~authorities),~~to ~~thus~~our ~~making~~foreign ~~strict~~exchange ~~compliance with all regulatory requirements impractical~~activities, orsuch inas ~~some~~remittance ~~circumstances~~of ~~impossible.~~dividends ~~From~~and ~~time~~foreign-currency-denominated ~~to time~~borrowings, which we may ~~have~~adversely toaffect ~~resort to administrative and court proceedings to enforce~~ our ~~legal~~financial ~~rights.~~condition ~~Any administrative~~ and ~~court~~results ~~proceedings~~of inoperations. ~~China~~In ~~may be protracted~~addition, ~~resulting~~if ~~in substantial~~we ~~costs~~decide ~~and~~to ~~diversion~~acquire ofa ~~resources and management attention. Since~~ PRC ~~administrative~~domestic ~~and~~company, we ~~court~~cannot ~~authorities~~assure ~~have~~you ~~significant discretion~~that inwe ~~interpreting~~or ~~and~~the ~~implementing~~owners ~~statutory~~of ~~provisions~~such ~~and~~company, ~~contractual~~as ~~terms,~~the itcase may be, ~~more~~will ~~difficult~~be able to ~~evaluate~~obtain the ~~outcome of~~necessary ~~administrative~~approvals ~~and~~or ~~court proceedings and~~ complete the ~~level~~necessary offilings ~~legal~~and ~~protection~~registrations werequired ~~enjoy~~by ~~than~~the inforeign ~~more~~exchange ~~developed legal systems~~regulations. ~~These~~This ~~uncertainties~~ may ~~impede~~restrict our ability to ~~enforce~~implement ~~the~~our ~~contracts~~acquisition strategy ~~we have entered into~~ and could ~~materially and~~ adversely affect our business and ~~results of operations~~prospects.

3841

~~The~~As ~~PRC~~of ~~legal~~the ~~system~~date isof ~~based~~this inAnnual ~~part~~Report, onthe ~~government~~PRC ~~policies~~residents ~~and~~have ~~internal~~either ~~rules~~not completed, ~~some~~or ofhave ~~which~~not ~~are~~applied ~~not~~for, ~~published~~foreign onexchange aregistration under ~~timely~~the ~~basis~~SAFE orCircular ~~at all~~37 and ~~may~~other ~~have~~related ~~retroactive effect~~rules. AsAlthough athey ~~result,~~are weeither ~~may~~in ~~not~~the beprocess ~~aware~~ of ~~our~~making ~~violation~~foreign ofexchange ~~any~~registration ~~of these policies and rules until sometime~~or ~~after~~plan ~~the~~to ~~violation.~~make ~~Such~~foreign ~~unpredictability~~exchange ~~towards our contractual~~registrations, ~~property~~they ~~and~~may ~~procedural~~still ~~rights~~face ~~could~~with ~~adversely~~the ~~affect~~above ~~our~~said ~~business and~~possible ~~impede~~fines ~~our~~in ~~ability~~accordance towith ~~continue~~the ~~our~~PRC ~~operations~~Laws.

~~Furthermore, if~~Labor ~~China~~laws ~~adopts more stringent standards with respect to environmental protection or corporate social responsibilities, we may incur increased compliance costs or become subject to additional restrictions~~ in ~~our operations. Intellectual property rights and confidentiality protections in China may also not be as effective as in~~ the ~~United States or other countries. In addition, we cannot predict the effects~~ ~~of future developments in the~~ PRC ~~legal~~may ~~system~~adversely onaffect our ~~business~~results ~~operations, including the promulgation~~ of ~~new laws, or changes to existing laws or the interpretation or enforcement thereof~~operations. These uncertainties could limit the legal protections available to us and our investors, including you. Moreover, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention.

~~You~~The ~~may~~PRC ~~experience~~National ~~difficulties~~People’s inCongress ~~effecting~~promulgated ~~service~~the Labor Contract Law which became effective on January 1, 2008 and was amended on December 28, 2012 (the “Labor Contract Law”), and the State Council promulgated implementing regulations for the labor contract law on September 18, 2008. The Labor Contract Law and the implementing regulations impose requirements concerning, among others, the execution of ~~legal~~written ~~process~~contracts between employers and employees, ~~enforcing~~the ~~foreign~~time ~~judgments~~limits for probationary periods, and the length of employment contracts. The interpretation and implementation of these regulations are still evolving, our employment practices may violate the Labor Contract Law and related regulations and we could be subject to penalties, fines or ~~bringing~~legal ~~actions~~fees inas ~~China~~a ~~against~~result. usIf we are subject to severe penalties or incur significant legal fees in connection with labor law disputes or investigations, our ~~management~~business, ~~based~~financial oncondition ~~foreign~~and ~~laws~~results of operations may be adversely affected.

WeFurther, ~~are~~the aLabor ~~company~~Contract ~~incorporated~~Law ~~under~~requires ~~the~~certain ~~laws~~terminations ofbe ~~the~~based ~~United~~upon ~~States~~seniority and wenot ~~conduct substantially all of our operations in China~~merit. In ~~addition, our~~the ~~officers~~event ~~and~~that ~~directors~~we ~~reside~~decide ~~within China and are PRC nationals. As a result, it may be difficult for you~~ to ~~effect service of process~~significantly ~~upon~~change us or ~~those~~decrease ~~persons~~our ~~inside~~workforce, ~~mainland~~the ~~China.~~Labor ItContract ~~may~~Law ~~also~~could beadversely ~~difficult~~affect ~~for~~our ~~you~~ability to ~~enforce~~enact insuch ~~U.S.~~changes ~~courts~~in ~~judgments~~a ~~obtained~~manner inthat ~~U.S.~~is ~~courts~~most ~~based~~advantageous onto ~~the civil liability provisions of the U.S. federal securities laws against us and~~ our ~~officers~~business ~~and directors as none of them currently resides in the United States~~ or ~~has substantial assets located~~ in ~~the~~a ~~United~~timely ~~States.~~and Incost-effective ~~addition~~manner, ~~there~~thus ismaterially ~~uncertainty as~~and toadversely ~~whether~~affecting ~~the~~our ~~courts~~financial ~~of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the~~condition ~~civil~~and ~~liability~~results ~~provisions~~ of ~~the securities laws of the United States or any state~~operations.

~~The recognition~~We ~~and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts~~ may ~~recognize~~be ~~and enforce~~exposed foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to ~~the~~liabilities ~~PRC~~under ~~Civil Procedures Law,~~ the ~~PRC~~Foreign ~~courts~~Corrupt ~~will~~Practices ~~not~~Act ~~enforce a foreign judgment against us or our directors~~ and ~~officers if~~Chinese ~~they~~anti-corruption ~~decide that the judgment violates the basic principles of PRC laws or national sovereignty, security or public interest~~law. ~~As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.~~

~~Government~~We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. We have operations, agreements with third parties, and make sales in China, which may experience corruption. Our activities in China may create the risk of unauthorized payments or offers of payments by one or more of the employees of our company, because such employees might act against our policies, outside of our control. Violations of ~~currency~~the ~~conversion~~FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the ~~value~~government ofmay ~~your~~seek ~~investment~~to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

~~The PRC~~Our government imposes controls on the convertibility of the Renminbi, or “RMB,” into foreign currencies and, in certain cases, the remittance of currency out of China. We receive some revenue and incur some expenses in U.S. dollars but incur other expenses primarily in RMB. Although our main business ~~is based in mainland China with our Chinese operating subsidiary, some of our business~~ may ~~require us to use U.S. dollars. Under~~ ~~existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can~~ be ~~made~~materially in foreign currencies without prior approval from SAFE, by complying with certain procedural requirements. Approval from appropriate government authorities is required where Renminbi is to be converted into foreign currency and ~~remitted~~ ~~out~~adversely ofaffected ~~the~~if ~~PRC~~our ~~to pay capital expenses such as the repayment of loans denominated in foreign currencies. The~~ PRC ~~government may,~~subsidiary atdeclares ~~its~~bankruptcy ~~discretion,~~or ~~impose~~becomes ~~restrictions~~subject ~~on access~~ to ~~foreign~~a ~~currencies~~dissolution ~~for~~or ~~current~~liquidation ~~account transactions and if this occurs in the future, we may not be able to pay in foreign currencies, and our business and operations may be adversely affected~~proceeding.

39The Enterprise Bankruptcy Law of the PRC, or the Bankruptcy Law, came into effect on June 1, 2007. The Bankruptcy Law provides that an enterprise will be liquidated if the enterprise fails to settle its debts as and when they fall due and if the enterprise’s assets are, or are demonstrably, insufficient to clear such debts.

~~Fluctuations~~Our inPRC ~~exchange~~subsidiary ~~rates~~holds ~~could~~certain ~~have~~assets athat ~~material~~are ~~and~~important ~~adverse~~to ~~effect~~our onbusiness operations. If our ~~results~~PRC subsidiary undergoes a voluntary or involuntary liquidation proceeding, unrelated third-party creditors may claim rights to some or all of ~~operations~~these assets, thereby hindering our ability to operate our business, which could materially and ~~the~~adversely ~~value~~affect ofour ~~your~~business, ~~investment~~financial condition and results of operations.

~~The~~According ~~value~~to of the ~~Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China~~SAFE’s ~~foreign~~Notice ~~exchange~~of ~~policies. On July 21, 2005,~~ the ~~PRC~~State ~~government~~Administration ~~changed its decade-old policy~~ of ~~pegging~~Foreign ~~the~~Exchange ~~value~~on ofFurther ~~the~~Improving ~~Renminbi to the U.S. dollar,~~ and ~~the~~Adjusting ~~Renminbi~~Foreign ~~appreciated~~Exchange ~~more than 20% against the U.S. dollar over~~Administration ~~the~~Policies ~~following~~for ~~three~~Direct ~~years. Between July 2008 and June 2010~~Investment, ~~this~~effective ~~appreciation~~on ~~halted~~December ~~and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010~~17, ~~the Renminbi has fluctuated against the U.S. dollar~~2012, ~~at times significantly~~ and ~~unpredictably. On November 30, 2015,~~ the ~~Executive~~Provisions ~~Board~~for ofAdministration ~~IMF completed the regular five-year review~~ of ~~the~~Foreign ~~basket~~Exchange ofRelating ~~currencies~~to ~~that~~Inbound ~~make~~Direct upInvestment ~~the~~by ~~Special~~Foreign ~~Drawing Right~~Investors, oreffective ~~the~~May ~~SDR~~13, ~~and decided that with effect from October 1~~2013, ~~2016,~~if ~~Renminbi~~our isPRC ~~determined~~subsidiary toundergoes be a ~~freely~~ ~~usable~~voluntary ~~currency~~or ~~and~~involuntary ~~will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the Euro, the Japanese~~liquidation ~~yen and the British pound. In the fourth quarter of 2016~~proceeding, ~~the~~prior ~~Renminbi~~approval ~~has~~from ~~depreciated significantly in~~ the ~~backdrop~~SAFE offor aremittance ~~surging U.S. dollar and persistent capital outflows~~ of ~~China. This depreciation halted in 2017, and the RMB appreciated approximately 7% against the U.S. dollar during this one-year period. With the development of the~~ foreign exchange ~~market~~to ~~and~~our ~~progress~~shareholders ~~towards~~abroad ~~interest~~is ~~rate~~no ~~liberalization and~~longer ~~Renminbi internationalization~~required, ~~the~~but ~~PRC~~we ~~government~~still need ~~may in the future announce further changes~~ to ~~the~~conduct ~~exchange~~a ~~rate~~registration ~~system,~~process ~~and~~with ~~we cannot assure you that~~ the ~~Renminbi~~SAFE ~~will~~local ~~not appreciate or depreciate significantly in value against the U~~branch.S. ~~dollar in the future.~~ It is ~~difficult~~not toclear ~~predict~~whether ~~how~~“registration” ~~market~~is ~~forces~~a ormere ~~PRC~~ formality or ~~U.S.~~involves ~~government~~the ~~policy~~kind ~~may~~of ~~impact~~substantive ~~the~~review ~~exchange~~process ~~rate~~undertaken ~~between~~by ~~the~~SAFE ~~Renminbi~~ and ~~the U.S.~~its ~~dollar~~relevant branches in the ~~future~~past.

Significant revaluation of the Renminbi may have a material and adverse effect on our operations. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our shares of Common Stock or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.42

~~Very limited~~Changes ~~hedging~~in ~~options~~China’s economic, ~~are~~political ~~available~~or insocial ~~China~~conditions toor ~~reduce~~government ~~our~~policies ~~exposure~~could tohave ~~exchange~~a ~~rate~~material ~~fluctuations.~~adverse Toeffect ~~date,~~on weour ~~have~~business ~~not~~and ~~entered~~operations. ~~into~~The ~~any~~PRC ~~hedging~~government ~~transactions~~has inrecently indicated an ~~effort~~intent to ~~reduce~~exert ~~our~~more ~~exposure~~oversight toand ~~foreign~~control ~~currency~~over ~~exchange~~overseas ~~risk.~~securities ~~While~~offerings weand ~~may~~other ~~decide~~capital markets toactivities ~~enter~~and ~~into~~foreign ~~hedging transactions~~investment in ~~the~~China-based ~~future,~~companies ~~the~~like ~~availability~~us. ~~and~~Any ~~effectiveness~~such ofaction, ~~these~~once ~~hedges~~taken ~~may~~by bethe ~~limited~~PRC ~~and~~government, wecould ~~may~~significantly limit ~~not~~or becompletely ~~able~~hinder toour ~~adequately~~ability ~~hedge our~~to ~~exposure~~offer or atcontinue ~~all.~~to Inoffer ~~addition,~~securities ~~our~~to ~~currency~~investors ~~exchange~~and ~~losses~~cause ~~may~~the bevalue ~~magnified~~of bysuch ~~PRC~~securities ~~exchange control regulations that restrict~~to ~~our~~significantly ~~ability~~decline toor ~~convert~~in ~~Renminbi~~extreme ~~into~~cases, ~~foreign~~become ~~currency~~worthless.

~~Governmental~~Substantially ~~control~~all of ~~currency~~our ~~conversion~~assets ~~may~~and ~~limit~~operations are located in China. Accordingly, our ~~ability~~business, financial condition, results of operations and prospects may be influenced to ~~utilize~~a ~~our~~significant ~~revenues~~degree ~~effectively~~by political, economic and ~~affect~~social conditions in China generally. The Chinese economy differs from the ~~value~~economies of ~~your~~most ~~investment~~developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies.

The PRC government ~~imposes~~has ~~controls~~significant onauthority ~~the~~to ~~convertibility~~exert ofinfluence on the ~~Renminbi~~ability ~~into~~of ~~foreign~~a ~~currencies~~China-based ~~and~~company, insuch ~~certain~~as ~~cases~~us, ~~the~~to ~~remittance~~conduct ofits business, ~~currency~~accept ~~out~~foreign ofinvestments ~~China.~~or Welist ~~receive~~on ~~substantially~~an ~~all~~U.S. ofor ~~our~~other ~~revenues~~foreign ~~in Renminbi~~exchanges. ~~Under~~For ~~existing~~example, ~~PRC~~we ~~foreign~~face ~~exchange~~risks ~~regulations,~~associated ~~payments~~with regulatory approvals of ~~current~~offshore ~~account items~~offerings, ~~including~~anti-monopoly ~~profit~~regulatory ~~distributions~~actions, ~~interest~~as ~~payments~~well ~~and~~as ~~trade~~oversight on cybersecurity and ~~service-related~~data ~~foreign~~privacy. ~~exchange~~Such ~~transactions,~~risks or any actions ~~can~~by bethe ~~made~~PRC ingovernment ~~foreign~~to ~~currencies~~exert ~~without~~more ~~prior~~oversight ~~approval~~and ofcontrol ~~SAFE~~over byofferings ~~complying~~that ~~with~~are ~~certain~~conducted ~~procedural~~overseas ~~requirements.~~and/or ~~Specifically,~~foreign ~~under the~~investment ~~existing~~in ~~exchange~~China-based issuers ~~restrictions,~~could ~~without~~result ~~prior~~in ~~approval~~a ofmaterial ~~SAFE,~~change ~~cash~~in ~~generated~~our ~~from~~operations and/or the ~~operations~~value of our ~~PRC~~common ~~subsidiary~~stock inor ~~China~~could significantly limit or completely ~~may~~hinder beour ~~used~~ability to ~~pay~~offer ~~dividends~~or continue to offer our ~~company.~~common ~~However,~~stock ~~approval~~and/or ~~from~~other orsecurities ~~registration~~to ~~with~~investors ~~appropriate~~and ~~government~~cause ~~authorities~~the isvalue ~~required~~of such securities ~~where~~to ~~Renminbi~~significantly isdecline toor be ~~converted~~worthless. ~~into~~The ~~foreign~~PRC ~~currency~~government has significant authority, oversight and ~~remitted~~discretion ~~out~~over the conduct of ~~China~~our business toand ~~pay~~may ~~capital~~intervene ~~expenses~~with ~~such~~or influence our operations as the ~~repayment~~government ofdeems ~~loans denominated~~appropriate into ~~foreign~~further ~~currencies~~regulatory, political and societal goals. AsThe aPRC ~~result~~government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we ~~need~~cannot torule ~~obtain~~out ~~SAFE~~the ~~approval~~possibility tothat ~~use~~it ~~cash~~will ~~generated~~in ~~from~~ the ~~operations~~future ofrelease regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Furthermore, the PRC government has recently ~~subsidiary~~indicated an intent to ~~pay~~exert ~~off~~more ~~their~~oversight ~~respective~~and ~~debt~~control inover aoverseas ~~currency~~securities offerings and other ~~than~~capital ~~Renminbi~~markets ~~owed~~activities toand ~~entities~~foreign investment ~~outside~~in China-based companies like us. Any such action, once taken by the PRC government, could significantly limit or completely hinder our ability to ~~make~~offer ~~other~~or ~~capital expenditure~~continue ~~payments~~to ~~outside~~offer ~~China~~securities into ainvestors ~~currency~~and ~~other~~cause ~~than~~the ~~Renminbi~~value of such securities to significantly decline or in extreme cases, become worthless.

InThe ~~light~~Chinese ofgovernment ~~the~~also ~~flood~~exercises ofsignificant ~~capital~~control ~~outflows~~over of China,’s ~~the~~economic ~~PRC~~growth ~~government~~through ~~may~~allocating ~~from~~resources, ~~time~~controlling ~~to time impose more restrictive foreign exchange policies~~payment ~~and step up scrutiny~~ of major outbound capital movement. More restrictions and substantial vetting process may be required by SAFE or other government authorities to regulate cross-border transactions falling under the capital account. The PRC government may at its discretion restrict access to foreign ~~currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign~~ currency-denominated ~~demands~~obligations, wesetting ~~may~~monetary ~~not~~policy, beand ~~able~~providing topreferential ~~pay~~treatment ~~dividends in foreign currencies~~ to ~~our~~particular ~~shareholders,~~industries ~~including holders of our Common Stock~~or companies.

40While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and operating results, lead to reduction in demand for our services and adversely affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and operating results.

~~The~~Uncertainties with ~~Chinese~~respect ~~government~~to ~~exerts~~the ~~substantial~~PRC ~~influence~~legal ~~over~~system, ~~the~~including ~~manner~~uncertainties inregarding ~~which~~the weenforcement ~~must~~of ~~conduct~~laws ~~our~~and ~~business~~sudden ~~activities~~ and ~~may~~unexpected ~~intervene~~changes ~~or influence~~in ~~our~~laws ~~operations~~and regulations atin ~~any time~~China, ~~which~~ could ~~result~~adversely inaffect aus ~~material~~and ~~change~~limit inthe ~~our~~legal ~~operations~~protections ~~and/or~~available ~~the~~to ~~value~~you ofand ~~our common stock~~us.

~~The~~Our ~~Chinese~~operations ~~government~~in ~~has~~China ~~exercised~~are ~~and~~governed ~~continues~~by toPRC ~~exercise~~laws ~~substantial control over virtually every sector of the Chinese economy through regulation~~ and ~~state ownership~~regulations. Our ~~ability~~wholly toforeign-owned ~~operate~~PRC inoperating ~~China~~subsidiary ~~may~~Sichuan beVtouch ~~harmed~~is bysubject to ~~changes in its~~ laws and regulations, ~~including~~applicable ~~those relating~~ to ~~taxation,~~foreign ~~environmental~~investment ~~regulations,~~in ~~land~~China. ~~use~~The ~~rights,~~PRC ~~property~~legal ~~and~~system ~~other~~is ~~matters.~~a ~~The~~civil ~~central~~law orsystem ~~respective~~based ~~local~~on ~~governments~~written statutes. ~~may~~Unlike ~~impose~~the ~~new,~~common ~~stricter~~law ~~regulations~~system, orprior ~~interpretations~~court ofdecisions ~~existing~~under ~~regulations~~the ~~that~~civil ~~would~~law ~~require~~system ~~additional~~may ~~expenditures~~be ~~and~~cited ~~efforts on~~for ~~our~~reference ~~part~~but tohave ~~ensure~~limited ~~our~~precedential value. ~~compliance~~In ~~with~~addition, ~~such~~any ~~regulations~~new or ~~interpretations.~~changes ~~The~~in ~~Chinese~~PRC ~~government~~laws ~~may~~and ~~intervene~~regulations orrelated ~~influence~~to ~~our operations~~foreign atinvestment ~~any~~in ~~time,~~China ~~which~~ could ~~result~~affect inthe abusiness ~~material~~environment and ~~change in~~ our ~~operations~~ability ~~and/or~~to ~~the~~operate ~~value of~~ our ~~common~~business ~~stock~~in China.

If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and the common stockholders.43

~~Under~~Since the PRC ~~Enterprise~~legal ~~Income~~system ~~Tax~~continues ~~Law~~to ~~and~~evolve ~~its implementation rules~~rapidly, anthe ~~enterprise~~interpretations ~~established outside~~ of ~~the~~many ~~PRC~~laws, ~~with~~regulations ~~its~~and ~~“de~~rules ~~facto management~~are ~~body”~~not ~~within~~always ~~the~~uniform ~~PRC~~and isenforcement of ~~considered~~these alaws, ~~“resident~~regulations ~~enterprise”~~ and ~~will~~rules beinvolves ~~subject~~uncertainties, towhich ~~the~~may ~~enterprise~~limit ~~income tax~~legal onprotections ~~its~~available ~~global~~to ~~income~~us. atUncertainties ~~the~~due ~~rate~~to ofevolving laws ~~25%.~~and ~~The~~regulations ~~implementation~~could ~~rules~~also ~~define~~impede the ~~term~~ability ~~“de~~of ~~facto~~a ~~management~~China-based ~~body”~~company, such as ~~the~~ ~~body~~our ~~that~~company, ~~exercises~~to ~~full~~obtain ~~and~~or ~~substantial~~maintain ~~control~~permits ~~and~~or ~~overall~~licenses required ~~management~~to ~~over~~conduct ~~the~~ business, ~~productions,~~in ~~personnel, accounts and properties of an enterprise~~China. In ~~2009,~~ the ~~State~~absence ~~Administration~~ of ~~Taxation,~~required permits or ~~SAT~~licenses, ~~issued~~governmental aauthorities ~~circular,~~could ~~known~~impose asmaterial sanctions ~~SAT~~or ~~Circular~~penalties ~~82,~~on ~~which~~us. ~~provides certain~~In ~~specific~~addition, ~~criteria~~some ~~for~~regulatory ~~determining~~requirements ~~whether~~issued ~~the~~by ~~“de~~certain ~~facto~~PRC ~~management~~government ~~body”~~authorities ofmay anot ~~PRC-controlled~~be ~~enterprise that~~consistently isapplied ~~incorporated~~by ~~offshore~~other isPRC ~~located~~government inauthorities ~~China.~~(including ~~Although~~local ~~this~~government ~~circular~~authorities), ~~applies~~thus ~~only~~making tostrict ~~offshore~~compliance ~~enterprises~~with ~~controlled~~all ~~by PRC enterprises~~regulatory orrequirements ~~PRC enterprise groups~~impractical, ~~not~~or ~~those~~in ~~controlled~~some bycircumstances ~~PRC~~impossible. ~~individuals~~From ortime ~~foreigners~~to time, ~~the~~we ~~criteria~~may ~~set~~have ~~forth~~to inresort ~~the~~to ~~circular~~administrative ~~may~~and ~~reflect~~court ~~the~~proceedings ~~SAT’s~~to ~~general~~enforce ~~position~~our onlegal ~~how~~rights. ~~the~~Any ~~“de~~administrative ~~facto~~and ~~management~~court ~~body”~~proceedings ~~text should be applied~~ in ~~determining~~China ~~the~~may ~~tax~~be ~~resident status of all offshore enterprises. According to SAT Circular 82~~protracted, anresulting ~~offshore~~in ~~incorporated~~substantial ~~enterprise~~costs ~~controlled~~and ~~by a PRC enterprise~~diversion orof aresources ~~PRC~~and ~~enterprise~~management ~~group~~attention. ~~will~~Since ~~be regarded as a~~ PRC ~~tax~~administrative ~~resident~~and bycourt ~~virtue~~authorities ofhave ~~having~~significant ~~its~~discretion ~~“de facto management body”~~ in ~~China,~~interpreting and implementing ~~will~~statutory beprovisions ~~subject~~and tocontractual ~~PRC~~terms, ~~enterprise~~it ~~income~~may ~~tax~~be onmore ~~its~~difficult ~~global~~to ~~income~~evaluate ~~only~~the ifoutcome ~~all~~ of ~~the~~administrative ~~following~~and ~~conditions~~court proceedings ~~are~~and ~~met: (i)~~ the ~~primary~~level ~~location~~ of ~~the~~legal ~~day-to-day~~protection ~~operational~~we ~~management~~enjoy isthan in ~~the~~more ~~PRC;~~developed ~~(ii)~~legal ~~decisions~~systems. ~~relating~~These touncertainties ~~the~~may ~~enterprise’s~~impede ~~financial and~~our ~~human resource matters are made or are subject~~ ability to ~~approval~~enforce ~~by organizations or personnel in~~ the ~~PRC;~~contracts ~~(iii)~~we ~~the~~have ~~enterprise’s primary~~entered ~~assets,~~into ~~accounting books~~ and ~~records,~~could ~~company~~materially ~~seals,~~ and ~~board~~adversely ~~and~~affect ~~shareholder~~our ~~resolutions~~business ~~are located or maintained in the PRC;~~ and ~~(iv)~~results ~~at least 50%~~ of ~~voting board members or senior executives habitually reside in the PRC~~operations.

WeThe ~~believe our Company, excluding our~~ PRC ~~subsidiary,~~legal issystem ~~not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise~~ is ~~subject~~based toin ~~determination~~part byon ~~the~~government ~~PRC~~policies ~~tax authorities~~ and ~~uncertainties~~internal remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income tax purposesrules, wesome ~~would be subject to PRC enterprise income on our worldwide income at the rate~~ of ~~25%.~~which ~~Furthermore, we would be required to withhold a 10% tax from dividends we pay to our shareholders that~~ are ~~non-resident~~not ~~enterprises.~~published ~~In addition, non-resident enterprise shareholders (including the common stockholders) may be subject to PRC tax~~ on ~~gains~~a ~~realized~~timely onbasis ~~the sale~~ or ~~other disposition~~at ~~of the common stock, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident~~all ~~enterprise, dividends paid to our non-PRC individual shareholders (including the common stock holders)~~ and ~~any gain realized on the transfer of the common stock or ordinary shares by such shareholders~~ may behave ~~subject~~retroactive toeffect. ~~PRC~~As ~~tax at~~ a ~~rate of 20% (which~~result, inwe ~~the case of dividends,~~ may benot ~~withheld at source by us). These rates may~~ be ~~reduced~~aware ~~by an applicable tax treaty, but it is unclear whether non-PRC shareholders~~ of our ~~company~~violation ~~would be able to claim the benefits~~ of any ~~tax treaties between their country~~ of ~~tax~~these ~~residence~~policies and ~~the~~rules ~~PRC~~until insometime after the ~~event that~~violation. weSuch ~~are~~unpredictability ~~treated~~towards asour acontractual, ~~PRC~~property ~~resident~~and ~~enterprise.~~procedural ~~Any~~rights ~~such~~could ~~tax~~adversely ~~may~~affect ~~reduce~~our ~~the~~business ~~returns~~and onimpede our ~~your~~ability ~~investment~~to incontinue our ~~common stock~~operations.

41Furthermore, if China adopts more stringent standards with respect to environmental protection or corporate social responsibilities, we may incur increased compliance costs or become subject to additional restrictions in our operations. Intellectual property rights and confidentiality protections in China may also not be as effective as in the United States or other countries. In addition, we cannot predict the effects of future developments in the PRC legal system on our business operations, including the promulgation of new laws, or changes to existing laws or the interpretation or enforcement thereof. These uncertainties could limit the legal protections available to us and our investors, including you. Moreover, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention.

~~Risks~~You may experience ~~Related~~difficulties toin ~~Our~~effecting ~~Common~~service ~~Stock~~of legal process, enforcing foreign judgments or bringing actions in China against us or our management based on foreign laws.

~~The~~We ~~price~~are a company incorporated under the laws of the United States and we conduct substantially all of our ~~common~~operations ~~stock~~in China. In addition, our officers and directors reside within China and are PRC nationals. As a result, it may be ~~volatile~~difficult orfor ~~may~~you ~~decline~~to ~~regardless~~effect service of ~~our~~process upon ~~operating~~us ~~performance~~or ~~and~~those ~~you~~persons inside mainland China. It may ~~not~~also be ~~able~~difficult for you to ~~resell~~enforce ~~your~~in U.S. courts judgments obtained in U.S. ~~shares~~courts atbased on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors as none of them currently resides in the United States or ~~above~~has substantial assets located in the ~~purchase~~United ~~price~~States. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.

AnThe ~~active~~recognition ~~trading~~and ~~market~~enforcement of foreign judgments are provided for ~~our~~under ~~common~~the ~~stock~~PRC Civil Procedures Law. PRC courts may ~~not~~recognize beand ~~sustained.~~enforce foreign ~~The~~judgments ~~lack~~in accordance with the requirements of anthe ~~active~~PRC ~~market~~Civil ~~may~~Procedures ~~impair~~Law ~~your~~based ~~ability~~either toon ~~sell~~treaties ~~your~~between ~~shares~~China and the country atwhere the ~~time~~judgment ~~you~~is ~~wish~~made toor ~~sell~~on ~~them~~principles of reciprocity between jurisdictions. China does not have any treaties or atother aforms ~~price~~of written arrangement with the United States that ~~you~~provide ~~consider~~for ~~reasonable.~~the Anreciprocal ~~inactive~~recognition ~~market~~and ~~may~~enforcement ~~also~~of ~~impair~~foreign ~~our~~judgments. ~~ability~~In toaddition, ~~raise~~according ~~capital~~to bythe ~~selling~~PRC ~~shares~~Civil ofProcedures ~~common~~Law, ~~stock~~the ~~and~~PRC ~~may~~courts ~~impair~~will ~~our~~not ~~ability~~enforce toa ~~acquire~~foreign ~~other~~judgment ~~businesses~~against us or ~~technologies~~our ~~using~~directors ~~our~~and ~~shares~~officers ofif they decide ~~common~~that ~~stock~~the asjudgment ~~consideration,~~violates ~~which,~~the inbasic ~~turn,~~principles ~~could~~of ~~materially~~PRC ~~adversely~~laws ~~affect~~or ~~our~~national ~~business.~~sovereignty, ~~The~~security ~~market~~or ~~price~~public ofinterest. ~~our~~As ~~common~~a ~~stock~~result, ~~may~~it is uncertain ~~fluctuate~~whether ~~significantly~~and inon ~~response~~what tobasis ~~numerous~~a ~~factors,~~PRC ~~many~~court ofwould ~~which~~enforce ~~are~~a ~~beyond~~judgment ~~our~~rendered ~~control,~~by ~~including:~~a court in the United States.

●Government ~~overall performance~~ control of ~~the~~currency ~~equity~~conversion ~~markets;~~may ●affect ~~our operating performance and~~ the ~~performance~~value of ~~other~~your similar companies; ● the published opinions and third-party valuations by banking and market analysts; ● changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; ● regulatory or legal developments; ● the level of expenses related to operations; ● our failure to achieve its goals in the timeframe it announces; ● announcements of acquisitions, strategic alliances or significant agreements by us;investment.

●The PRC ~~recruitment~~government orimposes ~~departure~~controls on the convertibility of ~~key~~the ~~personnel;~~Renminbi, ●or “RMB,” into foreign currencies and, in certain cases, the ~~economy~~remittance asof acurrency ~~whole~~out of China. We receive some revenue and ~~market~~incur ~~conditions~~some expenses in U.S. dollars but incur other expenses primarily in RMB. Although our ~~industry;~~main ●business ~~trading~~is ~~activity~~based byin amainland ~~number~~China ofwith ~~stockholders;~~our ●Chinese ~~the~~operating ~~size~~subsidiary, some of our ~~market~~business ~~float;~~may ●require us ~~political~~to ~~uncertainty~~use ~~and/or~~U.S. ~~instability~~dollars. ●Under ~~the~~existing ~~ongoing~~PRC ~~and~~foreign ~~future~~exchange ~~impact~~regulations, payments of ~~the~~current ~~COVID~~account items, including profit distributions, interest payments and expenditures from trade-19related ~~pandemic~~transactions, can be made in foreign currencies without prior approval from SAFE, by complying with certain procedural requirements. Approval from appropriate government authorities is required where Renminbi is to be converted into foreign currency and ~~actions~~remitted ~~taken~~out of the PRC to ~~slow~~pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its ~~spread;~~discretion, impose restrictions on access to foreign currencies for current account transactions and ●if ~~any~~this ~~other~~occurs ~~factors~~in ~~discussed~~the future, we may not be able to pay in ~~this~~foreign ~~Annual~~currencies, ~~Report~~and our business and operations may be adversely affected.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.44

~~Since our~~Fluctuations ~~By-laws provide that the courts~~ in exchange ~~the~~rates ~~State~~could ofhave ~~Nevada~~a ~~are~~material ~~the sole~~ and ~~exclusive~~adverse ~~forum~~effect ~~for~~on ~~substantially~~our ~~all~~results ~~disputes~~of ~~between~~operations us and ~~our~~the ~~shareholders,~~value ~~this~~of ~~could~~your ~~limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors or officers, or employees~~investment.

~~Our~~The ~~Amended~~value of the Renminbi against the U.S. dollar and ~~Restated~~other ~~By-laws~~currencies ~~provide~~may ~~that~~fluctuate and is affected by, ~~unless~~among weother ~~consent~~things, changes in ~~writing~~political and toeconomic ~~the~~conditions ~~selection~~in ofChina anand ~~alternative~~by ~~forum~~China’s foreign exchange policies. On July 21, 2005, the ~~appropriate~~PRC ~~state and~~government ~~federal~~changed ~~courts~~its indecade-old policy of pegging the ~~State~~value of ~~Nevada~~the ~~shall~~Renminbi beto the ~~sole~~U.S. dollar, and ~~exclusive~~the ~~forum~~Renminbi ~~for~~appreciated ~~any~~more ~~derivative~~than ~~action~~20% oragainst ~~proceeding~~the ~~brought~~U.S. ondollar ~~behalf~~over of the ~~Company~~following three years. Between July 2008 and June 2010, ~~any~~this ~~action~~appreciation ~~asserting~~halted aand ~~claim~~the ofexchange ~~breach~~rate ofbetween athe ~~fiduciary~~Renminbi ~~duty~~and ~~owed~~the U.S. bydollar ~~any~~remained ~~director,~~within ~~officer~~a ornarrow ~~other~~band. ~~employee~~Since ofJune 2010, the ~~Company to~~Renminbi ~~the~~has ~~Company~~fluctuated oragainst the ~~Company’s~~U.S. ~~shareholders~~dollar, ~~any~~at ~~action~~times ~~asserting~~significantly and aunpredictably. ~~claim~~On ~~arising~~November ~~pursuant~~30, to2015, ~~any~~the ~~provision~~Executive Board of IMF completed the ~~Nevada~~regular ~~Revised Statutes,~~five-year orreview ~~any~~of ~~action~~the ~~asserting~~basket aof ~~claim~~currencies that ~~governed~~make byup the ~~internal~~Special ~~affairs~~Drawing ~~doctrine.~~Right, ~~This~~or ~~exclusive~~the ~~forum~~SDR, ~~provision~~and ~~would~~decided ~~not~~that ~~apply~~with ~~to suits~~effect ~~brought~~from toOctober ~~enforce~~1, ~~any~~2016, ~~liability~~Renminbi oris ~~duty~~determined ~~created~~to bybe ~~the~~a freely ~~Securities~~usable ~~Act~~currency orand ~~the~~will ~~Exchange~~be ~~Act~~included orin ~~any~~the ~~other~~SDR ~~claim~~basket ~~for~~as ~~which~~a ~~the~~fifth ~~federal courts~~currency, ~~have~~along ~~exclusive~~with ~~jurisdiction~~the U.S. Todollar, the ~~extent~~Euro, ~~that~~the ~~any~~Japanese yen ~~such~~and ~~claims~~the ~~may~~British bepound. ~~based~~In ~~upon~~the ~~federal~~fourth ~~law~~quarter ~~claims~~of 2016, ~~Section~~the 27Renminbi ofhas depreciated significantly in the ~~Exchange Act~~backdrop ~~creates~~of ~~exclusive~~a ~~federal~~surging ~~jurisdiction~~U.S. dollar ~~over~~and ~~all~~persistent ~~suits~~capital ~~brought~~outflows toof ~~enforce~~China. ~~any~~This ~~duty~~depreciation orhalted ~~liability~~in ~~created~~2017, byand the ~~Exchange~~RMB ~~Act~~appreciated orapproximately 7% against the ~~rules~~U.S. ~~and~~dollar ~~regulations~~during ~~thereunder~~this one-year period. ~~Section~~With 22the development of the ~~Securities~~foreign ~~Act~~exchange ~~creates~~market ~~concurrent~~and ~~jurisdiction~~progress ~~for~~towards ~~federal~~interest rate liberalization and ~~state~~Renminbi ~~courts~~internationalization, ~~over all~~the ~~suits~~PRC ~~brought~~government may in the future announce further changes to ~~enforce~~the ~~any~~exchange ~~duty~~rate orsystem, ~~liability~~and ~~created~~we bycannot assure you that the ~~Securities~~Renminbi ~~Act~~will not appreciate or depreciate significantly in value against the ~~rules~~U.S. ~~and~~dollar ~~regulations~~in ~~thereunder~~the future. ~~Any~~It ~~person~~is difficult orto ~~entity~~predict ~~purchasing~~how ormarket ~~otherwise~~forces ~~acquiring~~or ~~any~~PRC ~~interest~~or inU.S. ~~our~~government ~~Company~~policy ~~shall~~may beimpact ~~deemed~~the toexchange ~~have~~rate ~~notice~~between ofthe Renminbi and ~~consented~~the toU.S. ~~these~~dollar ~~provisions~~in the future.

42Significant revaluation of the Renminbi may have a material and adverse effect on our operations. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our shares of Common Stock or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.

~~These~~Very ~~exclusive-forum~~limited ~~provisions~~hedging ~~may~~options ~~limit~~are aavailable ~~shareholder’s~~in ~~ability~~China to ~~bring~~reduce aour ~~claim~~exposure into aexchange ~~judicial~~rate ~~forum~~fluctuations. ofTo ~~its~~date, ~~choosing~~we ~~for~~have ~~disputes~~not entered into ~~with~~any ushedging ortransactions in an effort to reduce our ~~directors,~~exposure ~~officers~~to orforeign ~~other~~currency ~~employees,~~exchange ~~which~~risk. While we may ~~discourage~~decide ~~lawsuits~~to ~~against~~enter usinto hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our ~~directors~~exposure or at all. In addition, ~~officers~~our ~~and~~currency ~~other~~exchange losses may be magnified by PRC exchange control regulations that restrict our ~~employees~~ability to convert Renminbi into foreign currency.

~~Moreover, if~~Governmental ~~a court were to find the choice~~ control of ~~forum~~currency ~~provision~~conversion ~~contained~~may inlimit our ~~Amended~~ability ~~and Restated By-laws~~ to beutilize ~~inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm~~ our ~~business, results~~revenues ofeffectively ~~operations,~~ and ~~financial~~affect ~~condition.~~the ~~Even~~value ifof weyour ~~are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees~~investment.

~~Short~~The ~~sellers~~PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our ~~stock~~revenues in Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiary in China may be ~~manipulative~~used to pay dividends to our company. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and ~~may~~remitted ~~drive~~out ~~down~~of China to pay capital expenses such as the ~~market~~repayment ~~price~~of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our ~~common~~PRC ~~stock~~subsidiary to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.

~~Short~~In ~~selling~~light isof the ~~practice~~flood of ~~selling~~capital ~~securities~~outflows ~~that~~of China, the ~~seller~~PRC ~~does~~government ~~not~~may ~~own~~from ~~but~~time ~~rather~~to ~~has~~time ~~borrowed~~impose ormore ~~intends~~restrictive toforeign ~~borrow~~exchange ~~from a third~~policies ~~party~~and ~~with~~step ~~the~~up ~~intention~~scrutiny of ~~buying~~major ~~identical~~outbound ~~securities~~capital atmovement. aMore ~~later~~restrictions ~~date~~and tosubstantial ~~return~~vetting toprocess ~~the~~may ~~lender.~~be Arequired ~~short~~by ~~seller~~SAFE ~~hopes to profit from~~or aother ~~decline~~government inauthorities ~~the~~to ~~value~~regulate ofcross-border ~~the~~transactions ~~securities~~falling ~~between~~under the ~~sale~~capital ofaccount. ~~the~~The ~~borrowed~~PRC ~~securities~~government ~~and~~may ~~the~~at ~~purchase~~its ~~of the replacement shares, as the~~discretion ~~short~~restrict ~~seller~~access ~~expects~~ to ~~pay~~foreign ~~less~~currencies infor ~~that~~current ~~purchase~~account ~~than~~transactions ~~it received~~ in the ~~sale~~future. AsIf itthe isforeign ~~therefore~~exchange incontrol ~~the~~system ~~short seller’s interest~~prevents ~~for~~us ~~the~~from ~~price~~obtaining ofsufficient ~~the~~foreign ~~stock~~currencies to ~~decline,~~satisfy ~~some~~our ~~short~~foreign ~~sellers~~currency ~~publish~~demands, orwe ~~arrange~~may ~~for~~not ~~the~~be ~~publication~~able ~~of,~~to ~~opinions~~pay ordividends ~~characterizations~~in ~~regarding~~foreign ~~the~~currencies ~~relevant issuer, its business prospects and similar matters calculated~~ to orour ~~which may create negative market momentum~~shareholders, ~~which~~including ~~may permit~~holders ~~them to obtain profits for themselves as a result~~ of ~~selling~~our ~~the~~Common ~~stock short~~Stock. ~~Issuers whose securities have historically had limited trading volumes and/or have been susceptible to relatively high volatility levels can be particularly vulnerable to such short seller attacks.~~

The publication of any such commentary regarding us by a short seller may bring about a temporary, or possibly long term, decline in the market price of our common stock. No assurances can be made that we will not become a target of such commentary and declines in the market price of our common stock will not occur in the future, in connection with such commentary by short sellers or otherwise.45

~~If we~~The ~~become~~Chinese ~~directly~~government exerts ~~subject~~substantial toinfluence over the ~~scrutiny,~~manner ~~criticism~~in ~~and~~which ~~negative publicity involving U.S.-listed Chinese companies,~~ we ~~may~~must ~~have~~conduct ~~to expend~~our ~~significant~~business ~~resources~~activities ~~to investigate~~ and ~~resolve~~may ~~the~~intervene ~~matter~~or ~~which~~influence ~~could harm~~ our ~~business,~~ operations at ~~and~~any ~~reputations~~time, which could result in a ~~loss~~material ofchange ~~your~~in ~~investment~~our inoperations and/or the value of our common stock.

~~U.S.~~The ~~public~~Chinese ~~companies~~government ~~that~~has ~~have~~exercised ~~substantially~~and ~~all~~continues ofto ~~their~~exercise ~~operations~~substantial incontrol ~~China~~over ~~have~~virtually ~~been~~every ~~the~~sector ~~subject~~ of ~~intense~~the ~~scrutiny,~~Chinese ~~criticism~~economy ~~and negative~~through ~~publicity~~regulation ~~by investors, financial commentators~~ and ~~regulatory~~state ~~agencies,~~ownership. ~~such~~Our asability ~~the~~to ~~SEC.~~operate ~~Much~~in ofChina ~~the~~may ~~scrutiny,~~be ~~criticism~~harmed ~~and~~by ~~negative publicity~~changes ~~has~~in ~~centered~~its ~~around~~laws ~~financial~~ and ~~accounting irregularities~~regulations, aincluding ~~lack of effective internal controls over financial accounting,~~those ~~inadequate~~relating ~~corporate~~to ~~governance policies or a lack of adherence thereto and~~taxation, inenvironmental ~~some cases~~regulations, ~~allegations~~land ofuse ~~fraud. As a result of the scrutiny~~rights, ~~criticism~~property and ~~negative~~other ~~publicity, the publicly traded stock of many U~~matters.S. ~~listed~~The ~~Chinese~~central ~~companies~~or ~~has~~respective ~~sharply~~local ~~decreased in~~governments ~~value~~may ~~and,~~impose ~~in some cases~~new, ~~has~~stricter ~~become~~regulations ~~virtually~~or ~~worthless.~~interpretations ~~Many~~ of ~~these~~existing ~~companies~~regulations ~~are~~that ~~now~~would ~~subject~~require toadditional ~~shareholder~~expenditures ~~lawsuits~~ and ~~SEC enforcement~~efforts ~~actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have~~ on our ~~business.~~part ~~If we become the subject of any unfavorable allegations, whether such allegations are proven~~ to beensure ~~true~~our orcompliance ~~untrue,~~with ~~we will have to expend significant resources to investigate~~ such ~~allegations~~regulations ~~and/~~or ~~defend~~interpretations. ~~the~~The ~~Company. This~~Chinese ~~situation~~government may beintervene aor ~~major~~influence ~~distraction to~~ our ~~management.~~operations at Ifany ~~such~~time, ~~allegations~~which ~~are~~could ~~not~~result ~~proven~~in toa bematerial ~~groundless,~~change in our ~~company and business~~ operations ~~will be severely hampered~~ and/or ~~your~~the ~~investment~~value inof our ~~shares~~common ~~could be rendered worthless~~stock.

~~The sale~~If orwe ~~availability~~are ~~for~~classified ~~sale~~as

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