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JX Luxventure Group Inc.

JX Luxventure Group Inc.JXGEarnings & Financial Report

Nasdaq · Consumer Discretionary

JX Luxventure Group Inc operates cross-border e-commerce platforms selling premium imported consumer goods, and provides integrated tourism and hospitality services. Its main markets cover Greater China and Southeast Asia, targeting middle-to-high income consumers seeking quality lifestyle products and travel experiences.

What changed in JX Luxventure Group Inc.'s 20-F — 2023 vs 2024

Top changes in JX Luxventure Group Inc.'s 2024 20-F

467 paragraphs added · 442 removed · 323 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 A. Offer Statistics 1 B. Method and Expected Timetable 1 ITEM 3. KEY INFORMATION 1 A. Reserved 5 B. Capitalization and Indebtedness 5 C. Reasons for the Offer and Use of Proceeds 5 D. Risk Factors 5 ITEM 4. INFORMATION ON THE COMPANY 41 A.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 A. Offer Statistics 1 B. Method and Expected Timetable 1 ITEM 3. KEY INFORMATION 1 A. Reserved 6 B. Capitalization and Indebtedness 6 C. Reasons for the Offer and Use of Proceeds 6 D. Risk Factors 6 ITEM 4. INFORMATION ON THE COMPANY 41 A.
History and Development of the Company 41 B. Business Overview 47 C. Organizational Structure 70 D. Property, Plants and Equipment 70
History and Development of the Company 41 B. Business Overview 48 C. Organizational Structure 72 D. Property, Plants and Equipment 72

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

151 edited+79 added−73 removed415 unchanged
Holders of shares of our common stock do not own equity securities of our subsidiaries that have substantive business operations in China, but instead are holders of equity securities of a Marshall Islands holding company. Such structure involves unique risks to investors holding shares of our common stock.
Holders of shares of our Common Stock do not own equity securities of our subsidiaries that have substantive business operations in China, but instead are holders of equity securities of a Marshall Islands holding company. Such a structure involves unique risks to investors holding shares of our Common Stock.
Chinese regulatory authorities could disallow this holding company structure, which would likely result in a material change in our operations and/or a material change in the value of our securities, including that it could cause the value of our securities to significantly decline or become worthless.
Chinese regulatory authorities could disallow this holding company structure, which would likely result in a material change in our operations and/or a material change in the value of our securities, including that it could cause the value of our securities to significantly decline or become worthless.
If the PRC government determines that these contractual arrangements did not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government determines that these contractual arrangements did not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
In addition, any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch of SAFE with respect to that SPV, to reflect any material change.
In addition, any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch of SAFE with respect to that SPV, to reflect any material change.
Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of SAFE.
Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of SAFE.
If any PRC shareholder of such SPV fails to make the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiary in China.
If any PRC shareholder of such SPV fails to make the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiary in China.
On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015.
On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015.
Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.
Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.
Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency that is located in China where all of our operations and business are located have conducted any due diligence on our operations or reviewed or cleared any of our disclosure.
Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency that is in China where all of our operations and business are located have conducted any due diligence on our operations or reviewed or cleared any of our disclosure.
The ability of the Board to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent shareholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of shares of our Common Stock.
The ability of the Board to issue shares of Preferred Stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent shareholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of shares of our Common Stock.
According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China, and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. 31 The tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties 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 purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%.
According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China, and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. 33 The tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties 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 purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%.
If we fail to obtain such approval if and when needed or complete such filings or meet other requirements in a timely manner, the Chinese regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from securities offerings into China, force a delisting of our ordinary shares, or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. 4 The Cybersecurity Review Measures provide that an online platform operator, which possesses personal information of at least one million users, must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.
If we fail to obtain such approval if and when needed or complete such filings or meet other requirements in a timely manner, the Chinese regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from securities offerings into China, force a delisting of our ordinary shares, or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. 5 The Cybersecurity Review Measures provide that an online platform operator, which possesses personal information of at least one million users, must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.
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. Leakage or misappropriation of know-how, confidential information and trade secrets from unauthorized copying, use or disclosure could have an adverse impact on our reputation and operations.
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. 20 Leakage or misappropriation of know-how, confidential information and trade secrets from unauthorized copying, use or disclosure could have an adverse impact on our reputation and operations.
This growth in revenue, especially revenues from our tourism business, has been adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns. Since January 2023, the Chinese government has gradually lifted restrictions and quarantines that were imposed in response to the pandemic and has now completed lifted such restrictions and quarantines.
This growth in revenue, especially revenues from our tourism business, has been adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns. Since January 2023, the Chinese government has gradually lifted restrictions and quarantines that were imposed in response to the pandemic and has completed lifted such restrictions and quarantines.
Since the Foreign Investment Law and its current implementation and interpretation rules are relatively new, uncertainties still exist in relation to their further application and improvement. The Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in a “negative list”.
Since the Foreign Investment Law and its current implementation and interpretation rules are relatively new, uncertainties still exist in relation to their further application and improvement. 21 The Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in a “negative list”.
Further, it could cause our investors to lose confidence in the information we report, which could adversely affect our stock price. We may incur liabilities that are not covered by insurance. 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.
Further, it could cause our investors to lose confidence in the information we report, which could adversely affect our stock price. We may incur liabilities that are not covered by insurance. While we seek to maintain appropriate levels of insurance, not all claims are insurable and we may experience major incidents of nature that are not covered by insurance.
Unlike public reporting companies whose operations are located primarily in the United States, however, all of our operations will be located in China. Since substantially all of our operations and business takes place in China, it may be more difficult for the Staff of the SEC to overcome the geographic and cultural obstacles that are present when reviewing our disclosure.
Unlike public reporting companies whose operations are located primarily in the United States, however, all of our operations are located in China. Since substantially all of our operations and business takes place in China, it may be more difficult for the Staff of the SEC to overcome the geographic and cultural obstacles that are present when reviewing our disclosure.
Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. 13 Pandemics and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations, which could materially and adversely affect our business, financial condition, and results of operations.
Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. Pandemics and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations, which could materially and adversely affect our business, financial condition, and results of operations.
As of the date of this Annual Report, there have been no cash and asset transfers between the holding company and its PRC subsidiaries. 2 3. Within our direct holding structure, the cross-border transfer of funds within our corporate group is conducted in compliance with the laws and regulations of the PRC.
As of the date of this Annual Report, there have been no cash and asset transfers between the holding company and its PRC subsidiaries. 3. Within our direct holding structure, the cross-border transfer of funds within our corporate group is conducted in compliance with the laws and regulations of the PRC.
If we fail to continue to develop, innovate and utilize our technologies or if our competitors develop or apply more advanced technologies, our business, financial condition and results of operations could be materially and adversely affected. We conduct our business through online third party platforms operated by our business customers.
If we fail to continue to develop, innovate and utilize our technologies or if our competitors develop or apply more advanced technologies, our business, financial condition and results of operations could be materially and adversely affected. 11 We conduct our business through online third party platforms operated by our business customers.
To date, none of our subsidiaries have made any dividends or distributions to JX Luxventure Limited and we have not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid to shareholders in the foreseeable future.
To date, none of our subsidiaries have made any dividends or distributions to JX Luxventure and we have not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid to shareholders in the foreseeable future.
If we decide to pay dividends in the future, as a holding company, we will depend on receiving dividends from our PRC subsidiaries. 5. As a holding company, we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements.
If we decide to pay dividends in the future, as a holding company, we will depend on receiving dividends from our PRC subsidiaries. 3 5. As a holding company, we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements.
The uncertain nature, magnitude and duration of political instability and military hostilities, including the recent conflict in Israel with Hamas, the ongoing war between uncertain nature, magnitude and duration of the Russia-Ukraine war could lead to significant disruptions in the global economy.
In addition, political instability and military hostilities, including the recent conflict in Israel with Hamas, the ongoing war between uncertain nature, magnitude and duration of the Russia-Ukraine war could lead to significant disruptions in the global economy.
This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. 3 PRC Government Permissions and Approvals We relied on the opinion of our PRC counsel, Beijing Dacheng Law Offices LLP (Haikou) in concluding that we and our PRC subsidiaries have obtained all necessary licenses and approvals required for our operations in China, including business licenses and VAT licenses for internet data center services, internet access services, domestic internet protocol virtual private network services, content delivery network services and information services.
This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. 4 PRC Government Permissions and Approvals We relied on the opinion of our PRC counsel, Beijing Dacheng Law Offices LLP (Haikou) in concluding that we and our PRC subsidiaries have obtained all necessary licenses and approvals required for our operations in China, including business licenses and VAT licenses for internet data center services, internet access services, domestic internet protocol virtual private network services, content delivery network services and information services.
Although we have set up rules and procedures to enable copyright owners to provide us with notice of alleged infringement, given the volume of content we offer, we may not be able to identify and remove all potentially infringing content that may exist, and thus we may encounter intellectual property claims against us. 14 The success of our business depends on the continuing efforts of our senior management and other key personnel.
Although we have set up rules and procedures to enable copyright owners to provide us with notice of alleged infringement, given the volume of content we offer, we may not be able to identify and remove all potentially infringing content that may exist, and thus we may encounter intellectual property claims against us. 17 The success of our business depends on the continuing efforts of our senior management and other key personnel.
As of the date of this Annual Report, the Company has created and designated the following series of the Preferred Stock: (i) Series A Convertible Preferred Stock: (ii) Series B Participating Preferred Stock; (iii) Series C Convertible Preferred Stock; and (iv) Series D Convertible Preferred Stock.
As of the date of this Annual Report, the Company has created and designated the following series of the Preferred Stock: (i) Series A Convertible Preferred Stock: (ii) Series B Participating Preferred Stock; (iii) Series C Convertible Preferred Stock; (iv) Series D Convertible Preferred Stock, and (iv) Series E Convertible Preferred Stock.
Our Common Stock is traded and listed on the Nasdaq Capital Market under the symbol “JXJT.” We are required to comply with all continued listing requirements, including among other things, a minimum bid price of $1.00 per share of Common Stock (the “Minimum Bid Requirement”), minimum shareholder’ equity. certain major corporate transactions, the composition of our Board of Directors and committees thereof.
Our Common Stock is traded and listed on the Nasdaq Capital Market under the symbol “JXG.” We are required to comply with all continued listing requirements, including among other things, a minimum bid price of $1.00 per share of Common Stock (the “Minimum Bid Price Requirement”), minimum shareholder’ equity. certain major corporate transactions, the composition of our Board of Directors and committees thereof.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our Common Stock or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount. 28 Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our Common Stock or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount. 30 Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
As a result, the scope of our content, product and service offerings could be reduced, which could adversely affect our ability to attract new business customers, harm our reputation and have a material adverse effect on our business, financial condition and results of operations. 15 Imposition of trade barriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.
As a result, the scope of our content, product and service offerings could be reduced, which could adversely affect our ability to attract new business customers, harm our reputation and have a material adverse effect on our business, financial condition and results of operations. 18 Imposition of trade barriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.
However, the relevant governmental authorities may take a different view and impose fines on us. 25 As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations.
However, the relevant governmental authorities may take a different view and impose fines on us. 32 As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations.
For more details, see “ Risk Factors—Risks Related to Doing Business in China –We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” on page 27 .
For more details, see “ Risk Factors—Risks Related to Doing Business in China –We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” on page 22 .
Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our securities, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
We have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated government agencies for the benefit of our employees.
In addition, we e have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated government agencies for the benefit of our employees.
Accordingly, we may not be able to effectively protect our intellectual property rights and exclusive rights or to enforce our contractual rights in China or elsewhere. In addition, policing any unauthorized use of our intellectual property and exclusive rights is difficult, time-consuming and costly. The precautionary steps we have taken for protecting our rights may be inadequate.
Accordingly, we may not be able to effectively protect our intellectual property rights and exclusive rights or to enforce our contractual rights in China or elsewhere. In addition, policing any unauthorized use of our intellectual property and exclusive rights is difficult, time-consuming and costly. The precautionary steps we have taken to protect our rights may be inadequate.
As a foreign private issuer, we are permitted to follow the governance practices of our home country, the Republic of the Marshall Islands in lieu of certain corporate governance requirements of Nasdaq. As result, the standards applicable to us are considerably different than the standards applied to domestic U.S. issuers.
As a foreign private issuer, we are permitted, and we elected to follow the governance practices of our home country, the Republic of the Marshall Islands in lieu of certain corporate governance requirements of Nasdaq. As result, the standards applicable to us are considerably different than the standards applied to domestic U.S. issuers.
These reserves are not distributable as cash dividends. For more details regarding our cash flows, see “ Regulations Relating to Foreign Exchange and Dividend Distribution” beginning on page 66 and our consolidated financial statements beginning on page F-1 of this Annual Report for more information .
These reserves are not distributable as cash dividends. For more details regarding our cash flows, see “ Regulations Relating to Foreign Exchange and Dividend Distribution” beginning on page 67 and our consolidated financial statements beginning on page F-1 of this Annual Report for more information .
In addition, other misconduct of our business partners such as failure to provide safe and humane working conditions could harm our reputation and business as well. 16 The estimates of market opportunity and forecasts of market growth in this Annual Report may prove to be inaccurate.
In addition, other misconduct of our business partners such as failure to provide safe and humane working conditions could harm our reputation and business as well. 19 The estimates of market opportunity and forecasts of market growth in this Annual Report may prove to be inaccurate.
Any of the above could affect our ability to maintain profitability or have a material adverse effect on our business, financial condition or results of operations. 9 Order cancelation as well as merchandise return and exchange policies may adversely affect our business and the results of operations.
Any of the above factors could affect our ability to maintain profitability or have a material adverse effect on our business, financial condition or results of operations. Order cancelation as well as merchandise return and exchange policies may adversely affect our business and the results of operations.
We have adopted various equity incentive plans, including the 2018 Equity Incentive Plan, the 2022 Plan, and the most recent, the New 2022 EIP. In addition, we granted a performance-based stock awards to our Chief Executive Officer, Chief Financial Officer, co-chairwoman and director.
We have adopted various equity incentive plans, including the 2018 Equity Incentive Plan, the 2022 Plan, and the most recent, the New 2022 EIP, as amended. In addition, we granted a performance-based stock awards to our Chief Executive Officer, Chief Financial Officer, co-chairwoman and director.
Following the recent reorganization of the Company’s corporate structure, resulting in incorporation of new entities, Flower Crown Holding also owns Billion Place Limited (Hong Kong) Co., Limited (“Billion Place HK”), a limited company incorporated in Hong Kong and its wholly-owned subsidiaries.
Following the reorganization of the Company’s corporate structure in 2023, resulting in incorporation of new entities, Flower Crown Holding also owns Billion Place Limited (Hong Kong) Co., Limited (“Billion Place HK”), a limited company incorporated in Hong Kong and its wholly-owned subsidiaries.
This situation will be costly, time consuming, and distract our management from growing our company. 33 The disclosures in our reports and other filings with the SEC and our other public pronouncements will not be subject to the scrutiny of any regulatory bodies in the PRC.
This situation will be costly, time consuming, and distract our management from growing our company. 35 The disclosures in our reports and other filings with the SEC and our other public pronouncements will not be subject to the scrutiny of any regulatory bodies in the PRC.
Under the HFCAA, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not subject to inspection by the PCAOB for three consecutive years, and this ultimately could result in our Ordinary Shares being delisted from trading on any U.S. stock exchange.
Under the HFCAA, our securities may be prohibited from trading on The Nasdaq Market LLC (“Nasdaq”) or other U.S. stock exchanges if our auditor is not subject to inspection by the PCAOB for three consecutive years, and this ultimately could result in our Ordinary Shares being delisted from trading on any U.S. stock exchange.
The PRC rules and regulations impose restrictions and limitations on transfer of cash on foreign exchange, our ability to transfer cash between entities, across borders and to U.S. investors, and our ability to distribute earnings from our subsidiaries to JX Luxventure Limited and holders of the common stock of the Company.
The PRC rules and regulations impose restrictions and limitations on transfer of cash on foreign exchange, our ability to transfer cash between entities, across borders and to U.S. investors, and our ability to distribute earnings from our subsidiaries to the Company and holders of the common stock of the Company.
Our corporate structure is a direct holding structure, that is, the overseas entity listed in the U.S., JX Luxventure Limited incorporated Marshall Islands, currently has no material operations on its own.
Our corporate structure is a direct holding structure, that is, the overseas entity listed in the U.S., JX Luxventure Group Inc. incorporated in Marshall Islands, currently has no material operations on its own.
The following diagram illustrates our corporate structure and our subsidiaries as of the date of the Annual Report: 1 For a detailed description of the risks associated with our corporate structure, please see “Summary of Risk Factors” – beginning on page 5 and “ Risk Factors – Risks Related to Our Corporate Structure ” on page 18 of this Annual Report for more information.
The following diagram illustrates our corporate structure and our subsidiaries as of the date of the Annual Report: 1 For a detailed description of the risks associated with our corporate structure, please see “Summary of Risk Factors” – beginning on page 6 and “ Risk Factors – Risks Related to Our Corporate Structure ” on page 21 of this Annual Report for more information.
These factors include: ● our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors; ● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; ● actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our Company, or our failure to meet these estimates or the expectations of investors; ● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; speculation about our business in the press or the investment community; ● significant developments relating to our relationships with our customers or suppliers; ● customer demand for our products; ● investor perceptions of our industry in general and our company in particular; ● the operating and stock performance of comparable companies; ● general economic conditions and trends; ● major catastrophic events; ● announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures; ● changes in accounting standards, policies, guidance, interpretation or principles; 38 ● loss of external funding sources; ● sales of our shares, including sales by our directors, officers or significant shareholders; and ● additions or departures of key personnel.
These factors include: ● our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors; ● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; ● actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our Company, or our failure to meet these estimates or the expectations of investors; ● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; speculation about our business in the press or the investment community; ● significant developments relating to our relationships with our customers or suppliers; ● customer demand for our products; ● investor perceptions of our industry in general and our company in particular; ● the operating and stock performance of comparable companies; ● general economic conditions and trends; ● major catastrophic events; ● announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures; ● changes in accounting standards, policies, guidance, interpretation or principles; ● loss of external funding sources; ● sales of our shares, including sales by our directors, officers or significant shareholders; and ● additions or departures of key personnel. 38 Securities class action litigation is often instituted against companies following periods of volatility in their share price.
We had a concentration of major customers during the years ended December 31, 2023 and if our existing major customers cease to engage our services, we may be unable to find new customers with similar attributable revenue within a reasonable time or at all.
We had a concentration of major customers during the year ended December 31, 2024 and if our existing major customers cease to engage our services, we may be unable to find new customers with similar attributable revenue within a reasonable time or at all.
To the extent funds or assets in the business are in the PRC or are held by a PRC entity, the funds or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our company or the operating entities by the PRC government to transfer cash or assets outside the PRC ” on page 27 for more information.
To the extent funds or assets in the business are in the PRC or are held by a PRC entity, the funds or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our company or the operating entities by the PRC government to transfer cash or assets outside the PRC.
If any PRC subsidiaries determine to distribute dividends, it transfer the dividends to JX Hainan in accordance with the laws and regulations of the PRC, and then JX Hainan will transfer the dividends to JX Luxventure, and the dividends will be distributed from JX Luxventure Limited to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries. 4.
If any PRC subsidiaries determine to distribute dividends, they will transfer the dividends to JX Hainan or Baofu Technology, as applicable, in accordance with the laws and regulations of the PRC, and then JX Hainan or Baofu Technology, as applicable, will transfer the dividends to JX Luxventure, and the dividends will be distributed from JX Luxventure to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries. 4.
As a result, you may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements. Future sales or perceived sales of our shares of Common Stock could depress our stock price. As of the date of this Annual Report, we have 6,063,192 shares of Common Stock outstanding.
As a result, you may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements. Future sales or perceived sales of our shares of Common Stock could depress our stock price. As of the date of this Annual Report, we have 4,040,952 shares of Common Stock outstanding.
For a detailed description of risks related to doing business in China, see “Summary of Risk Factors” beginning on page 5 and “ Risk Factors – Risks Related to Doing Business in China ” beginning on page 19 for more information.
For a detailed description of risks related to doing business in China, see “Summary of Risk Factors” beginning on page 6 and “ Risk Factors – Risks Related to Doing Business in China ” beginning on page 23 for more information.
We may become an attractive target for attacks on our infrastructure intended to destabilize, overwhelm, or shut down our platform. The costs incurred by us to avoid or alleviate cyber or other security problems and vulnerabilities will be significant. However, our efforts to address these problems and vulnerabilities may not be successful.
We may become an attractive target for attacks on our infrastructure intended to destabilize, overwhelm, or shut down our platform. The costs incurred by us to avoid or alleviate cyber or other security problems and vulnerabilities will be significant.
Negative publicity concerning these parties could be related to a wide variety of matters, including, but are not limited to: ● alleged misconducts or other improper activities committed by our directors, officers, employees, agents and other business partners; ● false or malicious allegations or rumors about us or our directors, shareholders, affiliates, officers, employees and other business partners; ● complaints from our business customers about our products and services; ● employment-related claims relating to employment discrimination, working hours violation, tax, wage or pension matters; ● governmental and regulatory investigations, penalties or claims resulting from misconduct of our business partners, ● or our failure to comply with applicable laws and regulations; ● negative publicity and claims asserted against our brand partners, especially any product quality issues of our ● brand partners’ products; and ● negative publicity of the industry in which we operate, including, but not limited to, bankruptcy and cessation of business operations of any of our major competitors.
Negative publicity concerning these parties could be related to a wide variety of matters, including, but are not limited to: ● alleged misconducts or other improper activities committed by our directors, officers, employees, agents and other business partners; ● false or malicious allegations or rumors about us or our directors, shareholders, affiliates, officers, employees and other business partners; ● complaints from our business customers about our products and services; ● employment-related claims relating to employment discrimination, working hours violation, tax, wage or pension matters; ● governmental and regulatory investigations, penalties or claims resulting from misconduct of our business partners, ● or our failure to comply with applicable laws and regulations; ● negative publicity and claims asserted against our brand partners, especially any product quality issues of our ● brand partners’ products; and ● negative publicity of the industry in which we operate, including, but not limited to, bankruptcy and cessation of business operations of any of our major competitors. 10 If we fail to anticipate and respond to changing business customer preferences and shifts in market trends in a timely manner, our business and operating results could be harmed.
It directly owns wholly owns Flower Crown Holding, a Cayman Islands company, which wholly owns Flower Crown (China) Holding Group Co., Limited, a limited company incorporated in Hong Kong (“Flower Crown HK”), which, in turn, wholly owns all of the share capital of JX Hainan or WFOE, our indirect PRC subsidiary, which wholly owns other PRC operating entities.
It wholly owns Flower Crown Holding, a Cayman Islands company, also a holding company, which wholly owns Flower Crown (China) Holding Group Co., Limited, a limited company incorporated in Hong Kong (“Flower Crown HK”), which, in turn, wholly owns all of the share capital of JX Hainan, our indirect PRC subsidiary, and its PRC operating entities.
See “ Summary of Risk Factors ” beginning on page 5 and “ Risk Factors — Risks Related to our Corporate Structure ” on page 18 for more information . 2.
See “ Summary of Risk Factors ” beginning on page 6 and “ Risk Factors — Risks Related to our Corporate Structure ” on page 21 for more information . 2.
Many of these laws and regulations are subject to change and uncertain interpretation, and any actual or alleged failure to comply with related laws and regulations regarding cybersecurity, information security, data privacy, and protection could materially and adversely affect our business and results of operations.
Any actual or alleged failure to comply with these and related laws and regulations regarding cybersecurity, information security, data privacy, and protection could materially and adversely affect our business and results of operations.
On May 23, 2023, Nasdaq notified the Company in its compliance letter (the “Compliance Letter”) that it regained compliance with the Minimum Bid Requirement and that the hearing previously scheduled for May 25, 2023 (the hearing was related to regaining compliance with the Minimum Bid Requirement) has been canceled.
On May 23, 2023, Nasdaq Staff notified the Company that it regained compliance with the Minimum Bid Requirement and that the hearing previously scheduled for May 25, 2023 (the hearing was related to regaining compliance with the Minimum Bid Requirement) has been canceled.
The percentage of our revenue attributable to our largest customer, Hefei Liantuo Tianji E-commence Corporation Ltd., an online airline tickets agency company, amounted to $23,621,588, or 74%, for the year ended December 31, 2023 and $74,340,429 or 93% for the year ended December 31, 2022. We depend on this customer and several other major customers.
The percentage of our revenue attributable to our largest customer, Hefei Liantuo Tianji E-commence Corporation Ltd., an online airline tickets agency company, amounted to $21,003,414, or 42%, for the year ended December 31, 2024 and $23,621,588, or 74%, for the year ended December 31, 2023. We depend on this customer and several other major customers.
We may also encounter problems when software licensed from third parties is upgraded, and undetected programming errors could adversely affect the performance of the software we use to provide our services.
Any interruptions that result from the unavailability of the software licensed from third parties may affect the quality of our services. We may also encounter problems when software licensed from third parties is upgraded, and undetected programming errors could adversely affect the performance of the software we use to provide our services.
We are a company incorporated under the laws of the Marshall Islands. Holders of shares of our common stock do not own equity securities of our subsidiaries that have substantive business operations in China, but instead are holders of equity securities of a Marshall Islands holding company. Such structure involves unique risks to investors holding shares of our common stock.
We are a company incorporated under the laws of the Marshall Islands. Holders of shares of our common stock do not own equity securities of our subsidiaries that have substantive business operations in China, but instead are holders of equity securities of a Marshall Islands holding company.
Similar security risks exist with respect to such third-parties. As a result, we are subject to the risk that cyber-attacks on our business partners and third-party suppliers may adversely affect our business even if an attack or breach does not directly impact our systems.
As a result, we are subject to the risk that cyber-attacks on our business partners and third-party suppliers may adversely affect our business even if an attack or breach does not directly impact our systems.
Holding Foreign Companies Accountable Act The recently enacted Holding Foreign Companies Accountable Act (“HFCAA”), together with a recent joint statement by the United States Securities and Exchange Commission (“SEC”) and the PCAOB call for additional stringent criteria to be applied to emerging market companies by assessing the qualification of non-U.S. auditors who are not inspected by the PCAOB.
Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act (“HFCAA”) enacted in December 2020, together with a recent joint statement by the United States Securities and Exchange Commission (“SEC”) and the Public Company Accounting Oversight Board “(PCAOB”) call for additional stringent criteria to be applied to emerging market companies by assessing the qualification of non-U.S. auditors who are not inspected by the PCAOB.
The failure to meet these Nasdaq Capital Market continued listing requirements may result in the delisting of our Common Stock from the Nasdaq Capital Market, which could adversely affect the liquidity and market price thereof. In the past, the Company’s common stock felt below the Minimum Bid Requirement.
The failure to meet these Nasdaq Capital Market continued listing requirements may result in delisting of our Common Stock from the Nasdaq Capital Market, which could adversely affect the liquidity and market price thereof.
Sun Lei, our Chief Executive Officer, Interim Financial Officer, co-chairwoman and director, holds 150,000 shares of Series C Convertible Preferred Stock that are convertible into 75,000 shares of our Common Stock, 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 124,000 shares of Common Stock, and 80,000 shares of Series D Preferred Stock, convertible into 104,000 shares of Common Stock.
Sun Lei, our Chief Executive Officer, Interim Financial Officer, co-chairwoman and director, holds 150,000 shares of Series C Convertible Preferred Stock that are convertible into 18,750 shares of our Common Stock, 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 31,000 shares of Common Stock, and 80,000 shares of Series D Preferred Stock, convertible into 26,000shares of Common Stock.
As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations. 32 You may have difficulty enforcing judgments against us.
As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations. 34 You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management.
These reserves are not distributable as cash dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.
These reserves are not distributable as cash dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Currently, our subsidiaries in China are the only sources of revenues or investment holdings for the payment of dividends.
Although we own and control our PRC operating subsidiaries, investors holding shares of our common stock may never hold equity interests directly in our operating entities.
Such a structure involves unique risks to investors holding shares of our common stock. Although we own and control our PRC operating subsidiaries, investors holding shares of our common stock may never hold equity interests directly in our operating entities.
See also ” Risk Factors –Risks Related to Doing Business in China – We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
Securities class action litigation is often instituted against companies following periods of volatility in their share price. This type of litigation could result in substantial costs to us and divert our management’s attention and resources. Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies.
This type of litigation could result in substantial costs to us and divert our management’s attention and resources. Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies.
Summary of Risk Factors Below please find a summary of the principal risks we face related to our corporate structure and operation and doing business in China.
Summary of Risk Factors Below please find a summary of the principal risks we face related to our corporate structure and operation and doing business in China. Risks Related to Our Corporate Structure : ● We previously carried out our business operations through the VIE contractual arrangements.
On October 24, 2022, the Company received its first letter (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, based upon the closing bid price of its common stock for the last 30 consecutive business days preceding the Notice, the Company was not in compliance with the Minimum Bid Requirement.
On October 24, 2022, the Company received its first notification from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq Staff”) notifying the Company that the closing bid price of its common stock for the last 30 consecutive business days preceding the Notice was below $1.00 per share, not in compliance with the Minimum Bid Requirement.
Any significant breach of our security measures could: ● lead to the dissemination of proprietary information or sensitive, personal, or confidential data about us, our employees, or our customers—including personally identifiable information of individuals involved with our customers and their end-users; ● lead to interruptions or degradation of performance in our platform, products and solutions; ● threaten our ability to provide our customers with access to our platform, products and solutions, and negatively affect our abilities to retain existing customers; ● generate negative publicity about us; ● result in litigation and increased legal liability or fines; or ● lead to governmental inquiry or oversight.
Any significant breach of our security measures could: ● lead to the dissemination of proprietary information or sensitive, personal, or confidential data about us, our employees, or our customers—including personally identifiable information of individuals involved with our customers and their end-users; ● lead to interruptions or degradation of performance in our platform, products and solutions; ● threaten our ability to provide our customers with access to our platform, products and solutions, and negatively affect our abilities to retain existing customers; ● generate negative publicity about us; ● result in litigation and increased legal liability or fines; or ● lead to governmental inquiry or oversight. 14 The occurrence of any of these events could harm our business or damage our brand and reputation, lead to customer credits, loss of customers, higher expenses, and possibly impede our present and future success in retaining and attracting new customers.
To the extent funds or assets in the business are in the PRC or are held by a PRC entity, the funds or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our company or the operating entities by the PRC government to transfer cash or assets outside the PRC” We rely principally on dividends and other distributions of equity from our PRC subsidiaries for our cash requirements, including for services of any debt we may incur.
To the extent funds or assets in the business are in the PRC or are held by a PRC entity, the funds or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our company or the operating entities by the PRC government to transfer cash or assets outside the PRC.
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. 24 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches.
Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches.
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. 29 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches.
Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches.
Recent statements by the Chinese government have indicated its intent to exert more oversight s and control over offerings that are conducted overseas and/or foreign investments in China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected, and any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 24 Recent statements by the Chinese government have indicated its intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless .
Any such laws, regulations or policies could negatively impact our business, results of operations and financial condition, which creates the risk that any such actions 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 be worthless. 23 Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
Any such laws, regulations or policies could negatively impact our business, results of operations and financial condition, which creates the risk that any such actions 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 be worthless.
See “ Risks Related to Our Corporate Structure - Holders of our securities may face difficulties in protecting their interests because we are incorporated under the Republic of the Marshall Islands law ” on page 19 for more information. ● We previously carried out our business operations through the VIE contractual arrangements.
See “ Risks Related to our Corporate Structure – Holders of our securities may face difficulties in protecting their interests because we are incorporated under the Republic of the Marshall Islands law” on page 22 for more information.
Our business is subject to general business regulations governing cross-borders and tourism industries. We are also subject to supervision and regulation by the State Administration for Market Regulation of the PRC and other relevant PRC government authorities and/or their relevant local counterparts.
We are also subject to supervision and regulation by the State Administration for Market Regulation of the PRC and other relevant PRC government authorities and/or their relevant local counterparts.
This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. 27 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of future securities offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
As a result, our business operations and our ability to make distributions to you could be materially and adversely affected. 29 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of future securities offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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On February 3, 2017, the Company effected a one-for-fifteen reverse stock split of the Company’s issued and outstanding Common Stock. Our Common Stock began trading on the NASDAQ Stock Market on a split-adjusted basis when the market opened on February 9, 2017.
On February 3, 2017, the Company effected a one-for-fifteen reverse stock split of the Company’s issued and outstanding Common Stock. Our Common Stock began trading on Nasdaq on a split-adjusted basis when the market opened on February 9, 2017.
On April 25, 2022, the Company filed the Certificates of Designation with the Registrar of Corporations under the Company’s former name, KBS Fashion Group Limited (except for the Certificate of Designation of Series D Preferred), and on April 27, 2022, the Company filed with the Registrar of Corporations the First Amended and Restated Certificate of Designation of Series A Preferred, the Amended and Restated Certificate of Designation of Series B Participating, the Amended and Restated Certificate of Designation of Series C Preferred, and the Amended and Restated Certificate of Designation of Series D Preferred, reflecting the Company’s current name “JX Luxventure Limited” and restating all provisions set forth in the Certificates of Designation of Preferred Stock.
On April 25, 2022, the Company filed the Certificates of Designation with the Registrar of Corporations under the Company’s former name, KBS Fashion Group Limited (except for the Certificate of Designation of Series D Preferred), and on April 27, 2022, the Company filed with the Registrar of Corporations the First Amended and Restated Certificate of Designation of Series A Preferred, the Amended and Restated Certificate of Designation of Series B Participating, the Amended and Restated Certificate of Designation of Series C Preferred, and the Amended and Restated Certificate of Designation of Series D Preferred, reflecting the Company’s name “JX Luxventure Limited” and restating all provisions set forth in the Certificates of Designation of Preferred Stock.
The reorganization was approved by the unanimous consent of our Board of Directors and the affirmative vote of the holders of approximately 60.4% of our total issued and outstanding capital stock. 42 Following the reorganization, we had the following corporate structure between December 13, 2021 and October 19, 2022: On January 11, 2022, the Board, by unanimous written consent, in accordance with the Company’s Bylaws and the terms of the 2018 Equity Incentive Plan, and the BCA, terminated the Company’s 2018 Equity Incentive Plan and adopted the 2022 JX Luxventure Equity Incentive Plan (the “2022 Plan”), which provides for up to 1,000,000 shares of our Common Stock that may be issued under the 2022 Plan.
The reorganization was approved by the unanimous consent of our Board of Directors and the affirmative vote of the holders of approximately 60.4% of our total issued and outstanding capital stock. 42 Following the reorganization, we had the following corporate structure between December 13, 2021 and October 19, 2022: On January 11, 2022, the Board, by unanimous written consent, in accordance with the Company’s Bylaws and the terms of the 2018 Equity Incentive Plan, and the BCA, terminated the Company’s 2018 Equity Incentive Plan and adopted the 2022 JX Luxventure Equity Incentive Plan (the “2022 Plan”), which provides for up to 250,000 shares of our Common Stock that may be issued under the 2022 Plan.
The 2022 Employment Agreement has expired, and the Company did not enter into a new employment agreement with Sun Lei in 2023. 44 On October 26, 2022, the Board, acting by unanimous consent, in accordance with applicable provisions of the Marshall Island Business Corporations Act (“BCA”) and the Company’s Bylaws, terminated the 2022 Plan and adopted a new 2022 Equity Incentive Plan (the “New 2022 EIP”), replacing the 2022 Plan, effective immediately.
The 2022 Employment Agreement has expired, and the Company did not enter into a new employment agreement with Sun Lei in 2023 and in 2024. 43 On October 26, 2022, the Board, acting by unanimous consent, in accordance with applicable provisions of the Marshall Island Business Corporations Act (“BCA”) and the Company’s Bylaws, terminated the 2022 Plan and adopted a new 2022 Equity Incentive Plan (the “New 2022 EIP”), replacing the 2022 Plan, effective immediately.
(“Baofu Technology”) was incorporated under the PRC laws. This entity became a direct wholly-owned subsidiary of Billion Place HK and will be engaged in Technology Solution for Tourism Cross-Border Operations business segment. On December 27, 2023, Hefei Aitong Cultural Tourism Development Ltd. was incorporated under the PRC laws.
(“Baofu Technology”) was incorporated, under the PRC laws. This entity became a direct wholly-owned subsidiary of Billion Place HK and is engaged in Technology Solution for Tourism Cross-Border Operations business segment. Hefei Aitong Cultural Tourism Development Ltd. was incorporated on December 27, 2023, under the PRC laws.
On May 22, 2022, the Board granted 100,000 shares of the Company’s Common Stock to Sun Lei pursuant to the employment agreement between the Company and Sun Lei dated June 22, 2021 (the “2021 Employment Agreement”).
On May 22, 2022, the Board granted 25,000 shares of the Company’s Common Stock to Sun Lei pursuant to the employment agreement between the Company and Sun Lei dated June 22, 2021 (the “2021 Employment Agreement”).
On October 8, 2023, the Company sold 100% ownership in Heyang Travel, to a non-related third party. Concurrently with the conclusion of the Share Exchange Agreement on December 9, 2020, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Ms.
On October 8, 2023, the Company sold 100% ownership in Heyang Travel, a non-related third party. Concurrently with the closing of the Share Exchange Agreement on December 9, 2020, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Ms.
The Share Exchange transaction was closed on December 21, 2020 and as a result, Flower Crown is now our wholly-owned subsidiary. 41 Flower Crown is a holding company incorporated on August 7, 2020 in Cayman Islands, which wholly owns Flower Crown (China) Holding Group Co., Limited, a limited company incorporated in Hong Kong on May 24, 2018 (“Flower Crown HK”).
The Share Exchange transaction was closed on December 21, 2020 and as a result, Flower Crown is now our wholly-owned subsidiary. 41 Flower Crown is a holding company incorporated on August 7, 2020 in Cayman Islands, directly owns 100% share capital in Flower Crown (China) Holding Group Co., Limited, a limited company incorporated in Hong Kong on May 24, 2018 (“Flower Crown HK”).
On December 9, 2020, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Flower Crown Holding, a corporation organized under the laws of the Cayman Islands (the “Flower Crown”), and the shareholders of Flower Crown (each a “FC Shareholder” and collectively the “FC Shareholders”), to acquire all the issued and outstanding ordinary shares of Flower Crown in exchange for the issuance to the FC Shareholders an aggregate of 25,913 shares of our Common Stock (the “Share Exchange”).
On December 9, 2020, we entered into a Share Exchange Agreement with Flower Crown Holding, a corporation organized under the laws of the Cayman Islands (the “Flower Crown”), and the shareholders of Flower Crown (each a “FC Shareholder” and collectively the “FC Shareholders”), to acquire all the issued and outstanding ordinary shares of Flower Crown in exchange for the issuance to the FC Shareholders an aggregate of 6,478 shares of our Common Stock (the “Share Exchange”).
On November 4, 2022, the Company filed a new S-8 Registration Statement, registering 2,000,000 shares out of the total 4,000,000 shares of Common Stock, available to be issued under the New 2022 EIP.
On November 4, 2022, the Company filed a new S-8 Registration Statement, registering 500,000 shares out of the total 1,000,000 shares of Common Stock, available to be issued under the New 2022 EIP.
Jin Xuan Luxury Tourism currently wholly owns Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd., a limited company incorporated on July 17, 2020 in PRC (“Flower Crown China”), and prior to October 8, 2023, it also wholly-owned Flower Crown HK Beijing Heyang International Travel Service Co., Ltd., a limited company incorporated on March 29, 2018 in China (“Heyang Travel”).
Jin Xuan Luxury Tourism owns 100% of the share capital of Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd., a limited company incorporated on July 17, 2020 in PRC (“Flower Crown China”), and prior to October 8, 2023, it also owned 100% share capital of Flower Crown HK Beijing Heyang International Travel Service Co., Ltd., a limited company incorporated on March 29, 2018 in China (“Heyang Travel”).
Flower Crown HK, in turn, wholly owns all of the share capital of Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, a limited company incorporated on August 4, 2016 in China (“Jin Xuan Luxury Tourism”).
Flower Crown HK, in turn, owns 100% of the share capital of Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, a limited company incorporated on August 4, 2016 in PRC (“Jin Xuan Luxury Tourism”).
On May 23, 2023, Nasdaq notified the Company in its Compliance Letter that it regained compliance with the Minimum Bid Requirement and that the hearing previously scheduled for May 25, 2023 (the hearing was related to regaining compliance with the Minimum Bid Requirement) has been canceled.
On May 23, 2023, Nasdaq Staff notified the Company that the Company regained compliance with the Minimum Bid Requirement and that the hearing previously scheduled for May 25, 2023 (the hearing was related to regaining compliance with the Minimum Bid Requirement) has been canceled.
The Compliance Letter also stated that the Company is in compliance with all applicable listing standards and that its stock will continue to be listed and traded on Nasdaq. 46 Current Corporate Structure.
The letter from Nasdaq also stated that the Company is in compliance with all applicable listing standards and that its stock will continue to be listed and traded on Nasdaq.
Sun Lei, who at that time was Chief Executive Officer and a director of the Company, which provided for the issuance of an aggregate of 23,321 shares of the Company (the “Purchased Shares”) in exchange for making payments on behalf of the Company for all “Public Company Expenses” as set forth in the Stock Purchase Agreement for the next two years, in the amount of no less than $600,000 and no more than $700,000 (“Stock Purchase”).
Sun Lei, our Chief Executive Officer and a director of the Company, which provided for the issuance of an aggregate of 5,830 shares of the Company (the “Purchased Shares”) in exchange for making payments on behalf of the Company for all “Public Company Expenses” as set forth in the Stock Purchase Agreement for the next two years, in the amount of no less than $600,000 and no more than $700,000 (“Stock Purchase”).
Billion Place Limited (Hong Kong) Co., Limited (“Billion Place HK”), a limited company incorporated in Hong Kong on March 13, 2023, was acquired by Flower Crown on August 3, 2023. It is a holding company that became a wholly-owned subsidiary of Flower Crown and our indirect wholly-owned subsidiary. On March 7, 2024, Baofu (Zhuhai) Technology Co., Ltd.
On August 3, 2023, Flower Crown acquired 100% share capital of Billion Place Limited (Hong Kong) Co., Limited (“Billion Place HK”), a limited company incorporated in Hong Kong on March 13, 2023. This Hong Kong holding company became a wholly-owned subsidiary of Flower Crown and our indirect wholly-owned subsidiary. On March 7, 2024, Baofu (Zhuhai) Technology Co., Ltd.
On March 24, 2014, we entered into a share exchange agreement and plan of liquidation (the “Exchange Agreement”), with KBS International, Hongri International, a then wholly owned subsidiary of KBS International and Cheung So Wa and Chan Sun Keung, each an individual and shareholder of KBS International (each, a “Principal Stockholder”).
On March 24, 2014, we entered into a share exchange agreement and plan of liquidation (the “Exchange Agreement”), as amended on June 21, 2014, with KBS International Holding Inc., (“KBS International”), Hongri International Holdings Limited (“Hongri International”), a then wholly owned subsidiary of KBS International and Cheung So Wa and Chan Sun Keung, each an individual and shareholder of KBS International.
Purchase to the Repurchase Program, she acquired in private negotiated transactions 152,000 shares of Common Stock, at the total purchase price of $1,780,000; 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 124,000 shares of Common Stock at the total purchase price of $1,240,000; and 80,000 shares of Series D Convertible Preferred Stock, convertible into 104 shares of Common Stock at the purchase price of $2,080,000.
Lei acquired in private negotiated transactions 38,000 shares of Common Stock, at the total purchase price of $1,780,000; 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 31,000 shares of Common Stock at the total purchase price of $1,240,000; and 80,000 shares of Series D Convertible Preferred Stock, convertible into 26,000 shares of Common Stock at the purchase price of $2,080,000.
The Exchange Agreement was subsequently amended on June 21, 2014. The transactions contemplated in the Exchange Agreement (the “Share Exchange”) were closed on August 1, 2014. At the closing, we acquired 100% of the issued and outstanding equity interest in Hongri International from KBS International.
At the closing of the transactions contemplated in the Exchange Agreement, occurred on August 1, 2014, we acquired 100% of the issued and outstanding equity interest in Hongri International from KBS International.
Hainan Si Quan Run Hang International travel agency Co., Ltd. (“Hainan Travel”) was incorporated in the PRC on August 9, 2023. On March 7, 2024, as a wholly-owned subsidiary of Baofu Technology, Hainan Travel became an indirect wholly-owned subsidiary of Billion Place HK when Baofu Technology was acquired by Billion Place HK.
Hainan Si Quan Run Hang International travel agency Co., Ltd. (“Hainan Travel”) was incorporated under PRC laws on August 9, 2023. On March 7, 2024, Hainan Travel became an indirect wholly-owned subsidiary of Billion Place HK when Baofu Technology was acquired by Billion Place HK. It will be engaged in Airline Tickets and Tourism Services business segment.
It will be engaged in Airline Tickets and Tourism Services business segment. The Securities and Exchange Commission, or SEC, maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. See “
(“Hefei Travel”) was incorporated under PRC laws wholly-owned subsidiary of Baofu Technology. It is engaged in Airline Tickets and Tourism Services business segment. The Securities and Exchange Commission, or SEC, maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. See “
It is a direct majority subsidiary of JX Luxury Tourism and will be engaged in Technology Solution for Tourism Cross-Border Operations business segment. On Feb 6, 2024, Jin Xuan (Shenzhen) International Trade Co., Ltd. (“JX Shenzhen”) was incorporated under PRC laws. It became a wholly-owned subsidiary of Flower Crown HK and will be engaged in Cross-border Merchandise business segment.
It is 51% owned by JX Luxury Tourism and is engaged in tourism business and providing air-tickets sales agent services. 47 Jin Xuan (Shenzhen) International Trade Co., Ltd. (“JX Shenzhen”) was incorporated on Feb 6, 2024 under PRC laws. It became a wholly-owned subsidiary of Flower Crown HK and is engaged in Cross-border Merchandise business segment.
On December 12, 2022, the Company registered the remaining 2,000,000 shares of Common Stock available to be issued under the New 2022 EIP under another S-8 Registration Statement. As of the date of this Annual Report, all shares of common stock available for issuance under the new 2022 EIP were issued.
On December 12, 2022, the Company registered the remaining 500,000 shares of Common Stock available to be issued under the New 2022 EIP under another S-8 Registration Statement.
The Note is payable in four installments, on the following dates and in the following amounts: (a) $1,000,000, together with an accrued interest, is payable on or before November 19, 2022; (b) $2,000,000, together with an accrued interest, is payable on or before April 19, 2023; (c) $3,000,000, together with an accrued interest, is payable on or before April 19, 2024, and (d) the remaining $4,000,000, together with an accrued interest, is payable on or before October 19, 2024.
At the Closing, the Purchaser issued to the Company a 5% promissory note in the principal amount of $10,000,000, in payment of the Purchase Price (the “Note”), payable in four installments, on the following dates and in the following amounts: (a) $1,000,000, together with an accrued interest, is payable on or before November 19, 2022; (b) $2,000,000, together with an accrued interest, is payable on or before April 19, 2023; (c) $3,000,000, together with an accrued interest, is payable on or before April 19, 2024, and (d) the remaining $4,000,000, together with an accrued interest, is payable on or before October 19, 2024.
(the “Purchaser”) and closed the transaction (the “Closing”) pursuant to the terms of the Stock Purchase Agreement (the “Sale and Purchase Transaction”), resulting in the Company’s sale of 20,000 shares of common stock of Hongri International, constituting all of the issued and outstanding capital stock of Hongri International, to the Purchaser, in consideration for $10,000,000 (the “Purchase Price”).
(the “Purchaser”), pursuant to which on the same date it closed the transaction (the “Closing”) Company’s sold 20,000 shares of common stock of Hongri International, constituting all of the issued and outstanding capital stock of Hongri International, to the Purchaser, in consideration for $10,000,000 (the “Purchase Price”).
(“Heyang Travel”) and Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd. (“FCEC”) through a variable interest structure (“VIE”). As a result of the FLH’s China subsidiaries restructuring, we terminated the original VIE contractual agreements and we are no longer operate those entities through a VIE structure and became the indirect sole shareholder of JX Hainan and Heyang Travel.
As a result of the FLH’s China subsidiaries restructuring, we terminated the original VIE contractual agreements and we no longer operate those entities through a VIE structure and became the indirect sole shareholder of JX Hainan and Heyang Travel.
Since August 2023, the Company has been further changing its corporate structure, resulting in sale of 100% ownership of Heyang Travel and incorporation of new entities, without changing the core of its business operations.
As referenced above, on May 7, 2025, the Company amended the New 2022 EIP by the Plan Amendment. Current Corporate Structure. Since August 2023, the Company has been further changing its corporate structure, resulting in sale of 100% ownership of Heyang Travel and incorporation of new entities, without changing the core of its business operations.
This Amendment to the Articles of Incorporation permitted holders of a majority of the total voting power of the outstanding capital stock to take any action that is required or permitted to be taken at a meeting of the shareholders, by written consent.
On June 21, 2021, the Company further amended its Restated Articles by filing the Articles of Amendment with the Registrar of the Corporation, to permit holders of a majority of the total voting power of the outstanding capital stock to take any action that is required or permitted to be taken at a meeting of the shareholders, by written consent.
The maximum aggregate number of shares of Common Stock, issuable under the New 2022 EIP is four million (4,000,000) shares, subject to adjustments in the event of certain reorganizations, mergers, combinations, recapitalizations, share splits, share dividends, or other similar events which change the number or kind of shares outstanding.
The New 2022 Plan provided for a maximum of one million (1,000,000) shares authorized for issuance, subject to adjustments in the event of certain reorganizations, mergers, combinations, recapitalizations, share splits, share dividends, or other similar events which change the number or kind of shares outstanding.
Effective December 13, 2021, we reorganized our corporate subsidiary structure in the PRC under Flower Crown Holding (“FLH”). On December 21, 2021, we closed a Share Exchange Agreement with FLH, which operated its China subsidiaries, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd. (“JX Hainan Digital”), Beijing Heyang International Travel Service Co., Ltd.
On December 21, 2021, we closed a Share Exchange Agreement with FLH, which operated its China subsidiaries, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd. (“JX Hainan Digital”), Beijing Heyang International Travel Service Co., Ltd. (“Heyang Travel”) and Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd. (“FCEC”) through a variable interest structure (“VIE”).
On October 4, 2021, the Company changed its name from “KBS Fashion Group Limited” to “JX Luxventure Limited” (the “Name Change”) by filing another Articles of Amendment to the Restated Articles with the Registrar of the Corporation reflecting the change of the corporate name of the Company from “KBS Fashion Group Limited” to “JX Luxventure Limited” which became effective upon filing.
On October 4, 2021, the Company changed its name from “KBS Fashion Group Limited” to “JX Luxventure Limited” by filing another Articles of Amendment to the Restated Articles with the Registrar of the Corporation. Effective December 13, 2021, we reorganized our corporate subsidiary structure in the PRC under Flower Crown Holding (“FLH”).
On October 19, 2022, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Shenzhen Zhongjiyingfeng Investment Co., Ltd.
As of the date of this Annual Report, 1,000,000 shares of Common Stock were issued under the New 2022 EIP, as amended. On October 19, 2022, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Shenzhen Zhongjiyingfeng Investment Co., Ltd.
As of the date of this Annual Report, 100% of the Purchased Shares were released from escrow under this Stock Purchase Agreement. On June 21, 2021, the Company further amended the Restated Articles by filing the Articles of Amendment with the Registrar of the Corporation.
As of the date of this Annual Report, 100% of the Purchased Shares were released from escrow under this Stock Purchase Agreement.
The 2022 Plan was approved by the holders of 60.4% of the total issued and outstanding capital stock of the Company on the same day. On February 11, 2022, the Company filed the Registration Statement on Form S-8, in which it registered 400,000 shares of our Common Stock issuable under the 2022 Plan.
The 2022 Plan was approved by the holders of 60.4% of the total issued and outstanding capital stock of the Company on the same day. Between February 12, 2022, and October 25, 2022, the Company issued all of the 250,000 shares of Common Stock available for issuance under the 2022 Plan.
Removed
On July 13, 2022, the Company filed another Registration Statement on Form S-8, in which it registered the remaining 600,000 shares of Common Stock issuable under the 2022 Plan. These registration statements became effective upon filing.
Added
On May 7, 2025, the Board and shareholders of 65% of issued and outstanding capital stock of the Company, approved, by written consent, and adopted an amendment to the New 2022 EIP (the “Plan Amendment”), which, among other things, among other things, increased the maximum number of shares issuable thereunder to 25 million (25,000,000) and eliminated any limitations on the number of shares that could be granted to participants in any fiscal year as performance-based compensation.
Removed
Between February 12, 2022, and October 25, 2022, the Company issued all of the 1,000,000 shares of Common Stock available for issuance under the 2022 Plan. 43 On April 9, 2022, the Company dismissed its independent registered public accounting firm, WWC, P.C.
Added
On April 15, 2024, Jinxuan (Hainan) Digital Technology Co., Ltd, the Company’s indirect wholly-owned subsidiary, acquired 100% share capital of Tianjin Baoliting Intelligent Technology Co., Ltd., a subsidiary of the Purchaser, in consideration of the remaining $7,0000,000 due by the Purchaser to the Company under the Note.
Removed
The Board of Directors of the Company approved the dismissal of WWC, P.C. and approved the engagement of Onestop Assurance PAC as our independent registered public accounting firm.
Added
As a result of the sale of Hongri International, the Company disposed its menswear business segment, and Hongri International and all its wholly-owned subsidiaries are no longer subsidiaries of the Company. 44 Following the Closing of Hongri, the Company’s corporate structure changed as follows: On April 26, 2023, the Company effected the 1-for-10 reverse stock split of its Common Stock.
Removed
Onestop audited the Company’s financial statements for the year ended December 31, 2021 and 2022, in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) for foreign private issuers and the PCAOB.
Added
Recent Developments On August 23, 2024, the Company issued a negotiable, transferrable, due on demand, promissory note, without an interest (the “2024 Original Note”), in the principal amount of $3,000,000 (the “Principal Amount”) to Huidan Li, the Co-Chairman of the board of directors of the Company, in consideration of the continuous advances of funds to the Company by the Co-Chairman for a period of over two (2) years.
Removed
On April 20, 2022, our Board adopted resolutions, by unanimous written consent pursuant to Section 35 of the BCA, in which it determined that the Certificate of Designation of Series A Preferred, the Certificate of Designation of Series B Participating, Certificate of Designation of Series C Preferred, and the Certificate of Designation of Series D Preferred were not filed with the Registrar of Corporations in the Marshall Islands (“Registrar of Corporations”), in accordance with the provisions of sections 35 and 5 of the BCA at the relevant time each Certificate of Designation was approved by the Board, and that it is in the best interests of the Corporation and its stockholders to correct such administrative oversight by filing Certificate of Designation of Series A Preferred, the Certificate of Designation of Series B Participating, the Certificate of Designation of Series C Preferred, and the Certificate of Designation of Series D Preferred with the Registrar of Corporations (collectively, the “Certificates of Designation of Preferred Stock”).
Added
On August 26, 2024, the Company entered into the Note Transfer and Assignment Agreement (the “Assignment Agreement”) with the Mr. Li and eight (8) investors (the “Assignees” or the “Holders”), pursuant to which on the same date Mr.
Removed
Lei will not sell the shares in the public market for at least two years. As of the date of this Annual Report, Ms. Lei completed the Repurchase Program.
Added
Li sold, transferred, and assigned the 2024 Original Note and, collectively, all of his rights, title and interest in, to and under the 2024 Original Note to the Assignees, with each Assignee being assigned all of the Original Noteholder’s rights, title and interest in, and to the principal amount of $375,000 (the “Assignment”), and the Company recognized each Assignee as the owner of the Assignment, and issued to each Assignee a new promissory note in the principal amount of $375,000 (the “New Note”) on the same terms as the 2024 Original Note. 45 On August 26, 2024, the Company and the Holders entered into a debt exchange agreement (the “2024 Exchange Agreement”), pursuant to which, on September 26, 2024, at the closing, the Company issued to Holders, collectively, an aggregate of 1,000,000 shares (each Holder was issued 125,000 shares) of newly-designated Series E Convertible Preferred Stock (the “Series E Stock”), in exchange of cancellation of $375,000, representing each Holder’s portion of the Company’s total indebtedness to the Holders under the New Notes.
Removed
At the Closing, the Purchaser issued to the Company a 5% promissory note in the principal amount of $10,000,000, in payment of the Purchase Price (the “Note”).
Added
The shares of Series E Stock were issued pursuant to the terms of the Certificate of Designation of Series E Stock, filed by the Company on September 23, 2024 with the Registrar of the Corporation under the BCA, establishing the Series E Stock.
Removed
As of April 15, 2024, the Purchase settled the outstanding balance of $7,000,000 under the Note by contributing to the Company certain software appraised at $7,220,000. Prior to the Closing, Hongri International was a wholly-owned subsidiary of the Company through which the Company operated its menswear business.
Added
The Certificate of Designation of Series E Stock features a stated value of $3.00 per share, the conversion rate of 1 for 2.5 (reflecting the 1-for-4 post reverse split ratio), no additional consideration by the Holder for the conversion of Series E Shares into the shares of the Company’s common stock and provided the schedule of conversion, such as, (i) up to 30% of the Series E Shares issued to each Holder may be converted by such Holder at any time from the date of the issuance; (ii) up to additional 30% of the Series E Shares counted on the date of the issuance may be converted by such Holder at any time after 90 days from the date of the issuance; (iii) up to 40% of the Series E Shares counted on the date of the issuance may be converted by such Holder after six (6) months from the date of the issuance.
Removed
As a result of the Closing, the Company no longer operates menswear business segment, and Hongri International and its wholly-owned subsidiaries, France Cock (China) Limited, a Hong-Kong company that owned Company’s trademarks, including “KBS” and “Kabiniao,” Roller Rome Limited (“Roller Rome”), a BVI company, Vast Billion Investment Limited, a Hong Kong company, Hongri PRC, and Anhui Kai Xin Apparel Company Limited, a PRC company, are no longer the subsidiaries of the Company. 45 Following the Closing of Hongri, the Company’s corporate structure changed as follows: Recent Developments On October 24, 2022, the Company received the initial letter (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”), notifying the Company that, based upon the closing bid price of its common stock for the last 30 consecutive business days preceding the Notice, the Company was not in compliance with the $1.00 per share minimum bid price for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”).
Added
Pursuant to the Certificate of Designation of Series E Stock, on April 3, 2025, the Company required holders to convert all Series E Shares that remained outstanding on or after March 14, 2025 into shares of common stock.
Removed
The Notice provided the Company a period of 180 calendar days from the date of the Notice, or until April 24, 2023, as set forth in Listing Rule 5810(c)(3)(A) (the “Compliance Period”), to regain compliance with Minimum Bid Requirement.
Added
As a result, as of the date of this Annual Report, all of 1,000,000 Series E Shares were converted into 2,500,000 shares of Common Stock, and the Company does not have any outstanding shares of Series E Preferred Stock.
Removed
On April 17, 2023, the Board determined that, based on the market price of the Company’s Common Stock, a 1-for-10 split ratio would be appropriate (the “Reverse Stock Split”). On April 25, 2023, the Company filed the Amendment to the Restated Articles with the Registrar or Deputy Registrar of Corporations in the Marshall Islands, implementing the Reverse Stock Split.
Added
On December 20, 2024, the Company changed its trading symbol from “JXJT” to “JXG.” On December 27, 2024 the Company filed the Amendment with the Registrar or Deputy Registrar of Corporations in the Marshall Islands, implementing the 1-for-4 reverse stock split and the change of the Company’s name to “JX Luxventure Group Inc.” The Company began trading under its new name and on a post-reverse stock split basis on January 8, 2025.
Removed
Upon the opening of the market on April 26, 2023, the Company’s common stock began trading on the Nasdaq Capital Market on a post-split basis. Since that date, the Company’s common stock has continually traded well above the Minimum Bid Requirement.
Added
On February 17, 2025, the Company issued a new promissory note (the “2025 Original Note”) to Mr. Li in the principal amount of $3,500,000, in consideration of funds advanced by Mr. Li to the Company. On April 21, 2025, Mr.
Removed
However, the Company did not regain compliance with the Minimum Bid Requirement by April 24, 2023, as required by the Notice.
Added
Li transferred and assigned to six (6) investors (the “Assignees”) an aggregate of $1,380,000, representing a portion of the principal amount under the 2025 Original Note (the “Total Assigned Debt”), with each Assignee to be assigned a portion of the Total Assigned Debt equal to $230,000 (the “Assignment”), in consideration of the purchase price of $230,000 from each Assignee.
Removed
On April 25, 2023, the Company received a Staff Determination Letter (the “Determination Letter”) from the Listing Qualifications Department of Nasdaq notifying it that, unless the Company requested an appeal of that determination to a Nasdaq Hearings Panel, the Staff would schedule the Company’s securities for delisting from The Nasdaq Capital Market and would suspend trading of the Company’s common stock at the opening of business on May 4, 2023 due to the Company’s failure to regain compliance with the Minimum Bid Requirement.
Added
Upon Mr. Li’s assignment of the Total Assigned Debt to Assignees, the Company issued to Mr. Li a new promissory note in principal amount of $2,120,000, representing the total remaining outstanding amount due to Mr. Li under the 2025 Original Note, on the terms of the 2025 Original Note.
Removed
On April 26, 2023, the Company submitted a request for a hearing before the Nasdaq Hearings Panel to present its plan to regain compliance with the Minimum Bid Requirement.
Added
The Company also issued promissory notes to each Assignee in the principal amount of $230,000 (the “Investor Note”), recognizing each Assignee as the legal holder of the Assignment and the noteholder of the Investor Note. The terms of the Investor Note are the same as the terms of the 2025 Original Note issued by the Company to Mr. Li.
Added
On April 22, 2025, the Assignees entered into a debt exchange agreement with the Company (the “2025 Exchange Agreement”), pursuant to which, the Assignees agreed to cancel an aggregate of $1,380,000, the total amount of the Company’s indebtedness (each Assignee to cancel $230,000 under the promissory note issued to such Assignee) in exchange for the issuance of 69,000 shares (each Assignee to be issued 11,500 shares) of a new series of the Company’s preferred stock, designated as Series F Convertible Preferred Stock (the “Series F Preferred Stock”), pursuant to the terms and subject to conditions set forth in the 2025 Exchange Agreement.
Added
The 2025 Exchange Agreement provides that closing of the transactions contemplated by the 2025 Exchange Agreement (the “Closing”) will occur upon satisfaction of the following conditions, including, among other things (i) the Company’s submission of Listing of Additional Shares Notification Form with Nasdaq Capital Market at least 15 calendar days prior to the issuance of the shares of Series F Preferred Stock; (ii) obtaining the shareholder approval for the issuance of 20% or more of the Company’s issued and outstanding share capital, as required by Nasdaq Marketplace Rule 5635; and (iii) filing of the Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (the “Certificate of Designation of Series F Stock”) with the Registrar of the Corporation under the BCA, establishing the Series F Preferred Stock. 46 Series F Shares will feature a stated value of $20.00 per share and will be convertible to shares of the Company’s Common Stock at the conversion rate of 1 for 100, such as each Series F Share to be converted into 100 shares of the Company’s Common Stock without payment or any additional consideration by the holder thereof.
Added
Such conversion will be subject to the following schedule: (i) up to 2,000 of the Series F Shares issued to each holder may be converted by such holder at any time from the date of the issuance; (ii) up to additional 2,500 of the Series F Shares may be converted by such Holder at any time after 90 days from the date of the issuance; (iii) up to 3,000 of Series F Shares counted on the date of the issuance may be converted by such Holder after six (6) months from the date of the issuance; and (iv) the remaining 4,000 of the Series F Shares may be converted by such holder after nine (9) months from the date of the issuance.
Added
If any Series F Shares will remain outstanding on or after one (1) year from the date of the issuance, the Company will have the right, but not the obligations, to require the holders of such Series F Shares to convert them into the number of fully paid and non-assessable shares of common stock as would result from multiplying the number of Series F Shares by 100.
Added
On April 15, 2024, JX Hainan acquired 100% share capital of Tianjin Baoliting Intelligence Technology Co., Ltd (“Baoliting”), a company incorporated under PRC laws on August 11, 2023 It became a wholly-owned subsidiary of and is engaged in software development and technology support services. On May 31, 2024, Hefei Si Quan Run Hang International travel agency Co., Ltd.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

105 edited+32 added−23 removed309 unchanged
Administrative expenses Administrative expenses decreased by $54.0 million or 96% to $2.1 million for the year 2023 from $56.0 million for the year 2022.
Administrative expenses decreased by $54.0 million or 96% to $2.1 million for the year 2023 from $56.0 million for the year 2022.
Revenue from reselling of airline-ticket The Company is a reseller of airline tickets, it provides value-added services to its customers including guaranteed flight replacement and other financial benefits. The Company procured the tickets from different airline companies and resell them to the online airline ticket agency companies.
Revenue from reselling of airline tickets The Company is a reseller of airline tickets, it provides value-added services to its customers including guaranteed flight replacement and other financial benefits. The Company procured the tickets from different airline companies and resell them to the online airline ticket agency companies.
In addition, the Overseas Listing Trial Measures provide that an overseas listing or offering is explicitly prohibited under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the domestic company intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller. 59 At a press conference held for these new regulations, officials from the CSRC clarified that the domestic companies that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e.
In addition, the Overseas Listing Trial Measures provide that an overseas listing or offering is explicitly prohibited under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the domestic company intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller. 60 At a press conference held for these new regulations, officials from the CSRC clarified that the domestic companies that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e.
Trademark Name Trademark Application Date Trademark Classes Trademark Owner Trademark Term Trademark Status China 51872718 Bu Fan Xing Jing 12/04/2020 35 Beijing Heyang 10 years Approved China 50933195 11/03/2020 35 Flower Crown (Hainan) 10 years Approved China 50941310 Quanqiu Yixianghui 11/03/2020 35 Flower Crown (Hainan) 10 years Approved China 49572627 Jinxuan Pinlv 09/08/2020 41 Jinxuan Luxury Tourism 10 years Approved China 49572624 Jinxuan Pinlv 09/08/2020 43 Jinxuan Luxury Tourism 10 years Approved China 49567840 09/08/2020 35 Jinxuan Luxury Tourism 10 years Approved China 49580237 LUXVENTFURE 09/08/2020 43 Jinxuan Luxury Tourism 10 years Approved China 49563070 09/08/2020 41 Jinxuan Luxury Tourism Approved China 49592112 LUXVENTFURE 09/08/2020 41 Jinxuan Luxury Tourism 10 years Approved 54 China 49563061 09/08/2020 43 Jinxuan Luxury Tourism 10 years Approved China 49563090 LUXVENTFURE 09/08/2020 35 Jinxuan Luxury Tourism 10 years Approved China 49572631 Jinxuan Pinlv 09/08/2020 39 Jinxuan Luxury Tourism 10 years Approved China 49583228 Jinxuan Pinlv 09/08/2020 35 Jinxuan Luxury Tourism 10 years Approved China 49593405 09/08/2020 39 Jinxuan Luxury Tourism 10 years Approved China 49580225 LUXVENTURE 09/08/2020 39 Jinxuan Luxury Tourism 10 years Approved Hong Kong 305384304 09/08/2020 10 years Approved Hong Kong 305384313 Jinxuan Pinlv 09/08/2020 10 years Approved Hong Kong 305384322 LUXVENTURE 09/08/2020 10 years Approved Macao N/173434(304) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173435(975) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173436(747) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173437(132) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173438(333) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved 55 Macao N/173439(206) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173440(834) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173441(540) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173442(418) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173443(343) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173444(867) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173445(578) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063176 Jinxuan Pinlv 09/10/2020 35 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063175 Jinxuan Pinlv 09/10/2020 39 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063173 Jinxuan Pinlv 09/10/2020 43 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063186 LUXVENTURE 09/10/2020 41 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063178 09/10/2020 41 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063177 09/10/2020 43 Jinxuan Luxury Tourism 10 years Approved 56 Taiwan 109063183 09/10/2020 39 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063184 09/10/2020 35 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063187 LUXVENTURE 09/10/2020 39 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063188 LUXVENTURE 09/10/2020 35 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063174 Jinxuan Pinlv 09/10/2020 41 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063185 LUXVENTURE 09/10/2020 43 Jinxuan Luxury Tourism 10 years Approved Insurance We do not have any business liability, interruption or litigation insurance coverage for our operations in China.
Trademark Name Trademark Application Date Trademark Classes Trademark Owner Trademark Term Trademark Status China 51872718 Bu Fan Xing Jing 12/04/2020 35 Beijing Heyang 10 years Approved China 50933195 11/03/2020 35 Flower Crown (Hainan) 10 years Approved China 50941310 Quanqiu Yixianghui 11/03/2020 35 Flower Crown (Hainan) 10 years Approved China 49572627 Jinxuan Pinlv 09/08/2020 41 Jinxuan Luxury Tourism 10 years Approved China 49572624 Jinxuan Pinlv 09/08/2020 43 Jinxuan Luxury Tourism 10 years Approved China 49567840 09/08/2020 35 Jinxuan Luxury Tourism 10 years Approved China 49580237 LUXVENTFURE 09/08/2020 43 Jinxuan Luxury Tourism 10 years Approved China 49563070 09/08/2020 41 Jinxuan Luxury Tourism Approved China 49592112 LUXVENTFURE 09/08/2020 41 Jinxuan Luxury Tourism 10 years Approved 55 China 49563061 09/08/2020 43 Jinxuan Luxury Tourism 10 years Approved China 49563090 LUXVENTFURE 09/08/2020 35 Jinxuan Luxury Tourism 10 years Approved China 49572631 Jinxuan Pinlv 09/08/2020 39 Jinxuan Luxury Tourism 10 years Approved China 49583228 Jinxuan Pinlv 09/08/2020 35 Jinxuan Luxury Tourism 10 years Approved China 49593405 09/08/2020 39 Jinxuan Luxury Tourism 10 years Approved China 49580225 LUXVENTURE 09/08/2020 39 Jinxuan Luxury Tourism 10 years Approved Hong Kong 305384304 09/08/2020 10 years Approved Hong Kong 305384313 Jinxuan Pinlv 09/08/2020 10 years Approved Hong Kong 305384322 LUXVENTURE 09/08/2020 10 years Approved Macao N/173434(304) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173435(975) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173436(747) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173437(132) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173438(333) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved 56 Macao N/173439(206) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173440(834) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173441(540) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173442(418) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173443(343) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173444(867) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Macao N/173445(578) 09/18/2020 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063176 Jinxuan Pinlv 09/10/2020 35 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063175 Jinxuan Pinlv 09/10/2020 39 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063173 Jinxuan Pinlv 09/10/2020 43 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063186 LUXVENTURE 09/10/2020 41 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063178 09/10/2020 41 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063177 09/10/2020 43 Jinxuan Luxury Tourism 10 years Approved 57 Taiwan 109063183 09/10/2020 39 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063184 09/10/2020 35 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063187 LUXVENTURE 09/10/2020 39 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063188 LUXVENTURE 09/10/2020 35 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063174 Jinxuan Pinlv 09/10/2020 41 Jinxuan Luxury Tourism 10 years Approved Taiwan 109063185 LUXVENTURE 09/10/2020 43 Jinxuan Luxury Tourism 10 years Approved Insurance We do not have any business liability, interruption or litigation insurance coverage for our operations in China.
Pursuant to the Agreement, Kaiwo will sell high-end foreign luxury automobiles supplied by JX Hainan in the amount of up to USD50,000,000. On October 3, 2022, Flower Crown (China) Holding Group Co., Ltd. (“JXFC”) entered into and executed a Strategic Cooperation Agreement (the “Agreement”) with Hainan Hang Seng Zhongli Commercial Holding Co., Ltd.
(“Kaiwo”). Pursuant to the Agreement, Kaiwo will sell high-end foreign luxury automobiles supplied by JX Hainan in the amount of up to USD50,000,000. On October 3, 2022, Flower Crown (China) Holding Group Co., Ltd. (“JXFC”) entered into and executed a Strategic Cooperation Agreement (the “Agreement”) with Hainan Hang Seng Zhongli Commercial Holding Co., Ltd.
Financial Statement Presentation In December 2020, the Company acquired Flower Crown, which at the time, contributed two new segments, tourism cross-border merchandize sales and tourism. Flower Crown add Technology Solution for Tourism Cross-border operation segment in 2022. In October 2022, the Company disposed the whole menswear business segment, which was presented as discontinued operation as set out below. Revenue.
Financial Statement Presentation In December 2020, the Company acquired Flower Crown, which at the time, contributed two new segments, tourism cross-border merchandize sales and tourism. Flower Crown add Technology Solution for Tourism Cross-border operation segment in 2022. In October 2022, the Company disposed the whole menswear business segment, which was presented as discontinued operation as set out below.
Profit for the year increased from 2022 to 2023 mainly due to the following reasons: (1) no expenses for share-based compensations to employees, Directors and managements of $53.3 million; (2) No loss on discontinued operations of $18.1 million; (3) increasing gross profit of $4.0 million generated by higher gross margin business in 2023.
Profit for the year increased from 2022 to 2023 mainly due to the following reasons: (1) no expenses for share-based compensations to employees, Directors and managements of $53.3 million; (2) No loss on discontinued operations of $18.1 million; (3) increasing gross profit of $4.0 million generated by higher gross margin business in 2023. B.
This advanced software solution not only enhances transparency but also fosters trust and collaboration between our company and our clients. Innovative Excess Inventory Management : Our unique approach to addressing the challenge of surplus inventory involves a dynamic warehouse management system that facilitates the sharing of unsold merchandise among our business clients.
This advanced software solution not only enhances transparency but also fosters trust and collaboration between our company and our clients. 53 Innovative Excess Inventory Management : Our unique approach to addressing the challenge of surplus inventory involves a dynamic warehouse management system that facilitates the sharing of unsold merchandise among our business clients.
The Consumer Protection Law sets forth standards of behavior that businesses must observe in their dealings with consumers. Violations of the Consumer Protection Law may result in the imposition of fines. In addition, the violating entity may be ordered to suspend its operations, and its business license may be revoked. There may also be criminal liability in serious cases.
The Consumer Protection Law sets forth standards of behavior that businesses must observe in their dealings with consumers. 70 Violations of the Consumer Protection Law may result in the imposition of fines. In addition, the violating entity may be ordered to suspend its operations, and its business license may be revoked. There may also be criminal liability in serious cases.
We are subject to periodic inspections by local environmental protection authorities. 69 We did not incur material costs in environmental compliance in fiscal years 2022, 2021 and 2020. We believe we are in material compliance with the relevant PRC environmental laws and regulations. We are not currently subject to any pending actions alleging any violations of applicable PRC environmental laws.
We are subject to periodic inspections by local environmental protection authorities. We did not incur material costs in environmental compliance in fiscal years 2022, 2021 and 2020. We believe we are in material compliance with the relevant PRC environmental laws and regulations. We are not currently subject to any pending actions alleging any violations of applicable PRC environmental laws.
On July 7, 2022, the CAC promulgated the Security Assessment Measures for Cross-border Data Transfers with effect from September 1, 2022, a data processor shall declare security assessment for its outbound data transfer if: (i)where a data processor provides critical data abroad;(ii) where a critical information infrastructure operator or a data processor processing the personal information of more than one million individuals provides personal information abroad; (iii) where a data processor has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals in total abroad since January 1 of the previous year; and (iv) any other circumstances prescribed by the CAC. 61 On November 14, 2021, the CAC released the Regulations for the Administration of Network Data Security (Draft for Comments) (the “ Draft Network Data Security Regulations ”).
On July 7, 2022, the CAC promulgated the Security Assessment Measures for Cross-border Data Transfers with effect from September 1, 2022, a data processor shall declare security assessment for its outbound data transfer if: (i)where a data processor provides critical data abroad;(ii) where a critical information infrastructure operator or a data processor processing the personal information of more than one million individuals provides personal information abroad; (iii) where a data processor has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals in total abroad since January 1 of the previous year; and (iv) any other circumstances prescribed by the CAC. 62 On November 14, 2021, the CAC released the Regulations for the Administration of Network Data Security (Draft for Comments) (the “ Draft Network Data Security Regulations ”).
Financial instruments – derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group’s consolidated statement of financial position) when: ● the rights to receive cash flows from the asset have expired; or ● the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. 84 When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset.
Financial instruments – derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group’s consolidated statement of financial position) when: ● the rights to receive cash flows from the asset have expired; or ● the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. 87 When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset.
In addition, an enterprise that fails to undertake contribution registration of housing provident fund or fails to go through the formalities of opening housing provident fund accounts for its employees may be ordered to rectify the noncompliance within a stipulated deadline, where failing to rectify the non-compliance at the expiration of the time limit, it be may be subject to a fine ranging from RMB10,000 or RMB 50,000. 64 REGULATIONS RELATED TO TAXATION Regulations on Income Tax We and our subsidiaries may be subject to tax in the jurisdictions in which we are organized or operate, reducing the amount of our net income and cash flows, including cash available for dividend payments.
In addition, an enterprise that fails to undertake contribution registration of housing provident fund or fails to go through the formalities of opening housing provident fund accounts for its employees may be ordered to rectify the noncompliance within a stipulated deadline, where failing to rectify the non-compliance at the expiration of the time limit, it be may be subject to a fine ranging from RMB10,000 or RMB 50,000. 65 REGULATIONS RELATED TO TAXATION Regulations on Income Tax We and our subsidiaries may be subject to tax in the jurisdictions in which we are organized or operate, reducing the amount of our net income and cash flows, including cash available for dividend payments.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is de-recognized. Inventories Inventories are stated at the lower of cost and net realizable value.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is de-recognized. 84 Inventories Inventories are stated at the lower of cost and net realizable value.
Financial instruments – offsetting financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. G.
Financial instruments – offsetting financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. 88 G.
If we decide to pay dividends in the future, as a holding company, we will depend on receiving dividends from our PRC subsidiaries. As a holding company, we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements.
If we decide to pay dividends in the future, as a holding company, we will depend on receiving dividends from our PRC subsidiaries. 78 As a holding company, we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements.
This qualification is reassessed by relevant government authorities every three years. 65 According to the Notice on the Implementation of Inclusive Tax Concessions for Small and Micro Enterprises which took effect on January 1, 2019, jointly issued by the Ministry of Finance and the State Taxation Administration, for the portion of annual taxable income which does not exceed RMB1,000,000, the annual taxable income shall be deducted to 25% and the income tax shall be calculated at the rate of 20%; for the portion of annual taxable income from RMB1,000,000 to RMB3,000,000, the taxable income shall be deducted to 50% and the income tax shall be calculated at the rate of 20%, for the period from January 1, 2019 to December 31, 2021.
This qualification is reassessed by relevant government authorities every three years. 66 According to the Notice on the Implementation of Inclusive Tax Concessions for Small and Micro Enterprises which took effect on January 1, 2019, jointly issued by the Ministry of Finance and the State Taxation Administration, for the portion of annual taxable income which does not exceed RMB1,000,000, the annual taxable income shall be deducted to 25% and the income tax shall be calculated at the rate of 20%; for the portion of annual taxable income from RMB1,000,000 to RMB3,000,000, the taxable income shall be deducted to 50% and the income tax shall be calculated at the rate of 20%, for the period from January 1, 2019 to December 31, 2021.
We believe that the significant growth and success of our business operations since 2020 can be attributed to the high quality of our employees, our ability to offer our business clients high-end travel products full range of services related to luxury tourism and supplemental services to reduce their total cost of procurement and ensuring that our clients receive the high-quality professional assistance they need. 47 We operate in the following operating segments of business: 1) Airline tickets and tourism services. 2) Software Solution for Tourism Cross-border operation and 3) Tourism Cross-border Merchandise.
We believe that the significant growth and success of our business operations since 2020 can be attributed to the high quality of our employees, our ability to offer our business clients high-end travel products full range of services related to luxury tourism and supplemental services to reduce their total cost of procurement and ensuring that our clients receive the high-quality professional assistance they need. 48 We operate in the following operating segments of business: 1) Airline tickets and tourism services. 2) Software Solution for Tourism Cross-border operation and 3) Tourism Cross-border Merchandise.
The Cybersecurity Law also stipulates that the China adopts classified system for cybersecurity protection, under which network operators are required to fulfil relevant obligations of security protection to ensure that the network is free from interference, disruption or unauthorized access, and to prevent network data from being disclosed, stolen or tampered. 60 On September 22, 2020, the Ministry of Public Security issued the Guiding Opinions on Implementing the Cyber Security Protection System and Critical Information Infrastructure Security Protection System to further improve the national cyber security prevention and control system.
The Cybersecurity Law also stipulates that the China adopts classified system for cybersecurity protection, under which network operators are required to fulfil relevant obligations of security protection to ensure that the network is free from interference, disruption or unauthorized access, and to prevent network data from being disclosed, stolen or tampered. 61 On September 22, 2020, the Ministry of Public Security issued the Guiding Opinions on Implementing the Cyber Security Protection System and Critical Information Infrastructure Security Protection System to further improve the national cyber security prevention and control system.
A patent is valid for a twenty-year term in the case of an invention, a fifteen-year term in the case of a design, and a ten-year term in the case of a utility model, starting from the application date. 63 Regulations on Domain Name Pursuant to the Administrative Measures for Internet Domain Names, which were promulgated by the MIIT on August 24, 2017 with effect from November 1, 2017, the registration of domain names adopts the “first to file, first to register” principle and the registrant shall complete the registration via the domain name registration service institutions.
A patent is valid for a twenty-year term in the case of an invention, a fifteen-year term in the case of a design, and a ten-year term in the case of a utility model, starting from the application date. 64 Regulations on Domain Name Pursuant to the Administrative Measures for Internet Domain Names, which were promulgated by the MIIT on August 24, 2017 with effect from November 1, 2017, the registration of domain names adopts the “first to file, first to register” principle and the registrant shall complete the registration via the domain name registration service institutions.
The foreign investors or foreign-invested enterprises shall report the investment information by submitting reports including initial reports, change reports, deregistration reports and annual reports. 58 REGULATIONS RELATING TO OVERSEAS LISTING On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission (the “CSRC”), promulgated the Rules on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which took effect on September 6, 2006 and was amended on June 22, 2009.
The foreign investors or foreign-invested enterprises shall report the investment information by submitting reports including initial reports, change reports, deregistration reports and annual reports. 59 REGULATIONS RELATING TO OVERSEAS LISTING On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission (the “CSRC”), promulgated the Rules on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which took effect on September 6, 2006 and was amended on June 22, 2009.
This growth in revenue, especially revenues from our tourism business, has been adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns. 57 Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in the PRC.
This growth in revenue, especially revenues from our tourism business, has been adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns. 58 Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in the PRC.
The Company presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as a principal to take inventory risks of these goods. 78 Revenue from the sale of Tourism Package Performance obligation is satisfied when the tourism package is completed, generally when the tour group successfully returned from the tour destination to the place of origination.
The Company presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as a principal to take inventory risks of these goods. 81 Revenue from the sale of Tourism Package Performance obligation is satisfied when the tourism package is completed, generally when the tour group successfully returned from the tour destination to the place of origination.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred. 79 Retirement benefit costs Pursuant to the relevant regulations of the PRC government, the Group’s subsidiaries located in the PRC participate in a local municipal government retirement benefits scheme (the “Scheme”), whereby they contribute a prescribed percentage of the basic salaries of their employees to the Scheme to fund their retirement benefits.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred. 82 Retirement benefit costs Pursuant to the relevant regulations of the PRC government, the Group’s subsidiaries located in the PRC participate in a local municipal government retirement benefits scheme (the “Scheme”), whereby they contribute a prescribed percentage of the basic salaries of their employees to the Scheme to fund their retirement benefits.
Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects. 76 C. Research and Development, Patents and Licenses, Etc. Our industry is characterized by rapid technological change, evolving industry standards and changing customer demands.
Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects. 79 C. Research and Development, Patents and Licenses, Etc. Our industry is characterized by rapid technological change, evolving industry standards and changing customer demands.
Pursuant to the Agreement, Hainan Douxing will sell JX Hainan cross-border merchandise, including cosmetics and skincare products, in the amount up to USD30,000,000 on the live-stream E-commerce shows hosted by Hainan Douxing. On July 26, 2022, Jin Xuan (Hainan) Holding Co., Ltd. (“JX Hainan”), entered into and executed a Cooperation Agreement (the “Agreement”) with Kaiwo International Trading Co. Ltd. (“Kaiwo”).
Pursuant to the Agreement, Hainan Douxing will sell JX Luxury Tourism cross-border merchandise, including cosmetics and skincare products, in the amount up to USD30,000,000 on the live-stream E-commerce shows hosted by Hainan Douxing. On July 26, 2022, Jin Xuan (Hainan) Holding Co., Ltd. (“JX Hainan”), entered into and executed a Cooperation Agreement (the “Agreement”) with Kaiwo International Trading Co. Ltd.
Any failure to maintain and expand our brand portfolio or maintain and enhance our brand recognition could have a material and adverse effect on our business, results of operations and prospects. 70 Flexibility and sustainability of our product supply chain.
Any failure to maintain and expand our brand portfolio or maintain and enhance our brand recognition could have a material and adverse effect on our business, results of operations and prospects. 72 Flexibility and sustainability of our product supply chain.
For the periods covered by this section, general and administrative expenses consisted primarily of compensation and benefits to our general management, finance and administrative staff, rental costs, office supplies, utilities, and other expenses incurred in connection with general operations. 71 Comparison of Fiscal Years Ended December 31, 2023, 2022, and 2021 The following table sets forth key components of our results of operations, for the years ended December 31, 2023, 2022, and 2021, both in U.S. dollars and as a percentage of or revenue.
For the periods covered by this section, general and administrative expenses consisted primarily of compensation and benefits to our general management, finance and administrative staff, rental costs, office supplies, utilities, and other expenses incurred in connection with general operations. 73 Comparison of Fiscal Years Ended December 31, 2024, 2023, and 2022 The following table sets forth key components of our results of operations, for the years ended December 31, 2024, 2023, and 2022, both in U.S. dollars and as a percentage of or revenue.
The Company’s Cash Flows and Summary Of Applicable Regulations The structure of cash flows within the entities in our corporate organization, and the applicable regulations, are as follows: Our corporate structure is a direct holding structure, that is, the overseas entity listed in the U.S., JX Luxventure Limited incorporated Marshall Islands, currently has no material operations on its own.
The Company’s Cash Flows and Summary Of Applicable Regulations The structure of cash flows within the entities in our corporate organization, and the applicable regulations, are as follows: Our corporate structure is a direct holding structure, that is, the overseas entity listed in the U.S., JX Luxventure Group Inc., incorporated Marshall Islands, currently has no material operations on its own.
The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. 83 General approach ECLs are recognized in two stages.
The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. 86 General approach ECLs are recognized in two stages.
Tabular Disclosure of Contractual Obligations We have no other material long-term debt, capital or operating lease or fixed purchase obligations. Holding Company Structure JX Luxventure Limited is our holding company which has no material operations of its own. We conduct all our operations through our operating subsidiaries in China.
Tabular Disclosure of Contractual Obligations We have no other material long-term debt, capital or operating lease or fixed purchase obligations. Holding Company Structure JX Luxventure Group Inc. is our holding company which has no material operations of its own. We conduct all our operations through our operating subsidiaries in China.
During the periods covered by this section, we generated revenue from a) sales of tourism cross-border merchandize, b) sales of Software Solution for Tourism Cross-border operation , and c) tourism products, which covers tourism package and airline ticket sale (including related services). Cost of sales.
During the periods covered by this section, we generated revenue from a) sales of tourism cross-border merchandize, b) sales of Software, and c) tourism products, which covers tourism package and airline ticket sale (including related services). Cost of sales.
IFRS 16 defines a lease term as the noncancellable period for which the lessee has the right to use an underlying asset including optional periods when an entity is reasonably certain to exercise an option to extend (or not to terminate) a lease.
IFRS 16 defines a lease term as the non-cancellable period for which the lessee has the right to use an underlying asset including optional periods when an entity is reasonably certain to exercise an option to extend (or not to terminate) a lease.
We believe our employees’ compensation packages are competitive and we have created a merit-based work environment that encourages initiative. As a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.
We do not have independent contractors. We believe our employees’ compensation packages are competitive and we have created a merit-based work environment that encourages initiative. As a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.
Profit for the year We had a profit of $3.0 million in 2023 as compared to a loss of $55.3 million in 2022, representing an increase of profit of $58.3 million. Net margin was 9% for the year ended December 31, 2023, compared to -93% for the year ended December 31, 2022.
We had a profit of $3.0 million in 2023 as compared to a loss of $55.3 million in 2022, representing an increase of profit of $58.3 million. Net margin was 10% for the year ended December 31, 2023, compared to -92% for the year ended December 31, 2022.
The gross profit ratio of technology sub-segment in 2022 achieved 97% due to the reason that most of the revenue in 2022 of this sub-segments was contributed to self-developed cross-board related software sold to customers and the developing costs of the software was recorded as general and administrative expenses in 2022 or prior years.
The high gross profit ratio was due to the reason that most of the revenue in 2023 and 2022 of this sub-segments was contributed to self-developed cross-board related software sold to customers and the developing costs of the software was recorded as general and administrative expenses in 2023 or prior years.
The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all.
The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all.
On December 27, 2021, JX Luxventure (Hainan) Digital Technology Co., Ltd. closed a Real Estate Transaction Contract with a non-affiliate, acquiring a piece of commercial real estate of 240 square meters for cross-border operations for the amount of USD $2,338,464 based upon the appraisal report. On February 9, 2022, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd.
On December 27, 2021, JX Luxventure (Hainan) Digital Technology Co., Ltd. closed a Real Estate Transaction Contract with a non-affiliate, acquiring a piece of commercial real estate of 240 square meters for cross-border operations for the amount of USD $2,338,464 based upon the appraisal report.
(“JX Hainan”), entered into and executed a Framework Agreement on Strategic Cooperation (the “Agreement”) with Ragdoll International Trading Co., Ltd. (“Ragdoll”), an E-commerce platform operator. Pursuant to the Agreement, Ragdoll will purchase from JX Hainan cross-border pet foods in the amount of up to USD30,000,000 to be distributed on the platforms operated by Ragdoll.
On March 31, 2022, JX Luxury Tourism entered into and executed a Framework Agreement on Strategic Cooperation (the “Agreement”) with Ragdoll International Trading Co., Ltd. (“Ragdoll”), an E-commerce platform operator. Pursuant to the Agreement, Ragdoll will purchase from JX Luxury Tourism cross-border pet foods in the amount of up to USD30,000,000 to be distributed on the platforms operated by Ragdoll.
The remaining fair value changes are recognized in other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled to the income statement.
Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled to the income statement.
UNRESOLVED STAFF COMMENTS Not required. ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included in this annual report and in particular, “Item 4. Information on the Company — B.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included in this annual report and in particular, “Item 4. Information on the Company — B.
On July 17, 2023, Jinxuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, entered into and executed Technology Development and Promotion Commission Contract (the “Technology Development Agreement”) with Tianjin Baixing Pharmaceutical Wholesale Co., Ltd. The Technology Development Agreement provides for the development of a medical ERP management platform, which will utilize a Chatgpt-type technology.
On July 17, 2023, JX Luxury Tourism entered into and executed Technology Development and Promotion Commission Contract (the “Technology Development Agreement”) with Tianjin Baixing Pharmaceutical Wholesale Co., Ltd. The Technology Development Agreement provides for the development of a medical ERP management platform, which will utilize a Chatgpt-type technology. On July 1, 2024, Jin Xuan (Hainan) Holding Co., Ltd.
Senate passed the HFCAA, which includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The U.S.
Senate passed the HFCAA, which includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The HFCAA was signed into law on December 18, 2020.
Historically, we have realized more of our revenue and earnings in the fourth quarter, which includes the majority of the holiday shopping season, than in any other fiscal quarter. Critical Accounting Policies The preparation of financial statements is in conformity with IFRS as issued by the IASB.
Seasonality Our business, like that of many retailers, is seasonal. Historically, we have realized more of our revenue and earnings in the fourth quarter, which includes the majority of the holiday shopping season, than in any other fiscal quarter. 80 Critical Accounting Policies The preparation of financial statements is in conformity with IFRS as issued by the IASB.
(“JX Hainan”) entered into and executed a Framework Agreement on Strategic Cooperation (the “Agreement”) with Hainan Douxing Cultural Media Co., Ltd. (“Hainan Douxing”), one of the major live stream content providers with over 30 A list live streamers and reaches over 30,000,000 followers in China.
On June 17, 2022, JX Luxury Tourism entered into and executed a Framework Agreement on Strategic Cooperation (the “Agreement”) with Hainan Douxing Cultural Media Co., Ltd. (“Hainan Douxing”), one of the major live stream content providers with over 30 A list live streamers and reaches over 30,000,000 followers in China.
By adopting advanced solutions such as AI-based analysis and state-of-the-art warehouse management software, we can create a more efficient supply chain, mitigate risks associated with excess inventory, and ultimately ensure our clients’ sustained growth in the competitive market. Our current top two business customers are, Kaiwo International Trading Co.
By adopting advanced solutions such as AI-based analysis and state-of-the-art warehouse management software, we can create a more efficient supply chain, mitigate risks associated with excess inventory, and ultimately ensure our clients’ sustained growth in the competitive market.
Net cash used in operating activities in fiscal year 2022 was $5.0 million, compared with net cash used in operating activities of $7.78 million in the year ended December 31, 2021.
Net cash used in operating activities in fiscal year 2023 was $4.5 million, compared with net cash used in operating activities of $5.0 million in the year ended December 31, 2022.
Pursuant to the Agreement, JX Hainan will provide technology consulting services to Tianjin Wei Ka by delivering a solution for a non-fungible token (NFT)-based virtual human host to be used on live stream platforms. On June 17, 2022, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd.
Pursuant to the Agreement, JX Luxury Tourism will provide technology consulting services to Tianjin Wei Ka by delivering a solution for a non-fungible token (NFT)-based virtual human host to be used on live stream platforms.
REGULATIONS RELATING TO INTELLECTUAL PROPERTY Regulations on Copyright Pursuant to the Copyright Law of the PRC (the “Copyright Law”), which was promulgated by the SCNPC and last amended on November 11, 2020 with effect from June 1, 2021, creators of protected works enjoy personal and property rights with respect to publication, authorship, alteration, integrity, reproduction, distribution, lease, exhibition, performance, projection, broadcasting, dissemination via information network, production, adaptation, translation, compilation and related activities.
Where the individual or organization failed to make correction within the stipulated period, a fine shall be imposed. 63 REGULATIONS RELATING TO INTELLECTUAL PROPERTY Regulations on Copyright Pursuant to the Copyright Law of the PRC (the “Copyright Law”), which was promulgated by the SCNPC and last amended on November 11, 2020 with effect from June 1, 2021, creators of protected works enjoy personal and property rights with respect to publication, authorship, alteration, integrity, reproduction, distribution, lease, exhibition, performance, projection, broadcasting, dissemination via information network, production, adaptation, translation, compilation and related activities.
In 2023, the revenue of Cross board merchandise segment increased to $7.6 million, from $0.01 in 2022. The increase is mainly due to the Company started its imported luxury vehicle business in 2023. In 2022, the total revenue increased to $79.87 million by 47.80% from $54.0 million in 2021.
In 2023, the revenue of Cross board merchandise segment increased to $7.6 million, from $0.01 in 2022. The increase is mainly due to the Company started its imported luxury vehicle business in 2023.
On June 1, 2022, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd. (“JX Hainan”) entered into and executed a Technology Consulting Agreement (the “Agreement”) with Tianjin City Wei Ka Technology Co., Ltd. (“Tianjin Wei Ka”).
On June 1, 2022, JX Luxury Tourism entered into and executed a Technology Consulting Agreement (the “Agreement”) with Tianjin City Wei Ka Technology Co., Ltd. (“Tianjin Wei Ka”).
Now that the solution is operational, this equity-heavy approach is unlikely to be an ongoing trend. 73 Distribution and selling expenses The selling and distribution expenses decreased by $0.6 million or 92% to $0.1 million for the year ended December 31, 2023 from $0.7 million for the year ended December 31, 2022, primarily due to the reason that the Company outsourced certain sales functions to third parties till the middle of 2022, while since then, the Company fully executed the sales functions by its own team, which reduced the outsourced expenses significantly.
The distribution and selling expenses decreased by $0.6 million or 92% to $0.1 million for the year ended December 31, 2023 from $0.7 million for the year ended December 31, 2022, primarily due to the reason that the Company outsourced certain sales functions to third parties till the middle of 2022, while since then, the Company fully executed the sales functions by its own team, which reduced the outsourced expenses significantly.
Investing Activities Net cash provided by investing activities in fiscal year 2023 was $2.6 million, compared with $9.4 million net cash used in investing activities in 2022. The net cash used in investing activities in 2023 mainly resulted from proceeds from long-term receivable of $3.0 million, by netting off cash decreased due to disposal of discontinued operations of $0.4 million.
The net cash used in investing activities in 2023 mainly resulted from proceeds from long-term receivable of $3.0 million, by netting off cash decreased due to disposal of discontinued operations of $0.4 million. 77 Financing Activities Net cash generated from financing activities in fiscal year 2024 was $5.2 million, compared with $1.8 million net cash generated in financing activities in 2023.
In 2022, the revenue of technology segment generated $782,302 compared to zero in previous years due to our self-developed B2B technology solution for tourism cross-board merchandize were accepted by small players, which are not able to develop the system by themselves.
In 2023, the revenue of technology segment generated $2.7 million compared to $0.8 million in previous years due to our self-developed B2B technology solution for tourism cross-board merchandize were more accepted by small players, which are not able to develop the system by themselves.
(“JX Hainan”), a subsidiary of the Company, entered into and executed a Memorandum of Japanese High-end Life Style Services Strategic Cooperation Agreement (the “Agreement”) with Xin Hua Fund Co., Ltd. (“XHFC”).
On February 9, 2022, JX Luxury Tourism a subsidiary of the Company, entered into and executed a Memorandum of Japanese High-end Life Style Services Strategic Cooperation Agreement (the “Agreement”) with Xin Hua Fund Co., Ltd. (“XHFC”).
The SPV is defined as an “offshore enterprise directly established or indirectly controlled by the domestic resident (including domestic institution and resident individual) with their legally owned assets and equity of the domestic enterprise, or legally owned offshore assets or equity, for the purpose of investment and financing”; “Round Trip Investment refers to “the direct investment activities carried out by a domestic resident directly or indirectly via a SPV, i.e., establishing a foreign-invested enterprise or project within the PRC through a new entity, merger or acquisition and other ways, while obtaining ownership, control, operation and management and other rights and interests”.
The SPV is defined as an “offshore enterprise directly established or indirectly controlled by the domestic resident (including domestic institution and resident individual) with their legally owned assets and equity of the domestic enterprise, or legally owned offshore assets or equity, for the purpose of investment and financing”; “Round Trip Investment refers to “the direct investment activities carried out by a domestic resident directly or indirectly via a SPV, i.e., establishing a foreign-invested enterprise or project within the PRC through a new entity, merger or acquisition and other ways, while obtaining ownership, control, operation and management and other rights and interests”. 67 On February 13, 2015, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies (the “ SAFE Circular 13 ”), which came into effect on June 1, 2015.
Financial assets at fair value through other comprehensive income (debt instruments) The Group measures debt instruments at fair value through other comprehensive income if both of the following conditions are met: ● The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling. ● The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 82 For debt instruments at fair value through other comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the income statement and computed in the same manner as for financial assets measured at amortized cost.
Gains and losses are recognized in the income statement when the asset is derecognized, modified or impaired. 85 Financial assets at fair value through other comprehensive income (debt instruments) The Group measures debt instruments at fair value through other comprehensive income if both of the following conditions are met: ● The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling. ● The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of $407,311. Our cash and cash equivalents consist of cash on hand and cash in the banks.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $1,184,456. Our cash and cash equivalents consist of cash on hand and cash in the banks.
The software solution streamlines product monitoring and distribution processes and offers a range of features and capabilities that enhance overall operational efficiency. 50 Our software solution comprises two primary components: 1) the Sourcing Solution which empowers us to accurately forecast market trends and offer competitive pricing to our business clients; and 2) the Business Solution which provides small to medium-sized business partners with a comprehensive platform to streamline merchandise operations and enhance customer engagement.
Our software solution comprises two primary components: 1) the Sourcing Solution which empowers us to accurately forecast market trends and offer competitive pricing to our business clients; and 2) the Business Solution which provides small to medium-sized business partners with a comprehensive platform to streamline merchandise operations and enhance customer engagement.
This strategic use of technology significantly reduces the risks associated with excess inventory, resulting in a more efficient and streamlined supply chain for all parties involved. 52 Description of Property Properties We Lease We currently lease additional spaces as indicated below: Lessor/Rental Cost per month Lessee Location Area (Square Meter) Annual Rent Term Use Li Jinping Jin Xuan Luxury Tourism Building 5, Entrance 1, Room 101, Baofu 9th Courtyard Project, Intersection of Weijin South Road and Suijiang Road, Xiqing District, Tianjin 336 $ 0 June 29, 2022 to June 30 2024 Office Business Employees As of the date of this Annual Report, the Company, its subsidiaries and PRC operating entities have a total of 134 employees, including 57 full time employees and 77 part time employees, and have no independent contractors.
Description of Property Properties We Lease We currently lease additional spaces as indicated below: Lessor/Rental Cost per month Lessee Location Area (Square Meter) Annual Rent Term Use Li Jinping Jin Xuan Luxury Tourism Building 5, Entrance 1, Room 101, Baofu 9th Courtyard Project, Intersection of Weijin South Road and Suijiang Road, Xiqing District, Tianjin 336 $ 0 June 29, 2022 to June 30 2027 Office Business Employees As of the date of this Annual Report, the Company, its subsidiaries and PRC operating entities have a total of 132 employees, including 55 full-time employees and 77 part-time employees.
The following table provides detailed information about our net cash flow for all financial statement periods presented in this report: Fiscal Year Ended December 31, 2023 2022 2021 Net cash provided by (used in) operating activities $ (4,519,037 ) $ (4,957,411 ) $ (7,775,819 ) Net cash provided by (used in) investing activities 2,625,599 (9,443,746 ) (3,279,171 ) Net cash provided by financing activities 1,873,479 2,220,098 6,958,971 Net increase (decrease) in cash and cash equivalents (19,959 ) (12,181,059 ) (4,096,019 ) Effects of exchange rate change in cash (93,647 ) (212,939 ) 389,643 Cash and cash equivalents at beginning of the period 520,916 12,914,914 16,621,290 Cash and cash equivalent at end of the period $ 407,310 $ 520,916 $ 12,914,914 Operating Activities The net cash provided by operating activities consists of profit before tax, as adjusted by finance costs, change in fair value of warrant liabilities, interest income, shared based compensation, bad debt allowance, depreciation of property, plant and equipment, amortization of prepaid lease payment and trademark, amortization of subsidies prepaid to distributors, amortization of prepayment and premiums under operating leases, provision(Reversal) of inventory obsolescence, provision of impairment loss in prepayments, loss(gain) on disposal of property, plant and equipment, deferred income tax, which include trade and other receivables, prepayment and deferred expenses, inventory, trade and other payables. 74 Net cash used in operating activities in fiscal year 2023 was $4.5 million, compared with net cash used in operating activities of $5.0 million in the year ended December 31, 2022.
Given the above, the accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. 76 The following table provides detailed information about our net cash flow for all financial statement periods presented in this report: Fiscal Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 7,708,626 $ (4,519,037 ) $ (4,957,411 ) Net cash provided by (used in) investing activities (12,011,122 ) 2,625,599 (9,443,746 ) Net cash provided by financing activities 5,140,029 1,873,479 2,220,098 Net increase (decrease) in cash and cash equivalents 837,533 (19,959 ) (12,181,059 ) Effects of exchange rate change in cash (60,388 ) (93,647 ) (212,939 ) Cash and cash equivalents at beginning of the period 407,311 520,916 12,914,914 Cash and cash equivalent at end of the period $ 1,184,456 $ 407,310 $ 520,916 Operating Activities The net cash provided by operating activities consists of profit before tax, as adjusted by finance costs, change in fair value of warrant liabilities, interest income, shared based compensation, bad debt allowance, depreciation of property, plant and equipment, amortization of prepaid lease payment and trademark, amortization of subsidies prepaid to distributors, amortization of prepayment and premiums under operating leases, provision(Reversal) of inventory obsolescence, provision of impairment loss in prepayments, loss(gain) on disposal of property, plant and equipment, deferred income tax, which include trade and other receivables, prepayment and deferred expenses, inventory, trade and other payables.
Under these regulations, failure to comply with the approved usage may subject to fines or other penalties, including potentially being required by the relevant land administrative authority to return the land. 62 REGULATIONS RELATING TO LEASING Pursuant to the Law on Administration of Urban Real Estate of the PRC which took effect in January 1, 1995 with the latest amendment in August 26, 2019, lessors and lessees are required to enter into a written lease contract, containing such provisions as the term of the lease, the use of the premises, liability for rent and repair, and other rights and obligations of both parties.
REGULATIONS RELATING TO LEASING Pursuant to the Law on Administration of Urban Real Estate of the PRC which took effect in January 1, 1995 with the latest amendment in August 26, 2019, lessors and lessees are required to enter into a written lease contract, containing such provisions as the term of the lease, the use of the premises, liability for rent and repair, and other rights and obligations of both parties.
Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. 80 Leasing IFRS 16 Leases requires lessees to recognize assets and liabilities for most leases based on a ‘right-of-use model’ which reflects that, at the commencement date, a lessee has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term.
Leasing IFRS 16 Leases requires lessees to recognize assets and liabilities for most leases based on a ‘right-of-use model’ which reflects that, at the commencement date, a lessee has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term.
Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 Amount % of Sales Amount % of Sales Amount % of Sales Revenue 31,840,588 79,874,727 54,040,948 Cost of sales (26,384,219 ) -83 % (78,410,244 ) -98 % (53,193,237 ) -98 % Gross profit 5,456,369 17 % 1,464,483 2 % 847,711 2 % Operating expenses Distribution and selling expenses (58,981 ) 0 % (721,388 ) -1 % (1,353,843 ) -3 % Administrative expenses (2,076,876 ) -7 % (56,043,741 ) -70 % (6,858,210 ) -13 % Total operating expenses (2,135,857 ) -7 % (56,765,129 ) -71 % (8,212,053 ) -15 % Other income 71,408 0 % 16,636 0 % 34,793 0 % Other gains and losses (342,954 ) -1 % (98,650 ) 0 % (17,325 ) 0 % Finance costs (5,187 ) 0 % - 0 % - 0 % Profit/(loss) before tax 3,043,779 10 % (55,382,660 ) -69 % (7,346,874 ) 14 % Income tax - 0 % (621 ) 0 % (5,495 ) 0 % Profit/(loss) from continuing operations 3,043,779 10 % (55,383,281 ) -69 % (7,352,369 ) -14 % Discontinued operations - 0 % (18,109,150 ) -23 % (29,863,116 ) -55 % Total profit/(loss) for the year 3,043,779 10 % (73,492,431 ) -92 % (37,215,483 ) -69 % Flower Crown is a subsidiary operating three sub-segment business, which are tourism (Luxury travel experiences), cross-border merchandise and B2B technology solution.
Year ended December 31, 2024 Year ended December 31, 2023 Year ended December 31, 2022 Amount % of Sales Amount % of Sales Amount % of Sales Revenue 49,840,288 31,840,588 79,874,727 Cost of sales (41,487,972 ) -83 % (26,384,219 ) -83 % (78,410,244 ) -98 % Gross profit 8,352,316 17 % 5,456,369 17 % 1,464,483 2 % Operating expenses Distribution and selling expenses (2,651,904 ) -5 % (58,981 ) 0 % (721,388 ) -1 % Administrative expenses (1,830,214 ) -4 % (2,076,876 ) -7 % (56,043,741 ) -70 % Total operating expenses (4,482,118 ) -9 % (2,135,857 ) -7 % (56,765,129 ) -71 % Other income 69,113 0 % 71,408 0 % 16,636 0 % Other gains and losses (107,384 ) 0 % (342,954 ) -1 % (98,650 ) 0 % Finance costs (13,895 ) 0 % (5,187 ) 0 % - 0 % Profit/(loss) before tax 3,818,032 8 % 3,043,779 10 % (55,382,660 ) -69 % Income tax (744,225 ) -1 % - 0 % (621 ) 0 % Profit/(loss) from continuing operations 3,073,807 6 % 3,043,779 10 % (55,383,281 ) -69 % Discontinued operations - 0 % - 0 % (18,109,150 ) -23 % Total profit/(loss) for the year 3,073,807 6 % 3,043,779 10 % (73,492,431 ) -92 % Flower Crown is a subsidiary operating three sub-segment business, which are tourism (Luxury travel experiences), cross-border merchandise and B2B technology solution.
(“JX Hainan”) entered into and executed a Strategic Cooperation Framework Agreement on Cross-border Supply Chain of Duty Free Merchandize (the “Agreement”) with Aikayun Technology (Hainan) Co., Ltd. (“Aikayun”). Pursuant to the Agreement, JX Hainan will have the exclusive right to distribute cross-border products from Japan in the Hainan Island in the amount of up to RMB1,000,000,000.
(“Aikayun”). Pursuant to the Agreement, JX Luxury Tourism will have the exclusive right to distribute cross-border products from Japan in the Hainan Island in the amount of up to RMB1,000,000,000. On March 21, 2022, JX Luxury Tourism, entered into and executed a Framework Agreement on Strategic Cooperation (the “Agreement”) with Chongqing E-Pet Technology Co., Ltd.
Our cost of sales decreased from $78.4 million in year 2022 to $26.4 million in year 2023. The decrease was mainly due to the decrease of cost in connection with the decreasing tourism segment’s revenue in year 2023 compared to 2022.
The decrease was mainly due to the decrease of cost in connection with the decreasing tourism segment’s revenue in year 2023 compared to 2022.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 83 Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. Loans, Other Commitments, Contingencies As of December 31, 2023, the Company does not have any bank loans.
Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries.
The three sub-segments are presented as below: Tourism Technology Cross border merchandize revenue For the year ended December 31, For the year ended December 31, For the year ended December 31, By business 2023 2022 2021 2023 2022 2021 2023 2022 2021 Sales to external customers 21,561,671 79,092,342 51,818,166 2,719,462 782,302 - 7,559,455 83 2,222,782 Segment revenue 21,561,671 79,092,342 51,818,166 2,719,462 782,302 - 7,559,455 83 2,222,782 Segment gross margins/(loss) 1,981,107 704,391 541,889 2,714,434 760,028 - 760,828 64 305,822 Gross margin rate 9 % 1 % 1 % 99 % 97 % - 10 % 77 % 13.7 % Revenues are recognized at a point in time and denominated only in USD.
The three sub-segments are presented as below: Tourism Technology Cross border merchandize revenue For the year ended December 31, For the year ended December 31, For the year ended December 31, By business 2024 2023 2022 2024 2023 2022 2024 2023 2022 Sales to external customers 22,048,052 21,561,671 79,092,342 1,530,812 2,719,463 782,302 26,261,424 7,559,454 83 Segment revenue 22,048,052 21,561,671 79,092,342 1,530,812 2,719,463 782,302 26,261,424 7,559,454 83 Segment gross margins/(loss) 730,173 1,981,107 704,391 589,968 2,714,434 760,028 7,032,175 760,828 64 Gross margin rate 3 % 9 % 1 % 39 % 99 % 97 27 % 10 % 77 % Revenues are recognized at a point in time and denominated only in USD.
Regulations on Loans by Foreign Companies to their PRC Subsidiaries A loan made by foreign investors as shareholders in a foreign-invested enterprise is considered to be foreign debt in China and is regulated by various laws and regulations, including the Regulation of the People’s Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions (Revised in 2020), the Detailed Rules for the Implementation of Provisional Regulations on Statistics and Supervision of External Debt, and the Administrative Measures for Registration of Foreign Debts.
Under our current corporate structure, our Marshall Islands holding company may rely on dividend payments from Hongri PRC, which is a wholly foreign-owned enterprise incorporated in China, to fund any cash and financing requirements we may have. 68 Regulations on Loans by Foreign Companies to their PRC Subsidiaries A loan made by foreign investors as shareholders in a foreign-invested enterprise is considered to be foreign debt in China and is regulated by various laws and regulations, including the Regulation of the People’s Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions (Revised in 2020), the Detailed Rules for the Implementation of Provisional Regulations on Statistics and Supervision of External Debt, and the Administrative Measures for Registration of Foreign Debts.
We also face intense competition from mass merchandisers and rapidly growing alternative retail channels, such as Internet-based retailers that offer a broad range of products and services and home delivery services.
We also face intense competition from mass merchandisers and rapidly growing alternative retail channels, such as Internet-based retailers that offer a broad range of products and services and home delivery services. Among our competitors are FASTENAL (NYSE:FAST), SYSCO (NYSE:SYY) and United Natural Foods (NASDAQ: UNFI).
The decrease in tourism segment are mainly due to following reasons: (i) the Company intentionally controlled its revenue scale in 2023 to pursue higher gross margin after airline companies offered higher discount prices on airline tickets when the Company achieved certain revenue target in 2022; (ii) the Company suspended its sales in air-ticket in early October 2023 due to dispose of Heyang Travel, a subsidiary operating air-ticket business, while it will take few months to setting up a new company which have the same license of Heyang Travel. 72 In 2023, the revenue of technology segment generated $2.7 million compared to $0.8 million in previous years due to our self-developed B2B technology solution for tourism cross-board merchandize were more accepted by small players, which are not able to develop the system by themselves.
The decrease in tourism segment are mainly due to following reasons: (i) the Company intentionally controlled its revenue scale in 2023 to pursue higher gross margin after airline companies offered higher discount prices on airline tickets when the Company achieved certain revenue target in 2022; (ii) the Company suspended its sales in air-ticket in early October 2023 due to dispose of Heyang Travel, a subsidiary operating air-ticket business, while it will take few months to setting up a new company which have the same license of Heyang Travel.
Financing Activities Net cash generated from financing activities in fiscal year 2023 was $1.8 million, compared with $2.22 million net cash generated in financing activities in 2022. Net cash generated from financing activities in 2023 mainly represents the proceeds from bank loans of $1.1 million and proceeds from related parties of $0.7 million.
Net cash generated from financing activities in 2024 mainly represents the proceeds from bank loans of $1.7 million and proceeds from related parties of $3.5 million. Net cash generated from financing activities in 2023 mainly represents the proceeds from bank loans of $1.1 million and proceeds from related parties of $0.7 million.
In 2023, the total revenue decreased to $31.8 million by 60% from $79.9 million in 2022. The decrease was mainly due to the decrease in revenue in tourism segment.
As a result, the Company started to sell upgraded system to these existing clients in 2024. 74 In 2023, the total revenue decreased to $31.8 million by 60% from $79.9 million in 2022. The decrease was mainly due to the decrease in revenue in tourism segment.
Furthermore, the SAFE Circular 19 stipulates that the use of capital by foreign-invested enterprises shall follow the principles of authenticity and self-use within the business scope of enterprises. 66 On June 9, 2016, SAFE promulgated the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (the “ SAFE Circular 16 ”), which came into effect on the same day.
On June 9, 2016, SAFE promulgated the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (the “ SAFE Circular 16 ”), which came into effect on the same day.
Pursuant to the Agreement, JX Hainan and XHFC will cooperate to bring high-end Japanese medical treatment, rehabilitation treatment, precision physical examination, anti-aging beauty and other related services to the China market. 48 On March 10, 2022, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd.
Pursuant to the Agreement, JX Luxury Tourism and XHFC will cooperate to bring high-end Japanese medical treatment, rehabilitation treatment, precision physical examination, anti-aging beauty and other related services to the China market. 49 On March 10, 2022, JX Luxury Tourism entered into and executed a Strategic Cooperation Framework Agreement on Cross-border Supply Chain of Duty Free Merchandize (the “Agreement”) with Aikayun Technology (Hainan) Co., Ltd.
Although there is no assurance that, if needed, the Company will be successful with its fundraising initiatives, management believes that the Company will be able to secure the necessary financing. Given the above, the accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.
Although there is no assurance that, if needed, the Company will be successful with its fundraising initiatives, management believes that the Company will be able to secure the necessary financing.
Enterprises shall file with SAFE in its capital item information system after entering into the relevant cross-border financing contracts and prior to three business days before drawing any money from the foreign debts. 67 In March 2020, the PBOC and SAFE issued the Notice on Adjustments to Comprehensive Macro-Prudential Regulation Parameters for Cross-border Financing, further increasing outstanding cross-border financing for enterprises to 250% of its net assets.
Enterprises shall file with SAFE in its capital item information system after entering into the relevant cross-border financing contracts and prior to three business days before drawing any money from the foreign debts.
Inflation Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future.
Inflation Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in the Chinese economy and the apparel industry and continually maintain effective cost controls in operations.
Ltd. and Southern Airlines cross-border e-commerce. 51 Our diverse product portfolios encompass 1) health care products; 2) personal care products; 3) cosmetics; 4) maternal and child products; 5) pet-related products; 6) universal cuisine, 7) universal household products and 8) Pre-owned Electric Cars.
Our current top two business customers are: Hefei Liantuo Tianji E-commerce Co., Ltd. and Hainan Sanhai Gold International Trade Group 52 Our diverse product portfolios encompass 1) health care products; 2) personal care products; 3) cosmetics; 4) maternal and child products; 5) pet-related products; 6) universal cuisine, 7) universal household products and 8) Pre-owned Electric Cars.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

30 edited+5 added−5 removed27 unchanged
Except as noted below, each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder’s address is c/o JX Luxventure Limited, Bin Hai Da Dao No. 270, Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou, Xiu Ying District, Haikou City, Hainan Province 570100, People’s Republic of China.
Except as noted below, each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder’s address is c/o JX Luxventure, Bin Hai Da Dao No. 270, Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou, Xiu Ying District, Haikou City, Hainan Province 570100, People’s Republic of China.
Jin was also appointed as a member of the Audit Committee of the Company. Our Board currently consists of five (5) members. Each director will serve until the next annual meeting of shareholders of the Company or until removed by other actions, in accordance with the Company’s bylaws. Huidan Li and Sun Lei are spouses.
Jin was also appointed as a member of the Audit Committee of the Company. 89 Our Board currently consists of five (5) members. Each director will serve until the next annual meeting of shareholders of the Company or until removed by other actions, in accordance with the Company’s Bylaws. Huidan Li and Sun Lei are spouses.
The Audit Committee is responsible for, among other things: ● the appointment, compensation, retention and oversight of the work of the independent auditor; ● reviewing and pre-approving all auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent auditor; ● reviewing and approving all proposed related-party transactions; ● discussing the interim and annual financial statements with management and our independent auditors; ● reviewing and discussing with management and the independent auditor (a) the adequacy and effectiveness of the Company’s internal controls, (b) the Company’s internal audit procedures, and (c) the adequacy and effectiveness of the Company’s disclosure controls and procedures, and management reports thereon; ● reviewing reported violations of the Company’s code of conduct and business ethics; and 89 ● reviewing and discussing with management and the independent auditor various topics and events that may have significant financial impact on the Company or that are the subject of discussions between management and the independent auditors.
The Audit Committee is responsible for, among other things: ● the appointment, compensation, retention and oversight of the work of the independent auditor; ● reviewing and pre-approving all auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent auditor; ● reviewing and approving all proposed related-party transactions; 92 ● discussing the interim and annual financial statements with management and our independent auditors; ● reviewing and discussing with management and the independent auditor (a) the adequacy and effectiveness of the Company’s internal controls, (b) the Company’s internal audit procedures, and (c) the adequacy and effectiveness of the Company’s disclosure controls and procedures, and management reports thereon; ● reviewing reported violations of the Company’s code of conduct and business ethics; and ● reviewing and discussing with management and the independent auditor various topics and events that may have significant financial impact on the Company or that are the subject of discussions between management and the independent auditors.
Risk Factors—Risks Related to Doing Business in China— Our failure to fully comply with PRC laws relating to social insurance and housing accumulation fund may expose it to potential administrative penalties.” E.
Risk Factors—Risks Related to Doing Business in China— Our failure to fully comply with PRC laws relating to social insurance and housing accumulation fund may expose it to potential administrative penalties .” 93 E.
Mr. Li, age 42, has been our Chairman and a director of our board since December 21, 2020, and now is a Co-chairman since November 7, 2022. He is the founder of Baofu (Beijing) Holding Co., Ltd (“Baofu”). For the past fifteen (15) years, Mr. Li successfully expanded its business into real estate, import and export, fin-tech and medical sectors.
Mr. Li, age 43, has been our Chairman and a director of our board since December 21, 2020, and now is a Co-chairman since November 7, 2022. He is the founder of Baofu (Beijing) Holding Co., Ltd (“Baofu”). For the past fifteen (15) years, Mr. Li successfully expanded its business into real estate, import and export, fin-tech and medical sectors.
Baofu currently operates more than 15 companies. Mr. Li received his MBA degree from University of Hawaii. Baojun Zhu, age 47, was appointed as a member to our Board and a member of the Audit Committee on May 3, 2022. He has over 20 years of experience in the hospitality industry.
Baofu currently operates more than 15 companies. Mr. Li received his MBA degree from University of Hawaii. Baojun Zhu, age 48, was appointed as a member to our Board and a member of the Audit Committee on May 3, 2022. He has over 20 years of experience in the hospitality industry.
The 2021 Employment Agreement provided, in pertinent terms, that if the Company reaches its annual revenue of US$50,000,000, as reported in the Company’s 2021 annual report on Form 20-F for the fiscal year end December 31, 2021, Sun Lei will receive 100,000 shares of the Company’s Common Stock as her stock compensation.
The 2021 Employment Agreement provided, in pertinent terms, that if the Company reaches its annual revenue of US$50,000,000, as reported in the Company’s 2021 annual report on Form 20-F for the fiscal year end December 31, 2021, Sun Lei will receive 25,000 shares of the Company’s Common Stock as her stock compensation.
Zhu is an independent director within the meaning of the NASDAQ listing rules. Mr. Mu Ruifeng. Mr. Mu, age 60, has been the independent director of our board since October 25, 2020. He is the founder of Xinruifeng Property Marketing Management Co., Ltd. and Xinruifeng Investment Group Co., Ltd.
Zhu is an independent director within the meaning of the NASDAQ listing rules. Mr. Mu Ruifeng. Mr. Mu, age 61, has been the independent director of our board since October 25, 2020. He is the founder of Xinruifeng Property Marketing Management Co., Ltd. and Xinruifeng Investment Group Co., Ltd.
Sun, age 40, has been our Chief Executive Officer and a director of our board since December 21, 2020, and our Interim Financial Officer and Co-Chairwoman since November 7, 2022. She is an expert in management operation and an avid world traveler.
Sun, age 41, has been our Chief Executive Officer and a director of our board since December 21, 2020, and our Interim Financial Officer and Co-Chairwoman since November 7, 2022. She is an expert in management operation and an avid world traveler.
For the year ended December 31, 2023, we did not paid cash as compensation to our directors and executive officers as a group. We do not set aside or accrue any amounts for pension, retirement or other benefits for our directors and senior management.
For the year ended December 31, 2024, we did not paid cash as compensation to our directors and executive officers as a group. We do not set aside or accrue any amounts for pension, retirement or other benefits for our directors and senior management.
Mu was appointed by the board of directors as the Chair of the Audit Committee. Our board of directors has also determined that Mr. Mu is an “audit committee financial expert”. Mr. Jin Yan. Mr. Jin, age 54, has been the independent director of our board since October 25, 2020.
Mu was appointed by the board of directors as the Chair of the Audit Committee. Our board of directors has also determined that Mr. Mu is an “audit committee financial expert”. Mr. Jin Yan. Mr. Jin, age 55, has been the independent director of our board since October 25, 2020.
For the year ended December 31, 2022, we granted 100,000 shares to our Chief Executive Officer, Interim Financial Officer, Co-chairwoman and director, pursuant to the employment agreement entered into and executed on June 22, 2021.
For the year ended December 31, 2022, we granted 25,000 shares to our Chief Executive Officer, Interim Financial Officer, Co-chairwoman and director, pursuant to the employment agreement entered into and executed on June 22, 2021.
Compensation Following the SEC’s approval of Nasdaq’s proposed clawback listing standards, under Rule 10D-1, which directed companies to adopt and comply with a written clawback policy, to disclose and file the policy as an exhibit to its annual report, we adopted a clawback policy on November 30, 2023, as filed as Exhibit 97.1 to this Annual Report.
Compensation Following the SEC’s approval of Nasdaq’s proposed clawback listing standards, under Rule 10D-1, which directed companies to adopt and comply with a written clawback policy, to disclose and file the policy as an exhibit to its annual report, we adopted a clawback policy on November 30, 2023.
No other family relationship exists between any of the persons named above. 86 B.
No other family relationship exists between any of the persons named above. B.
If the administrator makes an award transferable, such award will contain such additional terms and conditions as the administrator deems appropriate. 88 Termination of, or Amendments to, the New 2022 EIP .
If the administrator makes an award transferable, such award will contain such additional terms and conditions as the administrator deems appropriate. 91 Termination of, or Amendments to, the New 2022 EIP .
However, we reimburse our directors for out-of-pocket expenses incurred in connection with their services in such capacity. For the year ended December 31, 2023, we did not grant shares to our directors and officers, including our Chief Executive Officer.
However, we reimburse our directors for out-of-pocket expenses incurred in connection with their services in such capacity. For the years ended December 31, 2024 and December 2023, we did not grant shares to our directors and officers, including our Chief Executive Officer.
The Board may at any time amend, alter, suspend or terminate the 2022 Plan, provided that the Company will obtain shareholder approval of any amendment to the extent necessary and desirable to comply with applicable Laws.
The Board may at any time amend, alter, suspend or terminate the New 2022 EIP, provided that the Company will obtain shareholder approval of any amendment to the extent necessary and desirable to comply with applicable Laws.
Function Number of Employees Management and Administration 6 Finance 2 Business Development 14 IT R&D 33 TOTAL 55 We believe that we have maintained a satisfactory working relationship with our employees, and we have not experienced any significant labor disputes or any difficulty in recruiting staff for company’s operations.
Function Number of Employees Management and Administration 6 Finance 2 Business Development 14 IT R&D 33 TOTAL 55 We believe that we have maintained a satisfactory working relationship with our employees, and we have not experienced any significant labor disputes or any difficulty in recruiting staff for company’s operations. None of company’s employees is represented by a labor union.
None of company’s employees is represented by a labor union. 90 Our employees in China participate in a state pension plan organized by Chinese municipal and provincial governments. In addition, the company is required by Chinese law to cover employees in China with various types of social insurance. See “Item 3. Key Information—D.
Our employees in China participate in a state pension plan organized by Chinese municipal and provincial governments. In addition, the company is required by Chinese law to cover employees in China with various types of social insurance. See “Item 3. Key Information—D.
For the year ended December 31, 2022, we granted under our 2022 Equity Incentive Plan, as amended, an aggregate of 30,000 shares of our Common Stock to our executive officers and directors as compensation for their services. Each share had the value of $22.80.
For the year ended December 31, 2022, we granted under our 2022 Equity Incentive Plan, as amended, an aggregate of 7,500 shares of our Common Stock to our executive officers and directors as compensation for their services. Each share had the value of $91.20.
Employees As of December 31, 2023, we employed 57 full-time employees. The following table sets forth the number of our full-time employees by function.
D. Employees As of December 31, 2024, we employed 55 full-time employees. The following table sets forth the number of our full-time employees by function.
Subject to adjustment as described below, (a) the maximum aggregate number of shares that may be issued under the New 2022 EIP is 4,000,000 shares of Common Stock, (b) to the extent consistent with Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), Subject to the certain provisions of the New 2022 EIP, including but not limited to, the reorganizations, combinations, mergers, to the extent consistent with Section 422 of the Code, up to an aggregate of ten million (10,000,000) shares may be issued as ISOs under the New 2022 EIP; only employees of the Company or any parent or subsidiary shall be eligible for the grant of ISOs; for awards denominated in Shares and satisfied in cash, the maximum Award to any individual participant of the New 2022 EIP in the aggregate in any one fiscal year of the Company shall not exceed the Fair Market fair market value of one hundred (100,000) shares on the Grant Date.
Subject to adjustment as described below, (a) the maximum aggregate number of shares that may be issued under the New 2022 EIP is 25,000,000 shares of Common Stock, (b) to the extent consistent with Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), Subject to the certain provisions of the New 2022 EIP, including but not limited to, the reorganizations, combinations, mergers, to the extent consistent with Section 422 of the Code, up to an aggregate of 1,000,000 shares may be issued as ISOs under the New 2022 EIP; only employees of the Company or any parent or subsidiary shall be eligible for the grant of ISOs; for awards denominated in Shares and satisfied in cash.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth certain information regarding our directors and senior management, as well as employees upon whose work we are dependent, as of the date of this annual report.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth certain information regarding our directors and senior management as of the date of this Annual Report.
The grants to the Company’s executive officers and directors were as follows: ● Ruifeng Mu, Director, was granted 10,000 shares; ● Jin Yan, Director, was granted 10,000 shares ● Huidan Li, Co-chairman and director, was granted 10,000 shares The total compensation to Directors and Executives as a group is as follows: Directors and Executives Shares issued Total compensation (including cash) Sun Lei 100,000 2,280,000 Huidan Li 10,000 228,000 Ruifeng Mu 10,000 228,000 Jin Yan 10,000 228,000 2018 Equity Incentive Plan On December 24, 2018, the Board of Directors of the Company adopted the 2018 Equity Incentive Plan, or the 2018 Plan, pursuant to which the Company could offer up to two hundred thousand (200,000) shares of Common Stock as equity incentives to its directors, employees and consultants. 87 2022 Equity Incentive Plan On January 11, 2022, we terminated the 2018 equity incentive plan and adopted the new equity incentive plan (the “2022 Plan”).
The grants to the Company’s executive officers and directors were as follows: ● Ruifeng Mu, Director, was granted 2,500 shares; ● Jin Yan, Director, was granted 2,500 shares ● Huidan Li, Co-chairman and director, was granted 2,500 shares The total compensation to Directors and Executives as a group is as follows: Directors and Executives Shares issued Total compensation (including cash) Sun Lei 25,000 2,280,000 Huidan Li 2,500 228,000 Ruifeng Mu 2,500 228,000 Jin Yan 2,500 228,000 Equity Incentive Plans On December 24, 2018, the Board of Directors of the Company adopted the 2018 Equity Incentive Plan, or the 2018 Plan, for up to fifty thousand (50,000) shares of Common Stock as equity incentives to its directors, employees and consultants. 90 2022 Equity Incentive Plan On January 11, 2022, we terminated the 2018 equity incentive plan and adopted a new equity incentive plan (the “2022 Plan”) that provided for a maximum of 250,000 authorized for issuance.
All shares of preferred stock vote together with common stock on an as-converted basis (3) The percentage is calculated based upon Ms. Lei’s sole voting and dispositive power over 619,310 shares of common stock, including 303,000 shares of common stock issuable upon conversion of shares of Series A, C and D Preferred Stock
All shares of preferred stock beneficially owned by Ms. Lei vote together with common stock on an as-converted basis. (3) The percentage is calculated based upon Ms. Lei’s sole voting and dispositive power over 154,828 shares of Common stock, including 75,750 shares of Common stock issuable upon conversion of shares of Series A, C and D Preferred Stock. 94
NAME AGE POSITION Sun Lei 40 Chief Executive Officer, Co-chairwoman and Director Huidan Li 42 Co-chairman and Director Mu Ruifeng 60 Independent Director Baojun Zhu 47 Independent Director Jin Yan 54 Independent Director Ms. Sun Lei. Ms.
NAME AGE POSITION Sun Lei 41 Chief Executive Officer, Co-chairwoman and Director Huidan Li 43 Co-chairman and Director Mu Ruifeng 61 Independent Director Baojun Zhu 48 Independent Director Jin Yan 55 Independent Director Ms. Sun Lei. Ms.
The percentages below are calculated based on 6,063,192 shares of common stock issued and outstanding as of May 15, 2024.
The percentages below are calculated based on 4,040,952 shares of Common Stock issued and outstanding as of May 15, 2025.
Name Office, If Any Title of Class Amount and Nature of Beneficial Ownership Percent of Class (3) Officers and Directors Sun Lei Chief Executive Officer, Interim Chief Financial Officer, Co-Chairwoman and Director Common Stock 316,310 (1)(2) 9.7 % Huidan Li Co-Chairman Common Stock 30,000 * Baojun Zhu Director Common Stock 0 0 Mu Ruifeng Director Common Stock 10,000 * Jin Yan Director Common Stock 10,000 * All current officers and directors as a group (5 persons named above) Common Stock 366,310 (1)(2) 10.4 % (4) 5% Security Holders None * Less than 1% (1) Includes 20,989 shares of common stock held by Happy Brilliance Limited, a Cayman Islands company in which Sun Lei, our Chief Executive Officer, interim Chief Financial Officer, Co-Chairwoman and Director, has the sole voting and dispositive power 91 (2) Does not include (i)124,000 shares of common stock issuable upon conversion of 1,240,000 shares of Series A Preferred Stock; (ii) 75,000 shares of common stock issuable upon conversion of 150,000 shares of Series C Convertible Preferred Stock; and (iii) 104,000 shares of common stock issuable upon conversion of 80,000 shares of Series D Preferred Stock.
Name Office, If Any Title of Class Amount and Nature of Beneficial Ownership Percent of Class (3) Officers and Directors Sun Lei Chief Executive Officer, Interim Chief Financial Officer, Co-Chairwoman and Director Common Stock 79,078 (1)(2) 3.74 % Huidan Li Co-Chairman Common Stock 7,500 * Baojun Zhu Director Common Stock 0 0 Mu Ruifeng Director Common Stock 2,500 * Jin Yan Director Common Stock 2,500 * All current officers and directors as a group (5 persons named above) Common Stock 91,578 (1)(2) 5.95 % (4) * Less than 1% (1) Includes 5,247 shares of Common Stock held by Happy Brilliance Limited, a Cayman Islands company in which Sun Lei, our Chief Executive Officer, interim Chief Financial Officer, Co-Chairwoman and Director, has the sole voting and dispositive power.
Share Ownership The following table lists, as of May 15, 2024, the number of shares of common stock beneficially owned by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each of our directors (iii) each of our Named Executive Officers and (iv) all executive officers and directors as a group.
Share Ownership The following table lists, as of May 15, 2025, the number of shares of Common stock beneficially owned by (i) each person, entity or group each of our directors; (ii) each of our Named Executive Officers and (iii) all executive officers and directors as a group.
The New 2022 EIP On October 26, 2022, the Board terminated the 2022 Plan and adopted the New 2022 EIP with 4,000,000 maximum authorized shares of Common Stock for issuance. The following paragraphs summarize the terms of the New 2022 EIP Purpose.
On October 26, 2022, the Board terminated the 2022 Plan and adopted JX Luxventure Limited the New 2022 Equity Incentive Plan (the “New 2022 EIP”), which authorized 1,000,000 maximum shares of Common Stock for issuance.
Removed
We have advised the recipients of awards under our equity incentive plan to handle relevant foreign exchange matters in accordance with the Stock Incentive Plan Notice. However, we cannot guarantee that all employee awarded equity-based incentives can successfully register with SAFE in full compliance with the Stock Incentive Plan Notice.
Added
Between February 12, 2022, and October 25, 2022, the Company issued all of the 250,000 shares of Common Stock available for issuance under the 2022 Plan. The New 2022 EIP, as amended.
Removed
Board Diversity Matrix Board Diversity Matrix (as of December 31, 2023) Nasdaq’s recently adopted Board Diversity Rule is a disclosure standard designed to encourage a minimum board diversity objective for companies and provide stakeholders with consistent, comparable disclosures concerning a listed company’s current board composition.
Added
On May 7, 2025, the Company amended this plan by the Plan Amendment, to, among other things, (i) change the name of the plan from “JX Luxventure Limited New 2022 Equity Incentive Plan” to “JX Luxventure Group Inc.
Removed
A company that has five or fewer directors is required to have, or explain why it does not have, at least one director who self-identifies as female, an underrepresented minority, or LGBTQ+. Our current board composition is in compliance with these requirements.
Added
New 2022 Equity Incentive Plan”, to reflect the current name of the Company; (ii) increase the maximum number of shares authorized under the New 2022 EIP to 25,000,000 shares of Common Stock, and (ii) eliminate limitation on the maximum number of shares to be issued under the New 2022 EIP to any individual participant in any one fiscal year of the Company.
Removed
Each term used above and in the matrix below has the meaning given to it in Nasdaq Listing Rule 5605(f). The matrix below provides certain highlights of the composition of our Board members based on self-identification.
Added
The following paragraphs summarize the terms of the New 2022 EIP, as amended (the “New 2022 EIP”). Purpose.
Removed
Board Diversity Matrix Country of Principal Executive Offices China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law N Total Number of Directors 5 Part I: Gender Identity Female Male Non-Binary Did Not Disclose Gender Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 D.
Added
(2) Does not include (i) 31,000 shares of Common Stock issuable upon conversion of 1,240,000 shares of Series A Preferred Stock; (ii) 18,750 shares of Common Stock issuable upon conversion of 150,000 shares of Series C Convertible Preferred Stock; and (iii) 26,000 shares of Common Stock issuable upon conversion of 80,000 shares of Series D Preferred Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

1 edited+8 added−3 removed5 unchanged
Related Party Transactions On May 22, 2022, the Board granted 100,000 shares of the Company’s Common Stock to Sun Lei pursuant to the employment agreement between the Company and Sun Lei dated June 22, 2021 (the “2021 Employment Agreement”).
Related Party Transactions On May 22, 2022, the Board granted 25,000 shares of Common Stock to Sun Lei pursuant to the employment agreement between the Company and Sun Lei dated June 22, 2021 (the “2021 Employment Agreement”).
Removed
The 2021 Employment Agreement provided, in pertinent terms, that if the Company reaches its annual revenue of US$50,000,000, as reported in the Company’s 2021 annual report on Form 20-F for the fiscal year end December 31, 2021, Sun Lei will receive 100,000 shares of the Company’s Common Stock as her stock compensation.
Added
On August 23, 2024, the Company issued to Huidan Li, the Co-Chairman of the board of directors, the 2024 Original Note, in the principal amount of $3,000,000 in consideration of the continuous advances of funds to the Company by the Co-Chairman for a period of over two (2) years. On August 26, 2024, Mr.
Removed
The CEO Employment Agreement and the issuance of the Shares have been previously approved by the Board and by the written consent of a majority of stockholders of the voting power of the Company.
Added
Li sold, transferred, and assigned the 2024 Original Note and, collectively, all of his rights, title and interest in, to and under the 2024 Original Note to eight Assignees, pursuant to the Assignment Agreement among the Company, Mr.
Removed
C. Interests of Experts and Counsel Not applicable.
Added
Li as Assignor and the Assignees, and the Company issued to the Assignees promissory notes on the terms of the 2024 Original Note.
Added
Pursuant to the 2024 Exchange Agreement among the Company and the Assignees, on September 26, 2024, the Assignees canceled the total outstanding principal amount due under the promissory notes issued by the Company to the Assignees in exchange for the issuance of an aggregate of 1,000,000 shares (each Holder was issued 125,000 shares) of Series E Convertible Preferred Stock.
Added
On February 17, 2025, the Company issued a new promissory note (the “2025 Original Note”) to Mr. Li in the principal amount of $3,500,000, in consideration of funds advanced by Mr. Li to the Company. On April 21, 2025, Mr.
Added
Li transferred and assigned to six (6) investors (the “Assignees”) an aggregate of $1,380,000, representing a portion of the principal amount under the 2025 Original Note (the “Total Assigned Debt”), with each Assignee to be assigned a portion of the Total Assigned Debt equal to $230,000 (the “Assignment”), in consideration of the purchase price of $230,000 from each Assignee.
Added
Upon Mr. Li’s assignment of the Total Assigned Debt to Assignees, the Company issued to Mr. Li a new promissory note in principal amount of $2,120,000, representing the total remaining outstanding amount due to Mr. Li under the 2025 Original Note, on the terms of the 2025 Original Note.
Added
The Company also issued promissory notes to each Assignee in the principal amount of $230,000 (the “Investor Note”), recognizing each Assignee as the legal holder of the Assignment and the noteholder of the Investor Note. The terms of the Investor Note are the same as the terms of the 2025 Original Note issued by the Company to Mr. Li. C.

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