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JX Luxventure Group Inc.

JX Luxventure Group Inc.JXG決算レポート

Nasdaq · 非必須消費財 · 耐久消費財の卸売

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 — 2022 vs 2023

Top changes in JX Luxventure Group Inc.'s 2023 20-F

642 paragraphs added · 544 removed · 432 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] 1 B. Capitalization and Indebtedness 1 C. Reasons for the Offer and Use of Proceeds 1 D. Risk Factors 1 ITEM 4. INFORMATION ON THE COMPANY 36 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 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.
History and Development of the Company 36 B. Business Overview 40 C. Organizational Structure 63 D. Property, Plants and Equipment 63
History and Development of the Company 41 B. Business Overview 47 C. Organizational Structure 70 D. Property, Plants and Equipment 70

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

186 edited+120 added−36 removed333 unchanged
Although we believe our supply chain has capacity to support our current operation, we cannot guarantee our supply chain will be adequate to support our expanded business in the future. Thus, if we fail to manage our supply chain in line with our business expansion, our business, prospects, financial condition and results of operations may suffer.
Although we believe our supply chain has the capacity to support our current operation, we cannot guarantee our supply chain will be adequate to support our expanded business in the future. Thus, if we fail to manage our supply chain in line with our business expansion, our business, prospects, financial condition and results of operations may suffer.
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.
There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located in China.
There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located in China.
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.
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.
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.
So, it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States. 27 We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.
So, it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States. We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.
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. 35
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.
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.
While we currently hold all material licenses and permits required for our operations, we may be required to renew these licenses and permits upon their expiration or obtain new licenses or permits in the future as a result of our business expansion, changes of our operations, changes in laws and regulations applicable to us, or changes of interpretation from relevant authorities on such laws and regulations.
While we currently hold all licenses and permits required for our operations, we may be required to renew these licenses and permits upon their expiration or obtain new licenses or permits in the future as a result of our business expansion, changes of our operations, changes in laws and regulations applicable to us, or changes of interpretation from relevant authorities on such laws and regulations.
However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. 31 RISKS RELATED TO OUR SECURITIES The Nasdaq Capital Market imposes listing standards on our Common Stock that may be difficult to fulfill, thereby leading to a possible delisting of our Common Stock.
However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. RISKS RELATED TO OUR SECURITIES The Nasdaq Capital Market imposes listing standards on our Common Stock that may be difficult to fulfill, thereby leading to a possible delisting of our Common Stock.
Because the broker, not us, prepares this information, we would not be able to assure that such information is accurate, complete or current. 32 The market price of our Common Stock may be volatile or may decline regardless of our operating performance based on numerous factors, many of which are beyond our control.
Because the broker, not us, prepares this information, we would not be able to assure that such information is accurate, complete or current. The market price of our Common Stock may be volatile or may decline regardless of our operating performance based on numerous factors, many of which are beyond our control.
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.
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.
In addition, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention. You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the report based on foreign laws.
In addition, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention. 26 You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the report based on foreign laws.
A company chop or seal may serve as the legal representation of the company towards third parties even when unaccompanied by a signature. In order to secure the use of our chops and seals, we have established internal control procedures and rules for using these chops and seals.
A company chop or seal may serve as the legal representation of the company towards third parties even when unaccompanied by a signature. 34 In order to secure the use of our chops and seals, we have established internal control procedures and rules for using these chops and seals.
Accordingly, the forecasts of market growth should not be taken as indicators of our future growth. 12 We may be unable to establish and maintain an effective system of internal control over financial reporting, and, as a result, we may be unable to accurately report our financial results or prevent fraud.
Accordingly, the forecasts of market growth should not be taken as indicators of our future growth. We may be unable to establish and maintain an effective system of internal control over financial reporting, and, as a result, we may be unable to accurately report our financial results or prevent fraud.
You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.
Investors may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.
These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results. 18 A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition. The global macroeconomic environment is facing challenges.
These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results. A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition. The global macroeconomic environment is facing challenges.
In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial costs and diversion of resources and management attention. 21 Furthermore, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other countries.
In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial costs and diversion of resources and management attention. Furthermore, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other countries.
This situation will be costly, time consuming, and distract our management from growing our company. 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. 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.
As we continue to expand our cross-border merchandise and tourism business, our continued growth could strain our existing resources, and we could experience ongoing challenges, including: ● managing our operational, administrative and financial capabilities and other resources; ● managing our brand portfolio, including further expanding our products and services; ● expanding marketing channels and deepening end customer outreaches; ● staying abreast of the evolving industry demands and market developments and catering to end users’ changing tastes of our business customers; ● developing and applying technologies necessary to support our expanded operations; ● effectively managing our supply chain; ● responding to changes in the regulatory environment; ● exploring new market opportunities; and ● addressing other challenges resulting from our expansion.
As we continue to expand our cross-border merchandise and tourism business, our continued growth could strain our existing resources, and we could experience ongoing challenges, including: ● managing our operational, administrative and financial capabilities and other resources; ● managing our brand portfolio, including further expanding our products and services; ● expanding marketing channels and deepening end customer outreaches; ● staying abreast of the evolving industry demands and market developments and catering to end users’ changing tastes of our business customers; ● developing and applying technologies necessary to support our expanded operations; ● effectively managing our supply chain; ● responding to changes in the regulatory environment; ● exploring new market opportunities; and ● addressing other challenges resulting from our expansion.
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. 23 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. 28 Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
We may be subject to late fees and fines in relation to the underpaid employee benefits and under-withheld individual income tax, our financial condition and results of operations may be adversely affected. 25 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
We may be subject to late fees and fines in relation to the underpaid employee benefits and under-withheld individual income tax, our financial condition and results of operations may be adversely affected. 30 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
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. 19 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.
The material disruption of those platforms or any adverse changes on our cooperation with them could harm our business and operation. We use third party platforms operated by our business customers to promote and sell our products. Our growth is subject to aforesaid third party platforms’ traffic growth, account using terms and conditions and regulations, among other factors.
The material disruption of those platforms or any adverse changes on our cooperation with them could harm our business and operation. We use third party platforms operated by our business customers to promote and sell our products. Our growth is subject to aforesaid third party platforms’ traffic growth, account using terms and conditions and regulations, among other factors.
In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities.
In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities.
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. 2 Negative publicity about our brands, our business model or our products may materially and adversely affect our reputation, our business and the trading price of our shares, regardless of its accuracy.
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. 7 Negative publicity about our brands, our business model or our products may materially and adversely affect our reputation, our business and the trading price of our shares, regardless of its accuracy.
In addition to regulatory requirements, we may also modify our return policies from time to time, which may result in customers’ dissatisfaction or an increase in order cancelation or product returns rates. We rely on third-party product suppliers, manufacturers, logistics service providers and other vendors to serve our business customers.
In addition to regulatory requirements, we may also modify our return policies from time to time, which may result in customers’ dissatisfaction or an increase in order cancelation or product returns rates. We rely on third-party product suppliers, manufacturers, logistics service providers and other vendors to serve our business customers.
Because these statements and regulatory actions are new, it is highly uncertain (a) how soon legislative or administrative regulation-making bodies in China will respond to them, (b) what existing or new laws or regulations will be modified or promulgated, if any, or (c) what impact such modified or new laws and regulations will have on the Company’s daily business operations or our ability to accept foreign investments and continue listing our Common Stock on an U.S. securities exchange.
Because these statements and regulatory actions are new, it is highly uncertain (a) how soon legislative or administrative regulation-making bodies in China will respond to them, (b) what existing or new laws or regulations will be modified or promulgated, if any, or (c) what impact such modified or new laws and regulations will have on the Company’s daily business operations or our ability to accept foreign investments and continue listing our Common Stock on an U.S. securities exchange.
While we have adopted measures to protect the confidentiality of our customers’ information, including our internal control manual and the nondisclosure arrangements with our employees, there is no assurance that the steps taken by us will successfully prevent any leakage or misappropriation of confidential information of our customers.
While we have adopted measures to protect the confidentiality of our customers’ information, including our internal control manual and the nondisclosure arrangements with our employees, there is no assurance that the steps taken by us will successfully prevent any leakage or misappropriation of confidential information of our customers.
Any of the above may materially and adversely affect our business, financial condition and operating results. 5 If we fail to obtain requisite approvals or licenses or fail to comply with other regulatory requirements applicable to our operations, we may be subject to administrative penalties and our business and operating results could be adversely affected.
Any of the above may materially and adversely affect our business, financial condition and operating results. 10 If we fail to obtain requisite approvals or licenses or fail to comply with other regulatory requirements applicable to our operations, we may be subject to administrative penalties and our business and operating results could be adversely affected.
PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.
PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.
If these platforms’ traffic fails to grow in the future, our growth may slow down as well. If we breach the using terms of such platforms, the platform operators may decide at any time to curtail or inhibit our ability to use such platforms.
If these platforms’ traffic fails to grow in the future, our growth may slow down as well. If we breach the using terms of such platforms, the platform operators may decide at any time to curtail or inhibit our ability to use such platforms.
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. 4 Order cancelation as well as merchandise return and exchange policies may adversely affect our business and the results of operations.
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.
Furthermore, the HFCAA and related laws, which now require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years, may result in the delisting of our Company or the prohibition of trading in our securities in the future if the PCAOB is unable to inspect our accounting firm at such future time.
Furthermore, the HFCAA and related laws, which now require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years, may result in the delisting of our Company or the prohibition of trading in our securities in the future if the PCAOB is unable to inspect our accounting firm at such future time.
Any claims against us or our management, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention and resources or harm our brand equity. Through our network, we provide a wide variety of products that enable our customers to exchange information, conduct business, and engage in various online activities both domestically and internationally.
Any claims against us or our management, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention and resources or harm our brand equity. Through our network, we provide a wide variety of products that enable our customers to exchange information, conduct business, and engage in various online activities both domestically and internationally.
The recent joint statement by the SEC and the Public Company Accounting Oversight Board (the “PCAOB”), rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act and related regulations, all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
The recent joint statement by the SEC and the Public Company Accounting Oversight Board (the “PCAOB”), rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act and related regulations, all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
Failure to complete the SAFE registrations for our employee incentive plans after our listing may subject them to fines and legal sanctions, and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries’ ability to distribute dividends to us.
Failure to complete the SAFE registrations for our employee incentive plans after our listing may subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries’ ability to distribute dividends to us.
Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), and on December 29, 2022, the Consolidated Appropriations Act 2023 was signed into law, which contained, among other things, an identical provision to the AHFCAA, which reduces the number of consecutive non- inspection years required for triggering the prohibitions under the HFCAA from three years to two.
Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), and on December 29, 2022, the Consolidated Appropriations Act 2023 was signed into law, which contained, among other things, an identical provision to the AHFCAA, which reduces the number of consecutive non- inspection years required for triggering the prohibitions under the HFCAA from three years to two.
Although they are in the process of making foreign exchange registration, they may still face with the above said possible fines in accordance with the PRC Laws. Failure to make adequate contributions to various employee benefit plans and withhold individual income tax on employees’ salaries as required by PRC regulations may subject us to penalties.
Although they are in the process of making foreign exchange registration, they may still face with the above said possible fines in accordance with the PRC Laws. Failure to make adequate contributions to various employee benefit plans and withhold individual income tax on employees’ salaries as required by PRC regulations may subject us to penalties.
You may also have difficulty bringing an original action in the appropriate court of the Marshall Islands to enforce liabilities against us or any person based upon the U.S. federal securities laws.
They may also have difficulty bringing an original action in the appropriate court of the Marshall Islands to enforce liabilities against us or any person based upon the U.S. federal securities laws.
We rely on our technology infrastructure and operating systems to carry out the key aspects of our business, including identifying market trends in brands, selecting and partnering with quality brand partners, forecasting business customers’ demands, supporting our product supply chain, enabling effective marketing and distribution, and refining business customer services.
We rely on our technology infrastructure and operating systems to carry out the key aspects of our business, including identifying market trends in brands, selecting and partnering with quality brand partners, forecasting business customers’ demands, supporting our product supply chain, enabling effective marketing and distribution, and refining business customer services.
We may be a defendant in a number of lawsuits both in China and abroad, alleging copyright infringement based on content that is made available through our customers’ websites. There can be no assurance that we will not face litigation or regulatory enforcement actions in the future or that we will prevail in any litigation we may face.
We may be a defendant in a number of lawsuits both in China and abroad, alleging copyright infringement based on content that is made available through our customers’ websites. There can be no assurance that we will not face litigation or regulatory enforcement actions in the future or that we will prevail in any litigation we may face.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination. On June 22, 2021, the U.S.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination. On June 22, 2021, the U.S.
Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China based issuers.
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.
Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September 2008 and was amended in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts.
Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September 2008 and was amended in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts.
Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiaries’ ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends.
Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiary’s ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends.
The requirement of employee benefit contribution plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. Companies operating in China are also required to withhold individual income tax on employees’ salaries based on the actual salary of each employee upon payment.
The requirement of employee benefit contribution plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. Companies operating in China are also required to withhold individual income tax on employees’ salaries based on the actual salary of each employee upon payment.
We engage in cross border merchandise and tourism business and conduct substantially all of our operations in China; therefore, any deterioration of the PRC economy, decrease in disposable income and fear of a recession may lead to reductions of customers’ demand and their spending on fashion products with us.
We engage in cross border merchandise and tourism business and conduct substantially all of our operations in China; therefore, any deterioration of the PRC economy, decrease in disposable income and fear of a recession may lead to reductions of customers’ demand and their spending on fashion products with us.
China’s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business. Substantially all of our operations are located in China and substantially of our net revenues are derived from customers where the contracting entity is located in China.
China’s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business. Substantially all of our operations are located in China and substantially of our net revenues are derived from customers where the contracting entity is located in China.
In addition, the independent registered public accounting firm auditing the financial statements of a company that is not a non-accelerated filer, emerging growth company or smaller reporting company under Rule 12b-2 of the Exchange Act must also attest to the operating effectiveness of the company’s internal controls.
In addition, the independent registered public accounting firm auditing the financial statements of a company that is not a non-accelerated filer, emerging growth company or smaller reporting company under Rule 12b-2 of the Exchange Act must also attest to the operating effectiveness of the company’s internal controls.
In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37.
In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37.
Pursuant to the HFCAA, the PCOAB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China, because a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.
Pursuant to the HFCAA, the PCOAB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China, because a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.
A broker would be required to provide the bid and offer quotations and compensation information before effecting the transaction. This information must be contained on the customer’s confirmation. Generally, brokers are less willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements may make it more difficult for shareholders to purchase or sell our shares.
A broker would be required to provide the bid and offer quotations and compensation information before effecting the transaction. This information must be contained on the customer’s confirmation. Generally, brokers are less willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements may make it more difficult for shareholders to purchase or sell our shares.
The Chinese government exerts substantial influence over the manner in which the operating entities conduct their business activities, may intervene or influence such operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in such operations and the value of shares of our Common Stock, 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.
See “ Risks Related to Doing Business in China - Chinese government exerts substantial influence over the manner in which the operating entities conduct their business activities, may intervene or influence such operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in such operations and the value of shares of our Common Stock, 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.
In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over the PRC’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.
In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over the PRC’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.
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.
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.
These rules require, among other things, that any broker engaging in a purchase or sale of our securities provide its customers with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii) disclosure of the compensation of the broker and its salespersons in the transaction and (iv) monthly account statements showing the market values of our securities held in the customer’s accounts.
These rules require, among other things, that any broker engaging in a purchase or sale of our securities provide its customers with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii) disclosure of the compensation of the broker and its salespersons in the transaction and (iv) monthly account statements showing the market values of our securities held in the customer’s accounts.
If our shares were to trade on the over-the-counter market, selling our shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced.
If our shares were to trade on the over-the-counter market, selling our shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced.
On November 14, 2021, the CAC published the Regulations for the Administration of Network Data Security (Draft for Comments), or the Draft Administration Regulations on Cyber Data Security, which provide the circumstances under which data processors shall apply for cybersecurity review, including, among others, when the data processors who process personal information of at least one million users apply for a “foreign” listing.
On November 14, 2021, the CAC published the Regulations for the Administration of Network Data Security (Draft for Comments), or the Draft Administration Regulations on Cyber Data Security, which provide the circumstances under which data processors shall apply for cybersecurity review, including, among others, when the data processors who process personal information of at least one million users apply for a “foreign” listing.
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 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.
During the course of providing our services, we may have access to and be entrusted with information that is confidential in nature, such as information that relates to our customers’ systems, operations, raw data or affairs.
During the course of providing our services, we may have access to and be entrusted with information that is confidential in nature, such as information that relates to our customers’ systems, operations, raw data or affairs.
In particular, we face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data protection, and users’ attitude toward data privacy and protection. Many of these laws and regulations are subject to change and uncertain interpretation.
In particular, we face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data protection, and users’ attitude toward data privacy and protection. Many of these laws and regulations are subject to change and uncertain interpretation.
Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiary’s ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends.
Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiaries’ ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends.
Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an “Indirect Transfer”, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority.
Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an “Indirect Transfer”, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority.
Our success largely depends on our ability to consistently gauge business customers’ tastes and market trends, provide a balanced assortment of merchandise and source brands that satisfies business customer demands in a timely manner.
Our success largely depends on our ability to consistently gauge business customers’ tastes and market trends, provide a balanced assortment of merchandise and source brands that satisfies business customer demands in a timely manner.
Our customers may use our platform and products in violation of applicable law or in violation of our terms of service or the customer’s own policies. The existing laws relating to the liability of providers of online products and services for activities of their users are highly unsettled and in flux both within China and internationally.
Our customers may use our platform and products in violation of applicable law or in violation of our terms of service or the customer’s own policies. The existing laws relating to the liability of providers of online products and services for activities of their users are highly unsettled and in flux both within China and internationally.
To accommodate the Company’s growth, we will need to implement a variety of new and upgraded operational and financial systems, procedures, and controls, including improvements to our accounting and other internal management systems, by dedicating additional resources to our reporting and accounting function and improvements to our record keeping and contract tracking system.
To accommodate the Company’s growth, we will need to implement a variety of new and upgraded operational and financial systems, procedures, and controls, including improvements to our accounting and other internal management systems, by dedicating additional resources to our reporting and accounting function and improvements to our record keeping and contract tracking system.
In addition, the Data Security Law provides a national security review procedure for data activities that may affect national security, and imposes export restrictions on certain data and information. 16 On December 28, 2021, the Cyberspace Administration of China (the “CAC”), together with several other governmental authorities, jointly released the Cybersecurity Review Measures, which took effect on February 15, 2022.
In addition, the Data Security Law provides a national security review procedure for data activities that may affect national security, and imposes export restrictions on certain data and information. On December 28, 2021, the Cyberspace Administration of China (the “CAC”), together with several other governmental authorities, jointly released the Cybersecurity Review Measures, which took effect on February 15, 2022.
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. 26 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. 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%.
The HFCAA, among other things, directs the SEC to prohibit trading on U.S. stock exchanges and in the U.S. over-the-counter markets the securities of foreign-based companies if their financial statements are audited by accounting firms that the PCAOB determines it has been unable to inspect or investigate completely for a period of two consecutive audit years (“Non-Inspection Years”), because of a position taken by the authorities in a foreign jurisdiction in which the accounting firms are based (each accounting firm so determined by the PCAOB, a “PCAOB-Identified Firm”).
The HFCAA, among other things, directs the SEC to prohibit trading on U.S. stock exchanges and in the U.S. over-the-counter markets the securities of foreign-based companies if their financial statements are audited by accounting firms that the PCAOB determines it has been unable to inspect or investigate completely for a period of two consecutive audit years (“Non-Inspection Years”), because of a position taken by the authorities in a foreign jurisdiction in which the accounting firms are based (each accounting firm so determined by the PCAOB, a “PCAOB-Identified Firm”).
We might also be involved in governmental investigations of our business operation in the future. Any claims against us, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention and resources or harm our brand equity.
We might also be involved in governmental investigations of our business operation in the future. Any claims against us, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention and resources or harm our brand equity.
If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims. We may also be prohibited from using such intellectual property or relevant content.
If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims. We may also be prohibited from using such intellectual property or relevant content.
The PRC government also exercises significant control over China’s economic growth through allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.
The PRC government also exercises significant control over China’s economic growth through allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.
On June 10, 2021, the Standing Committee of the National People’s Congress of China promulgated the Data Security Law, which took effect in September 2021. The Data Security Law sets forth data security and privacy related compliance obligations of entities and individuals carrying out data related activities.
On June 10, 2021, the Standing Committee of the National People’s Congress of China promulgated the Data Security Law, which took effect in September 2021. The Data Security Law sets forth data security and privacy related compliance obligations of entities and individuals carrying out data related activities.
However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce new measures that will have a negative effect on us. China’s social and political conditions may change and become unstable.
However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce new measures that will have a negative effect on us. China’s social and political conditions may change and become unstable.
Furthermore, a third party may take advantage of the “first-to-file” trademark registration system in China to register our brands in bad faith, which will cause us to incur additional costs for legal actions. Moreover, confidentiality obligations may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.
Furthermore, a third party may take advantage of the “first-to-file” trademark registration system in China to register our brands in bad faith, which will cause us to incur additional costs for legal actions. Moreover, confidentiality obligations may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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As of the date of this Annual Report, 100% of the Purchased Shares were released from escrow under this Stock Purchase Agreement. 36 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. On June 21, 2021, the Company further amended the Restated Articles by filing the Articles of Amendment with the Registrar of the Corporation.
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. 37 On April 9, 2022, the Company dismissed its independent registered public accounting firm, WWC, P.C.
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.
As part of the restructuring, due to the restriction of foreign ownership by the relevant laws and regulations of the People’s Republic of China, namely Provisions on Administration of Foreign Invested Telecommunications Enterprise (外商投资电信企业管理规定), we divested FCEC under a Shares Transfer Agreement with a third party. FCEC represented less than 5% of our total revenues.
As part of the restructuring, due to the restriction of foreign ownership by the relevant laws and regulations of the People’s Republic of China, namely Provisions on Administration of Foreign Invested Telecommunications Enterprise (外商投资电信企业管理规定), we divested FCEC under a Shares Transfer Agreement with a third party. FCEC represented less than 5% of our total revenues.
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 the NASDAQ Stock Market on a split-adjusted basis when the market opened on February 9, 2017.
The Stock Purchase transaction was closed on December 21, 2020. Pursuant to the term of the Stock Purchase Agreement, the Purchased Shares were held in escrow by an escrow agent to secure Ms. Sun’s obligations under the Stock Purchase Agreement and released in every 6 months, pursuant to a vesting schedule set forth in the Stock Purchase Agreement.
The Stock Purchase transaction was closed on December 21, 2020. Pursuant to the term of the Stock Purchase Agreement, the Purchased Shares were held in escrow by an escrow agent to secure Ms. Sun’s obligations under the Stock Purchase Agreement and released in every 6 months, pursuant to a vesting schedule set forth in the Stock Purchase Agreement.
As further inducement of the Company to enter into the Stock Purchase Agreement and to sell the Shares to the Purchaser on the terms of the Stock Purchase Agreement, on the Closing, the Purchaser and the Company entered into and executed a Pledge and Security Agreement (the “Pledge Agreement”), pursuant to which the Purchaser, as the Borrower under the Note, granted the Company a first priority security interest in the Shares of Hongri.
As further inducement of the Company to enter into the Stock Purchase Agreement and to sell the Shares to the Purchaser on the terms of the Stock Purchase Agreement, on the Closing, the Purchaser and the Company entered into and executed a Pledge and Security Agreement (the “Pledge Agreement”), pursuant to which the Purchaser, as the Borrower under the Note, granted the Company a first priority security interest in the Shares of Hongri.
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.
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.
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”).
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”).
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.
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.
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.
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.
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.
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.
We were originally organized under the name “Acquisition Corp.” for the purpose of acquiring through a merger, capital stock exchange, asset acquisition, stock purchase, or similar acquisition transaction, one or more operating businesses or assets.
We were originally organized under the name “Acquisition Corp.” for the purpose of acquiring through a merger, capital stock exchange, asset acquisition, stock purchase, or similar acquisition transaction, one or more operating businesses or assets.
The Share Exchange transaction was closed on December 21, 2020 and as a result, Flower Crown is now our wholly-owned subsidiary. 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, which wholly owns Flower Crown (China) Holding Group Co., Limited, a limited company incorporated in Hong Kong on May 24, 2018 (“Flower Crown HK”).
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”).
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”).
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.
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.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company We are a Republic of the Marshall Islands company incorporated under the Marshall Islands Business Corporations Act (“BDA”) on January 26, 2012.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company We are a Republic of the Marshall Islands company incorporated under the Marshall Islands Business Corporations Act (“BDA”) on January 26, 2012.
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.
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.
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 current name “JX Luxventure Limited” and restating all provisions set forth in the Certificates of Designation of Preferred Stock.
On June 22, 2022, the Board authorized a share repurchase program of up to US$5,000,000 of the Company’s common stock from time to time during a 12-month period by Mr. Lei, our Chief Executive Officer of Company (the “Share Repurchase Program”). Pursuant to the Repurchase Program, Mrs.
On June 22, 2022, the Board authorized a share repurchase program of up to US$5,000,000 of the Company’s common stock from time to time during a 12-month period by Mr. Lei, our Chief Executive Officer of Company (the “Share Repurchase Program”). Pursuant to the Repurchase Program, Mrs.
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, 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”).
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.
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.
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 (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 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 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 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” (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 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.
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 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. On April 27, 2023, the Company received a letter from Nasdaq granting the appeal and scheduling the hearing for May 25, 2023.
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.
Following the reorganization, our corporate structure between December 13, 2021 and October 19, 2022 was as follows: 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 1,000,000 shares of our Common Stock that may be issued under the 2022 Plan.
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 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 “
(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”) 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”).
(“Beijing Heyang”) 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 no longer operate those entities through a VIE structure and are now the indirect sole shareholder of JX Hainan Digital and Beijing Heyang.
(“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.
Jin Xuan Luxury Tourism wholly owns two subsidiaries, namely Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd., a limited company incorporated on July 17, 2020 in P.R.China (“Flower Crown China”), and Beijing Heyang International Travel Service Co., Ltd., a limited company incorporated on March 29, 2018 in P.R.China (“Heyang Travel”).
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”).
Currently, the Company has the following corporate structure: 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. 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.
On the same date, the holders of 75% of the total issued and outstanding capital stock of the Company entitled to vote therein, acting by written consent, approved and authorized the terms and provisions of the New 2022 EIP, in accordance with the applicable provisions of the BCA and the Company’s Bylaws. 39 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 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.
On July 12, 2022, the Company entered into a new Employment Agreement with Sun Lei (the “2022 Employment Agreement”). The 2022 Employment Agreement has a term of one (1) year.
On July 12, 2022, the Company entered into a new Employment Agreement with Sun Lei (the “2022 Employment Agreement”) for a one (1) year term, pursuant to which Sun Lei received compensation of USD1.00 but no stock compensation.
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, 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 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”).
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”).
As of the date of this Annual Report, the Purchaser made two payments in the amount of $3,000,000, as required under the Note. Prior to the Closing, Hongri International was a wholly-owned subsidiary of the Company through which the Company operated its menswear business.
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.
The address of the Company’s principal executive office is 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 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”).
The address of the Company’s principal executive office is 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.
Flower Crown HK, in turn, wholly owns all of the share capital of Kim Hyun Technology (Tianjin) Co., Ltd, a wholly foreign-owned enterprise incorporated on July 23, 2020 in China (“Kim Hyun Tianjin” or “WFOE”).
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”).
Removed
Kim Hyun Tianjin, through a series of contractual arrangements, manages and controls our operating entity, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, a limited company incorporated on August 4, 2016 in P.R.China (“Jin Xuan Luxury Tourism”).
Added
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”).
Removed
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.
Added
On the same date, the holders of 75% of the total issued and outstanding capital stock of the Company entitled to vote therein, acting by written consent, approved and authorized the terms and provisions of the New 2022 EIP, in accordance with the applicable provisions of the BCA and the Company’s Bylaws.
Removed
Pursuant to the terms of the 2022 Employment Agreement, Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the amount of which will be based upon the Company’s achievements, as to be reported on this Annual Report for the fiscal year ended December 22, 2022.
Added
On October 19, 2022, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Shenzhen Zhongjiyingfeng Investment Co., Ltd.
Removed
Company Revenue Number of Common Stock US$59,000,0000 - US$99,999,999 2,500 Shares US$100,000,000 or more 5,000 Shares Profit (Loss) Margin from Operation A 5% - 9% improvement compared to 2021 5,000 Shares A 10% - 19% improvement compared to 2021 7,5000 Shares A 20% or more improvement compared to 2021 10,000 Shares Profit from Non-Menswear operation Achieve profitability on an adjusted basis 5,000 Shares The 2022 Employment Agreement has been approved by unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital stock of the Company. 38 Recent Developments On October 19, 2022, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Shenzhen Zhongjiyingfeng Investment Co., Ltd.
Added
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.
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.
Added
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.
Removed
On March 24, 2023, the Board and holders of a majority of the Company’s voting power of the outstanding capital stock, approved, by written consent in lieu of a meeting (a) a reverse stock split of the Company’s outstanding common stock, $0.0001 par value per share (the “Common Stock”) in a ratio of not less than 1-for-5 and not more than 1-for-15 (the “Split Range”) and granted the Board the ultimate authority to determine the exact split ratio of the reverse stock split within the Split Range, and (b) the form, terms, and provisions of an Amendment to the Amended and Restated Articles of Incorporation (the “Amendment”).
Added
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.
Removed
This hearing request will stay the suspension of the Company’s securities and the filing of Form 25-NSE pending the Nasdaq Hearings Panel’s decision. On May 10, 2023, our Common Stock traded for over $1.00 for ten consecutive business days.
Added
On October 8, 2023, the Company sold 100% ownership in Beijing Heyang International Travel Services Co., Ltd, a PRC subsidiary of JX Luxury Tourism, and its indirect PRC operating subsidiary, to a non-related third party for RMB1.
Removed
We will request the Hearing Panel to evaluate the Company’s compliance with the Minimum Bid Requirement and other continued listing requirements for trading on the Nasdaq Capital Market.
Added
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.
Removed
However, there is no assurance that Nasdaq Qualification and the Hearing Panel determine that as of the date of this Annual Report, the Company is in full compliance with all continued listing requirements.
Added
(“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.
Added
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.
Added
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

167 edited+70 added−60 removed200 unchanged
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs Simplified approach For trade receivables that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs Simplified approach For trade receivables that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs.
Our comprehensive process for curating these luxury travel packages includes the following key steps: ● Tailored Travel Packages : We carefully design travel packages that cater to diverse consumer interests and preferences, ensuring our clients can offer unique, memorable experiences to their end-users. ● Strategic Partnerships : We forge strong relationships with airlines and other travel industry stakeholders, enabling us to secure competitive pricing for our clients. ● Cutting-Edge Technology : Our software solution streamlines the booking and management processes for our clients, enhancing the overall travel experience for their end-users. ● Procurement of Luxury Assets : We carefully select and procure non-refundable time allocations from our exclusive network of luxury service providers, including top-tier automobile and yacht companies. ● Package Design and Curation : Our team of experienced professionals thoughtfully combines these luxury assets to create unique, all-encompassing luxury experiences tailored to the diverse preferences and expectations of our clients’ end-users. ● Supply and Distribution : We efficiently supply these high-end travel products to our business clients, ensuring seamless integration with their online platforms and streamlined distribution to their end-users.
Our comprehensive process for curating these luxury travel packages includes the following key steps: ● Tailored Travel Packages : We carefully design travel packages that cater to diverse consumer interests and preferences, ensuring our clients can offer unique, memorable experiences to their end-users. ● Strategic Partnerships : We forge strong relationships with airlines and other travel industry stakeholders, enabling us to secure competitive pricing for our clients. ● Cutting-Edge Technology : Our software solution streamlines the booking and management processes for our clients, enhancing the overall travel experience for their end-users. ● Procurement of Luxury Assets : We carefully select and procure non-refundable time allocations from our exclusive network of luxury service providers, including top-tier automobile and yacht companies. ● Package Design and Curation : Our team of experienced professionals thoughtfully combines these luxury assets to create unique, all-encompassing luxury experiences tailored to the diverse preferences and expectations of our clients’ end-users. ● Supply and Distribution : We efficiently supply these high-end travel products to our business clients, ensuring seamless integration with their online platforms and streamlined distribution to their end-users.
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. 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. 57 Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in the PRC.
Our Strategy To achieve this goal, we implement the following strategy: ● Strategic Partnerships : We continuously seek new opportunities to forge mutually beneficial partnerships with airlines and other stakeholders in the travel industry, further enhancing our service offerings. ● Technology Advancements : Our investment in cutting-edge software solutions enables us to streamline processes, optimize pricing, and ultimately deliver superior travel experiences to our clients’ end-users. ● Customer Support : We prioritize providing high-quality customer support, ensuring that our business clients receive the assistance they need to address any challenges that may arise during their partnership with us. ● Market Analysis : Our team of experts constantly monitors market trends and industry developments, allowing us to adapt and innovate our offerings to meet the evolving needs of our clients.
Our Strategy To achieve this goal, we implement the following strategy: ● Strategic Partnerships : We continuously seek new opportunities to forge mutually beneficial partnerships with airlines and other stakeholders in the travel industry, further enhancing our service offerings. ● Technology Advancements : Our investment in cutting-edge software solutions enables us to streamline processes, optimize pricing, and ultimately deliver superior travel experiences to our clients’ end-users. ● Customer Support : We prioritize providing high-quality customer support, ensuring that our business clients receive the assistance they need to address any challenges that may arise during their partnership with us. ● Market Analysis : Our team of experts constantly monitors market trends and industry developments, allowing us to adapt and innovate our offerings to meet the evolving needs of our clients.
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. 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. 76 C. Research and Development, Patents and Licenses, Etc. Our industry is characterized by rapid technological change, evolving industry standards and changing customer demands.
Loss for the year increased from 2021 to 2022 mainly due to the following reasons: (1) increment expenses for share-based compensations to employees, Directors and managements of $48.8 million; (2) by netting of the decrease of loss on discontinued operations of 11.8 million, presenting a decrease from $29.9 million in 2021 to $18.1 million in 2022.
Loss for the year increased from 2021 to 2022 mainly due to the following reasons: (1) increment expenses for share-based compensations to employees, Directors and managements of $48.8 million; (2) by netting of the decrease of loss on discontinued operations of 11.8 million, presenting a decrease from $29.9 million in 2021 to $18.1 million in 2022. B.
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.
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.
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. G.
In this case the tax is also recognized in other comprehensive income or directly in equity, respectively. 75 The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income.
In this case the tax is also recognized in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income.
Profit for the year We had a loss of $73.5 million in 2022 as compared to a loss of $37.2 million in 2021, representing an increase of loss of $36.3 million or 97%. Net margin was -93% for the year ended December 31, 2022, compared to -69% for the year ended December 31, 2021.
We had a loss of $73.5 million in 2022 as compared to a loss of $37.2 million in 2021, representing an increase of loss of $36.3 million or 97%. Net margin was -93% for the year ended December 31, 2022, compared to -69% for the year ended 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. 40 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. 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.
Our Competitive Strengths and Growth Strategy The key aspects of our cross-border Products Supply strategy include: ● Rigorous Supplier Selection : We prioritize building relationships with reputable suppliers that consistently deliver high-quality products. ● Extensive Product Offerings : Our diverse product range is designed to cater to the varying needs and preferences of our clients’ end-users. ● Competitive Pricing : Our focus on maintaining cost-effective supply chains enables us to provide our clients with attractive pricing structures, ensuring their success in the market.
Our Competitive Strengths and Growth Strategy The key aspects of our cross-border Products Supply strategy include: ● Rigorous Supplier Selection : We prioritize building relationships with reputable suppliers that consistently deliver high-quality products. ● Extensive Product Offerings : Our diverse product range is designed to cater to the varying needs and preferences of our clients’ end-users. ● Competitive Pricing : Our focus on maintaining cost-effective supply chains enables us to provide our clients with attractive pricing structures, ensuring their success in the market.
However, our management will closely monitor price changes in the Chinese economy and the apparel industry and continually maintain effective cost controls in operations. Seasonality Our business, like that of many retailers, is seasonal.
However, our management will closely monitor price changes in the Chinese economy and the apparel industry and continually maintain effective cost controls in operations. 77 Seasonality Our business, like that of many retailers, is seasonal.
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. 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. 70 Flexibility and sustainability of our product supply chain.
The effective interest rate amortization is included in finance costs in the income statement. Financial instruments – derecognition of financial liabilities A financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires.
The effective interest rate amortization is included in finance costs in the income statement. Financial instruments – derecognition of financial liabilities A financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires.
We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes, which may have, or have had in the recent past, material adverse effects on our financial position or profitability. 46 Intellectual Property Our business is dependent on a combination of trademarks, domain names, trade names, trade secrets and other proprietary rights in order to protect our intellectual property rights.
We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes, which may have, or have had in the recent past, material adverse effects on our financial position or profitability. 53 Intellectual Property Our business is dependent on a combination of trademarks, domain names, trade names, trade secrets and other proprietary rights in order to protect our intellectual property rights.
Financial instruments – impairment of financial assets The Group recognizes an allowance for ECLs for all debt instruments not held at fair value through profit or loss.
Financial instruments – impairment of financial assets The Group recognizes an allowance for ECLs for all debt instruments not held at fair value through profit or loss.
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. 41 On March 10, 2022, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd.
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.
Ltd. and Southern Airlines cross-border e-commerce. 44 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.
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.
The PRC agent must, on behalf of the PRC residents who have the right to exercise the employee stock options, apply to the State Administration of Foreign Exchange or its local branches for an annual quota for the payment of foreign currencies in connection with the PRC residents’ exercise of the employee stock options.
The PRC agent must, on behalf of the PRC residents who have the right to exercise the employee stock options, apply to the State Administration of Foreign Exchange or its local branches for an annual quota for the payment of foreign currencies in connection with the PRC residents’ exercise of the employee stock options.
In parallel, the Company’s management continually monitors its capital structure and operating plans and evaluates various potential funding alternatives that may be needed in order to finance the Company research and development activities, general and administrative expenses and growth strategy. These alternatives include raising funds through public or private equity markets and either from institutional or retail investors.
In parallel, the Company’s management continually monitors its capital structure and operating plans and evaluates various potential funding alternatives that may be needed in order to finance the Company research and development activities, general and administrative expenses and growth strategy. These alternatives include raising funds through public or private equity markets and either from institutional or retail investors.
We rely on our technology infrastructure and operating systems to carry out the key aspects of our business, including identifying market trends in brands, selecting and partnering with quality brand partners, assisting in product designs for our private label brands, forecasting customers’ demands, supporting our product supply chain, enabling effective marketing and distribution, and refining customer services.
We rely on our technology infrastructure and operating systems to carry out the key aspects of our business, including identifying market trends in brands, selecting and partnering with quality brand partners, assisting in product designs for our private label brands, forecasting customers’ demands, supporting our product supply chain, enabling effective marketing and distribution, and refining customer services.
Once the Scheme has been funded via contributions by the Group’s participating subsidiaries, the local municipal government takes responsibility for the retirement benefits obligations of all existing and future retired employees of those subsidiaries located in the PRC; accordingly, the only obligation of the Group with respect to the Scheme is to pay the on-going required contributions as long as the employees maintain employment with the Group.
Once the Scheme has been funded via contributions by the Group’s participating subsidiaries, the local municipal government takes responsibility for the retirement benefits obligations of all existing and future retired employees of those subsidiaries located in the PRC; accordingly, the only obligation of the Group with respect to the Scheme is to pay the on-going required contributions as long as the employees maintain employment with the Group.
Pursuant to the Foreign Investment Law, “foreign investment” refers to investment activities conducted by foreign investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC, which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or jointly with other investors, (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and interests of enterprises within the PRC, (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors, and (ⅳ) investment in other methods as specified in laws, administrative regulations, or as stipulated by the State Council.
Pursuant to the Foreign Investment Law, “foreign investment” refers to investment activities conducted by foreign investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC, which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or jointly with other investors, (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and interests of enterprises within the PRC, (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors, and (ⅳ) investment in other methods as specified in laws, administrative regulations, or as stipulated by the State Council.
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.
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.
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. 80 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. 83 General approach ECLs are recognized in two stages.
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 U.S.
Pursuant to PBOC Notice No. 9, within a transition period of one year from January 12, 2017, the foreign-invested enterprises may adopt the currently valid foreign debt management mechanism (the “ Current Foreign Debt Mechanism ”), or the mechanism as provided in PBOC Notice No. 9 (the “ Notice No. 9 Foreign Debt Mechanism ”), at their own discretions.
Pursuant to PBOC Notice No. 9, within a transition period of one year from January 12, 2017, the foreign-invested enterprises may adopt the currently valid foreign debt management mechanism (the “ Current Foreign Debt Mechanism ”), or the mechanism as provided in PBOC Notice No. 9 (the “ Notice No. 9 Foreign Debt Mechanism ”), at their own discretions.
In 2022, the revenue of Cross board merchandise segment decreased to $83, by $2,222,699 or 99.9% from $2,222,782 in 2021. The decrease is mainly due to our efforts and strategy shift to find other profitable sub-segments in 2022 and China’s continuing lock-down enforcement of Covid-19 policy, which resulted in less products sales in 2022.
In 2022, the revenue of Cross board merchandise segment decreased to $83, by $2,222,699 or 99.9% from $2,222,782 in 2021. The decrease is mainly due to our efforts and strategy shift to find other profitable sub-segments in 2022 and China’s continuing lock-down enforcement of Covid-19 policy, which resulted in less products sales in 2022.
Under these rules, Renminbi is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account items, such as direct investment, loan or investment in securities outside China, unless a prior approval of the State Foreign Exchange Administration of the PRC (the “SAFE”) or its local counterparts is obtained.
Under these rules, Renminbi is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account items, such as direct investment, loan or investment in securities outside China, unless a prior approval of the State Foreign Exchange Administration of the PRC (the “SAFE”) or its local counterparts is obtained.
It requires the Company’s management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. The Company has identified certain accounting policies that are significant to the preparation of Company’s financial statements.
It requires the Company’s management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. The Company has identified certain accounting policies that are significant to the preparation of Company’s financial statements.
We cannot determine in advance the extent to which certain jurisdictions may require us to pay corporate income tax or to make payments in lieu of such tax. In addition, payments due to us from our subsidiaries’ customers may be subject to tax claims.
We cannot determine in advance the extent to which certain jurisdictions may require us to pay corporate income tax or to make payments in lieu of such tax. In addition, payments due to us from our subsidiaries’ customers may be subject to tax claims.
Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures ” for a discussion of our capital expenditures. Our web site address is http://www.jxluxventure.com. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report. B.
Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures ” for a discussion of our capital expenditures. Our web site address is http:// www.jxluxventure.com/en/. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report. B.
The HFCAA and AHFCAA As part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, on May 20, 2020, the U.S.
The HFCAA and AHFCAA As part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, on May 20, 2020, the U.S.
The change was mainly due to the increase of the company’s share-based compensation paid to employees, officers and directors of the company in year 2022, which was $53.3 million in 2022 compared to $4.4 million in 2021, representing an increase of $48.8 million.
The change was mainly due to the increase of the Company’s share-based compensation paid to employees, officers and directors of the company in year 2022, which was $53.3 million in 2022 compared to $4.4 million in 2021, representing an increase of $48.8 million.
When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognizes an associated liability.
When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognizes an associated liability.
The M&A Rules, among other things, requires offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
The M&A Rules, among other things, requires offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
Criminal Law of the PRC, as amended on December 26, 2020, prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained in performing duties or providing services or obtaining such information through theft or other illegal ways.
Criminal Law of the PRC, as amended on December 26, 2020, prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained in performing duties or providing services or obtaining such information through theft or other illegal ways.
We believe that we should not be subject to tax under the laws of various countries, other than the United States, in which our subsidiaries’ vessels conduct activities or in which our subsidiaries’ customers are located.
We believe that we should not be subject to tax under the laws of various countries, other than the United States, in which our subsidiaries’ vessels conduct activities or in which our subsidiaries’ customers are located.
In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.
In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.
Our success largely depends on our ability to consistently gauge customers’ tastes and market trends, provide a balanced assortment of merchandize and source brands that satisfies customer demands in a timely manner.
Our success largely depends on our ability to consistently gauge customers’ tastes and market trends, provide a balanced assortment of merchandize and source brands that satisfies customer demands in a timely manner.
The focus on our technology solution has enabled us to achieve significant growth since 2020 by facilitating tourism cross-border commerce and offering services in tourism and airline tickets. Our website is www.jxluxventure.com. Our Mission Our mission is to provide outstanding value to our clients and to enhance their satisfaction.
The focus on our technology solution has enabled us to achieve significant growth since 2020 by facilitating tourism cross-border commerce and offering services in tourism and airline tickets. Our Mission Our mission is to provide outstanding value to our clients and to enhance their satisfaction.
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.
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.
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.
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.
Upon acquisition of Flower Crown, we have applied for several trademarks, all of which are pending approval by the Trademark Office of China National Intellectual Property Administration (“Trademark Office”). Set forth below is a detailed description of our trademarks: Country Trademark Trademark No.
Upon acquisition of Flower Crown, we have applied for several trademarks, all of which are pending approval by the Trademark Office of China National Intellectual Property Administration (“Trademark Office”). Set forth below is a detailed description of our trademarks: Country Trademark Trademark No.
REGULATIONS RELATING TO PRIVACY PROTECTION The Civil Code of the PRC, issued by the National People’s Congress of the PRC on May 28, 2020 and effective from January 1, 2021, provides legal basis for privacy and personal information infringement claims under the Chinese civil laws.
REGULATIONS RELATING TO PRIVACY PROTECTION The Civil Code of the PRC, issued by the National People’s Congress of the PRC on May 28, 2020 and effective from January 1, 2021, provides legal basis for privacy and personal information infringement claims under the Chinese civil laws.
On March 30, 2015, SAFE promulgated the Circular on Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises (the “ SAFE Circular 19 ”), which came into effect from June 1, 2015.
On March 30, 2015, SAFE promulgated the Circular on Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises (the “ SAFE Circular 19 ”), which came into effect from June 1, 2015.
Investing Activities Net cash used in investing activities in fiscal year 2022 was $12.3 million, compared with $3.3 million net cash used in investing activities in 2021. The net cash used in investing activities in 2022 mainly resulted from cash decreased due to disposal of discontinued operations.
Net cash used in investing activities in fiscal year 2022 was $9.4 million, compared with $3.3 million net cash used in investing activities in 2021. The net cash used in investing activities in 2022 mainly resulted from cash decreased due to disposal of discontinued operations.
REGULATIONS RELATING TO FOREIGN EXCHANGE AND DIVIDEND DISTRIBUTION Regulations on Foreign Exchange The fundamental regulation governing foreign exchange in China is the Foreign Exchange Administration Rules of the PRC (the “Foreign Exchange Administration Rules”), promulgated by the State Council on January 29, 1996 and most recently amended on August 5, 2008.
REGULATIONS RELATING TO FOREIGN EXCHANGE AND DIVIDEND DISTRIBUTION Regulations on Foreign Exchange The fundamental regulation governing foreign exchange in China is the Foreign Exchange Administration Rules of the PRC (the “Foreign Exchange Administration Rules”), promulgated by the State Council on January 29, 1996 and most recently amended on August 5, 2008.
Property, plant and equipment Property, plant and equipment (“PPE”) including buildings held for use in the production or supply of goods or services, or for administrative purposes other than construction in progress are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.
Property, plant and equipment Property, plant and equipment (“PPE”) including buildings held for use in the production or supply of goods or services, or for administrative purposes other than construction in progress are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.
On October 23, 2019, SAFE issued the Circular on Further Promoting the Facilitation of Cross- border Trade and Investment (the “ SAFE Circular 28 ”), which came into effect on the same day.
On October 23, 2019, SAFE issued the Circular on Further Promoting the Facilitation of Cross- border Trade and Investment (the “ SAFE Circular 28 ”), which came into effect on the same day.
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 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”).
On July 30, 2021, the State Council promulgated the Regulations on Security Protection of Critical Information Infrastructures, which took effect on September 1, 2021 and provide that “critical information infrastructures” refer to any important network facilities or information systems of important industries or fields such as public communication and information service, energy, communications, water conservation, finance, public services, e-government affairs and national defense science, and any other important network facilities or information systems which may endanger national security, people’s livelihood and public interest in case of damage, function loss or data leakage.
On July 30, 2021, the State Council promulgated the Regulations on Security Protection of Critical Information Infrastructures, which took effect on September 1, 2021 and provide that “critical information infrastructures” refer to any important network facilities or information systems of important industries or fields such as public communication and information service, energy, communications, water conservation, finance, public services, e-government affairs and national defense science, and any other important network facilities or information systems which may endanger national security, people’s livelihood and public interest in case of damage, function loss or data leakage.
We have initially adopted an equity incentive plan in 2018, under which we have the discretion to award incentives and rewards to eligible participants. On January 11, 2022, our Board terminated the initial equity incentive plan and adopted a new equity incentive plan (the “2022 Plan”).
We have initially adopted an equity incentive plan in 2018, under which we have the discretion to award incentives and rewards to eligible participants. On January 11, 2022, our Board terminated the initial equity incentive plan and adopted a new equity incentive plan (the “2022 Plan”).
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. 76 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.
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.
Pursuant to these rules and regulations, the balance of the foreign debts of a foreign-invested enterprise shall not exceed the difference between the total investment and the registered capital of the foreign-invested enterprise (the “ Total Investment and Registered Capital Balance ”).
Pursuant to these rules and regulations, the balance of the foreign debts of a foreign-invested enterprise shall not exceed the difference between the total investment and the registered capital of the foreign-invested enterprise (the “ Total Investment and Registered Capital Balance ”).
Competitive strategies vary based on many factors, such as the competitor’s format, strengths, weaknesses, pricing, and sales focus. 42 Our Revenue Model Business Segments Airline Tickets and Tourism Services We are a well-known supplier of airline tickets, catering to the needs of our esteemed business customers.
Competitive strategies vary based on many factors, such as the competitor’s format, strengths, weaknesses, pricing, and sales focus. Our Revenue Model Business Segments Airline Tickets and Tourism Services We are a well-known supplier of airline tickets, catering to the needs of our esteemed business customers.
Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. The Company believes the following critical accounting policies involve the most significant estimates and judgments used in the preparation of the Company’s financial statements.
Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. The Company believes the following critical accounting policies involve the most significant estimates and judgments used in the preparation of the Company’s financial statements.
Our manufacturing facilities are subject to various pollution control regulations with respect to noise, water and air pollution and the disposal of waste and hazardous materials, including, China’s Environmental Protection Law, Law of the People’s Republic of China on Appraising of Environment Impacts, China’s Law on the Prevention and Control of Water Pollution and its implementing rules, China’s Law on the Prevention and Control of Air Pollution and its implementing rules, China’s Law on the Prevention and Control of Solid Waste Pollution, and China’s Law on the Prevention and Control of Noise Pollution.
Our manufacturing facilities are subject to various pollution control regulations with respect to noise, water and air pollution and the disposal of waste and hazardous materials, including, China’s Environmental Protection Law, Law of the People’s Republic of China on Appraising of Environment Impacts, China’s Law on the Prevention and Control of Water Pollution and its implementing rules, China’s Law on the Prevention and Control of Air Pollution and its implementing rules, China’s Law on the Prevention and Control of Solid Waste Pollution, and China’s Law on the Prevention and Control of Noise Pollution.
(“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.
(“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 December 28, 2021, the Cyberspace Administration of China (the “CAC” ) and several other government authorities published the Revised Cybersecurity Review Measures, which came into effect on February 15, 2022 and replaced the previous version.
On December 28, 2021, the Cyberspace Administration of China (the “CAC” ) and several other government authorities published the Revised Cybersecurity Review Measures, which came into effect on February 15, 2022 and replaced the previous version.
(“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.
(“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.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic companies (the “Overseas Listing Trial Measures”) and relevant five guidelines, which will become effective on March 31, 2023.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic companies (the “Overseas Listing Trial Measures”) and relevant five guidelines, which will become effective on March 31, 2023.
Risk Factors—If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected,” —“If we are unable to keep pace with the rapid technological changes in our industry, demand for our products and services could decline which would adversely affect our revenue,” and —“Our technology may become obsolete which could materially adversely affect our ability to sell our products and services.” For a detailed analysis of research and development costs, see Item 5.A. “Operating Results—Results of Operations—Research and development expenses”.
Risk Factors—If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected,” — “If we are unable to keep pace with the rapid technological changes in our industry, demand for our products and services could decline which would adversely affect our revenue,” and — “Our technology may become obsolete which could materially adversely affect our ability to sell our products and services.” For a detailed analysis of research and development costs, see Item 5.A.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Our cost of sales increased from $53.19 million in year 2021 to $78.41 million in year 2022. The increase was mainly due to the increase of cost in connection with the increasing tourism segment’s revenue in year 2022 compared to 2021.
Our cost of sales increased from $53.19 million in year 2021 to $78.41 million in year 2022. The increase was mainly due to the increase of cost in connection with the increasing tourism segment’s revenue in year 2022 compared to 2021.
The Foreign Investment Law and the Implementing Rules allow foreign investors’ profits, capital gains, intellectual property royalties and other gains to be freely remitted outward in accordance with the law. It also contains provisions aiming to promote foreign investment, including that the State’s policies supporting enterprise development are equally applicable to foreign-invested enterprises in accordance with the law.
The Foreign Investment Law and the Implementing Rules allow foreign investors’ profits, capital gains, intellectual property royalties and other gains to be freely remitted outward in accordance with the law. It also contains provisions aiming to promote foreign investment, including that the State’s policies supporting enterprise development are equally applicable to foreign-invested enterprises in accordance with the law.
Critical accounting policies are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Critical accounting policies are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Other income Interest income is recognized on an accrual basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset. 74 Rental income is recognized on a time proportion basis over the lease terms.
Other income Interest income is recognized on an accrual basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
The currently effective negative list is published by the National Development and Reform Commission and the Ministry of Commerce on December 27, 2021, which became effective on January 1, 2022 (the “2021 Negative List”).
The currently effective negative list is published by the National Development and Reform Commission and the Ministry of Commerce on December 27, 2021, which became effective on January 1, 2022 (the “2021 Negative List”).
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”.
REGULATIONS RELATING TO CYBERSECURITY AND DATA SECURITY According to the Cybersecurity Law of the PRC (the “Cybersecurity Law”) which was promulgated by the Standing Committee of the National People’s Congress of the PRC (the “SCNPC”) on November 7, 2016 and came into effect on June 1, 2017, network operators shall take all necessary measures in accordance with applicable laws, regulations and compulsory national requirements to safeguard the safe and stable operation of networks, respond to cybersecurity incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality and usability of network data.
REGULATIONS RELATING TO CYBERSECURITY AND DATA SECURITY According to the Cybersecurity Law of the PRC (the “Cybersecurity Law”) which was promulgated by the Standing Committee of the National People’s Congress of the PRC (the “SCNPC”) on November 7, 2016 and came into effect on June 1, 2017, network operators shall take all necessary measures in accordance with applicable laws, regulations and compulsory national requirements to safeguard the safe and stable operation of networks, respond to cybersecurity incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality and usability of network data.
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.
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 ”).
These conditions require continuous expenditures on product research and development to enhance existing products create new products and avoid product obsolescence. See Item 3 “Key Information—D.
These conditions require continuous expenditures on product research and development to enhance existing products create new products and avoid product obsolescence. See Item 3 “Key Information—D.
According to the SAFE Circular 19, the foreign exchange capital of foreign-invested enterprises shall be subject to the Discretional Foreign Exchange Settlement (the “ Discretional Foreign Exchange Settlement ”).
According to the SAFE Circular 19, the foreign exchange capital of foreign-invested enterprises shall be subject to the Discretional Foreign Exchange Settlement (the “ Discretional Foreign Exchange Settlement ”).
Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15 in accordance with the policies set out for “Revenue recognition”.
Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15 in accordance with the policies set out for “Revenue recognition”.
On March 21, 2022, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd. (“JX Hainan), entered into and executed a Framework Agreement on Strategic Cooperation (the “Agreement”) with Chongqing E-Pet Technology Co., Ltd. (“Chongqing E-Pet”), one of the major operators of online cross-border pet-food shopping platform in China.
On March 21, 2022, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd. (“JX Hainan), entered into and executed a Framework Agreement on Strategic Cooperation (the “Agreement”) with Chongqing E-Pet Technology Co., Ltd. (“Chongqing E-Pet”), one of the major operators of online cross-border pet-food shopping platform in China.
The conversion of the construction purposes of the land shall receive the consent of the competent land administrative authority and be submitted to the people’s governments that originally granted land use approval.
The conversion of the construction purposes of the land shall receive the consent of the competent land administrative authority and be submitted to the people’s governments that originally granted land use approval.
The management of the company believes that its operating income, combined with the CEO’s commitment to cover operating expenses through loans, will enable the business to continue its operations.
The management of the company believes that its operating income, combined with the CEO’s commitment to cover operating expenses through loans, will enable the business to continue its operations.
The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Currently, the Company’s contracts do not include such variable amount.

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Item 6. [Reserved]

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

33 edited+8 added−4 removed21 unchanged
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 (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 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.
C. Board Practices Our board of directors currently consists of five members, namely Sun Lei, Huidan Li, Mu Ruifeng, Jin Yan, and Baojun Zhu. The Board has established the Audit Committee, which is comprised entirely of independent directors. From time to time, the Board may establish other committees.
Board Practices Our board of directors currently consists of five members, namely Sun Lei, Huidan Li, Mu Ruifeng, Jin Yan, and Baojun Zhu. The Board has established the Audit Committee, which is comprised entirely of independent directors. From time to time, the Board may establish other committees.
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 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.
If the administrator makes an award transferable, such award will contain such additional terms and conditions as the administrator deems appropriate. 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. 88 Termination of, or Amendments to, the New 2022 EIP .
Baofu currently operates more than 15 companies. Mr. Li received his MBA degree from University of Hawaii. Baojun Zhu, age 46, 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 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.
Zhu is an independent director within the meaning of the NASDAQ listing rules. Mr. Mu Ruifeng. Mr. Mu, age 59, 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 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.
Sun, age 39, 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 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.
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. 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 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 100,000 shares of the Company’s Common Stock as her stock compensation.
Share Ownership The following table lists, as of May 12, 2023, 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, 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.
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 ● 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. 87 D.
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.
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.” E.
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 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
Audit Committee Our Audit Committee is currently composed of three members: Baojun Zhu, Mu Ruifeng, and Jin Yan. Our Board of Directors determined that each member of the Audit Committee meets the independence criteria prescribed by applicable regulation and the rules of the SEC for audit committee membership. Each Audit Committee member also meets NASDAQ’s financial literacy requirements.
Audit Committee Our Audit Committee is currently composed of three members: Baojun Zhu, Mu Ruifeng, and Jin Yan. Our Board of Directors determined that each member of the Audit Committee meets the independence criteria prescribed by applicable regulation and the rules of the SEC for audit committee membership. Each Audit Committee member also meets NASDAQ’s financial literacy requirements.
Mr. Li, age 41, 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 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.
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. 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 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”).
However, the administrator may, at or after the grant of an award other than an ISO, provide that such award may be transferred by the recipient to a “family member” (as defined in the New 2022 EIP); provided, however, that any such transfer is without payment of any consideration whatsoever and that no transfer shall be valid unless first approved by the administrator, acting in its sole discretion, and as required by our Restated Articles .
However, the administrator may, at or after the grant of an award other than an ISO, provide that such award may be transferred by the recipient to a “family member” (as defined in the New 2022 EIP); provided, however, that any such transfer is without payment of any consideration whatsoever and that no transfer shall be valid unless first approved by the administrator, acting in its sole discretion, and as required by our Restated Articles.
In addition to her rich experience in luxury goods management, Ms. Sun is also an E-Commerce entrepreneur. Ms. Sun Lei graduated from Emlyon Business School in France with a Bachelor’s degree in business administration, a Master’s Degree in economics and a Master’s degree in finance. She also studied at School of Economics and Management of Tsinghua University. Mr. Huidan Li.
In addition to her rich experience in luxury goods management, Ms. Sun is also an E-Commerce entrepreneur. Ms. Sun Lei graduated from Emlyon Business School in France with a Bachelor’s degree in business administration, a Master’s Degree in economics and a Master’s degree in finance. She also studied at School of Economics and Management of Tsinghua University. Mr. Huidan Li.
Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC.
Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC.
The Shares bear the restrictive legend, as issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption under Section 4(a)(2) of the Securities Act.
The Shares bear the restrictive legend, as issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption under Section 4(a)(2) of the Securities Act.
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.
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.
Mu Ruifeng serves as Chair of the Audit Committee. Our Board of Directors has determined that Mr. Mu Ruifeng is the “audit committee financial expert” as such term is defined in Item 407(d) of Regulation S-K promulgated by the SEC and also meets NASDAQ’s financial sophistication requirements.
Mu Ruifeng serves as Chair of the Audit Committee. Our Board of Directors has determined that Mr. Mu Ruifeng is the “audit committee financial expert” as such term is defined in Item 407(d) of Regulation S-K promulgated by the SEC and also meets NASDAQ’s financial sophistication requirements.
Employees As of December 31, 2022, we employed 55 full-time employees. The following table sets forth the number of our full-time employees by function.
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.
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 53, 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 54, has been the independent director of our board since October 25, 2020.
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.
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.
No other family relationship exists between any of the persons named above. 84 B. Compensation For the year ended December 31, 2022, 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, 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.
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. 88 The percentages below are calculated based on 6,063,192 shares of common stock issued and outstanding as of May 12, 2023.
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.
NAME AGE POSITION Sun Lei 39 Chief Executive Officer, Co-chairwoman and Director Huidan Li 41 Co-chairman and Director Mu Ruifeng 59 Independent Director Baojun Zhu 46 Independent Director Jin Yan 53 Independent Director Ms. Sun Lei. Ms.
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.
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, 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 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.
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.
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.
Termination of the New 2022 EIP will not affect the administrator’s ability to exercise the powers granted to it hereunder with respect to awards granted prior to the date of such termination.
Termination of the New 2022 EIP will not affect the administrator’s ability to exercise the powers granted to it hereunder with respect to awards granted prior to the date of such termination. The New 2022 EIP will terminate ten years following the date it was adopted by the Board, unless sooner terminated by the Board.
On July 12, 2022, the Company entered into the 2022 Employment Agreement with Sun Lei. The 2022 Employment Agreement has a term of one (1) year.
Employment Agreements We do not have employment agreements with our executive officers and we have not entered into any fixed compensation arrangements with any of our directors. On July 12, 2022, the Company entered into the 2022 Employment Agreement with Sun Lei for a one (1) year term, which expired on July 11, 2023. C.
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. 85 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 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.
Removed
The following paragraphs summarize the terms of the New 2022 EIP Purpose.
Added
No other family relationship exists between any of the persons named above. 86 B.
Removed
The New 2022 EIP will terminate ten years following the date it was adopted by the Board, unless sooner terminated by the Board. 86 Employment Agreements With the exception of Sun Lei, we have not entered into any fixed compensation arrangements with any of our directors.
Added
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.
Removed
Pursuant to the terms of the 2022 Employment Agreement, Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the amount of which will be based upon the Company’s achievements, as to be reported on this Annual Report for the fiscal year ended December 22, 2022.
Added
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.
Removed
Company Revenue Number of Common Stock US$59,000,0000 - US$99,999,999 2,500 Shares US$100,000,000 or more 5,000 Shares Profit (Loss) Margin from Operation A 5% - 9% improvement compared to 2021 5,000 Shares A 10% - 19% improvement compared to 2021 7,5000 Shares A 20% or more improvement compared to 2021 10,000 Shares Profit from Non-Menswear operation Achieve profitability on an adjusted basis 5,000 Shares The Employment Agreement has been approved by unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital stock of the Company.
Added
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
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
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
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
The percentages below are calculated based on 6,063,192 shares of common stock issued and outstanding as of May 15, 2024.

Item 7. Management's Discussion & Analysis

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

5 edited+1 added−3 removed3 unchanged
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 100,000 shares of the Company’s Common Stock as her stock compensation.
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 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”).
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to Item 6 “Directors, Senior Management and Employees—E. Share Ownership.” B.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to Item 6 “Directors, Senior Management and Employees—E. Share Ownership.” B.
Lei, our Chief Executive Officer of Company (the “Share Repurchase Program”). Pursuant to the Repurchase Program, Mrs. 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.
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.
The Shares bear the restrictive legend, as issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption under Section 4(a)(2) of the Securities Act. 89 On June 22, 2022, the Board authorized a share repurchase program of up to US$5,000,000 of the Company’s common stock from time to time during a 12-month period by Mr.
On June 22, 2022, the Board authorized a share repurchase program of up to US$5,000,000 of the Company’s common stock from time to time during a 12-month period by Mr. Lei, our Chief Executive Officer of Company (the “Share Repurchase Program”). Pursuant to the Repurchase Program, Mrs.
Removed
On July 12, 2022, the Company entered into a new Employment Agreement with Sun Lei. The Employment Agreement has a term of one (1) year.
Added
The Shares bear the restrictive legend, as issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption under Section 4(a)(2) of the Securities Act.
Removed
Pursuant to the terms of the Employment Agreement, Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the amount of which will be based upon the Company’s achievements, as to be reported on this Annual Report for the fiscal year ended December 22, 2022.
Removed
Company Revenue Number of Common Stock US$59,000,0000 - US$99,999,999 2,500 Shares US$100,000,000 or more 5,000 Shares Profit (Loss) Margin from Operation A 5% - 9% improvement compared to 2021 5,000 Shares A 10% - 19% improvement compared to 2021 7,5000 Shares A 20% or more improvement compared to 2021 10,000 Shares Profit from Non-Menswear operation Achieve profitability on an adjusted basis 5,000 Shares The Employment Agreement has been approved by unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital stock of the Company.

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