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Jowell Global Ltd.

Jowell Global Ltd.JWEL财报

Nasdaq · 可选消费 · 无店铺零售商

Jowell Global Ltd. is a Holding company which owns its predecessor Longrich and operates Juhao Mall, an e-commerce platform for cosmetics, health and nutritional supplements and household products.

What changed in Jowell Global Ltd.'s 20-F — 2023 vs 2024

Top changes in Jowell Global Ltd.'s 2024 20-F

307 paragraphs added · 282 removed · 257 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

59 edited+10 added−3 removed438 unchanged
Internet and network system limitations or failures could harm our business. Our businesses depend on the integrity and performance of the technology, computer and network systems supporting them.
Internet and network system limitations or failures could harm our business. Our businesses depend on the integrity and performance of technology, computer and network systems supporting them.
We have in the past and may in the future be subject to legal proceedings and claims relating to the intellectual property rights of others. For example, in 2018 Shanghai Juhao was sued by an individual for copyright infringement for the use Shanghai Juhao’s logo.
We have in the past and may in the future be subject to legal proceedings and claims relating to the intellectual property rights of others. For example, in 2018 Shanghai Juhao was sued by an individual for copyright infringement for the use of Shanghai Juhao’s logo.
Currently, most of the Chinese companies listed on overseas stock exchanges and are in the internet-based business such as e-commerce or online-gaming have adopted a VIE structure. In addition, under PRC laws, rulings by arbitrators are final and parties cannot appeal arbitration results in court unless such rulings are revoked or determined unenforceable by a competent court.
Currently, most of the Chinese companies listed on overseas stock exchanges and are on the internet-based business such as e-commerce or online-gaming have adopted a VIE structure. In addition, under PRC laws, rulings by arbitrators are final and parties cannot appeal arbitration results in court unless such rulings are revoked or determined unenforceable by a competent court.
Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation.
Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation.
The New Overseas Listing Rules stipulate the legal consequences to the companies for breaches, including failure to fulfill filing obligations or filing documents having false statement or misleading information or material omissions, which may result in administrative penalties such as order to rectify, warnings and a fine ranging from RMB1 million to RMB10 million, and in cases of severe violations, the controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines and may be barred from entering the securities market.
The New Overseas Listing Rules stipulate the legal consequences to the companies for breaches, including failure to fulfill filing obligations or filing documents having false statement or misleading information or material omissions, which may result in administrative penalties such as order to rectify, warnings and a fine ranging from RMB1 million to RMB10 million, and in cases of severe violations, the controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines and may be barred from entering the securities market.
The capital of a foreign invested enterprise shall not be used for the following purposes: (i) directly or indirectly used for payment beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for investment in securities or investments other than banks’ principal-secured products unless otherwise provided by relevant laws and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises). 34 SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses.
The capital of a foreign invested enterprise shall not be used for the following purposes: (i) directly or indirectly used for payment beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for investment in securities or investments other than banks’ principal-secured products unless otherwise provided by relevant laws and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises). 33 SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new clients and retain existing clients; ● changes in our mix of products and services and introduction of new products and services; ● the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; ● our decision to manage client volume growth during the period; ● the impact of competitors or competitive products and services; ● increases in our costs and expenses that we may incur to grow and expand our operations and to remain competitive; ● network outages or security breaches; 16 ● changes in the legal or regulatory environment or proceedings, including with respect to security, privacy, or enforcement by government regulators, including fines, orders or consent decrees; ● general economic, industry, inflation and market conditions; and ● the timing of expenses related to the development or acquisition of technologies or businesses.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new clients and retain existing clients; ● changes in our mix of products and services and introduction of new products and services; ● the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; ● our decision to manage client volume growth during the period; ● the impact of competitors or competitive products and services; ● increases in our costs and expenses that we may incur to grow and expand our operations and to remain competitive; ● network outages or security breaches; 16 ● changes in the legal or regulatory environment or proceedings, including with respect to security, privacy, or enforcement by government regulators, including fines, orders or consent decrees; ● general economy, industry, inflation and market conditions; and ● the timing of expenses related to the development or acquisition of technologies or businesses.
Our Juhao mobile app has been registered on the VATS License held by Shanghai Juhao. However, Shanghai Juhao did not apply for a value-added telecommunications business license until 2017 as its business operations were small and service fees generated by third-party stores was immaterial for the Company.
Our Juhao mobile app has been registered on the VATS License held by Shanghai Juhao. However, Shanghai Juhao did not apply for a value-added telecommunications business license until 2017 as its business operations were small and service fees generated by third-party stores were immaterial for the Company.
If these logistics and express companies fail to provide reliable and timely delivery services, our business and reputation, as well as our financial situation and operating results, may be adversely affected. ● Internet or network system limitations or failures could harm our business. ● If we fail to adopt new technologies or adapt our website, mobile application and systems to changing customer requirements or emerging industry standards, our business may be materially and adversely affected. ● If counterfeit products are sold on our internet platform, our reputation and financial results could be materially and adversely affected. ● We may be subject to product liability claims if our customers are harmed by the products sold on our internet platform. ● We collect, process and use data, some of which contains personal information.
If these logistics and express companies fail to provide reliable and timely delivery services, our business and reputation, as well as our financial situation and operating results, may be adversely affected. ● Internet or network system limitations or failures could harm our business. ● If we fail to adopt new technologies or adapt our website, mobile application and systems to changing customer requirements or emerging industry standards, our business may be materially and adversely affected. ● If counterfeit products are sold on our internet platform, our reputation and financial results could be materially and adversely affected. ● We may be subject to product liability claims if our customers are harmed by the products sold on our internet platform. ● We collect, process and use data, some of which contain personal information.
If we or any of our PRC subsidiaries do not receive or maintain such permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change and we or our subsidiaries are required to obtain such permissions or approvals in the future, it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or become worthless. 36 PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiary’s ability to increase its registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.
If we or any of our PRC subsidiaries do not receive or maintain such permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change and we or our subsidiaries are required to obtain such permissions or approvals in the future, it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or become worthless. 35 PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiary’s ability to increase its registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.
Although we believe that we currently have obtained necessary license to practice our business, we cannot assure you that we will be always able to meet all of requirements in the future to renew the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain new ones. 33 We rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.
Although we believe that we currently have obtained necessary license to practice our business, we cannot assure you that we will be always able to meet all of requirements in the future to renew the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain new ones. 32 We rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. 31 The enactment of the HFCA Act and related regulations, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could cause investors uncertainty for affected issuers and the market price of our ordinary shares could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. 30 The enactment of the HFCA Act and related regulations, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could cause investors uncertainty for affected issuers and the market price of our ordinary shares could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement.
Our PRC counsel has advised us based on their understanding of the current PRC laws, rules and regulations relating to the CSRC’s filing requirements, we will be required to file with CSRC for our future offering.
Our PRC counsel has advised us based on their understanding of the current PRC laws, rules and regulations relating to the CSRC’s filing requirements, we will be required to file with CSRC for our offering.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations. 32 We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations. 31 We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. 42 We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. 41 We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests. 30 The Holding Foreign Companies Accountable Act, or the HFCA Act, and the related regulations are evolving quickly.
While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests. 29 The Holding Foreign Companies Accountable Act, or the HFCA Act, and the related regulations are evolving quickly.
However, due to the outbreak of Omicron variant i n many cities in China, including Xi’an, Hong Kong, Shanghai, Guangzhou and Suzhou , local governments have imposed restrictions and quarantine requirements with travel restrictions and temporary closure of office buildings and facilities , and the employees at our Shanghai office have been working from home from March 30, 2022 to June 1, 2022.
However, due to the outbreak of Omicron variant in many cities in China, including Xi’an, Hong Kong, Shanghai, Guangzhou and Suzhou, local governments have imposed restrictions and quarantine requirements with travel restrictions and temporary closure of office buildings and facilities, and the employees at our Shanghai office have been working from home from March 30, 2022 to June 1, 2022.
Furthermore, we cannot rule out the possibility that the PRC government will institute new licensing regime covering our industry at some point in the future.
Furthermore, we cannot rule out the possibility that the PRC government will institute a new licensing regime covering our industry at some point in the future.
Gains and losses from the remeasurement of assets and liabilities that are receivable or payable in RMB are included in our consolidated statements of operations and comprehensive income (loss).
Gains and losses from the remeasurement of assets and liabilities that are receivable or payable in RMB are included in our consolidated statements of operations and comprehensive income.
Assuming that we are the owner of the VIE (including its subsidiaries) for U.S. federal income tax purposes, and based upon our current and expected income and assets, including goodwill, and the value of our ordinary shares, we do not believe that we were a PFIC for the taxable year ended December 31, 2023 and we do not expect to be a PFIC for the foreseeable future.
Assuming that we are the owner of the VIE (including its subsidiaries) for U.S. federal income tax purposes, and based upon our current and expected income and assets, including goodwill, and the value of our ordinary shares, we do not believe that we were a PFIC for the taxable year ended December 31, 2024 and we do not expect to be a PFIC for the foreseeable future.
Even unsuccessful claims could result in the expenditure of funds and managerial efforts in defending them and could have a negative impact on our reputation. We collect, process and use data, some of which contains personal information. Any privacy or data security breach could damage our reputation and brand and substantially harm our business and results of operations.
Even unsuccessful claims could result in the expenditure of funds and managerial efforts in defending them and could have a negative impact on our reputation. We collect, process and use data, some of which contain personal information. Any privacy or data security breach could damage our reputation and brand and substantially harm our business and results of operations.
Furthermore, the PRC tax authorities may impose late payment fees and other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the consolidated variable interest entity’ tax liabilities increase or if it is required to pay late payment fees and other penalties.
Furthermore, the PRC tax authorities may impose late payment fees and other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the consolidated variable interest entity’s tax liabilities increase or if it is required to pay late payment fees and other penalties.
Our new auditor, Enrome LLP, as an auditor of companies that are traded publicly in the U.S. and a firm registered with the PCAOB, is subject to PCAOB inspections to assess its compliance with the applicable professional standards. Neither Enrome nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021.
Our current auditor, Enrome LLP, as an auditor of companies that are traded publicly in the U.S. and a firm registered with the PCAOB, is subject to PCAOB inspections to assess its compliance with the applicable professional standards. Neither Enrome nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021.
Therefore, our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment registrations by the beneficial owners of our company who are PRC residents.
Therefore, our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulations, such as the overseas investment registrations by the beneficial owners of our company who are PRC residents.
Bulletin 37, among other things, simplified procedures of withholding and payment of income tax levied on non-resident enterprises. 39 We face uncertainties on the reporting and consequences on future private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises.
Bulletin 37, among other things, simplified procedures of withholding and payment of income tax levied on non-resident enterprises. 38 We face uncertainties on the reporting and consequences on future private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises.
These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.
These efforts may prove more expensive than we anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.
Nevertheless, the aforementioned measures and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. 28 We cannot rule out the possibility that the PRC government will institute a licensing regime or pre-approval requirement covering our industry at some point in the future.
Nevertheless, the aforementioned measures and any related implementation rules to be enacted may subject us to additional compliance requirements in the future. We cannot rule out the possibility that the PRC government will institute a licensing regime or pre-approval requirement covering our industry at some point in the future.
If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares and our share price may be more volatile. 44 If we are classified as a passive foreign investment company, United States taxpayers who own our ordinary shares may have adverse United States federal income tax consequences.
If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares and our share price may be more volatile. 43 If we are classified as a passive foreign investment company, United States taxpayers who own our ordinary shares may have adverse United States federal income tax consequences.
Any unintentional or unknowingly sale of counterfeit or substandard products in our product distribution or retail business, or illegal use of our brand name by third parties to sell counterfeit or substandard products, may cause negative publicity, fines and other administrative penalties to us, and even lead to lawsuits related to the sale, marketing and advertising of these products.
Any unintentional or unknowing sale of counterfeit or substandard products in our product distribution or retail business, or illegal use of our brand name by third parties to sell counterfeit or substandard products, may cause negative publicity, fines and other administrative penalties to us, and even lead to lawsuits related to the sale, marketing and advertising of these products.
Accordingly, the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2). 43 Because we are a foreign private issuer and are exempt from certain NASDAQ corporate governance standards applicable to U.S. issuers, you may have less protection than you would have if we were a domestic issuer.
Accordingly, the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2). 42 Because we are a foreign private issuer and are exempt from certain NASDAQ corporate governance standards applicable to U.S. issuers, you may have less protection than you would have if we were a domestic issuer.
Such inspections, though permitted by the Company and its affiliates, are subject to the unpredictability of the Chinese enforcers, and may therefore be impossible to facilitate. 38 We face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of our operating company’s equity interests.
Such inspections, though permitted by the Company and its affiliates, are subject to the unpredictability of the Chinese enforcers, and may therefore be impossible to facilitate. 37 We face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of our operating company’s equity interests.
The PRC legal system is based on written statutes, and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties.
The PRC legal system is based on written statutes, and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties.
In addition, the securities market has from time-to-time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Ordinary Shares. 41 Volatility in our ordinary share price may subject us to securities litigation.
In addition, the securities market has from time-to-time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Ordinary Shares. 40 Volatility in our ordinary share price may subject us to securities litigation.
Confidentiality, invention assignment and non-compete agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in China.
Confidentiality, invention assignments and non-compete agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in China.
We sell products manufactured by third parties, some of which may be defectively designed or manufactured, of inferior quality or counterfeit. For example, cosmetic products in general, regardless of their authenticity or quality, may cause allergic reactions or other illness that may be severe for certain customers.
We sell products manufactured by third parties, some of which may be defectively designed or manufactured, of inferior quality or counterfeit. For example, cosmetic products in general, regardless of their authenticity or quality, may cause allergic reactions or other illnesses that may be severe for certain customers.
Regulation—Regulations on Stock Incentive Plans .” 37 If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
Regulation—Regulations on Stock Incentive Plans .” 36 If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
Our business and reputation may be affected if the product is not delivered in proper conditions or on time. 14 In the direct sales business model, we manage inventory and delivery products with our own integrated processing system.
Our business and reputation may be affected if the product is not delivered in proper conditions or on time. 14 For our direct sales business, we manage inventory and delivery products with our own integrated processing system.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 35 Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 34 Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment.
The Nasdaq Listing Rules require listed companies to comply with NASDAQ corporate governance standards. As a foreign private issuer, however, we are permitted to follow home country practice in lieu of certain of such requirements.
The Nasdaq Listing Rules require listed companies to comply with NASDAQ corporate governance standards. As a foreign private issuer, however, we are permitted to follow the home country’s practice in lieu of certain of such requirements.
However, we may consider following home country practice in lieu of additional requirements under the Nasdaq Listing Rules with respect to certain corporate governance standards in the future which may afford less protection to investors.
However, we may consider following the home country’s practice in lieu of additional requirements under the Nasdaq Listing Rules with respect to certain corporate governance standards in the future which may afford less protection to investors.
A broad or active public trading market for our Ordinary Shares may not develop or be sustained. 40 If securities or industry analysts do not publish research or reports about our business, or if the publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
A broad or active public trading market for our Ordinary Shares may not develop or be sustained. 39 If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
In our market business model, many of third-party sellers who sell their products on our platform use their own facilities to store products and use their own or third-party delivery systems to deliver products to distributors and consumers that place orders on our platform, which makes it difficult to ensure that such customers and distributors get consistent quality products and services for all products sold through our online platform.
For third party merchant business, many of third-party sellers who sell their products on our platform use their own facilities to store products and use their own or third-party delivery systems to deliver products to distributors and consumers that place orders on our platform, which makes it difficult to ensure that such customers and distributors get consistent quality products and services for all products sold through our online platform.
Our success will depend, in part, on our ability to identify, develop, acquire or license new technologies useful in our business, and respond to technological advances and emerging industry standards and practices in a cost-effective and timely way. The development of website, mobile application and other proprietary technology entails significant technical and business risks.
Our success will depend, in part, on our ability to identify, develop, acquire or license new technologies useful in our business, and respond to technological advances and emerging industry standards and practices in a cost-effective and timely way. The development of websites, mobile applications and other proprietary technology entails significant technical and business risks.
Various impact arising from a severe condition may cause business disruption, resulting in material, adverse impact to our financial condition and results of operations. The relative lack of public company experience of our management team may put us at a competitive disadvantage.
Various impacts arising from severe conditions may cause business disruption, resulting in material adverse impact on our financial condition and results of operations. The relative lack of public company experience of our management team may put us at a competitive disadvantage.
If the basic salary of certain employees fails to meet the local minimum salary standard, we may be faced with labor dispute or compensation. The remuneration we pay to our employee in general consists of basic salary, subsidy and performance bonus subject to different department. For marketing staff, a great proportion of their remuneration is the performance bonus.
If the basic salary of certain employees fails to meet the local minimum salary standard, we may be faced with labor disputes or compensation. The remuneration we pay to our employees in general consists of basic salary, subsidy and performance bonus subject to different departments. For marketing staff, a great proportion of their remuneration is the performance bonus.
Historically, a substantial part of our supplies came from the Longrich Group, a related party. For the year ended December 31, 2021 and 2022, the Longrich Group accounted for approximately 45% and 14% of the total purchases, respectively. For the year ended December 31, 2023, this proportion is 20%. Longrich Group is controlled by Mr.
Historically, a substantial part of our supplies came from the Longrich Group, a related party. For the years ended December 31, 2022 and 2023, the Longrich Group accounted for approximately 14% and 20% of the total purchases, respectively. For the year ended December 31, 2024, this proportion is 26%. Longrich Group is controlled by Mr.
In such case, we may be faced with labor dispute or compensation. Competition for employees is intense, and we may not be able to attract and retain the qualified and skilled employees needed to support our business.
In such cases, we may be faced with labor disputes or compensation. Competition for employees is intense, and we may not be able to attract and retain the qualified and skilled employees needed to support our business.
As advised by our PRC counsel, Jiangsu Yiyou Tianyuan Law Firm, our future offerings in Nasdaq will be subject to the New Overseas Listing Rules.
As advised by our PRC counsel, Jiangsu Yiyou Tianyuan Law Firm, our offerings will be subject to the New Overseas Listing Rules.
For example, foreign investors are generally not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except for the e-commerce business) in accordance with the Foreign Investment Entry Clearance Negative List (the 2021 version), promulgated in 2021, or the Negative List, and other applicable laws and regulations.
For example, foreign investors are generally not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except for the e-commerce business) in accordance with the Foreign Investment Entry Clearance Negative List (the 2024 version), promulgated in 2024 and became effective on November 1, 2024, or the Negative List, and other applicable laws and regulations.
Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.
Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations. 28 Increases in labor costs in the PRC may adversely affect our business and results of operations.
If any of the designated legal representatives obtains and misuses or misappropriates our chops and seals or other controlling intangible assets for whatever reason, we could experience disruption to our normal business operations.
If any of the designated legal representatives obtain and misuse or misappropriate our chops and seals or other controlling intangible assets for whatever reason, we could experience disruption to our normal business operations.
Because our focus is limited in this way, any risk affecting the health and nutritional supplements, cosmetics and household products industries could disproportionately affect our business. Our lack of product and business diversification could inhibit the opportunities for growth of our business, revenues and profits. We may continue to incur net losses in the future.
Because our focus is limited in this way, any risk affecting the health and nutritional supplements, cosmetics and household products industries could disproportionately affect our business. Our lack of product and business diversification could inhibit the opportunities for growth of our business, revenues and profits.
For the year ended December 31, 2023, two major suppliers, the Longrich Group and a third-party supplier, accounted for approximately 20% and 11% of the total purchases, respectively. For the year ended December 31, 2022, two major suppliers, the Longrich Group and a third-party supplier, accounted for approximately 14% and 12% of the total purchases, respectively.
For the year ended December 31, 2024, two major suppliers, the Longrich Group and a third-party supplier, accounted for approximately 26% and 16% of the total purchases, respectively. For the year ended December 31, 2023, two major suppliers, the Longrich Group and a third-party supplier, accounted for approximately 20% and 11% of the total purchases, respectively.
We anticipate that our operating expenses will increase in the foreseeable future as we seek to continue to develop new high margin business, attract clients and partners and further enhance and develop our services and other product offerings.
We cannot assure you that we will be able to generate net income or will have retained earnings in the future. We anticipate that our operating expenses will increase in the foreseeable future as we seek to continue to develop new high margin business, attract clients and partners and further enhance and develop our services and other product offerings.
Increases in inflation and labor costs in the PRC may adversely affect our business and results of operations. The economy in China has experienced increases in labor costs in recent years. As a result, average products we source from third parties and wages in the PRC have increased and are expected to continue to increase.
The economy in China has experienced increases in labor costs in recent years. As a result, wages in the PRC have increased and are expected to continue to increase.
As a result of the foregoing and other factors, we may incur additional net losses in the future and may not be able to maintain profitability on a quarterly or annual basis. 15 We may need additional capital, and financing may not be available on terms acceptable to us, or at all.
If we are unable to achieve or maintain profitability, the market price of our shares may significantly decrease. 15 We may need additional capital, and financing may not be available on terms acceptable to us, or at all.
Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties. 29 In particular, PRC laws and regulations concerning the valued added telecom service and online retail industry are developing and evolving.
The PRC legal system is based on written statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties.
Since 2012, China’s economic growth has slowed down and recovery from COVID-19 has been slow since early 2023. Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materially and adversely affect our business and results of operations.
Since 2012, China’s economic growth has slowed down and recovery from COVID-19 has been slow since early 2023.
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We had incurred a net loss of $11.52 million and a net loss of $11.53 million in fiscal year of 2023 and 2022, respectively. We cannot assure you that we will be able to generate net income or will have retained earnings in the future.
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We incurred net losses for the years ended December 31, 2024 and 2023 and may not be able to generate sufficient operating cash flows and working capital to continue as a going concern. Failure to manage our liquidity and cash flows may materially and adversely affect our financial condition and results of operations.
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On November 14, 2021, CAC published the Administration Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber Data Security Measure (Draft)”, which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity Review.
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As a result, we may need additional capital, and financing may not be available on terms acceptable to us, or at all. We had incurred a net loss of $8.0 million and a net loss of $11.52 million in fiscal years of 2024 and 2023, respectively.
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The PRC legal system is based on written statutes and prior court decisions have limited value as precedents.
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We can offer no assurance that we will operate profitably or that we will generate positive cash flow in the next twelve months, given our substantial expenses in relation to our revenue at this stage of our Company.
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Inability to collect our accounts receivable in a timely and sufficient manner, or the inability to offset our expenses with adequate revenue, may adversely affect our liquidity, financial condition and results of operations.
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Although we believe that our cash on hand and anticipated cash flows from operating activities will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next 12 months, we cannot assure you this will be the case.
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If and when we are unable to generate sufficient cash flow from operations to meet our working capital requirements and various operating needs, we may need to raise additional funds for our operations and such funds may not be available on commercially acceptable terms, if at all.
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If we are unable to raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. This may seriously harm our business, financial condition and results of operations.
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Any prolonged slowdown in the Chinese economy or negative impact from the recent tariff war between U.S. and China may negatively impact the spending by Chinese consumers and reduce the demand for our products and services and materially and adversely affect our business and results of operations.
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On September 24, 2024, the State Council published the Administration Measures for Cyber Date Security, or the “Cyber Data Security Measure”, which requires cyber data processors to file a national security review if their cyber data processing activities affect or may affect national security.
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In particular, PRC laws and regulations concerning the valued added telecom service and online retail industry are developing and evolving.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Live streaming marketing . We also use the most popular online sales model, Live Streaming/Broadcasting Marketing. We train our authorized retail store owners to become live streamers participating in the live online broadcasting to market and sell products.
We also use the most popular online sales model, Live Streaming/Broadcasting Marketing. We train our authorized retail store owners to become live streamers participating in the live online broadcasting to the market and sell products.
The third-party merchants need to register and reserve the spots for the flash sales with us in advance and we will arrange the products to be sold by flash sales according to the recent sales data for various products and their categories on the platform, so that the selected products can achieve best sales and recognition by the customers. 50 Products Offerings Product Categories We offer high quality and affordable products.
The third-party merchants need to register and reserve the spots for the flash sales with us in advance and we will arrange the products to be sold by flash sales according to the recent sales data for various products and their categories on the platform, so that the selected products can achieve the best sales and recognition by the customers. 50 Products Offerings Product Categories We offer high quality and affordable products.
For such services, Shanghai Juhao agrees to pay service fees determined based on all of its net profit after tax payments to Shanghai Jowell or Shanghai Jowell has obligation to absorb all of Shanghai Juhao’s losses.
For such services, Shanghai Juhao agrees to pay service fees determined based on all of its net profit after tax payments to Shanghai Jowell or Shanghai Jowell has obligation to absorb all of Shanghai Juhao’s losses.
The agreements remain in effect until and unless all parties agree to its termination, except the Exclusive Option Agreement that the effective term of 10 years and can be renewed for an additional 10 years. Until such termination, Shanghai Juhao may not enter into another agreement for the provision of management consulting services without the prior consent of Shanghai Jowell.
The agreements remain in effect until and unless all parties agree to its termination, except the Exclusive Option Agreement that the effective term of 10 years and can be renewed for an additional 10 years. Until such termination, Shanghai Juhao may not enter into another agreement for the provision of management consulting services without the prior consent of Shanghai Jowell.
Also, pursuant to the equity interest pledge agreement between the shareholders of Shanghai Juhao and Shanghai Jowell, such shareholders pledged all of their equity interests in Shanghai Juhao to Shanghai Jowell, to guarantee Shanghai Juhao’s performance of its obligations under the Exclusive Business Cooperation and Management Agreement.
Also, pursuant to the equity interest pledge agreement between the shareholders of Shanghai Juhao and Shanghai Jowell, such shareholders pledged all of their equity interests in Shanghai Juhao to Shanghai Jowell, to guarantee Shanghai Juhao’s performance of its obligations under the Exclusive Business Cooperation and Management Agreement.
Without Shanghai Jowell’s prior written consent, the shareholders of Shanghai Juhao shall not transfer or assign the pledged equity interests, or incur or allow any encumbrance that would jeopardize Shanghai Jowell’s interests.
Without Shanghai Jowell’s prior written consent, the shareholders of Shanghai Juhao shall not transfer or assign the pledged equity interests, or incur or allow any encumbrance that would jeopardize Shanghai Jowell’s interests.
If Shanghai Juhao breaches its contractual obligations under the aforesaid agreement, Shanghai Jowell, as the pledgee, will be entitled to certain rights and entitlements, including priority in receiving payments by the evaluation or proceeds from the auction or sale of all or part of the pledged equity interests of Shanghai Juhao, in accordance with legal procedures.
If Shanghai Juhao breaches its contractual obligations under the aforesaid agreement, Shanghai Jowell, as the pledgee, will be entitled to certain rights and entitlements, including priority in receiving payments by the evaluation or proceeds from the auction or sale of all or part of the pledged equity interests of Shanghai Juhao, in accordance with legal procedures.
Competitive advantages of Juhao’s online and offline new retail model We have been using big data and artificial intelligence technologies to collect and analyze consumers’ activities on our platform and their shopping patterns as permitted under laws and regulations, such as the time each customer spends on our platform, the web pages such customer visits, how long the customer spends on each web page, how often such customer visits our site, average spending amount that such customer spends each order and products she/he purchase, the location of such customer, whether she/he is a repeat customer, from which search engine or portal such customer is directed to our site and whether she/he use computer or mobile-app, etc.
Competitive advantages of Juhao’s online and offline retail model We have been using big data and artificial intelligence technologies to collect and analyze consumers’ activities on our platform and their shopping patterns as permitted under laws and regulations, such as the time each customer spends on our platform, the web pages such customer visits, how long the customer spends on each web page, how often such customer visits our site, average spending amount that such customer spends each order and products she/he purchase, the location of such customer, whether she/he is a repeat customer, from which search engine or portal such customer is directed to our site and whether she/he use computer or mobile-app, etc.
Zhiwei Xu, directly and indirectly through Jowell Holdings Ltd., beneficially owns all 46,875 issued and outstanding Preferred Shares and 340,654 Ordinary Shares and therefore will have substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. 47 The Company has subsidiaries in countries and jurisdictions including PRC and Hong Kong.
Zhiwei Xu, directly and indirectly through Jowell Holdings Ltd., beneficially owns all 46,875 issued and outstanding Preferred Shares and 340,654 Ordinary Shares and therefore will have substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. 46 The Company has subsidiaries in countries and jurisdictions including PRC and Hong Kong.
Our PRC counsel believes, due to the immaterial amount from valued-added telecommunication business from 2012 until we received the approval in 2019, that it is unlikely that such operation without appropriate license will be considered as a material violation of the regulation by the regulator and that the possibility that the Company be penalized is remote. In addition, Mr.
Our PRC counsel believes, due to the immaterial amount from valued-added telecommunication business from 2012 until we received the approval in 2019, that it is unlikely that such operation without an appropriate license will be considered as a material violation of the regulation by the regulator and that the possibility that the Company be penalized is remote. In addition, Mr.
Our largest supplier is Longrich Group including its subsidiaries, a related party of the Company. Since its establishment in 1986, Longrich Group grew to five manufacturing factories and ten R & D bases in the world. Longrich Group has built a large-scale, flexible and intelligent production line and manufacturing process around its core business of cosmetics products.
Our largest supplier, Longrich Group and its subsidiaries, is a related party of the Company. Since its establishment in 1986, Longrich Group grew to five manufacturing factories and ten R & D bases in the world. Longrich Group has built a large-scale, flexible and intelligent production line and manufacturing process around its core business of cosmetics products.
As a result, we have been able to build a large, engaged and loyal customer base with relatively low customer acquisition cost. Our cost-effective marketing campaigns have allowed us to have relatively low marketing expenses. As part of our viral marketing strategy, we offer various incentives to our existing customers in order to increase their spending and loyalty.
As a result, we have been able to build a large, engaged and loyal customer base with relatively low customer acquisition costs. Our cost-effective marketing campaigns have allowed us to have relatively low marketing expenses. As part of our viral marketing strategy, we offer various incentives to our existing customers in order to increase their spending and loyalty.
We have also provided free live streaming marketing classes to LLH Store owners, potential Juhao Best Choice store owners and anyone who is interested in livestreaming which help students and young people obtain related employment and help us identify online selling and marketing talents for our marketing department.
We have also provided free live streaming marketing classes to LLH Store owners, potential Juhao Best Choice store owners and anyone who is interested in live streaming which help students and young people obtain related employment and help us identify online selling and marketing talents for our marketing department.
The material terms of the Juhao Mall Marketplace and Service Agreement for third-party stores in Juhao Mall with such store owners include: (i) the third-party store/merchant is responsible for stores set-up, sales, inventory management, logistics and after-sales services and Shanghai Juhao will provide assistance and charge relevant service fees; (ii) the merchant is responsible for the sales of its products on its online store, and the sales price shall be determined by the merchant, but shall not be lower than the minimum price agreed by the parties; (iii) if the merchant’s customers make payment through Shanghai Juhao’s online platform, Shanghai Juhao is obliged to pay the received payment to the merchant every month according to the payment method agreed in the agreement; (iv) if the customer finds that the product has shortage, defective or damage, or the variety, model, specification, color, quantity, shelf life and quality of the products is inconsistent with the order, he/she may reject the product and the merchant shall timely reissue or replace the product; (v) the merchant guarantees that the quality of the products it sells has met the national or international standards and met the general performance and use requirements of such product; (vi) the merchant guarantees to Shanghai Juhao that there is no dispute with any third-party on intellectual property rights and other rights of the products sold on Juhao’s platform; (vii) the merchant shall provide after-sale service and support for the products that it sold; (viii) Shanghai Juhao charges a fix service fee equals to 5% of the merchant’s store revenue and will also charge a performance fee between 0-5% based upon the monthly performance of the merchant store, i.e. the higher the sales reaches, the lower performance fee will apply and it will be no performance fee if the sales reaches RMB 100,000 in such month; and (ix) the term of the agreement is usually one year subject to renewal.
The material terms of the Juhao Mall Marketplace and Service Agreement for third-party stores in Juhao Mall with such store owners include: (i) the third-party store/merchant is responsible for stores set-up, sales, inventory management, logistics and after-sales services and Shanghai Juhao will provide assistance and charge relevant service fees; (ii) the merchant is responsible for the sales of its products on its online store, and the sales price shall be determined by the merchant, but shall not be lower than the minimum price agreed by the parties; (iii) if the merchant’s customers make payment through Shanghai Juhao’s online platform, Shanghai Juhao is obliged to pay the received payment to the merchant every month according to the payment method agreed in the agreement; (iv) if the customer finds that the product has shortage, defective or damage, or the variety, model, specification, color, quantity, shelf life and quality of the products is inconsistent with the order, he/she may reject the product and the merchant shall timely reissue or replace the product; (v) the merchant guarantees that the quality of the products it sells has met the national or international standards and met the general performance and use requirements of such product; (vi) the merchant guarantees to Shanghai Juhao that there is no dispute with any third-party on intellectual property rights and other rights of the products sold on Juhao’s platform; (vii) the merchant shall provide after-sale service and support for the products that it sold; (viii) Shanghai Juhao charges a fix service fee equals to 5% of the merchant’s store revenue and will also charge a performance fee between 0-5% based upon the monthly performance of the merchant store, i.e. the higher the sales reaches, the lower performance fee will apply and it will be no performance fee if the sales reaches RMB 100,000 in such month; and (ix) the term of the agreement is usually one year subject to renewal. 49 Live streaming marketing .
Any non-compliant products identified will subject the supplier or third-party merchant to fines as well as permanent termination of business relationship with such supplier or third-party merchant. We commit to the high-quality standards of products offerings sold through our internet platform.
Any non-compliant products identified will subject the supplier or third-party merchant to fines as well as permanent termination of business relationship with such a supplier or third-party merchant. We commit to the high-quality standards of products offerings sold through our internet platform.
In 2021, our Juhao Best Choice Stores has launched Qiyun Choice community group purchase business, combined with 5G telecom, to further develop Juhao online and offline connection, aiming to the transformation to unmanned logistics for the last kilometer of the delivery to destinations with our community stores.
In 2021, our Juhao Best Choice Stores launched Qiyun Choice community group purchase business, combined with 5G telecom, to further develop Juhao online and offline connection, aiming to the transformation to unmanned logistics for the last kilometer of the delivery to destinations with our community stores.
As a result of such foresight, we are able to provide our customers constantly smooth online shopping experience. Our mid-end modules support our daily administrative and business operations and our back-end modules support our supply chain and greatly enhance the efficiency of our operations.
As a result of such foresight, we are able to provide our customers with a constantly smooth online shopping experience. Our mid-end modules support our daily administrative and business operations and our back-end modules support our supply chain and greatly enhance the efficiency of our operations.
The material terms of the Love Home Health Franchise Store Contract with such store owners/franchisees include: (i) Shanghai Juhao will provide training to franchisee, which should pass the examination of Shanghai Juhao to be qualified as an authorized store; (ii) the franchisee shall obtain the business license, tax registration certificate and other relevant certificates required for operation according to law at its own costs; (iii) the franchisee shall abide by the rules and policies issued by Shanghai Juhao; (iv) during the term of the agreement, the franchisee may use Shanghai Juhao’s trademark and service mark and Shanghai Juhao authorizes the franchisee to sell the products or services of Shanghai Juhao; (v) Shanghai Juhao may inspect the operation of the franchisee from time to time; (vi) during the term of the agreement, the franchisee’s store structure, internal and external decoration shall comply with the standards set by Shanghai Juhao; (vii) the franchisee shall purchase the products from Shanghai Juhao for at least RMB 4,000 every two months; (viii) the franchisee shall sell the products (or provide services) at the price specified by Shanghai Juhao; (ix) the franchisee shall not transfer the operation right without authorization of Shanghai Juhao, and shall not conduct business beyond its authorized territory (the area within 1.5 km radius of the address of the franchisee); (x) the franchisee will receive a 20% discount of the retail price of the products sold directly on the LHH mall members; and (xi) the term of the agreement is usually one year subject to renewal. 49 Third-party Merchants .
The material terms of the Love Home Health Franchise Store Contract with such store owners/franchisees include: (i) Shanghai Juhao will provide training to franchisee, which should pass the examination of Shanghai Juhao to be qualified as an authorized store; (ii) the franchisee shall obtain the business license, tax registration certificate and other relevant certificates required for operation according to law at its own costs; (iii) the franchisee shall abide by the rules and policies issued by Shanghai Juhao; (iv) during the term of the agreement, the franchisee may use Shanghai Juhao’s trademark and service mark and Shanghai Juhao authorizes the franchisee to sell the products or services of Shanghai Juhao; (v) Shanghai Juhao may inspect the operation of the franchisee from time to time; (vi) during the term of the agreement, the franchisee’s store structure, internal and external decoration shall comply with the standards set by Shanghai Juhao; (vii) the franchisee shall purchase the products from Shanghai Juhao for at least RMB 4,000 every two months; (viii) the franchisee shall sell the products (or provide services) at the price specified by Shanghai Juhao; (ix) the franchisee shall not transfer the operation right without authorization of Shanghai Juhao, and shall not conduct business beyond its authorized territory (the area within 1.5 km radius of the address of the franchisee); (x) the franchisee will receive a 20% discount of the retail price of the products sold directly on the LHH mall members; and (xi) the term of the agreement is usually one year subject to renewal.
See “ Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIE and the shareholders of the VIE for our business operations, which may not be as effective as direct ownership in providing operational control .” Shanghai Juhao, the VIE, engages in e-commerce retail and related services, including online data processing and transaction processing service, which are within the category in which foreign investment is classified into License Category pursuant to the most recently published Negative List 2021 version.
See “ Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIE and the shareholders of the VIE for our business operations, which may not be as effective as direct ownership in providing operational control .” Shanghai Juhao, the VIE, engages in e-commerce retail and related services, including online data processing and transaction processing service, which are within the category in which foreign investment is classified into License Category pursuant to the most recently published Negative List 2024 version.
Zhiwei Xu, the Chairman of the Board of Directors and Chief Executive Officer of the Company is also the Chairman of the Board of Directors of Hongrun. Jiangsu Longrich Group Co., Ltd., the largest shareholder of Hongrun is also a related party of the Company.
Zhiwei Xu, then Chairman of the Board of Directors and Chief Executive Officer of the Company is also the Chairman of the Board of Directors of Hongrun. Jiangsu Longrich Group Co., Ltd., the largest shareholder of Hongrun is also a related party of the Company.
We have relationships with leading cosmetics and health and nutritional supplements manufacturers and distributors in China, which not only to provide us with high-quality products, but also supply chain services to our platform. By connecting these suppliers/distributors with our online sales and offline authorized stores, we have created a closed-circle to brings tremendous convenience and cost savings to our customers.
We have relationships with leading cosmetics and health and nutritional supplements manufacturers and distributors in China, which not only to provide us with high-quality products, but also supply chain services to our platform. By connecting these suppliers/distributors with our online sales and offline authorized stores, we have created a closed-circle to bring tremendous convenience and cost savings to our customers.
We currently operate under four sales channels: Online Direct Sales, Authorized Retail Store Distribution, Third-party Merchants and Live streaming marketing. 48 Shanghai Juhao started its operation in 2012 and is among the first group of membership-based online-to-offline cosmetics, health and nutritional supplements and household products e-commerce platforms in China.
We currently operate under four sales channels: Online Direct Sales, Authorized Retail Store Distribution, Third-party Merchants and Live streaming marketing. 47 Shanghai Juhao started its operation in 2012 and is among the first group of membership-based online-to-offline cosmetics, health and nutritional supplements and household products e-commerce platforms in China.
In order to reduce the cost of third-party logistics as much as possible, we usually only sign a year-round agreement with express companies to receive better rate. We regularly monitor and review the delivery companies’ performance and their compliance with our contractual terms. We typically negotiate and enter into logistics agreements on an annual basis.
In order to reduce the cost of third-party logistics as much as possible, we usually only sign a year-round agreement with express companies to receive better rates. We regularly monitor and review the delivery companies’ performance and their compliance with our contractual terms. We typically negotiate and enter into logistics agreements on an annual basis.
Other than revenue from product sales, we also earn service fees charged to third-party merchants for using our platform, which was immaterial.
Other than the revenue from product sales, we also earn service fees charged to third-party merchants for using our platform, which was immaterial.
Our front-end modules are supported by our content distribution network, dynamic and distributed cluster and a core database, providing our customers with quicker access to the product display they are interested in, and facilitating faster processing of their purchases. We have designed our systems to cope with our maximum peak concurrent visitors at all times.
Our front-end modules are supported by our content distribution network, dynamic and distributed clusters and a core database, providing our customers with quicker access to the product display they are interested in, and facilitating faster processing of their purchases. We have designed our systems to cope with our maximum peak concurrent visitors at all times.
Based on the forgoing, if we intend to provide funding to our wholly foreign owned subsidiaries through capital injection at or after their establishment, we should file with the State Administration for Market Regulation or its local counterparts, via the foreign investment comprehensive administrative system and register such funding with local banks for foreign exchange related matters.
Based on the foregoing, if we intend to provide funding to our wholly foreign owned subsidiaries through capital injection at or after their establishment, we should file with the State Administration for Market Regulation or its local counterparts, via the foreign investment comprehensive administrative system and register such funding with local banks for foreign exchange related matters.
For delivery to remote regions of China, we use China Post. We generally include the delivery cost in the fulfillment costs, except in rare instance of bulk orders where we require the purchaser to pay for shipping expenses. We leverage our large-scale operations and reputation to obtain favorable contractual terms from third-party delivery companies.
For delivery to remote regions of China, we use China Post. We generally include the delivery cost in the fulfillment costs, except in rare instances of bulk orders where we require the purchaser to pay for shipping expenses. We leverage our large-scale operations and reputation to obtain favorable contractual terms from third-party delivery companies.
Our customers can earn cash coupons for eligible purchases and become VIP members by registered their information with us on our platform, which status offers them additional benefits such as cash coupon rewards, exclusive products and free samples. We offer gifts and lucky draw promotions on our internet platform.
Our customers can earn cash coupons for eligible purchases and become VIP members by registering their information with us on our platform, which status offers them additional benefits such as cash coupon rewards, exclusive products and free samples. We offer gifts and lucky draw promotions on our internet platform.
We believe our module-based systems are highly scalable, which enable us to quickly expand system capacity and add new features and functionality to our systems in response to our business needs and evolving customers’ demands without affecting the operation of existing modules.
We believe our module-based systems are highly scalable, which enables us to quickly expand system capacity and add new features and functionality to our systems in response to our business needs and evolving customers’ demands without affecting the operation of existing modules.
Before selecting each product, we consider and analyze historical sales data, fashion trends, seasonality and customer feedbacks to project how many items of a particular product we should offer for curated sales, in our online shopping mall or for flash sales.
Before selecting each product, we consider and analyze historical sales data, fashion trends, seasonality and customer feedback to project how many items of a particular product we should offer for curated sales, in our online shopping mall or for flash sales.
Also, foreign investors or the foreign investment enterprise should be imposed legal liabilities for failing to report investment information in accordance with the requirements. This new Foreign Investment Law has provided a more transparent foreign investment environment in China.
Also, foreign investors or foreign investment enterprises should be imposed legal liabilities for failing to report investment information in accordance with the requirements. This new Foreign Investment Law has provided a more transparent foreign investment environment in China.
Our Mobile Platform We believe consumers will increasingly shop online through mobile app when the economy turns around. Therefore, we continue to invest resources to build a mobile application platform dedicated to providing a superior mobile shopping experience.
Our Mobile Platform We believe consumers will increasingly shop online through mobile apps when the economy turns around. Therefore, we continue to invest resources to build a mobile application platform dedicated to providing superior mobile shopping experience.
Certain selected products and sales events are offered exclusively on our mobile applications to increase their popularity. We also seek to provide customers with a customized shopping experience through analyzing and understanding their transaction histories and browsing patterns on our mobile application and develop targeted sales events to increase customer stickiness and enhance cross-selling opportunities.
Certain selected products and sales events are offered exclusively on our mobile applications to increase their popularity. We also seek to provide customers with customized shopping experience through analyzing and understanding their transaction histories and browsing patterns on our mobile application and to develop targeted sales events to increase customer loyalty and enhance cross-selling opportunities.
The shareholders of the VIE have pledged all of their right, title and equity interests in the VIE as security for WFOE to collect consulting services fees provided to the VIE through the Equity Interest Pledge Agreement.
The shareholders of the VIE have pledged all of their rights, title and equity interests in the VIE as security for WFOE to collect consulting services fees provided to the VIE through the Equity Interest Pledge Agreement.
In addition, if the operator deceives the consumer or sells a product that is known to be unqualified or defective, it shall not only compensate the consumer for the loss, but also pay the additional damages in accordance with the price of the goods or services three times.
In addition, if the operator deceives the consumer or sells a product that is known to be unqualified or defective, it shall not only compensate the consumer for the loss, but also pay the additional damages equals to three times the price of the goods or services.
In October 2019, SAFE promulgated the Circular 28 to further promote facilitation of cross-border trade and investment and relaxed certain restriction on foreign exchange settlement.
In October 2019, SAFE promulgated the Circular 28 to further promote facilitation of cross-border trade and investment and relaxed certain restrictions on foreign exchange settlement.
Our license was approved on February 1, 2019 and is valid for 5 years. Shanghai Juhao was at its early development stage between 2012 and 2017 and it did not apply for a value-added telecommunications business license until 2017.
Our license was approved on February 1, 2019, then renewed on February 1, 2024 and is valid for 5 years. Shanghai Juhao was at its early development stage between 2012 and 2017 and it did not apply for a value-added telecommunications business license until 2017.
As of December 31, 2023, we had authorized 26,746 Love Home Stores in 31 provinces of China, providing offline retail of our products. On April 28, 2021, the Company announced it has officially launched its “Juhao Best Choice” community group-buying store initiative to continue growing its offline retail market presence.
As of December 31, 2024, we had authorized 26,857 Love Home Stores in 31 provinces of China, providing offline retail of our products. On April 28, 2021, the Company announced it has officially launched its “Juhao Best Choice” community group-buying store initiative to continue growing its offline retail market presence.
The following table illustrates the categories of products we sell on our platform: Product Category Product Description Health and nutritional supplements and foods Products that regulate immune system, bone health products, beauty and beauty supplements Cosmetics Lipstick, foundation, cream, eyebrow pencil, makeup remover, lip enamel, eye shadow, mascara, eye liner Skin care Eye cream, eye mask, sunscreen cream, skin cream, moisturizing water, lotion, hand cream, cleansing cream, face cream, essence, facial mask Body Care Body wash, shampoo, hair conditioner, hand sanitizer, essential oil, toothpaste, mouthwash, essential oil soap, styling gel For baby and children Lip balm, baby massage oil, moisture cream, shower gel, shampoo, hand sanitizer, baby toothpaste, diaper, baby soap Washing items Detergent, washing powder, washing tablet, washing liquid, kitchen cleaner, soap, pipe dredger Fragrances Traditional herbal lotion, perfume for men and women, fragrant ball, air purifying box Food Fruits, vegetables, snacks, roasted sunflower seeds and nuts, biscuits and pastries, health foods, beverages, wines, prepared products, kitchen seasoning, dry grain and oil Electronics Large electronic appliances, home appliances, kitchen appliances, cosmetic electronic appliances Apparel Men’s and women’s clothes, men’s and women’s shoes, men’s and women’s bags, suitcases and accessories Household Products Home textile, home decoration, maternal and infant products, kitchenware, daily life necessities, cosmetic products We also sell the following products under our own brands: Product Category Product Description Skin care Facial mask Body Care Body wash, shampoo, hair conditioner For baby and children Lip balm, baby massage oil, moisture cream, shower gel, shampoo, hand sanitizer, baby toothpaste, diaper, baby soap Food Roasted seeds and nuts, beverages, prepared products Electronics Home appliances Apparel Suitcases and accessories Household Products Daily life necessities Exclusive Products To enhance consumers’ attraction to our product offerings and online shopping mall, we enter into exclusive arrangements from time to time with certain manufacturers and suppliers to offer exclusive products, including products under our owns brand names on our platform.
The following table illustrates the categories of products we sell on our platform: Product Category Product Description Health and nutritional supplements and foods Products that regulate immune system, bone health products, beauty and beauty supplements Cosmetics Lipstick, foundation, cream, eyebrow pencil, makeup remover, lip enamel, eye shadow, mascara, eye liner Skin care Eye cream, eye mask, sunscreen cream, skin cream, moisturizing water, lotion, hand cream, cleansing cream, face cream, essence, facial mask Body Care Body wash, shampoo, hair conditioner, hand sanitizer, essential oil, toothpaste, mouthwash, essential oil soap For babies and children Moisture cream, shower gel, shampoo, baby toothpaste, diaper Washing items Detergent, washing powder, washing tablet, washing liquid, kitchen cleaner, soap, pipe dredger Fragrances Perfume for men and women Food Snacks, roasted sunflower seeds and nuts, biscuits and pastries, health foods, beverages, wines, prepared products, kitchen seasoning, dry grain and oil Electronics Large electronic appliances, home appliances, kitchen appliances, cosmetic electronic appliances Apparel Men’s and women’s shoes, suitcases and accessories Household Products Home textile, maternal and infant products, kitchenware, daily life necessities, cosmetic products We also sell the following products under our own brands: Product Category Product Description Skin care Facial mask Body Care Body wash, shampoo, hair conditioner For babies and children Lip balm, baby massage oil, moisture cream, shower gel, shampoo, hand sanitizer, baby toothpaste, diaper, baby soap Food Roasted seeds and nuts, beverages, prepared products Electronics Home appliances Apparel Suitcases and accessories Household Products Daily life necessities Exclusive Products To enhance consumers’ attraction to our product offerings and online shopping mall, we enter into exclusive arrangements from time to time with certain manufacturers and suppliers to offer exclusive products, including products under our owns brand names on our platform.
We use different sales channels to market and sell the products on our online shopping mall, except for the products purchased and taken by walk-in customers at our authorized stores. For the products sold through our online shopping mall, which represents the majority of our sales, these are either purchased on our online portal/platform or through our mobile app.
We use different sales channels to market and sell the products on our online shopping mall, except for the products purchased and picked up walk-in customers at our authorized stores. For the products sold through our online shopping mall, which represents the majority of our sales, these are either purchased on our online portal/platform or through our mobile app.
As an important part of our strategy to better serve consumers, we had 26,746 offline authorized stores spread out in 31 provinces in China as of December 31, 2023, providing both online and offline retail and wholesale services to our customers.
As an important part of our strategy to better serve consumers, we had 26,857 offline authorized stores spread out in 31 provinces in China as of December 31, 2024, providing both online and offline retail and wholesale services to our customers.
Also, Shanghai Juhao has established cooperation relationship with ZTO Express in smart logistics and new community retail, which allows Shanghai Juhao to connect to ZTO’s cloud-based warehousing system, and to transform to intelligent logistics relying on ZTO’s cloud warehouse system.
Also, Shanghai Juhao established a cooperation relationship with ZTO Express in smart logistics and new community retail, which allowed Shanghai Juhao to connect to ZTO’s cloud-based warehousing system, and to transform to intelligent logistics relying on ZTO’s cloud warehouse system.
As of December 31, 2023, we had approximately 427 suppliers and 421 third-party merchants. As of December 31, 2022, we had approximately 281 suppliers and 266 third-party merchants. We charge a service fee to third-party merchants that open stores on our platform based upon their sales volume generated from their online stores ranging from 5% - 10% of their revenues.
As of December 31, 2024, we had approximately 799 suppliers and 274 third-party merchants. As of December 31, 2023, we had approximately 427 suppliers and 421 third-party merchants. We charge a service fee to third-party merchants that open stores on our platform based upon their sales volume generated from their online stores ranging from 5% – 10% of their revenues.
We also sell household products, such as pots and pans, smartphones, functional shoes, paper towels, cups, vacuum cleaners, massagers and towels on our platform, and those products account for 51.4% of the products sold on our platform for the year ended December 31, 2023.
We also sell household products, such as pots and pans, smartphones, functional shoes, paper towels, cups, vacuum cleaners, massagers and towels on our platform, and those products account for 47.2% of the products sold on our platform for the year ended December 31, 2024.
In December 2021, MOFCOM and NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), or the Negative List, which became effective on January 1, 2022. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other PRC regulations.
In September 2024, MOFCOM and NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version), or the Negative List, which became effective on November 1, 2024. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other PRC regulations.
The Company has submitted and passed current annual report for 2023.
The Company has submitted and passed current annual report for 2024.
Ltd. RMB 793,800 December 31, 2024 Office No. 46-5 Xinzhuang Avenue, Xinzhuang County, Changshu City, Jiangsu Province, China Colori, Inc. RMB 1,554,230 December 31, 2024 Warehouse No. 26 Longrich Blvd., Longrich Industrial Park, Changshu City, Jiangsu Province, China Jiangsu Longrich Bioscience Co. Ltd.
Ltd. RMB 793,800 December 31, 2025 Office No. 46-5 Xinzhuang Avenue, Xinzhuang County, Changshu City, Jiangsu Province, China Colori, Inc. RMB 1,013,964 December 31, 2025 Warehouse No. 26 Longrich Blvd., Longrich Industrial Park, Changshu City, Jiangsu Province, China Jiangsu Longrich Bioscience Co. Ltd.
In June, 2020, the MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2020 Version), or the Negative List, which was further replaced by the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), as promulgated by the MOFCOM and the NDRC in December 2021 and became effective on January 1, 2022.
In June, 2020, the MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2020 Version), or the Negative List, which was further replaced by the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version), as promulgated by the MOFCOM and the NDRC in September 2024 and became effective on November 1, 2024.
We also have other material leases of one office space for approximately 5,976 square meters, two warehouse space for approximately 11,550 square meters and one Juhao Best Choice Store space for approximately 3,956 square meters in Chuangshu City, Jiangsu Province. Our leases can be renewed upon mutual agreement with our lessors.
We also have other material leases of an office space for approximately 5,976 square meters, a warehouse space for approximately 3,621 square meters and one Juhao Best Choice Store space for approximately 2,851 square meters in Chuangshu City, Jiangsu Province. Our leases can be renewed upon mutual agreement with our lessors.
The Company also provide the store owners with live-streaming marketing skill training and upgrade and expand certain existing LHH Stores to Juhao Best Choice stores. As of December 31, 2023, Shanghai Juhao has opened 3 self-operated Juhao Best Choice community group buying stores in various cities in China as the experimental and demonstration stores for this development.
The Company also provides the store owners with live-streaming marketing skill training and upgrade and expands certain existing LHH Stores to Juhao Best Choice stores. As of December 31, 2024, Shanghai Juhao has opened five self-operated Juhao Best Choice community group buying stores in China as the experimental and demonstration stores for this development.
In 2021, we generated approximately 20.83% of GMV from our mobile app and the remaining 79.17% was generated on our online portal/platform. 52 Our Android- and iOS-based mobile applications allow customers to quickly and efficiently view, search, select and purchase products offered on our platform. The layout of products offered on our mobile applications is intuitive and easy to use.
In 2022, we generated approximately 8.76% of GMV from our mobile app and the remaining 91.24% was generated on our online portal/platform. 52 Our Android- and iOS-based mobile applications allow customers to quickly and efficiently view, search, select and purchase products offered on our platform. The layout of products offered on our mobile applications is intuitive and easy to use.
Details of the subsidiaries and VIE of the Company are set out below: Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal Activities Jowell Tech June 24, 2019 Hong Kong 100 Holding Company Shanghai Jowell October 15, 2019 Shanghai, China 100 Holding Company Shanghai Juhao* July 31, 2012 Shanghai, China 0 (VIE) Online Retails Juhao Yuan December 20, 2022 Hangzhou, China 0 (subsidiary of VIE) Brand Management Shanghai Lianfu April 13, 2023 Shanghai, China 100% Live Stream Ecommerce * Shanghai Juhao has five wholly owned Juhao Best Choice Stores, located in the cities of Nantong and Changshu, and seventeen wholly owned subsidiaries engaging online promotion of Shanghai Juhao’s products and services located in the cities of Changshu, Shanghai and Guangzhou.
Details of the subsidiaries and VIE of the Company are set out below: Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal Activities Jowell Tech June 24, 2019 Hong Kong 100 Holding Company Shanghai Jowell October 15, 2019 Shanghai, China 100 Holding Company Shanghai Juhao* July 31, 2012 Shanghai, China 0 (VIE ) Online Retails Shanghai Lianfu April 13, 2023 Shanghai, China 100 % Live Stream Ecommerce Baotou Juhaoyuan September 5, 2024 Baotou, China 55 % Trading * Shanghai Juhao has five wholly owned Juhao Best Choice Stores, located in the cities of Nantong and Changshu, and fifteen wholly owned subsidiaries engaging online promotion of Shanghai Juhao’s products and services located in the cities of Shanghai and Guangzhou.
For the fiscal year ended December 31, 2023, approximately $55.1 million or 34.4% of our revenue were generated from the sales of cosmetic products, approximately $22.6 million or 14.1% of our revenue were generated from the sales of health and nutritional supplements and $81.8 million or 51.1% of our revenue were generated from the sales of household products.
For the fiscal year ended December 31, 2024, approximately $36.3 million, or 27.3%, of our revenue were generated from the sales of cosmetic products, approximately $33.6 million, or 25.2%, of our revenue were generated from the sales of health and nutritional supplements and $62.8 million, or 47.2%, of our revenue were generated from the sales of household products. 48 For the fiscal year ended December 31, 2023, approximately $55.1 million, or 34.4%, of our revenue were generated from the sales of cosmetic products, approximately $22.6 million, or 14.1%, of our revenue were generated from the sales of health and nutritional supplements and $81.8 million, or 51.1%, of our revenue were generated from the sales of household products.
In 2022, there were 184,079 customer-placed orders on our platform, of which 62,936 or 34.19% are repeat customers. In 2021, there were 195,880 customer-placed orders on our platform, of which 68,088 or 34.76% are repeat customers. In 2023, the number of repeat customers decreased by 22.80% compared with 2022.
In 2022, there were 184,079 customer-placed orders on our platform, of which 62,936 or 34.19% are repeat customers. In 2024, the number of repeat customers increased by 117.96% compared with 2023. In 2023, the number of repeat customers decreased by 22.80% compared with 2022.
In 2023, we generated approximately 6.02% of Gross Merchandise Volume (“GMV”) from our mobile app and the remaining 93.98% was generated on our online portal/platform. In 2022, we generated approximately 8.76% of Gross Merchandise Volume (“GMV”) from our mobile app and the remaining 91.24% was generated on our online portal/platform.
In 2024, we generated approximately 9.25% of Gross Merchandise Volume (“GMV”) from our mobile app and the remaining 90.75% was generated on our online portal/platform. In 2023, we generated approximately 6.02% of Gross Merchandise Volume (“GMV”) from our mobile app and the remaining 93.98% was generated on our online portal/platform.
On December 20, 2022, Shanghai Juhao incorporated Juhao Yuan Brand Management (Hangzhou) Co., Ltd. (“Juhao Yuan”) with a third-party in Hangzhou City and Shanghai Juhao owns 55% equity interest of Juhao Yuan. On April 13, 2023, Shanghai Jowell incorporated a wholly owned subsidiary Shanghai Lianfu in Shanghai city.
On December 20, 2022, Shanghai Juhao incorporated Juhao Yuan Brand Management (Hangzhou) Co., Ltd. (“Juhao Yuan”) with a third-party in Hangzhou City and Shanghai Juhao owns 55% and the third party owns 45% equity interest of Juhao Yuan, respectively.
As of December 31, 2023, our platform had 2,483,250 VIP members who have registered on our platform, 270 merchants who have opened their own stores on our platform, and 48.2% of products sold on our platform were cosmetics and health and nutritional supplements.
As of December 31, 2024, our platform had 2,485,533 VIP members who have registered on our platform, 274 merchants who have opened their own stores on our platform, and 52.6% of products sold on our platform were cosmetics and health and nutritional supplements.
The total aggregate ordinary shares of the Company authorized for issuance during the term of the Equity Plan is limited to 4,000,000 shares.
The total aggregate ordinary shares of the Company authorized for issuance during the term of the Equity Plan is limited to 4,000,000 shares (before the Share Consolidation effected on October 25, 2023).
The “Food Management License Management Measures” promulgated by the State Food Product Supervision and Administration Bureau in August 2015 and revised in 2017 regulates food business licensing activities, strengthens the supervision and management of food business, and guarantees food safety. Food business operators engaged in food business activities shall receive a Food Business License at a business location.
The Food Business License and Filing Management Measures promulgated by the State Market Supervision and Administration Bureau in June 2023 regulates food business licensing activities, strengthens the supervision and management of food business, and guarantees food safety. Food business operators engaged in food business activities shall receive a Food Business License at a business location.
Under the Telecommunications Regulations of the People’s Republic of China and Administrative Measures on Internet Information Services, a telecommunications service provider is required to procure operating licenses from the MIIT or its provincial counterparts, prior to the commencement of its operations, otherwise such operator might be subject to sanctions including corrective orders and warnings from the competent administration authority, fines and confiscation of illegal gains.
Zhiwei Xu, a major shareholder of Shanghai Juhao, has provided an indemnification letter to the Company and agreed that he will indemnify Shanghai Juhao and Company for any losses and penalties imposed by government agencies due to the lack of a value-added telecommunication business license prior to February 1, 2019 Under the Telecommunications Regulations of the People’s Republic of China and Administrative Measures on Internet Information Services, a telecommunications service provider is required to procure operating licenses from the MIIT or its provincial counterparts, prior to the commencement of its operations, otherwise such operator might be subject to sanctions including corrective orders and warnings from the competent administration authority, fines and confiscation of illegal gains.
We do not substantially depend on any of our exclusive products suppliers. 51 Customers Our large, engaged and loyal customer base is the key to our success. The loyalty of our customer base is demonstrated by the repeat purchase rates. In 2023, there were 131,616 customer-placed orders on our platform, of which 48,591 or 36.92% are repeat customers.
The loyalty of our customer base is demonstrated by repeat purchase rates. In 2024, there were 343,440 customer-placed orders on our platform, of which 105,908 or 30.84% are repeat customers. In 2023, there were 131,616 customer-placed orders on our platform, of which 48,591 or 36.92% are repeat customers.
In 2022, the number of repeat customers decreased by 7.57% compared with 2021. In 2021, the number of repeat customers increased by 64.31% compared with 2020. If a customer returns to our platform and purchase from us within 30 days from his/her previous purchase, it is considered as a repeat customer.
If a customer returns to our platform and purchases from us within 30 days from his/her previous purchase, it is considered as a repeat customer.
In addition, under the requirements of other relevant provisions of the “Food Safety Law of the People’s Republic of China” and “Regulations on the Administration of Production and Marketing of Alcoholic Products in Shanghai”, we have also obtained the renewable “Retail License for Alcoholic Products” for alcohol related products on our platform on September 4, 2020 which is valid for four years and we will apply for renewal before its expiration date on September 4, 2024. 62 Regulations on product quality and customer protection According to the “Product Quality Law of the People’s Republic of China” which came into effect in September 1993 and the “Product Quality Law of the People’s Republic of China” revised by the Chinese People’s Congress in 2000, 2009, and 2018 respectively, the products sold must comply with relevant safety standards, and the seller should take measures to maintain quality of products.
These licenses are renewable every 5 years. 62 Regulations on product quality and customer protection According to the “Product Quality Law of the People’s Republic of China” which came into effect in September 1993 and the “Product Quality Law of the People’s Republic of China” revised by the Chinese People’s Congress in 2000, 2009, and 2018 respectively, the products sold must comply with relevant safety standards, and the seller should take measures to maintain quality of products.
RMB 1,188,000 June 30, 2024 Warehouse We believe that we will be able to obtain adequate facilities, principally through leasing, to accommodate our future expansion plans. ITEM 4A. UNRESOLVED STAFF COMMENTS Not Applicable
RMB 2,740,915 December 31, 2025 Office 227 Provincial Rd, Xinzhuang County, Changshu City, Jiangsu Province, China Colori, Inc. RMB 370,630 December 31, 2025 Juhao Best Choice Store We believe that we will be able to obtain adequate facilities, principally through leasing, to accommodate our future expansion plans. ITEM 4A. UNRESOLVED STAFF COMMENTS Not Applicable
The food business license is valid for five years. Shanghai Juhao holds a food business license issued on May 12, 2016, which was renewed on April 22, 2021 with an expiration date of April 21, 2026. This license is renewable every 5 years and the Company shall submit a renewal application with the authority 30 days before its expiration date.
The Food Business License is valid for five years. Shanghai Juhao and WFOE currently each hold a Food Business License issued on March 19, 2025 with an expiration date of March 20, 2030.
Removed
For the fiscal year ended December 31, 2021, approximately $78.8 million or 46.13% of our revenue were generated from the sales of cosmetic products, approximately $56.1 million or 32.83% of our revenue were generated from the sales of health and nutritional supplements and $35.9 million or 21.03% of our revenue were generated from the sales of household products.
Added
Shanghai Juhao sold its 55% ownership to the 45% shareholder at $0 in August 2024 as Juhao Yuan has suffered consecutive losses since its establishment. On April 13, 2023, Shanghai Jowell incorporated a wholly owned subsidiary Shanghai Lianfu in Shanghai city. On September 5, 2024, Shanghai Jowell incorporated Baotou Juhaoyuan Trading Co., Ltd.
Removed
Zhiwei Xu, a major shareholder of Shanghai Juhao, has provided an indemnification letter to the Company and agreed that he will indemnify Shanghai Juhao and Company for any losses and penalties imposed by government agencies due to the lack of a value-added telecommunication business license prior to February 1, 2019.
Added
(“Baotou Juhaoyuan”) in Baotou City, China, with a third-party individual that owns 30%, Shanghai Jowell owns 55% and an officer of the Company owns 15% equity interest of Baotou Juhaoyuan.
Removed
RMB 2,740,915 December 31, 2024 Office 227 Provincial Rd, Xinzhuang County, Changshu City, Jiangsu Province, China Colori, Inc. RMB 1,028,560 August 31, 2024 Juhao Best Choice Store Changshu Tonggang road Changkelong Logistics Center Suzhou Zhongtong Lianshang Supply Chain Management Co., Ltd.
Added
We do not substantially depend on such products from any of our exclusive products suppliers. In response to the sluggish market and demand for low-priced products after a slow recovery from the pandemic, we have launched high-quality yet affordable daily necessities this year. 51 Customers Our large, engaged and loyal customer base is the key to our success.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

118 edited+36 added−18 removed137 unchanged
Shanghai Jowell has gained control over Shanghai Juhao and Shanghai Juhao is considered a Variable Interest Entity (“VIE”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation”. Jowell Global, Jowell Tech, are holding companies with no material operations of their own and do not hold any material assets.
Shanghai Jowell has gained control over Shanghai Juhao and Shanghai Juhao is considered a Variable Interest Entity (“VIE”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation”. Jowell Global and Jowell Tech are holding companies with no material operations of their own and do not hold any material assets.
Income Taxes Expense (Benefit) Our income taxes expense was approximately $135 thousand in 2023 as compared to income taxes benefit of about $420 thousand in 2022. The effective income tax rate was 1.0% and 3.5% in 2023 and 2022, respectively.
Income Taxes Benefit Our income taxes expense was approximately $135 thousand in 2023 as compared to income taxes benefit of about $420 thousand in 2022. The effective income tax rate was 1.0% and 3.5% in 2023 and 2022, respectively.
Currently, we have three types of revenue streams deriving from our three major product categories: cosmetic products, health and nutritional supplements and household products. Other than revenue from product sales, we also earn service fees charged to third-party merchants for using our platform, which was immaterial and is grouped in “Others” presented below.
Currently, we have three types of revenue streams deriving from our three major product categories: cosmetic products, health and nutritional supplements and household products. Other than revenue from product sales, we also earn service fees charged to third-party merchants for using our platform, which was immaterial and is grouped in “Others” presented below.
Operating Expenses Operating expenses primarily consist of cost of revenues, fulfilment expenses, marketing expenses and general and administrative expenses.
Operating Expenses Operating expenses primarily consist of cost of revenues, fulfilment expenses, marketing expenses and general and administrative expenses.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such an entity.
Qian was the financial controller of Financial Management Department of Jiangsu Longrich Bioscience Co. Ltd. From June 2012 to February 2018, Mr. Qian was the director of the accounting team of Financial Management Department of Jiangsu Longrich Bioscience Co. Ltd. Mr. Qian received his bachelor’s degree in from Jiangsu University in June 2006 with a major in accounting.
Qian was the financial controller of Financial Management Department of Jiangsu Longrich Bioscience Co. Ltd. From June 2012 to February 2018, Mr. Qian was the director of the accounting team of Financial Management Department of Jiangsu Longrich Bioscience Co. Ltd. Mr. Qian received his bachelor’s degree from Jiangsu University in June 2006 with a major in accounting.
Kuo was the chief financial officer of China Biologic Products (NASDAQ: CBPO) from June 2008 to May 2012 and was the vice president-finance of China Biologic Products from September 2007 to May 2008. Mr.
Kuo was the chief financial officer of China Biologic Products (NASDAQ: CBPO) from June 2008 to May 2012 and was the vice president-finance of China Biologic Products September 2007 to May 2008. Mr.
For the Year Ended December 31, Variance 2023 % 2022 % Amount % (in thousands, except for percentages) Cosmetic products $ 55,068 34.4 % $ 99,282 47.3 % $ (44,214 ) (44.5 )% Health and Nutritional Supplements 22,613 14.1 % 39,949 19.0 % (17,336 ) (43.4 )% Household Products 81,783 51.1 % 70,627 33.6 % 11,156 15.8 % Other 545 0.4 % 123 0.1 % 422 343.1 % Total $ 160,009 100.0 % $ 209,981 100.0 % $ (49,972 ) (23.8 )% Total revenue for the fiscal year ended December 31, 2023 decreased by about $50.0 million, or 23.8%, to $160.0 million from $210.0 million for the fiscal year ended December 31, 2022.
For the Year Ended December 31, Variance 2023 % 2022 % Amount % (in thousands, except for percentages) Cosmetic products $ 55,068 34.4 % $ 99,282 47.3 % $ (44,214 ) (44.5 )% Health and Nutritional Supplements 22,613 14.1 % 39,949 19.0 % (17,336 ) (43.4 )% Household Products 81,783 51.1 % 70,627 33.6 % 11,156 15.8 % Other 545 0.4 % 123 0.1 % 422 343.1 % Total $ 160,009 100.0 % $ 209,981 100.0 % $ (49,972 ) (23.8 )% 80 Total revenue for the fiscal year ended December 31, 2023 decreased by about $50.0 million, or 23.8%, to $160.0 million from $210.0 million for the fiscal year ended December 31, 2022.
While our business is influenced by general factors affecting China’s online retail industry, our operating results are more directly affected by certain company specific factors, including: ● our ability to attract and retain customers at reasonable cost; ● our ability to establish and maintain relationships with suppliers, third-party merchants and other service providers; ● our ability to invest in growth and new technologies while improving operating efficiency; ● our ability to control marketing expenses, while promoting our brand and internet platform cost-effectively; ● our ability to source new products to meet customer demands; and ● our ability to establish Juhao Best Choice Stores and continue to expand offline LHH Stores and increase the interactions between our online platform and offline stores. ● our ability to compete effectively and to execute our strategies successfully. 74 Impact of COVID-19 Beginning in late 2019, there was an outbreak of COVID-19 (coronavirus) which has spread quickly across many parts in China, the U.S. and worldwide.
While our business is influenced by general factors affecting China’s online retail industry, our operating results are more directly affected by certain company specific factors, including: ● our ability to attract and retain customers at reasonable cost; ● our ability to establish and maintain relationships with suppliers, third-party merchants and other service providers; ● our ability to invest in growth and new technologies while improving operating efficiency; ● our ability to control marketing expenses, while promoting our brand and internet platform cost-effectively; ● our ability to source new products to meet customer demands; and ● our ability to establish Juhao Best Choice Stores and continue to expand offline LHH Stores and increase the interactions between our online platform and offline stores. ● our ability to compete effectively and to execute our strategies successfully. 75 Impact of COVID-19 Beginning in late 2019, there was an outbreak of COVID-19 (coronavirus) which has spread quickly across many parts in China, the U.S. and worldwide.
In accordance with our Audit Committee Charter, our Audit Committee shall: ● evaluate the independence and performance of, and assess the qualifications of, our independent auditor, and engage such independent auditor; ● approve the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approve in advance any non-audit service to be provided by the independent auditor; 91 ● monitor the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law; ● review the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and review with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements; ● oversee all aspects our systems of internal accounting control and corporate governance functions on behalf of the board; ● review and approve in advance any proposed related-party transactions and report to the full Board on any approved transactions; and ● provide oversight assistance in connection with legal, ethical and risk management compliance programs established by management and the Board, including Sarbanes-Oxley Act implementation, and make recommendations to the Board regarding corporate governance issues and policy decisions.
In accordance with our Audit Committee Charter, our Audit Committee shall: ● evaluate the independence and performance of, and assess the qualifications of, our independent auditor, and engage such independent auditor; ● approve the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approve in advance any non-audit service to be provided by the independent auditor; 93 ● monitor the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law; ● review the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and review with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements; ● oversee all aspects our systems of internal accounting control and corporate governance functions on behalf of the board; ● review and approve in advance any proposed related-party transactions and report to the full Board on any approved transactions; and ● provide oversight assistance in connection with legal, ethical and risk management compliance programs established by management and the Board, including Sarbanes-Oxley Act implementation, and make recommendations to the Board regarding corporate governance issues and policy decisions.
Zhao has served as supervisor of Nantong Zhuama Bioscience Co., Ltd. From April 1996 to May 2019, Ms. Zhao served in various positions at Jiangsu Longrich Group Co., Ltd. including head of investment department, general manager of its subsidiary company, director of customer service department and director of planning and information department. Ms.
Zhao served as supervisor of Nantong Zhuama Bioscience Co., Ltd. From April 1996 to May 2019, Ms. Zhao served in various positions at Jiangsu Longrich Group Co., Ltd. including head of investment department, general manager of its subsidiary company, director of customer service department and director of planning and information department. Ms.
In such case, the executive officer will solely be entitled to accrued and unpaid salary through the effective date of such termination, and his/her right to all other benefits will terminate, except as required by any applicable law. The executive officer is not entitled to severance payments upon any termination.
In such case, the executive officer will solely be entitled to an accrued and unpaid salary through the effective date of such termination, and his/her right to all other benefits will terminate, except as required by any applicable law. The executive officer is not entitled to severance payments upon any termination.
Compared to the year ended December 31, 2022, sales of cosmetic products decreased by about $44.2 million, or 44.5%, in the year ended December 31, 2023. The decrease in revenue of cosmetic products is mainly due to significant decrease in weighted average unit price and units for products sold.
Compared to the year ended December 31, 2022, sales of cosmetic products decreased by about $44.2 million, or 44.5%, in the year ended December 31, 2023. The decrease in revenue of cosmetic products is mainly due to a significant decrease in weighted average unit price and units for products sold.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the revenues from our products do not increase with such increased costs. 84 Interest rate risk Our exposure to interest rate risk primarily relates to the interest rate that our deposited cash can earn, on the other hand, interest-earning instruments carry a degree of interest rate risk.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the revenues from our products do not increase with such increased costs. 85 Interest rate risk Our exposure to interest rate risk primarily relates to the interest rate that our deposited cash can earn, on the other hand, interest-earning instruments carry a degree of interest rate risk.
The decrease in accounts payables is mainly due to shrinking credit term provided by our third-party vendors. The decrease in accounts receivables is mainly due to decrease in sales to local distributors and wholesalers which we provided certain credit terms based on our evaluation of their creditworthiness.
The decrease in accounts payables is mainly due to shrinking credit term provided by our third-party vendors. The decrease in accounts receivables is mainly due to a decrease in sales to local distributors and wholesalers which we provided certain credit terms based on our evaluation of their creditworthiness.
For the Year Ended December 31, 2023 2022 Variance $ Amount % of Revenue $ Amount % of Revenue $ Amount % Percentage (in thousands, except for percentages) Revenue $ 160,009 100.0 % $ 209,981 100.0 % $ (49,972 ) (23.8 )% Operating Expenses: Cost of Revenues 156,738 98.0 % 203,738 97.0 % (47,000 ) (23.1 )% Fulfilment 3,022 1.8 % 3,700 1.8 % (678 ) (18.3 )% Marketing 7,771 4.9 % 8,795 4.2 % (1,024 ) (11.6 )% General and Administrative 3,369 2.1 % 5,789 2.8 % (2,420 ) (41.8 )% Total Operating Expenses 170,900 106.8 % 222,022 105.8 % (51,122 ) (23.0 )% Loss from Operations (10,891 ) (6.8 )% (12,041 ) (5.7 )% 1,150 (9.6 )% Other Income (loss) (494 ) (0.3 )% 89 0.0 % (583 ) (655.1 )% Loss before Income Taxes (11,385 ) (7.1 )% (11,952 ) (5.7 )% 567 (4.7 )% Income Taxes Expense (Benefit) 135 (0.1 )% (420 ) (0.2 )% 555 (132.2 )% Net Loss (11,520 ) (7.2 )% (11,532 ) (5.5 )% 12 (0.1 )% Other Comprehensive Loss, net of tax (898 ) (0.6 )% (2,446 ) (1.2 )% 1,548 (63.3 )% Comprehensive Loss $ (12,418 ) (7.8 )% $ (13,978 ) (6.7 )% $ 1,560 (11.2 )% 75 Revenue Through our website at www.1juhao.com and mobile app, we engage primarily in the sales of cosmetic products, health and nutritional supplements and household products sourced from third-party manufacturers and distributors.
For the Year Ended December 31, 2023 2022 Variance $ Amount % of Revenue $ Amount % of Revenue $ Amount % Percentage (in thousands, except for percentages) Revenue $ 160,009 100.0 % $ 209,981 100.0 % $ (49,972 ) (23.8 )% Operating Expenses: Cost of Revenues 156,738 98.0 % 203,738 97.0 % (47,000 ) (23.1 )% Fulfilment 3,022 1.8 % 3,700 1.8 % (678 ) (18.3 )% Marketing 7,771 4.9 % 8,795 4.2 % (1,024 ) (11.6 )% General and Administrative 3,369 2.1 % 5,789 2.8 % (2,420 ) (41.8 )% Total Operating Expenses 170,900 106.8 % 222,022 105.8 % (51,122 ) (23.0 )% Loss from Operations (10,891 ) (6.8 )% (12,041 ) (5.7 )% 1,150 (9.6 )% Other Income (loss) (494 ) (0.3 )% 89 0.0 % (583 ) (655.1 )% Loss before Income Taxes (11,385 ) (7.1 )% (11,952 ) (5.7 )% 567 (4.7 )% Income Taxes Benefit (Expense) 135 (0.1 )% (420 ) (0.2 )% 555 (132.2 )% Net Loss (11,520 ) (7.2 )% (11,532 ) (5.5 )% 12 (0.1 )% Other Comprehensive Loss, net of tax (898 ) (0.6 )% (2,446 ) (1.2 )% 1,548 (63.3 )% Comprehensive Loss $ (12,418 ) (7.8 )% $ (13,978 ) (6.7 )% $ 1,560 (11.2 )% Revenue Through our website at www.1juhao.com and mobile app, we engage primarily in the sales of cosmetic products, health and nutritional supplements and household products sourced from manufacturers and distributors in China.
All categories of our operating expenses decreased in 2023 compared to 2022. Cost of revenues Cost of revenues primarily consists of the purchase price of merchandise that we sell directly on our platform and inbound shipping costs.
All categories of our operating expenses decreased in 2023 compared to 2022. 81 Cost of revenues Cost of revenues primarily consists of the purchase price of merchandise that we sell directly on our platform and inbound shipping costs.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2023 to December 31, 2023 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2024 to December 31, 2024 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
In addition, each executive officer has agreed to be bound by non-competition restrictions during the term of his or her employment and for six months following the last date of employment. 88 Each executive officer also has agreed not to (i) solicit or induce, on his/her own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of its affiliates; or (ii) solicit or induce, on his/her own behalf or on behalf of any other person or entity, any customer or prospective customer of the Company or any of their respective affiliates to reduce its business with the Company or any of its affiliates.
In addition, each executive officer has agreed to be bound by non-competition restrictions during the term of his or her employment and for six months following the last date of employment. 90 Each executive officer also has agreed not to (i) solicit or induce, on his/her own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of its affiliates; or (ii) solicit or induce, on his/her own behalf or on behalf of any other person or entity, any customer or prospective customer of the Company or any of their respective affiliates to reduce its business with the Company or any of its affiliates.
Kuo received Master of Arts in Accounting from The Ohio State University in February 1982 and his Bachelor of Arts in Economics from Soochow University in Taiwan in May 1977. We believe that Mr.
Kuo received a Master of Arts in Accounting from The Ohio State University in February 1982 and his Bachelor of Arts in Economics from Soochow University in Taiwan in May 1977. We believe that Mr.
Zhiwei Xu, the Chairman of the Board of Directors and Chief Executive Officer of the Company is also the Chairman of the Board of Directors of Hongrun. Jiangsu Longrich Group Co., Ltd., the largest shareholder of Hongrun is also a related party of the Company.
Zhiwei Xu, then Chairman of the Board of Directors and Chief Executive Officer of the Company is also the Chairman of the Board of Directors of Hongrun. Jiangsu Longrich Group Co., Ltd., the largest shareholder of Hongrun is also a related party of the Company.
The decrease in advance to suppliers and inventories is mainly due to contraction of our operation. 82 Net cash used in operating activities in 2022 was $12.0 million.
The decrease in advance to suppliers and inventories is mainly due to contraction of our operation. Net cash used in operating activities in 2022 was $12.0 million.
The limitation over cash transfer within the Company does not raise additional liquidity risk as all of our liabilities are also denominated in RMB and we conduct our business primarily through the consolidated VIE in China. 83 We rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have.
The limitation over cash transfer within the Company does not raise additional liquidity risk as all of our liabilities are also denominated in RMB and we conduct our business primarily through the consolidated VIE in China. 84 We rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have.
As of the date of this report, we have opened 5 self-owned Juhao Best Choice stores. We will consolidate online and offline resources for store design and logistics services to develop franchisee third-party store owners and provide guidance and trainings for store owners with a unified system for store management, design, service criteria, SKU management and product delivery.
As of the date of this report, we have opened 5 self-owned Juhao Best Choice stores. We will consolidate online and offline resources for store design and logistics services to develop franchisee third-party store owners and provide guidance and training for store owners with a unified system for store management, design, service criteria, SKU management and product delivery.
We periodically evaluate inventories for their net realizable value adjustments and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales.
We periodically evaluate inventories for their net realizable value adjustments and reduce the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales.
(EuroNext-Paris: AKOM, OTCQX: AKOM) from April 10, 2017 to August 28, 2022. From November 1, 2019 to December 16, 2021, Mr. Kuo has served as a board member, chairman of the audit committee and a member of compensation committee and corporate governance and nominating committee of Oriental Culture Holding LTD. (Nasdaq: OCG). From April 2016 to February 2020, Mr.
(OTCQX: AKOM) from April 10, 2017 to August 28, 2022. From November 1, 2019 to December 16, 2021, Mr. Kuo has served as a board member, chairman of the audit committee and a member of compensation committee and corporate governance and nominating committee of Oriental Culture Holding LTD. (Nasdaq: OCG). From April 2016 to February 2020, Mr.
We also recognize the importance of keeping our employees safe. 93 As required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund.
We also recognize the importance of keeping our employees safe. 95 As required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund.
The increase in weighted average unit costs of products sold of our household products is mainly because we sold more higher unit price products in 2023 than 2022 from weighted average unit cost. 77 Fulfillment Expenses Our fulfillment expenses primarily consist of costs related to order fulfillment, including charges we paid for order preparation, packaging, outbound freight, and physical storage.
The increase in weighted average unit costs of products sold of our household products is mainly because we sold higher unit price products in 2023 than 2022 from weighted average unit cost. Fulfillment Expenses Our fulfillment expenses primarily consist of costs related to order fulfillment, including charges we paid for order preparation, packaging, outbound freight, and physical storage.
It is therefore difficult for the Company to estimate the impact on our business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19 and new variants. We will continue to closely monitor the situation throughout 2024 and beyond.
It is therefore difficult for the Company to estimate the impact on our business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19 and new variants. We will continue to closely monitor the situation throughout 2025 and beyond.
Cost of revenues of cosmetic products decreased by about $43.0 million, or 43.7%, from $98.5 million in 2022 to about $55.5 million in 2023. The decrease is attributable to a decrease in the weighted average unit cost and a decrease in units sold of 6.3 million, or 26.8%, in 2023 comparing to 2022.
Cost of revenues of cosmetic products decreased by about $43.0 million, or 43.7%, from $98.5 million in 2022 to about $55.5 million in 2023. The decrease is attributable to a decrease in the weighted average unit cost and a decrease in units sold of 6.3 million, or 26.8%, in 2023 compared to 2022.
Marketing expenses constituted of 4.9% and 4.2% of our total revenue in 2023 and 2022, respectively. The decrease was primarily due to the decreased marketing and promotion activities as a result of our efforts to reduce expenses. General and Administrative Expenses Compared to 2022, our general and administrative expenses decreased by $2.4 million, or 41.8%, in 2023.
Marketing expenses constituted 4.9% and 4.2% of our total revenue in 2023 and 2022, respectively. The decrease was primarily due to the decreased marketing and promotional activities as a result of our efforts to reduce expenses. General and Administrative Expenses Compared to 2022, our general and administrative expenses decreased by $2.4 million, or 41.8%, in 2023.
Tristan Kuo(1)(2)(3) 69 Independent Director William Morris(1)(2)(3) 70 Independent Director (1) Member of audit committee. (2) Member of compensation committee. (3) Member of corporate governance and nominating committee. Biography Haiting Li. Mr. Li was appointed as Chairman and director of the Board and the Chief Executive Officer of the Company on March 1, 2023. Mr.
Tristan Kuo(1)(2)(3) 70 Independent Director William Morris(1)(2)(3) 71 Independent Director (1) Member of audit committee. (2) Member of compensation committee. (3) Member of corporate governance and nominating committee. Biography Haiting Li. Mr. Li was appointed as Chairman and director of the Board and the Chief Executive Officer of the Company on March 1, 2023. Mr.
In 2023, the downgraded demands from consumers led to significant decrease in the weighted average unit cost and units sold in 2023 comparing to 2022. Cost of revenues of health and nutritional supplements decreased by about $17.0 million, or 45.0%, from $37.8 million in 2022 to $20.8 million in 2023.
In 2023, the downgraded demands from consumers led to significant decrease in the weighted average unit cost and units sold in 2023 compared to 2022. Cost of revenues of health and nutritional supplements decreased by about $17.0 million, or 45.0%, from $37.8 million in 2022 to $20.8 million in 2023.
Fulfillment expenses decreased by $0.7 million, or 18.3%, in 2023 compared to 2022. The fulfillment expenses as a percentage of total revenues were 1.8% in 2023, slight up from 1.8% in 2022. The decrease was in consistent with the decline in total revenues. Marketing Expenses Marketing expenses decreased by $1.0 million, or 11.6%, in 2023 compared to 2022.
Fulfillment expenses decreased by $0.7 million, or 18.3%, in 2023 compared to 2022. The fulfillment expenses as a percentage of total revenues were 1.8% in 2023, slightly up from 1.8% in 2022. The decrease was consistent with the decline in total revenues. Marketing Expenses Marketing expenses decreased by $1.0 million, or 11.6%, in 2023 compared to 2022.
Wang graduated from Heilongjiang Finance School in 1990 with a major in in planning and statistics. 87 Y. Tristan Kuo . Mr. Kuo was appointed as a member of our board of directors on December 23, 2020. Since September 2022, Mr.
Wang graduated from Heilongjiang Finance School in 1990 with a major in in planning and statistics. 89 Y. Tristan Kuo . Mr. Kuo was appointed as a member of our board of directors on December 23, 2020. Since September 2022, Mr.
Each of such entity in the PRC is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors.
Each of such entities in the PRC is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors.
We have adopted a charter for the Corporate Governance and Nominating Committee. 92 In accordance with its charter, the Corporate Governance and Nominating Committee is responsible for identifying and proposing new potential director nominees to the board of directors for consideration and reviewing our corporate governance policies.
We have adopted a charter for the Corporate Governance and Nominating Committee. 94 In accordance with its charter, the Corporate Governance and Nominating Committee is responsible for identifying and proposing new potential director nominees to the board of directors for consideration and reviewing our corporate governance policies.
Results of Operations Certain tables within this section may not reflect the exact amount or percentage due to rounding. For the Year Ended December 31, 2023 and 2022 The following table summarized the results of our operations for the years ended December 31, 2023 and 2022, respectively, and provides information regarding the dollar and percentage fluctuations during such periods.
Results of Operations Certain tables within this section may not reflect the exact amount or percentage due to rounding. For the Years Ended December 31, 2024 and 2023 The following table summarized the results of our operations for the years ended December 31, 2024 and 2023, respectively, and provides information regarding the dollar and percentage fluctuations during such periods.
As of December 31, 2023 and 2022, we authorized 26,746 and 26,414 Love Home stores in 31 provinces of China, respectively, providing offline retail and wholesale of our products. On April 28, 2021, the Company announced it has officially launched its “Juhao Best Choice” community group-buying store initiative to continue growing its offline retail market presence.
As of December 31, 2024 and 2023, we authorized 26,857 and 26,746 Love Home stores in 31 provinces of China, respectively, providing offline retail and wholesale of our products. On April 28, 2021, the Company announced it has officially launched its “Juhao Best Choice” community group-buying store initiative to continue growing its offline retail market presence.
Compensation For the fiscal year ended December 31, 2023, we paid an aggregate of approximately $ 231,288 in cash to our directors and executive officers.
Compensation For the fiscal year ended December 31, 2024, we paid an aggregate of approximately $ 231,288 in cash to our directors and executive officers.
Director Independence Our Board reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly, and the Company has determined that William Morris, Haitao Wang, Y. Tristan Kuo are “independent directors” as defined by NASDAQ. 6.D. Employees As of December 31, 2023, we had a total of 154 employees.
Director Independence Our Board reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly, and the Company has determined that William Morris, Haitao Wang, Y. Tristan Kuo are “independent directors” as defined by NASDAQ. 6.D. Employees As of December 31, 2024, we had a total of 166 employees.
Zhiwei Xu and 9,750 shares to Dan Zhao with price at $2.62 on January 1, 2023. The Company issued 9,750 shares to Dan Zhao with price at $2.62 on April 1, 2023. The share numbers in this paragraph are all before our Share Consolidation numbers. 6.C.
Zhiwei Xu and 9,750 shares to Dan Zhao with price at $2.62 on January 1, 2023. The Company issued additional 9,750 shares to Dan Zhao, Vice President with price at $2.62 on April 1, 2023. The share numbers in this paragraph are all before our Share Consolidation numbers. 6.C.
Cash flows from financing activities Net cash used in financing activities in 2023 was about $1.6 million, including about $2.4 million repayment of short-term loan, partially offset by $354 thousand from the proceeds from related party loans.
Net cash used in financing activities in 2023 was about $1.6 million, including about $2.4 million repayment of short-term loan, partially offset by $426 thousand from the proceeds from short-term loans and $354 thousand from the proceeds from related party loans.
The total aggregate ordinary shares of the Company authorized for issuance during the term of the Equity Plan is limited to 250,000 shares (after the Share Consolidation in October 2023). As of May 10, 2024, 44,344 shares were granted and outstanding under the Equity Plan. The following paragraphs summarize the terms of the Equity Plan: Administration .
The total aggregate ordinary shares of the Company authorized for issuance during the term of the Equity Plan is limited to 250,000 shares (after the Share Consolidation in October 2023). As of May 8, 2025, 44,344 shares were granted and outstanding under the Equity Plan. The following paragraphs summarize the terms of the Equity Plan: Administration .
The principal items accounting for the difference between our net cash used in operating activities and our net loss including increase in accounts receivable of about $1.5 million, increase in inventories of about $3.1 million, increase in advance to suppliers of about $18.0 million and offset by increase in accounts payables of about $1.6 million and deferred revenue of about $16.9 million.
The principal items accounting for the difference between our net cash used in operating activities and our net loss including increase in accounts receivable of about $1.5 million, increase in inventories of about $3.1 million, increase in advance to suppliers of about $18.0 million and offset by increase in accounts payables of about $1.6 million and contract liabilities of about $16.9 million.
Dan (Jessie) Zhao . Ms. Zhao was appointed as a member of the Board on December 15, 2019 and vice president of finance of the Company on September 17, 2020. Since May 2019, Ms. Zhao has served as secretary of the board of directors of Shanghai Juhao Information Technology Co., Ltd. Since April 2019, Ms.
Dan (Jessie) Zhao . Ms. Zhao was appointed as a member of the Board on December 15, 2019 and vice president of finance of the Company on September 17, 2020. Since May 2019, Ms. Zhao has served as secretary of the board of directors of Shanghai Juhao Information Technology Co., Ltd. From April 2019 to June 2023, Ms.
In November 2021, the warrants holders have cashless exercised the Warrants for an aggregate of 137,111 ordinary shares of the Company. As of December 31, 2023, there was no warrants outstanding. The share numbers and par value in this paragraph are before Share Consolidation in October 2023.
In November 2021, the warrants holders have cashless exercised the Warrants for an aggregate of 137,111 ordinary shares of the Company. As of the date of this report, there was no warrants outstanding. The share numbers and par value in this paragraph are before Share Consolidation in October 2023.
The balance sheet amounts with the exception of equity as of December 31, 2023 were translated at RMB 1.00 to US$ 0.1412 as compared to the average translation rates applied to the income statements accounts for 2023 at RMB 1.00 to US$0.1419. The equity accounts were stated at their historical rate.
The balance sheet amounts with the exception of equity as of December 31, 2023 were translated at RMB 1.00 to US$0.1412 as compared to the average translation rates applied to the income statements accounts for 2023 at RMB 1.00 to US$0.1419.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of May 10, 2024 for: ● each beneficial owner of 5% or more of our outstanding ordinary shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of May 8, 2025 for: ● each beneficial owner of 5% or more of our outstanding ordinary shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group.
The principal items accounting for the difference between our net cash used in operating activities and our net loss including decrease in accounts payables of about $4.0 million and deferred revenue of about $15.7 million, offset by decrease in inventories of about $5.2 million, decrease in advance to suppliers of about $8.1 million and decrease in accounts receivable of about $3.4 million.
The principal items accounting for the difference between our net cash used in operating activities and our net loss including a decrease in accounts payables of about $4.0 million and contract liabilities of about $15.7 million, offset by decrease in inventories of about $5.2 million, decrease in advance to suppliers of about $8.1 million and a decrease in accounts receivable of about $3.4 million.
We also sell household products, such as pots and pans, paper towels, cups, vacuum cleaners, massagers, towels on our platform, and those products account for 51.4% and 33.6% of the products sold on our platform in 2023 and 2022, respectively. We believe that we are industry forerunners in turning data insight into valuable business intelligence in China.
We also sell household products, such as pots and pans, paper towels, cups, vacuum cleaners, massagers, towels on our platform, and those products account for 47.2% and 51.4% of the products sold on our platform in 2024 and 2023, respectively. We believe that we are industry forerunners in turning data insight into valuable business intelligence in China.
Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares issuable upon the exercise of options that are immediately exercisable or exercisable within 60 days of the date hereof.
These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares issuable to such persons upon the exercise of options that are immediately exercisable or exercisable within 60 days of the date hereof.
As of December 31, 2023 and 2022, the allowance for credit losses for accounts receivable was $559,382 and $84,400, respectively. Inventories Inventories consist of goods in transit and finished goods and are stated at the lower of cost or net realizable value. The cost of inventories is calculated using the weighted average basis.
As of December 31, 2024 and 2023, the allowance for credit losses for accounts receivable was $438,864 and $559,382, respectively. Inventories Inventories consist of goods in transit and finished goods and are stated at the lower of cost or net realizable value. The cost of inventories is calculated using the weighted average basis.
Immediately after Share Consolidation, the term of the Equity Plan is limited to 250,000 shares. Types of Awards and Eligibility . The Equity Plan provides for five types of awards and they are: Stock Options, Stock Appreciation Rights (“SAR”), Unrestricted Stock, Restricted Stock and Restricted Stock Units.
Immediately after Share Consolidation, the shares under the Equity Plan is reduced and limited to 250,000 shares in total. Types of Awards and Eligibility . The Equity Plan provides for five types of awards and they are: Stock Options, Stock Appreciation Rights (“SAR”), Unrestricted Stock, Restricted Stock and Restricted Stock Units.
For the Year Ended December 31, 2022 and 2021 The following table summarized the results of our operations for the year ended December 31, 2022 and 2021, respectively, and provides information regarding the dollar and percentage fluctuations during such periods.
For the Years Ended December 31, 2023 and 2022 The following table summarized the results of our operations for the years ended December 31, 2023 and 2022, respectively, and provides information regarding the dollar and percentage fluctuations during such periods.
Based on our current operating plan, we believe that the above-mentioned measures, including cash on hand of approximately $1.2 million and bank borrowing, will collectively provide sufficient liquidity for the Company to meet its future liquidity and capital requirements for at least next twelve months from the date the Company’s consolidated financial statements are issued. 85 The following table sets forth summary of our cash flows for 2023, 2022 and 2021: For the Years Ended December 31, 2023 2022 2021 (in thousands) Net cash used in operating activities $ (13,492 ) $ (11,993 ) $ (18,034 ) Net cash used in investing activities (42 ) (1,338 ) (6,637 ) Net cash provided by (used in) financing activities (1,633 ) 9,938 27,212 Effect of exchange rate change on cash (301 ) (1,139 ) 465 Net increase (decrease) in cash and cash equivalents (15,468 ) (4,532 ) 3,006 Cash and restricted cash, beginning of the year 16,718 21,250 18,244 Cash and restricted cash, end of the year 1,250 16,718 21,250 5C.
Based on our current operating plan, we believe that the above-mentioned measures, including cash on hand of approximately $2.1 million and bank borrowing, will collectively provide sufficient liquidity for the Company to meet its future liquidity and capital requirements for at least the next twelve months from the date the Company’s consolidated financial statements are issued. 87 The following table sets forth summary of our cash flows for 2024, 2023 and 2022: For the Years Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 790 $ (13,492 ) $ (11,993 ) Net cash used in investing activities 124 (42 ) (1,338 ) Net cash provided by (used in) financing activities (18 ) (1,633 ) 9,938 Effect of exchange rate change on cash 286 (301 ) (1,139 ) Net increase (decrease) in cash and cash equivalents 934 (15,468 ) (4,532 ) Cash and restricted cash, beginning of the year 1,250 16,718 21,250 Cash and restricted cash, end of the year 2,184 1,250 16,718 5C.
Each of the committees of the board of directors has the composition and responsibilities described below. 90 Board Diversity Matrix The following table sets forth Board level diversity statistics based on self-identification of members of our Board as of May 10, 2024. Board Diversity Matrix (As of May 10, 2024) Country of Principal Executive Offices: P.R.
Each of the committees of the board of directors has the composition and responsibilities described below. 92 Board Diversity Matrix The following table sets forth Board level diversity statistics based on self-identification of members of our Board as of May 8, 2025. Board Diversity Matrix ( As of May 8, 2025 ) Country of Principal Executive Offices: P.R.
Kuo has served as a board member, chairman of the audit committee and a member of compensation committee and corporate governance and nominating committee of Cine Top Culture Holdings Limited. Since August 29, 2022, Mr. Kuo has served as a consultant and was the chief financial officer of Aerkomm Inc.
Kuo has served as a board member, chairman of the audit committee and a member of compensation committee and corporate governance and nominating committee of Cine Top Culture Holdings Limited. Mr. Kuo served as a consultant from August 29, 2022 to June 30, 2024 and was the chief financial officer of Aerkomm Inc.
Directors and Executive Officers The following table sets forth information regarding our executive officers and directors as of the date of this report. Directors and Executive Officers Age Position/Title Haiting Li 53 Chief Executive Officer, Director, Chairman of the Board Lu Qian 39 Chief Financial Officer Dan (Jessie) Zhao 51 Director and Vice President Haitao Wang(1)(2)(3) 55 Independent Director Y.
Directors and Executive Officers The following table sets forth information regarding our executive officers and directors as of the date of this report. Directors and Executive Officers Age Position/Title Haiting Li 54 Chief Executive Officer, Director, Chairman of the Board Lu Qian 40 Chief Financial Officer Dan (Jessie) Zhao 52 Director and Vice President Haitao Wang(1)(2)(3) 56 Independent Director Y.
As of December 31, 2023, the Company had cash and restricted cash of approximately $1.3 million and working capital of $17.6 million. $1.2 million of the cash were held by the VIE with banks and financial institutions inside China as the Company conducted its operations primarily through the consolidated VIE in China.
As of December 31, 2024, the Company had cash of approximately $2.2 million and working capital of $10.2 million. $2.1 million of the cash were held by the VIE with banks and financial institutions inside China as the Company conducted its operations primarily through the consolidated VIE in China.
The average exchange rate for the fiscal years ended December 31, 2022 and 2021, was RMB1 to $0.1489 and RMB 1 to $0.1550, respectively, representing a 3.9% unfavorable impact when exchange rates were used in converting RMB to USD, which was included in the above analysis.
The average exchange rate for the fiscal years ended December 31, 2023 and 2022, was RMB1 to $0.1419and RMB 1 to $0.1489, respectively, representing a 4.7% unfavorable impact when exchange rates were used in converting RMB to USD, which was included in the above analysis.
The following sets forth the breakdown of our revenue by stream for the years ended December 31, 2022 and 2021, respectively.
The following sets forth the breakdown of our revenue by stream for the years ended December 31, 2024 and 2023, respectively.
For the years ended December 31, 2023, 2022 and 2021, provision (reversal) of ($438,949), $1,102,119 and $329,639, respectively were recorded in cost of revenues in the consolidated statements of operations and comprehensive income (loss). 86 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 6.A.
For the years ended December 31,2024, 2023 and 2022, provision (reversal) of $235,674, ($438,949) and $1,102,119, respectively were recorded in cost of revenues in the consolidated statements of operations and comprehensive loss. 88 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 6.A.
During the years ended December 31, 2023 and 2022, 48.2% and 66.3% of the products sold on our platform were cosmetics and health and nutritional supplements, respectively.
During the years ended December 31, 2024 and 2023, 52.6% and 48.2% of the products sold on our platform were cosmetics and health and nutritional supplements, respectively.
Loss from Operations For the Year Ended December 31, 2023 2022 Amount % of revenue Amount % of revenue (in thousands, except for percentage) Loss from Operations $ (10,891 ) (6.8 )% $ (12,041 ) (5.7 )% Loss from operations in 2023 was approximately $10.9 million compared to loss from operations of about $12.0 million in 2022.
Loss from Operations For the Year Ended December 31, 2024 2023 Amount % of revenue Amount % of revenue (in thousands, except for percentage) Loss from Operations $ (8 ,090 ) (6.1 )% $ (10,891 ) (6.8 )% Loss from operations in 2024 was approximately $8.0 million compared to loss from operations of about $10.9 million in 2023.
Net Loss As a result of the foregoing, we had net loss of $11.5 million in 2023, compared to net loss of $11.5 million in 2022. 78 Other Comprehensive Loss Foreign currency translation adjustments amounted to a loss of $0.9 million for 2023 when compared to $2.4 million in 2022, respectively.
Net Loss As a result of the foregoing, we had a net loss of $8.0 million in 2024, compared to a net loss of $11.5 million in 2023. 79 Other Comprehensive Loss Foreign currency translation adjustments amounted to a loss of $0.32 million for 2024 when compared to $0.9 million in 2023, respectively.
The statutory reserve funds and the discretionary funds are not distributable as cash dividends. For the year ended December 31, 2023, we reported a net loss of $11.5 million and negative operating cash flows of $13.5 million, which were primarily due to the negative impact of economic downturn on our business and operation.
The statutory reserve funds and the discretionary funds are not distributable as cash dividends. For the year ended December 31, 2024, we reported a net loss of $8.0 million and operating cash inflow of $790 thousand, which were primarily due to the negative impact of economic downturn on our business and operation.
The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in U.S dollar terms without giving effect to any underlying change in our business or results of operation. Cash flows from operating activities Net cash used in operating activities in 2023 was $13.5 million.
The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in U.S dollar terms without giving effect to any underlying change in our business or results of operation. Cash flows from operating activities Net cash provided by operating activities in 2024 was $790 thousand.
Options may be granted at any time on or after the date the Board of Directors adopt the Equity Plan, however, until the stockholders approve the Equity Plan, no options or SARs may be exercised, no restricted stock may be issued, and no award may be settled in stock.
Options may be granted at any time on or after the date the Board of Directors adopt the Equity Plan, however, until the stockholders approve the Equity Plan, no options or SARs may be exercised, no restricted stock may be issued, and no award may be settled in stock. 91 On November 26, 2021, the Compensation Committee of the Board of the Company (the “Compensation Committee”) granted Ms.
As of December 31, 2023 and 2022, our platform had 2,483,250 and 2,440,745 VIP members who have registered on our platform, respectively, 270 and 266 merchants who have opened their own stores on our platform, respectively.
As of December 31, 2024 and 2023 our platform had 2,485,533 and 2,483,250 VIP members who have registered on our platform, respectively, 274 and 270 merchants who have opened their own stores on our platform, respectively.
Except as otherwise indicated, all of the shares reflected in the table are ordinary shares and all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.
These shares, however, are not included in the computation of the percentage ownership of any other person. Except as otherwise indicated, all of the shares reflected in the table are ordinary shares and all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws.
The balance sheet amounts with the exception of equity as of December 31, 2022 were translated at RMB 1.00 to US$0.1450 as compared to the average translation rates applied to the income statements accounts for 2022 at RMB 1.00 to US$0.1489.
The balance sheet amounts with the exception of equity as of December 31, 2024 were translated at RMB 1.00 to US$0.1391 as compared to the average translation rates applied to the income statements accounts for 2024 at RMB 1.00 to US$0.1404. The equity accounts were stated at their historical rate.
If Shanghai Juhao incurs debt on its behalf in the future, the instruments governing its debt may restrict its ability to pay service fee to us. In addition, Shanghai Juhao is permitted to pay service fee to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
In addition, Shanghai Juhao is permitted to pay service fee to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
The principal items accounting for the difference between our net cash used in operating activities and our net loss including increase in accounts receivable of about $4.7 million, increase in inventories of about $5.0 million, increase in advance to suppliers of about $3.3 million and offset by increase in accounts payables – related parties of about $2.2 million.
The principal items accounting for the difference between our net cash provided by operating activities and our net loss including decrease in advance to suppliers of about $10.2 million and decrease in accounts receivable of about $0.5 million, offset by decrease in accounts payables of about $1.8 million.
We had a total of 218 employees as of December 31, 2022.
We had a total of 154 employees as of December 31, 2023.
Our telephone number at this address +86-21-5521-01874. Ordinary Shares Beneficially Owned Name of Beneficial Owners Number % Directors and Executive Officers: Yu- Yun Tristan Kuo 219 * William J.
Ordinary Shares Beneficially Owned Name of Beneficial Owners Number % Directors and Executive Officers: Yu- Yun Tristan Kuo 219 * William J.
As of March 31, 2024, approximately $1.2 million, or 47%, of its accounts receivable balance as of December 31, 2023 were collected, and approximately $10.9 million or 81% of its advances to supplier balance as of December 31, 2023 were utilized.
As of March 31, 2025, approximately $704 thousand, or 28%, of its accounts receivable balance as of December 31, 2024 were collected, and approximately $2.9 million or 76% of its advances to supplier balance as of December 31, 2024 were utilized.
The average translation rates applied to the income statements accounts for 2022 and 2021 were 1.00 RMB to 0.1489 US$ and 1.00 RMB to 0.1550 US$, respectively.
The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for 2023 and 2022 were 1.00 RMB to 0.1419 US$ and 1.00 RMB to 0.1489 US$, respectively.
Morris 219 * Haitao Wang 218 * Haiting Li - Dan (Jessie) Zhao - Lu Qian - All directors and executive officers as a group (six individuals): 656 * 5% or Greater Shareholders: Jowell Holdings Ltd. (1) 333,837 15.4 Zhiwei Xu (1) 340,654 15.7 (1) 6,817 shares owned by Zhiwei Xu directly and 333,837 shares owned by Jowell Holdings Ltd.
Morris 219 * Haitao Wang 218 * Haiting Li - - Dan (Jessie) Zhao - - Lu Qian - - All directors and executive officers as a group (six individuals): 656 * 5% or Greater Shareholders: Jowell Holdings Ltd.
The Share Consolidation is primarily being effectuated to regain compliance with Nasdaq Marketplace Rule 5550(a)(2) related to the minimum bid price per share of the Company’s ordinary shares.
The Share Consolidation is primarily being effectuated to regain compliance with Nasdaq Marketplace Rule 5550(a)(2) related to the minimum bid price per share of the Company’s ordinary shares. On September 5, 2024, Shanghai Jowell incorporated Baotou Juhaoyuan Trading Co., Ltd. (“Baotou Juhaoyuan”).

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Item 6. [Reserved]

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

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Our board of directors may also decline to register any transfer of any ordinary share unless: ● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; ● the instrument of transfer is in respect of only one class of shares; ● the instrument of transfer is properly stamped, if required; ● in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; and ● a fee of such maximum sum as the Nasdaq Capital Market may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. 99 If our directors refuse to register a transfer, they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.
Our board of directors may also decline to register any transfer of any ordinary share unless: ● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; ● the instrument of transfer is in respect of only one class of shares; ● the instrument of transfer is properly stamped, if required; ● in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; and ● a fee of such maximum sum as the Nasdaq Capital Market may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. 101 If our directors refuse to register a transfer, they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.
Holder” is a beneficial owner of our ordinary shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or treated as a tax resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under the Code. 103 If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership.
Holder” is a beneficial owner of our ordinary shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or treated as a tax resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under the Code. 105 If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership.
Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.” 102 Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority.
Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.” 104 Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority.
No stamp duty is payable in respect of the issue of the shares or on an instrument of transfer in respect of a share. 101 People’s Republic of China Taxation Under the EIT Law, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations.
No stamp duty is payable in respect of the issue of the shares or on an instrument of transfer in respect of a share. 103 People’s Republic of China Taxation Under the EIT Law, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations.
The deductibility of capital losses is subject to limitations. 104 Passive Foreign Investment Company (“PFIC”) A non-U.S. corporation is considered a PFIC for any taxable year if either: ● at least 75% of its gross income for such taxable year is passive income; or ● at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).
The deductibility of capital losses is subject to limitations. 106 Passive Foreign Investment Company (“PFIC”) A non-U.S. corporation is considered a PFIC for any taxable year if either: ● at least 75% of its gross income for such taxable year is passive income; or ● at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).
A special resolution will be required for important matters such as making changes to our second amended and restated memorandum and articles of association. 98 There are no limitations on non-residents or foreign shareholders in the memorandum and articles to hold or exercise voting rights on the Ordinary Shares imposed by foreign law or by the charter or other constituent document of our company.
A special resolution will be required for important matters such as making changes to our second amended and restated memorandum and articles of association. 100 There are no limitations on non-residents or foreign shareholders in the memorandum and articles to hold or exercise voting rights on the Ordinary Shares imposed by foreign law or by the charter or other constituent document of our company.
You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our ordinary shares and the elections discussed above. 106 Information Reporting and Backup Withholding Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related intermediaries may be subject to information reporting and backup withholding, unless (i) the U.S.
You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our ordinary shares and the elections discussed above. 108 Information Reporting and Backup Withholding Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related intermediaries may be subject to information reporting and backup withholding, unless (i) the U.S.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). 100 Preferred Shares Conversion.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). 102 Preferred Shares Conversion.
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold the ordinary shares as capital assets. 105 A U.S.
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold the ordinary shares as capital assets. 107 A U.S.
You may also visit us on the world wide web at http://www.1juhao.com. However, information contained on our website does not constitute a part of this annual report. 10.I. Subsidiary Information Not Applicable. 10.J. Annual Report to Security Holders Not applicable. 107
You may also visit us on the world wide web at http://www.1juhao.com. However, information contained on our website does not constitute a part of this annual report. 10.I. Subsidiary Information Not Applicable. 10.J. Annual Report to Security Holders Not applicable. 109

Item 7. Management's Discussion & Analysis

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

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Zhiwei Xu, a major shareholder of the Company Purchase and operating leases from the related party Longliqi International (NIG) Limited Controlled by Mr. Zhiwei Xu Sales to the related party Longrich Goalbridge Company Limited Controlled by Mr. Zhiwei Xu Sales to the related party Longrich America Int’l, Inc. Controlled by Mr.
Zhiwei Xu, a major shareholder of the Company Purchase and operating leases from the related party Longrich America Int’l, Inc. Controlled by Mr. Zhiwei Xu Sales to the related party Jowell Holdings Limited Controlled by Mr.
Zhiwei Xu, a major shareholder of the Company, in the amount of $6,853, $160,055 and $1,521,566 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, the Company had accounts receivable of $47,040 and $285,530 related to these sales. 7.C. Interests of Experts and Counsel Not applicable. 95
Zhiwei Xu, a major shareholder of the Company, in the amount of $17,860, $6,853 and $160,055 for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, the Company had accounts receivable of nil and $47,040 related to these sales. 7.C. Interests of Experts and Counsel Not applicable. 97
These dues to related parties, subsidiaries of Longrich Group and Jowell Holdings Limited, are typically short-term in nature, interest-free and due upon demand. Related party lease: As of December 31, 2023, the Company had five leases from its related party, subsidiaries of Longrich Group, which are controlled by Mr. Zhiwei Xu, a major shareholder of the Company.
Zhiwei Xu Funds support Due to related parties: The balance due to related parties account amounted to $925,100 and $528,472 as of December 31, 2024 and 2023, respectively. These dues to related parties, subsidiaries of Longrich Group and Jowell Holdings Limited, are typically short-term in nature, interest-free and due upon demand.
The Company is obligated to pay quarterly based rents under these lease agreements. See Note 14 for further discussion. Related party purchases: The Company periodically purchases merchandise from Longrich Group and its subsidiaries during the ordinary course of business.
Related party lease: As of December 31, 2024, the Company had five leases from its related party, subsidiaries of Longrich Group, which are controlled by Mr. Zhiwei Xu, a major shareholder of the Company. The Company is obligated to pay quarterly based rents under these lease agreements. See Note 14 for further discussion.
The goods purchased from Longrich Group were $34,258,761, $44,886,549 and $73,876,430 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, the Company had accounts payable of $194,818 and $1,806,352 related to these purchases. Related party sales: The Company made sales to the related parties controlled by Mr.
As of December 31, 2024 and 2023, the Company had accounts payable of $70,258 and $194,818 related to these purchases. Related party sales: The Company made sales to the related parties controlled by Mr.
Removed
Zhiwei Xu Sales to the related party Longrich Bioscience (M) Berhad Controlled by Mr. Zhiwei Xu Sales to the related party Jowell Holdings Limited Controlled by Mr. Zhiwei Xu Funds support Due to related parties: The balance in due to related parties account amounted to $528,472 and $178,816 as of December 31, 2023 and 2022, respectively.
Added
Related party purchases: The Company periodically purchases merchandise from Longrich Group and its subsidiaries during the ordinary course of business. The goods purchased from Longrich Group were $37,414,302, $34,258,761 and $44,886,549 for the years ended December 31, 2024, 2023 and 2022, respectively.

Other JWEL 10-K year-over-year comparisons