Able View Global Inc 20-F for FY2025
Able View Global Inc. (ABLV)
About this 20-F
Able View Global Inc filed this 20-F on April 27, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $105.2M
- down 17.0% from $126.76M a year earlier
- Net income
- $820.02K
- compared with a net loss of $7.42M a year earlier
- Diluted EPS
- $0.02
- compared with -$0.17 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
OR
For
the fiscal year ended:
OR
OR
Commission
File Number:
(Exact name of Registrant as specified in its charter)
| Not applicable | ||
| (Translation of Registrant’s name into English) | (Jurisdiction of incorporation or organization) |
Chief Financial Officer
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate
the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered
by the annual report:
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No
If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Emerging growth company |
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected to use the extended transition period for complying with any new or revised financial accounting standards† provided
pursuant to Section 13(a) of the Exchange Act.
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐
ABLE VIEW GLOBAL INC.
TABLE OF CONTENTS
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 20-F (including information incorporated by reference herein, the “Report”) contains or may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intends”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Report may include, for example, statements about:
| ● | the benefits from the Business Combination; |
| ● | the Company’s plans to expand its customers base with market trends; |
| ● | the Company’s work to provide comprehensive brand management of international beauty and personal care brands in China; |
| ● | the Company’s future financial performance following the Business Combination, including any expansion plans and opportunities; |
| ● | the Company’s success in retaining or recruiting, or changes required in, its officers, key employees or directors following the Business Combination or any other initial business combination; |
| ● | changes in the Company’s strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects and plans; |
| ● | the implementation, market acceptance and success of the Company’s business model; |
| ● | the Company’s expectations surrounding the growth of its digital platform as a part of its revenues; |
| ● | the Company’s expectations surrounding the insurance it will maintain going forward; |
| ● | the Company’s ability to utilize the “controlled company” exemption under the rules of Nasdaq; and |
| ● | the Company’s ability to maintain the listing of its Class B Ordinary Shares or Warrants on Nasdaq. |
ii
These forward-looking statements are based on information available as of the date of this Report, and current expectations, forecasts and assumptions involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
| ● | the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the ability of the Company to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees; |
| ● | future exchange and interest rates; |
| ● | the Company is highly dependent on the services of its executive officers; |
| ● | the Company may experience difficulties in managing its growth and expanding its operations; |
| ● | the outcome of any legal proceedings that may be instituted against the Company or others in connection with the Business Combination and the related transactions; |
| ● | the Company may face risks and uncertainties associated with laws and regulations within the People’s Republic of China, which may have a material adverse effect on its business; |
| ● | the Company’s business largely depends on relationships with customers; |
| ● | the Company is subject to customer concentration risk; |
| ● | any significant disruption in services on the Company’s apps, websites or computer systems. |
The risk factors and cautionary language referred to or incorporated by reference in this Report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described in our forward-looking statements, including among other things, the items identified in the section entitled “Risk Factors” of this Report.
iii
DEFINED TERMS
In this Report, unless otherwise stated, references to:
“$,” “USD,” “US$” and “U.S. dollar” each refers to the United States dollar.
“Amended and Restated Memorandum and Articles of Association” means the amended and restated memorandum and articles of association of the Company adopted upon the consummation of the Business Combination.
“Ancillary Agreements” means certain additional agreements entered into or to be entered into pursuant to or in connection with the Business Combination Agreement.
“Business Combination” means the transactions contemplated by the Business Combination Agreement and the Ancillary Agreements.
“Business Combination Agreement” means that certain Business Combination Agreement, dated as of November 21, 2022 and as modified by that certain Waiver Agreement, dated as of June 12, 2023, by and among (i) the Company, (ii) HMAC, (iii) Target, (iv) Able View Corporation Inc., a Cayman Islands exempted company and a wholly owned subsidiary of the Company, and (v) each of the holders of the Target’s outstanding shares named on Annex I of the Business Combination Agreement.
“CAGR” means compound annual growth rate.
“China” or the “PRC”, in each case, means the People’s Republic of China, including Hong Kong and Macau. The term “Chinese” has a correlative meaning for the purpose of this annual report.
“Class A Ordinary Shares” means, the Class A ordinary shares of the Company, each with par value $0.0001 per share.
“Class B Ordinary Shares” means, the Class B ordinary shares of the Company, each with par value $0.0001 per share.
“Closing” means the closing of the Business Combination.
“Code” means the Internal Revenue Code of 1986, as amended.
“Companies Act” means the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time.
“Company”, “Able View”, or “Pubco” means Able View Global Inc., a Cayman Islands exempted company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Form F-4” means the Company’s Registration Statement on Form F-4 (333-270675) initially filed with the SEC on March 17, 2023 and declared effective by the SEC on June 30, 2023.
iv
“HMAC” means Hainan Manaslu Acquisition Corp., a Cayman Islands exempted company.
“HMAC Sponsor” means Bright Winlong LLC, the sponsor of HMAC.
“iResearch Report” means the Independent Market Research Report on the Beauty and Personal Care Brand Full-Service Partners in China dated October 17, 2022 and updated on February 13, 2023, issued by iResearch Co. Ltd. which was commissioned by Able View.
“JOBS Act” means the Jumpstart Our Business Startups Act.
“Nasdaq Listing Rules” refers to the listing rules of The Nasdaq Stock Market LLC.
“Nasdaq” means The Nasdaq Stock Market LLC.
“Ordinary Shares” means, collectively, the Class A Ordinary Shares and the Class B Ordinary Shares.
“PRC Laws” means all the laws, administrative measures, regulations, rules promulgated in mainland China by the government of mainland China.
“PRC Operating Entities” means all the subsidiaries of Able View Inc. that are operating in PRC, including in mainland China and Hong Kong.
“Pre-Public Shareholders” means all the shareholders who holds the shares of the Target before Business Combination.
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as may be amended.
“SEC” means the U.S. Securities and Exchange Commission.
“Target” refers to Able View Inc. (d/b/a Able View), a Cayman Islands exempted company and wholly owned subsidiary of the Company after the Business Combination.
“U.S.” means the United States of America.
“U.S. GAAP” or “GAAP” means generally accepted accounting principles in the United States of America.
“Warrants” means warrants of the Company, each exercisable for one Class B Ordinary Share at an exercise price of $11.50 per share.
v
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
Holding Company Structure
The following diagram illustrates our corporate structure, including all of our significant subsidiaries, as “significant” is defined under Section 1-02 of Regulation S-X under the Securities Act and certain other subsidiaries, as of the date of this annual report.
Able View Global Inc. is not an operating company but a Cayman Islands holding company. We conduct operations through our subsidiaries, with our operations in China and Hong Kong currently being conducted by our PRC and Hong Kong subsidiaries. Investors in the Class B Ordinary Shares of the Company are not acquiring equity interest in any operating company but are instead acquiring interests in a Cayman holding company. This holding company structure involves unique risks to investors. As a holding company, the Company may rely on dividends from its subsidiaries for cash requirements, including any potential payment of dividends to its shareholders. The ability of our subsidiaries to pay dividends or make distributions to the Company may be restricted by laws and regulations applicable to them, or by the debt they incur or the instruments governing their debt. In addition, PRC regulatory authorities could disallow this holding company structure and limit or hinder our ability to conduct business through, receive dividends or distributions from, or transfer funds to the operating companies, which could cause the value of our securities to significantly decline or become worthless.
1
We face various legal and operational risks and uncertainties related to doing business in China. Our business operations are primarily conducted in China, and we are subject to complex and evolving PRC laws and regulations. For example, the PRC government has issued statements and regulatory actions concerning areas such as regulatory approvals for overseas offerings and listings by, and foreign investment in, China-based issuers, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. It remains uncertain how PRC government authorities will regulate overseas listings and offerings and whether we can fully comply with applicable regulatory requirements, including completing filings with the China Securities Regulatory Commission (CSRC), or whether we are required to complete other filings or obtain regulatory approvals from the CSRC, or any other PRC government authorities for our overseas offerings and listings. Additionally, if future regulatory developments mandate clearance of cybersecurity reviews or other specific actions to be completed by China-based companies listed on foreign stock exchanges, such as us, we face uncertainties as to whether such clearance can be obtained in a timely manner, or at all. These risks may impact our ability to conduct certain businesses, accept foreign investments, or list and conduct offerings on a stock exchange in the United States or any other foreign country. Such risks could result in a material adverse change in our operations and the value of our ordinary shares, significantly limit or completely hinder our ability to offer securities to investors, or cause the value of such securities to significantly decline or become worthless. For a detailed description of risks related to doing business in China, please refer to “Item 3. Key Information-D. Risk Factors- Risks Related to Doing Business in the People’s Republic of China.”
The PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. The implementation of industry-wide regulations in areas such as data security or anti-monopoly could lead to a significant decline in the value of our securities. For more details, see “Item 3. Key Information-D. Risk Factors- Risks Related to Doing Business in the People’s Republic of China.”
Risks and uncertainties regarding the interpretation and enforcement of laws, as well as quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ordinary shares. For more details, see “Item 3. Key Information-D. Risk Factors- Risks Related to Doing Business in the People’s Republic of China.”
Recent Regulatory Development
Cybersecurity Review Measures
On December 28, 2021, the Cyberspace Administration of China (the “CAC”) and several other regulatory authorities in China jointly promulgated the Cybersecurity Review Measures, which came into effect on February 15, 2022. Pursuant to the Cybersecurity Review Measures, (i) the purchase of network products and services by “critical information infrastructure operator” (the “CIIO”) and the data processing activities of a network platform operator that affect or may affect national security are subject to the cybersecurity review; (ii) an application for cybersecurity review should be made by the internet platform operator holding personal information of more than one million users before such internet platform operator lists its securities in a foreign country; and (iii) relevant governmental authorities in the PRC may initiate cybersecurity review if they determine an operator’s network products or services or data processing activities affect or may affect national security.
On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-Border Transfer of Data, which took effect on September 1, 2022. These measures aim to regulate cross-border transfers of data, requiring, among other things, that data processors that provide data overseas apply to the CAC for security assessments if: (i) data processors provide important data to overseas parties; (ii) critical information infrastructure operators and data processors process personal information of more than one million individuals provide personal information to overseas parties; (iii) data processors that have cumulatively provided personal information of 100,000 people or sensitive personal information of 10,000 people to overseas parties since January 1 of the previous year provide personal information to overseas parties; and (iv) other scenarios required by the CAC to apply for security assessments are met.
In addition, these measures require data processors to carry out self-assessments of risks of providing data to overseas parties before applying to the CAC for security assessments. According to the Provisions on Promoting and Regulating Cross-border Data Flows, which was promulgated by the CAC on March 22, 2024 and came into effect on the same day, if relevant departments or jurisdictions have not informed the data handlers or publicly announced that the data are important data, data handlers are not required to undergo security assessment for cross-border data provision.
2
Uncertainties still exist in relation to the interpretation and implementation of the Cybersecurity Review Measures. For instance, if we are deemed to be a CIIO, our purchases of network products or services, if deemed to be affecting or possibly affecting national security, will need to be subject to cybersecurity review. The critical information infrastructure has a relatively broad definition and the interpretation in this regard remains vague. However, the relevant administration departments of each critical industry and sector (the “Protection Departments”) are responsible to formulate eligibility criteria and determine the CIIOs in the respective industry or field. The operators will be informed about the final determination as to whether they are categorized as CIIOs from the Protection Departments. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CAC or other Chinese regulatory authorities required for cybersecurity.
The management believes that as of the date of this Report: (i) the Company does not hold personal information of over one million users; (ii) the Company and its subsidiaries have not been informed by any PRC governmental authority of any requirement that it file for a cybersecurity review; and (iii) the Company and its subsidiaries have never disclosed any customer or supplier information within China (except when requested by related parties, the company and its subsidiaries tailor their customer or supplier information disclosures to the narrowest possible scope), therefore, the Company believes it is not required to pass cybersecurity review of CAC. We are also not aware that there are relevant laws or regulations in the PRC explicitly requiring us to seek approval from the China Securities Regulatory Commission for our overseas listing. Further, as of the date of this Report, the Company and its subsidiaries 1) did not collect any data that will or may negatively influence PRC’s national security; and 2) strictly follow the relevant PRC laws and regulations. Since these statements and regulatory actions are new, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries, our ability to accept foreign investments, and our listing on a U.S. exchange. The PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that require us, our subsidiaries to obtain regulatory approval from Chinese authorities for listing in the U.S. If we do not receive or maintain the approval, or inadvertently conclude that such approval is not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of our ordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.
CSRC Filing Requirements
On December 24, 2021, the China Securities Regulatory Commission, or the “CSRC,” published draft regulations (the “Draft Rules”) on domestic enterprises issuing securities and being listed overseas. The Draft Rules lay out specific filing requirements for overseas listing and offering by PRC domestic companies and include unified regulation management and strengthening regulatory coordination.
On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) with five interpretive guidelines (together with the New Overseas Listing Rules, collectively, the “New Overseas Listing Rules”), which came into effect on March 31, 2023. The New Overseas Listing Rules apply to overseas securities offerings and/or listings conducted by (i) companies incorporated in the PRC, or PRC domestic companies, directly and (ii) companies incorporated overseas with operations primarily in the PRC and valued on the basis of interests in PRC domestic companies, or indirect offerings. Under the New Overseas Listing Rules, a filing-based regulatory system applies to “indirect overseas offerings and listings” of companies in mainland China, which refers to securities offerings and listings in an overseas market made under the name of an offshore entity but based on the underlying equity, assets, earnings or other similar rights of a company in mainland China that operates its main business in mainland China. The New Overseas Listing Rules state that any post-listing follow-on offering by an issuer in an overseas market, including issuance of shares, convertible notes, exchangeable notes and preferred shares, shall be subject to filing requirement within three business days after the completion of the offering. Additionally, if we do not obtain the permissions and approvals of the filing procedure for any subsequent offering in a timely manner under PRC laws and regulations, we may be subject to investigations by competent PRC regulators, fines or penalties, ordered to suspend our relevant operations and rectify any non-compliance, prohibited from engaging in relevant business or conducting any offering, and these risks could result in a material adverse change in our operations, limit our ability to continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. Based on our understanding of the rules, although we are not currently required to submit the filing report to the CSRC in connection with this offering, we may be requested to do so, and upon that time, it is uncertain whether such filing can be completed or how long it will take to complete such filing. Any delay in completing such filing procedures might affect the other filing procedures with respect to other applicable circumstances, under the New Overseas Listing Rules in the future, such as the secondary listing, primary listing, spin-off listing and making overseas offering and listing anew after being delisted from an overseas exchange, which might affect our future public market financings and capital market transactions. To date, there are uncertainties in the interpretation and enforcement of these new laws and guidelines, which could materially and adversely impact our business and financial outlook and may impact our ability to accept foreign investments, or continue to list on a U.S. or other foreign exchange.
3
On February 24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration released the revised Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (the “Archives Rules”), which became effective on March 31, 2023. The Archives Rules regulate both overseas direct offerings and overseas indirect offerings, providing that, among other things: (i) in relation to the overseas listing activities of PRC enterprises, the PRC enterprises are required to strictly comply with the relevant requirements on confidentiality and archives management, establish a sound confidentiality and archives system, and take necessary measures to implement their confidentiality and archives management responsibilities; (ii) during the course of an overseas offering and listing, if a PRC enterprise needs to publicly disclose or provide to securities companies, securities service providers or overseas regulators, any materials that contain relevant state secrets, government work secrets or information that has a sensitive impact (i.e., be detrimental to national security or the public interest if divulged), the PRC enterprise should complete the relevant approval/filing and other regulatory procedures; and (iii) working papers produced in the PRC by securities companies and securities service providers, which provide PRC enterprises with securities services during their overseas issuance and listing, should be stored in the PRC, and competent PRC authorities must approve the transmission of all such working papers to recipients outside the PRC. Any failure or perceived failure by us to comply with the Archives Rules and the confidentiality requirements and other PRC laws and regulations may result in us being held legally liable by competent authorities.
A. Selected Financial Data
The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2025, 2024, and 2023.
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Total revenue | $ | 105,203,366 | $ | 126,762,314 | $ | 129,276,476 | ||||||
| Total cost of revenue | $ | (93,290,366 | ) | $ | (112,260,018 | ) | $ | (98,956,303 | ) | |||
| Total operating expenses | $ | (12,399,613 | ) | $ | (14,708,339 | ) | $ | (18,985,784 | ) | |||
| (Loss) income from operations | $ | (486,613 | ) | $ | (206,043 | ) | $ | 11,334,389 | ||||
| Total other expenses, net | $ | (209,911 | ) | $ | (700,292 | ) | $ | (1,625,325 | ) | |||
| (Loss) income before income taxes | $ | (696,524 | ) | $ | (906,335 | ) | $ | 9,709,064 | ||||
| Income tax benefits (expenses) | $ | (2,070,829 | ) | $ | (240,231 | ) | $ | (301,898 | ) | |||
| Net (loss) income from continuing operations | $ | (2,767,353 | ) | $ | (1,146,566 | ) | $ | 9,407,166 | ||||
| Net income (loss) from discontinued operations | $ | 3,587,371 | $ | (6,272,846 | ) | $ | 342,880 | |||||
| Net income (loss) | $ | 820,018 | $ | (7,419,412 | ) | $ | 9,750,046 | |||||
The following table sets forth selected information from our consolidated balance sheets as of December 31, 2025 and 2024.
| December 31, 2025 | December 31, 2024 | |||||||
| Total Current Assets | $ | 32,110,432 | $ | 40,272,952 | ||||
| Total Non-current Assets | $ | 2,439,839 | $ | 7,357,063 | ||||
| Total Assets | $ | 34,550,271 | $ | 47,630,015 | ||||
| Total Current Liabilities | $ | 19,771,916 | $ | 17,416,718 | ||||
| Total Non-current Liabilities | $ | 7,006,146 | $ | 23,122,082 | ||||
| Total Liabilities | $ | 26,778,062 | $ | 40,538,800 | ||||
| Total Shareholders’ Equity | $ | 7,772,209 | $ | 7,091,215 | ||||
| Total Liabilities and Shareholders’ Equity | $ | 34,550,271 | $ | 47,630,015 | ||||
4
The following table presents the Company’s summary consolidated cash flow data for the years ended December 31, 2025, 2024 and 2023.
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net cash (used in) provided by operating activities from continuing operations | $ | (3,631,932 | ) | $ | (3,727,609 | ) | $ | 25,474,737 | ||||
| Net cash provided by (used in) operating activities from discontinued operations | 4,827,758 | 1,483,065 | (1,901,407 | ) | ||||||||
| Net cash (used in) provided by investing activities from continuing operations | (3,971,096 | ) | (51,771 | ) | 408,605 | |||||||
| Net cash used in investing activities from discontinued operations | (311,612 | ) | (973 | ) | (154,943 | ) | ||||||
| Net cash provided by (used in) financing activities from continuing operations | 1,588,334 | 7,210,978 | (19,035,175 | ) | ||||||||
| Net cash (used in) provided by financing activities from discontinued operations | (4,490,841 | ) | (3,169,394 | ) | 2,819,153 | |||||||
| Effect of exchange rate changes on cash and cash equivalents from continuing operations | (166,965 | ) | 285,498 | (22,045 | ) | |||||||
| Effect of exchange rate changes on cash and cash equivalents from discontinued operations | 2,952 | (26,679 | ) | (34,149 | ) | |||||||
| Net (decrease) increase in cash and cash equivalents, including cash and cash equivalents classified to assets of discontinued operations | (6,153,402 | ) | 2,003,115 | 7,554,776 | ||||||||
| Less: net increase (decrease) in cash and cash equivalents of discontinued operations | 28,257 | (1,713,981 | ) | 728,654 | ||||||||
| Net (decrease) increase in cash and cash equivalents of continuing operations | (6,181,659 | ) | 3,717,096 | 6,826,122 | ||||||||
| Cash and cash equivalents of continuing operations at beginning of year | 15,191,995 | 11,474,899 | 4,648,777 | |||||||||
| Cash and cash equivalents of continuing operations at end of year | $ | 9,010,336 | $ | 15,191,995 | $ | 11,474,899 | ||||||
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities. The statements contained in or incorporated into this report that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our ordinary shares could decline, and you may lose all or part of your investment.
5
Risks Related to Able View’s Business and Industry
If the e-commerce market in China does not grow, or grows more slowly than we expect, demand for our services and solutions could be adversely affected.
Able View, as a brand management partner, generates revenue from product sales by distributing and selling cross-border products from various global brand owners to Chinese consumers through e-commerce platforms, and therefore, continued demand from our existing and potential future brand partners to use our services and solutions depends on whether e-commerce market will continue to grow. Our future results of operations will depend on numerous factors affecting the development of the e-commerce industry in China, which may be beyond our control. These factors include:
| ● | the growth of internet, broadband, personal computer and mobile penetration and usage in China, and the rate of any such growth; |
| ● | the trust and confidence level of online retail consumers in China, as well as changes in consumers’ demographics, tastes and preferences; |
| ● | whether alternative retail channels or business models that better address the needs of consumers emerge in China; and |
| ● | the development of fulfilment, payment and other ancillary services associated with online purchases. |
If consumer’s utilization of e-commerce channels in China does not grow or grows more slowly than we expect, demand for our services and solutions would be adversely affected, our revenues would be negatively impacted and our ability to pursue our growth strategy would be compromised.
If the complexities and challenges faced by brand partners seeking to sell online diminish, or if our brand partners increase their in-house e-commerce capabilities as an alternative to our solutions and services, demand for our solutions and services could be adversely affected.
One of the key attractions of our solutions and services to brand partners is our ability to help cope with the complexities and difficulties they face in the e-commerce market in China. If the level of such complexities and difficulties declines as a result of changes in the e-commerce landscape or otherwise, or if our brand partners choose to increase their in-house support capabilities as an alternative to our e-commerce solutions and services, our solutions and services may become less important or attractive to our brand partners, and demand for our solutions and services may decline.
Our success is tied to the success of our existing and future brand partners for which we operate their brand e-commerce business, in addition to our ability to attract brand partners and customers.
Our success is substantially dependent upon the continued success of our current brand partners. As we continue to expand and optimize our brand partner base, our future success will also be tied to the success of our future brand partners. We cannot assure you that our efforts to attract new brand partners and optimize our brand partner base will continue to be successful. If such efforts fail, it may have a material adverse impact on our business performance or results of operation. The retail business in China is intensely competitive. If our brand partners were to experience any significant decline in their brand reputations due to any reason, such as newly identified quality or safety issues or decreased popularity of their products, or if they were to have any financial difficulties, suffer impairment of their brands or if the profitability of, or demand for, their products decreases for any other reason, it could adversely affect our results of operations and our ability to maintain and grow our business. Our business could also be adversely affected if our brand partners’ product sales, marketing, brands or retail stores are not successful or if our brand partners reduce their marketing efforts.
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If we are unable to retain our existing brand partners, our results of operations could be materially and adversely affected.
We provide services to help distribute and sell cross-border products from various global brand owners through e-commerce platforms for brand partners primarily pursuant to contractual arrangements with a term typically ranging from 12 to 36 months. The contract renewal process usually starts at the beginning of the next year and takes around one month to negotiate the annual minimum purchase target. As of the date of this Report, majority of our contracts with our brand partners have been renewed for the calendar year of 2026. Although we are fairly confident that we will be able to renew the contracts annually with these brand partners, there is possibility that these contracts may not be renewed or, if renewed, may not be renewed under the same or more favorable terms for us. We may not be able to accurately predict future trends in brand partners renewals, and our brand partners’ renewal rates may decline or fluctuate due to factors such as level of satisfaction with our capacities, as well as factors beyond our control, such as level of competition faced by our brand partners, their level of success in e-commerce and their spending levels.
In particular, some of our existing brand partners have had years of cooperation with us and we generated a significant portion of our net revenue through the sale of products from our brand partners in the stores operated by us. We had 10 brand partners contributing all of our gross merchandise value (GMV) in 2025. For the year ended December 31, 2025, the products sales of our top brand partner, Clarins, contributed over 10% of the Company’s revenue. If any brand partner terminates or does not renew its business relationship with us, our GMV may be materially and adversely affected. In the past, some brand partners did not renew their business relationships with us, and we cannot assure you that our existing brand partners will renew their business relationships with us in the future. If some of our existing brand partners, in particular brand partners with years of cooperation with us, terminate or do not renew their business relationships with us or renew on less favorable terms, and we do not acquire replacement brand partners or otherwise grow our brand partner base, our results of operations may be materially and adversely affected.
The non-compete provisions in some of our contracts with existing brand partners may restrict us from selling product of, or providing service to other brand partners, may negatively influence our development and expansion of our brand partner base.
Some of our contracts with existing brand partners were based on standard forms proposed by such brand partners that contain non-compete provisions prohibiting us from selling products of, or providing similar services to, competitors of such brand partners. Such provision has restricted and may continue to restrict the development and expansion of our business with some of our brand partners. As our business further expands, we may engage in business with multiple brand partners that may be in competition with each other and may be subject to similar non-compete restrictions requested from other existing brand partners or future brand partners. We cannot assure you that we will not be found to be in breach of such non-compete provisions with our existing or future brand partners if any of our brand partners brings claims against us for breach of such provisions. If any such claim is brought against us and we are found to be in breach of any non-compete provision, we may be subject to potential liabilities and penalties for breach of contracts, including liquidated damages and forfeiture of sales bonuses, and our brand partners may decide to terminate their contracts with us, which may cause us to lose revenue. As a result of such potential breach, our reputation, financial condition and results of operations may be materially and adversely affected.
In several of our contractual arrangements with our brand partners, there is a provision that specifies a sales volume target for us to fulfil within a certain period of time. If we fail to fulfill the sales target number, our brand partners have the right to unilaterally terminate the agreement, which may materially and adversely affect our business.
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We may not be able to effectively manage the expansion of our business or optimally implement our business strategies.
To realize our mission of providing comprehensive brand management capabilities to our brand partners, we have expanded our business, and plan to continue expanding our business. We have been widening our relationships with existing brand partners to include more offerings, procuring new brand partners with different products, improving our logistic and fulfillment capabilities to support our expanded offering and growing through acquisitions of complementary businesses. This expansion has contributed to a heightened level of complexity of our business, in terms of both the type and scale of our operations, which may place a significant strain on our operational, financial and technical resources and increase demands on our management and employees. We cannot assure you that we will be able to manage our expansion successfully, and failure to do so may materially and adversely affect our business, financial condition and results of operations.
We are also continuously executing a number of growth initiatives, strategies and operating plans designed to enhance our business. The anticipated benefits from these efforts are based on assumptions that may prove to be inaccurate. Moreover, we may not be able to successfully complete these growth initiatives, strategies and operating plans and realize all of the benefits that we expect to achieve, such as expanding our product and service offerings, expanding our offline channel coverage, or it may be more costly to do so than we anticipate. In addition, profitability, if any, in the new areas that we expand into may be lower than the profitability in our existing business, and we may not be successful enough in these newer areas to recoup our investments in them. If any of these circumstances were to occur, our business, financial condition and results of operations may be materially and adversely affected.
If we fail to maintain our relationships with e-commerce channels or adapt ourselves to emerging e-commerce channels, or if e-commerce channels otherwise curtail or inhibit our ability to integrate our capabilities with their channels, our capabilities would be less appealing to existing and potential brand partners.
We generate substantially all of our revenues in distributing and selling cross-border products from various global brand owners to Chinese consumers from multiple e-commerce channels, including (i) via online marketplaces, (ii) via distributors, and (iii) directly to end consumers from e-commerce stores operated by Able View. These e-commerce channels have no obligation to do business with us or to allow us to have access to their channels in the long term. If we fail to maintain our relationship with these channels, they may decide at any time and for any reason to significantly curtail or inhibit our ability to integrate our capabilities with their channels. A majority of our platform service agreements have been renewed on an annual basis.
Additionally, these channels may decide to make significant changes to their respective business models, policies, systems or plans, and those changes could impair or inhibit our ability or our partners’ ability to leverage our capabilities to sell their products on those channels, or may adversely affect the amount of GMV that our partners can sell on those channels, or otherwise reduce the desirability of selling on those channels. Further, any of these channels could decide to acquire capabilities that would allow them to compete with us. If we are unable to adapt to new e-commerce channels as they emerge, our capabilities may be less attractive to our partners. Any of these developments could have a material adverse effect on our results of operations.
If certain mainstream e-commerce channels, such as Tmall and JD.com., fail, we may be negatively influenced.
A significant portion of our GMV is derived from merchandise sold or services rendered on Tmall and JD.com, which comprise 29% and 21%, 24% and 7%, and 22% and 8%, respectively of our total GMV from continuing operations in 2025, 2024, and 2023, respectively. If e-commerce channels such as Tmall and JD.com are not successful in attracting consumers or their reputations are adversely affected for whatever reasons, our brand partners may have to cease selling their products on these channels. As our results of operations rely on the sales performance on these e-commerce channels, a decrease in the use of these channels would reduce demand for our services, and we may have to push for more sales on other channels, which requires search and transition time. Therefore, we cannot assure you that our business and results of operations will not be negatively influenced in the short term if such situation arises.
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A variable portion of the revenues we generate from certain brand partners is based upon the amount of GMV, and any change to such pricing mechanism may adversely affect our financial results.
A portion of the revenue we generate from certain brand partners is variable based on GMV generated through such partners’ online stores that we operate, based on terms we negotiate with the brand partners. If that GMV were to decline, it does not grow as expected, or if our partners demand pricing terms that do not provide for variability based on the value of purchases transacted and settled on the stores operated by us, our revenue, profitability and business prospects may be adversely affected.
In addition, the ratio of our revenues as a percentage of GMV generated through the online stores that we operate for brand partners could vary as their bargaining power increases or our service scope reduces, which could adversely affect our financial results. We also intend to focus on high quality GMV categories. Although we are focused on achieving a higher ratio of revenues as a percentage of GMV generated through the partners’ online stores that we operate, there is no guarantee that we will successfully achieve this and our failure to do so could adversely affect our financial results.
We may not be able to compete successfully against current and future competitors.
We face intense competition in the market for being comprehensive brand management partners, and we expect competition to continue to intensify in the future. Our contracts with our brand partners are generally not written on an exclusive basis and we generally do not have contractual rights to exclude other agents from selling the products of our brand partners under the distribution model. As a result, once brand partners decide to switch part of their products sales to our competitors, we may face competition with other brand management providers that our brand partners work with. Increased competition may result in reduced pricing for providing the products or a decrease in our market share, any of which could negatively affect our ability to retain existing brand partners and attract new brand partners, our future financial and operating results, and our ability to grow our business.
A number of competitive factors could cause us to lose potential sales including:
| ● | Potential brand partners may choose to use or develop applications or build e-commerce teams or infrastructures in-house, rather than engage us for product sales and brand management; |
| ● | The e-commerce channels themselves, which typically offer, often free, software tools that allow brand partners to connect to the e-commerce channels, may decide to compete more vigorously with us; |
| ● | Competitors may adopt more aggressive pricing policies and offer more attractive sales terms, adapt more quickly to new technologies and changes in brand partners’ requirements, and/or devote greater resources to the promotion and sales than we can; |
| ● | Current and potential competitors may offer software or services that address one or more online channel management and logistics functions at a lower price point or with greater depth than our solutions and may be able to devote greater resources to those than we can; and |
| ● | Software vendors could bundle channel management solutions with other solutions or offer such products at a lower price as part of a larger product sale. |
In addition, competition may intensify as our competitors raise additional capital and as established companies in other market segments or geographic markets expand into our market segments or geographic markets. If we cannot compete successfully against our competitors, our business and our operating and financial results could be adversely affected.
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Material disruption of e-commerce channels could prevent us from providing services to our brand partners and reduce sales in stores operated by us.
E-commerce channels could cease operations unexpectedly due to a number of events, including interruptions in telecommunication services, computer viruses or unlawful access to e-commerce channels. Any material channel downtime or disruption could prevent us from providing services to our brand partners and reduce sales in stores operated by us. If one or more of the e-commerce channels we operate on experience downtime or disruption, the adverse effects of such downtime and disruption could be significant to our operations as a whole.
The proper functioning of the technology platforms provided by third parties is essential to our business. Any failure to maintain the satisfactory performance of such platform could materially and adversely affect our business and reputation.
The satisfactory performance, reliability and availability of the technology platforms provided by third parties are critical to our success and our ability to attract and retain brand partners and provide quality customer services. Any system interruptions caused by telecommunications failures, errors encountered during system upgrades or system expansions, computer viruses, hacking or other attempts to harm our systems that result in the unavailability or slowdown of the technology platform, degraded order fulfillment performance, or additional shipping and handling costs may, individually or collectively, materially and adversely affect our business, reputation, financial condition and results of operations.
We use platforms and applications provided by third parties, such as those provided by Tmall and JD, to manage and operate our business, which we regard as the best method to maximize our profitability. If any of these platforms fails, becomes disabled or is disrupted, even for a limited period of time, our businesses may be disrupted and we could suffer financial loss, liability to clients, loss of clients, or damage to our reputation, any of which could have a material adverse effect on our results of operation or financial condition. In addition, these third-party providers may cease providing us the access to use the platforms, elect to not renew their agreements with us on commercially reasonable terms or at all, breach their agreements with us or fail to satisfy our expectations, which could adversely impact our operations and require us to incur costs which could materially adversely affect our results of operation or financial condition.
In addition, any system failure or interruption could cause material damage to our reputation and brand image if our systems are perceived to be insecure or unreliable. The servers may also be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to system interruptions, website slowdown or unavailability, delays or errors in transaction processing, loss of data or the inability to accept and fulfill consumers’ orders. Security breaches, computer viruses and hacking attacks have become more prevalent in our industry. We have experienced system failure and interruption in the past and may experience in the future such attacks and unexpected interruptions. We can provide no assurance that the current security mechanisms will be sufficient to protect the IT systems we are using from any third-party intrusions, viruses or hacker attacks, information or data theft or other similar activities. Any such future occurrences could materially and adversely affect our business, reputation, financial condition and results of operations.
Additionally, system upgrade and improvement are essential to support our business growth, and failure to do so could impede our growth. However, we cannot assure you that these third parties who provide us the access to the platforms will be executing these system upgrades and improvement strategies in a timely fashion or succeed in doing so at all. In particular, the systems may experience interruptions during upgrades, and the new technologies or infrastructures may not be fully integrated with the existing systems on a timely basis, or at all. If the technology platform we are using or will use does not function properly, it could cause system disruptions and slow response times, affecting data transmission, which in turn could materially and adversely affect our business, financial condition and results of operations.
We also rely on technologies that we license from third parties, such as Microsoft, Adobe and certain management information systems. These licenses may not continue to be available to us on commercially reasonable terms or at all in the future. As a result, we may be required to obtain substitute technologies. There is no assurance that we will be able to obtain such substitute technologies on commercially reasonable terms, or at all, which could negatively affect the functionality of our technological platform and our business operations.
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We have experienced substantive growth in recent years, and failure to manage our growth and return to or maintain profitability could harm our business and prospects.
We have experienced substantive growth in recent years. Our total net revenues increased from $0.14 million in 2016 to $105.2 million in 2025, representing a compound annual growth rate of 108%. However, there is no assurance that we will be able to maintain our historical growth rates in future periods. Our revenue growth may slow, or our revenues may decline for many reasons, including competition, slower growth of the China retail or China online retail sales, fulfillment bottlenecks, emergence of alternative business models, changes in government policies and other general economic conditions.
Our growth has placed, and continues to place, significant strain on our management and resources. We anticipate that we will need to implement new or upgraded operational and financial systems, procedures and controls, including the improvement of our accounting and other internal management systems. We also need to expand, train, manage and motivate our workforce and manage our relationships with our partners, suppliers, third-party merchants and other service providers. To return to or maintain profitability, we must implement such upgrades, manage our workforce cost-effectively and manage our cost of products and operating expenses. We cannot assure you that we will be able to manage our growth or return to or maintain profitability or execute our strategies effectively, and any failure to do so may have a material adverse effect on our business and prospects. Accordingly, our historical performance may not be indicative of future operating results.
Any occurrence of a natural disaster, health epidemic or similar development could have a material adverse effect on our business.
Our business could be materially and adversely affected by natural disasters, such as earthquakes, floods, snowstorms, typhoons, or fires, widespread health epidemics, such as avian influenza, swine flu, severe acute respiratory syndrome, or SARS, Ebola, Zika, or other events, such as wars, acts of terrorism, environmental accidents, power shortage or communication interruptions. Such developments in China or elsewhere could disrupt our business and operations, cause a temporary closure of facilities we use for our operations, and have a material adverse effect on our business, financial condition and results of operations.
In recent years, there have been outbreaks of health epidemics in various countries globally, which may disrupt supply chains and diminish e-commerce fulfilment and logistics capabilities, as well as result in weaker consumer demand; all these consequences may have an adverse impact on our business, financial condition and results of operations. If there is any other epidemic or pandemic that causes harm to global economy, our results of operations will likely be adversely and materially affected.
Our results of operations are subject to fluctuations due to the seasonality of our business and other events.
We expect to experience seasonal fluctuations in our revenues. These seasonal patterns have caused and will continue to cause fluctuations in our operating results. Our results of operations historically have been seasonal primarily because consumers increase their purchases during particular promotional activities, such as Singles Day (an online sales promotions event that falls on or around November 11 each year) promotion and the impact of seasonal buying patterns within certain categories such as sunscreen. In addition, we generally experience a lower level of sales activity in the first quarter due to the Chinese New Year holiday, during which consumers generally spend less time shopping online and businesses in China are generally closed.
In anticipation of increased sales activity during peak seasons, we increase our inventory levels and incur additional expenses. If our seasonal revenues are below expectations, our operating results could be below the expectations of securities analysts and investors. Due to the nature of our business, it is difficult to predict the impact of this seasonality on our business and financial results. In the future, our seasonal sales patterns may become more pronounced, may strain our personnel, customer service operations, fulfillment operations and shipment activities and may cause a shortfall in revenues compared to expenses in a given period. As a result, the trading price of our Class B Ordinary Shares may fluctuate from time to time due to seasonality.
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In addition, if too many consumers access the online stores operated by us within a short period of time due to increased promotions or other demand surges, we may experience system interruptions that make such online stores unavailable or prevent us from transmitting orders to our fulfillment operations. Any such system interruptions may reduce the volume of transactions in the stores that we operate as well as the attractiveness of such online stores to consumers. In anticipation of increased sales activity during peak seasons, we and our brand partners increase our inventory levels. If we and our brand partners do not increase inventory levels for popular products in sufficient amounts or are unable to restock popular products in a timely manner, we and our brand partners may fail to meet customer demand, which could reduce the attractiveness of such online stores. Alternatively, if we overstock products, we may be required to take significant inventory markdowns or write-offs under the distribution model, which could reduce profits. Either of these outcomes may lead our brand partners to reduce their engagement with us.
Our substantial level of indebtedness could adversely affect our financial condition.
We have a substantial amount of short-term indebtedness at various interest rates. As of December 31, 2025, we had a total short term indebtedness liability of approximately $9.3 million and total long term indebtedness liability of approximately $6.9 million, relative to a twelve-month net income of approximately $0.8 million in the twelve months ended at the same date and a total liability of approximately $26.8 million as of the same date. This short-term indebtedness includes short term borrowings from banks, financial institutions and third parties.
During the years ended December 31, 2025 and 2023, we entered into certain loan agreements with certain financial institutions, pursuant to which we borrowed $5.4 million and $9.5 million, respectively, from these financial institutions. The borrowings bore interest rates ranging between 8.8% and 9.0% per annum. For the year ended December 31, 2024, we did not borrow from financial institutions. For the years ended December 31, 2025, 2024 and 2023, we repaid borrowings of $2.5 million, $0.7 million and $17.9 million, respectively. The loans outstanding as of December 31, 2025 were with the maturity dates due through December 2026.
During the year ended December 31, 2025, 2024 and 2023, we entered into a loan agreement with a bank, pursuant to which we borrowed $21.1 million, $33.4 million and $48.4 million, respectively. The loans were renewed upon maturity, with final maturities dates extending through October 2026. The borrowing bore interest rates ranging between 3.2% and 7.5% per annum. For the year ended December 31, 2025, 2024 and 2023, we repaid borrowings of $23.4 million, $32.3 million and $53.0 million, respectively. The short-term loans were pledged by the accounts receivables due from customers.
During the year ended December 31, 2024, we entered into another loan agreement with an additional bank, pursuant to which we borrowed $4.9 million with maturity dates due through October 2025. The loans were renewed upon maturity, with final maturity dates extending through October 2026. The borrowings bore interest rates ranging between 4.6% and 5.1% per annum. For the years ended December 31, 2025 and 2024, we did not repay the bank.
During the year ended December 31, 2025, we entered into one additional loan agreement with another bank, pursuant to which we borrowed $0.7 million with maturity date due in July 2026. The borrowings bore an interest rate of 2.5% per annum. The borrowing is guaranteed by Mr. Wang Jun, who is the Chief Executive Officer of Weitong and a shareholder of the Company.
Our substantial level of indebtedness could have important consequences, including the following:
| ● | we must use a substantial portion of our cash flow from operations to pay interest and principal on these loans, which will reduce funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes and potential acquisitions; |
| ● | our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired; |
| ● | we will be exposed to fluctuations in interest rates and currency exchange rates; |
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| ● | our leverage may be greater than that of some of our competitors in the same markets, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions; |
| ● | we may be more vulnerable to the economic downturns and adverse developments in our business; |
| ● | we may be unable to comply with financial and other restrictive covenants in our debt agreements, which could result in an event of default that, if not cured or waived, may result in adverse effect on our business and prospects, and force us into bankruptcy or liquidation; and |
| ● | in the event of insolvency, liquidation, reorganization, dissolution or other winding up of our business, if there are not sufficient assets remaining to pay all creditors, then all or a portion of the amounts due on some of our indebtedness then outstanding may remain unpaid. |
We may incur substantial additional indebtedness in the future, subject to the restrictions contained in our existing indebtedness. For example, we may incur additional debt to fund our business and strategic initiatives. If we incur additional debt and other obligations, the risks associated with our leverage and the ability to service such debt would increase.
Our ability to meet expenses, to remain in compliance with our covenants under our debt arrangements and to make future principal and interest payments in respect of our debt arrangements depends on, among other things, our operating performance, competitive developments and financial market conditions, all of which are significantly affected by financial, business, economic and other factors. We are not able to control many of these factors. Accordingly, our cash flow may not be sufficient to allow us to pay principal and interest on our debt and meet our other obligations. If we are unable to obtain funding in a timely manner or on commercially acceptable terms, we may not be able to meet our payment obligations under our indebtedness.
If we fail to manage our accounts receivable effectively or fail to collect our accounts receivable, our results of operations, financial condition and liquidity may be materially and adversely affected.
We generally receive funds which are created by our flagship online stores from the e-commerce platforms within one month, and from other e-commerce platforms and third-party distributors within one to two months after online consumers have confirmed receipt of goods. We normally provide our brand partners with a credit period of one month to four months. As of December 31, 2025 and 2024, our accounts receivable due from continuing operations were $12.8 million and $15.0 million, respectively. Our accounts receivable turnover days were 48 days and 39 days in 2025 and 2024, respectively. The amount and turnover days of our accounts receivable may increase in the future, which will make it more challenging for us to manage our working capital effectively and our results of operations, financial conditions and liquidity may be materially and adversely affected. In addition, if some brand partners refuse to settle their accounts receivable, we may need to initiate legal proceedings for collection. There is no guarantee that we will finally collect such accounts receivable.
If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected.
We assume inventory ownership of the products of all of our brand partners and thus are subject to inventory risk. We deploy different strategies to deal with non-seasonal and seasonal demands and make adjustments to our procurement plan in order to minimize the chance of excess unsold inventory and manage our product costs. Demand for products, however, can change significantly between the time inventory is ordered and the date by which we target to sell it. Demand may be affected by seasonality, new product launches, fashion trends, changes in product cycles and pricing, product defects, changes in consumer spending patterns and habits, changes in consumer tastes with respect to our products and other factors. In addition, when we begin selling a new product, it may be difficult to determine appropriate product selection and accurately forecast demand.
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Our inventories were $3.3 million and $6.3 million as of December 31, 2025 and 2024, respectively. The decrease in inventory balance was primarily because we lowered our stocks of inventories as of December 31, 2025, which was in line with the decrease in revenues. Our inventory turnover days were 20 days and 35 days in 2025 and 2024, respectively. Inventory turnover days for a given period are equal to the average inventory balances as of the beginning and the end of the period, divided by total cost of products during the period and multiplied by the number of days during the period.
We cannot assure you that we will be able to effectively manage our inventories and product costs. The amount and turnover days of our inventories may increase in the future, which will make it more challenging for us to manage our working capital effectively. If we fail to manage our inventory effectively, we may be subject to a heightened risk of inventory obsolescence, a decline in inventory values, and significant inventory write-downs or write-offs. Our inventory may also be damaged due to natural disasters or accidents, such as fire accidents. In addition, we may be required to lower sale prices in order to reduce inventory level, which may lead to lower margins. Any of the above may materially and adversely affect our results of operations and financial condition.
On the other hand, if we underestimate demand for our products, or if our brand partners under the distribution model fail to supply quality products in a timely manner or if there is any natural disaster or outbreak of pandemic or epidemic that disrupts supply chain, we may experience inventory shortages, which might result in missed sales, diminished brand loyalty and lost revenues, any of which could harm our business and reputation.
We rely on marketing and promotional arrangements we signed with online services, search engines, and other websites to drive traffic to the stores we operate and for our other customers. If we are unable to enter into or properly maintain and manage these marketing and promotional arrangements, our ability to generate revenue could be adversely affected.
We have entered into marketing and promotional arrangements with online services, search engines, and other websites to provide content, advertising banners and other links to our brand partners’ e-commerce businesses. We expect to rely on these arrangements as significant sources of traffic to our brand partners’ e-commerce businesses and to attract new brand partners. We also provide digital marketing services to our other customers. If we are unable to maintain these relationships or enter into new arrangements on acceptable terms, our ability to attract new brand partners and new customers could be harmed. Further, many of the parties with which we may have online advertising arrangements provide advertising services for other marketers of goods. As a result, these parties may be reluctant to enter into or maintain relationships with us. Failure to achieve sufficient traffic or generate sufficient revenue from purchases originating from third parties may limit our brand partners’ and our ability to maintain market share and revenue and affect our profitability. Moreover, if we are unable to manage and conduct marketing and promotional activities for our clients cost-effectively, they may turn to other alternatives, reducing our revenues and potentially materially adversely affecting our business and reputation.
We may not be able to respond to rapid changes in e-commerce platform’s developments.
The e-commerce marketplace is characterized by rapid technological changes and frequent changes in rules, specifications and other requirements for our brand partners to be able to sell their merchandise on particular channels. Our ability to retain and attract brand partners depends in large part on our ability to improve our existing capabilities and introduce new practices that can adapt quickly to the emerging channels, such as Douyin and Xiaohongshu, and these changes in channel technologies. To achieve market acceptance for our practices, we must effectively anticipate and conduct activities that meet emerging channels and frequently change channel requirements in a timely manner. If we fail to do so, our ability to renew our contracts with existing brand partners will be impaired.
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If we and our brand partners fail to anticipate changes in consumers’ buying preferences and adjust product offering and merchandising of the stores that we operate accordingly, our results of operation may be materially and adversely impacted.
Our success depends, in part, upon our ability and our brand partners’ ability to anticipate and respond to consumer trends with respect to products sold through the stores that we operate and other channels we distribute products to. Constantly changing consumer preferences have affected and will continue to affect the retail industry. We must stay abreast of emerging consumer preferences and anticipate product trends that will appeal to existing and potential consumers. Our dedicated online store operation teams work closely with our brand partners to manage inventory and site content of the brand stores that we operate. In order to be successful, we and our brand partners must accurately predict consumers’ tastes and avoid overstocking or understocking products. If we or our brand partners fail to identify or respond to changes in merchandising and consumer preferences, sales of our brand partners’ e-commerce businesses could suffer and we or our brand partners could be required to mark down unsold inventory, which could negatively impact on our financial results.
Any deficiencies in China’s telecommunication infrastructure could impair our ability to conduct e-commerce and materially and adversely affect our results of operations.
Our business depends on the performance and reliability of the telecommunication infrastructure in China. The availability of the technology platforms provided by third parties depends on telecommunications carriers and other third-party providers for communications and storage capacity, including bandwidth and server storage, among other things. Almost all access to the internet and mobile network is maintained through state-owned telecommunication carriers under administrative control, and we obtain access to end-user networks operated by such telecommunications carriers and service providers to present our internet platform to consumers. We have experienced service interruptions in the past, which were typically caused by service interruptions at the underlying external telecommunications service providers, such as the internet data centers and broadband carriers from which we lease services. Service interruptions prevent brand partners from utilizing our technology platform, and frequent or extended interruptions could frustrate consumers and discourage them from attempting to place orders, which could cause us and our brand partners to lose consumers and adversely affect our results of operations.
Software failures or human errors could cause us to oversell our brand partners’ inventory or misprice their offerings, which would hurt our reputation.
We, on behalf of our brand partners, automate the allocation of the inventories simultaneously across multiple online channels, as well as to ensure that the sales comply with the policies of each channel. In the event that our automated allocations do not function properly, or if there are human errors on the part of our service staff, we may sell more inventories than we actually have in stock or make sales that violate channel policies. Errors in the software we use or human error could cause transactions to be incorrectly processed and would cause GMV and our fees to be overstated. We have experienced rare instances of such errors in the past and might experience similar occurrences in the future which could hurt our business reputation. Brand partners could also seek recourse against us in these cases.
Any interruption in our fulfillment operations for an extended period may have an adverse impact on our business and financial condition.
Our ability to process and fulfill orders accurately depends on the smooth operation of our fulfillment and warehousing network. Warehouses rented by us may be vulnerable to damage caused by fire, flood, power outage, telecommunications failure, break-ins, earthquake, human error and other events. If any of our fulfillment and logistics infrastructures were rendered incapable of operations, then we may be unable to fulfill any orders from the affected infrastructure. We do not carry business interruption insurance to protect us from natural disasters and force majeure risks, and the occurrence of any of the foregoing risks could have a material adverse effect on our business, prospects, financial condition and results of operations.
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We depend on third-party delivery service providers to deliver products to consumers, and if they fail to provide reliable delivery services our business and reputation may be materially and adversely affected.
We rely on third-party delivery service providers to deliver products to consumers, and any major interruptions to or failures in these third parties’ delivery services could prevent the timely or successful delivery of products. These interruptions may be due to unforeseen events that are beyond our control or the control of these third-party delivery companies, such as inclement weather, natural disasters, transportation interruptions, fire incidents, labor unrest or shortage, pandemics or epidemics. If products are not delivered on time or are delivered in a damaged state, consumers may refuse to accept products and may claim refund from us or our brand partners, and brand partners and consumers may have less confidence in our services. As a result, we may lose brand partners, and our financial condition and reputation could suffer.
Our service partners’ failure to effectively manage the capacity and utilization of the warehouse we use could have a material adverse effect on our business and results of operation.
As of the date of this Report, all of our warehouses are operated and managed by third parties, which we engage with through several service agreements. These service partners may not be able to effectively manage our inventories or timely provide enough space for our storage, and we may have to enforce the agreements through legal remedies, which may be expensive and costly. If they fail to effectively manage the warehouse facilities, we may have to find more service partners to provide similar services, and our costs will rise as a percentage of revenue. In addition, since we operate the warehouse through our services providers relying on service agreements, we cannot control the method on how they manage the warehouse and our inventories, and if their management cannot satisfy or sudden incident occur during their management, we may be forced to switch to other warehouses managed by other services providers. We cannot assure we are able to find substitute immediately. There can be no assurance that failure to manage our warehouse capacity and utilization will not have a material adverse effect on our business and results of operation.
We are subject to third-party payment processing related risks.
We accept payments using a variety of methods, including online payments with credit cards and debit cards issued by major banks in China, payment through third-party online payment platforms such as Alipay and WeChat Pay, and payment on delivery. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower our profitability. We may also be subject to fraud and other illegal activities in connection with the various payment methods we offer, including online payment and payment on delivery options. We are also subject to various rules, regulations and requirements, regulatory or otherwise, governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from consumers, process electronic funds transfers or facilitate other types of online payments, and our business, financial condition and results of operations could be materially and adversely affected.
If we are unable to provide high-quality customer service, our business and results of operations may be materially and adversely affected.
We depend on our customer service representatives in our customer service center to provide live assistance to customers. If our online customer service representatives fail to satisfy the individual needs of consumers, the sales of our brand partners’ products could be negatively affected, and we may lose potential or existing brand partners, which could have a material adverse effect on our business, financial condition and results of operations. In addition, our business generates and processes a large amount of data, and the improper use or disclosure of such data could harm our reputation as well as have a material adverse effect on our business and prospects.
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Negative publicity, including negative internet postings, about us, our Able View brand, management, brand partners and product offerings may have a material adverse effect on our business, reputation and the trading price of our ordinary shares.
Negative publicity about us, our Able View brand, management, brand partners and product offerings may arise from time to time. Negative comments about the stores operated by us, products offered in such stores, our business operation and management may appear on internet postings and other media sources from time to time and we cannot assure you that other types of negative publicity of a more serious nature will not arise in the future. For example, if our customer service representatives fail to satisfy the individual needs of our consumers, our consumers may become disgruntled and disseminate negative comments about our product offerings and services. In addition, our brand partners may also be subject to negative publicity for various reasons, such as consumers’ complaints about the quality of their products and related services or other public relation incidents of such brand partners, which may adversely affect the sales of products of these brand partners in the stores operated by us and indirectly affect our reputation.
Moreover, negative publicity about other online retailers or brand management player in China may arise from time to time and cause consumers and suppliers to lose confidence in the products and services we offer. Any such negative publicity, regardless of veracity, may have a material adverse effect on our business and financial results, our reputation and the trading price of our ordinary shares.
If counterfeit products are sold in the stores we operate or other channels where the products are distributed, our reputation and financial results could be materially and adversely affected.
We represent reputable brands, and we source goods from our brand partners directly or through third party procurement agents authorized by our brand partners. However, their measures of safeguarding against counterfeit products may not be adequate. Although we have indemnity clauses in most of our contracts with our brand partners, sales could decline and we may suffer reputational harm. We may be subject to sanctions under applicable laws and regulations if we are deemed to have participated or assisted in infringement activities associated with counterfeit goods, which may include injunctions to cease infringing activities, rectification, compensation, administrative penalties and even criminal liability, depending on the gravity of such misconduct. Furthermore, counterfeit products may be defective or inferior in quality as compared to authentic products and may pose safety risks to consumers. If consumers are injured by counterfeit products sold through the stores we operate or the platform we operated, we may be subject to lawsuits, severe administrative penalties and criminal liability. We believe our reputation is extremely important to our success and our competitive position. The discovery of counterfeit products sold through the stores we operate or the platform we operated may severally damage our reputation among brand partners, and they may refrain from using our services in the future, which would materially and adversely affect our business operations and financial results.
Any lack of requisite approvals, licenses or permits applicable to our business or failure to comply with PRC Laws and regulations may have a material and adverse impact on our business, financial condition and results of operations.
Our mainland China subsidiaries are subject to supervision and regulation by relevant PRC government authorities, including without limitation the Ministry of the Commerce, or the MOFCOM, the Ministry of Industry and Information Technology, or the MIIT, the State Administration for Market Regulation, or the SAMR and National Medical Products Administration. These government authorities promulgate and enforce regulations that cover many aspects of online retailing and distribution of products such as food and medical devices, including scope of permitted business activities, licenses and permits for business operation, and restrictions on foreign investments. Meanwhile, the brand partners we partner with are also obliged to hold licenses and meet regulatory requirements in order to sell products themselves or through our e-commerce capabilities. While we currently hold all material licenses and permits required for our business operations, we cannot assure you that we will be able to renew these licenses and permits upon their expiration or to expand the current business scope of these licenses and permits when required, obtain any license or permit that is in application, or obtain new licenses or permits in the future as a result of our business expansion, change in our business operations or change in laws and regulations applicable to us.
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As e-commerce business via internet and mobile network is still evolving in China, new laws and regulations may be adopted from time to time, and substantial uncertainties exist regarding interpretation and implementation of current and future PRC Laws and regulations applicable to our business operations. We cannot assure you that our current business activities will not be found in violation of any future laws and regulations or any of the laws and regulations currently in effect due to changes in the relevant authorities’ interpretation of these laws and regulations. For example, the MIIT released the new Classified Catalog of Telecommunications Services, or the Telecommunication Catalog, on December 28, 2015, which came into effect on March 1, 2016, and later amended on June 6, 2019, and specifies that information services provided through mobile networks are recognized as internet information services. According to relevant MIIT rules, service providers, like operators of mobile application stores, will be required to meet certain qualifications, including obtaining a value-added telecommunication license, or a VAT License, covering internet information services rendered through mobile network, or an ICP License. In addition, according to the Telecommunication Catalog and other MIIT rules, operating a marketplace platform that connects sellers and buyers is categorized as online data processing and transaction processing services, and therefore such service providers are required to obtain a VAT License covering online data processing and transaction processing services. Given that the current business conducted by our PRC Operating Entities does not involve in operating a marketplace platform or providing any services concerning online data processing and transaction processing, we are not required to obtain the VAT License or ICP License. However, we cannot assure you that our current business activities will not be required to obtain such licenses in the future due to changes in the relevant MIIT laws and regulations or the authorities’ interpretation of these laws and regulations. With the expansion of our business in the future, we may be required to obtain other required licenses or expand the current scope of the licenses we hold to cover internet information services rendered through mobile networks or to cover other scopes such as online data processing and transaction processing service (in addition to operational e-commerce) that may be required by the government authorities from time to time.
Our business as operated by our Hong Kong subsidiaries is also subject to supervision and regulation by relevant government authorities in Hong Kong, including without limitation the Companies Registry and Business Registration Office, which, among other things, require us to complete certain registrations and to obtain various licenses and permits for our operations. As of the date of this Report, our Hong Kong subsidiaries is not required to obtain any special licenses and permits other than certificates of incorporation and business registration certificates, which are basic corporate documents for each company. While we currently hold all licenses and permits required for our business operation in Hong Kong, we cannot assure you that we will be able to renew these licenses and permits upon their expiration or to expand the current business scope of these licenses and permits when required, obtain any license or permit that is in application, or obtain new licenses or permits in the future as a result of our business expansion, change in our business operations or change in laws and regulations applicable to us.
If we fail to adapt to any new regulatory requirement or any competent government authority considers that we operate our business operation without any requisite license, permit or approval, or otherwise fail to comply with applicable regulatory requirements, we may be subject to administrative actions and penalties, including fines, confiscation of our incomes, revocation of our licenses or permits, or, in severe cases, cessation of certain business. In addition, if our brand partners are found by government authorities to have operated their business through us without requisite approvals, licenses or permits or otherwise to be in violation of applicable laws and regulations, they may be ordered to take rectification actions. Any of these actions may have a material and adverse effect on our business, financial condition and results of operations.
Our leased property interests may be defective and our right to lease and use the properties affected by such defects may be challenged, or we may fail to extend or renew our current leases or locate desirable alternatives for our facilities on commercially acceptable terms, which could cause significant disruption to our business.
We lease 5 premises in mainland China for our offices, as of the date of this Report. Some of the lessors of these leases have not provided us with sufficient documents to prove their ownership of the premises or their rights to lease the premises to us for our intended use. We may not be able to maintain such leases if the lessors are not legal owners of the properties or do not have competent authorization from the legal owners of the properties or have not obtained requisite governmental approvals in respect of our leases. In addition, we cannot assure you that we will be able to successfully extend or renew our leases upon expiration of the current term or locate desirable alternatives for our facilities on commercially reasonable terms or at all and may therefore be forced to relocate our affected operations. Pursuant to the Administrative Measure for Commodity House Leasing, the parties to house leasing shall, within 30 days after the execution of the house leasing contract, submit the house leasing registration and filing formalities at the relevant construction or real estate administrative department at the place where the leased house is located. Otherwise, anyone failing to complete the leasing registration and filing will be ordered to make corrections within a prescribed time limit and/or be subject to a fine ranging from RMB 1,000 (approximately USD140) to RMB 10,000 (approximately USD1,403) if we fail to make corrections within such prescribed time limit. A substantial portion of our leasehold interests in leased properties has not been registered with the relevant PRC government authorities as required by PRC law, which may expose us to potential fines if we fail to remediate after receiving any notice from the relevant PRC government authorities. As of the date of this Report, we are not aware of any actions, claims or investigations being contemplated by government authorities with respect to the defects in our leased real properties or any challenges by third parties to our use of these properties. However, if third parties who purport to be property owners challenge our right to use the leased properties, we cannot assure you that we will be able to successfully protect our leasehold interest, to extend or renew our leases upon expiration of the current term or locate desirable alternatives for our facilities on commercially reasonable terms or at all, and may therefore be forced to relocate our affected operations, which would in turn materially and adversely affect our business and operating results.
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In addition, we may acquire certain land use rights and titles in the relevant buildings for business operation purposes from time to time. Our use of the land and buildings we acquired may not be consistent with their approved usage, and some approvals, licenses and permits may be yet to be obtained for the construction and continuous use of such buildings. We cannot assure you that we will be able to successfully remedy the defects or obtain all the requisite approvals, licenses or permits. These could disrupt our operations and result in significant relocation expenses, which could adversely affect our business, financial condition and results of operations. In addition, we compete with other businesses for premises at certain locations or of certain sizes. As a result, even if we could extend or renew our leases, rental payments may significantly increase as a result of the high demand for the leased properties. In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations.
We may be subject to product liability claims that could be costly and time-consuming.
We sell products manufactured by third parties, some of which may be defective. If any product that we sell were to cause personal injury or injury to property, the injured party or parties could bring claims against us as the retailer of the product. These claims will not be covered by insurance as we do not maintain any product liability insurance. Similarly, we could be subject to claims that consumers of the online stores operated by us were harmed due to their reliance on our product information, product selection guides, advice or instructions. If a successful claim were brought against us, it could adversely affect our business. We may have the right under applicable laws, rules and regulations to recover from the relevant brand partners’, manufacturers’ or distributors’ compensation that we are required to make to consumers or end users in connection with product liability, personal injury or a similar claim, if such relevant party is found responsible. However, there can be no assurance that we will be able to recover all or any amount from these parties. We may encounter some callback from the products sold to consumers due to defective products, which may have adverse effect on our operations. Any future product liability claims or large scale of callback due to defective products discovered, regardless of their merit or success, could result in the expenditure of funds and management time, adverse publicity and reputational harm and could have a negative impact on our business and financial condition.
We depend on key management as well as experienced and capable personnel generally, and any failure to attract, motivate and retain our staff could severely hinder our ability to maintain and grow our business.
Our future success is significantly dependent upon the continued service of our key executives and other key employees. If we lose the services of any member of management or key personnel, we may not be able to locate suitable or qualified replacements and may incur additional expenses to recruit and train new staff, which could severely disrupt our business and growth.
Competition for talent in China is intense, and the availability of suitable and qualified candidates in China is limited. Competition for these individuals could cause us to offer higher compensation and other benefits to attract and retain them. Even if we were to offer higher compensation and other benefits, there is no assurance that these individuals will choose to join or continue to work for us. Any failure to attract or retain key management and personnel could severely disrupt our business and growth.
If we are unable to recruit, train and retain qualified personnel or sufficient workforce while controlling our labor costs, our business may be materially and adversely affected.
Our future success depends, to a significant extent, on our ability to recruit, train and retain qualified personnel, particularly technical, fulfillment, marketing and other operational personnel with experience in the e-commerce industry. Since our industry is characterized by high demand and intense competition for talent and labor, we can provide no assurance that we will be able to attract or retain qualified staff or other highly skilled employees that we will need to achieve our strategic objectives. Particularly, our fulfillment infrastructure is labor intensive and requires a substantial number of blue-collar workers, and these positions tend to have higher than average turnover. We may need to but may be unable to hire additional employees in connection with the strengthening of our fulfillment capabilities.
We have observed an overall tightening of the labor market and an emerging trend of shortage of labor supply. Failure to obtain stable and dedicated warehousing, delivery and other labor support may lead to underperformance of these functions and cause disruption to our business. Labor costs in China have increased with China’s economic development, particularly in the large cities where we operate our fulfillment centers and more generally in the urban areas where we maintain our delivery and pickup stations. It is also costly to employ qualified personnel who have the knowledge and experience of working with leading global brands. In addition, our ability to train and integrate new employees into our operations may also be limited and may not meet the demand for our business growth in a timely fashion, or at all, and rapid expansion may impair our ability to maintain our corporate culture.
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Our business generates and processes a large amount of data, and the improper storage, use or disclosure of such data could harm our reputation as well as have a material adverse effect on our business and prospects.
Our business generates and processes a large quantity of personal, transaction, demographic and behavioral data. We face risks inherent in handling and protecting large volumes of data. In particular, we face challenges relating to data derived from transactions and other activities on our platform, including:
| ● | protecting data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; |
| ● | addressing data privacy, security and other concerns; and |
| ● | complying with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information, including any requests from regulatory and government authorities relating to such data.
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Significant capital and other resources may be required to protect against information security breaches or to alleviate problems caused by such breaches or to comply with our privacy policies or privacy-related legal obligations. The resources required may increase over time as the methods used by hackers and others engaged in online criminal activities are increasingly sophisticated and constantly evolving. Any failure or perceived failure by us to prevent information security breaches or to comply with privacy policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other customer data, could cause our consumers to lose trust in us and could expose us to legal claims. Any perception by the public that online transactions or the privacy of user information is becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of online retail and other online services generally.
The PRC regulatory and enforcement regime with regard to data security and data protection is evolving. On July 1, 2015, the Standing Committee of the National People’s Congress, or the SCNPC promulgated the National Security Law of the PRC, or the New National Security Law, which took effect on the same date and replaced the former National Security Law promulgated in 1993. The New National Security Law covers various types of national security including technology security and information security. According to the New National Security Law, the state shall ensure that the information system and data in important areas are secure and controllable. In addition, according to the New National Security Law, the state shall establish national security review and supervision institutions and mechanisms and conduct national security reviews of key technologies and IT products and services that affect or may affect national security. In particular, we are legally obligated under the New National Security Law to safeguard national security by, for example, providing evidence related to activities endangering national security, providing convenience and assistance for national security work, and providing necessary support and assistance for national security institutions, public security institutions as well as military institutions. As such, we may have to provide data to PRC government authorities and military institutions for compliance with the New National Security Law, which may increase our expenses and subject us to negative publicity that could harm our reputation with users and negatively affect the trading price of our ordinary shares. In addition, on June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC, or the Data Security Law, which took effect on September 1, 2021. The Data Security Law provides a national security review procedure for those data activities that may affect national security and imposes export restrictions on certain data and information. As of the date of this Report, there are uncertainties on how the New National Security Law will be implemented in practice. PRC regulators, including the SCNPC, the MIIT and the Cybersecurity Administration of China, or the CAC, have been increasingly focused on regulation in the areas of data security and data protection. For example, on November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC, or the Cybersecurity Law, which became effective on June 1, 2017, strengthens the administration on cyber security. See “Substantial uncertainties exist with respect to the Cybersecurity Law and the impact it may have on our business operations.” The Data Security Law sets forth data security and privacy related compliance obligations on entities and individuals carrying out data related activities. The Data Security Law also introduces a data classification and layered protection system based on the importance of data and the degree of impact on national security, public interests or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked or illegally acquired or used. We expect that these areas will receive greater attention and focus from regulators, as well as attract public scrutiny and attention going forward. This greater attention, scrutiny and enforcement, including more frequent inspections, could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection. If we are unable to manage these risks, our reputation and results of operations could be materially and adversely affected. Please see “Risk Factors - We may be subject to a variety of laws and other obligations regarding cybersecurity, data protection or anti-monopoly, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations” for potential risks due to data protection in Hong Kong. As we expand our operations, we will be subject to additional laws and regulations in other jurisdictions where our brand partners, consumers and other customers are located, such as Hong Kong, Taiwan, Korea and the United States. The laws, rules and regulations of other jurisdictions may be at a more mature stage of development, be more comprehensive and nuanced in their scope, and impose more stringent or conflicting requirements and penalties than those in the mainland China, compliance with which could require significant resources and costs. Any failure, or perceived failure, by us to comply with our privacy policies or with any regulatory requirements or privacy protection-related laws, rules and regulations could result in proceedings or actions against us by governmental entities or others. These proceedings or actions could subject us to significant penalties and negative publicity, require us to change our business practices, increase our costs and severely disrupt our business.
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Substantial uncertainties exist with respect to the Cybersecurity Law and the impact it may have on our business operations.
The Cybersecurity Law requires network operators in the PRC to take actions to prevent security attacks and data loss, including data classification and backup and encryption. The Cybersecurity Law specifies requirements on user information protection applicable to network operators, who are prohibited from disclosing without permission or selling individual information with limited exceptions. When network operators become aware of any information that is prohibited by laws and administrative regulations, they are required to immediately cease transmission of such information and take measures such as deletion of relevant information to prevent its dissemination. Operators must maintain a record of these incidents when they occur and report them to the relevant authorities, who may also request such reports. Where any prohibited information comes from outside the territory of China, the authorities may additionally request that all relevant institutions take measures to stop the dissemination of such prohibited information.
On November 14, 2021, the Regulations on the Network Data Security (Draft for Comments), or the Network Data Security Draft Regulations, was proposed by the CAC for public comments until December 13, 2021, which applies to activities relating to the use of networks to carry out data processing activities within the territory of the PRC. The Network Data Security Draft Regulations set out general guidelines, protection of personal information, security of important data, security management of cross-border data transfer, obligations of internet platform operators, supervision and management, and legal liabilities. In accordance with the Network Data Security Draft Regulations, data processors shall apply for a cybersecurity review for the following activities: (i) merger, reorganization or division of internet platform operators that have acquired a large number of data resources related to national security, economic development or public interests to the extent that affects or may affect national security; (ii) listing abroad of data processors which process over one million users’ personal information; (iii) data processors listing in Hong Kong which affects or may affect national security; or (iv) other data processing activities that affect or may affect national security. Besides, data processors that are listed overseas shall carry out an annual data security assessment. The Network Data Security Draft Regulations was formally adopted on August 20, 2024 as Regulations on the Network Data Security Management, which was promulgated on September 24, 2024 and took effect on January 1, 2025.
On December 28, 2021, the CAC, and other twelve PRC regulatory authorities jointly revised and promulgated the Measures for Cyber Security Review, or the New Measures for Cyber Security Review, which came into effect on February 15, 2022, and replace the prior Measures for Cyber Security Review promulgated on April 13, 2020. The New Measures for Cyber Security Review provides that, among others, (i) the purchase of cyber products and services by critical information infrastructure operators and the network platform operators engaging in data processing activities that affects or may affect national security should be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is responsible for the implementation of cybersecurity review under the CAC; (ii) network platform operators with personal information data of more than one million users are obliged to apply for a cybersecurity review by the Cybersecurity Review Office before listing abroad; and (iii) relevant governmental authorities in the PRC may initiate cybersecurity review if they determine the relevant network products or services or data processing activities affect or may affect national security.
On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-Border Transfer of Data, which took effect on September 1, 2022. These measures aim to regulate cross-border transfers of data, requiring, among other things, that data processors that provide data overseas shall apply to the CAC for security assessments if: (i) data processors provide important data overseas; (ii) critical information infrastructure operators or data processors processing personal information of more than one million individuals provide personal information to overseas parties; (iii) data processors that have cumulatively provided personal information of 100,000 people or sensitive personal information of 10,000 people to overseas since January 1 of the previous year, provide personal information to overseas parties; or (iv) other scenarios required by the CAC to apply for security assessments occur. In addition, these measures require data processors to carry out self-assessments of risks of providing data overseas before applying to the CAC for security assessments.
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Based on the understanding of Company’s corporate compliance team, we are not subject to mandatory cybersecurity review, since we (i) are not a network platform operator engaging in data processing activities that affect or may affect national security; (ii) are not a critical information infrastructure operator purchasing cyber products or services that affect or may affect national security; (iii) are not a network platform operator with personal information data of more than one million users. Therefore, we do not need to obtain any permission or approval from the CAC for the listing of our securities in accordance with the New Measures for Cyber Security Review. However, PRC governmental authorities have broad discretion in interpreting and implementing statutory provisions and there remains significant uncertainty on the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. In particular, due to lack of details on the implementation of the Cybersecurity Law and the New Measures for Cyber Security Review, we cannot assure you that we would be able to comply with the requirements in a timely manner, or whether we should be deemed subject to it. Failure to comply with the requirements may lead to fines, revocation of business permits or licenses and other sanctions.
National laws adopted by the PRC are not applicable in Hong Kong, except for those listed in Annex III to the Basic Law. Further, there is no legislation stating that the laws in Hong Kong should be commensurate with those in the PRC. With regard to the potential regulatory actions related to data security in Hong Kong, please refer to our disclosures in “Risk Factors - Risks Related to Doing Business in Hong Kong - We may be subject to a variety of laws and other obligations regarding cybersecurity, data protection or anti-monopoly, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations” on page 40. Apart from the foregoing, there is no other impact on our ability to conduct our business as presently conducted, accept foreign investments, or list on a U.S. or foreign exchange.
Based on the facts that the New Measures for Cyber Security Review and the Network Data Security Draft Regulations were newly adopted or have not been formally adopted and are still subject to further guidance, we cannot assure you that we would be able to comply with the requirements in a timely manner. Failure to comply with the requirements may lead to fines, revocation of business permits or licenses and other sanctions.
Finally, we procure equipment or software for storage, encryption and decryption from time to time. It remains unclear whether such equipment or software will fall into the category of the so-called “critical network equipment” or “dedicated network security products” due to lack of criteria or standards in the Cybersecurity Law. On June 1, 2017, the MIIT and other three PRC regulatory authorities jointly promulgated the Catalog of Critical Network Equipment and Dedicated Network Security Products (Batch One), which provides that any equipment and product listed in this catalog shall not be sold or supplied unless it is certified or tested by qualified organizations. In addition, pursuant to the Announcement on Uniform Issuance of the Security Certification and Security Testing Results of Critical Network Equipment and Dedicated Network Security Products, the critical network equipment and dedicated network security products which have been certified or tested by qualified organizations and meet the mandatory requirements of relevant national standards shall be published. To the date of this Report, eight batches of qualified critical network equipment have been published on the website of the MIIT. As such, we cannot assure you that the equipment and software we have procured or may procure in the future complies with the requirements, and we may incur additional costs to comply with the requirements.
We may not be able to adequately protect our intellectual property rights.
We rely on a combination of trademark, fair trade practice, and trade secret protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights. We typically enter into confidentiality agreements with certain senior management and core personnel who may access our proprietary information, and we rigorously control access to our proprietary technology and information.
Intellectual property protection may not be sufficient in China or other countries in which we operate. confidentiality 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 or elsewhere. In addition, policing any unauthorized use of our intellectual property is difficult, time-consuming and costly and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. Under the Foreign Investment Law of the PRC, or the PRC Foreign Investment Law, promulgated by the National People’s Congress on March 15, 2019, which became effective on January 1, 2020, the PRC government encourages technology cooperation on the basis of free will and business rules in the process of foreign investment; no administrative agency or its employee may force the transfer of any technology by administrative means. However, because the PRC Foreign Investment Law is relatively new, there remain high uncertainties with regard to how the law will be interpreted and enforced.
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Able View is also subject to a variety of laws and other obligations regarding intellectual property rights in Hong Kong, including but are not limited to the Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong), which provides for the registration of trademarks, the use of registered trademarks and related matters. Intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our clients.
We may be accused of infringing intellectual property rights of third parties and violating content restrictions of relevant laws.
Third parties may claim that the technology or content used in our operation of online stores or our service offerings infringe upon their intellectual property rights. We have been in the past subject to non-material legal proceedings and claims relating to infringement of the intellectual property rights of others. The possibility of intellectual property claims against us increases as we continue to grow, particularly internationally. Such claims, whether having merit, may result in our expenditure on significant financial and management resources, injunctions against us or payment of damages. We may need to obtain licenses from third parties who allege that we have infringed their rights, but such licenses may not be available on terms acceptable to us or at all. These risks have been amplified by the increase in the number of third parties whose sole or primary business is to assert such claims. In addition, we have registered or are in the process of registering some marks we used for our business but some of our applications have been or may be rejected by the governmental authority. As some third parties have already registered or may register the trademarks which are similar to the marks we used in our business, infringement claims may be asserted against us, and we cannot assure you that a government authority or a court will hold the view that such similarity will not cause confusion in the market. In this case, we may be required to explore the possibility of acquiring these trademarks from or entering into exclusive licensing agreements with third parties, which will cause us to incur additional costs.
China has enacted laws and regulations governing internet access and the distribution of products, services, news, information, audio-video programs and other content through the internet. The PRC government has prohibited the distribution of information through the internet that it deems to be in violation of PRC Laws and regulations. If any of the information disseminated through the online stores operated by us were deemed by the PRC government to violate any content restrictions, we would not be able to continue to display such content and could become subject to penalties, including confiscation of income, fines, suspension of business and revocation of required licenses, which could materially and adversely affect our business, financial condition and results of operations.
The outcome of any claims, investigations and proceedings is inherently uncertain, and in any event defending against these claims could be both costly and time-consuming and could significantly divert the efforts and resources of our management and other personnel. An adverse determination in any such litigation or proceedings could cause us to pay damages, as well as legal and other costs, limit our ability to conduct business or require us to change the manner in which we operate.
We may face risks arising from ongoing litigation and related disputes.
In September 2024, our subsidiaries Able View Enterprise Limited and AbleView Brands Limited initiated a civil action against Jonathan Petrillo and Cosmetic Skin Solutions LLC, alleging fraudulent misrepresentations, concealment, and inducements in connection with a distribution agreement entered into by the parties. The counterparty subsequently filed a counterclaim alleging unjust enrichment and fraudulent misrepresentation.
The litigation is ongoing, and the final outcome cannot be determined at this time. We believe our positions are supported by the relevant facts and applicable law. In connection with this matter, we recorded an inventory write-down of approximately $3.6M from discontinued operation and $1.3M from continuing operation for the fiscal year ended December 31, 2024, as disclosed in our audited financial statements. No additional provisions have been made, and we will continue to monitor developments in this matter. At this time, we are unable to predict the ultimate outcome of this matter or to reasonably estimate the possible loss or range of loss, if any. Depending on the course of the proceedings, the litigation could result in judgments, settlements, additional write-downs or other obligations, and an adverse resolution could require us to incur additional costs or provisions. Any such developments could result in increased expenses, further write-downs or other financial impacts that could adversely affect our results of operations and cash flows.
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Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from growing.
We may in the future be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. Additional equity or equity linked financing may dilute the interests of our shareholders, and debt financing, if available, may involve restrictive covenants and could restrict our operational flexibility and reduce our profitability. The resale of the shares will be considerable relative to the Company’s public float.
Our ability to obtain additional financing in the future is subject to many uncertainties, including our future financial condition, results of operations, cash flows, trading price of our ordinary shares, liquidity of international capital and lending markets and PRC governmental regulations over foreign investment and cross-border financing and the Internet industry in the PRC. For example, the National Development and Reform Commission of China, or the NDRC, has issued a number of rules requiring filing with the NDRC of foreign debt issuance since September 2015. In May 2016, the NDRC also specifically required offshore incorporated companies directly or indirectly controlled by PRC domestic enterprises, and although not explicitly required by statute, individual PRC residents, to complete filings with the NDRC before pricing and closing of any offshore debt issuance, and to furnish post-issuance reporting to the NDRC, otherwise, the offshore incorporated companies directly or indirectly controlled by PRC domestic enterprises or individual PRC residents will be put on a blacklist of credits and such information will be published on the PRC credit information sharing platform. The NDRC and other relevant authorities may also impose joint sanctions on the issuers listed on the blacklist. Pursuant to Notice of the National Development and Reform Commission and the Ministry of Finance on Improving the Market Restraint Mechanism and Strictly Preventing Foreign Debt Risks and Local Debt Risks effective in May 2018, among others, enterprises that plan to borrow medium-term and long-term foreign debts shall establish and improve a sound and standardized corporate governance structure, management and decision-making mechanisms and financial management rules and properly disclose relevant information. We may be considered as an offshore incorporated company indirectly controlled by individual PRC residents and thus our issuance of foreign debt may be subject to these requirements. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures.
Furthermore, according to the risk alert dated May 25, 2016 published on the NDRC’s website, issuers who fail to furnish the post-issuance reporting will be put on a blacklist and the PRC credit information sharing platform, which may potentially result in restrictions on the offshore debt issuance in the future.
We may not have sufficient insurance coverage to fully cover our business risks, which could expose us to significant costs and business disruption.
We have not obtained any insurance, such as business interruption insurance or product liability insurance, nor do we maintain key-man life insurance to cover potential risks in the daily operation of the business. This could leave us exposed to potential claims and losses. As for the inventory in the warehouse we are using, we depend on the insurance held by our third-party service partners to cover our loss, if any. Therefore, we do not have any control over which insurance is selected by them, and we cannot confirm whether our third-party service partners have obtained any insurance at all. In addition, insurance companies in China offer limited business insurance products. As a result, even if we are successful in our claims against third-party service providers when certain accidents occurred, the insurance bought by our third-party service providers may not be able to fully, or at all, pay the damages resulting from such accidents. Our third-party service providers, if any, may also fail to purchase insurance or maintain effective insurance. Under these circumstances, we have to claim compensation directly from our service providers through friendly negotiation or other legal proceedings, such as arbitrations or litigations, which may be time-consuming and costly, and we cannot be sure that we can provide any adequate compensation for losses. Any business disruption, litigation, regulatory action, outbreak of epidemic disease, accidents, or natural disaster could also expose us to substantial costs and diversion of resources. We cannot assure you that the insurance coverage provided by our third-party service providers’ insurance coverage is sufficient to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely basis, or at all. If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition and results of operations could be materially and adversely affected.
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The financial soundness of financial institutions with which we place our cash and cash equivalents could affect our financial conditions, business and result of operations.
We place our cash and cash equivalents with financial institutions, which include (i) banks incorporated in China, which are all authorized to operate banking business by China Banking and Insurance Regulatory Commission and other relevant agencies, and (ii) overseas financial institutions regulated by competent regulatory authorities in their relevant jurisdictions such as Hong Kong. On February 17, 2015, the PRC State Council, or the State Council, promulgated the Deposit Insurance Regulation, which became effective on May 1, 2015. The Deposit Insurance Regulation requires that banks registered within China shall provide insurance premises to the deposit insurance fund management organization. However, pursuant to the Deposit Insurance Regulation, the insurance provided by the banks has a coverage limit of RMB500,000 (US$71,500). In Hong Kong, the Deposit Protection Scheme (the “Scheme”) was introduced in 2006 under the Deposit Protection Scheme Ordinance (Chapter 581 of the Laws of Hong Kong) to protect depositors by paying them compensation in the event of the failure of a bank which is a member of the Scheme. A depositor is entitled to be compensated up to a maximum of HK$500,000. Most of the commonly placed deposits with Scheme members, whether denominated in Hong Kong dollar, renminbi or any other currency, qualify for this protection. These include current accounts, savings accounts, secured deposits and time deposits with maturity not exceeding five years.
Nevertheless, any deterioration of financial soundness of these banks or financial institutions or any failure of such deposit insurance to fully cover our bank deposits would cause credit risks to our cash and cash equivalents placed with them and thus could have a material adverse effect on our financial conditions, business and results of operations.
A severe or prolonged downturn in the global or Chinese economy or tensions in the relationship between China and other countries could materially and adversely affect our business and our financial condition.
Recently, there have been strained relationships between China and other countries, including surrounding Asian countries, which may potentially lead to foreign investors closing down their business or withdrawing their investment in China and thus exiting the China market, and other economic effects. In addition, there have been concerns on the relationship between China and the U.S. following rounds of tariffs imposed by the U.S and retaliatory tariffs imposed by China. Trade tension between China and the United States may intensify. Political tensions between the United States and China have escalated since the COVID-19 outbreak and the PRC National People’s Congress’ passage of Hong Kong national security legislation, the imposition of U.S. sanctions on certain Chinese officials from China’s central government and the Hong Kong Special Administrative Region by the U.S. government, the imposition of sanctions on certain individuals from the U.S. by the Chinese government, various executive orders issued by former U.S. President Donald J. Trump, such as the one issued in August 2020 that prohibits certain transactions with certain Chinese companies, the executive order issued in November 2020 that prohibits U.S. persons from transacting publicly traded securities of certain “Communist Chinese military companies” named in such executive order, various actions taken by the U.S. government in response to concerns regarding forced labor in the Xinjiang Uyghur Autonomous Region of China, as well as the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures promulgated by MOFCOM on January 9, 2021, which will apply to situations where the extra-territorial application of foreign legislation and other measures, in violation of international law and the basic principles of international relations, unjustifiably prohibits or restricts the citizens, legal persons or other organizations of China from engaging in normal economic, trade and related activities with a third country (or region) or its citizens, legal persons or other organizations.
Rising political tensions could reduce levels of trades, investments, technological exchanges and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions and the stability of global financial markets. It is unclear whether these challenges and uncertainties will be contained or resolved, and what effects they may have on the global political and economic conditions in the long term. We engage in business with various international brand partners, many of whom have their home market in the U.S. Escalating political and trade tensions between China and the U.S. may cause some of these brands to downscale their operations in China, or in the extreme case, exit China completely, which may materially and adversely affect our results of operations and financial position. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. If we were unable to conduct our business as it is currently conducted or our business partners were unable to conduct their business as it is currently conducted, as a result of such regulatory changes, our business, results of operations and financial condition would be materially and adversely affected.
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In addition, there is considerable uncertainty in the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China. Also, the conflict in Ukraine and the imposition of broad economic sanctions on Russia raised energy prices and disrupted global markets. Unrest, terrorist and war threats in the Middle East and elsewhere may further increase market volatility across the globe. Any prolonged slowdown in the global or Chinese economy may have a negative impact on our business, results of operations and financial condition, and continued turbulence in the international markets may adversely affect our ability to access the capital markets to meet liquidity needs.
Our growth and profitability depend on the overall economic and political conditions and level of consumer confidence and spending in China.
Our business, financial condition and results of operations are sensitive to changes in overall economic and political conditions that affect consumer spending in China. For example, changes to trade policies, treaties and tariffs in China, or the perception that these changes could occur, could adversely affect the financial and economic conditions in China, as well as our financial condition and results of operations. The U.S.-China trade tension may impact tariff of products imported by our brand partners, which could impact the pricing of their products and in turn adversely affect our business, financial condition, and results of operations.
In addition, the retail industry is highly sensitive to general economic changes. Many factors outside of our control, including inflation and deflation, interest rates, volatility of equity and debt securities markets, taxation rates, employment and other government policies can adversely affect consumer confidence and spending. The domestic and international political environments, including trade disputes, political turmoil or social instability, may also adversely affect consumer confidence and spending, which could in turn adversely affect our business, financial condition, and results of operations.
We rely on certain key operating metrics to evaluate the performance of our business, and any perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We rely on certain key operating metrics, such as GMV, to evaluate the performance of our business. Our operating metrics may differ from estimates published by third parties or from similarly titled metrics used by other companies due to differences in methodology and assumptions. If these metrics are perceived to be inaccurate by investors or investors make investment decisions based on operating metrics we disclosed but with their own methodology and assumptions or those published or used by third parties or other companies, our reputation may be harmed, which could negatively affect our business, and we may also face potential lawsuits or disputes.
We rely on the e-commerce performance of certain product categories, and any significant downward industry trend of such categories may materially and adversely affect our business and results of operations.
We currently serve brand partners manufacturing beauty and personal care products. If the e-commerce performance of certain or various product categories is not successful in general, our business and results of operations may be materially and adversely affected.
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 U.S. domestic public companies.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
| ● | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; |
| ● | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
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| ● | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; |
| ● | the selective disclosure rules by issuers of material nonpublic information under Regulation FD; and |
| ● | certain audit committee independence requirements in Rule 10A-3 of the Exchange Act. |
Effective March 18, 2026, pursuant to the Holding Foreign Insiders Accountable Act, directors and officers of foreign private issuers, including us, are required to comply with the reporting requirements of Section 16(a) of the Exchange Act. Notwithstanding the foregoing, directors and officers of a “foreign private issuer” remain exempt from Section 16(b) (short -swing profit liability) and Section 16(c) (short sale prohibitions).
Risks Related to Doing Business in the People’s Republic of China
Heightened tensions in international relations and any resulting changes in international trade policies may adversely impact our business, financial condition, and results of operations.
Recently there have been heightened tensions in international relations, particularly between the United States and China as well as between the United States and other countries where we operate, such as Mexico. These tensions have resulted in changes in international trade policies and, as they further escalate, may result in additional barriers to trade. Countries impose, modify, and remove tariffs and other trade restrictions in response to a diverse array of factors, including global and national economic and political conditions, which contribute to the volatile nature of tariffs and other trade restrictions.
The United States government has made statements and taken certain actions that may lead to changes in United States and international trade policies towards China. It remains unclear what additional actions, if any, will be taken by the United States or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the United States, tax policy related to international commerce, or other trade matters. In February and March 2025, the United States administration imposed an additional 20 percent duty on Chinese imports. Subsequently, authorities in China announced tariffs over selected United States products and regulatory investigation against United States companies in response to the tariff imposed by the United States. Furthermore, on April 2, 2025, President Trump announced that the United States would impose a 10% tariff on all countries, effective on April 5, 2025, and an individualized reciprocal higher tariff on countries with which the United States has the largest trade deficits, including a 34% additional reciprocal tariff on goods imported from China that brings the total tariff rate to 54%. On April 4, 2025, the Foreign Ministry of China announced that China would impose a retaliatory 34% tariff on goods imported from the United States. On April 8, 2025, President Trump announced to impose an additional 50% tariff on Chinese imports. The Trump administration proceeded to implement a 104% tariff on goods imported from China on April 9, 2025. Subsequently, on April 10, 2025, President Trump announced a temporary suspension of reciprocal tariff measures targeting most U.S. trading partners for a 90-day period, while concurrently escalating tariffs on Chinese goods, which currently amounts to 145% and may become even higher in the future. On November 26, 2025, the United States extended exclusions for 178 products until November 10, 2026 that had been scheduled to expire on November 29, 2025. This sequence of actions underscored a strategic recalibration of the United States trade policy, emphasizing heightened pressure on international trades. We are closely monitoring potential changes in international trade policy and assessing the potential impact of these and other trade policy changes on our business operations and financial performance.
Changes in the political and economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies.
Our business and operations are primarily based in the PRC and substantially all of our revenues are derived from our operations in the PRC. Accordingly, our financial condition and results of operations are affected to a significant extent by economic, political and legal developments in the PRC.
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The Chinese government recently has published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could require us to seek permission from Chinese authorities to continue to operate our business, which may adversely affect our business, financial condition and results of operations. Furthermore, recent statements made by the Chinese government have indicated an intent to increase the government’s oversight and control over offerings of companies with significant operations in China that are to be conducted in foreign markets, as well as foreign investment in China-based issuers. Any such action, once taken by the Chinese government, could significantly limit or completely hinder our ability to offer or continue to offer its securities to investors, and could cause the value of such securities to significantly decline or become worthless.
The PRC economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, regulating financial services and institutions and providing preferential treatment to particular industries or companies.
While the PRC economy has experienced significant growth in the past three decades, growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall PRC economy but may also have a negative effect on us. Our financial condition and results of operation could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. In addition, the PRC government has implemented in the past certain measures, including interest rate increases, to control the pace of economic growth. These measures may cause decreased economic activity, which in turn could lead to a reduction in demand for our services and consequently have a material adverse effect on our businesses, financial condition and results of operations.
There are uncertainties regarding the interpretation and enforcement of PRC Laws, rules and regulations and sudden or unexpected changes in laws, rules and regulations in China could adversely affect us and limit the legal protections available to you and us.
Our business and operations are primarily conducted in the PRC, and are governed by PRC Laws, rules and regulations. Our PRC Operating Entities are subject to laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value.
In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by PRC regulatory agencies. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-binding nature of such decisions, and because the laws, rules and regulations often give the relevant regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation.
Uncertainties due to evolving laws and regulations could impede the ability of a China-based company to obtain or maintain permits or licenses required to conduct business in China. In the absence of required permits or licenses, governmental authorities could impose material sanctions or penalties on us. In addition, some regulatory requirements issued by certain PRC government authorities may not be consistently applied by other PRC government authorities (including local government authorities), thus making strict compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business, financial condition and results of operations.
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Furthermore, China may adopt more stringent standards in different business aspects, such as environmental protection or corporate social responsibilities, which may cause us to incur increased compliance costs or become subject to additional restrictions in our operations. Intellectual property rights and confidentiality protections in China may also not be as effective as in the United States or other countries. In addition, we cannot predict the effects of future developments in the PRC legal system on our business operations, including the promulgation of new laws, or changes to existing laws or the interpretation or enforcement thereof. These uncertainties could limit the legal protections available to us and our investors.
The Chinese government exerts substantial influence over the manner in which we must conduct our business activities in mainland China.
The Chinese government has exercised and will continue to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
As such, our business segments may be subject to various government and regulatory interference in the provinces in which they operate. We could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. The Chinese government may intervene or influence our operations at any time with little advance notice, which could result in a material change in our operations in mainland China and in the value of our ordinary shares. Any actions by the Chinese government to exert more oversight and control over transaction that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.
We are subject to laws that are applicable to retailers, including advertising and promotion laws and consumer protection laws that could require us to modify our current business practices and incur increased costs.
As an online distributor of goods, we are subject to numerous PRC Laws and regulations that regulate retailers generally or govern online retailers specifically. For example, we are subject to laws in relation to advertising and online promotion, such as the Advertising Law of the PRC, Pricing Law of the PRC, Anti-Unfair Competition Law of the PRC, Interim Measures for the Administration of Internet Advertising, and also Consumer Protection Laws that are applicable to retailers. In the past, Shanghai Jingyue, a former subsidiary before its disposition in June 2025, had certain non-compliance issues in connection with its advertising of certain cosmetics products in 2024 and 2022, and SAMR’s local counterpart imposed a fine of RMB 500,000 (approximately USD 68,500) on November 21, 2024, a fine of RMB 32,400 (approximately USD 4,400) on August 10, 2022, and a fine of RMB 2,600 (approximately USD 360) on December 14, 2022. All of these fines were paid, and Shanghai Jingyue was no longer a subsidiary of ours on June 27, 2025. We may be subject to such allegations of non-compliance with such laws and regulations in the future if we are not compliant with the PRC Laws and regulations. Such allegations, which may or may not have merit, may result in legal or administrative penalties and other costs to us, and we may need to adjust some of our advertising and promotional practices as a result.
If these regulations were to change or if we are found to be in violation with them, we may need to spend additional costs to rectify non-compliance, adjust our business practices and could be subject to fines or penalties or suffer reputational harm, which could reduce demand for the products or services offered by us and hurt our business and results of operations. For example, the amended Consumer Protection Law, which became effective in March 2014, further strengthened the protection of consumers and imposed more stringent requirements and onerous obligations on businesses, especially businesses that operate on the internet.
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Pursuant to the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests (2013 Amendment), consumers are generally entitled to return goods purchased within seven days upon receipt without giving any reasons if they purchase the goods over the internet. Consumers whose interests have been damaged due to their purchase of goods online may claim damages against sellers. Moreover, if we deceive consumers or knowingly sell substandard or defective products, we would not only be required to compensate consumers for their losses but also pay additional compensation equal to three times the price of the goods or services.
Operators of online marketplace platforms, such as Tmall and JD.com who have partnered with us, are also subject to stringent obligations under the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests (2013 Amendment). For example, where platform operators are unable to provide the real names, addresses and valid contact details of the sellers, the consumers may also claim damages from the platform operators. Operators of online marketplace platforms that know or should have known that sellers use their platforms to infringe upon legitimate rights and interests of consumers but fail to take necessary measures will bear joint and several liabilities with the sellers. Therefore, operators of online marketplace platforms that we partner with may take measures and impose stricter requirements on us or our brand partners as a reaction to their enhanced obligations under the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests (2013 Amendment).
Similar legal requirements are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. We may be required to make significant expenditures or modify our business practices to comply with existing or future laws and regulations or to satisfy compliance requests from the marketplace platforms we partnered with, which may increase our costs and materially limit our ability to operate our business.
Failure to comply with the relatively new E-Commerce Law may have a material adverse impact on our business, financial conditions and results of operations.
As the e-commerce industry is still evolving in China, new laws and regulations may be adopted from time to time to address new issues that arise from time to time. For example, in August 2018, the Standing Committee of the National People’s Congress promulgated the E-Commerce Law of the PRC, or the E-Commerce Law, which became effective on January 1, 2019. The E-Commerce Law generally provides that e-commerce operators must obtain administrative licenses if business activities conducted by the e-commerce operators are subject to administrative licensing requirements under applicable laws and regulations. In addition, the E-commerce Law imposes a number of obligations on e-commerce operators, including the obligations to disclose information about commodities or services in a comprehensive, faithful, accurate and timely manner; while displaying search results of commodities or services to consumers according to their interests, preferences, consumption habits and other personal characteristics, to provide consumers with options irrelevant to their personal characteristics; when to offer tie-in commodities or services, to warn consumers about the tie-in sale in a prominent position and not to set the tie-in commodities or services as the default option; and when charging consumers guarantee deposits as agreed thereby, to explicitly indicate how and under what procedures consumers may have the guarantee deposits refunded, and not to impose any unjustifiable conditions on the refund of guarantee deposits. Failure to comply with the relatively new regulatory requirements may have a material adverse impact on our business and results of operations. As no detailed interpretation and implementation rules have been promulgated, it remains uncertain how the newly adopted E-Commerce Law will be interpreted and implemented. We cannot assure you that our current business operations satisfy the obligations provided under the E-Commerce Law in all respects. If the PRC governmental authorities determine that we are not in compliance with all the requirements proposed under the E-Commerce Law, we may be subject to fines and/or other sanctions.
Substantial uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
On March 15, 2019, the National People’s Congress approved the PRC Foreign Investment Law, which took effect on January 1, 2020 and replaced three existing laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law and the PRC Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. The PRC Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic invested enterprises in China. The PRC Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition.
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According to the PRC Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.
According to the PRC Foreign Investment Law, the State Council will publish or approve to publish the “negative list” for special administrative measures concerning foreign investment. The PRC Foreign Investment Law grants national treatment to foreign-invested entities, or FIEs, except for those FIEs that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list”. The National Development and Reform Commission and the Ministry of Commerce publicly released the Directory of Industries to Encourage Foreign Investment (Encouraged Catalogue) (2020 Edition) and the Directory of Industries to Encourage Foreign Investment (Encouraged Catalogue) (2022 Edition) on December 28, 2020 and October 22, 2022 respectively, and the latter has been effective and replaced the former from January 1, 2023. On November 1, 2024, the National Development and Reform Commission of China (“NDRC”) and the Ministry of Commerce (“MOFCOM”) jointly implemented the Special Administrative Measures for Foreign Investment Access (Negative List) (2024 Edition), superseding the Negative List (2021 Edition) promulgated on December 27, 2021. As per these policies, the national negative list of foreign investment access was reduced from 31 to 29. Industries listed in the 2022 Encouraged Catalogue are the encouraged industries. On the other hand, industries listed in the 2024 Negative List are subject to special management measures. For example, establishment of wholly foreign-owned enterprises is generally allowed in industries outside of the 2024 Negative List. Also, foreign investors are not allowed to invest in industries that are expressly prohibited in the 2024 Negative List. The industries that are not expressly prohibited in the Negative List are still subject to government approvals and certain special requirements.
On December 20, 2024, NDRC and MOFCOM issued the Catalogue of Industries for Encouraged Foreign Investment (2025), updating the 2022 version. Following a consultation process, the 2025 Catalogue has been officially released and replaces the previous edition. Compared with the 2022 Catalogue, the revised version further expands the scope of industries eligible for foreign investment incentives, with a particular emphasis on advanced manufacturing services. In total, the 2025 Catalogue introduces 205 new items and revises 303 existing ones, increasing the total number of encouraged items to 1,679. The 2025 Catalogue entered into force on February 1, 2026.
Able View, as a comprehensive brand management partner, distribute and sell cross-border products from various global brand owners to Chinese consumers through multiple e-commerce channels. The industry of the wholesale and retail of cosmetics is not prohibited or restricted by the 2024 Negative List that is currently effective as of the date of this Report.
If, in the future, the Negative List does expand to include the wholesale and retail of cosmetics into the restricted category of the foreign investment, the Negative List may set out the shareholding limit for foreign investors to invest in a domestic company with the business of wholesale and retail of cosmetics, the requirements on the nationality of senior executives or other special administrative measures for the entry of foreign investment in the wholesale and retail of cosmetics. If foreign investment is prohibited from the wholesale and retail of cosmetics, the foreign investors cannot invest in the sector of the wholesale and retail of cosmetics. Any of such changes may negatively influence the business operation of Able View, forcing Able View to switch market focus, which may not be successful, or cause our securities to significantly decline in value or become worthless.
PRC regulations regarding acquisitions impose significant regulatory approval and review requirements, which could make it more difficult for us to grow through acquisitions.
On August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State-Owned Assets Supervision and Administration Commission, the State Taxation Administration of the PRC, or the STA, the State Administration for Industry and Commerce of the PRC (currently known as SAMR), the CSRC, and the State Administration of Foreign Exchange, or the SAFE, jointly promulgated the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were latest amended on June 22, 2009.
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The M&A Rules established additional procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex, including requirements in some instances that the MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. Moreover, the Rules of the MOFCOM on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, issued by the MOFCOM in August 2011, specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the MOFCOM, and prohibit any attempt to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In addition, the Anti-Monopoly Law requires that the anti-monopoly law enforcement agency be notified in advance of any concentration of undertaking if certain thresholds are triggered. In addition, our proposed formation of joint venture with, or acquisition of control of, or decisive influence over, any company with revenues above relevant thresholds would be subject to SAMR merger control review. Complying with the requirements of the relevant regulations to complete such transactions could be time-consuming, and any required approval processes, including approval from the anti-monopoly law enforcement agency, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.
Furthermore, outbound direct investments conducted by PRC enterprises are subject to approval, filing or reporting requirements under relevant NDRC, MOFCOM and SAFE rules. Currently we do not intend to make any outbound direct investment, but if in the future we conduct any such investments, we are subject to the requirements mentioned above and may be ordered to cease such outbound investments and subject to relevant legal and administrative liabilities. In addition, the NDRC issued the Administrative Measures for the Outbound Investment by Enterprises, or the Outbound Investment Measures, in December 2017 which came into effect on March 1, 2018. Under the Outbound Investment Measures, if an overseas entity controlled by PRC enterprises or individuals conducts an outbound investment with an investment amount of US$300 million or above in one of the non-sensitive areas, it shall file with the NDRC the relevant information before the closing of such investment. For any outbound investment by an overseas entity controlled by PRC enterprises or individuals in one of the sensitive areas listed in the Outbound Investment Sensitive Industry Catalogue (2018 Version) which was promulgated by the NDRC in January 2018 and came into effect on March 1, 2018, or the Outbound Investment Sensitive Industry Catalogue (2018), such investment shall be subject to the NDRC approval requirement. We may be deemed by the regulatory authorities as an overseas entity controlled by PRC individuals and therefore our overseas acquisition may be subject to such filing or approval procedures.
If the regulatory authorities’ practice remains unchanged, our ability to carry out our investment and acquisition strategy may be materially and adversely affected and there may be significant uncertainty as to whether transactions that we have taken or may undertake would subject us to fines or other administrative penalties and negative publicity and whether we will be able to complete large acquisitions in the future in a timely manner or at all.
The permission or approval of, or filing to, the China Securities Regulatory Commission may be required in future offerings or financings, and, if required, we cannot predict whether we will be able to obtain such permission or approval, or timely clear the filing requirements.
The M&A Rules requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. The interpretation and application of the regulations remain unclear, and our offshore offerings may ultimately require approval of the CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if we obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which may include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.
On December 24, 2021, the CSRC published the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comment) (the “Draft Provisions”), and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comment) (the “Draft Measures”, collectively with the Draft Provisions, the “Draft Rules”) for public comments. The Draft Rules lay out specific filing requirements for overseas listing and offering by PRC domestic companies and include unified regulation management and strengthening regulatory coordination.
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On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), which took effect on March 31, 2023. The Trial Measures supersede the Draft Rules and clarified and emphasized several aspects, which include but are not limited to: (1) comprehensive determination of the “indirect overseas offering and listing by PRC domestic companies” in compliance with the principle of “substance over form” and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by PRC domestic companies, and b) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements for issuers that a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures, and b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and c) whose such overseas securities offering or listing shall be completed before September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC, specifically, future securities offerings in an overseas stock exchange where the company has previously offered and listed shall be filed with the CSRC based on the Trial Measures within three working days after the offering is completed.; (3) a negative list (the “Trial Measures Negative List”) of types of issuers banned from listing or offering overseas, including but not limited to (a) issuers whose listing or offering overseas have been recognized by the State Council of the PRC as possible threats to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers under ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers’ compliance with web security, data security, and other national security laws and regulations; and (5) issuers’ filing and reporting obligations (the “Trial Measures Filing Obligations”), such as obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and obligation after offering or listing overseas to report to the CSRC material events including change of control or voluntary or forced delisting of the issuer.
The Trial Measures provide the CSRC with power to warn, fine, and issue injunctions against both PRC domestic companies, their controlling shareholders, and their advisors in listing or offering securities (collectively, the “Subject Entities”), as well as individuals directly responsible for these Subject Entities (the “Subject Individuals”). For failure to comply with the Trial Measures Negative List or the Trial Measures Filing Obligations, or materially false or misleading statements in the filing and reporting required by the Trial Measures: (1) PRC domestic companies, and their controlling shareholders if the controlling shareholders induced the PRC domestic companies’ failure to comply, severally, may face warnings, injunctions to comply, and fines between RMB 1 million and 10 million (approximately $137,000 and $1,370,000); the Subject Individuals in these entities may severally, face warnings and fines between RMB 0.5 million and 5 million (approximately $68,500 and $685,000). (2) Advisors in listing or offering securities that failed to dutifully advise the PRC domestic companies and their controlling shareholders in complying with the Trial Measures and caused such failures to comply can face warnings and fines between RMB 0.5 million and 5 million (approximately $68,500 and $685,000); the Subject Individuals in these advisor entities may, severally, face warnings and fines between RMB 0.2 million and 2 million (approximately $27,400 and $274,000).
Lastly, any actions by the Chinese government to exert more oversight and control over transaction that are conducted overseas could significantly limit or completely hinder our ability to complete our business combination transaction, delisting from the Nasdaq stock market even after listing and cause the value of such securities to significantly decline or be worthless.
On February 24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration jointly issued the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Confidentiality and Archives Provisions, which took effect from March 31, 2023. The Confidentiality and Archives Provisions specify that during the overseas securities offering and listing activities of domestic companies, domestic companies and securities companies and securities service institutions that provide relevant securities business shall, by strictly abiding by the relevant laws and regulations of the PRC and this Confidentiality and Archives Provisions, institute a sound confidentiality and archives administration systems, take necessary measures to fulfill confidentiality and archives administration obligations, and shall not divulge any national secrets, work secrets of governmental agencies and harm national and public interests. Confidentiality and Archives Provisions provides that it is applicable to initial public offerings as well as other types of securities listing of PRC domestic enterprises, including de-SPAC transactions such as our Business Combination, and any future issuance of securities and listing activities after the initial listing. Working papers generated in the PRC by securities companies and securities service providers that provide relevant securities services for overseas issuance and listing of securities by domestic companies shall be kept in the PRC. Confidentiality and Archives Provisions provide no explicit definition of working papers. In practice, the securities companies’ working papers usually refer to various important information and work records related to the securities business obtained and prepared by the securities companies and securities service providers and their representatives in the whole process of the securities businesses, such as due diligence work. Without the approval of relevant competent authorities, such as CSRC, MOF PRC National Administration of State Secrets Protection, and National Archives Administration of China, depending on the nature and transmission method of secrets, it shall not be transferred overseas. Where documents or materials need to be transferred outside of the PRC, it shall be subject to the approval procedures in accordance with relevant PRC regulations. The relevant competent authorities, such as, CSRC, MOF, PRC National Administration of State Secrets Protection, and National Archives Administration of China will regulate, supervise and inspect pursuant to their respective statutory mandates over matters of Confidentiality and Archives Administration concerning overseas offering and listing by domestic companies. As Confidentiality and Archives Administration is newly promulgated, there is substantial uncertainty regarding their specific requirements. If we fail to comply with related laws and regulations, we may be subject to fines, confiscation, blocking transmission or criminal offense. We have taken measures to adopt management systems for the compliance of Confidentiality and Archives Provisions. We believe our listing does not involve national secrets, work secrets of governmental agencies and undermines national and public interests. There is no assurance that we will be able to meet all applicable regulatory requirements and guidelines, or comply with all applicable regulations at all times, or that we will not be subject to fines or other penalties in the future as a result of regulatory inspections.
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Based on the understanding of Company’s corporate compliance team, neither the Company, nor any of its subsidiaries, including all the PRC Operating Entities are currently required to obtain any permissions or approvals from Chinese authorities, including the China Securities Regulatory Commission, or CSRC, or Cybersecurity Administration Committee, or CAC, to list on U.S. exchanges or issue securities to foreign investors. We have not been denied any permissions or approvals either as of the date of this Report. However, if we were required to obtain any requisite permissions or approvals in the future and were denied permission or approval from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on any U.S. exchange, which would materially affect the interest of the investors. It is uncertain when and whether the Company will be required to obtain any requisite permissions or approvals from the PRC government to list on U.S. exchanges in the future, and even when such permission or approval is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission or approval from any of the PRC government and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry.
PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC Operating Entities to liability or penalties, limit our ability to inject capital into our PRC Operating Entities or limit our PRC Operating Entities’ ability to increase their registered capital or distribute profits.
SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC Operating Entities of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its mainland China subsidiary. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by SAFE, local banks shall examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration under SAFE Circular 37 from June 1, 2015. Beneficial owners of the special purpose vehicle who are PRC citizens are also required to make annual filing with the local banks regarding their overseas direct investment status.
We may not be aware of the identities of all of our beneficial owners who are PRC residents. We do not have control over our beneficial owners and cannot assure you that all of our PRC-resident beneficial owners will comply with SAFE Circular 37 and subsequent implementation rules, including the annual filing requirement. Furthermore, we may be unable to disclose change in our beneficial owners’ shareholding interests in us during the annual filing process of our PRC Operating Entities as required by SAFE. The failure of our beneficial owners who are PRC residents to register or amend their foreign exchange registrations in a timely manner pursuant to SAFE Circular 37 and subsequent implementation rules, or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth in SAFE Circular 37 and subsequent implementation rules, may subject such beneficial owners or our PRC Operating Entities to fines and legal sanctions. As of the date of this Report, all our shareholders have duly registered as required. However, we cannot guarantee that in the future, any new shareholders or any existing shareholders can register or amend their registration in a timely manner. Failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC Operating Entities and limit our PRC subsidiaries’ ability to distribute dividends to our company. These risks may have a material adverse effect on our business, financial condition and results of operations.
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PRC regulations of loans to PRC entities and direct investment in PRC entities by offshore holding companies may delay or prevent us from using the proceeds of our offerings to make loans or additional capital contributions to our PRC Operating Entities.
We may transfer funds to our PRC Operating Entities, which are Foreign-invested enterprises or FIEs, under PRC Laws or finance such FIEs by means of shareholder loans or capital contributions, upon completion of our offerings. Any such loans to our FIEs cannot exceed statutory limits, which is either the difference between the registered capital and the total investment amount of such FIE or a multiple of the FIE’s net assets in the previous year, and shall be registered or filed with SAFE, or its local counterparts. Furthermore, if we make any capital contributions to FIEs, FIEs are required to register the details of the capital contribution with the local branch of SAMR and submit a report on the capital contribution via the online enterprise registration system to the MOFCOM.
In addition, SAFE promulgated the Circular on the Relevant Operating Issues concerning Administration Improvement of Payment and Settlement of Foreign Currency Capital of Foreign-invested Enterprises, or Circular 142, on August 29, 2008. SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Clarifying & Regulating Relevant Matters Concerning the Administration of Some Foreign Exchange Businesses under Capital Accounts, or Circular 45, on November 9, 2011, in order to clarify the application of Circular 142. Under Circular 142 and Circular 45, registered capital of a foreign-invested company settled in RMB converted from foreign currencies, may only be used within the business scope approved by the applicable government authority and may not be used for equity investments in the PRC. On March 30, 2015, SAFE released the Circular on the Reform of the Management Method for the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or SAFE Circular 19, which came into force and superseded SAFE Circular 142 from June 1, 2015. SAFE Circular 19 has made certain adjustments to some regulatory requirements on the settlement of foreign exchange capital of foreign-invested enterprises, and some foreign exchange restrictions under Circular 142 are lifted. Under SAFE Circular 19, the settlement of foreign exchange by FIEs shall be governed by the policy of foreign exchange settlement at will. In June 2016, SAFE promulgated the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, which removed certain restrictions previously provided under several SAFE circulars in respect of conversion by an FIE of foreign currency registered capital into RMB and use of such RMB capital. However, SAFE Circular 19 and SAFE Circular 16 also reiterate that the settlement of foreign exchange shall only be used for purposes within the business scope of the FIEs. On October 23, 2019, the SAFE issued the Circular on Further Promoting Cross-border Trade and Investment Facilitation, or SAFE Circular 28. Among others, SAFE Circular 28 relaxes prior restrictions and allows foreign-invested enterprises whose approved business scope does not include equity investments to use their capital funds obtained from foreign exchange settlement to make domestic equity investments in China, provided that such investments do not violate the Negative List and the target investment projects are genuine and in compliance with the laws.
In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, including SAFE Circulars referred to above, we cannot assure you that we will be able to complete the necessary government registrations or filings on a timely basis, if at all, with respect to future loans by us to our PRC Operating Entities or additional capital contributions by us to our PRC Operating Entities, and conversion of such loans or capital contributions into RMB. If we fail to complete such registrations or filings, our ability to provide loans or capital contributions to our PRC Operating Entities in a timely manner may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
We may be treated as a resident enterprise for PRC tax purposes under the EIT Law, and we may therefore be subject to PRC income tax on our global income.
Under the PRC Enterprise Income Tax Law, or the EIT Law, and its implementing rules, enterprises established under the laws of jurisdictions outside of China with “de facto management bodies” located in China may be considered PRC tax resident enterprises for tax purposes and may be subject to the PRC enterprise income tax at the rate of 25% on their global income. “De facto management body” refers to a managing body that exercises substantive and overall management and control over the production and business, personnel, accounting books and assets of an enterprise. The STA issued the Notice Regarding the Determination of Chinese-Controlled Offshore-Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, on April 22, 2009, with retroactive effect from January 1, 2008. Circular 82 provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises, not those controlled by foreign enterprises or individuals, the determining criteria set forth in Circular 82 may reflect the STA’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises. If we were to be considered a PRC resident enterprise, we would be subject to PRC enterprise income tax at the rate of 25% on our global income. In such case, our profitability and cash flow generated from mainland China may be materially reduced as a result of our global income being taxed under the EIT Law. We believe that none of our entities outside of China is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”
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Dividends payable to our foreign investors and gains on the sale of our ordinary shares or ordinary shares by our foreign investors may become subject to PRC tax law.
Under the EIT Law and its implementation regulations issued by the State Council, a 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises, which do not have an establishment or place of business in the PRC or which have such establishment or place of business but the dividends are not effectively connected with such establishment or place of business, to the extent such dividends are derived from sources within the PRC. Similarly, any gain realized on the transfer of ordinary shares or ordinary shares by such investors is also subject to PRC tax at a current rate of 10%, subject to any reduction or exemption set forth in applicable tax treaties or under applicable tax arrangements between jurisdictions, if such gain is regarded as income derived from sources within the PRC. If we are deemed a PRC resident enterprise, dividends paid on our ordinary shares or ordinary shares, and any gain realized from the transfer of our ordinary shares or ordinary shares would be treated as income derived from sources within the PRC and would as a result be subject to PRC taxation. Furthermore, if we are deemed a PRC resident enterprise, dividends payable to individual investors who are non-PRC residents and any gain realized on the transfer of ordinary shares or ordinary shares by such investors may be subject to PRC tax at a current rate of 20%, subject to any reduction or exemption set forth in applicable tax treaties or under applicable tax arrangements between jurisdictions. It is unclear whether we or any of our subsidiaries established outside China are considered a PRC resident enterprise, holders of our ordinary shares or ordinary shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. If dividends payable to our non-PRC investors, or gains from the transfer of our ordinary shares or ordinary shares by such investors are subject to PRC tax, the value of your investment in our ordinary shares or ordinary shares may decline significantly.
We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.
On February 3, 2015, the STA issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 7. Pursuant to Bulletin 7, an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be recharacterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, immoveable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. When determining whether there is a “reasonable commercial purpose” of the transaction arrangement, features to be taken into consideration include: whether the main value of the equity interest of the relevant offshore enterprise derives from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consists of direct or indirect investment in China or if its income mainly derives from China; whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure; the duration of existence of the shareholders, business model and organizational structure of an overseas enterprise; the income tax payable abroad due to the indirect transfer of PRC taxable assets; the replicability of the transaction by direct transfer of PRC taxable assets; and the tax situation of such indirect transfer and applicable tax treaties or similar arrangements. In respect of an indirect offshore transfer of assets of a PRC establishment, the resulting gain is to be included with the enterprise income tax filing of the PRC establishment or place of business being transferred and would consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates to the immoveable properties located in China or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or place of business of a non-resident enterprise, a PRC enterprise income tax at 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation. Where the payor fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the tax authority by itself within the statutory time limit. Bulletin 7 does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired from a transaction through a public stock exchange. On October 17, 2017, the STA issued the Announcement of the State Taxation Administration on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or Bulletin 37, which came into effect on December 1, 2017. Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax. Pursuant to Bulletin 7 and Bulletin 37, both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.
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We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of shares in our offshore subsidiaries or investments. We may be subject to filing obligations or taxed if we are transferor in such transactions and may be subject to withholding obligations if we are transferee in such transactions, under Bulletin 7 and Bulletin 37. For transfer of shares in our company by investors that are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing. As a result, we may be required to expend valuable resources to comply with Bulletin 7 and Bulletin 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, or to pay tax pursuant to these circulars, which may have a material adverse effect on our financial condition and results of operations.
The Holding Foreign Companies Accountable Act, or the HFCAA, and the related regulations continue to evolve. Further implementations and interpretations of or amendments to the HFCAA or the related regulations, or a PCAOB determination of its lack of sufficient access to inspect our auditor, might pose regulatory risks to and impose restrictions on us because of our operations in mainland China.
On April 21, 2020, SEC released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets. On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the Company’s auditors.
On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act (the “HFCAA”) requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the Company uses a foreign auditor not subject to PCAOB inspection. On December 18, 2020, the HFCAA was signed into law. The HFCAA has since then been subject to amendments by the U.S. Congress and interpretations and rulemaking by the SEC. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which proposes to reduce the period of time for foreign companies to comply with PCAOB audits from three to two consecutive years. On December 29, 2022, the Consolidated Appropriations Act, 2023 (the “CAA”) was signed into law, which officially reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, thus, would reduce the time before an applicable issuer’s securities may be prohibited from trading or delisted.
On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which reduced the period for foreign companies to comply with PCAOB audits from three to two consecutive years. On December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law, which officially reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.
On December 16, 2021, PCAOB announced the PCAOB HFCAA determinations relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, because of a position taken by one or more authorities in mainland China or Hong Kong. The inability of the PCAOB to conduct inspections of auditors in China made it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause existing and potential investors in issuers operating in China to lose confidence in such issuers’ procedures and reported financial information and the quality of financial statements.
Our auditor, Marcum Asia CPAs LLP (“Marcum Asia”), the independent registered public accounting firm that issues the audit report included elsewhere in this Report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards. Our auditor is headquartered in Manhattan, New York, and is subject to inspection by the PCAOB on a regular basis.
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On August 26, 2022, the PCAOB announced and signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China (together, the “PRC Authorities”). The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.
On December 15, 2022, the PCAOB announced in its 2022 HFCAA Determination Report (the “2022 Report”) its determination that the PCAOB was able to secure complete access to inspect and investigate audit firms headquartered in mainland China and Hong Kong in 2022, and the PCAOB Board voted to vacate previous determinations to the contrary. According to the 2022 Report, this determination was reached after the PCAOB had thoroughly tested compliance with every aspect of the Protocol necessary to determine complete access, including on-site inspections and investigations in a manner fully consistent with the PCAOB’s methodology and approach in the U.S. and globally. According to the 2022 Report, the PRC Authorities had fully assisted and cooperated with the PCAOB in carrying out the inspections and investigations according to the Protocol and have agreed to continue to assist the PCAOB’s investigations and inspections in the future. However, as required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely because of a position taken by any foreign authority, including but is not limited to mainland China or Hong Kong jurisdiction, the PCAOB will act expeditiously to consider whether it should issue a new determination.
Further developments related to the HFCAA could add uncertainties to our offering. We cannot assure you what further actions the SEC, the PCAOB or the stock exchanges will take to address these issues and what impact such actions will have on U.S. companies that have significant operations in the PRC and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market). In addition, any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create uncertainty for investors, 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. Such a delisting would substantially impair your ability to sell or purchase our ordinary shares when you wish to do so and would have a negative impact on the price of our ordinary shares.
You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against the Company or its management named in this annual report based on foreign laws.
The Company is an exempted company with limited liability incorporated under the laws of the Cayman Islands, the Company conducts substantially all of its operations in mainland China and in Hong Kong, with substantially all of our assets being located there. In addition, both of our senior executive officers, namely, Mr. Stephen Jian Zhu, Chairman, Director and Chief Executive Officer of the Company, and Mr. Tang Jing, Director and Chief Financial Officer of the Company, are PRC nationals who reside within China for a significant portion of the time each year. As a result, it may be difficult for our shareholders to effect foreign service of process upon the Company or those executives or officers inside China.
Shareholder claims that are common in the United States, including securities law class actions and fraud claims, generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the Unities States have not been efficient in the absence of mutual and practical cooperation mechanism.
Among our directors and officers, Mr. Stephen Jian Zhu, Chairman, Director and Chief Executive Officer of the Company, Mr. Tang Jing, Director and Chief Financial Officer of the Company, and Mr. Yilun Wu, Mr. Yimin Zhou, and Mr. Zhifan Zhou, independent directors of the Company, are all residents of China and all or a substantial portion of their assets are located outside the United States. China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions. Therefore, recognition and enforcement in China of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. As a result, it may be difficult to enforce against us or them judgments obtained in United States courts or in Cayman Islands courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. It may also be difficult for a shareholder to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and these persons located in China.
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Restrictions on currency exchange may limit our ability to utilize our revenue effectively. To the extent our cash in the business is in mainland China, such cash may not be available to freely convert or be changed at favorable rate, and such cash may not be available to fund operations or for other use outside of PRC due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the government in mainland China to transfer cash.
As of December 31, 2025, Able View has five mainland China operating subsidiaries whose revenues are denominated in Renminbi. Renminbi is currently convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but not freely convertible under the “capital account,” which includes foreign direct investment and loans, including loans we may secure from our onshore subsidiaries. The Outbound Investment Sensitive Industry Catalogue (2018) also lists certain industries as sensitive outbound investment industries, which are subject to NDRC pre-approval requirements prior to remitting investment funds offshore. However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. Since we expect to maintain such corporate structure in the future, part of our revenue will continue being denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to fund our business activities outside of the mainland China or pay dividends in foreign currencies to our shareholders, including holders of our ordinary shares and/or ordinary shares. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration with, SAFE and other relevant governmental authorities in mainland China. This could affect our ability to obtain foreign currency through debt or equity financing for our subsidiaries. To the extent our funds in the business is in mainland China, the funds may not be available to fund operations or for other use outside of PRC due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the government in mainland China to transfer cash.
Fluctuations in exchange rates could result in foreign currency exchange losses and could materially reduce the value of your investment.
The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the PBOC. Renminbi has fluctuated against the U.S. dollars, at times significantly and unpredictably. The value of the Renminbi against the U.S. dollar and other currencies is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and U.S. dollar in the future. As Able View has five mainland China operating subsidiaries, part of our revenues and costs are denominated in Renminbi, any significant revaluation of Renminbi may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, and any dividends payable on, our ordinary shares and/or ordinary shares in U.S. dollars. For example, to the extent that we need to convert U.S. dollars we receive from our public offerings into Renminbi for our operations in mainland China, appreciation of Renminbi against U.S. dollar would have an adverse effect on the amount of Renminbi we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ordinary shares, or for other business purposes, appreciation of U.S. dollar against Renminbi would have a negative effect on the amounts of U.S. dollar available to us.
Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited, and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.
Our deferred tax assets are subject to uncertainties and judgments.
In the application of our accounting policies, our management is required to make judgments, estimates and assumptions about the carrying amounts of certain assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Therefore, actual results may differ from these accounting estimates. As of December 31, 2025, we recorded deferred tax assets of $1.5 million. We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements carrying amounts and tax bases of existing assets and liabilities by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of operations in the period of change. In the event that a substantial reversal of deferred tax assets arises in future periods, our results of operations and financial condition may be materially and adversely affected.
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Failure to make adequate contributions to various employee benefit plans as required by the PRC regulations may subject us to penalties.
Companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. In addition, we engage third-party human resources agencies to make social insurance and housing fund contributions for certain of our employees, and there is no assurance that such third-party agencies will make such contributions in full in a timely manner, or at all. Although some of our PRC entities incorporated in various locations in China have made the required employee benefit payments, we cannot assure you that we are able to make adequate contribution in a timely manner at all times. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.
Outsourced services engaged by our PRC Operating Entities may be deemed as labor dispatch and thus may cause our PRC Operating Entities to violate the requirements under labor dispatch related PRC Laws and regulations.
The Ministry of Human Resources and Social Security promulgated the Interim Provisions on Labor Dispatch on January 24, 2014, which became effective on March 1, 2014. Pursuant to the Interim Provisions on Labor Dispatch (the “Provisions”), the employment of workers by an employer in the name of contracting or outsourcing but in essence the workers work at the employer’s location, receive tasks directly from the employer shall be regarded as labor dispatch and subject to the Provisions. Pursuant to the Labor Contract Law of the PRC and the Interim Provisions on Labor Dispatch, the number of dispatched labor that an employer may employ shall not exceed 10 percent of the total number of its employees (i.e., the sum of employees executed labor contracts with such employer and the number of labor dispatch used by such employer). Any employer in violation of the aforementioned laws and regulations shall be ordered by competent labor administrative authorities to make corrections within a stipulated period, and any failure to make the correction may subject such employer to a fine ranging from RMB 5,000 (approximately USD 702) to RMB 10,000 (approximately USD 1,403) per person. Three of our PRC Operating Entities have relatively few employees (i.e., less than 10) while most of the labor force used by such PRC Operating Entities are in the form of outsourced services. In addition, the workers, pursuant to the outsource service agreements executed by and between our PRC Operating Entities and the human resources company, will work at the office of these PRC Operating Entities, receive tasks directly from the management, and be paid social insurance by the PRC Operating Entities. Therefore, in practice, these PRC Operating Entities may be deemed by the competent labor administrative authorities as using the labor force in the form of labor dispatch. If the outsourced services used by any of our PRC Operating Entities is regarded as labor dispatch in the future, the number of such workers of that PRC Operating Entity employed would exceed the legally permitted number of labor dispatch workers a company may use. We may be required to reduce the number of outsourced service persons used to be compliant with the legal requirements, otherwise, we may be subject to fines by relevant labor administrative authorities, and we may be fined again for the same reason if such labor authority finds out that the Company commits the same non-compliance subsequently. If we cannot convert certain outsourced employees into employees to gain compliance in a timely manner, our business operations and financial conditions may be adversely affected.
Risks Related to Doing Business in Hong Kong
Able View is subject to a variety of laws and other obligations, including cybersecurity, data protection or anti-monopoly. Any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations.
Able View is subject to a variety of laws and other obligations regarding data protection in Hong Kong. The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (the “PDPO”) came into force on December 20, 1996. The PDPO states that any person who controls the collection, holding, processing or use of personal data (the “data user”) shall not do any act, or engage in a practice, that contravenes any of the data protection principles set out in Schedule 1 to the PDPO (the “Data Protection Principles”) unless the act or practice, as the case may be, is required or permitted under the PDPO. Personal data means any data (a) relating directly or indirectly to a living individual; (b) from which it is practicable for the identity of the individual to be directly or indirectly ascertained; and (c) in a form in which access to or processing of the data is practicable.
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The Data Protection Principles set out that (1) personal data must be collected in a lawful and fair way, for a purpose directly related to a function or activity of the data user. Data subjects must be notified of the purpose for which the data is to be used and the classes of persons to whom the data may be transferred. Data collected should be adequate but not excessive; (2) personal data must be accurate and should not be kept for a period longer than necessary for the fulfillment of the purpose for which the data is or is to be used; (3) personal data must be used for the purpose for which the data is collected or for a directly related purpose unless voluntary and explicit consent with a new purpose is obtained from the data subject; (4) a data user shall take practicable steps to safeguard any personal data held against unauthorized or accidental access, processing, erasure, loss or use; (5) a data user shall take practicable steps to ensure that its policies and practices in relation to personal data, the kind of personal data it holds and the main purposes for which the personal data is or is to be used for are made known to the public; and (6) a data user shall be entitled to request access to personal data and must be allowed to correct the personal data if it is inaccurate.
Moreover, the Personal Data (Privacy) (Amendment) Ordinance 2021 (the “PDPAO”) came into effect on October 8, 2021. It amends the PDPO, particularly to: (i) criminalize doxing, i.e. unconsented disclosure of personal information of targeted individuals and groups; (ii) introduce a cessation notice regime to tackle doxing with extra-territorial reach; and (iii) substantially expand the investigation and enforcement powers of the Privacy Commissioner for Personal Data, in contexts beyond doxing.
Our directors are of the view that Able View is in compliance with the PDPO and the PDPAO, for the following reasons: (i) using our products and services which do not require providing users’ personal information and (ii) we possess minimum amount, if not none of the personal information in our business operations. Nonetheless, we are subject to laws and regulations relating to the collection, storage, use, processing, transmission, retention, security and transfer of personal information and other data. The interpretation and application of laws, regulations and standards on data protection and privacy are still uncertain and evolving. We cannot assure you that the governmental authorities will not interpret or implement the laws or regulations in ways that negatively affect us. We may be subject to investigations and inspections by government authorities regarding our compliance with laws and regulations on data privacy, and we cannot assure you that our practices will always fully comply with all applicable rules and regulatory requirements. In addition, laws, regulations and standards on data protection and privacy continue to develop and may vary from jurisdiction to jurisdiction. Complying with emerging and changing international requirements may cause us to incur substantial costs or require us to change our business practices.
In addition, the Competition Ordinance (Chapter 619 of the Laws of Hong Kong) prohibits and deters undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting, or distorting competition in Hong Kong. It provides for general prohibitions in three major areas of anti-competitive conduct described as the first conduct rule, the second conduct rule, and the merger rule. The first conduct rule prohibits undertakings from making or giving effect to agreements or decisions or engaging in concerted practices that have as their object or effect the prevention, restriction, or distortion of competition in Hong Kong. The second conduct rule prohibits undertakings that have a substantial degree of market power in a market from engaging in conduct that has as its object or effect the prevention, restriction, or distortion of competition in Hong Kong. The merger rule prohibits mergers that have or are likely to have the effect of substantially lessening competition in Hong Kong. The scope of application of the merger rule is limited to carrier licenses issued under the Telecommunications Ordinance (Chapter 106 of the Laws of Hong Kong). As of the date of this Report, we and our Hong Kong subsidiaries have complied with all three areas of anti-competition laws and requirements in Hong Kong. Our Hong Kong subsidiaries have not engaged in any concerted practices that have an object or effect to prevent, restrict, or distort competition in Hong Kong. Additionally, neither we nor our Hong Kong subsidiaries possess a substantial degree of market power in the Hong Kong market that could trigger the second conduct rule. The merger rule is equally not applicable to us or our Hong Kong subsidiaries since neither we nor our Hong Kong subsidiaries hold any carrier license issued under the Telecommunications Ordinance.
Except for the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China (“Basic Law”), national laws of the Mainland China do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong. Therefore, laws and regulations of mainland China relating to data protection, cybersecurity review and the anti-monopoly have not been listed in Annex III and so do not apply directly to Hong Kong.
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However, due to long arm provisions under the current Mainland China laws and regulations, there remains regulatory and legal uncertainty with respect to the implementation of laws and regulations of Mainland China to Hong Kong. As a result, there is no guarantee that the PRC government may not choose to implement the laws of the Mainland China to Hong Kong and exercise significant direct influence and discretion over Hong Kong subsidiary of Able View in the future and, it will not have a material adverse impact on our business, financial condition and results of operations, due to changes in laws, political environment or other unforeseeable reasons.
In the event that the Hong Kong subsidiary of Able View were to become subject to laws and regulations of Mainland China, the legal and operational risks associated in Mainland China may also apply to our operations in Hong Kong, and we face the risks and uncertainties associated with the legal system in the Mainland China, complex and evolving Mainland China laws and regulation, and as to whether and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace security and anti-monopoly concerns, would be applicable to Hong Kong subsidiary of Able View.
Risks Related to Ownership of our Securities
Payment of dividends is subject to restrictions under PRC Laws. There is no assurance whether and when we will pay dividends.
Under applicable PRC Laws, dividends may be paid only out of distributable profits. Distributable profits mean, as determined under PRC GAAP or U.S. GAAP, whichever is lower, our net profits for a period, plus the distributable profits or net of the accumulated losses, if any, at the beginning of such period, less appropriations to transaction risk reserve, statutory surplus reserve (determined under PRC GAAP) and discretionary surplus reserve (as approved by our shareholders’ meeting). As a result, we may not have sufficient profit to enable us to make future dividend distributions to our shareholders, even if one of our financial statements prepared in accordance with PRC GAAP or U.S. GAAP indicates that our operations have been profitable. We may distribute dividends in the form of cash or by other means permitted by our Articles of Association. Any proposed distribution of dividends shall be formulated by our Board and will be subject to approval of our Shareholders. A decision to declare or to pay any dividends in the future, and the amount of any dividend, will depend upon a number of factors, including our earnings and financial condition, operating requirements, capital requirements, business prospects, statutory, regulatory and contractual restrictions on our declaration and payment of dividends, and any other factors that our Directors may consider important. Any history dividends distribution cannot be regarded as any form of indication of either the amount or the time we will distribute dividends. We cannot assure you that our dividend policies will not change in the future.
The Company is a holding company, and will rely on dividends paid by our PRC Operating Entities for our cash needs. Any limitation on the ability of our PRC Operating Entities to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our ordinary shares.
The Company is a holding company and conduct a significant part of our business in China through our PRC Operating Entities. We may rely on dividends to be paid by our PRC Operating Entities to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If our PRC Operating Entities incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us, and in turn affect our ability to pay dividends to our investors.
Under PRC Laws and regulations, our PRC Operating Entities may pay dividends only out of their accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, our subsidiaries in China are required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory capital reserve until such reserve reaches 50% of its registered capital. Each of such entity in China may further set aside a portion of its after-tax profits to the optional capital reserve, the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. If our PRC Operating Entities cannot generate enough revenues in the future, their abilities to pay dividends or make other distributions to us may be restricted, and in turn affect our ability to pay dividends to our investors.
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Our PRC Operating Entities generates primarily all of their revenue in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our PRC Operating Entities to use their Renminbi revenues to pay dividends to us. The PRC government may continue to strengthen its capital controls, and more restrictions and substantial vetting process may be put forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC Operating Entities to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
In addition, the EIT Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. Any limitation on the ability of our PRC Operating Entities to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
Pursuant to the Arrangement between the PRC and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise, as the beneficial owner, owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC Operating Entities to their respective immediate holding company in Hong Kong.
Because there are no current plans to pay cash dividends on the Ordinary Share for the foreseeable future, you may not receive any return on investment unless you sell your Ordinary Share for a price greater than that which you paid for it.
The Company intends to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of the Ordinary Share will be at the sole discretion of our board of directors. our board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by the Company to its shareholders or by its subsidiaries to it and such other factors as our board of directors may deem relevant. In addition, our ability to pay dividends is limited by covenants of our existing and outstanding indebtedness and may be limited by covenants of any future indebtedness the Company incurs. As a result, you may not receive any return on an investment in our Ordinary Share unless you sell our Ordinary Share for a price greater than that which you paid for it.
Our Class B Ordinary Shares’ liquidity and market price may be volatile.
The price and trading volume of our Class B Ordinary Shares may be volatile. The following factors, among others, may affect the trading volume and price of our Class B Ordinary Shares:
| ● | actual or anticipated fluctuations in our revenue and results of operations; |
| ● | loss of significant customers or material defaults by our customers; |
| ● | major changes in our key personnel or senior management; |
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| ● | announcements of competitive developments, acquisitions or strategic alliances in our industry; |
| ● | changes in earnings estimates or recommendations by financial analysts; |
| ● | involvement in litigation or regulatory investigations; |
| ● | general market conditions or other developments affecting us or our industry; |
| ● | fluctuations in stock market price and volume and other events or factors beyond our control; |
| ● | the release of lockup or other transfer restrictions on our outstanding Ordinary Shares, or sales or perceived sales of additional Ordinary Shares by us or other shareholders; and |
| ● | our inability to obtain or maintain regulatory approval for our business operations. |
In addition, stock markets and the shares of other companies listed on the Nasdaq with significant operations and assets in China have been experiencing increasing price and volume fluctuations in recent years, some of which have been unrelated or disproportionate to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the market price of our Ordinary Shares, and it is possible that our Ordinary Shares may be subject to changes in price not directly related to our performance.
If Able View fails to implement and maintain an effective system of internal controls to remediate its material weaknesses over financial reporting, the Company may be unable to accurately report its results of operations, meets its reporting obligations or prevent fraud, and investor confidence and the market price of our ordinary shares may be materially and adversely affected.
Prior to the Business Combination, Able View was a private company with limited accounting personnel and other resources with which to address Able View’s internal controls and procedures. Neither Able View nor its independent registered public accounting firm undertook a comprehensive assessment of Able View’s internal control under the Sarbanes-Oxley Act of 2002 for purposes of identifying and reporting any material weakness in Able View’s internal control over financial reporting. Had Able View performed a formal assessment of Able View’s internal control over financial reporting or had Able View’s independent registered public accounting firm performed an audit of Able View’s internal control over financial reporting, material weakness or control deficiencies may have been identified. Upon completion of the Business Combination, the Company has become subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act, or Section 404, requires the Company to include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F beginning with our second annual report on Form 20-F after becoming a public company. In addition, once the Company ceases to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue an adverse opinion on the effectiveness of internal control over financial reporting if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from the Company. In addition, after the Company becomes a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. The Company may be unable to complete its evaluation testing and any required remediation in time.
During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, the Company may identify other weaknesses and deficiencies in our internal control over financial reporting. If the Company fails to maintain the adequacy of its internal control over financial reporting, as these standards are modified, supplemented, or amended from time to time, the Company may not be able to conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with Section 404. Generally speaking, if the Company fails to achieve and maintain an effective internal control environment, it could result in material misstatements in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our businesses, financial condition, results of operations and prospects, as well as the trading price of ordinary shares, may be materially and adversely affected. Additionally, ineffective internal control over financial reporting could expose the Company to increased risk of fraud or misuse of corporate assets and subject the Company to potential delisting from the stock exchange on which the Company lists, regulatory investigations and civil or criminal sanctions. The Company may also be required to restate its financial statements from prior periods. The Company will incur increased costs as a result of being a public company.
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Being a public company incurs significant legal, accounting, and other expenses. For example, as a result of becoming a public company, the Company is required to adopt policies regarding internal controls and disclosure controls and procedures. Operating as a public company will make it more difficult and more expensive for it to obtain director and officer liability insurance, and the Company may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, the Company will incur additional costs associated with its public company reporting requirements. It may also be more difficult for the Company to find qualified persons to serve on its Board of directors or as executive officers.
After the Company is no longer an “emerging growth company,” the Company may incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC.
Current or future sales or perceived sales of substantial amounts of our securities in the public market could have a material adverse effect on the prevailing market price of our Ordinary Shares and our ability to raise capital in the future and may result in dilution of your shareholdings.
The market price of our Ordinary Shares could decline as a result of current or future sales of substantial amounts of our Ordinary Shares or other securities relating to our Ordinary Shares in the public market or the issuance of new Ordinary Shares or other securities, or the perception that such sales or issuances may occur. Current or future sales, or perceived sales, of substantial amounts of our securities, including any future offerings, could also materially and adversely affect our ability to raise capital in the future at a time and at a price which we deem appropriate. In addition, our Shareholders may experience dilution in their holdings to the extent we issue additional securities in future offerings.
If we need to obtain external financing, we cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Our future liquidity needs and other business reasons could require us to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could result in additional dilution to our shareholders. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations.
Our Class B Ordinary Shares may fall below the minimum bid price as required by The Nasdaq Capital Market, which could negatively impact the compliance of the listing of our Class B Ordinary Shares.
Our Class B Ordinary Shares are listed on the Nasdaq Capital Market. In order to maintain our listing, we are required to comply with certain rules, including those regarding minimum share price. If the bid price of our Class B Ordinary Shares below $1.00 per share for 30 consecutive business days, we will be deemed to be non-compliance with the Nasdaq minimum price requirement, as per Nasdaq Listing Rule 5550(a)(2). Recently our Class B Ordinary Shares have been trading at around $1.00 per share for an extended period.
If the Company would fail to maintain a minimum bid price of at least $1.00 per share for the 30 consecutive trading days, we will be notified by Nasdaq of such incompliance and provided a 180-day compliance period to regain the compliance. If the Company fails to regain such compliance within the compliance period, the Company may be offered aa second 180-day compliance period to regain compliance. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, except for Minimum Bid Price Requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the deficiency during the second compliance period, which may include, if necessary, implementing a reverse stock split. In addition, effective on January 19, 2026, pursuant to the newly amended Nasdaq Listing Rule 5810(c), if a company’s security has a closing bid price of US$0.10 or less for 10 consecutive trading days, regardless of whether the company is under any compliance period specified in Nasdaq Rule 5810(c)(3)(A), a delisting determination will be issued, and the security shall be immediately suspended from trading, and the company shall be ineligible for any compliance period otherwise described in Nasdaq Listing Rule 5810(c)(3)(A). In addition, a request for a hearing panel review will not stay the trading suspension. A company may regain compliance with the Minimum Bid Price Requirement by maintaining a closing bid price of US$1.00 or more for ten consecutive business days, unless Nasdaq exercises its discretion pursuant to Nasdaq Listing Rule 5810(c)(3)(H) to extend such period. The Company will closely monitor the closing price of our Class B Ordinary Shares, however, we cannot assure that the Company will be able to keep compliance with the Minimum Bid Price Requirement.
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The amendment to Nasdaq’s continued listing requirements could result in our inability to maintain our listing.
On January 13, 2026, Nasdaq proposed to introduce an accelerated process for suspending and delisting companies with a listings deficiency that also have a market value listed securities below $5.0 million. Nasdaq proposes further enhancing investor protections by providing for suspension from Nasdaq trading and immediate delisting (rather than providing a compliance period) of any company that becomes non-compliant with a numeric listing requirement, including the bid price, market value of public float, equity, income and total assets/revenue requirements, and that has a market value of listed securities of less than $5 million. To effect this change, Nasdaq proposes to modify Listing Rule 5810(c)(1) to add an additional type of a deficiency that results in immediate delisting and suspension from trading of the company’s securities. Specifically, Listing Rule 5810(c)(1) will provide that staff’s delisting notice will inform the company that its securities are immediately subject to suspension and delisting when a company is non-compliant with one or more of the listing requirements contained in Rule 5450 or Rule 5550 and the company’s Market Value of Listed Securities has failed to maintain a value of at least $5 million for a period of 10 consecutive business days. Listing Rule 5810(c)(2)(A)(i) currently identifies all quantitative deficiencies from standards that do not provide a compliance period as deficiencies for which a company may submit a plan of compliance for staff review. Nasdaq proposes to modify Listing Rule 5810(c)(2)(A)(i) to provide that the company may not submit such a plan when the company’s Market Value of Listed Securities had been less than $5 million for a period of 10 consecutive business days. Further, Listing Rule 5810(c)(3) currently identifies deficiencies for which the rules provide a specified cure or compliance period. Nasdaq proposes to modify Listing Rule 5810(c)(3) to provide that a company will not be entitled to such cure or compliance period if the company’s Market Value of Listed Securities has failed to maintain a value of at least $5 million for a period of 10 consecutive business days. Finally, Nasdaq proposes to modify Listing Rule 5810(c)(1) to provide that staff’s delisting notice in these circumstances will inform the company that its securities are immediately subject to suspension from trading on Nasdaq. Nasdaq believes that it is not appropriate for such a company to continue trading on Nasdaq during the pendency of the Hearings Panel review process. Instead, Nasdaq proposes to amend Rule 5815 to remove the stay provision in these situations so that the company’s securities will be suspended from trading on Nasdaq during the pendency of the Hearings Panel’s review. (“Strengthened Listing Threshold”).
We may be unable to continue to satisfy the newly revised listing requirements and applicable rules on the Nasdaq Capital Market, which could materially and adversely affect the liquidity, visibility, and overall marketability of our Ordinary Shares. In addition, the Strengthened Listing Threshold may be part of a broader trend of heightened regulatory scrutiny and stricter supervisions for companies with principal operations in China, Hong Kong, and Macau. Currently, it is not clear whether Nasdaq will propose any continue listing rules specifically applicable to companies with principal operations in China, Hong Kong, and Macau, but if that occurs, our ability to conduct future offerings or maintain our listing could be adversely affected if Nasdaq or the SEC implements additional stringent criteria. We may be required to expend significant resources to address any future regulatory changes or concerns, which could divert our management’s attention and resources from our business operations. Any such events could have a material adverse effect on our business, financial condition, and results of operations, and could cause a significant decline in the value of our securities, or our securities could be subject to delisting.
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
The Company was incorporated under the laws of the Cayman Islands on October 11, 2021 solely for the purpose of effectuating the Business Combination.
On August 17, 2023 (the “Closing Date”), the Company consummated the Business Combination contemplated by that certain Business Combination Agreement, dated as of November 21, 2022 and as modified by that certain Waiver Agreement, dated as of June 12, 2023, by and among (i) the Company, (ii) HMAC, (iii) Target, (iv) Able View Corporation Inc., a Cayman Islands exempted company and a wholly owned subsidiary of the Company (“Merger Sub”), and (v) each of the holders of the Target’s outstanding shares named on Annex I of the Business Combination Agreement (collectively, the “Sellers”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Business Combination Agreement.
On the Closing Date, pursuant to the Business Combination Agreement: (a) HMAC merged with Merger Sub, with HMAC continuing as the surviving entity in the merger (the “Merger”), as a result of which: (i) HMAC became a wholly-owned subsidiary of the Company and (ii) each issued and outstanding security of HMAC immediately prior to the consummation of the Merger was no longer outstanding and automatically cancelled, in exchange for the right of the holder thereof to receive a substantially equivalent security of the Company specified below, and (b) the Company acquired all of the issued and outstanding shares of Target held by the Sellers in exchange for the ordinary shares of the Company.
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As a result of the Business Combination, HMAC and Target each became a wholly-owned subsidiary of the Company.
See also a description of the material terms of the Business Combination as described in the Form F-4 in the section entitled, “The Business Combination Proposal”.
The mailing address of the Company’s principal executive office is Floor 16, Dushi Headquarters Building, No. 168, Middle Xizang Road, Shanghai, 200001, People’s Republic of China, and its telephone number is +86 185 0177 0425. The information contained on, or accessible through, the Company’s website is not incorporated by reference into this Report, and you should not consider it a part of this Report.
The Company is subject to certain of the informational filing requirements of the Exchange Act. Since the Company is a “foreign private issuer”, the officers, directors and principal shareholders of the Company are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchase and sale of Class B Ordinary Shares. In addition, the Company is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, the Company is required to file with the SEC an annual report on Form 20-F containing financial statements audited by an independent accounting firm. On July 5, 2023, the Company and HMAC furnished to its shareholders a proxy statement/prospectus relating to the Business Combination. The SEC also maintains a website at http://www.sec.gov that contains reports and other information that the Company files with or furnishes electronically to the SEC.
B. Business Overview
Prior to the Business Combination, the Company did not conduct any material activities other than those incidental to its formation and the matters contemplated by the Business Combination Agreement, such as the making of certain required securities law filings and the establishment of merger subsidiaries. Upon the Closing, the Company became the direct parent of Target, and conducts its business through Target and Target’s subsidiaries. Unless the context otherwise requires, references in this section to “we”, “us”, “our”, “Company” and similar first-person references are intended to mean the business and operations of Able View and its consolidated subsidiaries taken as a whole.
Overview of Able View
Able View is one of the largest comprehensive brand management partners of international beauty and personal care brands in China. The Company enjoys a market share of 16.5% in beauty and personal care cross-border brand management and a market share of 38.1% in functional beauty and personal care brand management in 2022, as measured by gross merchandise value (GMV), according to the Additional Independent Market Research Report by iResearch Co., Ltd. dated February 13, 2023. (the “iResearch Report”). To purchase from global brand owners and conduct sales in China, Able View’s comprehensive brand management capabilities encompass all segments of the brand management value chain, including strategy, branding, digital and social marketing, omni-channel sales, customer service, overseas logistics, warehouse and fulfilment. The Company’s mission is to help global brands enter, grow and succeed in China.
As a brand management partner, Able View generates revenue from product sales by distributing and selling cross-border products from various global brand owners to Chinese consumers. Able View regards the brand companies as Able View’s suppliers and purchases goods from these suppliers to sell to consumers either directly through online e-commerce stores or offline counters operated by Able View, or indirectly to distribution channels which include mainstream horizontal online marketplaces, vertical online marketplaces, social E-commerce platforms and a wide variety of online and offline distributors, dealers and agents.
With the rapid growth of demand for beauty and personal care products in China, more global brands and brand managers are targeting China for strategic entry. The Chinese market is inherently complex and such complexity is rapidly increasing, caused by a combination of the following factors: diverse, competing, but overlapping and interdependent sales channels; changing of consumer tastes, habits, and abilities to pay; fragmented, emerging, and highly-regulated and monitored social media and other online platforms; unique, deep, and evolving business practice.
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Able View has the experience to manage such complexity, including market resources and know-how, consumer data and access, social media and industry experience, as well as local infrastructure and operation teams. International brands look to Able View as a trusted partner to establish themselves in China without the heavy investment needed to build such experience on their own.
Able View’s experience has allowed it to steadily expand its engagement in terms of number of brand partners, whom Able View regard as Able View’s suppliers. Able View now serves as brand manager in China for well-known international brands such as Clarins, PAT. The brand portfolio mainly covers the segments of skin care and personal care (products used in personal hygiene and personal grooming). Among the two segments, the Company is particularly focused on functional products, which include both dermo-cosmetics (skincare products designed for people with skin problems such as dry skin) and functional personal care products (personal care products including functional ingredients, such as Over the Counter (OTC) drugs and supplements).
Able View is an experienced and insightful brand manager in China’s vast, complex and ever-changing consumer market for beauty and personal care products. The Company’s comprehensive brand management capabilities encompass all segments of the brand management value chain. To achieve the sales target and business goal, Able View designs its brand management strategies jointly with its brand partners and implements these strategies through Able View’s own dedicated brand management teams. The Company helps its brand partners establish supply chain and fulfilment infrastructures, devise market positioning and entry strategies, improve market exposure and penetration, and develop and manage channel strategies adapted to China’s vast and complex consumer demands. Able View’s omni-channel capabilities cover the entire range of 1) massive, horizontal, logistics-driven online marketplaces, such as Tmall.com and JD.com (these are Chinese equivalents of Amazon and eBay); 2) specialized, vertical online marketplaces for the more purposeful consumers, such as Ali Health and Vipshop; 3) social, interactive E-commerce platforms such Douyin (the Chinese version of TikTok), Kuaishou (a main competitor of TikTok), Xiaohongshu (a Chinese equivalent of Instagram) and WeChat (through its Moments which is like Facebook status and its Mini-Program apps); and 4) a wide variety of online and offline independent sellers, such as Watsons. The Company also maintains brick-and-mortar sales channels such as shopping mall counters and beauty chain stores including KKV and Harmay. To improve market presence and user traffic, the Company creates, manages and conducts comprehensive online sales campaigns and promotions through social platforms such as WeChat, Douyin, Kuaishou and Xiaohongshu, and through engaging KOLs and MCNs. Based the Company’s statistics, by the end of 2025, Able View has reached out to customers over 450 sales channels, over 300 KOLs, and 49 offline retail networks, reaching over 750 million consumers in China.
In addition to its marketing capabilities, the Company also values its logistics capabilities, which it outsources to third parties, as a critical factor for success, including its logistics network and fulfilment capabilities. For each brand, Able View provides dedicated teams with deep domain experience and brand management experience. The Company provides its teams with regular training in the brand philosophy, product specification and market background of its brand partners. Able View manages reliable goods delivery through several nationwide logistics service providers. Able View coordinates with multiple service partners to provide warehouse management and storage in over 10 cities globally, with an aggregate over 3,000 cubic meters of storage space. All of these warehouses are close to either products manufacturing sites or warehouses of horizontal online marketplaces for supply chain efficiency.
Able View’s brand management methodology is driven by data and technology. The Company established a dedicated data analysis and research team to gather, analyze and process data, to extract insights that support decision making in concrete business scenarios. Each of the Company’s brand management team is trained in technology tools ranging from product research, user traffic tracking and conversion evaluation, consumer behavior analysis, product catalogue tracking, sales tracking, order management, and logistics and warehouse management. The Company currently utilizes online platforms provided by mainstream horizontal online marketplaces such as JD.com and Tmall, as well as back-end technology applications such as Jackyun provided by the Company’s business partners or third-party developers. These platforms and applications are designed to help improve operating efficiency and output.
As China’s consumer market is complex and ever evolving, innovation is essential to Able View’s culture and mission. Able View encourages all its teams to improve and innovate by trial and error. In the past three years, the Company has helped its brand partners redesign product packaging and delivery, create new marketing schemes, deploy emerging algorithmic social media analysis and improve supply chain operation. The Company believes innovation is crucial for its success in an emerging market such as China, and a key element to Able View’s value proposition to its international brand partners.
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Able View does not generate revenue directly through its brand management services and the service cost is regarded as cost of sales undertaken by Able View. Instead, the Company generates revenue from the sales of the products of its brand partners. Any services that Able View provides to its brand partners in connection with its arrangements with its brand partners is factored into Able View’s overall budget when it resells the brand partners’ products to consumers in China. The Company sells products to three groups: (i) online marketplaces (ii) distributors (iii) directly to end consumers from e-commerce stores operated by Able View. For the years ended December 31, 2025, 2024 and 2023, net revenue from product sales came to $96.6 million, $122.0 million and $124.7 million, respectively, from our continuing operations. For the years ended December 31, 2025, 2024 and 2023, revenue from provision of operation services came to $8.6 million, $4.8 million and $4.5 million, respectively, from our continuing operations. For the years ended December 31, 2025 and 2024, the Company incurred net loss from continuing operations of $2.8 million and $1.1 million from our continuing operations, respectively. For the year ended December 31, 2023, the Company generated net income of $9.4 million from continuing operations.
Able View’s Competitive Strengths
Leading Position in China’s Cross-Border Brand Management in Beauty and Personal Care
Able View is one of the largest comprehensive brand management partners of international beauty and personal care brands in China. Able View is the trusted and comprehensive brand management partner of leading global brands. With its comprehensive and omni-channel capabilities, Able View helps the brand owners enter the China market while managing reasonable risks and costs. Able View accomplishes this through its supply chain capabilities, experienced execution team, established and well-connected online and offline channels and industry experience specialized in the beauty and personal care segments. In addition to its proven records, Able View believes its culture of innovation and adaptation to ever-evolving market trends in China are key to maintaining its leading position in the cross-border beauty and personal care brand management space in China.
Comprehensive Capabilities and Omni-Channel Distribution
Able View’s comprehensive brand management capabilities encompass all segments of the brand management value chain, including strategy, branding, digital and social marketing, omni-channel sales, customer service, overseas logistics, warehouse and fulfilment. Able View designs and plans its brand management strategies jointly with its brand partners and implements these strategies through Able View’s own dedicated brand management teams. Able View selects, implements, and manages sales channels to construct channel portfolios tailored to the different lifecycle stages of each brand and product. During implementation, Able View adapts brand and distribution strategies to complex and evolving market conditions through flexible and data-driven real time decisions. Able View believes its comprehensive capabilities and omni-channel coverage provide key values to brand partners with ambition of enter and compete in China’s vast and complex consumer market.
Brand Strategy and Marketing Capabilities
Able View believes brand strategy is essential to create sales potential and sustained value to its brand partners. The Company takes a long-term and comprehensive approach to brand strategy. The brand strategy teams study the evolving dynamics of market and consumer needs through data-driven analysis. The Company’s analytics lead to results that balance between growth, cost, and profit performance through the long term, adapted to each brand partner and products’ specific goals and requirements, which are often complex and unique for the Company’s international brand partners with ambitions to gain footholds in China. In terms of marketing capabilities, the Company can plan, design and implement cross-platform marketing integrating digital online marketing, social media marketing, traditional media marketing, offline marketing and marketing through creative contents, all specifically adapted to the diverse and complex target consumer base of China’s vast market.
Strong Relationships with Category-Leading Global Brand Owners
Able View believes that the brand image and value of its brand partners and their products open up more channels and better contractual terms with Able View’s distributors and service providers. Thus, Able View cultivates, establishes and strengthens symbiotic relationships with brand partners that fully realize the value of their intangible assets through cooperation. Able View’s brand portfolio consists of famous category-leading global brands, which has allowed the Company to bootstrap this goodwill and engage new brand partners. For the year ended December 31, 2025, one of Able View’s brand partners contributed over 10% of the Company’s revenue.
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Knowledgeable and Experienced Management Team
Led by its three founders, Able View’s management team possesses an average of over a decade of experience in e-commerce, retail, branding, media or finance. Able View believes its past successes benefited from the industry knowledge, operational experience, innovative mindset and hard work of its management team. Able View has also recruited and trained a new generation of passionate and talented professionals to further build on the knowledge and experience of its founders. Able View believes that its motivated and engaged management will continue to be a key asset to its business.
Able View’s Business Strategies
Expand brand portfolio and products offering
Able View seeks opportunities to engage new products, brands and markets while continuing to create value for and strengthen relations with its existing brand partners. With its existing brand partners, Able View believes its comprehensive and omni-channel capabilities allow its business performance to scale up in terms of volume and product offerings with controlled and manageable costs. Within its current segment, Able View expects to continue expanding its brand portfolio by strictly selecting quality brands that target functional beauty and personal care needs of China’s consumers. Horizontally, the Company plans to leverage its existing experience in marketing and distribution to more OTC and wellness brands in broader segments of the healthcare market. Vertically, the Company seeks opportunities to cooperate with leading global brand management groups to leverage Able View’s experience in the China market.
Expand distribution channel coverage
The consumer market in China is vast, complex, diverse and ever-evolving. There are still significant unmet demand and potential consumers over China’s vast geographic, economic, social and cultural landscape. In the past years, emerging online and offline retail channels and DTC (direct-to-customer) channels are growing rapidly to address the fragmented consumer market especially in the medium and smaller cities in China. Able View plans to continue expanding coverage of those emerging market segments to capture growth opportunities, which would lead to improved revenue and income for both Able View and its brand partners. Able View is recruiting and training its professionals to build capabilities to capture these emerging channels and opportunities.
Elevate to-Customer cross-border products to to-Business cross-border products
China’s cross-border products broadly divide into two categories: to-C (to-Customer) and to-B (to-Business). To-C is the cross-border transaction mode where brand managers sell goods to customers first and then freight goods into China, while customers declare to customs office and pay tariffs. To-B is the cross-border transaction mode where brand owners or their brand managers apply for relevant regulatory sales approvals and freight goods into China, and declare to customs office and pay tariffs. The trade-off between to-C and to-B is primarily one between flexibility and economy of scale.
Since its founding, Able View has helped cross-border brands enter and compete in the China market primarily by branding and selling to-C cross-border products. The Company believes the operation and existing sales volume of some of the brands it manages have reached sufficient scale and stability for to-B cross-border mode, which would further increase sales volume. In the to-B cross-border mode, Able View will help brand owners gather and compile materials for compliance through diverse government offices. For certain product categories such as OTC products, such regulatory process can be complex and time-consuming. But once the process is completed, to-B cross-border products often achieve greater volume and revenue potential, as their lower variable costs are more appealing to mainstream horizontal marketplaces and platforms and the to-B model offers a better and easier purchasing experience for end customers. Able View is currently in the process of elevating several products under two of its managed brands from to-B to to-C. The Company expects to further and continue this process with more of its managed products and brands.
Further invest in data analytics and digital management systems
With growing need for and importance of data in brand management, the Company plans to further invest in its data research and analytics capability by utilizing more third-party tools, consulting firms and technology partners, and hiring more talents in the Company’s data analytics team, which Able View currently has 5 employees. Able View plans to establish in-house R&D teams to develop digital management systems to better streamline and manage the external tools and systems, daily operation efficiency, and innovative digital contents. Able View believes its efforts in digitization will help the Company to not only improve its brand management process but also broaden access to more brand partners and consumers, extract insights from market data and improve the Company’s internal management efficiency.
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Pursue strategic opportunities
After seven years of operation in the cross-border brand management space, Able View has experience and knowledge to evaluate cross-border brands. The Company believes that direct ownership of specific brands or brand operating rights in China could provide valuable strategic growth opportunities. However, the Company had no such ownership as of December 31, 2025. Able View believes its accumulated brand management experience enables it to value, select, acquire, and manage proprietary brands. Able View plans to pursue selective investment and acquisition opportunities to strengthen its brand portfolio and overall business model.
Able View’s Business Model
Able View helps global brands enter and compete in the China market in selling cross-border products primarily in the beauty and personal care segments. The Company deploys a full spectrum capability as an experienced and insightful brand manager in China’s vast, complex and ever-changing consumer market. The Company’s comprehensive brand management capabilities encompass all segments of the brand management value chain. Able View designs and plans its brand management strategies jointly with its brand partners and implements these strategies through Able View’s own dedicated brand management teams. According to iResearch, the Company is a leading innovative comprehensive partner for beauty and personal care brands in China.
The Company searches for, selects and negotiates with brand owners or global brand management groups with the ambition, growth potential, and competitive products to enter and succeed in the China market. After engagement, Able View and the brand company will design a working plan including sales projections and procurement schedules for specific products. As the plan is executed, Able View acts as the exclusive brand partner to manage supply chain, marketing strategy, sales channels and after-sales services. Able View generate revenue by purchasing goods from brand partners and conducting sales in China market.
Able View regards the brand companies as Able View’s suppliers. Able View purchases goods from the suppliers to sell to consumers either directly through online e-commerce stores or offline counters operated by Able View, or indirectly to distribution channels which include mainstream horizontal online marketplaces, vertical online marketplaces, social E-commerce platforms and a wide variety of online and offline distributors, dealers and agents. Able View owns the inventory of products of its brand partners and assume inventory risks, as the Company generally cannot return unsold inventories to the brand companies. Able View manages its inventory risks through strict brand and product screening and evaluation procedures, as well as standard inventory management techniques.
The following chart illustrates the overall business model of Able View:
The following flowchart illustrates Able View’s capabilities for its managed brand throughout the brand management value chain:
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To-Customer and To-Business Product Categories
Able View enters into contractual arrangements with brand companies, some of which are exclusive arrangements, to sell their cross-border products in the China market. China’s cross-border products broadly divide into two categories: to-C (to-Customer) and to-B (to-Business).
Able View sells both to-C cross-border products and to-B cross-border products. For brand owners who has ambition to explore the China market without established local facility or teams in China, to-C cross-border is the first choice to gradually develop the brand and gain market exposure as well as a base volume of sales with the help of brand managers such as Able View. When the brand is proven to be popular with consumers, the brand company can decide to adopt the to-B cross-border mode and bear the fixed costs of regulation and compliance as well as the inventory risk of bulk local storage.
For the years ended December 31, 2025, 2024 and 2023, 94%, 83%, and 82% of Able View’s sales come from to-C cross border products, respectively. The Company believes the operation and existing sales volume of some of the brands it manages have reached sufficient scale and stability for to-B cross-border mode. The Company has elevated several products from brand company Cure into to-B cross-border mode. For these products Able View has initiated compliance process with China National Medical Products Administration, or NMPA.
Focus Categories and Brand Groups
After seven years of operation, Able View has accumulated resources, industrial knowledge and domain know-how in the beauty and personal care segments. According to the iResearch Report, consumers in China are particularly interested in functional products. Functional products include dermo-cosmetics (skincare products designed for people with skin problems such as dry skin) and functional personal care (personal care products including functional ingredients, such as OTC drugs and supplements). The functional products in China market outperform overall skincare market in terms of GMV growth, according to the iResearch Report. Able View believes it enjoys a first-more advantage in the quick growth of the functional products category. The Company intends to continue to build and deepen its domain experience in this segment to further this advantage.
Since Able View acts as brand partner of cross-border products, it mainly works with global brands with ambition to enter the China market. Such global brands could be classified into (i) multi-brand groups which are global companies each managing multiple brands and (ii) single-brand groups which are companies that each operate a single brand. Able View works with both global leading multi-brand groups such as Clarins and single-brand companies such as PAT. For the global multi-brand groups, Able View helps them manage the brands not yet officially introduced to the China market, but where unauthorized trading of the brand products already exists. The Company is experienced in reforming the market to reorganize channel structures, eliminate price discrepancies, establish marketing standards and organically improve sales volume. By December 31, 2025, three out of the Company’s total 10 managed brands are from multi-brand groups and the remainder are from single-brand groups.
Brand Strategy
Able View believes it is critical to form a complete, well-planned, innovative and executable brand strategy to help a cross-border brand enter and compete in the China market successfully.
Able View believes brand strategy is a key essential that differentiates a comprehensive brand manager such as Able View from other brand management players or fulfilment providers. The Company takes a long-term and comprehensive approach to brand strategy.
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Market and consumer research: Before making any plan or executable items, Able View’s dedicated data and research teams conduct research of the target market to study the competitive landscape, market trends, comparable products, value proposition, sales channels and communication methods. The Company’s research teams will also study the consumers using online data sources, focus groups or online surveys to generate insights of consumer habits and needs. Such research often involves issues complex and unique for Able View’s international brand partners with ambitions to gain footholds in China.
Training and consultation: Able View’s brand management teams conduct various training and consultation meetings and seminars with brand companies to transfer and adapt brand knowledge to appropriate business language, culture, and scenarios for the China market.
Brand and product positioning: Combining knowledge and know-how from Able View and brand company resulting from research and training, Able View’s brand management team typically works out a brand and product positioning strategy as overall guideline of the brand strategy. The brand positioning takes into consideration existing brand image, product competitive advantages, consumer preferences, competitive environments and market trends. Able View helps the brand company articulate the positioning to deliver accurate, attractive and vivid brand message to the target consumers.
Overall brand strategy execution: Able View typically works out an overall brand strategy which will clearly define the market entry strategy, work plan and expected business outcome. Once the overall strategy is confirmed by the brand company, each business unit of the brand management team will work out respective implementation plans including marketing, sales, supply chain operation and risk management. The Company’s budget team will also rely on this overall brand strategy and related product and marketing plans. Usually, Able View will generate brand strategies covering 1~3 years’ time scale.
Omni-Channel Operation
Able View’s omni-channel capabilities cover the entire range of (1) massive, horizontal, logistics-driven online marketplaces, such as Tmall.com and JD.com; (2) specialized, vertical online marketplaces for the more purposeful consumers, such as Ali Health and Vipshop; (3) social, interactive E-commerce platforms such Douyin, Kuaishou, Xiaohongshu and WeChat (through its Moments which is like Facebook status and its Mini-Program apps); and (4) a wide variety of online and offline independent sellers, such as Watsons. The Company also maintains brick-and-mortar sales channels such as shopping mall counters and beauty chain stores including KKV and Harmay. The Company also operates several flagship e-commerce stores under its own name on mainstream horizontal marketplaces which directly sell goods to consumers. Able View believes a full omni-channel coverage will optimize and adopt fitted channel portfolios tailored to the different lifecycle stages of each brand and product. During implementation, Able View adapts brand and distribution strategies to complex and evolving market conditions through flexible and data-driven real time decisions. Able View can also provide and implement cross-channel marketing plans with unified brand and product image across diverse channels and marketplaces. The Company’s online traffic operations and digital marketing campaigns benefit multiple distribution channels at once, creating cross-channel synergies and economies of scope.
Online flagship e-stores: Able View operates 6 online flagship e-stores on mainstream horizontal marketplaces such as Tmall, Pinduoduo and JD.com. All the e-stores are established and operated by request and permission from brand companies and owned by Able View or its subsidiaries. Able View uses brand names and images of the brand companies as their agents in these e-stores. In these e-stores, Able View controls store operation including merchandising, web content management, online event management, customer service and goods delivery, and sells goods directly to consumers. Our online flagship e-stores occupies 2%, 3% and 7% of our total revenues for the fiscal year ended December 31, 2025, 2024, and 2023, respectively.
Mainstream horizontal marketplaces: Able View maintains close business relationships with massive, horizontal, logistics-driven online marketplaces in China such as Tmall and JD.com. Such mainstream horizontal marketplaces offer centralized marketplaces for a wide range of products from different industry segments and broadly attract the majority of the entire consumer base. Since such mainstream horizontal marketplaces attract the majority of online shopping traffic in China, Able View devotes much effort to the operation and management of these channels. In the twelve months ended December 31, 2025, 2024, and 2023, 27%, 35%, and 42% of the Company’s revenue comes from these mainstream horizontal marketplaces, respectively.
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Typically, Able View acts as the supplier of the marketplaces and pays online marketplaces a pre-determined percentage of GMV when each transaction is settled. From the marketplaces’ perspective, Able View’s managed brand portfolio helps them offer higher quality brands and products at their marketplaces. To promote sales, Able View conducts digital marketing campaigns or online traffic operations to attract and direct more online shoppers to its managed brands. In addition to direct cooperation with the marketplaces, Able View also engages distributors and shop runners with their own online e-stores at these marketplaces for potential consumer traffic and expanded sales opportunities.
Vertical marketplaces: Different from mainstream horizontal marketplaces who provide wide ranges products from different segments to consumers, vertical marketplaces usually focus on specific product segments and targeted consumer groups providing differentiated products and selective brands. Since Able View’s managed brands focus on beauty and personal care segments, Able View works with various vertical marketplaces such as Ali Health and Vipshop as specialized sales channels to sell to more purposeful consumers. Able View provides goods either directly to such vertical marketplaces as suppliers or to distributors proficient in operating on these platforms. Our vertical marketplace occupies 6%, 3% and 4% of our total revenues for the fiscal year ended December 31, 2025, 2024, and 2023, respectively.
Social E-commerce channels: The emerging social, interactive e-commerce channels are attracting more user traffic and converting users into online shoppers, concurrent with the rise of internet usage in China. These social channels are evolving to become more algorithm-based, multimedia-presented, creative content oriented and driven by numerous KOLs uploading short video clips or live streaming. The social channels are fragmented into massive numbers of KOLs, bloggers, content owners and official representatives, making it complex and difficult to manage without experience and connections.
Able View works closely with social e-commerce channel touchpoints and continues to devise, learn and adopt methods and tools to manage and operate in this emerging space. By December 31, 2025, the Company has engaged over 300 KOLs on social channels such as Douyin, Kuaishou, Xiaohongshu and WeChat (through its Moments which is like Facebook status and its Mini-Program apps). With these KOLs and e-commerce channels, the Company provides products as well as workshops and works with them to design and execute digital marketing campaigns, creative digital contents, online traffic operations and online sales events.
Our social e-commerce channels occupy 3%, 1% and 1% of our total revenues for the fiscal year ended December 31, 2025, 2024, and 2023, respectively.
Offline channels: To capture the still sizeable offline consumer segment in China, Able View cooperates with emerging offline beauty chain stores such as KKV and Harmay. Able View also sets up shopping mall counters for strategic brands who benefit from such exposure. In 2023, the Company expand five offline channels such as Walmart. In 2023, Able View engaged several famous offline channels selling the Company’s managed brand products. Our offline channels occupy 4%, 9% and 2% of our total revenues for the fiscal year ended December 31, 2025, 2024, and 2023, respectively.
Various other distributors: To complete its omni-channel strategy covering all segments of the massive and diverse consumer base in China, Able View developed various specialized distributors targeting fragmented independent sales scenarios. According to the iResearch Report, independent sales channels contribute 15.4% of the beauty and personal care market in China in terms of GMV in 2022. Such independent channels include small online stores on platforms such as Taobao (a marketplace to facilitate consumer-to-consumer retail), small independent online stores, person-to-person transactions on social platforms and small offline beauty collection stores. Each channel has relatively small sales volume but stable and loyal consumer groups. The development and management of various independent channels can help brand companies generate revenues in the long tail market while simultaneously resolving price discrepancies, scalper trades, fake products and other issues which could damage the brand image and market efficiency. Our various other distributors occupy 58%, 49% and 44% of our total revenues for the fiscal year ended December 31, 2025, 2024, and 2023, respectively.
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Comprehensive Marketing
Able View has developed comprehensive marketing capabilities, and the Company is able to plan, design and implement cross-platform and multi-channel marketing activities integrating digital online marketing, social media marketing, traditional media marketing, offline marketing and marketing through creative contents. To achieve sustained success, Able View typically generates flexible and progressive marketing plans in different stages of the brand and product lifecycle and in response to evolving market trends. The Company adopts a cautious, sustainable approach to marketing which avoids both short-term aggressive promotion activities that tarnish the brand image as well as over-invest in upfront brand exposure. Able View helps brand companies build solid and sustained brand development paths and aims to attract more brand partners who share the same approach and values.
Digital and traditional marketing: Able View commands diverse digital marketing capabilities including digital marketing strategy, digital marketing campaign, creative content, media distribution, traffic operation and data analysis support. Based on a managed brand’s positioning, development stage and sales channel status, Able View plans, designs and executes marketing activities which usually include marketing campaigns and media communications. Able View implements marketing campaigns in specific marketplaces or across multiple channels. A campaign usually includes media advertisements to target audiences to better realize the marketing objective and increase ROI (return on investment). The Company manages to approach various types of media on horizontal and vertical marketplaces, social media platforms, popular online websites and individual KOLs. Able View also conducts traditional marketing campaigns or offline advertising activities when strategically useful.
Social marketing: Concurrent with the rise of internet usage, social media is booming in China with great amounts of user traffic and digital contents that are generated by both individual users and professional workshops. From Able View’s past experience and according to iResearch Report, when making a purchasing decision, the typical Chinese consumer is easily influenced by KOLs, famous bloggers, family members, close friends or colleagues who are usually regarded as trusted information sources. Such sales touchpoints are decentralized and received by potential consumers through active browsing as well as passive pushing to view through extensive social platforms such as Douyin, Kuaishou, Xiaohongshu and WeChat (through its Moments which is like Facebook status and its Mini-Program apps). Able View is dedicated to keeping pace with the latest trends and command methodologies to leverage social media into our marketing strategies. The Company designs or engages with professional MCNs to produce creative multi-media contents to launch on preferred social media platforms, encouraging interactions from potential consumers and driving purchasing decisions. The management team study and catch the latest trends of contents and emerging forms of digital campaigns, integrating the ideas into social marketing plans and keeping continuous communication in response to consumer feedback from various platforms.
Content management: Able View creates and maintains digital content used in online e-stores, marketing campaigns, advertising and social media. The Company helps brand companies maintain unified designs and visual image for brand exposure, product presentation and creative promotion. Able View also produces by itself or engages with professional media studios to create innovative and up-to-date social media contents including review blogs, flash animations, short video clips and live streaming videos. The Company typically do not register copyrights for the marketing contents it creates. In order to protect brand assets, Able View also established dedicated copyright teams to track and thwart the unauthorized, non-standard or false or misleading content which may violate trust and confidence in the brands and products Able View manages.
Supply Chain Management
During its years of operation, Able View has established along the cross-border brand management value chain a robust logistics network and warehousing capacity to help ensure a smooth and reliable delivery experience. The Company engages third-party warehousing and logistic service providers to deliver goods from its designated warehouses. Able View has adopted a warehouse management system, or WMS system, anti-counterfeit practices, custom clearance, bonded warehousing and inventory management to add value to the fulfilment process.
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Able View managed product logistics through several leading third-party logistics service providers. Able View also coordinates with several leading service partners in providing management and storage in more than 10 warehouses in over 10 cities globally, in Japan and China, with an aggregate over 3,000 cubic meters of storage space. The Company ships goods to distributors and individual consumers in over 8 cities across China with timely and reliable delivery. Able View monitors and adjusts inventory levels on an ongoing basis based on sales projections and shipment schedules of brand companies. To realize cross-border distribution, the Company arranges bulk shipment from overseas warehouses to designated receiving points after custom clearance. In case of cross-border e-commerce, Able View arranges delivery of goods to bonded areas (government designated low-tax and low-tariff zones) in China where the goods shall be pending for custom clearance. Once a consumer finishes a purchase transaction, the Company will execute the custom clearance process for the specific goods and deliver the goods to the consumer. Able View typically enters into annual service agreements with warehousing and logistics service providers and assumes risks of damage and loss not attributable to the service provider’s fault.
Customer Service
Able View provides pre-sales and post-sales customer services while operating its flagship online e-stores. Consumers can reach the service staff through online messaging, phone call or emails. The pre-sales inquiry usually relates to product specification or promotion details. Able View believes the pre-sales customer service help the Company to collect consumer concerns which would help improve future operations, and it’s also important to leave a good impression to consumers through pre-sales service process to encourage purchases. The post-sales inquiry usually relates to delivery, exchange or return. Able View also guides and trains the distributors to implement quality customer service to end consumers by providing training seminars, guidance on standard service procedures and summary of service best practices.
Price Management
Able View believes it is critical to maintain a healthy and orderly price system for stable brand operation. The Company sets up and adjusts pricing policies concerning brand company guidance, brand positioning, comparable products, promotion rules and consumer acceptance. Able View implements a strict price control system to crack down on fraudulent or deceptive pricing. The brand management team does regular inspections on the price from various platforms and makes alerts when there’s any unusual price volatility. Able View publishes open and transparent penalty terms to all distribution channels and takes actions such as written warning, deposit deduction and authorization cancellation when violation occurs.
Seasonality
Our results of operations historically have been seasonal primarily because consumers increase their purchases during particular promotional activities, such as Singles Day (an online sales promotions event that falls on or around November 11 each year) promotion and the impact of seasonal buying patterns within certain categories such as sunscreen. In addition, we generally experience a lower level of sales activity in the first quarter due to the Chinese New Year holiday, during which consumers generally spend less time shopping online and businesses in China are generally closed.
In anticipation of increased sales activity during peak seasons, we increase our inventory levels and incur additional expenses. After Able View goes public, if our seasonal revenues are below expectations, our operating results could be below the expectations of securities analysts and investors. Due to the nature of our business, it is difficult to predict the impact of this seasonality on our business and financial results. In the future, our seasonal sales patterns may become more pronounced, may strain our personnel, customer service operations, fulfillment operations and shipment activities and may cause a shortfall in revenues compared to expenses in a given period. As a result, the trading price of our ordinary shares may fluctuate from time to time due to seasonality.
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Brand Development and Acquisition
Managed Brands
By December 31, 2025, Able View has engaged 10 brands as brand management partner in China, compared to a portfolio of 15 and 15 brands by the end of 2024 and 2023. The Company engages brand companies under agency contracts with a term of 12 months. The contract renewal process usually starts at the beginning of each year and takes around one month to negotiate the annual minimum purchase target. The brand portfolio covers classes of beauty and personal care categories including nasal care, oral care, dermo skin care and OTC. The Company doesn’t have preference of country of origin and engage brands from United States, France, and Japan. The brand companies are regarded as product suppliers to Able View and the contracts with brand companies are usually on an exclusive basis.
Brand Screening and Acquisition
Able View primarily focuses on brands with global recognition, proven records of leading position in specific product categories and good reputation among target consumers in China. As a brand partner and agent in China market, Able View believes it is critical to cooperate with qualified brands which has great potential to grow in its category and ability to recognize Able View’s value to generate accord in future operation. The Company implements strict screening procedures utilizing various sourcing channels from online industrial websites, e-commerce websites, social media, KOLs, domain expert recommendation and industry exhibitions. The Company also deploys a research and data team to analyze product category data from various sources such as number of topics and review blogs from social media, trend of sales from unauthorized channels and network popularity of similar products or effectiveness. As a result, from the brand sourcing practice, the Company typically maintains a potential pitching list of over 200 brands. Based on the Company’s analysis and industry experience, Able View carefully selects competitive, trusted, reputable and reliable brands for further discussion and negotiation.
Able View also strengthens cooperation with existing brand companies, of which three have multiple brands, adding loyalty and extending the brand portfolio by penetrate into other brands owned by these companies leveraging a track record of success cases and long-term cooperation experience. The Company conducts reviews of managed brands regarding sales, profitability, growth forecast, finance compliance and other criteria. To optimize the resource and improve operation efficiency, Able View has terminated relationship with two brands through its entire operating history.
During the selection and negotiation of brands, Able View considers long-term potential with relatively low inventory risk. As in most scenarios the Company engage the brand as the sole partner in the China market, Able View controls or has big influence of pricing and distribution policies, which can usually help the Company make flexible and time-efficient adjustments to ever evolving market conditions and consumer needs.
Brand Management and Service Teams
Able View typically assigns dedicated brand management teams to offer tailored operation and services led by experienced brand managers who are responsible for managing relationships with brand companies and complete business performance requirements. In addition to the brand management teams, Able View also maintains shared service of data analysis, research and supply chain to ensure seamless experience for brand companies. Able View constantly reorganizes the structure of brand management teams to adapt to different brand lifecycle stages and provide qualified capabilities to help the managed brands grow.
Technology Adoption
Able View adopts technology systems and tools provided by online marketplace or third-party providers. The Company’s brand management teams are trained in and integrate technology tools into daily work from product research, traffic tracking and conversion evaluation, consumer behavior analysis, product catalogue tracking, sales tracking, order management and logistics and warehouse management. Although Able View does not own any technology infrastructure and related intellectual properties, it is planning to establish a dedicated technology team to develop and integrate in-house technology infrastructure and systems across various applications.
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Intellectual Property
We use our brand partners’ names, logos and other marks in connection with marketing and selling their products. Some of our agreements with our brand partners provide us with licenses, typically coterminous with the distribution agreements, to use their intellectual property for the said purposes; others require that we obtain the brand partner’s consent for specific uses of the brand partner’s intellectual property. We do not register our brand partners’ trademarks in China on their behalf.
We regard our trademarks, service marks, domain names, trade secrets, proprietary technologies and other intellectual property as critical to our success. To protect our proprietary rights in content, services and technology, we rely on trademark and trade secret protection laws in China. As of December 31, 2025, we own 6 registered trademarks and 1 trademarks applications, including those relating to our “Able View” brand names. We also own two registered trademarks in Hong Kong. As of the same date, we own thirteen domain names in mainland China and one domain name in Hong Kong.
Employees
As of December 31, 2025, we had a total of 164 full-time employees. We had a total of 85 and 95 full-time employees from continuing operations as of December 31, 2024 and 2023, respectively. All of our employees are based in China. The following table lists the breakdown of the number of employees in different departments.
| Number of Employees as of | ||||||||||||
| December 31, | December 31, | December 31, | ||||||||||
| Department | 2025 | 2024 | 2023 | |||||||||
| Brand Operating | 21 | 27 | 43 | |||||||||
| Supply Chain | 8 | 8 | 9 | |||||||||
| IT Data Analysis | 5 | 5 | 5 | |||||||||
| Business Development | 108 | 28 | 24 | |||||||||
| Financial and administration Supporting | 22 | 17 | 14 | |||||||||
| Total | 164 | 85 | 95 | |||||||||
As required by laws and regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments including, among other things, pension, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance and housing fund plans through a PRC government-mandated benefit contribution plan. We are required under PRC law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time.
We typically enter into standard employment agreements and confidentiality agreements or clauses with our senior management and core personnel. These agreements include a standard non-compete covenant that prohibits the employee from competing with us, directly or indirectly, during his or her employment and for six months after termination of his or her employment.
We believe that we maintain a good working relationship with our employees, and we have not experienced any material labor disputes.
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Properties and Facilities
Our corporate office and headquarters are located in Shanghai, China. We also engaged warehouse service contracts, ask third-party service partners to manage our inventories and provide warehouse storage services in China, including Shanghai, Ningbo, Kunshan, Nansha and in Hong Kong and Japan. As of December 31, 2025, we leased an aggregate of approximately 2,111 square meters of office space and had an aggregate over 3,000 cubic meters of storage space that are provided and managed by third-party service partners. We believe that our existing properties and facilities are generally adequate for our current needs, but we expect to seek additional space as needed to accommodate our future growth.
Insurance
We provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees. Additionally, we provide accident insurance and supplementary medical insurance for certain key personnel. We do not maintain business interruption insurance, product liability insurance or key-man life insurance. We consider our insurance coverage sufficient for our business operations in China.
Legal Proceedings
From time to time, we are involved in legal proceedings in the ordinary course of our business. Except as disclosed under the “Risk Factor - We may face risks arising from ongoing litigation and related disputes” elsewhere in this Report, we are currently not a party to any material legal or administrative proceedings.
C. Organizational Structure
The Company is not an operating company but a Cayman Islands holding company with operations primarily conducted by its subsidiaries in China and Hong Kong. The Company does not have any VIE structure, nor does the Company plan to have any such structure in the future.
The following diagram illustrates the corporate structure of the Company as of the date of this Report.
D. Property, Plants and Equipment
The Company leases the properties for its principal executive office, which is located at Floor 16, Dushi Headquarters Building, No. 168, Middle Xizang Road, Shanghai, 200001, People’s Republic of China. Please also see the subsection of Item 4.B entitled “Properties and Facilities” above.
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ITEM 4A. UNRESOLVED STAFF COMMENTS
None / Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Business Overview
We are one of the largest comprehensive brand management partners of international beauty and personal care brands in China. To purchase from global brand owners and conduct sales in China, our comprehensive brand management capabilities encompass all segments of the brand management value chain, including strategy, branding, digital and social marketing, omni-channel sales, customer service, overseas logistics, warehouse and fulfilment. Our mission is to help global brands enter, grow and succeed in China.
We generate revenue from the sales of the products of our brand partners. Any services that we provide to our brand partners in connection with the arrangements with our brand partners is factored into our overall budget and cost when we resell the brand partners’ products to consumers in China. We sell products to three groups: (i) online marketplaces; (ii) distributors; and (iii) directly to end consumers from e-commerce stores operated by us.
We also generate revenue from provision of operation services for online stores owned by customers. The operation services cover marketing and promotion of cosmetics products, warehouse management, logistics of products, and customer relationship services.
For the years ended December 31, 2025, 2024 and 2023, net revenue from product sales was $96.6 million $122.0 million and $124.7 million, respectively, from our continuing operations. For the years ended December 31, 2025, 2024 and 2023, revenue from provision of operation services was $8.6 million, $4.8 million and $4.5 million, respectively, from our continuing operations.
For the years ended December 31, 2025 and 2024, the Company incurred net loss from continuing operations of $2.8 million and $1.1 million, respectively. For the year ended December 31, 2023, the Company generated net income of $9.4 million from continuing operations.
Recent Development
On June 27, 2025, we transferred 100% equity interest in Shanghai Jingyue Trading Co., Ltd. (“Shanghai Jingyue”) to a certain third party (the “Buyer”) at zero consideration. The disposal of Shanghai Jingyue was part of our strategic decision to streamline operations and reallocate resources toward our core brand management business. Shanghai Jingyue had experienced declining sales of certain cosmetic brands, and management expected its financial performance to continue to deteriorate due in part to adverse brand perception. As a result, we determined that disposing of this subsidiary would better align our operations with our long-term strategic focus. The disposal represents a strategic shift that has a significant effect on our financial results and has been accounted for as discontinued operations in accordance with ASC 205-20-45.
In connection with the disposal of Shanghai Jingyue, we agreed to purchase inventories from Shanghai Jingyue with carrying value of $162,535 at the original cost of $3,330,617. In addition, the Buyer agreed to waive $4,389,889 of liabilities owed by the Company to Shanghai Jingyue. The disposal resulted in a net increase in income tax expense of $301,704, which was included in net income from discontinued operations.
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In September 2024, we entered into Convertible Note Purchase Agreements (the “Agreements”) with each of the three (3) non-U.S. investors (the “Purchasers”).
Pursuant to the Agreements, we issued and sold to the Purchasers convertible notes (the “Notes”) in the aggregate principal amount of US$5,000,000 after an original issue discount of 20%. The Notes have an interest rate of 8% per annum, and a maturity date of three (3) years from the date of issuance. The Notes are convertible into Class B Ordinary Shares (the “Conversion Shares”) at the option of the Purchasers, at a conversion price (the “Conversion Price”) of the higher of (i) 75% of the lowest volume-weighted average trading price of the Class B Ordinary Shares during the ten (10) latest consecutive business days preceding the conversion, or (ii) $0.6 per Class B Ordinary Share. In addition, we will issue the Purchasers certain conversion warrants upon the conversion of the Notes, with each warrant eligible to purchase one (1) Class B Ordinary Share per Conversion Share (the “Conversion Warrants”), and the exercise price of such Conversion Warrants is the same as the Conversion Price of the Notes. By November 4, 2024, we have collected proceeds from the Notes. On November 20, 2024, the Company received conversion notice from the Purchasers. On November 25, 2024, we issued an aggregation of 7,751,939 Class B Ordinary Shares and 7,751,939 Conversion Warrants to the three Purchasers at conversion price of $0.645 per share. The Conversion Warrants were expired as of the date of this report.
Factors Affecting Results of Operations
Our business, financial condition and results of operations have been, and are expected to continue to be, affected by a number of factors, which primarily include the following:
Overall economic and political conditions
Our business, financial condition and results of operations are sensitive to changes in overall economic and political conditions that affect consumer spending in China. In addition, the retail industry is highly sensitive to general economic changes. Many factors outside of our control, including inflation and deflation, interest rates, volatility of equity and debt securities markets, and other government policies can adversely affect consumer confidence and spending. The domestic and international political environments, including global inflation and uncertain financial markets or at all, could in turn adversely affect our business, financial condition, and results of operations.
Our ability to retain our existing brand partners
We provide services to help distribute and sell cross-border products from various global brand owners through e-commerce platforms for brand partners primarily pursuant to contractual arrangements with a term typically ranging from 12 to 36 months. Although we are fairly confident that we will be able to renew the contracts with these brand partners, there is possibility that these contracts may not be renewed or, if renewed, may not be renewed under the same or more favorable terms for us. We may not be able to accurately predict future trends in brand partners renewals, and our brand partners’ renewal rates may decline or fluctuate due to factors such as level of satisfaction with our capacities, as well as factors beyond our control, such as level of competition faced by our brand partners, their level of success in e-commerce and their spending levels.
Our ability to maintain our relationships with distribution channels
We generate a substantial majority of our revenues from product sales on e-commerce channels, including marketplaces, social media and other emerging e-commerce channels. We usually renew our platform service agreements on an annual basis, and these e-commerce channels have no obligation to do business with us or to allow us to have access to their channels in the long term. If we fail to maintain our relationships with these channels, they may decide at any time and for any reason to significantly curtail or inhibit our ability to integrate our brand management capabilities with their channels. We have annual platform service agreements with major online marketplaces, which may not be renewed in the future. A majority of our platform service agreements have been renewed for the fiscal year ended December 31, 2025. We endeavor to timely renew those platform service agreements before their expiration.
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Additionally, these channels may decide to make significant changes to their respective business models, policies, systems or plans, and those changes could impair or inhibit our ability or our partners’ ability to sell their products on those channels or may adversely affect the amount of GMV on those channels, or otherwise reduce the desirability of selling on those channels. Further, any of these channels could decide whether to apply for licenses and permissions or acquire other brands within our industry that would allow them to compete with us. If we are unable to adapt to new e-commerce channels as they emerge, our value may be less attractive to our partners. Any of these developments could have a material adverse effect on the results of our operations.
Our ability to manage our inventory
We assume inventory ownership over products from some brand partners and thus are subject to inventory risk. We deploy different strategies to deal with non-seasonal and seasonal demands and make adjustments to our procurement plan in order to minimize the turnaround time of the inventory and manage our storage costs. Demand for products, however, can change significantly between the time inventory is ordered and the date by which we target to sell it. Demand may be affected by seasonality, new product launches, fashion trends, changes in product cycles and pricing, product defects, changes in consumer spending patterns and habits, changes in consumer tastes with respect to our products and other factors. In addition, when we begin selling a new product, it may be difficult to determine appropriate product selection and accurately forecast demand.
Our ability to respond to rapid changes in channel technologies or requirements
The e-commerce marketplaces that we operate in are characterized by rapid technological changes and frequent changes in rules, specifications and other requirements for us to be able to sell our brand partner’s products on particular channels. Our ability to retain and attract brand partners depends in large part on our ability to improve our existing capabilities, introducing new marketing and sales operations that can adapt quickly to the emerging channels, such as Douyin and Xiaohongshu, and adapt to the changes in channel technologies. To achieve market acceptance for our operations, we must effectively forecast and design operations that meet emerging channels and frequently change channel requirements in a timely manner. If we fail to do so, our ability to renew our contracts with existing brand partners and expand our business with new brand partners will be impaired.
Key Components of Results of Operations
Revenues
We generated revenue primarily from (i) sales of cosmetics and beauty products, of which we recognize the revenues on a gross basis, net of return allowances and consideration payable to customers when the products are delivered and title is passed to customers, and (ii) provision of operation services for online stores owned by cosmetics brand names. For the years ended December 31, 2025, 2024 and 2023, our revenues from continuing operations were comprised of the following:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenues | ||||||||||||
| Sales of cosmetics and other beauty products | $ | 96,564,901 | $ | 122,002,947 | $ | 124,732,099 | ||||||
| Provision of operation services | 8,638,465 | 4,759,367 | 4,544,377 | |||||||||
| Total revenue | $ | 105,203,366 | $ | 126,762,314 | $ | 129,276,476 | ||||||
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Cost of revenues
Our cost of revenues primarily consists of (i) purchase price of products, (ii) inbound shipping charges and write-downs of inventories and (iii) labor costs which facilitate our operation services. Inbound shipping charges to receive products from the suppliers are included in inventories and recognized as cost of revenues upon sale of the products to the customers. Our cost of revenues from continuing operations were $93.3 million, $112.3 million and $99.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Selling and marketing expenses
Selling and marketing expenses from continuing operations primarily consist of (i) promotion and advertising expenses; (ii) freight and warehouse expenses; (iii) human resource service fees and IT service fees; (iv) payroll and welfare expenses, including salaries, social insurance and housing funds for our personnel in sales department; and (v) other miscellaneous expenses.
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Promotion and advertising expenses | $ | 4,343,967 | $ | 7,139,172 | $ | 6,734,039 | ||||||
| Freight expenses and warehouses | 2,424,725 | 2,713,109 | 3,054,379 | |||||||||
| Human resource service fees and IT service fees | 342,830 | 622,638 | 1,807,230 | |||||||||
| Payroll and welfare expenses | 475,822 | 258,050 | 1,385,090 | |||||||||
| Others | 241,699 | 276,601 | 278,114 | |||||||||
| $ | 7,829,043 | $ | 11,009,570 | $ | 13,258,852 | |||||||
General and administrative expenses
General and administrative expenses from continuing operations primarily consist of (i) professional expenses, mainly including legal consulting fees for our daily operations and audit fees; (ii) provision of expected credit losses against other receivables; (iii) payroll and welfare expenses, including salaries, social insurance and housing funds for our personnel in our general and administrative department; (iv) office rental expenses; and (v) other miscellaneous expenses.
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Professional expenses | $ | 2,661,163 | $ | 1,765,571 | $ | 2,513,393 | ||||||
| Provision of expected credit losses against other receivable | — | 398,150 | — | |||||||||
| Payroll and welfare expenses | 714,611 | 439,267 | 1,610,543 | |||||||||
| Office rental expenses | 481,827 | 676,944 | 609,288 | |||||||||
| Others | 712,969 | 418,837 | 993,708 | |||||||||
| $ | 4,570,570 | $ | 3,698,769 | $ | 5,726,932 | |||||||
Taxation
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
Singapore
The Company is subject to corporate income tax for its business operation in Singapore. Corporate income tax is imposed at a flat rate of 17%.
Hong Kong
Ableview Brands, Ableview Management, and Able View are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in their statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong.
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PRC
Weitong, Beijing Jingyuan, Shanghai Jinglu, Shanghai Jingnan, Zhejiang Jingxiu, Wuhan Jingtong and CSS Shanghai are subject to PRC Corporate Income Tax (“CIT”) on the taxable income in accordance with the relevant PRC income tax laws. Effective from January 1, 2008, the PRC’s statutory Enterprise Income Tax (“EIT”) rate is 25%.
For qualified small and low-profit enterprises, from January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the years ended December 31, 2023, 2024 and 2025, some PRC subsidiaries are qualified small and low-profit enterprises and thus are eligible for the above preferential tax rates for small and low-profit enterprises.
Results of Operations
The following table sets forth a summary of our consolidated results of operations from continuing operations for the years ended December 31, 2025, 2024 and 2023. This information should be read together with our consolidated financial statements and related notes included elsewhere herein. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenues | ||||||||||||
| - Third parties | $ | 105,105,571 | $ | 124,603,580 | $ | 129,107,132 | ||||||
| - Related parties | 97,795 | 2,158,734 | 169,344 | |||||||||
| Total revenue | 105,203,366 | 126,762,314 | 129,276,476 | |||||||||
| Cost of revenue | ||||||||||||
| - Third parties | (93,215,160 | ) | (110,103,133 | ) | (98,805,866 | ) | ||||||
| - Related parties | (75,206 | ) | (2,156,885 | ) | (150,437 | ) | ||||||
| Total cost of revenue | (93,290,366 | ) | (112,260,018 | ) | (98,956,303 | ) | ||||||
| Gross profit | 11,913,000 | 14,502,296 | 30,320,173 | |||||||||
| Operating expenses | ||||||||||||
| Selling and marketing expenses | (7,829,043 | ) | (11,009,570 | ) | (13,258,852 | ) | ||||||
| General and administrative expenses | (4,570,570 | ) | (3,698,769 | ) | (5,726,932 | ) | ||||||
| Total operating expenses | (12,399,613 | ) | (14,708,339 | ) | (18,985,784 | ) | ||||||
| (Loss) income from operations | (486,613 | ) | (206,043 | ) | 11,334,389 | |||||||
| Other income (expenses), net | ||||||||||||
| Interest expenses, net | (671,679 | ) | (405,599 | ) | (834,162 | ) | ||||||
| Other income | 40 | 98,929 | 52,156 | |||||||||
| Foreign currency exchange gain (loss) | 461,728 | (393,622 | ) | (843,319 | ) | |||||||
| Total other expenses, net | (209,911 | ) | (700,292 | ) | (1,625,325 | ) | ||||||
| (Loss) income before income taxes | (696,524 | ) | (906,335 | ) | 9,709,064 | |||||||
| Income tax expenses | (2,070,829 | ) | (240,231 | ) | (301,898 | ) | ||||||
| Net (loss) income from continuing operations | (2,767,353 | ) | (1,146,566 | ) | 9,407,166 | |||||||
| Discontinued operations: | ||||||||||||
| (Loss) income before income taxes from operations of discontinued operation | (675,658 | ) | (8,685,904 | ) | 1,981,834 | |||||||
| Gain on disposal of discontinued operation | 4,760,997 | — | — | |||||||||
| Income tax (expenses) benefits | (497,968 | ) | 2,413,058 | (1,638,954 | ) | |||||||
| Net income (loss) from discontinued operations | 3,587,371 | (6,272,846 | ) | 342,880 | ||||||||
| Net income (loss) | $ | 820,018 | $ | (7,419,412 | ) | $ | 9,750,046 | |||||
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For the years ended December 31, 2025 and 2024
Revenues
Our continuing operations generate revenues from (i) sales of beauty and personal care products of international brands over multiple sales channels, and (ii) rendering operations services for online stores owned by cosmetics brands. Our revenues decreased by $21.6 million, or 17% from $126.8 million for the year ended December 31, 2024 to $105.2 million for the year ended December 31, 2025. The decrease was primarily caused by a $25.4 million decrease in sales of beauty and personal care products, mainly due to the cessation of sales of certain branded beauty and personal care products, which resulted in lower customer demand. This decrease was partially offset by an increase of $3.9 million in provision of operation services because of an increase in sales generated by online stores owned by customers. Our operation service fees are calculated at a fixed percentage of sales volume.
Cost of revenues
Our cost of revenues from continuing operations decreased by $19.0 million, or 17% from $112.3 million for the year ended December 31, 2024 to $93.3 million for the year ended December 31, 2025. The decrease was in line with the decrease in revenues.
Gross margin
For the years ended December 31, 2025 and 2024, the gross margin from continuing operations was stable at 11% and 11%, respectively.
Selling and marketing expenses
Our selling and marketing expenses from continuing operations decreased by $3.2 million, or 29% from $11.0 million for the year ended December 31, 2024 to $7.8 million for the year ended December 31, 2025. The decrease was mainly due to (i) a decrease of $2.8 million in promotion and advertising expenses as we strategically reduced spending on underperforming traditional advertising and shifted more of our marketing budget toward higher-ROI digital channels, reflecting our focus on improving operational efficiency during the market downturn, and (ii) a decrease of $0.3 million in freight expenses which was in line with decrease in sales orders.
General and administrative expenses
Our general and administrative expenses from continuing operations were $4.6 million for the year ended December 31, 2025, compared to $3.7 million for the year ended December 31, 2024. Such increase was mainly due to an increase of $0.9 million in professional expenses related to legal proceedings against a supplier and additional public relationship expenses, an increase of $0.3 million in payroll and welfare expenses and an increase of $0.3 million in other expenses, partially offset by a decrease in expected credit loss of $0.4 million against other receivables and a decrease in office rental expenses of $0.2 million.
Income tax expenses
We recorded income tax expenses from continuing operations of $2.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively.
For the year ended December 31, 2025, we recorded current income tax expenses from continuing operations of $0.6 million, as compared with $0.2 million for the same period of 2024. The increase in current income tax expenses was primarily attributable to an increase in taxable income generated by certain subsidiaries.
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For the year ended December 31, 2025 and 2024, we recorded deferred tax expenses from continuing operations of $1.5 million and $0.1 million, respectively. The increase in deferred tax expenses was primarily because we utilized net operating losses brought forward.
Net income (loss) from discontinued operations
On June 27, 2025, we transferred 100% equity interest in Shanghai Jingyue to certain unrelated third party (the “Buyer”) at zero consideration. The disposal of Shanghai Jingyue was part of our strategic decision to streamline operations and reallocate resources toward our core brand management business. Shanghai Jingyue had experienced declining sales of certain cosmetic brands, and management expected its financial performance to continue to deteriorate due in part to adverse brand perception. In connection with the disposal of Shanghai Jingyue, we agreed to purchase inventories from Shanghai Jingyue with carrying value of $162,535 at the original cost of $3,330,617. In addition, the Buyer agreed to waive $4,389,889 of liabilities owed by the Company to Shanghai Jingyue. The disposal resulted in a net increase in income tax expense of $301,704, which was included in net income from discontinued operations.
We determined that the disposal of Shanghai Jingyue met the criteria to be classified as a discontinued operation and, as a result, Shanghai Jingyue’s historical financial results are reflected in the Company’s condensed consolidated financial statements as a discontinued operation. The disposal of Shanghai Jingyue represents a strategic shift that has a significant effect on the Company’s financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The assets and liabilities related to the discontinued operations were retroactively classified as assets/liabilities of discontinued operations as of December 31, 2024 in the consolidated balance sheet, while results of operations related to the discontinued operations, including comparatives, were retroactively reported as (loss) income from discontinued operations in the consolidated statements of operations and comprehensive income (loss) and cash flows from discontinued operations of the three categories for the years ended December 31, 2024 and 2023 were separately presented in the consolidated statements of cash flows for all periods presented retroactively in accordance with U.S. GAAP.
For the year ended December 31, 2025, the net income from discontinued operation was comprised of disposal gain of $4.5 million and net loss of $0.9 million incurred by Shanghai Jingyue. For the year ended December 31, 2024, the net loss from discontinued operation was $6.3 million.
Net income (loss)
As a result of the foregoing, we reported net income of $0.8 million and net loss of $7.4 million for the years ended December 31, 2025 and 2024, respectively.
For the years ended December 31, 2024 and 2023
Revenues
Our continuing operations generate revenues from (i) sales of beauty and personal care products of international brands over multiple sales channels, and (ii) rendering operations services for online stores owned by cosmetics brands. Our revenues decreased by $2.5 million, or 2% from $129.3 million for the year ended December 31, 2023 to $126.8 million for the year ended December 31, 2024. The decrease was primarily caused by decrease of $2.7 million in sales of beauty and personal care products, which was primarily due to a decrease in customer demand affected by a downward macroeconomic environment.
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Cost of revenues
Our cost of revenues from continuing operations increased by $13.3 million from $99.0 million for the year ended December 31, 2023 to $112.3 million for the year ended December 31, 2024. The increase was primarily due to an increase in purchase cost of beauty and personal care products and inventory write-down of $1.3 million against certain beauty and personal care products due to slow moving.
Gross margin
For the years ended December 31, 2024 and 2023, the gross margin from continuing operations was 11% and 23%, respectively. The decrease in gross margin was primarily attributable to the downward macroeconomic environment and an inventory write-down of $1.3 million against beauty and personal care products due to slowing moving for the year ended 2024.
Selling and marketing expenses
Our selling and marketing expenses from continuing operations decreased by $2.3 million, or 17% from $13.3 million for the year ended December 31, 2023 to $11.0 million for the year ended December 31, 2024. The decrease was mainly due to (i) a decrease of $1.1 million in payroll and welfare expenses which was affected by combined effects of (a) a decrease of bonus expenses to salespersons with decrease of revenues and (b) resignation of salespersons, and (ii) a decrease of $1.2 million in human resource service fees and IT service fees in relation to supporting promotion and advertising activities.
General and administrative expenses
Our general and administrative expenses from continuing operations were $5.7 million for the year ended December 31, 2023, compared to $3.7 million for the year ended December 31, 2024. In 2024, we incurred a decrease of $1.2 million in payroll and welfare expenses due to no bonus expenses incurred during the year of 2024 and resignation of employees and a decrease of $0.7 million in professional expenses as we incurred higher legal expenses before we consummated business combination in August 2023.
Income tax benefits (expenses)
We recorded income tax expenses from continuing operations of $0.2 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively.
For the year ended December 31, 2024, we recorded current income tax expenses from continuing operations of $0.2 million, as compared with $2.6 million for the same period of 2023. The change in current income tax expenses was primarily attributable to net operating losses incurred in the year ended December 31, 2024 by certain of our subsidiaries, which generated taxable income for the year ended December 31, 2023.
For the year ended December 31, 2024 and 2023, we recorded deferred tax expenses from continuing operations of $0.1 million and deferred tax benefits of $2.3 million, respectively. The deferred tax benefits arose because we incurred net operating losses in the year ended December 31, 2023 in certain of our subsidiaries which was more likely than not that certain subsidiaries would have sufficient taxable income to realize the deferred tax assets in the future.
Net (loss) income from discontinued operations
On June 27, 2025, we transferred 100% equity interest in Shanghai Jingyue to certain unrelated third party (the “Buyer”) at zero consideration. The disposal of Shanghai Jingyue was part of our strategic decision to streamline operations and reallocate resources toward our core brand management business. Shanghai Jingyue had experienced declining sales of certain cosmetic brands, and management expected its financial performance to continue to deteriorate due in part to adverse brand perception. In connection with the disposal of Shanghai Jingyue, we agreed to purchase inventories from Shanghai Jingyue with carrying value of $162,535 at the original cost of $3,330,617. In addition, the Buyer agreed to waive $4,389,889 of liabilities owed by the Company to Shanghai Jingyue. The disposal resulted in a net increase in income tax expense of $301,704, which was included in net income from discontinued operations.
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We determined that the disposal of Shanghai Jingyue met the criteria to be classified as a discontinued operation and, as a result, Shanghai Jingyue’s historical financial results are reflected in the Company’s condensed consolidated financial statements as a discontinued operation. The disposal of Shanghai Jingyue represents a strategic shift that has a significant effect on the Company’s financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The assets and liabilities related to the discontinued operations were retroactively classified as assets/liabilities of discontinued operations as of December 31, 2024 in the consolidated balance sheet, while results of operations related to the discontinued operations, including comparatives, were retroactively reported as (loss) income from discontinued operations in the consolidated statements of operations and comprehensive income (loss) and cash flows from discontinued operations of the three categories for the years ended December 31, 2024 and 2023 were separately presented in the consolidated statements of cash flows for all periods presented retroactively in accordance with U.S. GAAP.
For the year ended December 31, 2024 and 2023, the net loss from discontinued operation represented net loss of $6.3 million and net income of $0.3 million incurred by Shanghai Jingyue.
Net (loss) income
As a result of the foregoing, we reported net loss of $7.4 million and net income of $9.8 million for the years ended December 31, 2024 and 2023, respectively.
Discussion of Certain Balance Sheet Items
The following table sets forth selected information from our consolidated balance sheets as of December 31, 2025 and 2024. This information should be read together with our consolidated financial statements and related notes included elsewhere herein.
| December 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 9,010,336 | $ | 15,191,995 | ||||
| Accounts receivable | 12,765,279 | 15,012,273 | ||||||
| Accounts receivable – related party | — | 1,088,558 | ||||||
| Prepayments and other current assets | 6,987,633 | 1,962,048 | ||||||
| Inventories | 3,347,184 | 6,349,620 | ||||||
| Assets of discontinued operations, current | — | 668,458 | ||||||
| Total Current Assets | 32,110,432 | 40,272,952 | ||||||
| Non-current Assets | ||||||||
| Property and equipment, net | 117,635 | 139,183 | ||||||
| Right of use assets, net | 228,330 | 13,599 | ||||||
| Deferred tax assets | 1,494,931 | 2,221,467 | ||||||
| Other non-current assets | 598,943 | 777,935 | ||||||
| Assets of discontinued operations, non-current | — | 4,204,879 | ||||||
| Total Non-current Assets | 2,439,839 | 7,357,063 | ||||||
| Total Assets | $ | 34,550,271 | $ | 47,630,015 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Short-term loans | $ | 9,259,172 | $ | 7,972,764 | ||||
| Accounts payable | 1,949,054 | 2,475,273 | ||||||
| Advance from customers | 909,243 | 187,913 | ||||||
| Income tax payable | 3,626,532 | 2,024,460 | ||||||
| Lease liabilities, current | 93,191 | 9,163 | ||||||
| Other payable and accrued expenses | 3,934,724 | 2,696,107 | ||||||
| Amount due to related parties | — | 101,658 | ||||||
| Liabilities of discontinued operations, current | — | 1,949,380 | ||||||
| Total Current Liabilities | 19,771,916 | 17,416,718 | ||||||
| Non-current Liabilities | ||||||||
| Lease liabilities, non-current | 110,622 | — | ||||||
| Amount due to related parties, non-current | 4,714,830 | 16,017,183 | ||||||
| Long-term borrowings | 2,180,694 | 2,180,694 | ||||||
| Liabilities of discontinued operations, non-current | — | 4,924,205 | ||||||
| Total Non-current Liabilities | 7,006,146 | 23,122,082 | ||||||
| Total Liabilities | $ | 26,778,062 | $ | 40,538,800 | ||||
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Cash and cash equivalents
Cash and cash equivalents consist of funds deposited with banks and financial institutions and cash on hand, which are highly liquid and are unrestricted as to withdrawal or use.
The total balance of cash and cash equivalents from continuing operations was $9.0 million and $15.2 million as of December 31, 2025 and 2024, respectively. The change in balance of cash and cash equivalents was primarily a result of a decrease in cash of $3.6 million from our operating activities and a decrease of cash of $4.0 million from our investing activities, net off against an increase in cash of $1.6 million from our financing activities.
Accounts receivable
As of December 31, 2025 and 2024, the accounts receivable from continuing operations were $12.8 million and $15.0 million, respectively. We generally offer credit terms of 90 to 180 days to our customers. For the years ended December 31, 2025 and 2024, the turnover days for accounts receivable were 48 days and 39 days, respectively, which were well within the credit terms.
Prepayments and other current assets
As of December 31, 2025 and 2024, the balance of prepayments and other current assets from continuing operations primarily consisted of the following items:
| December 31, 2025 | December 31, 2024 | |||||||
| Prepayments and other current assets | ||||||||
| Prepayments to suppliers | $ | 3,739,837 | $ | 619,283 | ||||
| Due from a supplier (a) | 1,005,942 | — | ||||||
| Prepaid marketing and advertising expenses | 823,122 | 543,964 | ||||||
| Loans to third parties (b) | 1,212,614 | 500,000 | ||||||
| Tax recoverable | 7,544 | 53,963 | ||||||
| Others | 198,574 | 244,838 | ||||||
| $ | 6,987,633 | $ | 1,962,048 | |||||
| Other non-current assets | ||||||||
| Long-term deposits | 583,591 | 756,154 | ||||||
| Others | 15,352 | 21,781 | ||||||
| $ | 598,943 | $ | 777,935 | |||||
| (a) | The balance as of December 31, 2025 represented prepayments advanced to one supplier which terminated cooperation with us. We reclassified the balance from prepayments to suppliers to due from suppliers. As of the date of this report, we have collected approximately $0.8 million of the outstanding balance. |
| (b) |
As of December 31, 2025, the balance represented loans provided to Shanghai Jingyue. The loans bear interest rate of 3% per annum and repayable on December 30, 2026.
As of December 31, 2024, the balance represented loans provided to one third party, which was repaid in the year ended December 31, 2025. |
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Inventories
The balance of inventories from continuing operations was $3.3 million and $6.3 million as of December 31, 2025 and 2024, respectively. The decrease in inventory balance was primarily because we lowered our stocks of inventories as of December 31, 2025, which was in line with the decrease in revenues.
Short-term loans
As of December 31, 2025 and 2024, the balance of short-term borrowings primarily consisted of the following items:
| December 31, 2025 | December 31, 2024 | |||||||
| Short-term loans from financial institutions other than banks | $ | 2,901,080 | $ | — | ||||
| Short-term loans from banks | 6,358,092 | 7,972,764 | ||||||
| $ | 9,259,172 | $ | 7,972,764 | |||||
| (a) | During the years ended December 31, 2025 and 2023, we entered into certain loan agreements with certain financial institutions, pursuant to which we borrowed $5.4 million and $9.5 million, respectively, from these financial institutions. All borrowings were repaid in full upon their respective maturity dates. The borrowings bore interest rates ranging between 8.8% and 9.0% per annum. For the year ended December 31, 2024, we did not borrow from financial institutions. For the years ended December 31, 2025, 2024 and 2023, we repaid borrowings of $2.5 million, $0.7 million and $17.9 million, respectively. The loans outstanding as of December 31, 2025 were with the maturity dates due through December 2026. |
| (b) |
During the year ended December 31, 2025, 2024 and 2023, we entered into separate loan agreements with a bank each year, pursuant to which we borrowed $21.1 million, $33.4 million and $48.4 million, respectively. The loans were renewed upon maturity, with final maturities dates extending through October 2026. The borrowing bore interest rates ranging between 3.2% and 7.5% per annum. For the year ended December 31, 2025, 2024 and 2023, we repaid borrowings of $23.4 million, $32.3 million and $53.0 million, respectively.
During the year ended December 31, 2024, we entered into another loan agreement with another bank, pursuant to which we borrowed $4.9 million with maturity date due through October 2025. The loans were renewed upon maturity, with final maturity dates extending through October 2026. The borrowing bore interest rates ranging between 4.6% and 5.1% per annum. For the years ended December 31, 2025 and 2024, we did not repay the bank.
During the year ended December 31, 2025, we entered into one additional loan agreement with another bank, pursuant to which we borrowed $0.7 million with maturity date due in July 2026. The borrowing bore an interest rate of 2.5% per annum. |
Amount due to related parties, current and noncurrent
As of December 31, 2025 and 2024, the balance of amount due to related parties primarily consisted of the following items:
| December 31, 2025 | December 31, 2024 | |||||||
| Amount due to related parties, current | ||||||||
| Accounts payable | $ | — | $ | 101,658 | ||||
| $ | — | $ | 101,658 | |||||
| Amount due to related parties, noncurrent | ||||||||
| Dividends payable(a) | $ | 4,629,034 | $ | 15,788,003 | ||||
| Other payable | 85,796 | 229,180 | ||||||
| $ | 4,714,830 | $ | 16,017,183 | |||||
| (a) |
Dividends payable reflects the dividends declared by Ableview Brands Limited on December 31, 2022 for the distribution of the retained earnings within 2022. As of December 31, 2025, the dividend payable due to shareholders was extended to July 2027. We recorded the dividends payable as non-current liabilities. For the year ended December 31, 2025, the Company net settled dividends payable of $11.1 million through net-settlement agreements with respective related parties. |
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B. Liquidity and Capital Resources
To date, we have financed our operating and investing activities primarily through cash generated from operating activities, borrowings from financial institutions, third parties and related parties and financing through issuance of convertible notes. As of December 31, 2025, our cash and cash equivalents from continuing operations were $9.0 million. Our cash and cash equivalents primarily consist of cash and time deposits with terms of three months or less. For the years ended December 31, 2025, 2024 and 2023, we reported revenues of $105.2 million, $126.8 million and $129.3 million, respectively.
Our results of continuing operations were affected by supply chain disruptions in the year ended 2023 which resulted in delayed shipment of our cosmetics products and longer inventory turnover days. The disruptions were solved in the year ended 2024. Our inventory turnover days were 20 days, 35 days and 59 days in the years ended December 31, 2025, 2024 and 2023, respectively. In addition, the turnover days for accounts receivable for the years ended December 31, 2025, 2024 and 2023 were 48 days, 39 days and 45 days, respectively. Longer turnover days for accounts receivable slightly affect our short-term liquidity. We generally grant our customers credit terms up to 90 days.
We do not believe we have a material collection risk under our business model that will have a negative impact on collectability, and no significant written-off occurred historically. Therefore, we do not have substantial doubt on the collectability of the remaining accounts balances, and we do not provide allowance against accounts receivable as of December 31, 2025 and 2024.
On March 22, 2024, the Company entered into a Loan Agreement (the “Loan Agreement”) with High West Capital Partners, LLC (the “Lender”), pursuant to which the Lender agreed to lend to the Company (the “Loan”) amounts to be extended in four tranches. The amount of each tranche of the Loan is adjusted depending on the trading price of the Company’s Class B Ordinary Shares. The first tranche, extended on March 28, 2024, provided the Company with loan proceeds of approximately $0.59 million; the second tranche, extended on April 9, 2024, provided the Company with loan proceeds of approximately $0.68 million; the third and final tranche, extended on April 18, 2024, provides the Company with loan proceeds of approximately $0.91 million. Each tranche of the Loan has a maturity date of five years from the date the tranche is extended and an interest of 5.05% per annum to be paid by the Company to the Lender in semi-annual installments. The Loan Agreement contains other customary provisions and is governed by the laws of Hong Kong.
On November 4, 2024, we consummated the issuance and sale of certain convertible notes in the principal amount of $5.0 million (the “Notes”) to three investors (the “Note Purchasers”). Such principal amount includes an original issue discount of 20%. The Notes have an interest rate of 8% per annum, and maturity of three (3) years. On November 25, 2024, the Company issued an aggregation of 7,751,939 Class B Ordinary Shares at the conversion price of $0.645 per share and 7,751,939 warrants (“Conversion Warrants”) with an exercise of $0.645 per share, to the Note Purchasers. The Conversion Warrants have expired as of the date of this report.
Moreover, given the current disparity between the exercise price of the Pubco Warrants (defined below) and the current trading price of the Class B Ordinary Shares, we are unlikely to receive significant proceeds from exercises of the Pubco Warrants in the near future. If we need to obtain external financing, we cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Our future liquidity needs and other business reasons could require us to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could result in additional dilution to our shareholders. The incurrence of additional indebtedness would result in increased debt service obligations and operating and financing covenants that would restrict our operations.
We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and capital expenditures for the next 12 months. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
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For the years ended December 31, 2025, 2024 and 2023, 11%, 17% and 10% of our revenues have been in the form of Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our PRC Operating Entities are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, current PRC regulations permit our PRC Operating Entities to pay dividends to us only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Our PRC Operating Entities are required to set aside at least 10% of their after-tax profits after making up previous years’ accumulated losses each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Historically, our PRC Operating Entities have not paid dividends to us, and they will not be able to pay dividends until they generate accumulated profits. Furthermore, capital account transactions, which include foreign direct investment in and loans to our PRC Operating Entities, must be approved by and/or registered with SAFE, its local branches and certain local banks.
As a Cayman Islands exempted company and offshore holding company, the Cayman holding company is permitted under PRC Laws and regulations to provide funding to our PRC Operating Entities only through loans or capital contributions, subject to the approval, filings or registration of government authorities and limits on the amount of capital contributions and loans. This may delay us from using the proceeds from any future offering to make loans or capital contributions to our PRC Operating Entities.
Cash flows
The following table sets forth a summary of our cash flows for the years ended December 31, 2025, 2024 and 2023 presented:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net cash (used in) provided by operating activities from continuing operations | $ | (3,631,932 | ) | $ | (3,727,609 | ) | $ | 25,474,737 | ||||
| Net cash provided by (used in) operating activities from discontinued operations | 4,827,758 | 1,483,065 | (1,901,407 | ) | ||||||||
| Net cash (used in) provided by investing activities from continuing operations | (3,971,096 | ) | (51,771 | ) | 408,605 | |||||||
| Net cash used in investing activities from discontinued operations | (311,612 | ) | (973 | ) | (154,943 | ) | ||||||
| Net cash provided by (used in) financing activities from continuing operations | 1,588,334 | 7,210,978 | (19,035,175 | ) | ||||||||
| Net cash (used in) provided by financing activities from discontinued operations | (4,490,841 | ) | (3,169,394 | ) | 2,819,153 | |||||||
| Effect of exchange rate changes on cash and cash equivalents from continuing operations | (166,965 | ) | 285,498 | (22,045 | ) | |||||||
| Effect of exchange rate changes on cash and cash equivalents from discontinued operations | 2,952 | (26,679 | ) | (34,149 | ) | |||||||
| Net (decrease) increase in cash and cash equivalents, including cash and cash equivalents classified to assets of discontinued operations | (6,153,402 | ) | 2,003,115 | 7,554,776 | ||||||||
| Less: net increase (decrease) in cash and cash equivalents of discontinued operations | 28,257 | (1,713,981 | ) | 728,654 | ||||||||
| Net (decrease) increase in cash and cash equivalents of continuing operations | (6,181,659 | ) | 3,717,096 | 6,826,122 | ||||||||
| Cash and cash equivalents of continuing operations at beginning of year | 15,191,995 | 11,474,899 | 4,648,777 | |||||||||
| Cash and cash equivalents of continuing operations at end of year | $ | 9,010,336 | $ | 15,191,995 | $ | 11,474,899 | ||||||
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Operating activities
Net cash used in operating activities from continuing operations for the year ended December 31, 2025 was $3.6 million, primarily attributable to net loss from continuing operations of $2.8 million, adjusted for non-cash item of deferred tax expenses of $1.5 million, and changes in operating assets and liabilities, including (i) a decrease of $2.7 million and $1.1 million in accounts receivable due from third parties and related parties, respectively, as affected by decrease in revenues; (ii) an increase of $4.1 million in prepayments made to suppliers; (iii) a decrease of $3.3 million in inventories because we reduced our stocks of cosmetic products; (iv) a decrease of $7.9 million in accounts payable because of a decrease in purchase; (v) an increase of $1.5 million in income tax payable because we incurred increased income tax expenses in the year of 2025 due to more taxable income were generated in certain of our subsidiaries; and (vi) an increase of $1.2 million in other payable and accrued expenses.
Net cash used in operating activities from continuing operations for the year ended December 31, 2024 was $3.7 million, primarily attributable to net loss from continuing operations of $1.1 million, adjusted for non-cash item of inventory write-down of $1.3 million, and changes in operating assets and liabilities, including (i) an increase of $3.3 million in accounts receivable as certain of our customers fully utilized the credit terms at the end of year 2024, (ii) a decrease of $7.7 million in inventories because we reduced our stocks of cosmetic products; (iii) a decrease of $7.6 million in accounts payable because of a decrease in purchase; (iv) a decrease of $2.3 million in income tax payable because we paid income tax expenses incurred in the year of 2023 while we incurred decreased income tax expenses in the year of 2024 due to loss making in certain of our subsidiaries; and (v) an increase of $1.4 million in other payable and accrued expenses.
Net cash provided by operating activities from continuing operations for the year ended December 31, 2023 was $25.5 million, primarily attributable to a net income from continuing operations of $9.4 million, adjusted for non-cash item of deferred income tax benefits of $2.3 million, and changes in operating assets and liabilities, including (i) a decrease of $8.2 million and $1.6 million in accounts receivable due from third parties and related parties, respectively, as we collected certain aged accounts receivables from customers which delayed in payments as affected by the COVID-19 pandemic at the end of year 2022, (ii) an increase of $6.8 million in accounts payable, and (iii) an increase of $2.1 million income tax payable due to increase of current income tax expenses incurred.
Investing activities
For the year ended December 31, 2025, we reported cash used in investing activities from continuing operations of $4.0 million, which was primarily used in loans of $1.2 million provided to Shanghai Jingyue and payment of $3.2 million to Shanghai Jingyue as purchase of inventories, partially offset by collection of advances of $0.5 million from a third party.
For the year ended December 31, 2024, we reported cash used in investing activities from continuing operations of $51,771, which was primarily used in purchases of property and equipment of $65,857 and advances of $90,332 to related parties, partially offset by collection of advances of $0.1 million from related parties.
For the year ended December 31, 2023, we reported cash provided by investing activities from continuing operations of $0.4 million, which was primarily provided by collection of advances from related parties amounted to $3.9 million, partially offset by advances of $3.0 million to related parties, and loans of $0.5 million to third parties.
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Financing activities
For the year ended December 31, 2025, we reported cash provided by financing activities from continuing operations of $1.6 million, which primarily consisted of proceeds of $27.2 million from short-term borrowings and proceeds of $9.2 million from borrowings from related parties, partially offset by repayment of short-term borrowings of $26.0 million, repayment of related party borrowings of $8.8 million.
For the year ended December 31, 2024, we reported cash provided by financing activities from continuing operations of $7.2 million, which primarily consisted of proceeds of $38.3 million from short-term borrowings, proceeds of $8.6 million from borrowings from related parties, proceeds of $2.2 million from long-term borrowings from a third party, and proceeds of $4.0 million from issuance of convertible notes, partially offset by repayment of short-term borrowings of $33.0 million, repayment of related party borrowings of $12.0 million, and repurchase of Class B Ordinary Shares of $0.9 million,
For the year ended December 31, 2023, we reported cash used in financing activities from continuing operations of $19.0 million, which was primarily used in repayment of short-term borrowings of $70.8 million, repayment of related party borrowings of $6.6 million, payment of offering costs of $3.1 million and repurchase of Class B Ordinary Shares of $0.4 million, partially offset by proceeds of $58.0 million from short-term borrowings, and proceeds of $3.9 million from borrowings from related parties.
Quantitative and Qualitative Disclosures About Market Risk
Foreign Exchange Risk
Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange rates between the RMB and other currencies in which we conduct business may affect our financial position and results of operations.
Our functional currency is U.S. dollar, and we had four subsidiaries which are operating in Hong Kong with functional currency of Hong Kong dollar and one subsidiary which is operating in Singapore with functional currency of Singapore dollar. We are mainly exposed to foreign exchange risk arising from our cash and cash equivalents dominated in RMB.
In addition, we have five subsidiaries which are operating in mainland China with all of the transactions settled in RMB. We consider that our business in mainland China is not exposed to any significant foreign exchange risk as there are no significant financial assets or liabilities of these subsidiaries denominated in the currencies other than the functional currency.
Interest Rate Risk
Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank deposits. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.
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C. Research and Development, patent and licenses, etc.
We have not engaged in any research and development activities since inception.
D. Trend Information
Other than as disclosed above and elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our revenues, net income (loss), profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
E. Critical Accounting Estimates
We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make judgments, estimates and assumptions. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and various assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.
The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements.
For the year ended December 31, 2025, we identified no critical accounting estimates in the preparation of our consolidated financial statements.
Recently issued accounting pronouncements
A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 of our consolidated financial statements included elsewhere herein.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Executive Officers
The board of directors and executive officers of the Company as of the date of this Report are as follows.
| Name | Age | Position | ||
| Executive Officers | ||||
| Stephen Jian Zhu | 46 | Chairman, Director and Chief Executive Officer | ||
| Tang Jing | 52 | Director and Chief Financial Officer | ||
| Non-Executive Directors | ||||
| Yilun Wu | 49 | Independent Director | ||
| Yimin Zhou | 63 | Independent Director | ||
| Zhifan Zhou | 40 | Independent Director |
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Mr. Stephen Jian Zhu, aged 46, serves as Chairman, Director and Chief Executive officer of the Company. He has over 20 years of experience in marketing and business development area. From 2016 to present, he served as Chief Executive Officer of Able View where he was responsible for brand and business development for the Company through his expansive network in multiple beauty industry verticals and Responsible for the overall work of the Company. Previously, he served as the Chief Operating Officer of Search Tiger Media where he was responsible for national marketing and expansion into the media market. Mr. Zhu received a bachelor’s degree in advertising and marketing from Tongji University and a Master of Business Administration degree from Cheung Kong Graduate School of Business.
Mr. Tang Jing, aged 52, serves as Director and Chief Financial Officer of the Company. He has over 20 years of experience in finance and accounting area. From 2017 to present, he served as Chief Financial Officer of Able View where he is responsible for managing financial activities such as listing, financing, fund management, budgeting, mergers and acquisitions. He has held similar positions in other companies, including AMH Media Holding Company. He received a bachelor’s degree in finance and accounting from Shanghai University and received his Master of Business Administration from University of Birmingham (United Kingdom). He is also a duly licensed Certified Public Accountant in China.
Mr. Yilun Wu, aged 49, serves as an independent director of the Company. He has over 20 years of experience in financial and accounting area. Since 2022, he is the China CFO of Johnson Controls Corporation (“JCI”). From 2015 to 2021, he served as Asia Finance Director, Finance Director for Global Industrial Refrigeration (IR) and Middle East & Africa and Finance Director for Global Products Asia and Middle East in JCI in different period of these 7 years, where he oversaw the finance operations of global products in the regional including indirect business, integrated supply chain, product management and engineering, and is responsible for all M&A deals and business/manufacturing integration in APAC. From 2008 to 2015, he served as a Corporate Audit Director, an Asia Finance Controller and an Asia Pacific Finance Director in Honeywell Inc in different periods of these 8 years, where he oversaw the entire finance operation of Honeywell Sensing and Control in Asia Pacific and led the process of STRAP and AOP from finance. Mr. Wu received the bachelor’s degree of Arts in Accounting and Finance with honors in 1998 from University of Greenwich, and the master’s degree of Arts in International Finance in 1999 from Middlesex University.
Mr. Yimin Zhou, aged 63, serves as an independent director of the Company. He has over 30 years of experience in business operation. From June 2014 to October 2014 and from April 2018 to July 2020, he served as Vice President of Supply Chain and Operations in Great China Region in Fonterra, responsible for general management in importing, demand planning, warehousing, transportation, customer service and complaints, and third-party manufacturing. From January 2001 to March 2014, he served as a Supply Chain Director of China Business Unit in Pepsi-Cola International, being responsible for making and executing the company’s strategies plan. He received the bachelor’s degree of Science in Inorganic Material Science and Engineering in August 1984 from East China University of Technology, the Master of Business Administration in Finance and Risk Management in August 1993 from St. John University, and the Executive Master of Business Administration in May 2018 from Cheung Kong Graduate School of Business.
Mr. Zhifan Zhou, aged 40, serves as an independent director of the Company. Mr. Zhou has over ten years of experience in investment banking, audit, private equity and mergers and acquisitions. Mr. Zhou has served as the General Manager of Hainan Winlong Capital, an investment company, since April 2021, where he leads the mergers and acquisitions operations. Prior to that, Mr. Zhou served as Vice President and General Manager of Capital Operations of Shanzhinong Co., Ltd., a B2B e-commerce platform company, from March 2020 to April 2021, where he was responsible for acquiring assets of the agricultural sector in China. He also served as the Head of Finance Department of Wanda Information Stock Co., Ltd., a software company, from December 2019 to March 2020, where he was responsible for due diligence and integration of wholly-owned subsidiaries; Deputy General Manager of Xinghe Real Estate Financial Group Shanghai Company, a financial group company, from March 2018 to June 2019, where he was responsible for platform financing; Deputy General Manager of Cefc Anhui Internal Holding Co., Ltd., an investment company, from October 2014 to March 2018, where he participated in various mergers and acquisitions; and Senior Project Manager in the investment banking department of Zheshang Securities Co., Ltd., a securities company, from June 2013 to October 2014, where he participated in multiple mergers and acquisitions. From September 2010 to June 2013, Mr. Zhou served as Senior Consultant of PricewaterhouseCooper Consultants (Shenzhen) Co., Ltd., Shanghai branch, a consulting company where he provided risk management and internal control services and was experienced with cross-border IPO audits. Mr. Zhou received bachelor’s degrees in international economic law and accounting from Shanghai University of Finance and Economics in July 2008, and a master’s degree in law from The Chinese University of Hong Kong in December 2010. Mr. Zhou has been a Certified Public Accountant (CPA) and holds Certificate of Computer Application Techniques (CCAT) and Legal Profession Qualification Certificate in China.
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The business and affairs of the Company are managed by or under the supervision of the Company Board. The Company Board consist of five directors: Mr. Stephen Jian Zhu, Mr. Tang Jing as executive directors, and Mr. Yilun Wu, Mr. Yimin Zhou and Mr. Zhifan Zhou as independent directors, with Mr. Stephen Jian Zhu serving as Chairman of the Company Board. The primary responsibilities of the Company Board is to provide oversight, strategic guidance, counselling and direction to our management. The Company Board meets on a regular basis and additionally as required.
Family Relationships
There are no family relationships between any of the Company’s executive officers and directors.
B. Compensation
Compensation of Directors and Executive Officers
Under Cayman Islands law, we are not required to disclose compensation paid to our senior management on an individual basis and we have not otherwise publicly disclosed this information elsewhere. In 2025, our directors and management receive fixed and variable compensation. The fixed component of their compensation is set on market terms and adjusted annually. The variable component consists of cash bonuses. Cash bonuses are paid to executive officers and members of our senior management based on previously agreed targets for the business.
The aggregate cash compensation accrued to Able View’s directors and executive officers who were employed by Able View in fiscal year 2025 was approximately US$388,330.
The Company is developing an executive compensation program that is consistent with existing compensation policies and philosophies of Nasdaq-listed peer companies, which are designed to align the interest of executive officers with those of its stakeholders, while enabling the Company to attract, motivate and retain individuals who contribute to the long-term success of the Company.
C. Board Practices
Foreign Private Issuer and Controlled Company
We are a foreign private issuer within the meaning of the rules under the Exchange Act and, as such, the Company is permitted to follow the corporate governance practices of its home country, the Cayman Islands, in lieu of the corporate governance standards of Nasdaq applicable to U.S. domestic companies. For example, the Company is not required to have a majority of the board consisting of independent directors nor have a compensation committee or a nominating and corporate governance committee consisting entirely of independent directors. the Company may elect to follow its home country’s corporate governance practices as long as its remains a foreign private issuer. As a result, our shareholders may not have the same protection afforded to shareholders of U.S. domestic companies that are subject to Nasdaq corporate governance requirements. As a foreign private issuer, the Company is also subject to reduced disclosure requirements and are exempt from certain provisions of the U.S. securities rules and regulations applicable to U.S. domestic issuers such as the rules regulating solicitation of proxies and certain insider reporting and short-swing profit rules. Nonetheless, the Company intends to align itself with the practices adopted by Nasdaq-listed U.S. domestic companies to the best of its ability to provide its shareholders with enhanced transparency and protection.
We are a “controlled company” as defined under the rules of Nasdaq, because Healthy Great Investing Company Limited is able to exercise approximately 91.0% of the aggregate voting power of our total issued and outstanding shares (assuming no Ordinary Shares are redeemed as described in this annual report). Under the rules of Nasdaq, a “controlled company” may elect not to comply with certain corporate governance requirements. As a result, our shareholders may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. Nonetheless, the Company intends to align itself with the practices adopted by Nasdaq-listed non-controlled companies to the best of its ability to provide its shareholders with enhanced transparency and protection.
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Independence of Directors
The Company adheres to the rules of Nasdaq, as applicable to foreign private issuers and controlled companies, in determining whether a director is independent. The board of directors of the Company has consulted, and will consult, with its counsel to ensure that the board of directors’ determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. Mr. Yilun Wu, Mr. Yimin Zhou, and Mr. Zhifan Zhou are “independent directors” as defined in the rules of Nasdaq and applicable SEC rules.
Risk Oversight
The Board of Directors is responsible for overseeing our risk management process. The Board focuses on our general risk management strategy, the most significant risks facing the Company, and oversight of the implementation of risk mitigation strategies by the management of the Company. Our audit committee is responsible for discussing the Company’s policies with respect to risk assessment and risk management.
The Board appreciates the evolving nature of its business and industry and is actively involved with monitoring new threats and risks as they emerge. In particular, the Board is responsible for closely monitoring any epidemic, conflicts and its potential effects on the Company’s business, and risk mitigation strategies. While the Company has not yet experienced significant impact on the situation in Ukraine caused by the Russian invasion, or the trade war between the United States and China, the Board also closely monitors the risks in relation to such development, including but not limited to risks related to cybersecurity, sanctions, supply chain, suppliers and service providers.
Our Board of Directors is responsible for the oversight of the operational risk management, which includes cybersecurity risk management. In terms of the cybersecurity risk management, the Board receives periodic reporting from the Company’s officers on (i) material issues related to cybersecurity risks arising from the business operations, for instance the cooperation with our supply chain, suppliers and/or important service providers, and any methods adopted to resolve; and (ii) the legal compliance with cybersecurity and data protection. In addition, Able View’s board of directors has taken the following measures in overseeing cybersecurity risks:
1. Improve the awareness of network information security protection
Able View carries out network security protection awareness training for all employees from time to time, requiring employees not to register their real information during network operation, including name, address, telephone number, ID number, etc., and secondly, to follow secure password policies, such as length requirements; mixed use of numbers, upper and lower case letters, special characters; password life requirements and password history requirements, etc.
2. Firewall and anti-virus software installation
Employees are required to install firewall and anti-virus software to the host system of the Able View’s equipment, update the firewall version and virus library of anti-virus software in time, so as to cope with the continuous development of new viruses, and finally configure the protection level of firewall and anti-virus software according to the network security level.
3. Digital signature and file encryption technology
For important contracts and data within the company, digital signature or file encryption technology is required to protect files, so that data information will not be tampered or leaked arbitrarily, and file security is guaranteed.
4. Contracts with confidentiality clauses
During Able View’s cooperation with suppliers, customers and service providers, confidentiality clauses are required to be added to relevant contracts and agreements. Any matter, information or materials obtained from the other party due to the signing or performance of the agreements or for any other reason, including but not limited to the business secret or other secret of the other party shall not be disclosed to any third party without permission. Confidential information includes but not limited to (i) any matter formulated in writing or orally or marked as confidential or financial information, and any matter that either party shall identify as confidential information according to the circumstances of disclosure; (ii) either party’s product plan, sales plan, incentive policy, customer information, financial information, trading information, operation system, etc., and non-patented technology, design, procedure, technical information, production method, information source, marketing, product strategy and business plan; (iii) any liaison between the parties and concerning the agreement; (iv) any duplicate, summary, briefing or any other form of aforesaid information; and (v) any information which may have already been disclosed before the agreement is signed and delivered.
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Committees of the Board of directors
Audit Committee
Our audit committee consists of Mr. Yilun Wu, Mr. Yimin Zhou, and Mr. Zhifan Zhou, with Mr. Yilun Wu serving as chairperson. Our Board has determined that all such directors meet the independence requirements under the Nasdaq Listing Rules and under Rule 10A-3 of the Exchange Act. Each member of the audit committee is financially literate, in accordance with Nasdaq audit committee requirements, and possesses prior experience sitting in auditing committees of publicly-listed companies. In arriving at this determination, the Company Board examined each audit committee member’s scope of experience and the nature of their prior and/or current employment.
Nomination Committee
Our nomination committee consists of Mr. Yimin Zhou, Mr. Yilun Wu, and Mr. Zhifan Zhou, with Mr. Yimin Zhou serving as chairperson. The nomination committee is responsible for the assessment of the performance of the board, considering and making recommendations to the board with respect to the nominations or elections of directors and other governance issues.
Compensation Committee
Our compensation committee consists of Mr. Zhifan Zhou, Mr. Yilun Wu, and Mr. Yimin Zhou, with Mr. Zhifan Zhou serving as chairperson. The compensation committee is responsible for reviewing and making recommendations to the Board regarding its compensation policies for its officers and all forms of compensation. The compensation committee administers our equity-based and incentive compensation plans and makes recommendations to the Company Board about amendments to such plans and the adoption of any new employee incentive compensation plans.
Code of Ethics
The Company has adopted a Code of Ethics that applies to all of its employees, officers, and directors. This includes our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. We intend to disclose on our website any future amendments of the Code of Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions, or our directors from provisions in the Code of Ethics. A copy of the Code of Ethics is filed as Exhibit 11.1 to this Form 20-F.
Shareholder Communication with the Board of directors
Shareholders and other interested parties may communicate with the board of directors, including non-management directors, by sending a letter to us at Floor 16, Dushi Headquarters Building, No. 168, Middle Xizang Road, Shanghai, 200001, People’s Republic of China for submission to the board of directors or committee or to any specific director to whom the correspondence is directed. Shareholders communicating through these means should include with the correspondence evidence, such as documentation from a brokerage firm, that the sender is a current record or beneficial shareholder of the Company. All communications received as set forth above will be opened by the Corporate Secretary or his or her designee for the sole purpose of determining whether the contents contain a message to one or more of our directors. Any contents that are not advertising materials, promotions of a product or service, patently offensive materials or matters deemed, using reasonable judgment, inappropriate for the board of directors will be forwarded promptly to the chairman of the board of directors, the appropriate committee or the specific director, as applicable.
D. Employees
As of December 31, 2025, we had 164 employees combined in our continuing operations, consisting of 164 full-time and 0 part-time employees. The number of employees for each area of operations, and such employees as a percentage of our total workforce, are as follows:
| As of December 31, 2025 | ||||||||
| Employees | Percentage | |||||||
| Brand Operating | 21 | 12.81 | % | |||||
| Supply Chain | 8 | 4.88 | % | |||||
| IT Data Analysis | 5 | 3.05 | % | |||||
| Business Development | 108 | 65.85 | % | |||||
| Financial and Administration Supporting | 22 | 13.41 | % | |||||
| Total | 164 | 100 | % | |||||
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As of December 31, 2024, we had 85 employees combined in our continuing operations, consisting of 85 full-time and 0 part-time employees. The number of employees for each area of operations, and such employees as a percentage of our total workforce, are as follows:
| As of December 31, 2024 | ||||||||
| Employees | Percentage | |||||||
| Brand Operating | 27 | 31.76 | % | |||||
| Supply Chain | 8 | 9.41 | % | |||||
| IT Data Analysis | 5 | 5.88 | % | |||||
| Business Development | 28 | 32.94 | % | |||||
| Financial and Administration Supporting | 17 | 20.01 | % | |||||
| Total | 85 | 100 | % | |||||
As of December 31, 2023, we had 95 employees combined in our continuing operations, consisting of 95 full-time and 0 part-time employees. The number of employees for each area of operations, and such employees as a percentage of our total workforce, are as follows:
| As of December 31, 2023 | ||||||||
| Employees | Percentage | |||||||
| Brand Operating | 43 | 45.26 | % | |||||
| Supply Chain | 9 | 9.47 | % | |||||
| IT Data Analysis | 5 | 5.26 | % | |||||
| Business Development | 24 | 25.26 | % | |||||
| Financial and Administration Supporting | 14 | 14.75 | % | |||||
| Total | 95 | 100 | % | |||||
The Company’s employees have no material activities related to labor unions.
E. Share Ownership
Please see Item 7-Major Shareholders and Related Party Transactions below.
F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not Applicable.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The following table shows the beneficial ownership of the Ordinary Shares as of December 31, 2025 by:
| ● | each person known by the Company to beneficially own more than 5% of the outstanding Class B Ordinary Shares; |
| ● | each of Able View Global Inc.’s named executive officers and directors; and |
| ● | all of our executive officers and directors as a group. |
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Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them. Except as otherwise noted herein, the number and percentage of Ordinary Shares beneficially owned is determined in accordance with Rule 13d-3 under the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any Ordinary Shares and as to which the holder has sole or shared voting power or investment power and also any Ordinary Shares which the holder has the right to acquire within 60 days of December 31, 2025 through the exercise of any option, conversion or any other right. The table does not include stock options and restricted shares held by the executive officers that do not vest or become exercisable, and do not provide voting rights, within 60 days of the date of this Report. As of December 31, 2025, there were 24,871,433 Class A Ordinary Shares and 24,518,489 Class B Ordinary Shares outstanding (excluding treasury shares).
| the Company Class A | the Company Class B | Voting | ||||||||||||||||||
| Ordinary Shares | Ordinary Shares | Power | ||||||||||||||||||
| Name and Address of Beneficial Owner | Number | % | Number | % | (%) | |||||||||||||||
| Executive Officers and Directors | ||||||||||||||||||||
| Stephen Jian Zhu(1)(7) | 24,871,433 | 50.4 | % | 91.0 | % | |||||||||||||||
| Tang Jing(2)(8)(9) | 2,146,641 | 4.3 | % | 0.8 | % | |||||||||||||||
| Yilun Wu(3) | - | - | - | - | - | |||||||||||||||
| Yimin Zhou(4) | - | - | - | - | - | |||||||||||||||
| Zhifan Zhou(5) | - | - | - | - | - | |||||||||||||||
| All Executive Officers and Directors as a group | 24,871,433 | 50.4 | % | 2,146,641 | 4.3 | % | 91.8 | % | ||||||||||||
| 5% or Greater Holders | ||||||||||||||||||||
| Wang Jun(6)(9) | 4,459,339 | 9.0 | % | 1.6 | % | |||||||||||||||
| Healthy Great Investing Company Limited(7)(9) | 24,871,433 | 50.4 | % | 91.0 | % | |||||||||||||||
| Novoprospects Holding Company Limited(10) | 3,875,969 | 7.8 | % | 1.4 | % | |||||||||||||||
| (1) | The address of Mr. Stephen Jian Zhu is 61-65 Huqiu Road, Huangpu District, Shanghai, China. |
| (2) | The address of Mr. Tang Jing is Room 603, No. 73, Tianyao New Village, Xuhui District, Shanghai, China. |
| (3) | The address of Mr. Yilun Wu is Room 702, 868 Nanjing West Road, Jing ‘an District, Shanghai, China. |
| (4) | The address of Mr. Yimin Zhou is Room 1201, No.18, Lane 2518, Longhua Road, Xuhui District, Shanghai, China. |
| (5) | The address of Mr. Zhifan Zhou is B3406, 34F, West Tower, Block B, Guorui Building, 11 Guoxing Avenue, Haikou, Hainan Province, People’s Republic of China 570203. |
| (6) | Includes (i) 1,010,285 shares owned directly by Mr. Wang Jun, and (ii) 3,449,054 shares owned by Smartest Star Investing Company Limited. Mr. Wang Jun, being the sole owner of Smartest Star Investing Company Limited, may, under the rules of the SEC, be deemed to be the beneficial owner of the ordinary shares held by such entity. |
| (7) | Mr. Stephen Jian Zhu, being the sole owner of Healthy Great Investing Company Limited, may, under the rules of the SEC, be deemed to be the beneficial owner of the ordinary shares held by such entity. |
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| (8) | Includes (i) 486,332 shares owned directly by Mr. Tang Jing, and (ii) 1,660,309 shares owned by Scenery Investing Company Limited. Mr. Tang Jing, being the sole owner of Scenery Investing Company Limited, may, under the rules of the SEC, be deemed to be the beneficial owner of the ordinary shares held by such entity. |
| (9) | HSBC International Trustee Limited manages (i) Smart Star Trust, which owns 100% of Smartest Star Limited, which owns 80% of Smartest Star Investing Company Limited, which directly holds 3,449,054 Class B Ordinary Shares; (ii) Scenery Trust, which owns 100% of Scene Holding Limited, which owns 86.21% of Scenery Investing Company Limited, which directly holds 1,660,309 Class B Ordinary Shares; and (iii) Gentle Healthy Trust, which owns 100% of Healthy Great Limited, which owns 58.74% of Healthy Great Investing Company Limited, which directly holds 24,871,433 Class A Ordinary Shares. |
| (10) | Infinite Treasure Chariot Limited, being the sole owner of Novoprospects Holding Company Limited, may, under the rules of the SEC, be deemed to be the beneficial owner of the ordinary shares held by such entity. |
B. Related Party Transactions
1) Nature of relationships with related parties
The table below sets forth the major related parties and their relationships with the Company, with which the Company entered into transactions during the years ended December 31, 2025, 2024 and 2023, or recorded balances as of December 31, 2025 and 2024.
| Name | Relationship with the Company | |
| Mr. Zhu Jian | Chief Executive Officer, Director and Shareholder of the Company | |
| Mr. Wang Jun | Chief Executive Officer of Weitong and Shareholder of the Company | |
| Mr. Tang Jing | Chief Financial Officer and Shareholder of the Company | |
| Mr. Tang Yuhua | An immediate family member of Mr. Tang Jing | |
| Mr. Wang Jixiang | An immediate family member of Mr. Wang Jun | |
| Healthy Great Investing Company Limited (“Healthy Great”) | Wholly owned by Mr. Zhu Jian | |
| Smartest Star Investing Company Limited (“Smartest Star”) | Wholly owned by Mr. Wang Jun | |
| Scenery Investing Company Limited (“Scenery”) | Wholly owned by Mr. Tang Jing | |
| Yanyan Global Company Limited (formerly known as Skinist Global Company Limited “Yanyan Global”) | Company controlled by Mr. Wang Jun | |
| Skinist Global Cosmetics (Shanghai) Co., Ltd. (“Skinist Shanghai”) | Company controlled by Mr. Wang Jun | |
| Shanghai Yingtian Financial Information Service Co., Ltd. (“Ying Tian”) | Company controlled by Mr. Zhu Jian and Mr. Tang Jing | |
| Hong Kong Ping Forward Limited (formerly known as Hong Kong Mimosa Industry, or “Ping Forward”) | Company controlled by Mr. Wang Jixiang | |
| Shanghai Jingqi Developing Co., Ltd. (“Jingqi”) | Company controlled by Mr. Zhu Jian | |
| Shanghai Jingrong Information Co., Ltd. (“Jingrong”) | Company controlled by the spouse of Mr. Tang Jing | |
| Shanghai Youshan Corporate Consulting Co., Ltd. (“Youshan”) | Company controlled by Ms. Mu Xuemei, the director of the Company | |
| Merit Zone Development Limited (“Merit Zone”) | Company controlled by Mr. Wang Jun before January 1, 2023. Mr. Wang Jun transferred the equity interest in Merit Zone in January 2023. | |
| Shanghai Jiantong Trade Center (“Jian Tong”) | Company controlled by Mr. Wang Jun | |
| Shanghai Shilin Advertising Co., Ltd. (“Shi Lin”) | Company controlled by Ms. Pan Yue, a supervisor of Weitong, a subsidiary of the Company | |
| Shanghai Tengxin Advertising Co., Ltd. (“Teng Xin”) | Company controlled by Ms. Pan Yue, a supervisor of Weitong, a subsidiary of the Company | |
| Shanghai Zhiwang Cosmetics Co., Ltd. (“Zhi Wang”) | Company controlled by Ms. Mu Xuemei, a director of the Company | |
| Shanghai Yuancheng Advertising Co., Ltd. (“Yuan Cheng”) | Company controlled by Mr. Wang Jun. | |
| Shanghai Zhimeisi Beauty Technology Co., Ltd (“Zhi Mei Si”) | Company over which Mr. Zhu Jian owns 20% equity interest and exercises significant influence | |
| Shanghai Libo Medical Beauty Clinic Co., Ltd (“Li Bo”) | Controlled by Zhi Mei Si | |
| Shanghai Yaxing Commercial Consulting Co., Ltd. (“Ya Xing”) | Controlled by Mr. Tang Jing |
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2) Transactions with related parties
| For the Years Ended December 31, | ||||||||||
| 2025 | 2024 | 2023 | ||||||||
| Sales of products to related parties | ||||||||||
| Wang Jixiang | $ | 97,795 | $ | — | $ | — | ||||
| Ping Forward | — | 1,827,295 | — | |||||||
| Yanyan Global | — | 331,439 | 169,344 | |||||||
| $ | 97,795 | $ | 2,158,734 | $ | 169,344 | |||||
| Purchase of products from related parties | ||||||||||
| Youshan | $ | 874,697 | $ | 3,530,277 | $ | — | ||||
| Jingqi | — | 790,006 | — | |||||||
| Skinist Shanghai | — | — | 16,832 | |||||||
| $ | 874,697 | $ | 4,320,283 | $ | 16,832 | |||||
| Service fees charged by related parties | ||||||||||
| Zhi Wang | $ | 862,202 | $ | — | $ | — | ||||
| Ya Xing | 134,957 | — | — | |||||||
| Jingqi | — | — | 32,753 | |||||||
| $ | 997,159 | $ | — | $ | 32,753 | |||||
| Payment of dividends | ||||||||||
| Mr. Zhu Jian | $ | 19,242 | $ | 19,224 | $ | 19,159 | ||||
| Mr. Wang Jun | 19,242 | 19,224 | 19,159 | |||||||
| Mr. Tang Jing | 19,242 | 19,224 | 19,159 | |||||||
| Payment of dividends | $ | 57,726 | $ | 57,672 | $ | 57,477 | ||||
| Net settlement (1) | ||||||||||
| Reduction of dividend payables due to disposal of discontinued operations | $ | 9,988,060 | $ | — | $ | — | ||||
| Net settlement of dividends payable with due from related parties from continuing operations | 1,081,449 | |||||||||
| Net settlement of due from related parties and due to related parties within continuing operations | 3,247,402 | 3,461,458 | 1,291,790 | |||||||
| Net settlement of due from related parties and due to related parties between continuing operations and discontinued operations | 961,649 | 2,323,802 | 13,177,600 | |||||||
| $ | 15,278,560 | $ | 5,785,260 | $ | 14,469,390 | |||||
| (1) | In December 2023, the Company and certain related parties entered into settlement agreement, pursuant to which all parties agreed that the Company’s receivables of $14,469,390 due from related parties was netted off against the Company’s payables of $14,469,390 due to related parties. Among the Company’s receivables of $14,469,390 due from related parties, $1,291,790 and $13,177,600 was related to receivable of continuing operations and discontinued operations, respectively. |
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|
In December 2024, the Company and certain related parties entered into settlement agreement, pursuant to which all parties agreed that the Company’s receivables of $5,785,260 due from related parties was netted off against the Company’s payables of $5,785,260 due to related parties. Among the Company’s payable of $5,785,260 due to related parties, $3,461,458 and $2,323,802 was related to payables of continuing operations and discontinued operations, respectively.
During the year ended December 31, 2025, the Company and certain related parties entered into certain net settlement agreements, pursuant to which all parties agreed that: 1) the Company’s dividend payables of $9,988,060 was reduced due to disposal of discontinued operations; 2) the Company’s dividend payables of $1,081,449 was netted off against the Company’s receivables of $1,081,449 as recorded by the continuing operations; and 3) the Company’s payables of $4,209,051 was netted off against the Company’s receivables of $4,209,051 due from respective related parties. Among the Company’s payables of $4,209,051 due to related parties, $3,247,402 and $961,649 were related to payables of continuing operations and discontinued operations, respectively. |
(Advances to) Collection of advances from related parties
During the years ended December 31, 2025, 2024 and 2023, the Company made advance of $8,348, $90,332 and $2,960,203 to certain related parties, respectively. The advances were made to support operations of these related parties. The advances were interest free and repayable on demand. During the years ended December 31, 2025, 2024 and 2023, the Company collected advances of $8,348, $104,418 and $3,934,672 from these related parties, respectively.
| For the Years Ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Advances | Collection of advances | Advances | Collection of advances | Advances | Collection of advances | |||||||||||||||||||
| Skinist Shanghai | (8,348 | ) | 8,348 | — | 14,086 | (14,123 | ) | — | ||||||||||||||||
| Li Bo | — | — | (90,332 | ) | 90,332 | — | — | |||||||||||||||||
| Yanyan Global | — | — | — | — | (2,030,942 | ) | 2,030,942 | |||||||||||||||||
| Jingqi | — | — | — | — | (915,138 | ) | 1,903,730 | |||||||||||||||||
| $ | (8,348 | ) | 8,348 | $ | (90,332 | ) | $ | 104,418 | $ | (2,960,203 | ) | $ | 3,934,672 | |||||||||||
Borrowings from (Repayment of Borrowings to) related parties
| For the Years Ended December 31, | |||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||
| Borrowings | Repayment of borrowings |
Borrowings | Repayment of borrowings |
Borrowings | Repayment of borrowings |
||||||||||||||||
| Ying Tian(1) | $ | 5,195,629 | $ | (6,209,512 | ) | $ | 2,726,628 | $ | (905,630 | ) | $ | — | $ | — | |||||||
| Mr. Tang Jing | 1,307,826 | (2,500 | ) | — | — | — | — | ||||||||||||||
| Li Bo(1) | 904,348 | — | — | — | — | — | |||||||||||||||
| Teng Xin(1) | 598,261 | (796,912 | ) | 2,012,728 | (2,086,191 | ) | — | — | |||||||||||||
| Youshan(1) | 505,043 | (747,130 | ) | 532,262 | (532,262 | ) | — | — | |||||||||||||
| Mr. Wang Jixiang(1) | 486,957 | (473,043 | ) | — | (932,832 | ) | 1,381,583 | (82,760 | ) | ||||||||||||
| Mr. Zhu Jian(1) | 55,850 | (407,845 | ) | 70,792 | (70,792 | ) | — | (2,277,315 | ) | ||||||||||||
| Skinist Global(1) | 134,852 | (194,590 | ) | 2,843,804 | (2,843,804 | ) | 1,946,553 | (1,829,804 | ) | ||||||||||||
| Zhi Mei Si | 7,708 | (4,500 | ) | — | — | — | — | ||||||||||||||
| Yuan Cheng | — | — | — | — | 98,857 | (98,857 | ) | ||||||||||||||
| Shi Lin(1) | — | — | 451,658 | (1,708,888 | ) | 371,421 | (2,283,258 | ) | |||||||||||||
| Jian Tong(1) | — | — | — | (2,935,253 | ) | 151,515 | — | ||||||||||||||
| $ | 9,196,474 | (8,836,032 | ) | $ | 8,637,872 | $ | (12,015,652 | ) | $ | 3,949,929 | $ | (6,571,994 | ) | ||||||||
| (1) | During the years ended December 31, 2025, 2024 and 2023, the Company borrowed $9,196,474, $8,637,872 and $3,949,929 from these related parties, respectively. The borrowings were interest free, and outstanding loans are repayable within twelve months from borrowings. |
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C. Interests of Experts and Counsel
None / Not applicable.
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
See Item 18-Financial Statements of this Report for consolidated financial statements and other financial information.
B. Significant Changes
None.
ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details
The Class B Ordinary Shares and Warrants are listed on Nasdaq Capital Market under the symbols “ABLV” and “ABLVW”, respectively. Holders of Class B Ordinary Shares and Warrants should obtain current market quotations for their securities.
B. Plan of Distribution
Not applicable.
C. Markets
The Class B Ordinary Shares and Warrants are listed on Nasdaq Capital Market under the symbols “ABLV” and “ABLVW”, respectively.
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
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ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Our authorized share capital is US$60,000 divided into 600,000,000 ordinary shares of par value of $0.0001 each, comprising (a) 100,000,000 the Company Class A Ordinary Shares of par value of US$0.0001 each and (b) 500,000,000 the Company Class B Ordinary Shares of par value of $0.0001 each.
As of December 31, 2025, we had 24,871,433 Class A Ordinary Shares and 24,518,489 Class B Ordinary Shares issued and outstanding. The number of Class B Ordinary Shares outstanding excludes 7,241,500 warrants to purchase Class B Ordinary Shares at an exercise price of $11.50 per share.
B. Memorandum and Articles of Association
The following description of the Amended and Restated Memorandum and Articles of Association of the Company (the “Memorandum and Articles of Association”) is qualified in its entirety by the Memorandum and Articles of Association which are included as Exhibit 1.1 to this Report.
The Company, or Able View Global Inc., is a Cayman Islands exempted company and its affairs are governed by the memorandum and articles of association, as amended and restated from time to time, and Companies Act (As Revised) of the Cayman Islands, which we refer to as the “Companies Act” below, and the common law of the Cayman Islands.
General. Our authorized share capital is US$60,000 divided into 600,000,000 Ordinary Shares of par value of $0.0001 each, comprising (a) 100,000,000 the Company Class A Ordinary Shares of par value of US$0.0001 each and (b) 500,000,000 the Company Class B Ordinary Shares of par value of $0.0001 each. Our ordinary shares are divided into Class A Ordinary Shares and the Company Class B Ordinary Shares. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. All of our issued and outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form. the Company may not issue share to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares.
Dividends. The holders of our Ordinary Shares are entitled to such dividends as may be declared by its Board of Directors subject to its Memorandum and Articles of Association and the Companies Act. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by its directors. Our Memorandum and Articles of Association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which its Board of Directors determines is no longer needed. Dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act. No dividend may be declared and paid unless our directors determine that, immediately after the payment, the Company will be able to pay its debts as they become due in the ordinary course of business, and the Company has funds lawfully available for such purposes. Holders of Class A Ordinary Shares and Class B Ordinary Shares will be entitled to the same amount of dividends, if declared.
Voting Rights. In respect of all matters subject to a shareholders’ vote, each Class A Ordinary Share is entitled to 10 votes, and each Class B Ordinary Share is entitled to one vote, voting together as one class. Voting at any meeting of shareholders is by poll and not on a show of hands.
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A quorum required for a meeting of shareholders consists of two or more shareholders holding not less than one-half of the votes attaching to the issued and outstanding shares entitled to vote at general meetings present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. As a Cayman Islands exempted company, the Company is not obliged by the Companies Act to call shareholders’ annual general meetings. Our Memorandum and Articles of Association provide that we may (but are not obliged to) in each year hold a general meeting as its annual general meeting in which case the Company will specify the meeting as such in the notices calling it, and the annual general meeting will be held at such time and place as may be determined by its directors. We, however, will hold an annual shareholders’ meeting during each fiscal year, as required by the Nasdaq Listing Rules. Each general meeting, other than an annual general meeting, shall be an extraordinary general meeting. Shareholders’ annual general meetings and any other general meetings of our shareholders may be called by a majority of its Board of Directors or its chairman or, in the case of an extraordinary general meeting only, upon a requisition of shareholders holding at the date of deposit of the requisition not less than one-third of the votes attaching to the issued and outstanding shares entitled to vote at general meetings, in which case the directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting; however, the Company Memorandum and Articles of Association do not provide its shareholders with any right to put any proposals before any annual general meetings or any extraordinary general meetings not called by such shareholders. Advance notice of at least fifteen (15) days is required for the convening of our annual general meeting and other general meetings unless such notice is waived in accordance with its articles of association.
An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting, while a special resolution also requires the affirmative vote of no less than a majority of two-thirds of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting. A special resolution will be required for important matters such as a change of name or making changes to our Memorandum and Articles of Association.
Conversion. Each Class A Ordinary Share is convertible into one Class B Ordinary Share at any time at the option of the holder thereof. Our Class B Ordinary Shares are not convertible into Class A Ordinary Shares under any circumstances. Upon any sale, transfer, assignment or disposition of the Company Class A Ordinary Shares by a holder to any person or entity which is not an affiliate of such holder, such the Company Class A Ordinary Shares shall be automatically and immediately converted into the equivalent number of Class B Ordinary Shares.
Transfer of Ordinary Shares. Subject to the restrictions in our Memorandum and Articles of Association as set out below, any of our shareholders may transfer all or any of his or her Ordinary Shares by an instrument of transfer in the usual or common form or any other form approved by our Board of Directors.
Our Board of Directors may, in its absolute discretion, decline to register any transfer of any Ordinary Share which is not fully paid up or on which the Company has a lien. 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; |
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| ● | 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 ordinary share is to be transferred does not exceed four; and |
| ● | a fee of such maximum sum as the Nasdaq may determine to be payable or such lesser sum as our directors may from time to time require is paid to the Company in respect thereof. |
If our directors refuse to register a transfer they shall, within two 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.
The registration of transfers may, after compliance with any notice required of the Nasdaq, be suspended and the register closed at such times and for such periods as our Board of Directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our board may determine.
Liquidation. On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of ordinary shares), if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them. Any distribution of assets or capital to a holder of ordinary share will be the same in any liquidation event. Any distribution of assets or capital to a holder of a Class A Ordinary Share and a holder of a the Company Class B Ordinary Share will be the same in any liquidation event.
Redemption, Repurchase and Surrender of Ordinary Shares. the Company may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders thereof, on such terms and in such manner as may be determined, before the issue of such shares, by our Board of Directors or by a special resolution of our shareholders. The Company may also repurchase any of its shares provided that the manner and terms of such purchase have been approved by its Board of Directors or are otherwise authorized by its Memorandum and Articles of Association. Under the Companies Act, the redemption or repurchase of any share may be paid out of our profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if the company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company has commenced liquidation. In addition, the Company may accept the surrender of any fully paid share for no consideration.
Variations of Rights of Shares. If at any time our share capital is divided into different classes or series of shares, the rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series), whether or not the Company is being wound-up, may be varied with the consent in writing of a majority the holders of the issued shares of that class or series or with the sanction of an ordinary resolution at a separate meeting of the holders of the shares of the class or series. The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu with such existing class of shares.
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Inspection of Books and Records. Holders of the Company Ordinary Shares have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or its corporate records. (other than the memorandum and articles of association, the register of mortgages and charges and any special resolutions passed by shareholders). Under Cayman Islands law, the names of our current directors can be obtained from a search conducted at the Registrar of Companies in the Cayman Islands. However, the Company will provide its shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”
Issuance of Additional Shares. Our Memorandum and Articles of Association authorize its Board of Directors to issue additional ordinary shares from time to time as its Board of Directors shall determine, to the extent of available authorized but unissued shares.
Our Memorandum and Articles of Association also authorize its Board of Directors to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:
| ● | the designation of the series; |
| ● | the number of shares of the series; |
| ● | the dividend rights, dividend rates, conversion rights, voting rights; and |
| ● | the rights and terms of redemption and liquidation preferences. |
Our Board of Directors may issue preferred shares without action by its shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.
Anti-Takeover Provisions. Some provisions of our Memorandum and Articles of Association may discourage, delay or prevent a change of control of the Company or management that shareholders may consider favorable, including provisions that authorize our Board of Directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by its shareholders.
Exempted Company. The Company is an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for an exempted company:
| ● | does not have to file an annual return of its shareholders with the Registrar of Companies; |
| ● | is not required to open its register of members for inspection; |
| ● | does not have to hold an annual general meeting; |
| ● | may issue shares with no par value; |
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| ● | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
| ● | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
| ● | may register as a limited duration company; and |
| ● | may register as a segregated portfolio company. |
| ● | “Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder’s 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). |
Pubco Warrants
Set forth below is also a description of the publicly traded warrants of Pubco (the “Pubco Warrants”). Each Pubco Warrant entitles the holder thereof to purchase Pubco Class B Ordinary Share at a price of $11.50 per full share.
Pubco Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Pubco Warrants. No Pubco Warrants will be exercisable for cash unless Pubco has an effective and current registration statement covering the Class B Ordinary Shares issuable upon exercise of the Pubco Warrants and a current prospectus relating to such Class B Ordinary Shares. Pubco has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the Business Combination, Pubco will use its best efforts to file, and within 60 business days following the Business Combination to have declared effective, a registration statement covering the Class B Ordinary Shares issuable upon exercise of the Pubco Warrants. Notwithstanding the foregoing, if a registration statement covering the Class B Ordinary Shares issuable upon the exercise of the Pubco Warrants is not effective within 60 business days, the holders may, until such time as there is an effective registration statement and during any period when Pubco shall have failed to maintain an effective registration statement, exercise the Pubco Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Pubco Warrants on a cashless basis. The Pubco Warrants will expire five years from the consummation of the Business Combination or earlier upon redemption or liquidation.
Pubco may call the Pubco Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant:
| ● | upon not less than 30 days’ prior written notice of redemption to each warrant holder, |
| ● | if, and only if, the reported last sale price of Class B Ordinary Shares equals or exceeds $18 per share, for any 20 trading days within a 30 trading days period ending on the third trading day prior to the notice of redemption to warrant holders, and |
| ● | if, and only if, there is a current registration statement in effect with respect to the issuance of Class B Ordinary Shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. |
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If Pubco calls the Pubco Warrants for redemption, Pubco’s management will have the option to require all holders that wish to exercise the Pubco Warrants to do so on a “cashless basis”. The exercise price and number of Class B Ordinary Shares issuable upon exercise of the Pubco Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Pubco Warrants will not be adjusted for issuance of Class B Ordinary Shares at a price below its exercise price. Additionally, in no event will Pubco be required to net cash settle the Pubco Warrants.
If the foregoing conditions are satisfied and Pubco issues a notice of redemption, each warrant holder can exercise his, her or its Pubco Warrants prior to the scheduled redemption date. However, the price of the Pubco Ordinary Shares may fall below the $18.00 trigger price as well as the $11.50 warrant exercise price per full share after the redemption notice is issued and not limit Pubco’s ability to complete the redemption.
In the event Pubco determines to redeem Pubco Warrants, holders of redeemable Pubco Warrants will be notified of such redemption as described in a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Pubco. Specifically, in the event Pubco elects to redeem all of the Pubco Warrants that are subject to redemption, Pubco will fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by Pubco not less than 30 days prior to the date fixed for redemption to the registered holders of the Pubco Warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in the aforesaid manner will be conclusively presumed to have been duly given, whether or not the registered holder received such notice. In addition, beneficial owners of the redeemable Pubco Warrants will be notified of such redemption via posting of the redemption notice to DTC.
As of the date of this Report, trading prices of the Company’s Ordinary Shares have not exceeded the threshold that would allow the Company to redeem the Pubco Warrants.
Anti-dilution Adjustments
Following the conversion of the HMAC’s Warrants into Pubco Warrants, the Pubco Warrants will be subject to antidilution adjustments, as summarized in the paragraphs below.
If the number of issued and outstanding Ordinary Shares is increased by a capitalization payable in Ordinary Shares, or by a sub-division of ordinary shares or other similar event, then, on the effective date of such capitalization, sub-division or similar event, the number of Ordinary Shares issuable on exercise of each Pubco Warrant will be increased in proportion to such increase in the issued and outstanding Ordinary Shares. A rights offering to holders of Ordinary Shares entitling holders to purchase the Ordinary Shares at a price less than the fair market value will be deemed a capitalization of a number of the Ordinary Shares equal to the product of (i) the number of the Ordinary Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Ordinary Shares) multiplied by (ii) one minus the quotient of (x) the price per the Ordinary Share paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for the Ordinary Shares, in determining the price payable for the Ordinary Shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of ordinary shares as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the Pubco Warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of the Ordinary Shares on account of such the Ordinary Shares (or other the Ordinary Shares into which the Pubco Warrants are exercisable), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Ordinary Shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of ordinary shares issuable on exercise of each Pubco Warrants) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of the Company Ordinary Shares in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of ordinary shares in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of the Ordinary Shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination on or before July 14, 2023 (on or before February 14, 2024, 18 months after the consummation of HMAC’s IPO) or (B) with respect to any other provision relating to the rights of holders of Ordinary Shares, (e) as a result of the repurchase of Ordinary Shares by us if a proposed initial business combination is presented to our shareholders for approval, or (f) in connection with the redemption of our Ordinary Shares upon our failure to complete our initial business combination, then the Pubco Warrants exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each ordinary share in respect of such event.
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If the number of issued and outstanding the Ordinary Shares is decreased by a share consolidation, combination, reclassification of ordinary shares or other similar event, then, on the effective date of such share consolidation, combination, reclassification or similar event, the number of ordinary shares issuable on exercise of each warrant will be decreased in proportion to such decrease in issued and outstanding Ordinary Shares.
Whenever the number of the Ordinary Shares purchasable upon the exercise of the Pubco Warrants is adjusted, as described above, the Pubco Warrants exercise price will be adjusted by multiplying the Pubco Warrants exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of the Ordinary Shares purchasable upon the exercise of the Pubco Warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of Ordinary Shares so purchasable immediately thereafter.
In addition, if (x) we issue additional Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares, private placement units, or units upon conversion of working capital loans or extension loans held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
In case of any reclassification or reorganization of the issued and outstanding Ordinary Shares (other than those described above or that solely affects the par value of such ordinary shares), or in the case of any merger or consolidation of us with or into another entity (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our issued and outstanding ordinary shares) in which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) acquired more than 50% of the voting power of our securities, or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety, the holders of the Pubco Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the ordinary shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of Ordinary Shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Pubco Warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election.
The Pubco Warrants have been issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correcting any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this Report, or defective provision and (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of a majority of then-outstanding warrants is required to make any change that adversely affects the interests of the registered holders. All adjustments made pursuant to the warrant agreement shall be made equally to all outstanding warrants. You should review a copy of the warrant agreement, which is filed as an exhibit to the registration statement of which this Report is a part, for a complete description of the terms and conditions applicable to the warrants.
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Conversion Warrants
On November 25, 2024 (the “Conversion Date”), we issued an aggregation of 7,751,939 Class B Ordinary Shares and 7,751,939 Conversion Warrants to three non-U.S. investors (the “Purchasers”) following the conversion of certain convertible notes (the “Notes”) at a conversion price of $0.645 per share. Such Notes were issued to the Purchasers pursuant to certain Convertible Note Purchase Agreements (the “Agreements”) in September 2024.
Conversion Warrants has a term of one year from the Conversion Date to exercise any portion of the Conversion Warrants at the per share price equal to the conversion price of $0.645 (“Warrant Price”). Both numbers of the Conversion Warrants and the exercise price of the Conversion Warrants are subject to certain adjustments. The Company shall not issue any fractional shares in connection with any exercise of this Conversion Warrant. If any fraction of a share would be issuable on the exercise of this Conversion Warrant (or specified portions thereof), the Company shall, at its election, either purchase such fraction for an amount in cash equal to the same fraction of the Warrant Price of such share of Class B Ordinary Shares on the date of exercise of this Conversion Warrant or round such fraction of a share up to one whole share.
As of the date of this Report, all the Conversion Warrants have expired, and none of them have been exercised.
Certain Differences in Corporate Law
Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English law but does not follow recent English law statutory enactments and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. In certain circumstances, the Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands company and a company incorporated in another jurisdiction (provided that it is facilitated by the laws of that other jurisdiction).
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan of merger or consolidation containing certain prescribed information. That plan of merger or consolidation must then be authorized by (a) a special resolution (usually a majority of not less than two-thirds of the votes which are cast in person or by proxy by those shareholders who, being entitled to do so, attend and vote at a quorate general meeting of the relevant company or a unanimous written resolution of all of the shareholders entitled to vote at a general meeting of the relevant company) of the shareholders of each company; and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company where the parent and subsidiary company are both incorporated under the Companies Act. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the directors of the Cayman Islands company are required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; and (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
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Directors of a Cayman Islands company are further required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidation is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides for the right of dissenting shareholders to be paid payment of the fair value of their shares upon their dissent to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows: (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (c) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; and (e) if the company and the shareholder fail to agree on a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company must (and any dissenting shareholder may) file a petition with the Cayman Islands Grand Court to determine the fair value and such petition by the company must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date and where the consideration for such shares are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, by way of schemes of arrangement, which will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedures for which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by (a) 75% in value of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
| ● | we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with; |
| ● | the shareholders have been fairly represented at the meeting in question; |
| ● | the arrangement is such as a businessman would reasonably approve; and |
| ● | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.” |
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If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights (providing rights to receive payment in cash for the judicially determined value of the shares), which would otherwise ordinarily be available to dissenting shareholders of United States corporations.
Squeeze-out Provisions. When a takeover offer is made and accepted by holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through means other than these statutory provisions, such as a share capital exchange, asset acquisition or control, or through contractual arrangements of an operating business.
Shareholders’ Suits. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officer or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
| ● | a company is acting, or proposing to act, illegally or beyond the scope of its authority; |
| ● | the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or |
| ● | those who control the company are perpetrating a “fraud on the minority.” |
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Special Considerations for Exempted Companies. We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
| ● | an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies |
| ● | an exempted company’s register of members is not open to inspection; |
| ● | an exempted company does not have to hold an annual general meeting; |
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| ● | an exempted company may issue shares with no par value; |
| ● | an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
| ● | an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
| ● | an exempted company may register as a limited duration company; and |
| ● | an exempted company may register as a segregated portfolio company. |
“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).
C. Material Contracts
Material Contracts Relating to the Business Combination
The description of the Business Combination Agreement is included in the Form F-4 in the sections entitled “The Business Combination Proposal”, which is incorporated herein by reference.
We have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 10. Additional Information” or elsewhere in this Report.
D. Exchange Controls
There are no foreign exchange controls or foreign exchange regulations under the currently applicable laws of the Cayman Islands.
E. Taxation
The current PRC Enterprise Income Tax Law (the “EIT Law”), and the implementation regulations for the EIT Law issued by China’s State Council, became effective as of January 1, 2008. Under the EIT Law, enterprises are classified as either resident or non-resident enterprises. An enterprise established outside of China with its “de facto management bodies” located within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law defines a “de facto management body” as a managing body that in practice exercises “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise; however, it remains unclear whether the PRC tax authorities would deem our managing body as being located within China. Due to the relatively short history of the EIT Law and lack of applicable legal precedents, the PRC tax authorities determine the PRC tax resident treatment of entities organized under the laws of foreign jurisdictions on a case-by-case basis.
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If the PRC tax authorities determine that we are a resident enterprise for PRC enterprise income tax purposes, a number of PRC tax consequences could follow. First, we may be subject to enterprise income tax at a rate of twenty five percent (25%) on our respective worldwide taxable income, as well as PRC enterprise income tax reporting obligations. Second, although the EIT Law provides that “dividends, bonuses and other equity investment proceeds between qualified resident enterprises” is exempted income, and the implementing rules of the EIT Law refer to “dividends, bonuses and other equity investment proceeds between qualified resident enterprises” as the investment proceeds obtained by a resident enterprise from its direct investment in another resident enterprise.
If we are treated as a non-resident enterprise under the EIT Law, any dividends that we receive (assuming such dividends are deemed to be sourced from within the PRC) (i) may be subject to a five percent (5%) PRC withholding tax, and if the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the “Arrangement”) is applicable, or (ii) if the Arrangement does not apply (i.e. the PRC tax authorities may deem us to be a conduit not entitled to treaty benefits), may be subject to a ten percent (10%) PRC withholding tax. Similarly, if we are treated as a non-resident enterprise, and Renovation is treated as a resident enterprise, then any dividends that we receive from Renovation (assuming such dividends were considered sourced within the PRC) may be subject to a ten percent (10%) PRC withholding tax. Any such taxes on dividends could materially reduce the amount of dividends, if any, that we could pay to our shareholders.
Finally, the new “resident enterprise” classification could result in a situation in which a ten percent (10%) PRC tax is imposed on dividends we pay to our investors that are non-resident enterprises so long as such non-resident enterprise investors do not have an establishment or place of business in China or, despite the existence of such establishment of place of business in China, the relevant income is not effectively connected with such establishment or place of business in China, to the extent that such dividends have their sources within the PRC. Similarly, any gain realized on the transfer of our shares by such investors is also subject to a ten percent (10%) PRC income tax if such gain is regarded as income derived from sources within China. In such event, we may be required to withhold a ten percent (10%) PRC tax on any dividends paid to our investors that are non-resident enterprises. Our investors that are non-resident enterprises also may be responsible for paying PRC tax at a rate of ten percent (10%) on any gain realized from the sale or transfer of our common shares in certain circumstances. We would not, however, have an obligation to withhold PRC tax with respect to such gain.
Moreover, the State Administration of Taxation issued the Notice on Strengthening the Administration of Enterprise Income Tax on Share Transfer Income of Non-Resident Enterprises No. 698 (“Circular 698”) on December 10, 2009, which reinforces taxation on transfer of non-listed shares by non-resident enterprises through overseas holding vehicles. Circular 698 applies retroactively and was deemed to be effective as of January 2008. Pursuant to Circular 698, where (i) a foreign investor who indirectly holds equity interest in a PRC resident enterprise through an offshore holding company indirectly transfers equity interests in a PRC resident enterprise by selling the shares of the offshore holding company, and (ii) the offshore holding company is located in a jurisdiction where the effective tax rate is lower than twelve and a half percent (12.5%) or where the offshore income of its residents is not taxable, the foreign investor is required to provide the tax authority in charge of that PRC resident enterprise with certain relevant information within thirty (30) days of the transfer. The tax authorities in charge will evaluate the offshore transaction for tax purposes. In the event that the tax authorities determine that such transfer is abusing forms of business organization and there is no reasonable commercial purpose other than avoidance of PRC enterprise income tax, the tax authorities will have the power to conduct a substance-over-form re-assessment of the nature of the equity transfer. A reasonable commercial purpose may be established when the overall offshore structure is set up to comply with the requirements of supervising authorities of international capital markets. If the State Administration of Taxation’s challenge of a transfer is successful, they will deny the existence of the offshore holding company that is used for tax planning purposes. Since Circular 698 has a brief history, there is uncertainty as to its application.
F. Dividends and Paying Agents
The Company has no plan to declare or pay any dividends on Ordinary Shares in the foreseeable future, other than dividends declared to be payable to the Pre-Public Shareholders by Ableview Brands Limited on February 1, 2023, before the Company becomes a publicly listed company, and the purchase for each of the Majority Pre-Public Shareholders (as defined below) of insurance policies as the payment of a portion of such dividends. The Company currently intends to retain any earnings for future operations and expansion.
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For the years ended 2025 and 2024, the Company purchased insurance policies to three shareholders, which were classified as dividends to the shareholders. For more details regarding this transaction, please see Note 11. Equity - Declaration of dividends.
G. Statement by Experts
Not applicable.
H. Documents on Display
We are subject to certain of the informational filing requirements of the Exchange Act. Since we are a “foreign private issuer,” our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our equity securities. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC an annual report on Form 20-F containing financial statements audited by an independent accounting firm. We will also furnish with the SEC, on Form 6-K, unaudited financial information with respect to our first two fiscal quarters. Information filed with or furnished with the SEC by us will be available on our website. On March 17, 2023, the Company and HMAC furnished to its shareholders a proxy statement/prospectus, as amended from time to time, relating to the Business Combination. The SEC also maintains a website at http://www.sec.gov that contains reports and other information that we file with or furnish electronically with the SEC.
I. Subsidiary Information
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Exchange Risk
Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange rates between the RMB and other currencies in which we conduct business may affect our financial position and results of operations.
Our functional currency is U.S. dollar, and we had four subsidiaries which are operating in Hong Kong with functional currency of Hong Kong dollar and one subsidiary which is operating in Singapore with functional currency of Singapore dollar. We are mainly exposed to foreign exchange risk arising from our cash and cash equivalents dominated in RMB.
In addition, we have four subsidiaries which are operating in mainland China with all of the transactions settled in RMB. We consider that our business in mainland China is not exposed to any significant foreign exchange risk as there are no significant financial assets or liabilities of these subsidiaries denominated in the currencies other than the functional currency.
Interest Rate Risk
Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank deposits and financial products purchased from financial institutions. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as of December 31, 2025.
Based on that evaluation, our management has concluded that, due to the material weakness described below, as of December 31, 2025, our disclosure controls and procedures were not effective. Notwithstanding management’s assessment that our internal control over financial reporting was ineffective as of December 31, 2025 due to the material weakness described below, we believe that the consolidated financial statements included in this annual report on Form 20-F correctly present our financial position, results of operations and cash flows for the fiscal years covered thereby in all material respects.
Management’s Annual Report on Internal Control over Financial Reporting
As required by Rule 13a-15(c) of the Exchange Act, our management conducted an evaluation of our Company’s internal control over financial reporting as of December 31, 2025 based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025. In the course of auditing our consolidated financial statements as of December 31, 2025, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board of the United States. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As of December 31, 2025, we identified one material weakness related to lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP technical accounting issues and prepare and review financial statements and related disclosures in accordance with U.S. GAAP and reporting requirements set forth by the SEC.
Our management is currently in the process of evaluating the steps necessary to remediate the ineffectiveness, such as (i) hired a consulting firm with U.S. GAAP experience to strengthen our financial reporting function; and (ii) established an ongoing program to provide sufficient and appropriate training for financial reporting and accounting personnel, especially training related to U.S. GAAP and SEC reporting requirement.
Attestation Report of the Registered Public Accounting Firm
This annual report on Form 20-F does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC where domestic and foreign registrants that are non-accelerated filers, which we are, and “emerging growth companies,” which we also are, are not required to provide the auditor attestation report.
Changes in Internal Control over Financial Reporting
Other than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 16. [Reserved]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Mr. Yilun Wu, chairperson of our audit committee and an independent director (under the standards set forth in Rule 5605(c)(2) of the Nasdaq Stock Market Rules and Rule 10A-3 under the Securities Exchange Act of 1934), is an audit committee financial expert.
ITEM 16B. CODE OF ETHICS
The Company has adopted a Code of Ethics that applies to all of its employees, officers, and directors. This includes the Company’ principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. We intend to disclose on our website any future amendments of the Code of Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions, or our directors from provisions in the Code of Ethics.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by Marcum Asia CPAs LLP, our current auditors, for the periods indicated.
| For the Fiscal Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Audit fees (1) | $ | 350,000 | $ | 315,000 | ||||
| Audit-Related Fees (2) | $ | - | $ | - | ||||
| Tax Fees (3) | $ | - | $ | - | ||||
| All other fees (4) | $ | - | $ | - | ||||
| (1) | Audit Fees: This category includes the audit of our annual financial statements, review of financial statements included in our interim semi-annual report on Form 6-K, and services that are normally provided by independent auditors in connection with statutory and regulatory filings or the engagement for fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. |
| (2) | Audit-Related Fees: This category consists of assurance and related services by our independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” |
| (3) | Tax Fees: This category consists of professional services rendered by our independent auditors for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice. |
| (4) | All Other Fees: This category consists of fees for other miscellaneous items. |
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not applicable.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
100
ITEM 16G. CORPORATE GOVERNANCE
The Company’s corporate governance practices do not differ from those followed by domestic companies listed on the NASDAQ Capital Market other than those disclosed below.
NASDAQ Listing Rule 5615(a)(3) permits a Foreign Private Issuer to follow its home country practice in lieu of the requirements of the Rule 5600 Series, the requirement to disclose third party director and nominee compensation set forth in Rule 5250(b)(3), and the requirement to distribute annual and interim reports set forth in Rule 5250(d), provided, however, that such a Foreign Private Issuer shall follow the following NASDAQ Listing Rules: comply with the Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), the Diverse Board Representation Rule (Rule 5605(f)), the Board Diversity Disclosure Rule (Rule 5606), have an Audit Committee that satisfies Rule 5605(c)(3), and ensure that such Audit Committee’s members meet the independence requirement in Rule 5605(c)(2)(A)(ii). Except as provided in this paragraph, a Foreign Private Issuer must comply with the requirements of the Rule 5000 Series.
In accordance with NASDAQ Listing Rule 5615(a)(3), the Company has elected to follow the Company’s home country rules under the laws of the Cayman Islands from time to time in lieu of the requirements of the Rule 5600 Series of the NASDAQ Stock Market Marketplace Rules which are listed below:
| 1. | Rule 5605(b), pursuant to which (i) a majority of the board of directors must be comprised of independent directors, and (ii) the independent directors must have regularly scheduled meetings at which only independent directors are present. |
| 2. | Rule 5605(c), pursuant to which each company must have, and certify that it has and will continue to have, an Audit Committee of at least three members, each of whom must meet criteria set forth in Rule 5605(c)(2)(A). |
| 3. | Rule 5605(d), pursuant to which each company must (i) certify that it has adopted a formal written Compensation Committee charter and that the Compensation Committee will review and reassess the adequacy of the formal written charter on an annual basis, and (ii) have, and certify that it has and will continue to have, a Compensation Committee of at least two members, each of whom must be an independent director. |
| 4. | Rule 5605(e), pursuant to which director nominees must be selected, or recommended for the board of director’s selection, either by independent directors constituting a majority of the board of director’s independent directors in a vote in which only independent directors participate, or a nominations committee comprised solely of independent directors. |
| 5. | Rule 5610, pursuant to which each company shall adopt a code of conduct applicable to all directors, officers and employees. |
| 6. | Rule 5620(a), pursuant to which each company listing common stock or voting preferred stock, and their equivalents, shall hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year-end. |
| 7. | Rule 5620(b), pursuant to which each company that is not a limited partnership shall solicit proxies and provide proxy statements for all meetings of shareholders and shall provide copies of such proxy solicitation to Nasdaq. |
| 8. | Rule 5620(c), pursuant to which each company that is not a limited partnership shall provide for a quorum as specified in its by-laws for any meeting of the holders of common stock; provided, however, that in no case shall such quorum be less than 33 1/3 % of the outstanding shares of the company’s common voting stock. |
101
| 9. | Rule 5630, pursuant to which each company that is not a limited partnership shall conduct an appropriate review and oversight of all related party transactions for potential conflict of interest situations on an ongoing basis by the company’s Audit Committee or another independent body of the board of directors. | |
| 10. | Rule 5635(a), pursuant to which shareholder approval is required in certain circumstances prior to the issuance of securities in connection with the acquisition of the stock or assets of another company. |
| 11. | Rule 5635(b), pursuant to which shareholder approval is required prior to the issuance of securities when the issuance or potential issuance will result in a change of control of the company. |
| 12. | Rule 5635(c), pursuant to which shareholder approval is required prior to the issuance of securities when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangements made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants, subject to certain exceptions. |
| 13. | Rule 5635(d), pursuant to which shareholder approval is required prior to the issuance of securities in connection with a transaction, other than a public offering, involving the sale, issuance or potential issuance by the company of common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or Substantial Shareholders of the company equals 20% or more of common stock or 20% or more of the voting power outstanding before the issuance, at a price less than the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. |
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
We
have
The Company believes that the Policy is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Policy is filed as Exhibit 11.2 to this Form 20-F.
ITEM 16K. CYBERSECURITY
Risk Management and Strategy
We
have implemented cybersecurity risk assessment procedures to ensure effectiveness in cybersecurity management, strategy and governance
and reporting cybersecurity risks.
102
We
have developed a cybersecurity threat defense system to address both internal and external threats. This system encompasses various levels,
including network, host and application security and incorporates systematic security capabilities for threat defense, monitoring, analysis,
response, deception and countermeasures. We strive to manage cybersecurity risks and protect sensitive information through various methods,
including technical safeguards, procedural requirements, an intensive monitoring program on our corporate network, continuous testing
of our security posture both internally and with outside vendors, a robust incident response program, a review of the effectiveness of
our security system with reference to applicable security standards by qualified
As
of the date of this Report, we have
Governance
103
PART III
ITEM 17. FINANCIAL STATEMENTS
See Item 18.
ITEM 18. FINANCIAL STATEMENTS
The disclosures on pages F-1 to F-41 in the Form F-4 are incorporated by reference herein. The consolidated financial statements and the related notes for the fiscal year ended December 31, 2025 are included in this Annual Report beginning on page F-1.
ITEM 19. EXHIBITS
| ** | Filed herewith |
| # | Certain schedules, annexes and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K but will be furnished supplementally to the SEC upon request. |
104
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its behalf, in Shanghai, China on April 27, 2026.
| Able View Global Inc. | ||
| By: | /s/ Stephen Jian Zhu | |
| Name: | Stephen Jian Zhu | |
| Title: | Chief Executive Officer | |
105
INDEX TO FINANCIAL STATEMENTS
ABLE VIEW GLOBAL INC.
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
Able View Global Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Able View Global Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Marcum Asia CPAs LLP
We have served as the Company’s auditor since 2019.
April 27, 2026
BEIJING OFFICE ● Units 06-09 ● 46th Floor ● China World Tower B ● No. 1 Jian Guo Men Wai Avenue ● Chaoyang District ● Beijing ● 100004
Phone 8610.8518.7992 ● Fax 8610.8518.7993 ● www.marcumasia.com
F-2
ABLE VIEW GLOBAL INC.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2025 and 2024
(Expressed in U.S. dollar, except for share and per share data, unless otherwise noted)
| December 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Accounts receivable – related party | ||||||||
| Prepayments and other current assets | ||||||||
| Inventories | ||||||||
| Assets of discontinued operations, current | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets | ||||||||
| Property and equipment, net | ||||||||
| Right of use assets, net | ||||||||
| Deferred tax assets | ||||||||
| Other non-current assets | ||||||||
| Assets of discontinued operations, non-current | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Short-term loans | $ | $ | ||||||
| Accounts payable | ||||||||
| Advance from customers | ||||||||
| Income tax payable | ||||||||
| Lease liabilities, current | ||||||||
| Other payable and accrued expenses | ||||||||
| Amount due to related parties | ||||||||
| Liabilities of discontinued operations, current | ||||||||
| Total Current Liabilities | ||||||||
| Non-current Liabilities | ||||||||
| Lease liabilities, non-current | ||||||||
| Amount due to related parties, non-current | ||||||||
| Long-term borrowings | ||||||||
| Liabilities of discontinued operations, non-current | ||||||||
| Total Non-current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Class A Ordinary Shares ($ | ||||||||
| Class B Ordinary Shares ($ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserve | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements
F-3
ABLE VIEW GLOBAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2025, 2024 and 2023
(Expressed in U.S. dollar, except for share and per share data, unless otherwise noted)
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenues | ||||||||||||
| - Third parties | $ | $ | $ | |||||||||
| - Related parties | ||||||||||||
| Total revenue | ||||||||||||
| Cost of revenue | ||||||||||||
| - Third parties | ( | ) | ( | ) | ( | ) | ||||||
| - Related parties | ( | ) | ( | ) | ( | ) | ||||||
| Total cost of revenue | ( | ) | ( | ) | ( | ) | ||||||
| Gross profit | ||||||||||||
| Operating expenses | ||||||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ||||||
| (Loss) income from operations | ( | ) | ( | ) | ||||||||
| Other income (expenses), net | ||||||||||||
| Interest expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| Other income | ||||||||||||
| Foreign currency exchange gain (loss) | ( | ) | ( | ) | ||||||||
| Total other expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| (Loss) income before income taxes | ( | ) | ( | ) | ||||||||
| Income tax expenses | ( | ) | ( | ) | ( | ) | ||||||
| Net (loss) income from continuing operations | ( | ) | ( | ) | ||||||||
| Discontinued operations: | ||||||||||||
| (Loss) income before income taxes from operations of discontinued operation | ( | ) | ( | ) | ||||||||
| Gain on disposal of discontinued operation | — | — | ||||||||||
| Income tax (expenses) benefits | ( | ) | ( | ) | ||||||||
| Net income (loss) from discontinued operations | ( | ) | ||||||||||
| Net income (loss) | ( | ) | ||||||||||
| Accretion of convertible redeemable preferred shares | ( | ) | ||||||||||
| Net income attributable to Able View Global Inc’s preferred shareholders | ( | ) | ||||||||||
| Net income (loss) attributable to Able View Global Inc’s ordinary shareholders | $ | $ | ( | ) | $ | |||||||
| Net (loss) income from continuing operations attributable to Able View Global Inc’s ordinary shareholders | $ | ( | ) | $ | ( | ) | $ | |||||
| Net income (loss) from discontinued operations attributable to Able View Global Inc’s ordinary shareholders | $ | $ | ( | ) | $ | |||||||
| Net income (loss) | $ | $ | ( | ) | $ | |||||||
| Other comprehensive (expenses) income | ||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||
| Comprehensive income (loss) | ( | ) | ||||||||||
| Accretion of convertible redeemable preferred shares | ( | ) | ||||||||||
| Net income attributable to Able View Global Inc’s preferred shareholders | ( | ) | ||||||||||
| Comprehensive income (loss) attributable to Able View Global Inc’s ordinary shareholders | $ | $ | ( | ) | $ | |||||||
| (Loss) earnings per share from continuing operations – basic and diluted | $ | ( | ) | $ | ( | ) | $ | |||||
| Earnings (loss) per share from discontinued operations – basic and diluted | $ | ( | ) | $ | ||||||||
| Earnings (loss) per share – basic and diluted | $ | $ | ( | ) | $ | |||||||
| Weighted average shares – basic and diluted | ||||||||||||
The accompanying notes are an integral part of the consolidated financial statements
F-4
ABLE VIEW GLOBAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Years Ended December 31, 2025, 2024 and 2023
(Expressed in U.S. dollar, except for share and per share data, unless otherwise noted)
| Class A Ordinary Shares | Class B Ordinary Shares | Additional | Accumulated other comprehensive | Total | ||||||||||||||||||||||||||||||||
| Number of share | Amount | Number of share | Amount | paid-in capital |
Statutory reserve | Retained earnings | (Loss) income | Shareholders’ equity | ||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | | |||||||||||||||||||||||||||
| Reverse recapitalization | ( |
) | ( | ) | ||||||||||||||||||||||||||||||||
| Disposal of a subsidiary | — | — | ||||||||||||||||||||||||||||||||||
| Capitalization of offering costs pursuant to reverse recapitalization | — | — | ( |
) | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of Class B ordinary shares pursuant to conversion of Series A convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||||
| Issuance of Class B ordinary shares to a financial advisor (Note 11) | ( |
) | ||||||||||||||||||||||||||||||||||
| Repurchase and cancellation of Class B ordinary shares (Note 11) | ( | ) | ( | ) | ( |
) | ( | ) | ||||||||||||||||||||||||||||
| Appropriation of statutory reserve | — | — | ( | ) | ||||||||||||||||||||||||||||||||
| Accretion of convertible redeemable preferred shares | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Issuance of Class B ordinary shares pursuant to conversion of convertible notes | ||||||||||||||||||||||||||||||||||||
| Issuance of warrants pursuant to conversion of convertible notes | — | — | ||||||||||||||||||||||||||||||||||
| Repurchase and cancellation of Class B ordinary shares (Note 11) | ( | ) | ( | ) | ( |
) | ( | ) | ||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Disposal of a subsidiary | — | — | ( | ) | ||||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||
| Appropriation of statutory reserves | — | — | ( | ) | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements
F-5
ABLE VIEW GLOBAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2025, 2024 and 2023
(Expressed in U.S. dollar)
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | |||||||
| Less: net income (loss) from discontinued operations | ( | ) | ||||||||||
| Net (loss) income from continuing operations | ( | ) | ( | ) | ||||||||
| Adjustments to reconcile net (loss) income from continuing operations to net cash (used in) provided by operating activities from continuing operations: | ||||||||||||
| Depreciation expenses | ||||||||||||
| Write-down of inventories | ||||||||||||
| Deferred income tax expenses (benefits) | ( | ) | ||||||||||
| Amortization of right of use assets | ||||||||||||
| Provision of expected credit loss against other receivables | ||||||||||||
| Gain from disposal of property and equipment | ( | ) | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | ( | ) | ||||||||||
| Accounts receivable – related parties | ( | ) | ||||||||||
| Prepayment and other current assets | ( | ) | ( | ) | ||||||||
| Inventories | ||||||||||||
| Other non-current assets | ( | ) | ( | ) | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||||||
| Advance from customers | ( | ) | ||||||||||
| Income tax payable | ( | ) | ||||||||||
| Lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Other payable and accrued expenses | ( | ) | ||||||||||
| Amount due to related parties, current | ( | ) | ( | ) | ||||||||
| Net cash (used in) provided by operating activities from continuing operations | ( | ) | ( | ) | ||||||||
| Net cash provided by (used in) operating activities from discontinued operations | ( | ) | ||||||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Loans to third parties | ( | ) | ( | ) | ||||||||
| Collection of loans from a third party | ||||||||||||
| Payment to Shanghai Jingyue (Note 3) | ( | ) | ||||||||||
| Advances to related parties | ( | ) | ( | ) | ( | ) | ||||||
| Collection of advances from related parties | ||||||||||||
| Net cash (used in) provided by investing activities from continuing operations | ( | ) | ( | ) | ||||||||
| Net cash used in investing activities from discontinued operations | ( | ) | ( | ) | ( | ) | ||||||
| Net cash (used in) provided by investing activities | ( | ) | ( | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from short-term borrowings | ||||||||||||
| Repayments of short-term borrowings | ( | ) | ( | ) | ( | ) | ||||||
| Borrowings from related parties | ||||||||||||
| Repayment of short-term borrowings to related parties | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from long-term borrowings | ||||||||||||
| Payment of offering costs | ( | ) | ||||||||||
| Payment to repurchase of Class B ordinary shares | ( | ) | ( | ) | ||||||||
| Payments of dividends to shareholders | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from issuance of convertible notes | ||||||||||||
| Net cash provided by (used in) financing activities from continuing operations | ( | ) | ||||||||||
| Net cash (used in) provided by financing activities from discontinued operations | ( | ) | ( | ) | ||||||||
| Net cash (used in) provided by financing activities | ( | ) | ( | ) | ||||||||
| Effect of exchange rate changes on cash and cash equivalents from continuing operations | ( | ) | ( | ) | ||||||||
| Effect of exchange rate changes on cash and cash equivalents from discontinued operations | ( | ) | ( | ) | ||||||||
| Net (decrease) increase in cash and cash equivalents, including cash and cash equivalents classified to assets of discontinued operations | ( | ) | ||||||||||
| Less: net increase (decrease) in cash and cash equivalents of discontinued operations | ( | ) | ||||||||||
| Net (decrease) increase in cash and cash equivalents of continuing operations | ( | ) | ||||||||||
| Cash and cash equivalents of continuing operations at beginning of year | ||||||||||||
| Cash and cash equivalents of continuing operations at end of year | $ | $ | $ | |||||||||
| Supplemental cash flow information | ||||||||||||
| Cash paid for interest expense | $ | $ | $ | |||||||||
| Cash paid for income tax | $ | $ | $ | |||||||||
| Cash refunded for income tax | $ | $ | $ | |||||||||
| Noncash activities | ||||||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | $ | |||||||||
| Accretion of convertible redeemable preferred shares | $ | $ | $ | |||||||||
| Issuance of Class B ordinary shares to a financial advisor | $ | $ | $ | |||||||||
| Issuance of Class B ordinary shares for conversion of convertible notes | $ | $ | $ | |||||||||
| Due from a third party for disposal of property and equipment | $ | $ | $ | |||||||||
| Reduction of dividend payables due to disposal of discontinued operations | $ | $ | $ | |||||||||
| Net settlement of dividends payable with due from related parties from continuing operations | $ | $ | $ | |||||||||
| Net settlement of due from related parties and due to related parties within continuing operations | $ | $ | $ | |||||||||
| Net settlement of due from related parties and due to related parties between continuing operations and discontinued operations | $ | $ | $ | |||||||||
The accompanying notes are an integral part of the consolidated financial statements
F-6
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS DESCRIPTION
Able View Global Inc. (“Able View Global”,
or the “Company”) was incorporated as a private company under the laws of Cayman Island on
The Company, through its subsidiaries (herein the subsidiaries are collectively referred to as the “Operating Subsidiaries”) are engaged in importing and selling cosmetics and other beauty products to E-commerce platforms and distributor customers, as well as individual customers, and provision of operation services for online stores owned by customers.
As of December 31, 2025, the Company’s major operating entities were comprised of the following:
| Name | Date of Incorporation | Place of Incorporation | Percentage of effective ownership | Principal activities | ||||
| Ableview Brands Limited (“Ableview Brands”) | ||||||||
| Ableview Management Limited (“Ableview Management”) | ||||||||
| Able View Enterprise Limited (“Able View”) | ||||||||
| Shanghai Weitong Trading Co., Ltd. (“Weitong”) | ||||||||
| Shanghai Jingnan Medicial Appliances Co., Ltd. (“Shanghai Jingnan”) | ||||||||
| Healthy Great Pte. Ltd. (“Ableview Singapore”) | ||||||||
| Shanghai Jinglu Trading Co., Ltd. (“Shanghai Jinglu”) | ||||||||
| Beijing Jingyuan Trading Co., Ltd. (“Beijing Jingyuan”) | ||||||||
| Wuhan Jingtong Trading Co., Ltd. (“Wuhan Jingtong”) |
F-7
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS DESCRIPTION (cont.)
Reverse recapitalization
On August 17, 2023, Able View Global consummated the transactions contemplated by that certain Business Combination Agreement, dated as of November 21, 2022 (the “Business Combination Agreement”) modified by that certain Waiver Agreement, dated as of June 12, 2023, by and among (i) the Company, (ii) Hainan Manaslu Acquisition Corp. (“HMAC”), (iii) Ableview Cayman, (iv) Able View Corporation Inc., a Cayman Islands exempted company and a wholly owned subsidiary of the Company (“Merger Sub”), and (v) each of the holders of Ableview Cayman’s outstanding shares (collectively, the “Sellers”).
HMAC is a blank check company incorporated as a Cayman Islands exempted company on September 10, 2021, and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The registration statement for HMAC’s Initial Public Offering (“Initial Public Offering”) was declared effective on August 10, 2022.
On August 17, 2023, the closing date of the Business Combination (as defined below), pursuant to the Business Combination Agreement, (a) HMAC merged with Merger Sub, with HMAC continuing as the surviving entity in the merger (the “Merger”), as a result of which: (i) HMAC became a wholly-owned subsidiary of the Company and (ii) each issued and outstanding security of HMAC immediately prior to the consummation of the Merger was no longer outstanding and automatically cancelled, in exchange for the right of the holder thereof to receive a substantially equivalent security of the Company, and (b) the Company acquired all of the issued and outstanding shares of Ableview Cayman held by the Sellers in exchange for the Class A Ordinary Shares and Class B Ordinary Shares of the Company (“Business Combination”). As a result of the above transactions, HMAC and Ableview Cayman each became a wholly-owned subsidiary of the Company.
Upon closing of the Business Combination, the
Company acquired all of the issued and outstanding securities of Ableview Cayman in exchange for (i)
After giving effect to the Business Combination
and the issuance of the Class A Ordinary Shares and Class B Ordinary Shares described above, there are
Able View Global has also capitalized offering
cost of $
The reverse recapitalization is equivalent to the issuance of securities by the Company for the net monetary assets of HMAC, accompanied by a recapitalization. The Company debited equity for the fair value of the net liabilities of HMAC. In the subsequent financial statements after the Business Combination, the amounts of assets and liabilities for the period before the reverse recapitalization in financial statements, are presented as the Company’s and recognized and measured at their pre-combination carrying amounts.
F-8
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS DESCRIPTION (cont.)
Disposal of HMAC
On December 18, 2023, HMAC ceased being a subsidiary of the Company
as a result of it being disposed to a third party. HMAC was a holding company. The management believed the disposal of HMAC does not represent
a strategic shift, in both operating and financing aspects, because it is not changing the way it is running its business. The Company
has not shifted the nature of its operations or the major geographic market area. The management believed the deconsolidation of HMAC
does not represent a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. The
disposal is not accounted for as discontinued operations in accordance with ASC 205-20. On closing of Business Combination with HMAC,
the Company debited equity for the fair value of the net liabilities of HMAC. On disposal of HMAC, the Company credited additional paid-in
capital of $
Disposal of Shanghai Jingyue Trading Co., Ltd. (“Shanghai Jingyue”)
On June 27, 2025, the Company disposed of Shanghai Jingyue to an unrelated third party (the “Buyer”). The management believed the disposal of Shanghai Jingyue represented a strategic shift, which had a major effect on the Company’s operations and financial results, and was accounted for as discontinued operations in accordance with ASC 205-20.
Receipt of Nasdaq Notification Regarding Minimum Bid Price Deficiency
On December 4, 2025, the Company received a notification
letter from the Nasdaq Listing Qualifications Department (“Nasdaq”), notifying the Company that it is not in compliance with
the minimum bid price requirement from October 22, 2025 through December 3, 2025. As set forth in the Nasdaq Listing Rules 5550(a)(2)
(the “Nasdaq Listing Rule”), it requires that the closing bid price for the Company’s ordinary shares listed on the
Nasdaq be maintained at a minimum of USD$
The notification has no immediate effect on the listing of the Company’s ordinary shares on Nasdaq.
In accordance with the Nasdaq Listing Rule 5810(c)(3)(A),
the Company has a period of 180 calendar days from the date of notification, or until June 2, 2026, to regain compliance with the minimum
bid price requirement, during which time the Company’s ordinary shares will continue to trade on the Nasdaq Capital Market. If at
any time during this 180-day period, or before June 2, 2026, the closing bid price of the Company’s ordinary shares is at least
USD$
The Company intends to monitor the closing bid price of its ordinary shares between now and June 2, 2026. In the event the Company is not eligible for additional time to regain compliance with the Nasdaq requirements towards the end of the first compliance period, the Company’s board of directors will consider options that may be available to achieve compliance.
F-9
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Basis of consolidation
The consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
All intercompany transactions and balances have been eliminated upon consolidation.
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, determinations of the useful lives and valuation of long-lived assets, allowances for credit losses for accounts receivable and other receivables, valuation of deferred tax assets, and other provisions and contingencies.
Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet.
The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$.
In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive income (loss) within the consolidated statement of shareholders’ equity.
F-10
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Foreign currency translation (cont.)
Translation of amounts from HKD, SGD and RMB into US$ has been made at the following exchange rates for the respective periods:
| December 31, 2025 | December 31, 2024 | |||||||
| HKD exchange rate for balance sheet items, except for equity accounts | ||||||||
| SGD exchange rate for balance sheet items, except for equity accounts | ||||||||
| RMB exchange rate for balance sheet items, except for equity accounts | ||||||||
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| HKD exchange rate for items in the statements of operations and comprehensive income (loss), and statements of cash flows | ||||||||||||
| SGD exchange rate for items in the statements of operations and comprehensive income (loss), and statements of cash flows | ||||||||||||
| RMB exchange rate for items in the statements of operations and comprehensive income (loss), and statements of cash flows | ||||||||||||
No representation is made that the HKD, SGD and RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation.
Fair value of financial instruments
The Company’s financial instruments are accounted for at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of the fair value hierarchy are described below:
| Level 1 — | inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| Level 2 — | inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| Level 3 — | inputs to the valuation methodology are unobservable and significant to the fair value. |
Financial instruments of the Company primarily comprised current assets and current liabilities including cash and cash equivalents, accounts receivable, accounts receivable – related party, other current assets, short-term loans, accounts payable, and other payables. The Company’s financial instruments approximate their fair values because of the short-term nature of these instruments. Warrants were measured at fair value using unobservable inputs and categorized in Level 3 of the fair value hierarchy (Note 11).
F-11
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Cash and cash equivalents
Cash and cash equivalents primarily consist of bank deposits, as well as highly liquid investments, with original maturities of three months or less, which are unrestricted as to withdraw and use.
Accounts receivable
Accounts receivables are recorded at the gross amount less an allowance for expected credit losses and do not bear interest.
The management maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the consolidated statements of operations and comprehensive income (loss). In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2025 and 2024, the Company determined allowances for credit losses were necessary for accounts receivable.
Inventories
Inventories, consisting of cosmetics and other
beauty products available for sale, are stated at the lower of cost or net realizable value. Cost of inventories is determined using the
weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due
to damaged goods and slow-moving merchandise, which is dependent upon factors such as historical and forecasted consumer demand, and promotional
environment. The Company takes ownership, risks and rewards of the products purchased. Write-downs are recorded in cost of revenues in
the consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2025, 2024 and 2023, the Company
had inventory write-downs of $, $
Property and equipment, net
Property and equipment primarily consist of office
equipment, vehicles and leasehold improvements. Office equipment and vehicles are stated at cost less accumulated depreciation less any
provision required for impairment in value.
| Office equipment | ||
| Vehicles | ||
| Leasehold improvements |
Costs of repairs and maintenance are expensed as incurred, and asset improvements are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statement of income.
F-12
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Impairment of long-lived assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. impairment of long-lived assets was recognized for the years ended December 31, 2025, 2024 and 2023.
Revenue recognition
In accordance with ASC 606, revenues are recognized when control of the promised products is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. The Company also evaluates whether it is appropriate to record the gross amount of product sales. When the Company is a principal, and the Company obtains control of the specified goods before they are transferred to the customers, the revenues should be recognized in the gross amount of consideration to which it expects to be entitled to in exchange for the specified goods transferred. Revenues are recorded net of value-added taxes.
Sales of cosmetics and other beauty products
For the years ended December 31, 2025, 2024 and 2023, the Company generated revenues primarily from selling cosmetics and other beauty products. The Company identifies a single performance obligation from contracts which is the sales of cosmetics and other beauty products. The Company recognizes the product revenues on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods, subject to inventory risks and has the discretion in establishing prices. The Company recognizes revenues at a point in time when the control over the cosmetics and other beauty products are transferred to customers.
The Company recognizes revenues net of return allowances and consideration payable to customers when the products are delivered, and control is transferred to customers. For sales with return conditions, the Company reasonably estimates the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the amount of net revenues recognized. As of December 31, 2025 and 2024, the Company did not record return allowance because the Company did not expect a significant reversal in the amount of cumulative revenue.
Provision of operation services
The Company also generated revenues from provision of operation services for online stores owned by customers. The operation services cover marketing and promotion of cosmetics products, warehouse management, logistics of products, and customer relationship services. The Company identifies a single performance obligation from contracts. The transaction price is determined by a fixed percentage of sales volume. There were no variable considerations, significant financing components or payments to customers in the agreements with customers. The Company recognizes revenues over time when service is provided. The Company has a right to considerations from the customers in an amount that corresponds directly with the value the Company’s performance completed to date. The Company adopted practical expedient under ASC 606-10-55-18, and recognized revenues from provision of operation services based on amounts invoiced to the customers.
F-13
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue recognition (cont.)
Contract balances
The Company classifies its right to consideration in exchange for services transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration that is conditional upon factors other than the passage of time. The Company recognizes accounts receivable in its consolidated balance sheets when it performs a service in advance of receiving consideration and it has the unconditional right to receive consideration. A contract asset is recorded when the Company has transferred services to the customer before payment is received or is due, and the Company’s right to consideration is conditional on future performance or other factors in the contract. As of December 31, 2025 and 2024, the Company did record contract assets.
Contract liabilities are recognized if the Company
receives consideration prior to satisfying the performance obligations, which include customer advances and deferred revenue under operation
service arrangements. As of December 31, 2025 and 2024, the Company had customer advances of $
For the years ended December 31, 2025, 2024 and 2023, the Company disaggregate revenue into two revenue streams as the following table:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenues | ||||||||||||
| Sales of cosmetics and other beauty products | $ | $ | $ | |||||||||
| Provision of operation services | ||||||||||||
| Total revenue | $ | $ | $ | |||||||||
The Company disaggregates revenue by timing of revenues recognition as the following table:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenues | ||||||||||||
| Goods transferred at a point in time | $ | $ | $ | |||||||||
| Services transferred over time | ||||||||||||
| Total revenue | $ | $ | $ | |||||||||
F-14
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Cost of revenues
Cost of revenues primarily consists of purchase price of products, inbound shipping charges, write-downs of inventories and labor costs which facilitate operation services. Shipping charges to receive products from the suppliers are included in inventories and recognized as cost of revenues upon sale of the products to the customers.
Selling and marketing expenses
Selling and marketing expenses consist primarily of advertising and marketing costs, warehouse rental expenses, outbound shipping expenses and payroll and related expenses for employees involved in selling and marketing activities.
Advertising and marketing costs, which consist
primarily of online advertising, offline television, movie and outdoor advertising, and incentive programs and branding promotion for
the Company’s cosmetics products to attract or retain consumers, are expensed as incurred, and totaled $
Outbound shipping, freight and warehouse expenses
were in connection with sales of products and were expensed as incurred. For the years ended December 31, 2025, 2024 and 2023, the
Company incurred outbound shipping, freight and warehouse expenses of $
General and administrative expenses
General and administrative expenses primarily consist of employee related expenses for administrative functions, including accounting, finance, tax, legal and human relations; costs associated with these functions including facilities and equipment depreciation expenses, rental and other general corporate related expenses.
Employee benefits
The full-time employees of the Company are entitled
to staff welfare benefits including medical care, housing funds, pension benefits, unemployment insurance and other welfare, which are
government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the
employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions
to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $
Value-added tax
The Company is subject to value added tax (“VAT”)
and related surcharges on the revenues earned for products sold in the PRC. The applicable rate of value added tax is
F-15
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Income taxes
The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes.
The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is more likely than not these items will be utilized against taxable income in the future. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
An uncertain tax position is recognized as a benefit
only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination
being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than
Operating leases
The Company leases its offices, which are classified as operating leases in accordance with Topic 842. Operating leases are required to record in the balance sheet as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date, and (3) initial direct costs for any expired or existing leases as of the adoption date. The Company elected the short-term lease exemption as the lease terms are 12 months or less.
At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease.
The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, and less any lease incentives received. All right-of-use assets are reviewed for impairment. There was impairment for right-of-use lease assets as of December 31, 2025 and 2024.
F-16
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Comprehensive income (loss)
A comprehensive income (loss) includes net income (loss) and other comprehensive (expenses) income arising from foreign currency adjustments. Comprehensive income (loss) is reported in the consolidated statements of operations and comprehensive income (loss).
Earnings (loss) per share
In accordance with ASC 260, Earnings Per Share, basic net earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of unrestricted ordinary shares outstanding during the year using the two-class method. Under the two-class method, net income (loss) is allocated between ordinary shares and other participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible redeemable preferred shares are participating in securities because they are entitled to receive dividends or distributions on an as converted basis.
Diluted net earnings (loss) per share is calculated by dividing net income (loss) attributable to ordinary shareholders, as adjusted for the accretion and allocation of net income related to the preferred shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary share equivalents are excluded from the computation in income (loss) periods should their effects be anti-dilutive. The Company had convertible redeemable preferred shares, earnout shares and warrants, which could potentially dilute basic earnings per share. To calculate the number of shares for diluted net earnings (loss) per share, the effect of the convertible redeemable preferred shares is computed using the two-class method or the as-if converted method, whichever is more dilutive. The effect of warrants is computed using treasury stock method.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter with changes in fair value recognized in the statements of operations in the period of change.
Commitments and contingencies
In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450, the Company records accruals for such loss contingencies when it is probable that liability has been incurred and the amount of loss can be reasonably estimated.
F-17
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Segment reporting
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is the .
The Company’s CODM relies upon the consolidated
results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result
of the assessment made by CODM, the Company has only
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenues | $ | $ | $ | |||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||
| Promotion and advertising expenses | ( | ) | ( | ) | ( | ) | ||||||
| Other operating expenses | ( | ) | ( | ) | ( | ) | ||||||
| Total other expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| Income tax expenses | ( | ) | ( | ) | ( | ) | ||||||
| Net (loss) income from continuing operations | $ | ( | ) | $ | ( | ) | $ | |||||
The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company’s long-lived assets are all located in the PRC (including mainland China and Hong Kong) and substantially all of the Company’s revenues are derived from the PRC (including mainland China and Hong Kong). Therefore, no geographical segments are presented.
Discontinued operations
A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. In the period that a discontinued operation is classified as held for sale, the assets and liabilities of the discontinued operation are presented separately in asset and liability sections, respectively, of the consolidated balance sheets and prior periods are presented on a comparative basis. In the consolidated statements of operations and comprehensive income (loss), the results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinued operations are presented separately in the consolidated statements of cash flows.
F-18
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recently issued accounting standards
On December 17, 2025, the FASB issued ASU 2025-12, which is to correct, clarify, and otherwise improve U.S. GAAP. ASU 2025-12 includes 33 improvements that span a wide range of topics, including Clarifying diluted earnings per share (EPS) calculation when a loss from continuing operations exists, Clarifying disclosure requirements for lease receivables from sales-type or direct financing leases, Revising the calculation of the reference amount for beneficial interests to prevent double counting credit losses, Clarifying the permissible methods to account for treasury stock retirements, and Clarifying the guidance for transfers of receivables from contracts with customers. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: (i) Prospectively to all transactions recognized on or after the date that the entity first applies the amendments, or (ii) Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
On December 8, 2025, the FASB issued ASU 2025-11, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” For public business entities, the amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, the amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
On July 30, 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to provide a practical expedient for all entities which elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses, and an accounting policy election for all entities, other than a public business entity, that elect the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient and, if so, whether it has also applied the accounting policy election. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
F-19
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recently issued accounting standards (cont.)
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as employee compensation, depreciation, amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. As an Emerging Growth Company (“EGC”),the Company is currently evaluating the potential impact of adopting this guidance on financial statements requirements and does not expect the adoption to have a material impact.
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.
F-20
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Significant risks and uncertainties
1) Credit risk
Assets that potentially subject the Company to
significant concentration of credit risk primarily consist of cash and cash equivalents, accounts receivable, prepayments and other current
assets and amounts due from related parties. The maximum exposure of such assets to credit risk is their carrying amount as at the balance
sheet dates. As of December 31, 2025, the Company held cash and cash equivalents of $
The risk with respect to accounts receivable, prepayments and other current assets and amounts due from related parties is mitigated by credit evaluations the Company performs on its customers and its ongoing monitoring processes of outstanding balances.
Most of the Company’s operations are carried out in Hong Kong, while partial of the Company’s business is conducted in mainland China. As mainland China government has exerted more oversight in Hong Kong, the Company’s business, financial condition and results of income may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors.
2) Foreign currency risk
Substantially all of the Company’s operating activities and the Company’s assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.
F-21
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. DISPOSAL OF SHANGHAI JINGYUE
On June 27, 2025, the Company transferred
The Company determined that the disposal of Shanghai Jingyue met the criteria to be classified as a discontinued operation and, as a result, Shanghai Jingyue’s historical financial results are reflected in the Company’s consolidated financial statements as a discontinued operation. The disposal of Shanghai Jingyue represents a strategic shift that has a significant effect on the Company’s financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The assets and liabilities related to the discontinued operations were retroactively classified as assets and liabilities of discontinued operations as of December 31, 2024 in the consolidated balance sheet, while results of operations related to the discontinued operations were reported as income (loss) from discontinued operations in the consolidated statements operations and comprehensive income (loss), and cash flows from discontinued operations of the years ended December 31, 2025, 2024 and 2023 were separately presented in the consolidated statements of cash flows for all periods presented retroactively in accordance with U.S. GAAP.
For the period from January 1, 2025 through June 27, 2025 and for the years ended December 31, 2024 and 2023, the aggregated financial results of the discontinued operations, after intercompany elimination, are as following:
| For the period from January 1, 2025 through June 27, | For the Years Ended December 31, | |||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Revenues | $ | $ | $ | |||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||
| Gross profit (loss) | ( | ) | ||||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Total other expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| Loss before income taxes from operations of discontinued operation | ( | ) | ( | ) | ||||||||
| Gain on disposal of discontinued operation | ||||||||||||
| Income tax (expenses) benefits | ( | ) | ( | ) | ||||||||
| Net income (loss) from discontinued operation | $ | $ | ( | ) | $ | |||||||
F-22
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. DISPOSAL OF SHANGHAI JINGYUE (cont.)
As of December 31, 2024, major classes of assets and liabilities of the discontinued operation, after intercompany elimination, are as following:
| December 31, 2024 | ||||
| ASSETS | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | |||
| Accounts receivable | ||||
| Prepayments and other current assets | ||||
| Inventories | ||||
| Assets of discontinued operations, current | ||||
| Non-current Assets | ||||
| Property and equipment, net | ||||
| Right of use assets, net | ||||
| Deferred tax assets | ||||
| Other non-current assets | ||||
| Assets of discontinued operations, non-current | ||||
| Total assets of discontinued operations | $ | |||
| LIABILITIES | ||||
| Current Liabilities | ||||
| Accounts payable | $ | |||
| Advance from customers | ||||
| Income tax payable | ||||
| Lease liabilities, current | ||||
| Other payable and accrued expenses | ||||
| Liabilities of discontinued operations, current | ||||
| Lease liabilities | ||||
| Amount due to related parties, non-current | ||||
| Liabilities of discontinued operations, non-current | ||||
| Total liabilities of discontinued operations | $ | |||
For the period from January 1, 2025 through June 27, 2025 and for the years ended December 31, 2024 and 2023, the aggregated cashflow of the discontinued operations, after intercompany elimination, are as following:
| For the period from January 1, 2025 through June 27, | For the Years Ended December 31, | |||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net cash provided by (used in) operating activities from discontinued operations | $ | $ | $ | ( | ) | |||||||
| Net cash used in investing activities from discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net cash (used in) provided by financing activities from discontinued operations | $ | ( | ) | $ | ( | ) | $ | |||||
F-23
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. PREPAYMENTS AND OTHER ASSETS, CURRENT AND NON-CURRENT
Prepayments and other current assets from continuing operations consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Prepayments and other current assets | ||||||||
| Prepayments to suppliers (a) | $ | $ | ||||||
| Due from a supplier (b) | ||||||||
| Prepaid marketing and advertising expenses | ||||||||
| Loans to third parties (c) | ||||||||
| Tax recoverable | ||||||||
| Others | ||||||||
| $ | $ | |||||||
| Other non-current assets | ||||||||
| Long-term deposits (d) | ||||||||
| Others | ||||||||
| $ | $ | |||||||
For the years ended December 31, 2025, 2024 and 2023, the movement of expected credit losses against other receivable is as the following:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Opening balance | $ | $ | $ | |||||||||
| Provision of expected credit losses | ||||||||||||
| Writing off other receivable | ( | ) | ||||||||||
| Ending balance | $ | $ | $ | |||||||||
For the year ended December 31, 2024, the
Company wrote off compensation receivable of $
| (a) |
| (b) |
| (c) | As of December 31, 2025, the balance represented loans provided to Shanghai Jingyue. The loans bear interest rate of |
As of December 31, 2024, the balance represented loans provided to one third party, which was repaid in the year ended December 31, 2025.
| (d) |
F-24
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. PROPERTY AND EQUIPMENT, NET
Property and equipment, net from continuing operations consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Vehicles | $ | $ | ||||||
| Office equipment | ||||||||
| Leasehold improvements | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Depreciation expenses from continuing operations
were $
6. OPERATING LEASE
As of December 31, 2025, the Company leases
office spaces in the PRC under non-cancelable operating leases, with terms ranging between
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of the incremental borrowing rate.
For operating leases that include rent holidays and rent escalation clauses, the Company recognizes lease expense on a straight-line basis over the lease term from the date it takes possession of the leased property. The Company records the straight-line lease expense and any contingent rent, if applicable, in general and administrative expenses on the consolidated statements of operations and comprehensive income (loss). The corporate office lease also requires the Company to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in the general and administrative expenses on the consolidated statements of operations and comprehensive income (loss).
The lease agreements do not contain any material residual value guarantees or material restrictive covenants.
For short-term leases, the Company records operating lease expense in its consolidated statements of operations and comprehensive income (loss) on a straight-line basis over the lease term and record variable lease payments as incurred.
The table below presents the operating lease related assets and liabilities from continuing operations recorded on the consolidated balance sheets.
| December 31, 2025 | December 31, 2024 | |||||||
| Right of use assets, net | $ | $ | ||||||
| Operating lease liabilities, current | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
F-25
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. OPERATING LEASE (cont.)
Other information about the Company’s leases from continuing operations is as follows:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Operating cash flows used in operating leases | $ | $ | $ | |||||||||
| Weighted average remaining lease term (years) | ||||||||||||
| Weighted average discount rate | % | % | % | |||||||||
Operating lease expenses from continuing operations
were $
The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2025:
| December 31, 2025 | ||||
| For the year ending December 31, 2026 | $ | |||
| For the year ending December 31, 2027 | ||||
| For the year ending December 31, 2028 | ||||
| Total lease payments | ||||
| Less: Imputed interest | ( | ) | ||
| Present value of operating lease liabilities | $ | |||
7. SHORT-TERM LOANS
| December 31, 2025 | December 31, 2024 | |||||||
| Short-term loans from financial institutions other than banks | $ | $ | ||||||
| Short-term loans from banks | ||||||||
| $ | $ | |||||||
Short-term loans from financial institutions other than banks
During the years ended December 31, 2025 and 2023, the Company
entered into certain loan agreements with certain financial institutions, pursuant to which the Company borrowed $
Short-term loans from banks
During the year ended December 31, 2025, 2024
and 2023, the Company entered into one loan agreement with a bank, pursuant to which the Company borrowed $
During the year ended December 31, 2024, the Company entered into another
loan agreement with another bank, pursuant to which the Company borrowed $
During the year ended December 31, 2025, the Company
entered into one additional loan agreement with another bank, pursuant to which the Company borrowed $
F-26
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. LONG-TERM BORROWINGS
On March 22, 2024, the Company entered into a
Loan Agreement (the “Loan Agreement”) with a third party (the “Lender”), pursuant to which the Lender agrees to
lend to the Company (the “Loan”) amounts to be paid in four tranches. The amount of each tranche of the Loan is adjusted depending
on the trading price of the Company’s Class B Ordinary Shares. The first tranche, extended on March 28, 2024, provides the Company
with loan proceeds of $
As of December 31, 2025 and 2024, the Company
had long-term borrowings of $
9. INCOME TAXES
Cayman Islands
Under the current laws of the Cayman Islands, the Company and Ableview Investment are not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
Singapore
The Company is subject to corporate income tax
for its business operation in Singapore. Tax on corporate income is imposed at a flat rate of
Hong Kong
Ableview Brands, Ableview Management, and Able View are incorporated
in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in their statutory financial statements adjusted
in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$
PRC
Weitong, Beijing Jingyuan, Shanghai Jinglu, Shanghai
Jingnan, Zhejiang Jingxiu, Wuhan Jingtong and CSS Shanghai are subject to PRC Corporate Income Tax (“CIT”) on the taxable
income in accordance with the relevant PRC income tax laws. Effective from January 1, 2008, the PRC’s statutory, Enterprise
Income Tax (“EIT”) rate is
For qualified small and low-profit enterprises, from January 1, 2023
to December 31, 2027,
F-27
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. INCOME TAXES (cont.)
The components of the income (loss) before income taxes from continuing operations are as follows:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| PRC | $ | $ | $ | ( | ) | |||||||
| Singapore | ( | ) | ||||||||||
| Hong Kong | ( | ) | ( | ) | ||||||||
| Cayman | ( | ) | ( | ) | ( | ) | ||||||
| Total | $ | ( | ) | $ | ( | ) | $ | |||||
For the years ended December 31, 2025, 2024 and 2023, the income tax expenses (benefits) were comprised of the following:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Current income tax expenses | $ | $ | ||||||||||
| Deferred income tax expenses/(benefit) | ( | ) | ||||||||||
| Total income tax expenses | $ | $ | $ | |||||||||
Below is a reconciliation of the statutory tax rate to the effective tax rate:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Hong Kong statutory income tax rate | % | % | % | |||||||||
| Effect of different income tax rates in other jurisdictions | ( | )% | ( | )% | ( | )% | ||||||
| Effect of non-includable items | % | % | % | |||||||||
| Effect of preferential tax rates | ( | )% | % | ( | )% | |||||||
| Effect of non-deductible expenses | ( | )% | ( | )% | % | |||||||
| Effect of changes in valuation allowance | % | % | ( | )% | ||||||||
Effect of income tax expense adjustment for prior years | % | % | % | |||||||||
| Effect of net operating losses true-up due to adjustment for intra-group service fee | ( | )% | % | % | ||||||||
| Effect of true-up on net operating losses | ( | )% | % | ( | )% | |||||||
| Effective tax rate | ( | )% | ( | )% | % | |||||||
Deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating losses carryforwards | $ | $ | ||||||
| Inventory write-down | ||||||||
| Operating lease liabilities | ||||||||
| Total deferred tax assets, gross | | | ||||||
| Less: valuation allowance | ||||||||
| $ | $ | |||||||
| Deferred tax liabilities | ||||||||
| Operating lease right-of-use assets | ( | ) | ( | ) | ||||
| Total deferred tax assets, net | $ | $ | ||||||
F-28
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. INCOME TAXES (cont.)
Movement of valuation allowance of deferred tax assets for the years ended December 31, 2025, 2024 and 2023 were as the following:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Opening balance | $ | $ | $ | |||||||||
| Addition | ||||||||||||
| Reversal | ( | ) | ( | ) | ||||||||
| Ending balance | $ | $ | $ | |||||||||
Total net operating losses (NOLs) carryforwards
of the Company’s subsidiaries in mainland China is $
The Company evaluates its valuation allowance requirements at end of each reporting period by reviewing all available evidence, both positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a change in management’s judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under applicable tax law. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. The Company assessed that it would be able to generate sufficient operating profits within the next five years and concluded that it was more likely than not that all the entities would have sufficient taxable income to realize the deferred tax assets in the future. Accordingly, as of December 31, 2025 and 2024, no valuation allowance was provided against the deferred tax assets respectively.
Uncertain tax positions
In October 2024, Able View Brands (“Brands”) received a comment letter from Hong Kong IRS regarding certain deductible expenses claimed in its annual tax return for the year of 2023. Such expenses were related to intra-group services provided to Brands by certain PRC subsidiaries. Brands sent a response letter to provide supporting evidence to Hong Kong IRS in January 2025. In June 2025, the Hong Kong IRS completed its review and approved the deduction of the aforementioned expenses.
The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2024 and 2025, the Group did not have any unrecognized uncertain tax positions. For the years ended December 31, 2023, 2024 and 2025, the Company did not incur any interest and penalties related to potential underpaid income tax expenses.
As of December 31, 2025, the tax years ended December 31, 2020 through 2024 for the Company’s subsidiaries in the PRC are generally subject to examination by the PRC tax authorities. The tax years ended December 31, 2021 through 2024 for the Company’s subsidiary in the Singapore is generally subject to examination by the Singapore tax authorities. The tax years ended December 31, 2019 through 2024 for the Company’s subsidiaries in Hong Kong are generally subject to examination by the Hong Kong tax authorities.
F-29
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. CONVERTIBLE NOTES
In September 2024, the Company entered into Convertible Note Purchase Agreements (the “Agreements”) with three investors (the “Purchasers”).
Pursuant to the Agreements, the Company has issued
and sold to the Purchasers convertible notes (the “Notes”) with aggregate principal amount of US$
On November 4, 2024, the Company closed the issuance
and sale of the Notes to the Purchasers and fully collected net proceeds of $
As of December 31, 2025 and 2024, the Company did not have outstanding convertible notes.
11. EQUITY
Ordinary shares
The Company is authorized to issue
On August 17, 2023 (the “Closing Date”),
the Company consummated the business combination with Hainan Manaslu Acquisition Corp. (“HMAC”). As part of the business
combination between the Company and HMAC, the Company issued
The Company engaged a third party financial advisor
in connection with a business combination to assist the Company in locating target businesses, holding meetings with its shareholders
to discuss a potential business combination and the target business’ attributes, introduce the Company to potential investors that
are interested in purchasing securities, assist the Company in obtaining shareholder approval for the business combination and assist
the Company with its press releases and public filings in connection with a Business Combination. The Company agreed to pay the financial
advisor certain cash consideration and share consideration of
F-30
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. EQUITY (cont.)
Ordinary shares (cont.)
On December 22, 2023, the Company entered into
a Buy-Sell Agreement with Ladenburg Thalmann & Co. Inc. (“LT”), pursuant to which the Company shall purchase a total of
In connection with issuance of convertible notes
(Note 10) closed in November 2024, on November 25, 2024, the Company issued an aggregation of
As of both December 31, 2025 and 2024, the Company
had
Declaration of dividends
For the years ended December 31, 2025, 2024 and 2023, the Company did not declare dividends. For the years ended 2025, 2024 and 2023,
the Company paid dividends of $
On December 31, 2022 (the “Declaration Date”), Ableview
Brands Limited declared distribution of the retained earnings of 2022 to the Pre-Public Shareholders. As of December 31, 2025 and 2024,
the Company had unpaid dividends of $
According to PRC laws and regulations, after-tax profit can be distributed after a portion of net income has been set aside to fund certain reserve funds.
The board of directors will have the discretion to declare and pay dividends in the future, subject to applicable PRC regulations and Hong Kong regulations and restrictions. Payment of dividends in the future will depend upon the Company’s earnings, capital requirements, and other factors, which the Company’s board of directors may deem relevant.
Restricted net assets
The Company’s ability to pay dividends is
primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations
permit payments of dividends by PRC subsidiaries only out of its retained earnings, if any, as determined in accordance with PRC accounting
standards and regulations and after it has met the PRC requirements for appropriation to statutory reserves. Paid in capital of the PRC
subsidiaries included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of
income reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected
in the statutory financial statements of the Company’s PRC subsidiaries. The Company is required to set aside at least
F-31
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. EQUITY (cont.)
Restricted net assets (cont.)
The statutory reserve is required to set aside
annually. For the years ended December 31, 2025 and 2023, the Company’s PRC profit generating subsidiaries set aside statutory
reserve funds of $
As of December 31, 2025 and 2024, the Company had net restricted assets
of $
Warrants issued in connection with settlement of convertible notes
In connection with issuance of convertible notes
(Note 10) closed in November 2024, on November 25, 2024, the Company issued an aggregation of
The Conversion may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Conversion. The Conversion Warrants expired one year from the issuance of the Conversion Warrants. The Conversion Warrants could be exercised on a cashless basis. The exercise price and number of Class B Ordinary Shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a subdivision, reclassification and reorganization, spinoffs. However, the warrants will not be adjusted for issuances of ordinary shares at a price below their exercise price.
As the Conversion Warrants meet the criteria for
equity classification under ASC 815, therefore, the Conversion Warrants are classified as equity. On November 4, 2024, the fair value
of the Conversion Warrants is estimated at fair value of approximately $
| As of November 4, 2024 | ||||
| Risk-free rate of return | % | |||
| Estimated volatility rate | % | |||
| Dividend yield | % | |||
| Spot price of underling ordinary share | $ | |||
| Exercise price | $ | |||
| Fair value of warrant | $ | |||
F-32
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. EQUITY (cont.)
Public Warrants
Pursuant to HMAC’s initial public offering
on August 10, 2022, HMAC sold
Each holder of a warrant is entitled to purchase one ordinary
share at an exercise price of $
The Public Warrants became exercisable after the consummation of a business combination between the Company and HMAC on August 17, 2023. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares.
The Company may call the warrants for redemption,
in whole and not in part, at a price of $
| ● | upon not less than 30 days’ prior written notice of redemption to each warrant holder, |
| ● | if,
and only if, the reported last sale price of the ordinary share equals or exceeds $ |
| ● | if,
and only if, there is a current registration statement in effect with respect to the issuance of the ordinary share underlying such warrants
at the time of redemption and for the entire |
If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below their exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.
As the Public Warrants meet the criteria for equity
classification under ASC 480 and ASC 815, therefore, the warrants are classified as equity. As of December 31, 2025, the Company had
F-33
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. EQUITY (cont.)
Private Warrants
Simultaneously with the closing of the initial
public offering of HMAC, HMAC also sold
The Private Placement Units are identical to the Public Units being sold in the initial public offering of HMAC except that Private Placement Units will not be transferable, assignable or saleable until 30 days after the completion of the business combination and will be entitled to registration rights.
As the Private Warrants meet the criteria for
equity classification under ASC 480 and ASC 815, therefore, the warrants are classified as equity. As of December 31, 2025, the Company
had
Public Rights and Private Rights
Each holder of a public right and private right
automatically received one-tenth (1/10) of an ordinary share upon consummation of a business combination, even if the holder of a public
right converted all ordinary shares held by him, her or it in connection with a business combination or an amendment to the Company’s
Amended and Restated Memorandum and Articles of Association with respect to its pre-business combination activities. Upon the closing
of the business combination of the Company and HMAC, the Company issued
12. EARNINGS (LOSS) PER SHARE
For the years ended December 31, 2023, the Company has determined that its convertible redeemable preferred shares are participating securities as the preferred shares participate in undistributed earnings on an as-if-converted basis. The holders of the preferred shares are entitled to receive dividends on a pro-rata basis, as if their shares had been converted into ordinary shares. Accordingly, the Company uses the two-class method of computing net income per share, for ordinary shares and preferred shares according to the participation rights in undistributed earnings.
For the years ended December 31, 2025, 2024 and 2023, the outstanding
convertible redeemable preferred shares and warrants (Note 11), including Conversion Warrants, Public Warrants and Private Warrants, in
the total amount of
F-34
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. EARNINGS (LOSS) PER SHARE (cont.)
Holders of Class A ordinary shares and Class B
ordinary shares will be entitled to the same amount of dividends, if declared. The earnings (loss) per Class A ordinary shares and earnings
(loss) per Class B ordinary shares are the same.
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | |||||||
| Accretion of convertible redeemable preferred shares | ( | ) | ||||||||||
| Net income attributable to Able View Global Inc’s preferred shareholders | ( | ) | ||||||||||
| Net income (loss)attributable to Able View Global Inc’s ordinary shareholders | $ | $ | ( | ) | $ | |||||||
| Net (loss) income from continuing operations attributable to Able View Global Inc’s ordinary shareholders | $ | ( | ) | $ | ( | ) | $ | |||||
| Net income (loss) from discontinued operations attributable to Able View Global Inc’s ordinary shareholders | $ | $ | ( | ) | $ | |||||||
| (Loss) earnings per share from continuing operations – basic and diluted | $ | ( | ) | $ | ( | ) | $ | |||||
| Earnings (loss) per share from discontinued operations – basic and diluted | $ | ( | ) | $ | ||||||||
| Earnings (loss) per share – basic and diluted | $ | $ | ( | ) | $ | |||||||
| Weighted average shares – basic and diluted | ||||||||||||
F-35
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. RELATED PARTY TRANSACTIONS AND BALANCES
1) Nature of relationships with related parties
The table below sets forth the major related parties and their relationships with the Company, with which the Company entered into transactions during the years ended December 31, 2025, 2024 and 2023, or recorded balances as of December 31, 2025 and 2024.
| Name | Relationship with the Company | |
| Mr. Zhu Jian | ||
| Mr. Wang Jun | ||
| Mr. Tang Jing | ||
| Mr. Tang Yuhua | ||
| Mr. Wang Jixiang | ||
| Healthy Great Investing Company Limited (“Healthy Great”) | ||
| Smartest Star Investing Company Limited (“Smartest Star”) | ||
| Scenery Investing Company Limited (“Scenery”) | ||
| Yanyan Global Company Limited (formerly known as Skinist Global Company Limited “Yanyan Global”) | ||
| Skinist Global Cosmetics (Shanghai) Co., Ltd. (“Skinist Shanghai”) | ||
| Shanghai Yingtian Financial Information Service Co., Ltd. (“Ying Tian”) | ||
| Hong Kong Ping Forward Limited (formerly known as Hong Kong Mimosa Industry, or “Ping Forward”) | ||
| Shanghai Jingqi Developing Co., Ltd. (“Jingqi”) | ||
| Shanghai Jingrong Information Co., Ltd. (“Jingrong”) | ||
| Shanghai Youshan Corporate Consulting Co., Ltd. (“Youshan”) | ||
| Merit Zone Development Limited (“Merit Zone”) | ||
| Shanghai Jiantong Trade Center (“Jian Tong”) | ||
| Shanghai Shilin Advertising Co., Ltd. (“Shi Lin”) | ||
| Shanghai Tengxin Advertising Co., Ltd. (“Teng Xin”) | ||
| Shanghai Zhiwang Cosmetics Co., Ltd. (“Zhi Wang”) | ||
| Shanghai Yuancheng Advertising Co., Ltd. (“Yuan Cheng”) | ||
| Shanghai Zhimeisi Beauty Technology Co., Ltd (“Zhi Mei Si”) | ||
| Shanghai Libo Medical Beauty Clinic Co., Ltd (“Li Bo”) | ||
| Shanghai Yaxing Commercial Consulting Co., Ltd. (“Ya Xing”) |
F-36
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. RELATED PARTY TRANSACTIONS AND BALANCES (cont.)
2)
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Sales of products to related parties | ||||||||||||
| Wang Jixiang | $ | $ | $ | |||||||||
| Ping Forward | ||||||||||||
| Yanyan Global | ||||||||||||
| $ | $ | $ | ||||||||||
| Purchase of products from related parties | ||||||||||||
| Youshan | $ | $ | $ | |||||||||
| Jingqi | ||||||||||||
| Skinist Shanghai | ||||||||||||
| $ | $ | $ | ||||||||||
| Service fees charged by related parties | ||||||||||||
| Zhi Wang | $ | $ | $ | |||||||||
| Ya Xing | ||||||||||||
| Jingqi | ||||||||||||
| $ | $ | $ | ||||||||||
| Payment of dividends | ||||||||||||
| Mr. Zhu Jian | $ | $ | $ | |||||||||
| Mr. Wang Jun | ||||||||||||
| Mr. Tang Jing | ||||||||||||
| Payment of dividends | $ | $ | $ | |||||||||
| Net settlement (1) | ||||||||||||
| Reduction of dividend payables due to disposal of discontinued operations | $ | $ | $ | |||||||||
| Net settlement of dividends payable with due from related parties from continuing operations | ||||||||||||
| Net settlement of due from related parties and due to related parties within continuing operations | ||||||||||||
| Net settlement of due from related parties and due to related parties between continuing operations and discontinued operations | ||||||||||||
| $ | $ | $ | ||||||||||
| (1) |
F-37
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. RELATED PARTY TRANSACTIONS AND BALANCES (cont.)
2) Transactions with related parties (cont.)
In December 2024, the Company and certain related
parties entered into settlement agreement, pursuant to which all parties agreed that the Company’s receivables of $
During the year ended December 31, 2025, the Company
and certain related parties entered into certain net settlement agreements, pursuant to which all parties agreed that: 1) the Company’s
dividend payables of $
(Advances to) Collection of advances from related parties
During the years ended December 31, 2025, 2024 and 2023, the Company
made advance of $
| For the Years Ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Advances | Collection of advances | Advances | Collection of advances | Advances | Collection of advances | |||||||||||||||||||
| Skinist Shanghai | ( | ) | ( | ) | ||||||||||||||||||||
| Li Bo | ( | ) | ||||||||||||||||||||||
| Skinist Global | ( | ) | ||||||||||||||||||||||
| Jingqi | ( | ) | ||||||||||||||||||||||
| $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||
Borrowings from (Repayment of Borrowings to) related parties
| For the Years Ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Borrowings | Repayment of borrowings |
Borrowings | Repayment of borrowings |
Borrowings | Repayment of borrowings |
|||||||||||||||||||
| Ying Tian(1) | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ||||||||||||||
| Mr. Tang Jing | ( |
) | ||||||||||||||||||||||
| Li Bo(1) | ||||||||||||||||||||||||
| Teng Xin(1) | ( |
) | ( |
) | ||||||||||||||||||||
| Youshan(1) | ( |
) | ( |
) | ||||||||||||||||||||
| Mr. Wang Jixiang(1) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Mr. Zhu Jian(1) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Skinist Global(1) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Zhi Mei Si | ( |
) | ||||||||||||||||||||||
| Yuan Cheng | ( |
) | ||||||||||||||||||||||
| Shi Lin(1) | ( |
) | ( |
) | ||||||||||||||||||||
| Jian Tong(1) | ( |
) | ||||||||||||||||||||||
| $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||
| (1) |
F-38
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. RELATED PARTY TRANSACTIONS AND BALANCES (cont.)
3) Balances with related parties
As of December 31, 2025 and 2024, the balances with related parties were as follows:
—
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable | ||||||||
Ping Forward | $ | $ | ||||||
| Total | $ | $ | ||||||
—
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts payable | ||||||||
| Youshan | $ | $ | ||||||
| Total | $ | $ | ||||||
3) Balances with related parties (cont.)
—
| December 31, 2025 | December 31, 2024 | |||||||
| Dividends payable(1) | ||||||||
| Healthy Great | ||||||||
| Smartest Star | ||||||||
| Scenery | ||||||||
| Mr. Zhu Jian | $ | $ | ||||||
| Mr. Wang Jun | ||||||||
| Mr. Tang Jing | ||||||||
| $ | $ | |||||||
| Other payable(2) | ||||||||
| Ya Xing | $ | $ | ||||||
| Mr. Wang Jixiang | ||||||||
| Total | $ | $ | ||||||
| (1) |
| (2) |
F-39
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14. CONCENTRATION
Customer concentration
For the years ended December 31, 2025, 2024 and 2023, the following customers contributed revenues that were over 10% of total net revenues for the relevant periods. Customers accounting for 10% or more of the Company’s net revenues were as follows:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Customer A | % | % | % | |||||||||
| Customer B | % | % | % | |||||||||
| Customer C | % | % | % | |||||||||
| Customer D | % | |||||||||||
| * |
As of December 31, 2025 and 2024, accounts receivable due from the following customers were over 10% of consolidated accounts receivable. The details are as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Customer A | % | % | ||||||
| Customer E | % | % | ||||||
| Customer B | % | |||||||
| Customer D | % | |||||||
| * | Less than 10% |
Vendor concentration
For the years ended December 31, 2025, 2024 and 2023, the Company purchased products from the following vendors who charged over 10% of total cost of revenues for the relevant period, which include both brand partners and product distributors who distribute products from certain brands to us. Vendors accounting for 10% or more of the Company’s cost of revenues were as follows:
| For the Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Vendor A | % | % | % | |||||||||
| Vendor B | % | % | % | |||||||||
As of December 31, 2025 and 2024, accounts payable due to the following vendors were over 10% of consolidated accounts payable. The details are as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Vendor C | % | % | ||||||
| Vendor D | % | % | ||||||
| Vendor E | % | % | ||||||
F-40
ABLE VIEW GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. CONTINGENT CONSIDERATION
In connection with the Business Combination, the
Company is obliged to make earn out payments to the management of the Company consisting of up to an additional
The Earn Out Shares are determined as contingent
consideration in connection with the reverse recapitalization. In addition, the issuance of Earn Out Shares does not meet any conditions
to be classified as a liability under ASC 815, thus it should be classified as an equity financial instrument, and measure at fair value
using the quoted market price on grant date, August 17, 2023 which is $
For the years ended December 31, 2024 and 2023, the performance condition was not met based on the consolidated statements of operations. As of the date of issuance of the consolidated financial statements, the contingent consideration expired.
16. COMMITMENTS AND CONTINGENCIES
From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of income or liquidity.
17. SUBSEQUENT EVENTS
On March 13, 2026, the Company held a meeting of the holders of Class
B Ordinary Shares (the “Class B Meeting”) and an extraordinary general meeting of the shareholders of the Company (the “EGM”)
at the principal office of the Company. At the Class B Meeting, holders of Class B Ordinary Shares approved an ordinary resolution to
The Company evaluated subsequent events through April 27, 2026, the date of issuance of the consolidated financial statements, and the management determined that other than those that have been disclosed in the consolidated financial statements and subsequent events disclosed above, no subsequent events that require recognition and disclosure in the consolidated financial statements.
F-41
Exhibit 4.4
Equity Transfer Agreement
This agreement is jointly signed by the following parties on May 28, 2025 in Shanghai.
Transferor: ABLEVIEW BRANDS LIMITED (hereinafter referred to as Party A)
Transferee: Hong Kong Bohua Development Co., Ltd. (hereinafter referred to as Party B)
Shanghai Jingyue Trading Co., Ltd. (hereinafter referred to as the Target Company) has a registered capital of 15 million RMB, with ABLEVIEW BRANDS LIMITED contributing 15 million RMB, holding 100%. According to relevant laws and regulations, after friendly consultation among the parties to this agreement, the following terms are reached:
Article 1 (Subject of Equity Transfer and Transfer Price)
1. Party A will transfer 100.00% of the equity it holds in the Target Company to Party B for a consideration of 0 RMB.
2. Other rights attached to the equity shall be transferred along with the equity.
3. Party B shall pay the full amount of the equity transfer price to Party A within 7 days from the date of signing this agreement.
Article 2 (Commitments and Warranties)
Party A warrants that the equity transferred to Party B under Article 1 of this agreement is legally owned by Party A, and Party A has full and effective disposal rights. Party A also warrants that the equity it transfers has not been subject to any pledge or other security rights and is not subject to any claims by any third party.
Article 3 (Liability for Breach of Contract)
If any party to this agreement fails to properly and fully perform its obligations as stipulated in this agreement, it shall bear the liability for breach of contract. Any damage consequences arising from the breach of contract by one party and the negative responsibilities brought to the non-breaching party shall be borne by the breaching party to the non-breaching party.
Article 4 (Method of Dispute Resolution)
This agreement is subject to and governed by the relevant laws of the People’s Republic of China and shall be interpreted in accordance with such laws.
Any dispute arising from or in connection with this agreement shall be resolved through friendly consultation between the parties. If consultation fails, the dispute shall be submitted to the Shanghai Arbitration Commission for arbitration / directly to the People’s Court for litigation.
Article 5 (Others)
1. This agreement is made in triplicate, with each party holding one copy and the Target Company holding one copy for use in handling relevant procedures.
2. This agreement shall come into effect upon the signature of all parties.
ABLEVIEW BRANDS LIMITED
| By: | /s/ Jing Tang | |
| Name: | Jing Tang | |
| Title: | Director |
HONG KONG BOHUA DEVELOPMENT CO., LTD.
| By: | /s/ Seal affixed | |
| Date: | May 28, 2025 |
Exhibit 8.1
LIST OF SUBSIDIARIES
| # | Name of Subsidiaries | Jurisdiction of organization |
Record holders/beneficial owners | |||
| 1 | Ableview Investment Limited | Cayman | Able View Inc. | |||
| 2 | Ableview Capital Group Ltd. | BVI | Able View Inc. | |||
| 3 | Ableview Cosmetic Limited | HK | Ableview Capital Group Ltd. | |||
| 4 | CSS Cosmetic (Hong Kong) Limited | HK | Ableview Capital Group Ltd. | |||
| 5 | Ableview Management Limited | HK | Ableview Capital Group Ltd. | |||
| 6 | Ableview Brands Limited | HK | Ableview Capital Group Ltd. | |||
| 7 | Able View Enterprise Limited | HK | Ableview Investment Limited | |||
| 8 | Able View Inc. | Cayman | Able View Global Inc. | |||
| 9 | CSS Global Limited | BVI | Able View Inc. | |||
| 10 | Cosmetic Skin Solution Holding Limited | BVI | CSS Global Limited | |||
| 11 | Healthy Great Pte. Ltd. | SGP | Ableview Brands Limited | |||
| 12 | Beijing Jingyuan Trading Co., Ltd. | PRC | Ableview Management Limited | |||
| 13 | Shanghai Jinglu Trading Co., Ltd. | PRC | Ableview Management Limited | |||
| 14 | CSS Cosmetic (Shanghai) Ltd. | PRC | Ableview Management Limited | |||
| 15 | Shanghai Weitong Trading Co., Ltd. | PRC | Able View Enterprise Limited | |||
| 16 | Shanghai Jingnan Medical Instrument Co., Ltd. | PRC | Ableview Management Limited |
Exhibit 12.1
CERTIFICATION
BY THE PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Stephen Jian Zhu, certify that:
| 1. | I have reviewed this annual report on Form 20-F of Able View Global Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
| Date: April 27, 2026 | /s/ Stephen Jian Zhu |
| Stephen Jian Zhu | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 12.2
CERTIFICATION BY THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jing Tang, certify that:
| 1. | I have reviewed this annual report on Form 20-F of Able View Global Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
| Date: April 27, 2025 | /s/ Jing Tang |
| Jing Tang | |
| Chief Financial Officer | |
| (Principal Accounting Officer & Principal Financial Officer) |
Exhibit 13.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual report on Form 20-F for the year ended December 31, 2025 (the “Report”) of Able View Global Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof, we, Stephen Jian Zhu, President and Chief Executive Officer, and Jing Tang, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Stephen Jian Zhu | |
| Stephen Jian Zhu | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) |
| /s/ Jing Tang | |
| Jing Tang | |
| Chief Financial Officer | |
(Principal Financial Officer and Principal Accounting Officer) |
|
| April 27, 2025 |
Exhibit 15.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT
We consent to the incorporation by reference in this Registration Statement on Form F-3 (FILE NO. 333 284994) of our report dated April 27, 2026 relating to the financial statements appearing in the Annual Report on Form 20-F of Able View Global Inc. for the year ended December 31, 2025. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ Marcum Asia CPAs LLP
Marcum Asia CPAs LLP
Beijing, China
April 27, 2026
BEIJING OFFICE ●
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● 100004
Phone 8610.8518.7992 ● Fax 8610.8518.7993 ● www.marcumasia.com